SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 1)*
Audio Book Club, Inc.
(Name of Issuer)
Common Stock, no par value
(Title of Class of Securities)
05068R 10 8
(CUSIP Number)
Brad Shiffman, Esq.
Tenzer Greenblatt LLP
405 Lexington Avenue, New York, New York 10174 (212) 885-5442
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(Name, Address and Telephone Number of Person Authorized
to Receive Notice and Communications)
June 11, 1999
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
|_|.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 6 Pages
<PAGE>
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CUSIP NO. 05068R-10-8 Page 2 of 6 Pages
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________________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Norton Herrick
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
PF, OO
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
________________________________________________________________________________
7 SOLE VOTING POWER
3,307,638 (includes options, warrants and a convertible note
NUMBER OF to acquire an aggregate of 3,299,438 shares of Common Stock)
as of June 16, 1999
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
4,284,558 (includes options, warrants and a convertible note
REPORTING to acquire an aggregate of 3,299,438 shares of Common Stock)
as of June 16, 1999
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,284,558 (includes options, warrants and a convertible note
to acquire an aggregate of 3,299,438 shares of Common Stock)
as of June 16, 1999
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[X]
Does not include (i) 2,714,180 shares held by N. Herrick
Irrevocable ABC Trust (the "N. Herrick Trust"), of which
Norton Herrick is the sole beneficiary and in which he
therefore may be deemed to have an economic interest and
(ii) 775,000 shares issuable upon exercise of options which
are not exercisable until October 9, 1999. Mr. Herrick does
not have voting power or dispositive power with respect to
the 2,714,180 shares held by the N. Herrick Trust.
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.6%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEM 1-7 (INCLUDING EXHIBITS)
OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 2 of 6 Pages
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Item 1. Security and Issuer.
This statement relates to the Common Stock, no par value ("Common Stock")
issued by Audio Book Club, Inc., a Florida corporation (the "Company"), whose
principal executive offices are located at 2295 Corporate Boulevard, Suite 222,
Boca Raton, Florida 33431. All share information in this statement gives
retroactive effect to a 16,282-for-1 split of the Common Stock effected in
October 1997.
Item 2. Identity and Background.
This statement is filed by Norton Herrick, Co-Chief Executive Officer and a
principal shareholder of the Company (the "Reporting Person"). The business
address of the Reporting Person is c/o Audio Book Club, Inc., 2295 Corporate
Boulevard, Suite 222, Boca Raton, Florida 33431. The Reporting Person is a
United States citizen.
Mr. Herrick has not, during the last five years (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors), or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violations with respect to such laws.
Item 3. Source and Amount of Funds or other Consideration.
On June 11, 1999, the Company issued to the Reporting Person a convertible
note (the "Note") initially convertible into 391,011 shares of Common Stock at
any time until the earlier of the repayment of the Note or December 31, 2004.
The Note was issued to the Reporting Person in consideration of his loan to the
Company in the principal amount of $4,350,000 (the "Loan") the proceeds of which
were used by the Company to fund a portion of the purchase price of the
Audiobooks Direct business of Doubleday Direct, Inc. which was acquired by the
Company on June 14, 1999. The number of shares issuable upon conversion of the
Note are subject to certain anti-dilution and other adjustments.
Item 4. Purpose of Transaction.
The Note was acquired by the Reporting Person to provide the Company with
the funds necessary to complete the acquisition referred to in Item 3 above. The
Reporting Persons may make additional purchases of Common Stock from time to
time
Page 3 of 6 Pages
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and may dispose of any or all of the shares of Common Stock held by him at any
time. The Reporting Person has no plans or proposals which relate to, or could
result in any of the matters referred to in Paragraphs (b) through (j) of Item 4
of Schedule 13D although in his capacity as a director and executive officer of
the Company he will be involved in any decisions of the Company to issue
additional securities and to continue the Company's strategy which includes
pursuing acquisitions of complementary businesses. The Reporting Person may
review or reconsider his position with respect to the Company or to formulate
plans or proposals with respect to any such matters, but, except as noted above,
has no present intention of doing so.
Item 5. Interest in Securities of the Issuer.
As of the June 16, 1999, the Reporting Person beneficially owned an
aggregate of 4,284,558 shares of Common Stock constituting approximately 38.6%
of the outstanding Common Stock. The amount includes: (i) 8,200 shares owned of
record by the Reporting Person, (ii) 1,000,000 shares issuable upon Plan options
granted to the Reporting Person, (iii) 500,000 shares issuable upon exercise of
the Warrants, (iv) 1,258,427 shares issuable upon conversion of a promissory
note issued to the Reporting Person on December 31, 1998 (the "December Note"),
(v) 488,460 shares owned of record by H. Herrick, of which the Reporting Person
has sole dispositive but no voting power, (vi) 488,460 shares owned of record by
the M. E. Herrick Trust, of which the Reporting Person has sole dispositive but
no voting power, (vii) 150,000 shares issuable upon exercise of Plan options
granted to Evan Herrick, of which the Reporting Person has sole voting and
dispositive power, and (viii) 391,011 shares issuable upon conversion of the
Note. The foregoing calculation does not include the 2,714,180 shares owned of
record by the N. Herrick Trust, of which the Reporting Person is the sole
beneficiary but has no voting or dispositive power. The percentage used herein
is calculated based upon the 7,828,920 shares of Common Stock issued and
outstanding at June 16, 1999, as provided by the Company. Except for the shares
owned of record by H. Herrick and the M.E. Herrick Trust as to which the
Reporting Person has sole dispositive power, but no voting power, the Reporting
Person has sole voting and dispositive power with respect to all the shares of
Common Stock to which this statement relates. The Reporting Person has not
effected any transactions in shares of the Common Stock in the past 60 days
other than as indicated above.
