<PAGE> 1
Rule 424(b)(3)
FILE NO. 33-88768
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE 1, 1995)
1,000,000 Shares
MICROS(R)
MICROS SYSTEMS, INC.
Common Stock
(par value $.025 per share)
All of the shares of Common Stock, par value $.025 per share (the "Common
Stock"), of MICROS Systems, Inc. (the "Company") offered hereby are being sold
by Westinghouse Holdings Corporation (the "Selling Stockholder"), a wholly-owned
subsidiary of Westinghouse Electric Corporation ("Westinghouse"). See "Principal
and Selling Stockholder." The Company will not receive any proceeds from the
sale of such shares. Upon consummation of the offering made hereby, Westinghouse
will own, through the Selling Stockholder, 3,849,123 shares of Common Stock,
representing approximately 49% of the currently outstanding Common Stock.
The Common Stock is quoted on the Nasdaq National Market under the symbol
"MCRS." On July 5, 1995, the reported last sale price for the Common Stock, as
quoted on the Nasdaq National Market, was $33.50 per share. See "Price Range of
Common Stock and Dividend Policy."
SEE "RISK FACTORS" ON PAGES 4-6 OF THE ACCOMPANYING PROSPECTUS FOR CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
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 SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT(1) STOCKHOLDER(2)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
Per Share $31.00 $.93 $30.07
- -------------------------------------------------------------------------------------------------
Total $31,000,000 $930,000 $30,070,000
- -------------------------------------------------------------------------------------------------
<FN>
(1) The Company and Westinghouse have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(2) Before deducting expenses payable by Westinghouse estimated at $1,150,000.
</TABLE>
The shares of Common Stock offered by this Prospectus Supplement are being
offered by the Underwriters, subject to prior sale, when, as and if delivered to
and accepted by the Underwriters, and subject to approval of certain legal
matters by Cahill Gordon & Reindel, counsel for the Underwriters, and certain
other conditions. It is expected that delivery of certificates representing the
shares of Common Stock will be made against payment therefor on or about July
11, 1995 at the offices of J.P. Morgan Securities Inc., 60 Wall Street, New
York, New York 10260.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO.
INCORPORATED
SMITH BARNEY INC.
July 6, 1995
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
No person is authorized to give any information or to make any representation
not contained or incorporated by reference in this Prospectus Supplement or the
accompanying Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company,
Westinghouse, the Selling Stockholder or any Underwriter. Neither this
Prospectus Supplement nor the accompanying Prospectus constitutes an offer to
sell or a solicitation of an offer to buy any securities in any jurisdiction in
which such offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to any person to whom it
is unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus Supplement or the accompanying Prospectus nor any sale made hereunder
or thereunder shall, under any circumstances, create any implication that the
information contained herein or therein is correct as of any time subsequent to
the date hereof or thereof.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
Page
<S> <C>
Price Range of Common Stock and
Dividend Policy..................... S-3
Underwriting.......................... S-4
</TABLE>
PROSPECTUS
<TABLE>
<CAPTION>
Page
<S> <C>
Available Information................. 3
Incorporation of Certain Documents by
Reference........................... 3
The Company........................... 4
Risk Factors.......................... 4
Use of Proceeds....................... 6
Management Compensation and Changes... 7
Principal and Selling Stockholder..... 8
Description of Capital Stock.......... 9
Plan of Distribution.................. 11
Legal Matters......................... 12
Experts............................... 12
</TABLE>
S-2
<PAGE> 3
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Company's Common Stock is traded on the Nasdaq National Market under the
symbol "MCRS." The following table sets forth, on a per share basis for the
periods indicated, the high and low sale prices of the Common Stock on the
Nasdaq National Market.
<TABLE>
<CAPTION>
-------------
SALE PRICE
HIGH LOW
---- ----
<S> <C> <C>
Fiscal Year Ended June 30, 1994:
First Quarter $20 1/2 $13 1/2
Second Quarter 26 14 3/4
Third Quarter 29 1/2 23 1/4
Fourth Quarter 27 3/4 22 1/2
Fiscal Year Ended June 30, 1995:
First Quarter $33 1/2 $26 1/4
Second Quarter 41 1/4 28 3/4
Third Quarter 38 1/8 28
Fourth Quarter 35 27 3/4
Fiscal Year Ending June 30, 1996:
First Quarter (through July 5, 1995) $33 3/4 $32 1/4
</TABLE>
On July 5, 1995, the reported last sale price for the Common Stock, as quoted on
the Nasdaq National Market, was $33.50 per share. As of December 31, 1994, there
were approximately 547 stockholders of record.
The Company has never paid a dividend on the Common Stock. Its current policy is
to retain earnings and use funds for the operation and expansion of its
business. In addition, the Company is a party to an unsecured committed line of
credit which prohibits the payment of dividends other than stock dividends.
