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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 26, 1995
WESTERN MICRO TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
California 0-11560 94-2414428
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
12900 Saratoga Avenue, Saratoga, CA 95070
(Address of principal executive offices) (Zip Code)
(408) 725-1660
(Registrant's telephone number,
including area code)
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Item 2. Acquisition or Disposition of Assets.
On May 5, 1995, Registrant entered into an Asset Purchase Agreement (the
"Purchase Agreement") with Reptron Electronics, Inc. ("Purchaser") pursuant to
which Purchaser agreed to acquire the assets constituting Registrant's
electronic component distribution business (as further defined in the Purchase
Agreement and the Exhibits and Schedules thereto, the "Target Business") in
exchange for cash and the assumption of certain liabilities. The purchase
price for the assets was to be the sum of (i) $100,000 plus (ii) the sum of the
net book value (determined in accordance with generally accepted accounting
principles) of the accounts receivable, inventory and machinery, equipment,
furniture and fixtures related to the Target Business as of the Closing Date.
The Closing of the sale of the Target Business occurred on July 26, 1995.
The transaction, valued at $12.5 million, consisted of a $9.2 million payment
in cash and the assumption of $3.3 million in accounts payable. In connection
with the Closing, the Registrant and Purchaser entered into an Agreement (the
"Amendment") modifying certain provisions of the Purchase Agreement and related
escrow agreement. The Amendment amended the indemnification and escrow
provisions of the Purchase Agreement to reduce the amount deposited into the
escrow account. The Amendment did not modify either the amount or availability
of indemnification available to the parties.
Effective upon the Closing, Ronald H. Mabry resigned his positions as Chief
Executive Officer, Chairman of the Board, Director and Secretary of Registrant.
Mr. Mabry received a cash severance in the amount of $75,000, of which $50,000
was used to discharge Mr. Mabry's outstanding loan obligation and $25,000 was
paid to Mr. Mabry in cash at Closing, and has the right to receive up to an
additional $100,000 in incentive payments. Mr. Mabry entered into an
employment agreement with Purchaser. Effective upon the Closing, Scott Munro
was appointed President and Chief Executive Officer of the Registrant and
became a director of the Company.
Item 7. Financial Statements and Exhibits.
(b) Pro forma financial information.
Pro forma financial statements required by this Item 7(b) will be
filed as soon as practicable, and not later than October 10, 1995.
(c) Exhibits.
2.1 Asset Purchase Agreement dated May 5, 1995 between Western
Micro Technology, Inc. and Reptron Electronics, Inc,
incorporated herein by reference from Exhibit 10.31 of the
Registrant's Form 10-Q for the quarter ended March 31, 1995.
Schedules to this Agreement omitted from this report will be
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furnished to the Securities and Exchange Commission upon
request.
2.2 Agreement dated July 26, 1995 between Western Micro
Technology, Inc. and Reptron Electronics, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: August 9, 1995
WESTERN MICRO TECHNOLOGY, INC.
By /s/ JAMES W. DORST
Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION> Sequentially
Exhibit No. Description Numbered Page
----------- ----------- -------------
<S> <C> <C>
2.1 Asset Purchase Agreement dated May 5, 1995 by and
between Western Micro Technology, Inc. and Reptron
Electronics, Inc., incorporated herein by reference
from Exhibit 10.31 from the Registrant's Form 10-Q for
the quarter ended March 31, 1995. Schedules to this
agreement have not been filed, but will be furnished to
the Securities and Exchange Commission upon request.
2.2 Agreement dated July 26, 1995 between Western Micro
Technology, Inc. and Reptron Electronics, Inc.