Except as noted below, no person other than the Reporting Person has the
right to receive or the power to direct receipt of dividends from, or the
proceeds of, the sale of the shares of Common Stock. H. Herrick has the right to
receive
Page 4 of 6 Pages
<PAGE>
dividends and proceeds from any disposition of shares of Common Stock owned of
record by him. The M.E. Herrick Trust, whose sole beneficiary is M. Herrick, has
the right to receive any dividends on any shares owned of record by the M.E.
Herrick Trust and the proceeds from any sale of Common Stock by the M.E. Herrick
Trust.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
Other than as set forth above, there are no contracts, arrangements,
understandings or relationships with the Reporting Persons or any other person
with respect to the securities of the Issuer, including but not limited to
transfer or voting of any other securities, finders' fees, joint ventures, loan
or option arrangements, puts or calls, guaranties of profits, divisions of
profits or loss or the giving or withholding of proxies except that pursuant to
(i) a December 31, 1998 letter agreement between the Reporting Person and the
Company, the Company may be obligated to issue to the Reporting Person warrants
to purchase 350,000 shares of Common Stock at $12.00 per share in certain
circumstances involving the refinancing of the December Note and (ii) pursuant
to a June 11, 1999 letter agreement between the Reporting Person and the
Company, the Company may be obligated to issue to the Reporting Person warrants
to purchase 125,000 shares of Common Stock at a price of $12.00 per share in
certain circumstances involving the refinancing of the Note.
The Reporting Person has received certain registration rights with respect
to the shares of Common Stock beneficially owned by him.
Item 7. Materials to be filed as Exhibits.
Exhibit 1 June 11, 1999 financing letter agreement between the Company and the
Reporting Person.
Page 5 of 6 Pages
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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.
DATE: June 16, 1999
/s/ Norton Herrick
-------------------------
Norton Herric
Page 6 of 6 Pages
Exhibit 1
AUDIO BOOK CLUB, INC.
20 COMMUNITY PLACE
P.O. BOX 2346
MORRISTOWN, NJ 07962-2346
June 11, 1999
Mr. Norton Herrick
2295 Corporate Blvd., N.W.
Suite 222
P.O. Box 5010
Boca Raton, FL 33431
Dear Mr. Herrick:
As an inducement to, and in consideration of, your purchase from Audio
Book Club, Inc. (the "Company"), of the Company's 9% Convertible Senior
Subordinated Promissory Note Due December 31, 2004 (the "Note") in the principal
amount of $4,350,000, the Company hereby agrees as follows (capitalized terms
used and not otherwise defined herein having the meanings ascribed to them in
the Note):
1. The officers of the Company (other than Norton, Michael or Howard
Herrick) shall use their best efforts to seek to refinance or replace the Note
with debt or equity financing and will consider all proposals and accept a
proposal (which is permitted under the Senior Credit Facilities or consented to
by the lenders thereunder) whether or not (i) as favorable as the terms of the
Note, including, without limitation, those providing for a principal amount of
up to $6.5 million, a higher interest rate, the issuance of warrants, a lower
conversion price (or a variable conversion price based on the future market
price of the Company's Common Stock) for the Note; (ii) involving the issuance
of equity securities, including shares of preferred stock with a variable
conversion rate and mandatory redemption features; and/or (iii) requiring the
payment of financing, placement or other fees.
2. In the event refinancing is obtained from anyone other than the
Herricks or an Affiliate of any of the Herricks, upon receipt of approval of the
Company's shareholders (which the Company's Board of Directors has agreed to
recommend to the Company's shareholders), you shall be issued additional
warrants (identical to the Warrants) to purchase 125,000 shares of Common Stock.
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3. In the event that (i) an offer is presented to the Company's Board
of Directors to provide debt or equity refinancing of the Note (which is
permitted under the Senior Credit Facilities or consented to by the lenders
thereunder) and such refinancing is not accepted by the Company's board of
directors or (ii) debt or equity refinancing is not obtained by the Company on
or prior to July 15, 1999, in either case, at your option, after July 15, 1999,
and upon receipt of approval of the Company's shareholders (which the Company's
Board of Directors has agreed to recommend to the Company's shareholders), (a)
the interest rate on the Note will increase to 11%, except that no increase in
the interest rate on the Note shall be permitted or may be effected prior to
January 1, 2000 other than non-current pay interest which accrues and is not
payable in cash until final maturity of the Note, (b) the conversion price of
the Note will be decreased to the lesser of the conversion price then in effect
or the average of the closing bid price of the Common Stock for the five trading
days prior to conversion, and (c) you shall have all other rights and remedies
available to you.
4. If the Herricks or any of them are the holder of the Note and make
a Demand Registration Request (as defined in Section 3(a) of the Registration
Rights Agreement dated as of the date hereof between you and the Company), the
Company shall make and maintain the filings called for by said Section 3(a) so
as to permit a public offering and sale of all of the Registrable Securities (as
defined in the Registration Rights Agreement) by the holders thereof for a
period of twenty-four (24) months or until the seventh anniversary of the date
hereof, whichever is longer.
The Company acknowledges that your holding of the Note
(notwithstanding the terms thereof) from the Company was intended to be
short-term financing and serve as a bridge to replacement financing. However,
Fleet National Bank requires the Note to mature following the expiration of the
Senior Credit Facilities and, therefore, you agreed to the terms of the Note as
an accommodation to the Company.
AUDIO BOOK CLUB, INC.
By: /s/ John F. Levy
---------------------------
Name: John F. Levy
Title: EVP/CFO
Accepted and Agreed:
/s/ Norton Herrick
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Norton Herrick
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