As filed with the Securities and Exchange Commission on July 3, 1997
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
WESTERN MICRO TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
California 94-2414428
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
254 E. Hacienda Avenue
Campbell, California 95008
(Address of Principal Executive Offices) (Zip Code)
WESTERN MICRO TECHNOLOGY, INC. 1994 STOCK OPTION PLAN (700,000 Shares)
NONSTATUTORY STOCK OPTION AGREEMENT FOR OUTSIDE DIRECTORS (10,000 Shares)
EMPLOYMENT AGREEMENTS (140,000 Shares)
(Full title of the plan)
JAMES W. DORST Copy to:
Chief Financial Officer KATHARINE A. MARTIN, ESQ.
Western Micro Technology, Inc. Pillsbury Madison & Sutro LLP
254 E. Hacienda Avenue 2700 Sand Hill Road
Campbell, California 95008 Menlo Park, CA 94025
(408) 379-0177 (415) 233-4500
(Name, address and telephone number, including
area code, of agent for service)
<TABLE>
Calculation of Registration Fee
<CAPTION>
====================================================================================================================================
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered(1) offering price per share(2) aggregate offering price(1) registration fee(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
without par value.......... 850,000 $11.00 $9,350,000 $2,833.34
====================================================================================================================================
(1) Calculated pursuant to General Instruction E of Form S-8.
(2) Estimated solely for the purpose of calculating the registration fee
on the basis of the average of the high and low prices as reported on
the Nasdaq National Market on June 27, 1997.
(3) The Registration Fee has been calculated pursuant to Rule 457(h).
</TABLE>
Explanatory Note: This Registration Statement on Form S-8 relates to
the registration of 140,000 shares of the Company's Common Stock to be issued
from time to time to officers, consultants and advisors for the Company. None of
the shares will be issued to any consultants and/or advisors who are
broker/dealers, investment bankers or financial public relations firms or who
are associated, either directly or indirectly, in any transactions relating to
capital raising. -----------------
The Registration Statement shall become effective upon filing in
accordance with Rule 462 under the Securities Act of 1933, as amended.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
- ------ ----------------
Item 2. Registrant Information and Employee Plan Annual Information.*
- ------ -----------------------------------------------------------
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act of 1933, as amended, and the
Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents By Reference.
- ------ -----------------------------------------------
The following documents, filed with the Securities and Exchange
Commission (the "Commission") by the Registrant, are hereby incorporated by
reference in this Registration Statement:
(i) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996;
(ii) The Registrant's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1997; and
(iii) The information with regard to the Registrant's capital
stock contained in the Registrant's Registration Statement on Form 10,
filed with the Commission pursuant to section 12 of the Securities
Exchange Act of 1934, including any subsequent amendment or report
filed for the purpose of updating such information.
In addition, all documents subsequently filed by the Registrant
pursuant to sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, prior to the filing of a post-effective amendment which indicates that
all securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities.
- ------ -------------------------
Not Applicable.
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<PAGE>
Item 5. Interests of Named Experts and Counsel.
- ------ --------------------------------------
Not Applicable.
Item 6. Indemnification of Officers and Directors.
- ------ -----------------------------------------
Sections 204 and 317 of the General Corporation Law of the State of
California (the "General Law") empower a corporation to indemnify its directors,
officers, employees and agents (collectively "Agents") under certain
circumstances. Article Sixth of the Registrant's Certificate of Amendment of
Articles of Incorporation, as amended, authorizes the Registrant to indemnify
its Agents in excess of the indemnification otherwise permitted by Section 317
of the General Law, subject to applicable limits set forth in Section 204 of the
General Law with respect to actions for breach of duty to the Registrant and its
shareholders. Article IX of the Registrant's Bylaws provides for mandatory
indemnification of each director of the Registrant, except as prohibited by law.
The Registrant has also entered into agreements with its directors and
certain officers to provide indemnity to such persons against certain
liabilities and expenses by reason of their being or having been directors or
officers to the maximum extent permitted by applicable laws.
The directors and officers of the Registrant have a policy of insurance
under which they are insured, within limits and subject to limitations, against
certain expenses in connection with the defense of actions, suits or
proceedings, and certain liabilities which might be imposed as a result of such
actions, suits or proceedings, in which they are parties by reason of their
being or having been directors or officers.
Item 7. Exemption from Registration Claimed.
- ------ -----------------------------------
Not Applicable.
Item 8. Exhibits.
- ------ --------
See Index to Exhibits on page 8.
Item 9. Undertakings.
- ------ ------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the
most recent post-
-3-
<PAGE>
effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby further undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action,
-4-
<PAGE>
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
-5-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Campbell, State of California, on June 30, 1997.
WESTERN MICRO TECHNOLOGY, INC.
By /s/ P. SCOTT MUNRO
--------------------------------------
P. Scott Munro
President,
Chief Executive Officer,
Secretary and Director
By /s/ JAMES W. DORST
--------------------------------------
James W. Dorst
Chief Financial Officer
(Principal Financial and
Accounting Officer)
-6-
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints P. Scott Munro and James W. Dorst, and
each of them, his true and lawful attorneys-in-fact and agents, each with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments, including
post-effective amendments, to this Registration Statement, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
--------- ----- ----
/s/ P. SCOTT MUNRO President, Chief Executive Officer June 30, 1997
- ------------------------- Secretary and Director (Principal
P. Scott Munro Executive Officer)
/s/ JAMES W. DORST Chief Financial Officer (Principal June 30, 1997
- ------------------------- Financial and Accounting Officer)
James W. Dorst
/s/ JAMES J. HEFFERNAN Director June 30, 1997
- -------------------------
James J. Heffernan
/s/ JEROME A. MARTIN Director June 30, 1997
- -------------------------
Jerome A. Martin
/s/ K. WILLIAM SICKLER Director June 30, 1997
- -------------------------
K. William Sickler
/s/ J. LARRY SMART Director June 30, 1997
- -------------------------
J. Larry Smart
/s/ WILLIAM H. WELLING Director June 30, 1997
- -------------------------
William H. Welling
-7-
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
Number Exhibit
- ------- -------
5.1 Opinion regarding legality of securities to be offered.
10.1 The 1994 Stock Option Plan of Western Micro Technology, Inc., as
amended and restated on May 18, 1997, filed as Exhibit A to the
Company's Definitive Proxy Statement as filed with the Commission on
June 27, 1997, is hereby incorporated by reference.
