UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
AMERICAN BUSINESS COMPUTERS CORPORATION
-------------------------------------------
(Name of Issuer)
Common Stock, Par Value $.01 Per Share
-------------------------------------------
(Title of Class of Securities)
024759 10 2
---------------
(CUSIP Number)
Lawrence F. Dickie
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, New York 10577
(914) 253-2000
-------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 10, 1995
--------------------------------------
(Date of Event Which Requires Filing
of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /.
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CUSIP No. 024759 10 2 SCHEDULE 13D Page 2
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1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
PepsiCo, Inc., I.R.S. Identification No. 13-1584302
----------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
Not applicable
----------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
/ /
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
North Carolina
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NUMBER OF 7. SOLE VOTING POWER 1,000,000
SHARES -------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY EACH -------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 1,000,000
PERSON WITH -------------------------------------
10. SHARED DISPOSITIVE POWER 0
----------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,000,000
----------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES
/ /
----------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.235%
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14. TYPE OF REPORTING PERSON
CO
----------------------------------------------------
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CUSIP No. 024759 10 2 SCHEDULE 13D Page 3
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This Amendment No. 1 amends the Schedule 13D filed by PepsiCo, Inc. with
the Securities and Exchange Commission (the "SEC") on October 9, 1986 (the
"Schedule 13D"). Pursuant to Rule 101(a)(2)(ii) under Regulation S-T, the text
of the Schedule 13D is amended and restated herein.
Item 1. Security and Issuer.
-------------------
This statement relates to the common stock, par value $.01 per share (the
"Common Stock"), of American Business Computers Corp., formerly Sebrn
Corporation, a corporation organized and existing under the laws of the State of
Florida (the "Issuer"), with its principal executive offices at 451 Kennedy
Road, Akron, Ohio 44305.
Item 2. Identity and Background.
-----------------------
(a) - (c) PepsiCo, Inc. is a corporation organized and existing under the
laws of North Carolina ("PepsiCo"), with its principal executive offices located
at 700 Anderson Hill Road, Purchase, New York 10577. PepsiCo, through various
divisions and subsidiaries, is engaged in the following domestic and foreign
business activities: soft drinks, snack foods and restaurants.
The name, resident or business address, present principal occupation or
employment, and the name, principal business and address of the corporation or
other organization in which such employment is conducted, of each executive
officer and director of PepsiCo are set forth in Annex A attached hereto, and
are incorporated herein by reference.
(d) During the last five years, to the best knowledge of PepsiCo, none of
the executive officers and directors of PepsiCo has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, to the best knowledge of PepsiCo, none of
the executive officers and directors of PepsiCo was a party to a civil
proceeding of a judicial or
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CUSIP No. 024759 10 2 SCHEDULE 13D Page 4
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administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
(f) Each executive officer and director of PepsiCo is a United
States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The aggregate purchase price of the 2,000,000 shares of the Common Stock
of the Issuer purchased by PepsiCo and which were the subject of the Schedule
13D was $2,000,000. The funds used in the purchase of such shares were corporate
funds.
Item 4. Purpose of Transaction.
----------------------
PepsiCo acquired 2,000,000 shares of Common Stock, which was the subject
of the Schedule 13D, in order to participate in one of a series of transactions
in which PepsiCo obtained a royalty bearing license with respect to certain
technology owned by the Issuer.
On June 19, 1995, the United States District Court for the Southern
District of New York entered a Final Judgment in a class action lawsuit known as
AMERICAN BUSINESS COMPUTERS CORPORATION SECURITIES LITIGATION (MDL Docket No.
913) approving a Stipulation of Settlement and directing the parties thereto
(including PepsiCo) to consummate the settlement of such action in accordance
with the terms and provisions contained in the Stipulation of Settlement.
In accordance therewith, on October 10, 1995, PepsiCo delivered to the Issuer
1,000,000 of the shares of the Issuer's Common Stock held by PepsiCo.
Additionally, as part of such settlement, PepsiCo will receive from the Issuer
warrants to purchase 500,000 shares of the Issuer's Common Stock at an exercise
price of $3.50 per share.
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CUSIP No. 024759 10 2 SCHEDULE 13D Page 5
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Item 5. Interest in Securities of the Issuer.
-------------------------------------
(a) As of the date hereof, PepsiCo beneficially owns 1,000,000 shares of
Common Stock. To the best of its knowledge, PepsiCo owns approximately 6.235% of
the Common Stock outstanding.
(b) PepsiCo has the sole power to vote, to direct the vote, to dispose or
to direct the disposition of the 1,000,000 shares of Common Stock reported
herein.
(c) Except for the disposition of the 1,000,000 shares of Common Stock
reported herein, PepsiCo has not engaged in any transactions in respect to the
Common Stock during the past 60 days.