Future dividend policy will be determined by the Company's Board of Directors
based on the Company's earnings, financial condition, capital requirements and
other existing conditions, including restrictions in any loan agreements that
may be in effect. The Company does not currently anticipate paying any cash
dividends in the foreseeable future.
S-3
<PAGE> 4
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date hereof (the "Underwriting Agreement"), the Underwriters
named below have severally agreed to purchase, and the Selling Stockholder has
agreed to sell to them, severally, the respective number of shares of Common
Stock set forth opposite their names below:
<TABLE>
<CAPTION>
---------
NUMBER OF
SHARES
---------
<S> <C>
UNDERWRITERS
J.P. Morgan Securities Inc. 700,000
Morgan Stanley & Co. Incorporated 150,000
Smith Barney Inc. 150,000
---------
Total 1,000,000
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of Common Stock
offered hereby are subject to the approval of certain legal matters by their
counsel and to certain other conditions. The Underwriters are committed to take
and pay for all of the shares of Common Stock offered hereby if any are taken.
The Underwriters initially propose to offer the shares of Common Stock offered
hereby in part directly to the public at the public offering price set forth on
the cover page of this Prospectus Supplement and in part to certain dealers at
such price less a concession not in excess of $.57 per share. The Underwriters
may allow, and such dealers may reallow, a concession not in excess of $.10 per
share to certain other dealers. After the initial offering of the Common Stock
offered hereby, the public offering price and such concessions may be changed.
In the Underwriting Agreement, the Company and Westinghouse have agreed to
indemnify the Underwriters against certain liabilities, including liabilities
under the federal securities laws, or to contribute to payments which the
Underwriters may be required to make in respect thereof.
The Company, each of its directors and principal executive officers,
Westinghouse and the Selling Stockholder have agreed not to offer, sell,
contract to sell or otherwise dispose of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
(except for the shares offered hereby and shares issuable upon the exercise of
currently outstanding options and the grant of options pursuant to the Company's
existing stock option plans) for a period of 60 days after the date of this
Prospectus Supplement, without the prior written consent of J.P. Morgan
Securities Inc.
S-4
<PAGE> 5
PROSPECTUS
4,849,123 Shares
MICROS(R)
MICROS SYSTEMS, INC.
Common Stock
(par value $.025 per share)
Up to 4,849,123 shares of Common Stock, par value $.025 per share (the "Common
Stock"), of MICROS Systems, Inc. (the "Company") may be offered from time to
time by Westinghouse Electric Corporation ("Westinghouse") or Westinghouse
Holdings Corporation, a wholly-owned subsidiary of Westinghouse ("Transferee"),
to whom Westinghouse may transfer any or all shares of Common Stock owned by
it prior to any sale thereof (Westinghouse and Transferee are hereinafter
referred to collectively as the "Selling Stockholder"). See "Principal and
Selling Stockholder." The Company will not receive any proceeds from the sale
of such shares.
The Common Stock is quoted on the Nasdaq National Market under the symbol
"MCRS."
SEE "RISK FACTORS" FOR INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE
INVESTORS.
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.
The shares of Common Stock to which this Prospectus relates may from time to
time be offered and sold by the Selling Stockholder to or through underwriters,
through one or more agents or dealers or directly to purchasers. There is no
agreement at this time between the Selling Stockholder and any underwriter with
respect to such shares of Common Stock. The name of any underwriter, dealer or
agent involved in the offering of any of such shares of Common Stock will be set
forth in the accompanying Prospectus Supplement. The accompanying Prospectus
Supplement will also set forth the amounts proposed to be purchased by such
underwriter, dealer or agent, any applicable fee, commission or discount
arrangements with them and the initial offering price. Unless otherwise
specified in the accompanying Prospectus Supplement, the Selling Stockholder
will have the sole right to accept or reject, in whole or in part, any offer to
purchase shares of Common Stock and reserves the right to withdraw, cancel or
modify, without notice, the offer to sell shares of Common Stock contained in
this Prospectus and in any accompanying Prospectus Supplement. See "Plan of
Distribution" for possible indemnification arrangements for the agents and
underwriters. This Prospectus may not be used in connection with the sale of any
Common Stock unless accompanied by the applicable Prospectus Supplement.