10.2 Employment Agreement (with Exhibit) between the Company and Michael
R. Duhaime dated November 29, 1996.
10.3 Employment Agreement (with Exhibit) between the Company and Alan M.
Bynder dated November 29, 1996.
10.4 Nonstatutory Stock Option Agreement for Outside Directors between the
Company and William H. Welling dated January 18, 1996.
10.5 Nonstatutory Stock Option Agreement for Outside Directors between the
Company and K. William Sickler dated January 18, 1996.
23.1 Consent of Coopers & Lybrand LLP.
23.2 Consent of Pillsbury Madison & Sutro LLP (included in Exhibit 5.1).
24.1 Power of Attorney (see page 7 of this Form S-8).
Exhibit 5.1
[Letterhead of Pillsbury Madison & Sutro LLP]
June 30, 1997
Western Micro Technology, Inc.
254 E. Hacienda Avenue
Campbell, CA 95008
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
With reference to the Registration Statement on Form S-8 to be filed by
Western Micro Technology, Inc., a California corporation (the "Company"), with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to 850,000 shares of the Company's common stock, without par
value (the "Common Stock") of which (i) 700,000 shares are issuable pursuant to
the Company's 1994 Stock Option Plan, as amended and restated (the "Plan"), (ii)
140,000 shares in the aggregate pursuant to certain Employment Agreements with
the Company and Alan M. Bynder and Michael R. Duhaime (the "Employment
Agreements") and (iii) 10,000 shares in the aggregate pursuant to certain
Nonstatutory Stock Option Agreements with Outside Directors with the Company and
William H. Welling and K. William Sickler (the "Option Agreements"), it is our
opinion that the Common Stock, when issued and sold in accordance with the Plan,
the Employment Agreements and the Option Agreements will be legally issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as Exhibit 5.1 to the Registration Statement.
Very truly yours,
/s/ Pillsbury Madison & Sutro LLP
E-5573
Western Micro Technology, Inc.
254 East Hacienda Avenue
Campbell, California 95008
November 29, 1996
Mr. Michael R. Duhaime
International Data Products, LLC
25 Mauchly, Suite 316
Irvine, California 92618
Dear Mike:
This letter agreement sets forth the terms and conditions of your
employment with Western Micro Technology, Inc. (the "Company").
In consideration of the mutual covenants and promises made in this
letter agreement, you and the Company agree as follows:
1. Employment. Commencing as of November 29, 1996 (the "Effective
----------
Date"), you will be responsible for sales and marketing with the International
Data Products division of the Company. You will be given such duties,
responsibilities and authority as are appropriate to such position. Throughout
the term of your employment, you will devote such business time and energies to
the business and affairs of the Company as needed to carry out your sales and
marketing duties and responsibilities with the International Data Products
division of the Company, subject to the overall supervision and direction of the
President and Chief Executive Officer and of the Board of Directors of the
Company (the "Board").
2. Term. Commencing as of the Effective Date and ending on December 31,
----
1998 (the "Term"), your employment with the Company will be subject to the terms
of this Agreement. Either you or the Company can terminate your employment at
any time and for any reason, with or without cause and with or without notice,
in each case subject to the terms and provisions of paragraph 7 below.
3. Salary. For your services to the Company, you will be
------
paid a base salary, payable semi-monthly during each month of
employment, at a rate of eighty-one thousand dollars ($81,000)
per year.
4. Commissions. You will be eligible to receive commis-
-----------
sions at a rate of twelve percent (12%) on gross profit on sales
<PAGE>
Mr. Michael R. Duhaime
November 29, 1996
Page 2
up to and including three hundred thousand dollars ($300,000), at a rate of
sixteen percent (16%) on gross profit on sales between three hundred thousand
one dollars ($300,001) and five hundred thousand dollars ($500,000), and at a
rate of twenty percent (20%) on gross profit on sales over five hundred thousand
dollars ($500,000). The commissions shall be due and payable within a reasonable
time after completion of the commissioned sales but no later than one (1) month
after such sale. In no event shall the Company be obligated to pay commissions
in excess of two hundred thousand dollars ($200,000) per annum. The commissions
will not be payable to sales prior to the effective time of the sale and
purchase of the assets of International Data Products, LLC ("IDP") pursuant to
the Asset Purchase Agreement (the "Purchase Agreement"), dated as of November
29, 1996, by and among the Company, IDP and certain members of IDP. "Gross
profit on sales" shall mean gross sales net of returns and customary allowances
less the actual (specifically identifiable) product cost determined in
accordance with company-wide accounting principles of the Company and generally
accepted accounting principles whether or not consistent with IDP's past
accounting practices.
5. Earn-Out. You will be eligible to receive earn-out
--------
payments calculated and payable pursuant to Exhibit A hereto.
The Earn-Out will be subject to the Company's right of set-off
provided under section 7.4 of the Purchase Agreement.
6. Employee Benefit Programs. During the term of your employment, you
-------------------------
will be entitled to participate in all employee benefit programs of the Company
at the time or thereafter made available to the Company's executives or salaried
employees generally, including, without limitation, pension and other retirement
plans, profit sharing plans, group life insurance, accidental death and
dismemberment insurance, hospitalization, surgical, major medical and dental
coverage, sick leave (including salary continuation arrangements), long-term
disability, vacations, holidays and other employee benefit programs sponsored by
the Company. You shall also receive a car allowance of $325 per month.
7. Consequences of Termination of Employment.
-----------------------------------------
(a) For Cause. Following the Effective Date, the Company may terminate
---------
your employment for "Cause." "Cause" will exist in the event you are convicted
of a felony or, in carrying out your duties, you are guilty of gross negligence
or gross misconduct resulting, in either case, in material harm to the Company.
In the event your employment is terminated for Cause, you will be entitled to
any unpaid salary, commissions and earn-
<PAGE>
Mr. Michael R. Duhaime
November 29, 1996
Page 3
out due you pursuant to paragraphs 3, 4 and 5 above through the date of
termination, and you will be entitled to no other compensation from the Company.
(b) Without Cause. Following the Effective Date, the Company may
-------------
terminate your employment without Cause. In such event, you will be entitled to
continue to receive the lesser of your base salary for the Term of this letter
agreement or twelve (12) months of your base salary.