(d) and (e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
------------------------------------------------
Except as set forth in Item 4, neither PepsiCo nor, to the best knowledge
of PepsiCo, any executive officer or director of PepsiCo has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to any securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
---------------------------------
Stipulation of Settlement in Re American Business Computers
Corporation Securities Litigation, MDL Docket No. 913 (CLB).
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CUSIP No. 024759 10 2 SCHEDULE 13D Page 6
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
October 10, 1995
-------------------------
(Date)
PepsiCo, Inc.
LAWRENCE F. DICKIE /S/
By-----------------------
(Signature)
Lawrence F. Dickie
Vice President, Associate
General Counsel and
Assistant Secretary
-------------------------
(Name/Title)
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CUSIP No. 024759 10 2 SCHEDULE 13D Page 7
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ANNEX A
Set forth below are the name, present principal occupation or employment
of each director and executive officer of PepsiCo and the name, principal
business and address of the corporation or organization in which such employment
is conducted (if other than at PepsiCo). The business address of each director
and executive officer of PepsiCo is 700 Anderson Hill Road, Purchase, New York
10577
Directors:
- ---------
Name Principal Occupation and Address
- --------------- ----------------------------------------
John F. Akers Former Chairman and CEO, IBM Corporation
208 Harbor Dr., Stamford, CT 06904
Robert E. Allen Chairman and CEO, AT&T
295 North Maple Ave., Basking Ridge, NJ
07920
D. Wayne Calloway Chairman and CEO, PepsiCo, Inc.
Roger A. Enrico Vice Chairman, PepsiCo, Inc.
Chairman & CEO, PepsiCo Worldwide
Restaurants
John J. Murphy Chairman & CEO, Dresser Industries, Inc.
2001 Ross Ave., Dallas, TX 75201
Andrall E. Pearson General Partner, Clayton, Dubilier & Rice
126 E. 56 St., New York, NY 10022-3613
Sharon Percy President and CEO, WETA public stations
Rockefeller 2121 Park Road, N.W., Washington, D.C.
20010
Roger B. Smith Former Chairman and CEO, General Motors Corp.
1931 Rathmor Rd., Bloomfield Hills, MI
48304
Robert H. Stewart, Vice Chairman, Bank One, Texas, N.A.
III 1717 Main St., Dallas, TX 75201
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CUSIP No. 024759 10 2 SCHEDULE 13D Page 8
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Franklin A. Thomas President, The Ford Foundation
320 E. 43 St., New York, NY 10017
P. Roy Vagelos Former Chairman and CEO, Merck & Co., Inc.
1 Crossroads Dr., Bedminster, NJ 07921
Arnold R. Weber Chancellor, Northwestern University
c/o The Civic Committee of The
Commercial Club of Chicago
21 So. Clark St., Chicago, IL 60603
Executive Officers:
- ------------------
D. Wayne Calloway Chairman and CEO
Roger A. Enrico Vice Chairman of the Board
Robert G. Dettmer Executive Vice President and CFO
Randall C. Barnes Senior Vice President and Treasurer
Robert L. Carleton Senior Vice President and Controller
Edward V. Lahey, Jr. Senior Vice President, General Counsel
and Secretary
Indra K. Nooyi Senior Vice President, Strategic
Planning
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CUSIP No. 024759 10 2 SCHEDULE 13D Page 9
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EXHIBIT INDEX
Exhibit
- -------
(10) Stipulation of Settlement in re American Business Computers
Corporation Securities Litigation, MDL Docket No. 913 (CLB)
(24) Power of Attorney which is incorporated herein by reference
from PepsiCo's Form 10-K Annual Report for the Fiscal Year
Ended December 31, 1994
EXHIBIT (10)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- ----------------------------------X
In re: :
AMERICAN BUSINESS COMPUTERS : MDL Docket No. 913(CLB)
CORPORATION SECURITIES LITIGATION
:
This Document Relates To All Cases
- ----------------------------------X
STIPULATION OF SETTLEMENT
This Stipulation of Settlement ("Settlement Agreement") is made and
entered into as of this 13th day of March, 1995, in the above multi-district
litigation between plaintiffs, for themselves and on behalf of the Class as
defined in paragraph 1.03 below, and defendants American Business Computers
Corp., Joseph W. Shannon, Robert A. Cutting, Gary T. Salhany, Steven P.
Smolev, Arlene Smolev, C. Rand Michaels, Herbert L. Luxenburg, J. Larry
Vowell, Hussmann Corporation, V. Ann Hailey, and The Pepsi-Cola Company.
This Settlement Agreement provides for a settlement of this action on the
terms and conditions set forth below, and is subject to the approval of the
Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure.