June 1, 1995
<PAGE> 6
No person is authorized to give any information or to make any representation
not contained or incorporated by reference in this Prospectus or any
accompanying Prospectus Supplement and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company,
the Selling Stockholder or any underwriter, agent or dealer. Neither this
Prospectus nor any accompanying Prospectus Supplement constitutes an offer to
sell or a solicitation of an offer to buy any securities in any jurisdiction in
which such offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to any person to whom it
is unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus or any accompanying Prospectus Supplement nor any sale made hereunder
or thereunder shall, under any circumstances, create any implication that the
information contained herein or therein is correct as of any time subsequent to
the date hereof or thereof.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Available Information....................... 3
Incorporation of Certain Documents by
Reference................................. 3
The Company................................. 4
Risk Factors................................ 4
Use of Proceeds............................. 6
Management Compensation and Changes......... 7
Principal and Selling Stockholder........... 8
Description of Capital Stock................ 9
Plan of Distribution........................ 11
Legal Matters............................... 12
Experts..................................... 12
</TABLE>
2
<PAGE> 7
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission at the Commission's
office at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Regional
Offices of the Commission at 7 World Trade Center, New York, New York 10048 and
500 West Madison Street, 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. The Common Stock is
quoted on the Nasdaq National Market and reports, proxy statements and other
information concerning the Company can be inspected and copied at the offices of
Nasdaq Operations, 1735 K Street, N.W., Washington, D.C. 20006.
This Prospectus does not contain all the information set forth in the
Registration Statement of which this Prospectus is a part, or any amendments
thereto, certain portions of which have been omitted pursuant to the
Commission's rules and regulations. The information so omitted may be obtained
from the Commission's principal office in Washington, D.C. upon payment of the
fees prescribed by the Commission. Any statements contained herein concerning
the provisions of any document are not necessarily complete, and in each
instance reference is made to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
(File No. 0-9993) are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1994;
(ii) the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended September 30, 1994, December 31, 1994 and March 31,
1995;
(iii) the Company's Current Reports on Form 8-K dated October 11, 1994,
November 14, 1994 and February 28, 1995; and
(iv) the description of the Common Stock contained in the Company's
Registration Statement on Form 8-A dated October 23, 1981 by
incorporation by reference to the Company's Registration Statement
on Form S-1 (Registration No. 2-69969) and in the amendment to the
Company's Charter filed December 8, 1986 included as part of
Exhibit 3 to the Company's Annual Report of Form 10-K for the
fiscal year ended June 30, 1990.
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 of this
Prospectus and prior to the termination of the offering of the Common Stock
offered hereby shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be 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
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute part of this Prospectus. The Company will provide without charge
to each person to whom this Prospectus is delivered, upon such person's written
or oral request, a copy of any and all of the documents that have been
incorporated by reference in this Prospectus (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
such documents). Any such request should be directed to the Corporate Secretary
of MICROS Systems, Inc., 12000 Baltimore Avenue, Beltsville, Maryland 20705-1291
(telephone number (301) 210-6000).
3
<PAGE> 8
THE COMPANY
References to MICROS or the Company herein shall refer to MICROS Systems, Inc.
and its subsidiaries, unless the context otherwise indicates.
The Company is a leading worldwide designer, manufacturer, supplier and servicer
of point-of-sale ("POS") computer systems for hospitality providers, principally
full service and fast food restaurants, including restaurants located in hotels
and other lodging establishments. MICROS POS systems consist of terminals,
display devices, printers, computers and software which provide transaction
processing, in-store control and information management capabilities. The
Company also markets and distributes property management information systems
("PMS") products which provide reservation, guest accounting and other
information management capabilities to hotels and other lodging establishments.
The PMS products marketed and distributed by the Company are supplied by Fidelio
Software GmbH, a German company ("Fidelio"). MICROS owns a 30% interest in
Fidelio and has an option to acquire the remaining 70%. The Company also
provides service and support for its POS and PMS products, including
installation, training, hardware and software maintenance, spare parts, media
supplies and consulting services.
MICROS Systems, Inc. was incorporated in the State of Maryland in 1977 as Picos
Manufacturing, Inc. and, in 1978, changed its name to MICROS Systems, Inc. The
Company's executive offices and its main administrative, manufacturing, sales,
marketing, customer service and product development facilities are located at
12000 Baltimore Avenue, Beltsville, Maryland 20705-1291, and its telephone
number is (301) 210-6000.
As of December 31, 1994, MICROS was a 61.8%-owned subsidiary of Westinghouse.
RISK FACTORS
HOSPITALITY INDUSTRY ECONOMY
MICROS product sales are dependent in large part on the health of the
hospitality industry, which in turn is dependent on levels of travel, tourism
and business entertaining. Although the hospitality industry has recently
experienced profitability and growth after a recessionary period, there can be
no assurance that profitability and growth will continue. The hospitality
industry is affected by a variety of factors, including war, global and regional
instability, natural disasters and general economic conditions. Adverse
developments in the hospitality industry could materially adversely affect the
Company's business, operating results and financial condition.
COMPETITION
The markets in which the Company competes are highly competitive. There are
currently at least three dozen suppliers who offer some form of sophisticated
POS system similar to the Company's and over 100 PMS competitors worldwide. Some
of these competitors are larger than the Company and have access to
substantially greater financial and other resources than does the Company. The
rapid rate of technological change in the industry ensures that the Company will
face competition not only from new products designed by existing companies, but
also from products designed by companies not presently competing with the
Company, which products may have features not presently available on MICROS
products. The Company believes that its competitive ability depends on its
product development capability, its extensive distribution channels in the POS
and the PMS markets and its customer service capability. There can be no
assurance that the Company will be able to continue to compete effectively in
the future.