(c) Change in Responsibilities Following a Change in Control. Following
--------------------------------------------------------
the Effective Date, in the event your duties and responsibilities regarding
sales and marketing are substantially reduced in the International Data Products
division of the Company, without Cause, within twelve (12) months following a
Change of Control (defined below) of the Company, your resulting resignation of
employment will be treated as a termination of employment by the Company without
Cause in accordance with subparagraph 7(b) above. "Change of Control" as used
herein shall be defined as the occurrence of any of the following events:
(i) The shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least fifty percent (50%)
of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation; or
(ii) The shareholders of the Company approve (A) a plan of
complete liquidation of the Company or (B) an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets; or
(iii) Any "person" (as defined in sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power
represented by the Company's then outstanding voting securities.
<PAGE>
Mr. Michael R. Duhaime
November 29, 1996
Page 4
(d) Voluntary Termination. In the event you terminate your employment
---------------------
with the Company of your own volition, such termination will have the same
consequences as a termination for Cause under subparagraph 7(a) above.
8. Assignability; Binding Nature. Commencing on the Effective Date,
-----------------------------
this letter agreement will be binding upon you and the Company and your
respective successors, heirs, and assigns. This letter agreement may not be
assigned by you except that your rights to compensation and benefits hereunder,
subject to the limitations of this letter agreement, may be transferred by will
or operation of law. No rights or obligations of the Company under this letter
agreement may be assigned or transferred except by operation of law in the event
of a merger or consolidation in which the Company is not the continuing entity,
or the sale or liquidation of all or substantially all of the assets of the
Company provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and assumes the Company's
obligations under this letter agreement contractually or as a matter of law.
9. Governing Law; Arbitration. This letter agreement will be deemed a
--------------------------
contract made under, and for all purposes shall be construed in accordance with,
the laws of California. Any controversy or claim relating to this letter
agreement any breach thereof, and any claims you may have against the Company or
any officer, director or employee of the Company or arising from or relating to
your employment with the Company, will be settled solely and finally by
arbitration in accordance with the rules of the American Arbitration Association
("AAA") then in effect in the State of California, and judgment upon such award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. The arbitrator may provide that the cost of the arbitration (including
reasonable legal fees) incurred by you or the Company will be borne by the
non-prevailing party.
10. Withholding. Anything to the contrary notwithstanding, following
-----------
the Effective Date all payments made by the Company hereunder to you or your
estate or beneficiaries will be subject to tax withholding pursuant to any
applicable laws or regulations. In lieu of withholding, the Company may, in its
sole discretion, accept other provision for payment of taxes as required by law,
provided it is satisfied that all requirements of law affecting its
responsibilities to withhold such taxes have been satisfied.
11. Entire Agreement. Except as otherwise specifically
----------------
provided in this Agreement, this letter agreement contains all
the legally binding understandings and agreements between you
<PAGE>
Mr. Michael R. Duhaime
November 29, 1996
Page 5
and the Company pertaining to the subject matter of this letter agreement and
supersedes all such agreements, whether oral or in writing, previously entered
into between the parties.
12. Miscellaneous. No provision of this letter agreement may be amended
-------------
or waived unless such amendment or waiver is agreed to by you and the Board in
writing. No waiver by you or the Company of the breach of any condition or
provision of this letter agreement will be deemed a waiver of a similar or
dissimilar provision or condition at the same or any prior or subsequent time.
In the event any portion of this letter agreement is determined to be invalid or
unenforceable for any reason, the remaining portions shall be unaffected thereby
and will remain in full force and effect to the fullest extent permitted by law.
Please acknowledge your acceptance and understanding of this letter
agreement by signing below.
Sincerely,
____________________________________
ACKNOWLEDGED AND AGREED:
______________________________
Dated: November 29, 1996
<PAGE>
EXHIBIT A
---------
EARN-OUT
--------
1. Within thirty (30) days after the period ending December 31, 1998,
Western Micro Technology, Inc. ("WMT") shall calculate, and deliver notice of
such calculation (the "Calculation") to Alan M. Bynder ("Bynder") and Michael R.
Duhaime ("Duhaime"), an earn-out payment to be paid to Bynder and Duhaime if the
Gross Profit Dollars (as defined in paragraph 2) of the International Data
Products division of WMT during such period exceeds $2.4 million (the "Earn-Out
Payment"). The Earn-Out Payment shall be paid in shares of Common Stock, no par
value (the "Shares"), of WMT. The value of the Shares will be calculated based
on the ten (10) day simple average of the closing prices of the Shares in the
last ten (10) trading days prior to December 31, 1998. WMT shall pay the
Earn-Out Payment based on a calculation of sixty percent (60%) of the Shares to
Bynder and forty percent (40%) of the Shares to Duhaime. The Shares shall be
rounded to the nearest whole number and no fractional shares will be issued.
The Earn-Out Payment shall equal the following amount:
Gross Profit Dollars Earn-Out Payment
-------------------- ----------------
$0 - $2,400,000 0 Shares
$2,400,000 - $2,799,999 40,000 Shares
$2,800,000 - $3,199,999 55,000 Shares
$3,200,000 - $3,599,999 70,000 Shares
$3,600,000 - $3,999,999 85,000 Shares
$4,000,000 - $4,999,999 100,000 Shares
Greater than $5,000,000 140,000 Shares
2. Gross Profit Dollars shall be calculated on the
following sales (the "Sales"):
(a) Sales by the International Data Products division of WMT to
customers identified in the Asset Purchase Agreement (the "Asset Purchase
Agreement"), dated as of November 29, 1996, by and among WMT, IDP and certain
members of IDP; and
(b) Sales by the International Data Products division of WMT customers
that are recruited after the Closing Date as customers for WMT by any of the
International Data Products employees identified in the Asset Purchase Agreement
or by an employees hired in the International Data Products division of WMT.
"Gross Profit Dollars" shall mean gross Sales net of returns and
customary allowances less the actual (specifically identifiable) product cost
(the "Costs") determined in
A-1
<PAGE>
accordance with generally accepted accounting principles whether or not
consistent with IDP's past accounting practices.
For the purpose of calculating the Earn-Out Payment, separate books and
records shall be maintained by WMT with respect to the Sales and Costs. Such
books and records shall be maintained in accordance with WMT's company-wide
accounting principles and generally accepted accounting principles whether or
not consistent with IDP's past accounting practices.