RECITALS
1. This litigation consists of a class action filed on behalf of all
persons who purchased the common stock of
<PAGE>
American Business Computers Corp. ("ABCC") during the period January 24, 1990
through August 1, 1991, and is pending before Judge Charles L. Brieant in the
United States District Court for the Southern District of New York. The action
alleges violations of paragraphs 10(b) and 20(a) of the Securities Exchange Act
of 1934, 15 U.S.C. paragraphs 78(j) and 78(t)(a) and state common law in
connection with the sale or exchange of ABCC common stock. Plaintiffs allege
that defendants made, or participated in the making of, materially false and
misleading statements concerning ABCC's business and/or sold ABCC common stock
while in possession of material, non-public information. Plaintiffs seek
monetary damages and other relief for the Class.
2. Plaintiffs Gerald Bloomberg, Deborah Dechtger, and Howard Gollomp filed
their initial complaints in this action in August and December, 1991 in the
Southern District of New York. Plaintiffs Sal Laurenzano and Eric Ross filed
related actions in the United States District Court for the Northern District of
Ohio in October and December 1991.
3. On February 19, 1992, the Judicial Panel on Multi-District Litigation
entered an Order, pursuant to 28 U.S.C. paragraph 1407, transferring the
LAURENZANO and ROSS actions to the Southern District of New York, for pre-trial
purposes, and consolidating all the actions (the "Action").
4. On May 28, 1992, plaintiffs filed a Consolidated and Amended
Class Action Complaint (the "Complaint"), which, among other things, added
Howard Alter as a plaintiff. Named as
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defendants were ABCC, Joseph W. Shannon, Robert A. Cutting, Gary T. Salhany,
Steven P. Smolev, Arlene Smolev, C. Rand Michaels, Herbert L. Luxenburg, J.
Larry Vowell, Hussmann Corporation, V. Ann Hailey, The Pepsi-Cola Company
("Pepsi"), and Daniel J. Stempkowski.
5. On November 16, 1993, the District Court denied defendants' motions for
summary judgment. In an Order entered November 17, 1993, the District Court
granted plaintiffs' motion to certify the Action as a Class Action pursuant to
Rule 23(c)(3) of the Federal Rules of Civil Procedure.
6. On February 24, 1994, the District Court denied in part and granted in
part defendants' motions to reargue the denial of summary judgment, and
dismissed Daniel J. Stempkowski as a defendant.
7. In February and April, 1994, the parties exchanged experts' reports
pursuant to Rule 26 of the Federal Rules of Civil Procedure.
8 In September 1994, certain of the defendants renewed their
motions for summary judgment on the basis of CENTRAL BANK OF DENVER, N.A. V.
FIRST INTERSTATE BANK OF DENVER, N.A., 114 S.Ct. 1439 (1994). The parties
reached agreement to settle this action while those motions were pending.
9. Plaintiffs' counsel have conducted an extensive investigation
relating to the Class claims and the underlying events and transactions
alleged in the Complaint, including conducting numerous party and non-party
depositions, and
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reviewing the thousands of pages of documents produced by the parties, and
non-parties, in response to plaintiffs' comprehensive document requests and
subpoenas.
10. Defendants have denied the material allegations and have asserted
numerous defenses to the claims and causes of action against them, which they
believe would be sustained if the action were to be litigated to a conclusion.
11. The parties have engaged in arm's length settlement negotiations and
have reached the agreement embodied in this Settlement Agreement with due regard
for the best interests of their respective clients.
12. Defendants have denied, and continue to deny, any wrongdoing on their
part and further deny any liability to plaintiffs or the Class. However,
defendants, without admitting or conceding liability, wish to settle this case
in order to avoid the cost, expense, disruption and uncertainties associated
with litigation of this nature.
13. It is the intention of the parties that the proposed settlement
resolve all claims which have been or which could have been brought in this
litigation as set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and other
consideration described below, and subject to approval of the Court pursuant to
Rule 23(e) of the Federal Rules of Civil Procedure, the parties agree as
follows:
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ARTICLE I
DEFINITIONS
The following terms shall have the meanings ascribed to them below (it
being understood that other terms are defined elsewhere in this Settlement
Agreement):
1.01. "APPROVED CLAIMANT" means a claimant whose claim has been approved
by the Claims Administrator. No claimant whose PRO RATA portion of the Net
Settlement Fund is less than ten dollars ($10.00) shall receive any payment. In
no event shall ABCC's transfer agent be required to transfer or issue less than
five (5) shares of stock or fractional shares of stock.
1.02. "CLAIMS ADMINISTRATOR" means ACS Financial & Securities Services
or a successor chosen by Class Counsel.
1.03. "CLASS" means all persons who purchased American Business Computers
Corp. common stock on the open market during the period January 24, 1990 through
and including August 1, 1991 (the "Class Period"). Excluded from the Class are
the defendants herein, members of the immediate family of the individual
defendants, and any subsidiary, parent or other affiliate of any defendant.