DEPENDENCE UPON KEY PERSONNEL; MANAGEMENT OF POTENTIAL GROWTH
The Company's future success and potential growth depend in part on its ability
to retain its key management and technical and sales personnel and to recruit,
train and retain sufficient numbers of other highly qualified managerial,
technical and sales personnel on a continuing basis. There can be no assurance
that the Company will be able to retain its key management or technical and
sales personnel or that it will be able to attract and retain sufficient numbers
of other highly qualified managerial, technical and sales personnel. The
inability to retain or attract such personnel could materially adversely affect
the Company's business, operating results and financial condition. In addition,
the Company's ability to manage potential growth successfully will require the
Company to continue to improve its operational, management and financial systems
and controls.
4
<PAGE> 9
RESEARCH AND DEVELOPMENT; TECHNOLOGICAL CHANGE
The products sold by the Company are subject to rapid and continual
technological change. Products available from the Company, as well as
competitors, have increasingly offered a wider range of features and
capabilities. The Company's product development strategy is to provide upwardly
compatible systems incorporating the newest technologies. There can be no
assurance that the Company will be able to continue funding research and
development at levels sufficient to enhance its current product offerings or
will be able to develop and introduce on a timely basis new products that keep
pace with technological developments and emerging industry standards and address
the evolving needs of its customers. There also can be no assurance that the
Company will not experience difficulties that will result in delaying or
preventing the successful development, introduction and marketing of new
products or that its new products and product enhancements will adequately meet
the requirements of the marketplace or achieve any significant degree of market
acceptance. The inability of the Company, for any reason, to develop and
introduce new products and product enhancements in a timely manner in response
to changing market conditions or customer requirements could materially
adversely affect the Company's business, operating results and financial
condition.
GROWTH RATE AND MARGINS
The Company has recently experienced rapid revenue growth at a rate that it
believes has significantly exceeded that of the global market for POS computer
systems and PMS products for the hospitality industry. Although the Company
currently anticipates continued revenue growth at a rate in excess of such
market, and therefore an increase in its overall market share, it does not
expect to maintain growth at recent levels and there can be no assurance that
any particular level of growth can be achieved. In addition, due to the
competitive nature of the market, the Company recently has experienced greater
gross margin pressure on its products than it has in the past, and the Company
expects this trend to continue. There can be no assurance that the Company will
be able to sufficiently increase sales of its higher margin products, including
software and services, to prevent declines in the Company's overall gross
margin.
FLUCTUATIONS IN QUARTERLY RESULTS
The Company's quarterly operating results have varied in the past and may vary
in the future depending upon such factors as the timing of new product
introductions, changes in the pricing and promotion policies of the Company and
its competitors, market acceptance of new products and enhanced versions of
existing products and the capital expenditure budgets of its customers. Although
the Company does not consider its business to be seasonal, for a variety of
reasons, including certain of those noted above, during each of the past three
fiscal years and the current fiscal year the Company's revenue and income from
operations in the third fiscal quarter have shown declines from those for the
second fiscal quarter. The Company believes that quarter-to-quarter comparisons
of its results of operations are not necessarily meaningful or indicative of
future performance.
DEPENDENCE ON PMS SUPPLIER
The failure of Fidelio to continue to develop PMS products or other adverse
developments in the business of Fidelio or the Company's relationship with
Fidelio could adversely affect the Company's ability to supply PMS products and,
as a result, could materially adversely affect the Company's business, operating
results and financial condition.
INCREASED COSTS AS AN INDEPENDENT COMPANY
Westinghouse has heretofore arranged for the provision of certain services to
the Company at costs less than the Company believes it could have obtained on
its own. These arrangements will be replaced by the Company with its own
contracts as and when the Company elects to do so or is no longer eligible to
participate in such arrangements. The Company estimates that the incremental
cost to it of purchasing such services without the benefit of participating in
programs of Westinghouse could total approximately $1.0 million per year on a
pre-tax basis. See "Principal and Selling Stockholder." As of the effective date
of the Registration Statement of which this Prospectus is a part, the Company's
President and Chief Executive Officer became a full-time employee of the
Company. Prior to such date, he was a full-time employee of Westinghouse and was
compensated by Westinghouse, receiving no compensation from the Company. His
compensation arrangement with the Company extends through December 31, 1999 and
provides for a fiscal 1995 salary at an annual rate of $193,000 and a fiscal
1995 target bonus of $110,000, the actual amount of the bonus paid to be based
on certain performance criteria and not to exceed 200% of the target bonus. Such
annual salary and target bonus will each increase $10,000 each July 1 hereafter.