Bynder and Duhaime will be entitled to reasonable rights to audit the
Earn-Out Payment. Upon receipt of the Calculation from WMT, Bynder and Duhaime
shall have ten (10) business days in which to request in writing that WMT
deliver within thirty (30) business days of such request the books and records,
and back up invoices and schedules, to Bynder and Duhaime or their accountants
to confirm the calculation. If, within ten (10) business days, Bynder and
Duhaime do not request such books and records or if within ten (10) business
days after receipt of such books and records Bynder and Duhaime do not object to
such Calculation, WMT shall deliver instructions to its transfer agent to issue
and deliver to Bynder and Duhaime the Shares of WMT Common as soon as reasonably
practicable. If Bynder and Duhaime request such books and records and within ten
(10) business days after receipt of such books and records, Bynder and Duhaime
object in writing to WMT of the Calculation, WMT, Bynder and Duhaime shall work
together in good faith to see if they can reach an agreement on the appropriate
Earn-Out Payment. If within fourteen (14) days the parties have not reached an
agreement, the parties shall choose a nationally recognized accounting firm
mutually agreed upon by WMT, Bynder and Duhaime who shall calculate the amount,
or if no such agreement can be reached, then each of WMT, Bynder and Duhaime
shall appoint one nationally recognized accounting firm, which accounting firms
shall pick an additional nationally recognized accounting firm to which such
disputes shall be referred. In the event that either WMT, Bynder or Duhaime
shall fail to select a nationally recognized firm in accordance with the
provisions of this subsection within thirty (30) days after notice by the other
party that such selection should be made, and such other party has selected a
nationally recognized accounting firm pursuant to the provisions hereof, such
dispute shall be referred to the nationally recognized accounting firm selected
by such party. The decision of such nationally recognized accounting firm shall
be conclusive and binding on both parties. Each of WMT, Bynder and Duhaime shall
pay the costs and expenses of its own accountant and Bynder and Duhaime shall
pay the costs of the nationally recognized accounting firm selected by both
parties or their representatives (the "Independent Accountant); provided,
however, that if a dispute arises that is resolved by the Independent Accountant
and the amount of the Earn-Out Payment as calculated by the Independent
Accountant exceeds by more than ten percent (10%) the Calculation, WMT shall pay
the
A-2
<PAGE>
costs and expenses of Bynder's and Duhaime's and the Independent
Accountant's costs and expenses.
3. During the period subsequent to Closing and ending on December 31,
1998, (a) WMT shall conduct its business in conformity with sound business
practices and consistent with past practices and (b) WMT shall not take any
voluntary action for the purpose of preventing Bynder or Duhaime from being able
to earn the Earn-Out Payment or avoiding or seeking to avoid the observance or
performance of any of the terms under this Exhibit A, and shall at all times in
good faith assist in carrying out all such action as may be reasonably necessary
or appropriate in order to protect the rights of Bynder and Duhaime with respect
to its ability to earn the Earn-Out Payment against impairment. Notwithstanding
this paragraph 3, nothing contained herein shall require the officers and
directors of WMT to maintain WMT's business in a manner or take actions that
would violate their fiduciary duties to WMT and its shareholders.
4. If between the date hereof and December 31, 1998, WMT commences a
voluntary case under the federal bankruptcy laws or a petition is filed against
WMT under the federal bankruptcy laws and is not dismissed within ninety (90)
days, Bynder and Duhaime shall be entitled to seek recovery of the Earn-Out
Payment due as an unsecured creditor of WMT in the related bankruptcy
proceedings.
A-3
Western Micro Technology, Inc.
254 East Hacienda Avenue
Campbell, California 95008
November 29, 1996
Mr. Alan M. Bynder
International Data Products, LLC
25 Mauchly, Suite 316
Irvine, California 92618
Dear Alan:
This letter agreement sets forth the terms and conditions of your
employment with Western Micro Technology, Inc. (the "Company").
In consideration of the mutual covenants and promises made in this
letter agreement, you and the Company agree as follows:
1. Employment. Commencing as of November 29, 1996 (the "Effective
----------
Date"), you will be responsible for sales and marketing with the International
Data Products division of the Company. You will be given such duties,
responsibilities and authority as are appropriate to such position. Throughout
the term of your employment, you will devote such business time and energies to
the business and affairs of the Company as needed to carry out your sales and
marketing duties and responsibilities with the International Data Products
division of the Company, subject to the overall supervision and direction of the
President and Chief Executive Officer and of the Board of Directors of the
Company (the "Board").
2. Term. Commencing as of the Effective Date and ending on December 31,
----
1998 (the "Term"), your employment with the Company will be subject to the terms
of this Agreement. Either you or the Company can terminate your employment at
any time and for any reason, with or without cause and with or without notice,
in each case subject to the terms and provisions of paragraph 7 below.
3. Salary. For your services to the Company, you will be
------
paid a base salary, payable semi-monthly during each month of
employment, at a rate of eighty-one thousand dollars ($81,000)
per year.
4. Commissions. You will be eligible to receive commis-
-----------
sions at a rate of twelve percent (12%) on gross profit on sales
up to and including three hundred thousand dollars ($300,000),
at a rate of sixteen percent (16%) on gross profit on sales
<PAGE>
Mr. Alan M. Bynder
November 29, 1996
Page 2
between three hundred thousand one dollars ($300,001) and five hundred thousand
dollars ($500,000), and at a rate of twenty percent (20%) on gross profit on
sales over five hundred thousand dollars ($500,000). The commissions shall be
due and payable within a reasonable time after completion of the commissioned
sales but no later than one (1) month after such sale. In no event shall the
Company be obligated to pay commissions in excess of two hundred thousand
dollars ($200,000) per annum. The commissions will not be payable to sales prior
to the effective time of the sale and purchase of the assets of International
Data Products, LLC ("IDP") pursuant to the Asset Purchase Agreement (the
"Purchase Agreement"), dated as of November 29, 1996, by and among the Company,
IDP and certain members of IDP. "Gross profit on sales" shall mean gross sales
net of returns and customary allowances less the actual (specifically
identifiable) product cost determined in accordance with company-wide accounting
principles of the Company and generally accepted accounting principles whether
or not consistent with IDP's past accounting practices.
5. Earn-Out. You will be eligible to receive earn-out
--------
payments calculated and payable pursuant to Exhibit A hereto.
The Earn-Out will be subject to the Company's right of set-off
provided under section 7.4 of the Purchase Agreement.
6. Employee Benefit Programs. During the term of your employment, you
-------------------------
will be entitled to participate in all employee benefit programs of the Company
at the time or thereafter made available to the Company's executives or salaried
employees generally, including, without limitation, pension and other retirement
plans, profit sharing plans, group life insurance, accidental death and
dismemberment insurance, hospitalization, surgical, major medical and dental
coverage, sick leave (including salary continuation arrangements), long-term
disability, vacations, holidays and other employee benefit programs sponsored by
the Company. You shall also receive a car allowance of $325 per month.