1.04. "CLASS COUNSEL" means Wolf Popper Ross Wolf & Jones, L.L.P., and
Abbey & Ellis.
1.05. "COMPLAINT" means the Consolidated and Amended Class Action
Complaint filed on May 28, 1992 in the United States District Court for the
Southern District of New York.
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1.06. "COURT" means the United States District Court for the Southern
District of New York.
1.07. "DEFENDANTS" means ABCC, Joseph W. Shannon, Robert A. Cutting,
Gary T. Salhany, Steven P. Smolev, C. Rand Michaels, Herbert L. Luxenburg, J.
Larry Vowell, V. Ann Hailey, Arlene Smolev, Hussmann Corporation, and The
Pepsi-Cola Company.
1.08. "DISTRIBUTION ORDER" means the order(s) of the Court applied for
by Class Counsel directing the distribution of the Net Settlement Fund
defined in paragraph 1.11.
1.09. "EFFECTIVE DATE" means the date when this Settlement Agreement,
including any modification thereto made with the consent of the parties, has
been approved by the Court; and (a) a final order and judgment, in substantially
the form to be filed hereafter, has been entered and such final order and
judgment is no longer subject to appeal, either because of lapse of time or
because there were no objections rejected by the Court that would give rise to a
right to appeal, or (b) if an appeal is taken from the final order and judgment,
the day after the date that such final order and judgment is finally affirmed or
the appeal is finally dismissed with no right to further appeal to any court.
1.10. "GROSS SETTLEMENT FUND" means the funds and ABCC common stock
paid into the Gross Settlement Fund pursuant to the terms of this Settlement
Agreement.
1.11. "NET SETTLEMENT FUND" means the amount remaining in the Gross
Settlement Fund after payment of Court
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<PAGE>
awarded fees and expenses of Plaintiffs' Counsel as set forth in paragraph
6.01.
1.12. "PERSON" means an individual, corporation, limited or general
partnership, association, trust, joint venture or any other entity or
organization, including a governmental or political subdivision or an agent or
instrumentality thereof.
1.13. "PLAINTIFFS' COUNSEL" shall mean Class Counsel and each of the
other counsel that have appeared for plaintiffs in this action.
1.14. "PRELIMINARY APPROVAL" means entry of an Order which in form or
substance preliminarily approves this Settlement Agreement and provides for
notice to the Class.
ARTICLE II
ESTABLISHMENT OF GROSS SETTLEMENT FUND
2.01. The Gross Settlement Fund shall be paid or caused to be paid or
transferred to Approved Claimants and to Class Counsel in the following manner.
(a) Within five (5) business days after the signing of an
order preliminarily approving and scheduling a hearing on the Settlement, ABCC
shall deposit, into a separate escrow account to be maintained by the Claims
Administrator, One Hundred Thousand ($100,000) Dollars, to be used to pay all
costs of notice and settlement administration.
(b) Defendants ABCC, Shannon, Cutting, Michaels, Luxenburg,
and Arlene and Stephen Smolev, pursuant to an allocation agreement entered into
among them, shall deposit,
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on or before seven (7) business days prior to the Settlement Hearing into a
separate escrow account established by Wolf Popper Ross Wolf & Jones, L.L.P. and
Abbey & Ellis for the benefit of the Class, the amount of One Million Eight
Hundred and Fifty Thousand ($1,850,000) Dollars.
(c) Within ten (10) business days after the Effective Date,
Pepsi and Hussmann, respectively, shall deliver to ABCC's stock transfer agent
1,000,000 shares and 400,000 shares of ABCC common stock, endorsed in blank. The
shares of ABCC common stock delivered by Pepsi and Hussmann to ABCC's stock
transfer agent shall be cancelled. Within five (5) business days thereafter, to
facilitate the settlement, ABCC will cause to be issued and delivered to its
stock transfer agent, from its authorized but unissued shares of common stock,
1,550,000 shares for distribution to Plaintiffs' Counsel and the Plaintiff
Class.
(d) ABCC represents that it has filed a Form S-2 Registration
Statement under the Securities Act of 1933 with the SEC on February 14, 1995
(Registration No. 33-89596), a copy of which is appended to this Stipulation,
covering the 1.55 million shares to be issued to Plaintiffs and Plaintiffs'
Counsel in connection with this Settlement. It is expressly agreed and
understood by all parties to this Stipulation that the shares of ABCC common
stock delivered by defendants Pepsi and Hussmann are not included in the Form
S-2 Registration Statement, and are not being sold to or offered for sale to
Plaintiffs or Plaintiffs' Counsel but, rather, are being relinquished to fund
the
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Settlement and not to enhance the value of ABCC. Within five (5) business days
after the issuance of the ABCC shares as provided in paragraph 2.01(c), ABCC
shall provide written instructions to ABCC's stock transfer agent to deliver the
Fee Shares, as defined in paragraph 6.03, to Plaintiffs' Counsel in accordance
with the written instructions of Class Counsel, as provided in paragraph 6.03.