See "Management Compensation and Changes."
5
<PAGE> 10
In addition, Westinghouse, as an incentive to 11 key officers to remain with the
Company for a period of two years following the effective date of the
Registration Statement of which this Prospectus is a part, has agreed to make
payments to such officers aggregating up to approximately $1.25 million, payable
in three equal installments promptly after such effective date and on the first
and second anniversaries of such effective date (subject to the officer
remaining employed by the Company on the relevant payment date). Even though
such payments will be entirely funded by Westinghouse and will not require any
use of the Company's cash, for accounting purposes, one-third of such payments
will be required to be reflected as compensation expense in the Company's
financial statements on the first payment date with the remainder to be
reflected as compensation expense over the 24-month period following the
effective date of the Registration Statement of which this Prospectus is a part.
MARKET FOR COMMON STOCK
The Company's Common Stock is quoted on the Nasdaq National Market. Prior to the
date of this Prospectus, there has been limited trading in the Common Stock and
there can be no assurance that an active market for the Common Stock will
develop or continue after any sale of shares of Common Stock to which this
Prospectus relates. Accordingly, no assurance can be given as to the liquidity
of the market for the Common Stock or the price at which any sales may occur,
which price will depend upon a number of factors, many of which are beyond the
control of the Company.
POSSIBLE EFFECTS OF MARYLAND ANTI-TAKEOVER PROVISIONS
Certain provisions of the Maryland General Corporation Law (the "MGCL") may
discourage persons or entities from attempting to gain control of a corporation
that is subject to such provisions. The MGCL imposes certain statutory
requirements with respect to "business combinations," such as mergers and other
similar transactions and specified transfers of assets and securities, between a
Maryland corporation and a person who, directly or indirectly, beneficially owns
10% or more of the voting power of the then-outstanding voting stock of the
corporation or an affiliate of such a stockholder. The MGCL also contains
limitations on voting rights of shares acquired in a "control share acquisition"
(an acquisition in which certain thresholds of ownership of a Maryland
corporation's voting stock are met or exceeded). For a more detailed description
of these MGCL provisions, see "Description of Capital Stock--Maryland
Anti-takeover Provisions."
USE OF PROCEEDS
All of the shares of Common Stock offered hereby are being offered for sale by
the Selling Stockholder. The Company will not receive any of the proceeds from
the sale of such shares.
6
<PAGE> 11
MANAGEMENT COMPENSATION AND CHANGES
As of the effective date of the Registration Statement of which this Prospectus
is a part, A.L. Giannopoulos, the Company's President and Chief Executive
Officer, became a full-time employee of the Company. Prior to such date, he was
a full-time employee of Westinghouse and was compensated by Westinghouse,
receiving no compensation from the Company. Mr. Giannopoulos' compensation
arrangement with the Company extends through December 31, 1999 and provides for
a fiscal 1995 salary at an annual rate of $193,000 and a fiscal 1995 target
bonus of $110,000, the actual amount of the bonus paid to be based on certain
performance criteria and not to exceed 200% of the target bonus. Such annual
salary and target bonus will each increase $10,000 each July 1 hereafter.
In addition, Westinghouse, as an incentive to 11 key officers to remain with the
Company for a period of two years following the effective date of the
Registration Statement of which this Prospectus is a part, has agreed to make
payments to such officers aggregating up to approximately $1.25 million, payable
in three equal installments promptly after such effective date and on the first
and second anniversaries of such effective date (subject to the officer
remaining employed by the Company on the relevant payment date). Even though
such payments will be entirely funded by Westinghouse and will not require any
use of the Company's cash, for accounting purposes, one-third of such payments
will be required to be reflected as compensation expense in the Company's
financial statements on the first payment date with the remainder to be
reflected as compensation expense over the 24-month period following the
effective date of the Registration Statement of which this Prospectus is a part.
In May 1995, the Company authorized the grant to certain plan participants on or
after the effective date of the Registration Statement of which this Prospectus
is a part, pursuant to the Company's 1991 Stock Option Plan, of options to
purchase an aggregate of 186,000 shares of Common Stock at an exercise price
equal to the closing sale price of the Common Stock on the date of grant.
Pursuant to a Stock Unit Purchase Agreement dated October 30, 1986, as amended
by a letter agreement dated May 2, 1995, between Westinghouse and the Company
(collectively, the "Purchase Agreement"), for so long as the Selling Stockholder
holds not less than 18% of the then issued and outstanding shares of Common
Stock, the Company shall use its best efforts to cause the Board of Directors of
the Company to nominate as Directors of the Company such two representatives as
the Selling Stockholder may designate.
7
<PAGE> 12
PRINCIPAL AND SELLING STOCKHOLDER
The Selling Stockholder owns 4,849,123 shares of Common Stock, representing
61.8% of the outstanding Common Stock as of December 31, 1994. If all of the
shares of Common Stock to which this Prospectus relates are sold, the Selling
Stockholder will not own any shares of Common Stock.