7. Consequences of Termination of Employment.
-----------------------------------------
(a) For Cause. Following the Effective Date, the Company may terminate
---------
your employment for "Cause." "Cause" will exist in the event you are convicted
of a felony or, in carrying out your duties, you are guilty of gross negligence
or gross misconduct resulting, in either case, in material harm to the Company.
In the event your employment is terminated for Cause, you will be entitled to
any unpaid salary, commissions and earn-
<PAGE>
Mr. Alan M. Bynder
November 29, 1996
Page 3
out due you pursuant to paragraphs 3, 4 and 5 above through the date of
termination, and you will be entitled to no other compensation from the Company.
(b) Without Cause. Following the Effective Date, the Company may
-------------
terminate your employment without Cause. In such event, you will be entitled to
continue to receive the lesser of your base salary for the Term of this letter
agreement or twelve (12) months of your base salary.
(c) Change in Responsibilities Following a Change in Control. Following
--------------------------------------------------------
the Effective Date, in the event your duties and responsibilities regarding
sales and marketing are substantially reduced in the International Data Products
division of the Company, without Cause, within twelve (12) months following a
Change of Control (defined below) of the Company, your resulting resignation of
employment will be treated as a termination of employment by the Company without
Cause in accordance with subparagraph 7(b) above. "Change of Control" as used
herein shall be defined as the occurrence of any of the following events:
(i) The shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least fifty percent (50%)
of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation; or
(ii) The shareholders of the Company approve (A) a plan of
complete liquidation of the Company or (B) an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets; or
(iii) Any "person" (as defined in sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power
represented by the Company's then outstanding voting securities.
<PAGE>
Mr. Alan M. Bynder
November 29, 1996
Page 4
(d) Voluntary Termination. In the event you terminate your employment
---------------------
with the Company of your own volition, such termination will have the same
consequences as a termination for Cause under subparagraph 7(a) above.
8. Assignability; Binding Nature. Commencing on the Effective Date,
-----------------------------
this letter agreement will be binding upon you and the Company and your
respective successors, heirs, and assigns. This letter agreement may not be
assigned by you except that your rights to compensation and benefits hereunder,
subject to the limitations of this letter agreement, may be transferred by will
or operation of law. No rights or obligations of the Company under this letter
agreement may be assigned or transferred except by operation of law in the event
of a merger or consolidation in which the Company is not the continuing entity,
or the sale or liquidation of all or substantially all of the assets of the
Company provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and assumes the Company's
obligations under this letter agreement contractually or as a matter of law.
9. Governing Law; Arbitration. This letter agreement will be deemed a
--------------------------
contract made under, and for all purposes shall be construed in accordance with,
the laws of California. Any controversy or claim relating to this letter
agreement any breach thereof, and any claims you may have against the Company or
any officer, director or employee of the Company or arising from or relating to
your employment with the Company, will be settled solely and finally by
arbitration in accordance with the rules of the American Arbitration Association
("AAA") then in effect in the State of California, and judgment upon such award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. The arbitrator may provide that the cost of the arbitration (including
reasonable legal fees) incurred by you or the Company will be borne by the
non-prevailing party.
10. Withholding. Anything to the contrary notwithstanding, following
-----------
the Effective Date all payments made by the Company hereunder to you or your
estate or beneficiaries will be subject to tax withholding pursuant to any
applicable laws or regulations. In lieu of withholding, the Company may, in its
sole discretion, accept other provision for payment of taxes as required by law,
provided it is satisfied that all requirements of law affecting its
responsibilities to withhold such taxes have been satisfied.
11. Entire Agreement. Except as otherwise specifically
----------------
provided in this Agreement, this letter agreement contains all
the legally binding understandings and agreements between you
<PAGE>
Mr. Alan M. Bynder
November 29, 1996
Page 5
and the Company pertaining to the subject matter of this letter agreement and
supersedes all such agreements, whether oral or in writing, previously entered
into between the parties.
12. Miscellaneous. No provision of this letter agreement may be amended
-------------
or waived unless such amendment or waiver is agreed to by you and the Board in
writing. No waiver by you or the Company of the breach of any condition or
provision of this letter agreement will be deemed a waiver of a similar or
dissimilar provision or condition at the same or any prior or subsequent time.
In the event any portion of this letter agreement is determined to be invalid or
unenforceable for any reason, the remaining portions shall be unaffected thereby
and will remain in full force and effect to the fullest extent permitted by law.
Please acknowledge your acceptance and understanding of this letter
agreement by signing below.
Sincerely,
______________________________________
ACKNOWLEDGED AND AGREED:
________________________________
Dated: November 29, 1996
<PAGE>
EXHIBIT A
---------
EARN-OUT
--------
1. Within thirty (30) days after the period ending December 31, 1998,
Western Micro Technology, Inc. ("WMT") shall calculate, and deliver notice of
such calculation (the "Calculation") to Alan M. Bynder ("Bynder") and Michael R.
Duhaime ("Duhaime"), an earn-out payment to be paid to Bynder and Duhaime if the
Gross Profit Dollars (as defined in paragraph 2) of the International Data
Products division of WMT during such period exceeds $2.4 million (the "Earn-Out
Payment"). The Earn-Out Payment shall be paid in shares of Common Stock, no par
value (the "Shares"), of WMT. The value of the Shares will be calculated based
on the ten (10) day simple average of the closing prices of the Shares in the
last ten (10) trading days prior to December 31, 1998. WMT shall pay the
Earn-Out Payment based on a calculation of sixty percent (60%) of the Shares to
Bynder and forty percent (40%) of the Shares to Duhaime. The Shares shall be
rounded to the nearest whole number and no fractional shares will be issued.
The Earn-Out Payment shall equal the following amount:
Gross Profit Dollars Earn-Out Payment
-------------------- ----------------
$0 - $2,400,000 0 Shares
$2,400,000 - $2,799,999 40,000 Shares
$2,800,000 - $3,199,999 55,000 Shares
$3,200,000 - $3,599,999 70,000 Shares
$3,600,000 - $3,999,999 85,000 Shares
$4,000,000 - $4,999,999 100,000 Shares
Greather than $5,000,000 140,000 Shares
2. Gross Profit Dollars shall be calculated on the
following sales (the "Sales"):
(a) Sales by the International Data Products division of WMT to
customers identified in the Asset Purchase Agreement (the "Asset Purchase
Agreement"), dated as of November 29, 1996, by and among WMT, IDP and certain
members of IDP; and
(b) Sales by the International Data Products division of WMT customers
that are recruited after the Closing Date as customers for WMT by any of the
International Data Products employees identified in the Asset Purchase Agreement
or by an employees hired in the International Data Products division of WMT.