ABCC certifies that the distribution of shares being made to Plaintiffs' Counsel
and to Approved Claimants is in compliance with the provisions of the Securities
Act of 1933, as amended, and that such shares shall not bear any restrictive
legends or be restricted in any way from transfer.
(e) Class Counsel will provide defendants with thirty (30)
days notice that the Class administration is complete and that plaintiffs intend
to petition the Court for approval of the distribution of the Net Settlement
Fund ("Notification Date"). In the event that the Average Price (as defined
herein) of ABCC common stock is below $3.00 per share, the number of shares of
stock contributed to the settlement by ABCC (the "Settlement Shares") shall be
increased in a manner sufficient to reach the minimum guaranteed value of the
stock portion of the settlement (I.E., 1,550,000 x $3 per share, or $4,650,000).
Alternatively, if the Average Price of ABCC common stock is above $4.50 per
share, the number of Settlement Shares shall be reduced in a manner sufficient
to reach the maximum guaranteed value of the stock portion of the settlement
(I.E., 1,550,000 x $4.5, or $6,975,000). The "Average Price" shall be
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the average of ABCC's closing common stock trading price as reported by THE WALL
STREET JOURNAL during the period commencing on the fifth business day following
the Notification Date and ending on the fifteenth business day following the
Notification Date (the "Calculation Period"). If, based on the calculation
required by this paragraph, ABCC is required to contribute additional shares to
the settlement, ABCC shall deliver such additional shares to ABCC's stock
transfer agent within twenty-five (25) business days after the Notification
Date. Alternatively, if, based on the calculation required by this paragraph,
ABCC is entitled to a return of shares previously contributed to the settlement
by ABCC, ABCC shall provide written instructions to ABCC's stock transfer agent
to deliver such shares to ABCC within twenty-five (25) business days after the
Notification Date.
(f) The Claims Administrator shall provide, to ABCC's transfer
agent, a list of the Approved Claimants and the number of shares each Approved
Claimant is entitled to under the Distribution Order. Within ten (10) business
days after entry of the Distribution Order, ABCC shall provide written
instructions to ABCC's stock transfer agent to deliver to the Approved Claimants
the number of ABCC shares to which they are entitled under the Distribution
Order. The stock transfer agent will cause to be transferred to the Claims
Administrator stock certificates evidencing the shares to which the Approved
Claimants are entitled under the Distribution Order.
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(g) ABCC shall be responsible for paying in full all costs of
providing notice to the Class and for settlement administration, which (i) if
more than $100,000, ABCC must contribute the full amount to the Claims
Administrator, over and above the amount provided for in paragraph 2.01(a); and
(ii) if less than $100,000, the balance of the escrow fund maintained by the
Claims Administrator pursuant to paragraph 2.01(a) shall be returned to ABCC at
the conclusion of the Claims Administration process.
2.02. Subject to Court approval under Rule 23(e) of the Federal Rules of
Civil Procedure, payment and other consideration made by Defendants in
accordance with this article shall constitute the full and final settlement of
this litigation, and Defendants shall have no further liability or obligation
except as specifically set forth herein or in the final order and judgment
entered in this action.
2.03. If Class members holding an aggregate of more than 15% of the ABCC
common stock purchased on the open market during the Class Period request
exclusion from the Class, defendants may, at their option, terminate the
Settlement Agreement as to all parties, with no further obligation except for
the payment of the costs of notice to the Class. A decision to terminate the
Settlement Agreement pursuant to this provision shall require the written
consent of all defendants. If defendants do seek to withdraw from and terminate
the Settlement as to all parties, they must provide written notice of such
withdrawal and the grounds therefore to all signatories to this
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<PAGE>
Settlement Agreement within five (5) business days after the last date to
request exclusion. As a result of any such withdrawal, this Settlement
Agreement, the Settlement proposed herein and any action taken or to be taken in
connection therewith shall be terminated and shall become void and have no
further force or effect and all negotiations, proceedings, and statements
relating thereto shall be without prejudice as to the rights of any and all
parties hereto and their respective predecessors and successors shall be
restored to their respective positions existing at the date of the Settlement
Agreement, except for the payment of notice costs by ABCC.