The Company obtains certain insurance coverage and other services through
arrangements negotiated by Westinghouse for itself and its subsidiaries and
affiliates. These arrangements will be replaced by the Company with its own
contracts as and when the Company elects to do so or is no longer eligible to
participate in such arrangements. The Company estimates that the incremental
cost to it of purchasing such services without the benefit of participating in
programs of Westinghouse could total approximately $1.0 million per year on a
pre-tax basis. Westinghouse has indicated its willingness to work with the
Company to establish new service arrangements in efforts to minimize any
incremental costs thereof.
The Company's President and Chief Executive Officer, Mr. Giannopoulos, was
formerly a full-time employee of Westinghouse. In connection with his departure
from Westinghouse, Mr. Giannopoulos and Westinghouse entered into a severance
agreement, which provides for, among other things, a severance payment and
continued participation in certain aspects of Westinghouse's stock option and
pension plans. See "Management Compensation and Changes."
The shares of Common Stock owned by the Selling Stockholder and offered hereby
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to the exercise by Westinghouse of its rights to
request such registration under the Purchase Agreement. Pursuant to the terms of
the Purchase Agreement, Westinghouse shall pay the expenses incurred by the
Company in connection with the registration and sale of the shares of Common
Stock to which this Prospectus relates. In addition to the Registration
Statement of which this Prospectus is a part, the Selling Stockholder will have
the right under the Purchase Agreement to request one additional registration
under the Securities Act for the sale of all or a portion (subject to a minimum
of 100,000 shares) of its shares, as well as the right to include such shares in
a registration statement filed by the Company under the Securities Act for the
sale of shares by the Company. In the Purchase Agreement, the Company has agreed
to indemnify Westinghouse and Transferee, if it is the Selling Stockholder, in
respect of certain liabilities, including liabilities under the federal
securities laws.
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DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The following description of the Common Stock of the Company includes a summary
of certain provisions of the Company's Charter (the "Charter") and its By-laws,
as amended (the "By-laws"). Such description does not purport to be complete and
is subject to the detailed provisions of, and is qualified in its entirety by
reference to, the Charter and the By-laws, copies of which are on file with the
Commission and are incorporated by reference as exhibits to the Registration
Statement of which this Prospectus is a part.
The Company is authorized by its Charter to issue up to 10,000,000 shares of
Common Stock, par value $.025 per share. As of December 31, 1994, there were
7,843,761 shares of Common Stock issued and outstanding, all of which are
validly issued, fully paid and nonassessable. Holders of Common Stock are
entitled to cast one vote per share on all matters voted upon by stockholders.
Except as otherwise provided in the Charter or the MGCL, a majority of the votes
cast at a meeting of stockholders at which a quorum is present is sufficient to
elect directors and to approve any matter which properly comes before the
meeting. Holders of Common Stock are entitled to receive such dividends as are
authorized and declared by the Board of Directors. The Charter provides that the
holders of Common Stock shall have preemptive rights to acquire additional
shares upon any new issue of Common Stock. Upon liquidation of the Company,
holders of Common Stock are entitled to share equally and ratably in any assets
available for distribution to them.
Under the MGCL and the Charter, any amendment to the Charter shall be approved
by the vote of a majority of the shares of Common Stock entitled to vote on the
matter; however, any amendment to the Charter which changes the terms of any of
the outstanding stock shall not be valid unless such change of terms shall have
been authorized by the holders of four-fifths of all such stock at the time
outstanding, by vote at a meeting or in writing with or without a meeting.
Special meetings of stockholders of the Company may be called at any time by the
Board of Directors or the President, and shall be called by the President or the
Secretary at the written request of the holders of 25% of the shares of Common
Stock then outstanding and entitled to vote, or as otherwise required by law.
The transfer agent and registrar for the Common Stock is First National Bank of
Maryland, Baltimore, Maryland.
For a description of certain Securities Act registration rights granted to the
Selling Stockholder, see "Principal and Selling Stockholder."
MARYLAND ANTI-TAKEOVER PROVISIONS
Business Combinations
The MGCL imposes certain statutory requirements with respect to certain
"business combinations," such as mergers and other similar transactions and
specified transfers of assets and securities, between a Maryland corporation and
either (i) a person who, directly or indirectly, beneficially owns 10% or more
of the voting power of the outstanding voting stock of the corporation or (ii)
an affiliate or associate of the corporation who, at any time within the
two-year period prior to the date in question, was the beneficial owner,
directly or indirectly, of 10% or more of the voting power of the then-
outstanding voting stock of the corporation (such person, affiliate or
associate, an "Interested Stockholder").