</TABLE>
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EXHIBIT 2.2
AGREEMENT
In connection with that certain Asset Purchase Agreement dated May 5, 1995
(the "Agreement") between WESTERN MICRO TECHNOLOGY, INC., a California
corporation ("Seller"), and REPTRON ELECTRONICS, INC., a Florida corporation
("Purchaser"), Purchaser will deposit into escrow (the "Escrow") at Closing a
portion of the Purchase Price. The exact amount to be deposited in escrow is
calculated pursuant to Section 1.6 of the Agreement. In connection with the
establishment of the Escrow, the parties hereto and Bank of America, N.T. &
S.A., as Escrow Agent, have entered into an Escrow Agreement dated as of the
date hereof (the "Escrow Agreement"). Capitalized terms not defined herein
shall have the meanings assigned to them in the Agreement or the Escrow
Agreement, as applicable.
The parties hereby wish to limit the amount to be deposited under the Escrow
Agreement, provide a source other than the Escrow Agreement for satisfaction of
Seller's indemnification for claims described in subparagraph A of Section
3.1(a) of the Agreement and to preserve for Purchaser and not expand for Seller
the breadth of indemnification for claims described in both subparagraph A of
Section 3.1(a) of the Agreement and the Escrow Agreement as originally provided
under the Agreement.
In consideration of the covenants and agreements contained herein and for
other good and sufficient consideration, receipt of which is hereby
acknowledged, Purchaser and Seller agree to the following amendments to the
Agreement:
1. Notwithstanding the formula described in Section 1.6 of the Agreement,
the amount to be deposited in escrow shall be $1,000,000.
2. For the purposes of Section 3.1(a) of the Agreement, Seller's maximum
liability for indemnification under subparagraph (A) of Section 3.1(a) (other
than claims brought for a breach or inaccuracy of a representation contained in
Section 2.1(a), (b) or (e) of the Agreement) shall be limited to $1,389,095.
Purchaser's remedy for claims for which indemnification is provided under
subparagraph (A) of Section 3.1(a) (other than claims brought for a breach or
inaccuracy of a representation contained in Section 2.1(a), (b) or (e) of the
Agreement) shall not be limited to the Escrow as is currently provided in the
Agreement but shall be limited and asserted, if at all, as follows:
a. First, the Purchaser shall proceed against the $1,000,000 deposited
under the Escrow Agreement in accordance with the terms of the Escrow
Agreement;
b. Second, to the extent such claims exceed $1,000,000, the Purchaser
may proceed directly against Seller to the same extent that
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Purchaser would have been permitted to proceed against the Escrow if
the money had been deposited in Escrow as originally agreed on May 5,
1995. Upon Purchaser's compliance with the terms of the Escrow
Agreement as if Seller were the Escrow Agent by delivering all notices
and documents to Seller that would otherwise have been directed to the
Escrow Agent, Seller shall pay such excess claims immediately upon
demand; provided, however, the amount of such claims as may be
asserted against Seller may not exceed $389,095.
3. Notwithstanding anything contained to the contrary in the Agreement or
Escrow Agreement, if the items for which Purchaser is entitled to indemnity
under Section 1 of the Escrow Agreement exceed $1,000,000, Purchaser shall be
entitled to recover such excess amounts (in an amount not to exceed $389,095)
directly from Seller as if such excess amounts were in the Escrow. Purchaser
shall comply with all of the terms of the Escrow Agreement in making any such
claims as if Seller was the Escrow Agent by directing all notices and documents
to Seller that would otherwise have been directed to the Escrow Agent.
4. Seller shall be entitled to sublease from Purchaser at Purchaser's pro
rata cost approximately 50% of the premises at 12900 Saratoga Avenue, Saratoga,
California, from the Date of Closing until August 25, 1995.
5. All provisions of the Agreement and the Escrow Agreement not modified by
the terms of this letter shall remain in full force and effect.
Dated: July 26, 1995
REPTRON ELECTRONICS, INC.
By /s/ PAUL PLANTE
Vice President-Finance
WESTERN MICRO TECHNOLOGY, INC.
By /s/ RONALD H. MABRY
President and
Chief Executive Officer