2.04. In connection with this Settlement, ABCC has granted separate
Warrants to each of Pepsi and Hussmann. The Pepsi Warrant allows Pepsi to
purchase up to 500,000 shares of ABCC common stock at $3.50 per share for up to
five years from the date of issue. The Hussmann Warrant allows Hussmann to
purchase up to 200,000 shares of ABCC common stock at $3.50 per share for up to
five years from the date of issue. ABCC shall deliver the Pepsi Warrant and
Hussmann Warrant to ABCC's stock transfer agent within ten (10) business days of
the Effective Date, along with letters of instruction to ABCC's stock transfer
agent (with copies to Pepsi and Hussmann). Said letters of instruction shall
direct ABCC's stock transfer agent to deliver the Pepsi Warrant and Hussmann
Warrant to Pepsi and Hussman, respectively, by first class, registered mail,
within two (2)
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business days of the cancellation of the ABCC stock, in accordance with
paragraph 2.01(c).
2.05. In connection with this Settlement, ABCC has agreed to reimburse
Steven Smolev for the attorneys' fees and costs incurred by him in defense of
this action and for which ABCC has not previously indemnified him in the amount
of $56,672.
2.06. If the Settlement is not approved by the Court pursuant to this
Settlement Agreement (including the entry of the final order and judgment by the
Court) or if approval of the settlement is reversed on appeal, the Settlement
shall be null and void and all settlement consideration received shall be
returned to the defendant that deposited it with pro rata interest earned, less
income taxes which may be due on the interest earned, and notice costs. Notice
costs shall be deducted only from the $100,000 placed by ABCC into escrow
pursuant to Section 2.01(a).
ARTICLE III
ALLOCATION AND DISTRIBUTION
3.01. ALLOCATION AND DISTRIBUTION. The Gross Settlement Fund shall be
reduced by the amount of attorneys' fees and expenses approved by the Court,
which shall be paid in accordance with Article VI. The Net Settlement Fund shall
be allocated and distributed to the Approved Claimants pursuant to a
Distribution Order and shall be paid on a PRO RATA basis, with each Approved
Claimant receiving a share of the Net Settlement Fund issued proportional to the
Recognized Loss of such Approved
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<PAGE>
Claimant to the aggregate recognized loss of all Approved Claimants. Recognized
Loss is the lesser of (i) the difference between the amount paid for ABCC common
stock during the Class Period, and (if sold during the Class Period) the amount
for which such common stock was sold, excluding brokerage commissions and fees,
and (ii) the difference between the amount paid for ABCC common stock during the
Class Period and $3.75 per share, excluding brokerage commissions and fees.
Where an Approved Claimant has made more than one purchase or sale of ABCC
common stock during the Class Period, such Approved Claimant's Recognized Loss
shall be determined on a first-in, first-out basis, by calculating the
difference between the first purchase and the first sale (or $3.75 per share),
then the difference between the second purchase and the second sale (or $3.75
per share) and so forth.
3.02. In order to receive their PRO RATA share of the Net Settlement Fund,
Class members must return a completed Proof of Claim and Substitute Form W-9
("Claim Form"), on or before the date specified by the Court.
3.03. Cash and shares not paid to claimants because of the minimum
requirements of paragraph 1.01 shall be distributed to Approved Claimants.
3.04. All funds which are not distributed to the Class shall be
distributed as the Court orders.
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ARTICLE IV
DISCHARGE OF CLAIMS
4.01. Upon the Effective Date and by operation of the final order and
judgment, any and all claims asserted in the Complaint against Defendants shall
be dismissed, discharged and released by Plaintiffs and Class members, on the
merits with prejudice and without costs except as provided in this Settlement
Agreement. All Class members, whether or not they have filed lawsuits, and
whether or not such a class member executes and delivers a Verified Proof of
Claim and Release, and their heirs, executors, administrators, successors,
and/or assigns shall be forever barred and enjoined from instituting or
prosecuting against Defendants, in any manner of action or proceeding, any
claims, whether based on any federal or state law or other right of action,
asserted or unasserted, which members of the Class had, have, or may hereafter
have against the Defendants or any of them, for, by reason of, or arising from
or in any way based on, connected with or related to the facts, circumstances,
transactions, or occurrences alleged or which could have been alleged directly
or indirectly in the Complaint.
4.02. All defendants, and any subsidiary, parent or other affiliate of any
defendant, shall be forever barred and enjoined from instituting or prosecuting
against any other Defendant, in any manner of action or proceeding, any claims,
whether based on any federal or state law or other right of action, which they
had, have, or may hereafter have against any
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other defendant for, by reason of, or arising from or in any way based on,
connected with or related to the facts, circumstances, transactions, or
occurrences alleged or which could have been alleged directly or indirectly in
this Action.