Under the MGCL, certain business combinations between a Maryland corporation and
an Interested Stockholder may not be consummated for a period of five years
following the most recent date on which the Interested Stockholder becomes an
Interested Stockholder. Following the five-year period, any such business
combination must be recommended by the board of directors of the corporation and
approved by the affirmative vote of at least (i) 80% of the votes entitled to be
cast by the holders of outstanding shares of voting stock and (ii) 66- 2/3% of
the votes entitled to be cast by the holders of the voting stock held by
stockholders other than the Interested Stockholder with whom (or with whose
affiliate) the business combination is to be effected, unless the corporation's
common stockholders receive a minimum price (as defined in the MGCL) for their
shares and the consideration is received in the same form as previously paid by
the Interested Stockholder for its shares. A business combination with an
Interested Stockholder which is approved by, or exempted from the statute by,
the board of directors of the Maryland corporation at any time before an
Interested Stockholder first becomes an Interested Stockholder is not subject to
the special voting requirements. An amendment to a Maryland corporation's
charter electing not to be subject to the foregoing requirements must be
approved by the affirmative vote of at least 80% of the votes entitled to be
cast by all holders of outstanding shares of voting stock and 66- 2/3% of the
votes entitled to be cast by holders of outstanding shares of voting stock who
are not Interested Stockholders. Because the
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Company had a stockholder who held more than 10% of its voting stock on July 1,
1983, any business combination between the Company and a current or future
Interested Stockholder would not be subject to the five-year moratorium or the
supermajority vote requirements of the MGCL; however, there can be no assurance
that the Board of Directors of the Company will not elect to make such
provisions applicable to the Company in the future as permitted under the MGCL.
Control Share Acquisitions
The MGCL provides that "control shares" of a Maryland corporation acquired in a
"control share acquisition" have no voting rights unless approved by a vote of
two-thirds of the votes entitled to be cast on the matter, excluding shares of
stock owned by the acquiror, by officers or by directors who are employees of
the corporation. "Control shares" are voting shares of stock which, if
aggregated with all other such shares of stock previously acquired by the
acquiror, or in respect of which the acquiror is able to exercise or direct the
exercise of voting power (except solely by virtue of a revocable proxy), would
entitle the acquiror, directly or indirectly, to exercise or direct the exercise
of voting power in electing directors within one of the following ranges of
voting power: (i) one-fifth or more but less than one-third, (ii) one-third or
more but less than a majority or (iii) a majority or more of all voting power.
Control shares do not include shares the acquiring person is entitled to vote as
a result of having previously obtained stockholder approval. A "control share
acquisition" means the acquisition, directly or indirectly, of control shares,
subject to certain exceptions.
A person who has made or proposes to make a control share acquisition, upon
satisfaction of certain conditions, may compel the corporation to call a special
meeting of stockholders to be held within 50 days of the demand to consider the
voting rights of the shares. If no request for a meeting is made, the
corporation may itself present the question at any stockholders meeting.
If voting rights are not approved at the meeting or if the acquiring person does
not deliver an acquiring person statement as required by the statute, then,
subject to certain conditions and limitations, the corporation may redeem any or
all of the control shares (except those for which voting rights have previously
been approved) for fair value. If voting rights for control shares are approved
at a stockholders meeting, resulting in the acquiring person controlling a
majority of the voting power, then all other stockholders shall be entitled to
demand and receive from the corporation for their stock the highest price per
share paid by the acquiring person in the control share acquisition.
The control share acquisition statute does not apply (a) to shares acquired in a
merger, consolidation or share exchange if the corporation is a party to the
transaction or (b) to acquisitions approved or exempted by the charter or
by-laws of the corporation. There are currently no such exemptive provisions in
the Charter or By-laws of the Company.
Reference is made to the full text of the foregoing statutes for their entire
terms, and the partial summary contained herein is not intended to be complete.
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PLAN OF DISTRIBUTION
The Company has been advised that the shares of Common Stock to which this
Prospectus relates may from time to time be offered and sold by the Selling
Stockholder to or through underwriters, through one or more agents or dealers or
directly to purchasers. The distribution of the Common Stock being offered (the
"Offered Shares") may be effected from time to time in one or more transactions
at a fixed price or prices, which may be changed, at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices.
Unless otherwise specified in the accompanying Prospectus Supplement, the
obligations of any underwriters to pay for and accept delivery of the Offered
Shares will be subject to the approval of certain legal matters by their counsel
and certain other conditions, and the underwriters will be committed to take and
pay for all of the Offered Shares if any are taken. Any public offering price
and any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
The Company has been further advised that offers to purchase Common Stock may be
solicited directly by the Selling Stockholder or by agents designated by the
Selling Stockholder from time to time. Unless otherwise specified in the
accompanying Prospectus Supplement, any such agent will be acting on a
reasonable efforts basis for the period of its appointment. Unless otherwise
specified in the accompanying Prospectus Supplement, the Selling Stockholder
will have the sole right to accept or reject, in whole or in part, any offer to
purchase shares of Common Stock and reserves the right to withdraw, cancel or
modify, without notice, the offer to sell shares of Common Stock contained in
this Prospectus and in any accompanying Prospectus Supplement.