"Gross Profit Dollars" shall mean gross Sales net of returns and
customary allowances less the actual (specifically identifiable) product cost
(the "Costs") determined in
A-1
<PAGE>
accordance with generally accepted accounting principles whether or not
consistent with IDP's past accounting practices.
For the purpose of calculating the Earn-Out Payment, separate books and
records shall be maintained by WMT with respect to the Sales and Costs. Such
books and records shall be maintained in accordance with WMT's company-wide
accounting principles and generally accepted accounting principles whether or
not consistent with IDP's past accounting practices.
Bynder and Duhaime will be entitled to reasonable rights to audit the
Earn-Out Payment. Upon receipt of the Calculation from WMT, Bynder and Duhaime
shall have ten (10) business days in which to request in writing that WMT
deliver within thirty (30) business days of such request the books and records,
and back up invoices and schedules, to Bynder and Duhaime or their accountants
to confirm the calculation. If, within ten (10) business days, Bynder and
Duhaime do not request such books and records or if within ten (10) business
days after receipt of such books and records Bynder and Duhaime do not object to
such Calculation, WMT shall deliver instructions to its transfer agent to issue
and deliver to Bynder and Duhaime the Shares of WMT Common as soon as reasonably
practicable. If Bynder and Duhaime request such books and records and within ten
(10) business days after receipt of such books and records, Bynder and Duhaime
object in writing to WMT of the Calculation, WMT, Bynder and Duhaime shall work
together in good faith to see if they can reach an agreement on the appropriate
Earn-Out Payment. If within fourteen (14) days the parties have not reached an
agreement, the parties shall choose a nationally recognized accounting firm
mutually agreed upon by WMT, Bynder and Duhaime who shall calculate the amount,
or if no such agreement can be reached, then each of WMT, Bynder and Duhaime
shall appoint one nationally recognized accounting firm, which accounting firms
shall pick an additional nationally recognized accounting firm to which such
disputes shall be referred. In the event that either WMT, Bynder or Duhaime
shall fail to select a nationally recognized firm in accordance with the
provisions of this subsection within thirty (30) days after notice by the other
party that such selection should be made, and such other party has selected a
nationally recognized accounting firm pursuant to the provisions hereof, such
dispute shall be referred to the nationally recognized accounting firm selected
by such party. The decision of such nationally recognized accounting firm shall
be conclusive and binding on both parties. Each of WMT, Bynder and Duhaime shall
pay the costs and expenses of its own accountant and Bynder and Duhaime shall
pay the costs of the nationally recognized accounting firm selected by both
parties or their representatives (the "Independent Accountant); provided,
however, that if a dispute arises that is resolved by the Independent Accountant
and the amount of the Earn-Out Payment as calculated by the Independent
Accountant exceeds by more than ten percent (10%) the Calculation, WMT shall pay
the
A-2
<PAGE>
costs and expenses of Bynder's and Duhaime's and the Independent
Accountant's costs and expenses.
3. During the period subsequent to Closing and ending on December 31,
1998, (a) WMT shall conduct its business in conformity with sound business
practices and consistent with past practices and (b) WMT shall not take any
voluntary action for the purpose of preventing Bynder or Duhaime from being able
to earn the Earn-Out Payment or avoiding or seeking to avoid the observance or
performance of any of the terms under this Exhibit A, and shall at all times in
good faith assist in carrying out all such action as may be reasonably necessary
or appropriate in order to protect the rights of Bynder and Duhaime with respect
to its ability to earn the Earn-Out Payment against impairment. Notwithstanding
this paragraph 3, nothing contained herein shall require the officers and
directors of WMT to maintain WMT's business in a manner or take actions that
would violate their fiduciary duties to WMT and its shareholders.
4. If between the date hereof and December 31, 1998, WMT commences a
voluntary case under the federal bankruptcy laws or a petition is filed against
WMT under the federal bankruptcy laws and is not dismissed within ninety (90)
days, Bynder and Duhaime shall be entitled to seek recovery of the Earn-Out
Payment due as an unsecured creditor of WMT in the related bankruptcy
proceedings.
A-3
WESTERN MICRO TECHNOLOGY, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
FOR OUTSIDE DIRECTORS
Western Micro Technology, Inc., a California corporation (the
"Company"), hereby grants an option to purchase 5,000 Shares of its common stock
to the optionee named below. The terms and conditions of this option are set
forth in this Nonstatutory Stock Option Agreement for Outside Directors (the
"Agreement"). Any rights optionee may have are subject to the terms of this
Agreement.
Date of Option Grant: January 18, 1996
Name of Optionee: William H. Welling
Exercise Price per Share (100% of fair market value): $5.00
* * * * *
WESTERN MICRO TECHNOLOGY, INC.
_______________________________________
Signature
_______________________________________
Date
-1-
<PAGE>
WESTERN MICRO TECHNOLOGY, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
FOR OUTSIDE DIRECTORS
Nonstatutory Stock
Option This option is not intended to be an incentive stock
option under section 422 of the Internal Revenue Code
and will be interpreted accordingly.
Vesting/Exercisability Your right to exercise 2,500 Shares of this option
vests immediately and the remaining 2,500 Shares vest
at a rate of fifty percent (50%) upon each one-year
anniversary of the Date of Option Grant. In addition,
your right to exercise this option shall vest in full
if (1) your service as an Outside Director of the
Company terminates because of death or Total and
Permanent Disability or (2) there is a Change in
Control of the Company (as defined in the Company's
1994 Stock Option Plan as amended and restated).
However, no Shares will vest after your service as an
Outside Director of the Company has terminated for
any reason.
Term Your option will expire at Company headquarters on
the 10th anniversary of the Date of Option Grant, as
shown on the cover sheet. (It will expire earlier if
your service as an Outside Director of the Company
terminates, as described below.)
Termination If your service as an Outside Director of the Company
terminates for any reason except death, Total and
Permanent Disability or voluntary retirement from the
Board of Directors after age 60 (as described below),
then your option will expire at the close of business
at Company headquarters on the 90th day after your
service as an Outside Director terminates.
Death If you die while an Outside Director of the Company,
then your option will expire at the close of business
at Company headquarters on the date twelve (12)
months after the date of death. During that twelve
(12) month period, your estate or heirs may exercise
your entire option.