ARTICLE V
IMPLEMENTATION AND SCHEDULING
5.01. JOINT APPLICATION FOR PRELIMINARY APPROVAL.
Within five (5) business days of the signing of this
Settlement Agreement, counsel for the parties shall jointly apply to the Court
for entry of an order (the "Scheduling Order"):
A. preliminarily approving this Settlement Agreement
("Preliminary Approval");
B. approving the form of a mailed Notice of Pendency of Class
Action and Settlement Hearing (the "Notice") and authorizing that the Notice be
mailed by Plaintiffs to all Class Members by first class mail at the addresses
provided by ABCC from its stock transfer records;
C. approving the form of a Summary Notice of Pendency of
Class Action and Settlement Hearing (the "Summary Notice") to be published
once in the national edition of THE WALL STREET JOURNAL.
D. scheduling a fairness hearing (the "Hearing") to
determine whether (i) the Court should approve the Settlement Agreement as
fair, reasonable, and adequate to the Class; (ii) the Court should enter the
final order and judgment
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as provided for under this Settlement Agreement; and (iii) the Court should
award counsel fees and expense reimbursement in accordance with the provisions
of this Settlement Agreement;
E. providing a date by which requests for exclusion by
Class members from the Class must be received;
F. providing that any person who objects to the approval of
this Settlement Agreement, or the payment of attorneys' fees and reimbursement
of expenses, may appear at the Hearing and show cause why the Settlement
Agreement should not be approved as fair, reasonable and adequate and why a
judgment should not be entered thereon, or attorneys' fees paid and expenses
reimbursed in the amounts requested, and further providing that any such
objections must be in writing, and both filed with the Court and delivered to
all attorneys listed in the Notice by the date specified by the Court;
G. providing that any person who fails to make such objections
in a timely fashion shall be deemed to have waived, and shall be foreclosed
forever from making any objection to the Settlement Agreement, the payment of
fees and expenses, or the judgment to be entered thereon;
H. approving a Proof of Claim form and providing a date
by which Proofs of Claim must be received from Class members to participate
in the distribution of the Net Settlement Fund.
5.02. COOPERATION AMONG THE PARTIES. The parties agree to
cooperate in the prompt submission of this Settlement
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Agreement to the Court, to take all steps that may be required by the Court, and
otherwise to use their best efforts to consummate this Settlement and to obtain
the entry of the Final Order and Judgment, and to take all such other and
reasonably necessary actions to effectuate the terms and conditions of this
Settlement Agreement and the administration thereof.
ARTICLE VI
PLAINTIFFS' ATTORNEYS' FEES AND EXPENSES
6.01. Plaintiffs shall apply to the Court for attorneys' fees in an
aggregate amount not to exceed 30% of the Gross Settlement Fund, and for
reimbursement of actual expenses incurred in prosecuting this action. The fees
and expenses, together with interest thereon, ordered by the Court shall be paid
solely out of the Gross Settlement Fund and Defendants shall not otherwise be
liable for attorneys' fees and expenses.
6.02. The cash portion of the Court awarded attorneys' fees and
reimbursement of expenses, together with interest thereon, shall be paid from
the escrow account established for the Gross Settlement Fund upon written
instructions of Class Counsel subsequent to the Effective Date.
6.03. The stock portion of the Court awarded attorneys' fees (the "Fee
Shares") shall be paid out of the 1,550,000 shares of ABCC common stock to be
issued in connection with the settlement. Within ten (10) business days after
the Effective Date, Class Counsel shall provide ABCC's stock transfer agent with
written instructions as to the allocation of the Fee
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Shares among Plaintiffs' Counsel. ABCC's stock transfer agent, within ten (10)
business days after receipt of written instructions from Class Counsel, shall,
pursuant to Class Counsel's written instructions, deliver to Wolf Popper the
certificates issued in the name of each of Plaintiffs' Counsel. The Fee Shares,
if denominated in dollars rather than shares of stock, shall be valued at the
average closing price of ABCC stock as listed in THE WALL STREET JOURNAL for the
ten (10) consecutive trading days starting with the date of the Hearing. Class
Counsel agree not to sell or transfer, or deliver to other Plaintiffs' Counsel,
the shares issued to them under this Stipulation until the end of the
Calculation Period.
ARTICLE VII
MISCELLANEOUS
7.01. CLASS COUNSEL REPRESENTATION AND WARRANTY. Class Counsel represent
and warrant that they have received from Defendants, and other persons,
documents and other information that they deem necessary to support the fairness
and adequacy of the settlement set forth in this Settlement Agreement.
7.02. SUCCESSORS AND ASSIGNS. This Settlement Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors, assigns, executors, administrators, heirs and legal representatives,
as the case may be; provided, however, that no assignment by any party hereto
shall operate to relieve such party of its obligations hereunder.