If sold through agents, the Offered Shares may be sold from time to time by
means of (i) ordinary brokers' transactions, (ii) block transactions (which may
involve crosses) in accordance with the rules of any stock exchange or trading
system on which the Common Stock is admitted for trading privileges (the
"Markets"), in which such an agent may attempt to sell the Common Stock as agent
but may position and resell all or a portion of the blocks as principal, (iii)
"fixed price offerings" off the Markets (as described below) or (iv) any
combination of such methods of sale, in each case at market prices prevailing at
the time of sale in the case of transactions on the Markets and at prices
related to prevailing market prices or negotiated prices in the case of
transactions off the Markets. In connection therewith, distributors' or sellers'
commissions may be paid or allowed that will not exceed those customary in the
types of transactions involved. If an agent purchases Common Stock as principal,
such stock may be resold by any of the methods of sale described above.
From time to time an agent may conduct a "fixed price offering" of Common Stock
off the Markets. In such case, such agent would purchase a block of shares from
the Selling Stockholder and would form a group of selected dealers to
participate in the resale of the shares. Any such offering will be described in
the accompanying Prospectus Supplement setting forth the terms of the offering
and the number of shares being offered.
If a dealer is utilized in the sale of Offered Shares, the Selling Stockholder
may sell such Offered Shares to the dealer as principal. The dealer may then
resell such Offered Shares to the public at varying prices determined by such
dealer at the time of resale.
In connection with the sale of Common Stock, underwriters or agents may receive
compensation from the Selling Stockholder or from purchasers of Common Stock for
whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters or agents may sell Common Stock to or through dealers,
and such dealers may receive compensation in the form of discounts, concessions
or commissions from the underwriters or agents and/or commissions from the
purchasers for whom they may act as agents. Underwriters, agents and dealers
that participate in the distribution of Common Stock may be deemed to be
underwriters, and any discounts or commissions received by them from the Selling
Stockholder and any profit on the resale of Common Stock by them may be deemed
to be underwriting discounts and commissions, under the Securities Act. Any such
underwriter or agent will be identified, and any such compensation payable by
the Selling Stockholder will be described, in the accompanying Prospectus
Supplement.
Under agreements which may be entered into by the Company and the Selling
Stockholder, underwriters and agents who participate in the distribution of
Common Stock may be entitled to indemnification by Westinghouse and the Company
against certain civil liabilities, including liabilities under the federal
securities laws, or to contribution by Westinghouse and the Company to payments
which such underwriters or agents may be required to make in respect thereof.
Underwriters, agents and dealers may engage in transactions with or perform
services for the Selling Stockholder and/or the Company in the ordinary course
of business.
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LEGAL MATTERS
The legality of the shares of Common Stock offered hereby will be passed upon
for the Company by Ballard Spahr Andrews & Ingersoll, Baltimore, Maryland.
Certain legal matters in connection with the sale of shares of Common Stock to
which this Prospectus relates will be passed upon for the Company by Chadbourne
& Parke, New York, New York, for the Selling Stockholder by Louis J. Briskman,
General Counsel of Westinghouse, and Cravath, Swaine & Moore, New York, New
York, and for the underwriters, if any, by Cahill Gordon & Reindel (a
partnership including a professional corporation), New York, New York. With
respect to certain matters relating to the laws of the State of Maryland,
Chadbourne & Parke, Louis J. Briskman, Cravath, Swaine & Moore and Cahill Gordon
& Reindel may rely upon the opinion of Ballard Spahr Andrews & Ingersoll.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1994, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
With respect to the unaudited consolidated financial information for the three
months ended September 30, 1994 and 1993, the six months ended December 31, 1994
and 1993 and the nine months ended March 31, 1995 and 1994, incorporated by
reference in this Prospectus, Price Waterhouse LLP reported that they have
applied limited procedures in accordance with professional standards for a
review of such information. However, their separate reports dated October 28,
1994, February 8, 1995 and May 8, 1995, incorporated by reference herein, state
that they did not audit and they do not express an opinion on that unaudited
consolidated financial information. Price Waterhouse LLP has not carried out any
significant or additional audit tests beyond those which would have been
necessary if their reports had not been incorporated by reference. Accordingly,
the degree of reliance on their reports on such information should be restricted
in light of the limited nature of the review procedures applied. Price
Waterhouse LLP is not subject to the liability provisions of Section 11 of the
Securities Act for their reports on the unaudited consolidated financial
information because neither such report is a "report" or a "part" of the
Registration Statement prepared or certified by Price Waterhouse LLP within the
meaning of Sections 7 and 11 of the Securities Act.
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MICROS(R)