Total and Permanent If your service as an Outside Director of the Company
Disability terminates because of your Total and Permanent
Disability, then your option will expire at the close
of business at Company headquarters on the date
twelve (12) months after your service as an Outside
Director of the Company terminates.
"Total and Permanent Disability" means that you are
unable to engage in any substantial gainful activity
by reason of any medically determinable physical or
mental impairment which can be expected to result in
death or which has lasted, or can be expected to
last, for a continuous period of not less than twelve
(12) months.
-2-
<PAGE>
Voluntary Retirement If your service as an Outside Director of the Company
terminates due to your voluntary retirement from the
Board of Directors at or after age 60, then your
option will expire at the close of business at
Company headquarters on the date twelve (12) months
after your service as an Outside Director of the
Company terminates.
Restrictions on The Company will not permit you to exercise this
Exercise option if the issuance of Shares at that time would
violate any law or regulation.
Notice of Exercise When you wish to exercise this option, you must
notify the Company by filing the Company's "Notice of
Exercise" form at the address given on the form. Your
notice must specify how many Shares you wish to
purchase. Your notice must also specify how your
Shares should be registered (whether in your name
only, or in your and your spouse's names as community
property or as joint tenants with right of
survivorship). The notice will be effective when it
is received by the Company.
If someone else wants to exercise this option after
your death, that person must prove to the Company's
satisfaction that he or she is entitled to do so.
Form of Payment When you submit your Notice of Exercise, you must
include payment of the option price for the Shares
you are purchasing. Payment may be made in one (or a
combination) of the following forms:
o Your personal check, a cashier's check or a money
order.
o Shares which have already been owned by you for more
than six (6) months and which are surrendered to the
Company. The value of the Shares, determined as of
the effective date of the option exercise, will be
applied to the option price.
o By delivery of an irrevocable direction to a
securities broker to sell Shares and to deliver all
or part of the sale proceeds to the Company in
payment of the aggregate Exercise Price.
Restrictions on Resale You may not sell any Shares received upon the
exercise of this option at a time when applicable
laws, regulations or when Company or underwriter
trading policies prohibit a sale.
-3-
<PAGE>
Transfer of Option Prior to your death, you may only exercise this
option. You cannot transfer or assign this option.
For instance, you may not sell this option or use it
as security for a loan. If you attempt to do any of
these things, this option will immediately become
invalid. You may, however, dispose of this option in
your will.
Regardless of any marital property settlement
agreement, the Company is not obligated to honor a
Notice of Exercise from your spouse, nor is the
Company obligated to recognize your spouse's interest
in your option in any other way.
Shares Shares means the common stock, no par value, of the
Company.
Shareholder Rights You, your estate and/or your heirs, have no rights as
a shareholder of the Company until a certificate for
your Shares has been issued. No adjustments are made
for dividends or other rights if the applicable
record date occurs before your stock certificate is
issued, except as described in this Agreement.
Adjustments In the event of a stock split, a stock dividend or a
similar change in the Company stock, the number of
Shares covered by this option and the exercise price
per share may be adjusted. Your option shall be
subject to the terms of the agreement of merger,
liquidation or reorganization in the event the
Company is subject to such corporate activity. Any
fractional number of Shares available under the
option shall be rounded to the nearest whole number.
Applicable Law This option will be interpreted and enforced under
the laws of the State of California.
Other Agreements This Agreement constitutes the entire understanding
between you and the Company regarding this option.
Any prior agreements, commitments or negotiations
concerning this option are superseded.
-4-
<PAGE>
NOTICE OF EXERCISE OF STOCK OPTION
Western Micro Technology, Inc.
254 E. Hacienda Avenue
Campbell, CA 95008
Attn: Chief Financial Officer
Re: Exercise of Stock Option to Purchase Shares of
Company Common Stock
Ladies and Gentlemen:
Pursuant to the Nonstatutory Stock Option Agreement for Outside
Directors dated January 18, 1996 (the "Option Agreement"), between Western Micro
Technology, Inc., a California corporation (the "Company"), and the undersigned,
I hereby elect to purchase _________ shares of the common stock of the Company
(the "Shares"), at the price of $5.00 per Share. My check in the amount of
$_________ is enclosed. The Shares are to be issued in _________ certificate(s)
and registered in the name(s) of:
__________________________
(Print Name)
__________________________
(Print Name, if any)
The undersigned understands that there may be tax consequences as a
result of the purchase or disposition of the Shares. The undersigned represents
that he or she has consulted with any tax consultants he or she deems advisable
in connection with the purchase or disposition of the Shares and the undersigned
is not relying on the Company for any tax advice.
The undersigned acknowledges that he or she has received, read and
understood the Option Agreement and agrees to abide by and be bound by its terms
and conditions. The undersigned represents that the Shares are being acquired
solely for his or her own account and not as a nominee for any other party, or
for investment, and that the undersigned purchaser will not offer, sell or
otherwise dispose of any such Shares except under circumstances that will not
result in a violation of the Securities Act of 1933, as amended, or any state
securities laws.
Dated: _____________________
___________________________________________
(Signature)
___________________________________________
(Please Print Name)
Social Security No. _______________________
___________________________________________
___________________________________________
-5-
WESTERN MICRO TECHNOLOGY, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
FOR OUTSIDE DIRECTORS
Western Micro Technology, Inc., a California corporation (the
"Company"), hereby grants an option to purchase 5,000 Shares of its common stock
to the optionee named below. The terms and conditions of this option are set
forth in this Nonstatutory Stock Option Agreement for Outside Directors (the
"Agreement"). Any rights optionee may have are subject to the terms of this
Agreement.
Date of Option Grant: January 18, 1996
Name of Optionee: K. William Sickler
Exercise Price per Share (100% of fair market value): $5.00
* * * * *
WESTERN MICRO TECHNOLOGY, INC.
_______________________________________
Signature
_______________________________________
Date
-1-
<PAGE>
WESTERN MICRO TECHNOLOGY, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
FOR OUTSIDE DIRECTORS
Nonstatutory Stock This option is not intended to be an incentive stock
Option option under section 422 of the Internal Revenue Code
and will be interpreted accordingly.
Vesting/Exercisability Your right to exercise 2,500 Shares of this option
vests immediately and the remaining 2,500 Shares vest
at a rate of fifty percent (50%) upon each one-year
anniversary of the Date of Option Grant. In addition,
your right to exercise this option shall vest in full
if (1) your service as an Outside Director of the
Company terminates because of death or Total and
Permanent Disability or (2) there is a Change in
Control of the Company (as defined in the Company's
1994 Stock Option Plan as amended and restated).
However, no Shares will vest after your service as an
Outside Director of the Company has terminated for
any reason.