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7.03. COUNTERPARTS. This Settlement Agreement may be executed in two
or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
7.04. SOLE AND ENTIRE AGREEMENT; MODIFICATIONS. This Settlement Agreement,
and the exhibits hereto, constitute the sole and entire agreement among the
parties hereto with respect to the subject matter hereof (with the exception of
the Agreement Among Defendants on Allocation of the Settlement Amount, referred
to in Section 2.01(b), and the Warrants, referred to in Section 2.04) and no
representations, warranties, inducements, promises, or agreements oral or
otherwise not embodied or incorporated herein, have been made concerning or in
connection with this Settlement Agreement, or the exhibits hereto. Any and all
prior discussions, negotiations, agreements, commitments and understandings
relating thereto, are superseded hereby and merged herein. The provisions of
this Settlement Agreement (including any time periods specified herein) may be
modified by written agreement of all of the parties with the consent of the
Court without further notice to the Class unless the Court requires such notice.
The terms or provisions of this Settlement Agreement may not be changed, waived,
modified or varied in any manner whatsoever unless in writing duly signed by all
parties. Any failure by any party to insist upon the strict performance by any
other party of any of the provisions of this agreement shall not be deemed a
waiver of any of the provisions
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hereof, and such party, notwithstanding such failure, shall have the right
thereafter to insist upon the strict performance of any and all of the
provisions of this agreement to be performed by such other party.
7.05. GOVERNING LAW. This Settlement Agreement, including, but not limited
to, the releases contained herein, shall be governed by, and construed in
accordance with the laws of the State of New York, without regard to its
conflict of laws principles. This Settlement Agreement shall be enforced solely
in this Court. Defendants and members of the Class waive any objection which
each such party may now have or hereafter have to the venue of any such suit,
action, or proceeding and irrevocably consents to the jurisdiction of the Court
in any such suit, action or proceeding and agrees to accept and acknowledge
service of any and all process which may be served in any such suit, action or
proceeding.
7.06. NO ADMISSION. This Settlement Agreement and all papers relating to
it are not, and shall not be construed to be, an admission by any party of
either the validity of any of the claims or defenses asserted in this Action or
of liability with respect to any such claims of any wrongdoing by them
whatsoever. Defendants deny all allegations of wrongdoing alleged in the
Complaint.
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7.07. ARM'S-LENGTH NEGOTIATIONS AND INTERPRETATION OF SETTLEMENT
AGREEMENT.
A. The Settlement Agreement, including the exhibits attached
hereto, was executed after arm's-length negotiations among the parties and
reflects the conclusion of Class Counsel and counsel for Defendants that the
Settlement Agreement, and the settlement contemplated hereby, are fair,
equitable and in the best interests of each of their respective clients.
B. This Settlement Agreement shall not be construed more
strictly against one party than another merely by virtue of the fact that it may
have been prepared by counsel for one of the parties, it being recognized that,
because of the arm's-length negotiations described above, all parties hereto
have contributed substantially and materially to the preparation of this
Settlement Agreement.
7.08. TERMINOLOGY AND CONSTRUCTION. All personal pronouns used in this
Settlement Agreement, whether used in the masculine, feminine or neuter
gender, shall include all other genders, and the singular shall include the
plural and vice versa.
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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their respective counsel as of
March 13, 1995 WOLF POPPER ROSS WOLF & JONES, L.L.P.
By: LESTER L. LEVY /S/
------------------------------
Lester L. Levy (LL9956)
Robert C. Finkel (RF2373)
845 Third Avenue
New York, NY 10022
(212) 759-4600
Plaintiffs' Co-Lead Counsel
ABBEY & ELLIS
BY: JILL ABRAMS BY RCF /S/
-----------------------------
Jill Abrams (JA1578)
212 East 39th Street
New York, NY 10016
(212) 889-3700
Plaintiffs' Co-Lead Counsel
AMERICAN BUSINESS COMPUTERS CORP.
BY: ROBERT A. CUTTING /S/
-----------------------------
Pres./CEO
THE PEPSI-COLA COMPANY
BY: GERARD W. CASEY /S/
-----------------------------
Vice President
HUSSMAN CORPORATION
BY: BURTON HALPERN /S/
-----------------------------
Burton Halpern
Vice President
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JOSEPH W. SHANNON /S/
-----------------------------
Joseph W. Shannon
ROBERT A CUTTING /S/
-----------------------------
Robert A. Cutting
GARY T. SALHANY /S/
-----------------------------
Gary T. Salhany
V. ANN HAILEY /S/
-----------------------------
V. Ann Hailey
HERBERT L. LUXENBURG /S/
-----------------------------
Herbert L. Luxenburg
STEVEN P. SMOLEV /S/
-----------------------------
Steven P. Smolev
C. RAND MICHAELS /S/
-----------------------------
C. Rand Michaels
ARLENE SMOLEV /S/
-----------------------------
Arlene Smolev
J. LARRY VOWELL /S/
-----------------------------
J. Larry Vowell
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