Term Your option will expire at Company headquarters on
the 10th anniversary of the Date of Option Grant, as
shown on the cover sheet. (It will expire earlier if
your service as an Outside Director of the Company
terminates, as described below.)
Termination If your service as an Outside Director of the Company
terminates for any reason except death, Total and
Permanent Disability or voluntary retirement from the
Board of Directors after age 60 (as described below),
then your option will expire at the close of business
at Company headquarters on the 90th day after your
service as an Outside Director terminates.
Death If you die while an Outside Director of the Company,
then your option will expire at the close of business
at Company headquarters on the date twelve (12)
months after the date of death. During that twelve
(12) month period, your estate or heirs may exercise
your entire option.
Total and Permanent If your service as an Outside Director of the Company
Disability terminates because of your Total and Permanent
Disability, then your option will expire at the close
of business at Company headquarters on the date
twelve (12) months after your service as an Outside
Director of the Company terminates.
"Total and Permanent Disability" means that you are
unable to engage in any substantial gainful activity
by reason of any medically determinable physical or
mental impairment which can be expected to result in
death or which has lasted, or can be expected to
last, for a continuous period of not less than twelve
(12) months.
-2-
<PAGE>
Voluntary Retirement If your service as an Outside Director of the Company
terminates due to your voluntary retirement from the
Board of Directors at or after age 60, then your
option will expire at the close of business at
Company headquarters on the date twelve (12) months
after your service as an Outside Director of the
Company terminates.
Restrictions on The Company will not permit you to exercise this
Exercise option if the issuance of Shares at that time would
violate any law or regulation.
Notice of Exercise When you wish to exercise this option, you must
notify the Company by filing the Company's "Notice of
Exercise" form at the address given on the form. Your
notice must specify how many Shares you wish to
purchase. Your notice must also specify how your
Shares should be registered (whether in your name
only, or in your and your spouse's names as community
property or as joint tenants with right of
survivorship). The notice will be effective when it
is received by the Company.
If someone else wants to exercise this option after
your death, that person must prove to the Company's
satisfaction that he or she is entitled to do so.
Form of Payment When you submit your Notice of Exercise, you must
include payment of the option price for the Shares
you are purchasing. Payment may be made in one (or a
combination) of the following forms:
o Your personal check, a cashier's check or a money
order.
o Shares which have already been owned by you for more
than six (6) months and which are surrendered to the
Company. The value of the Shares, determined as of
the effective date of the option exercise, will be
applied to the option price.
o By delivery of an irrevocable direction to a
securities broker to sell Shares and to deliver all
or part of the sale proceeds to the Company in
payment of the aggregate Exercise Price.
Restrictions on Resale You may not sell any Shares received upon the
exercise of this option at a time when applicable
laws, regulations or when Company or underwriter
trading policies prohibit a sale.
-3-
<PAGE>
Transfer of Option Prior to your death, you may only exercise this
option. You cannot transfer or assign this option.
For instance, you may not sell this option or use it
as security for a loan. If you attempt to do any of
these things, this option will immediately become
invalid. You may, however, dispose of this option in
your will.
Regardless of any marital property settlement
agreement, the Company is not obligated to honor a
Notice of Exercise from your spouse, nor is the
Company obligated to recognize your spouse's interest
in your option in any other way.
Shares Shares means the common stock, no par value, of the
Company.
Shareholder Rights You, your estate and/or your heirs, have no rights as
a shareholder of the Company until a certificate for
your Shares has been issued. No adjustments are made
for dividends or other rights if the applicable
record date occurs before your stock certificate is
issued, except as described in this Agreement.
Adjustments In the event of a stock split, a stock dividend or a
similar change in the Company stock, the number of
Shares covered by this option and the exercise price
per share may be adjusted. Your option shall be
subject to the terms of the agreement of merger,
liquidation or reorganization in the event the
Company is subject to such corporate activity. Any
fractional number of Shares available under the
option shall be rounded to the nearest whole number.
Applicable Law This option will be interpreted and
enforced under the laws of the State of California.
Other Agreements This Agreement constitutes the entire understanding
between you and the Company regarding this option.
Any prior agreements, commitments or negotiations
concerning this option are superseded.
-4-
<PAGE>
NOTICE OF EXERCISE OF STOCK OPTION
Western Micro Technology, Inc.
254 E. Hacienda Avenue
Campbell, CA 95008
Attn: Chief Financial Officer
Re: Exercise of Stock Option to Purchase Shares of Company
Common Stock
Ladies and Gentlemen:
Pursuant to the Nonstatutory Stock Option Agreement for Outside
Directors dated January 18, 1996 (the "Option Agreement"), between Western Micro
Technology, Inc., a California corporation (the "Company"), and the undersigned,
I hereby elect to purchase _________ shares of the common stock of the Company
(the "Shares"), at the price of $5.00 per Share. My check in the amount of
$_________ is enclosed. The Shares are to be issued in _________ certificate(s)
and registered in the name(s) of:
__________________________
(Print Name)
__________________________
(Print Name, if any)
The undersigned understands that there may be tax consequences as a
result of the purchase or disposition of the Shares. The undersigned represents
that he or she has consulted with any tax consultants he or she deems advisable
in connection with the purchase or disposition of the Shares and the undersigned
is not relying on the Company for any tax advice.
The undersigned acknowledges that he or she has received, read and
understood the Option Agreement and agrees to abide by and be bound by its terms
and conditions. The undersigned represents that the Shares are being acquired
solely for his or her own account and not as a nominee for any other party, or
for investment, and that the undersigned purchaser will not offer, sell or
otherwise dispose of any such Shares except under circumstances that will not
result in a violation of the Securities Act of 1933, as amended, or any state
securities laws.
Dated: _____________________
___________________________________________
(Signature)
___________________________________________
(Please Print Name)
Social Security No. _______________________
___________________________________________
___________________________________________
-5-
Exhibit 23.1
CONSENT OF COOPERS & LYBRAND LLP
We consent to the incorporation by reference in this registration
statement on Form S-8 (File No. 333-__________) of our reports dated January 31,
1997 on our audits of the consolidated financial statements and financial
statement schedules of Western Micro Technology, Inc.
/s/ COOPERS & LYBRAND LLP
San Jose, CA
June 30, 1997
