<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 4, 1997
REGISTRATION NO. 333-27369
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
MERISEL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 5045 95-4172359
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
200 CONTINENTAL BOULEVARD
EL SEGUNDO, CALIFORNIA 90245
(310) 615-3080
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
KAREN A. TALLMAN, ESQ.
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
MERISEL, INC.
200 CONTINENTAL BOULEVARD
EL SEGUNDO, CALIFORNIA 90245
(310) 615-3080
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPIES TO:
JOSEPH J. GIUNTA, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
300 SOUTH GRAND AVENUE
LOS ANGELES, CA 90071-3144
(213) 687-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: The
expiration date of the Exchange Offer of the Registrant described in the
Supplement included as a part of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
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- --------------------------------------------------------------------------------
<PAGE>
INTRODUCTORY STATEMENT
This Post Effective Amendment No. 1 amends and supplements the Registration
Statement (the "Registration Statement") on Form S-4 of Merisel, Inc. (the
"Company"), dated July 31, 1997, relating to the proposed exchange of the
Company's 12 1/2% Senior Notes due 2004 for common stock of the Company. This
Post Effective Amendment No. 1 reflects recent developments related to certain
alternative restructuring proposals that the Company has received. This Post
Effective Amendment No. 1 also reflects the change by the Company's Board of
Directors of its recommendations with respect to the New Common Stock Issuance
and the Prepackaged Plan.
Unless otherwise indicated herein, capitalized terms used, but not otherwise
defined, shall have the meanings ascribed to them in the Registration
Statement.
II-1
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF LOS ANGELES, STATE OF
CALIFORNIA, ON SEPTEMBER 4, 1997.
Merisel, Inc.
By: /s/ Dwight A. Steffensen
--------------------------------
DWIGHT A. STEFFENSEN
CHAIRMAN OF THE BOARD OF
DIRECTORS,
AND CHIEF EXECUTIVE OFFICER
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
DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Dwight A. Steffensen Chairman of the September 4, 1997
- ------------------------------------- Board of Directors,
DWIGHT A. STEFFENSEN and Chief Executive
Officer (Principal
Executive Officer)
/s/ James E. Illson(1) Senior Vice September 4, 1997
- ------------------------------------- President--
JAMES E. ILLSON Finance, Chief
Financial Officer,
and Secretary
(Principal
Financial and
Accounting Officer)
/s/ Lawrence J. Schoenberg(1) Director September 4, 1997
- -------------------------------------
LAWRENCE J. SCHOENBERG
/s/ David L. House(1) Director September 4, 1997
- -------------------------------------
DAVID L. HOUSE
/s/ Dr. Arnold Miller(1) Director September 4, 1997
- -------------------------------------
DR. ARNOLD MILLER
/s/ Joseph Abrams(1) Director September 4, 1997
- -------------------------------------
JOSEPH ABRAMS
</TABLE>
- --------
(1) By Dwight A. Steffensen, attorney-in-fact.
II-2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENTS NUMBER
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<C> <S> <C>
2.1 Purchase Agreement dated as of August 29, 1996.(21)
2.2 Amendment 1 to Purchase Agreement dated as of October 4,
1996.(21)
2.3 Amended and Restated Receivables Transfer Agreement dated as
of September 27, 1996 by and between Merisel Americas, Inc.
and Merisel Capital Funding, Inc.(21)
2.4 Amended and Restated Receivables and Servicing Agreement
dated as of September 27, 1996, by and between Merisel
Capital Funding, Inc., Redwood Receivables Corporation,
Merisel Americas, Inc. and General Electric Capital
Corporation.(21)
2.5 Amendment No. 1 and Waiver to Amended and Restated
Receivables Purchase and Servicing Agreement dated as of
November 7, 1996 among Merisel Capital Funding, Inc.,
Redwood Receivables Corporation, Merisel Americas, Inc.
Electric and General Capital Corporation.(25)
2.6 Amendment No. 1 and Waiver to Amended and Restated
Receivables Transfer Agreement dated as of November 7, 1996
by and between Merisel Americas, Inc. and Merisel Capital
Funding, Inc.(25)
2.7 Settlement Agreement and Release dated February 13, 1997 by
and among CHS Electronics, Inc., Merisel, Inc. and Merisel
Europe, Inc.(25)
2.8 Asset Purchase Agreement dated January 15, 1997 by and among
SYNNEX Information Technologies, Inc., SynFab, Inc. and
Merisel FAB, Inc.(25)
2.9 Amendment No. 1 to the Asset Purchase Agreement dated as of
March 6, 1997 by and among Merisel, Inc., Merisel FAB,Inc.,
SYNNEX Information Technologies, Inc. and ComputerLand
Corporation, successor-in-interest to SynFab, Inc.(25)
3.1 Restated Certificate of Incorporation of Registrant.(1)
3.2 Amendment to Certificate of Incorporation of Registrant
dated August 22, 1990.(6)
3.3 Bylaws, as amended, of Merisel, Inc.(8)
4 Indenture dated October 15, 1994 between the Company and
NationsBank of Texas, N.A., as Trustee, relating to the
Company's 12.5% Senior Notes Due 2004, including the form of
such Senior Notes attached as Exhibit A thereto.(14)
4.1 First Amendment to Amended and Restated Revolving Credit
Agreement dated as of June 30, 1996 by and among Merisel
Americas, Inc., Merisel Europe, Inc., Merisel, Inc. and the
lender parties thereto.(21)
4.2 Second Amendment and Waiver to Amended and Restated
Revolving Credit Agreement dated as of October 2, 1996 by
and among Merisel Americas, Inc., Merisel Europe, Inc.,
Merisel, Inc. and the lender parties thereto.(21)
4.3 Third Amendment to Amended and Restated Subordinated Note
Purchase Agreement dated as of June 30, 1996 by and among
Merisel Americas, Inc. and the Noteholders signatory
thereto.(21)
4.4 Fourth Amendment and Waiver to Amended and Restated
Subordinated Note Purchase Agreement dated as of October 2,
1996 by and among Merisel Americas, Inc. and the Noteholders
signatory thereto.(21)
4.5 Fourth Amendment to Amended and Restated Senior Note
Purchase Agreement dated as of June 30, 1996 by and among
Merisel Americas, Inc., Merisel, Inc. and the Noteholders
signatory thereto.(21)
4.6 Fifth Amendment and Waiver to Amended and Restated Senior
Note Purchase Agreement dated as of October 2, 1996 by and
among Merisel Americas, Inc., Merisel, Inc. and the
Noteholders signatory thereto.(21)
4.7 Third Amendment and Waiver to Amended and Restated Revolving
Credit Agreement dated as of February 27, 1997 by and among
Merisel Americas, Inc. and the Noteholders signatory
thereto.(25)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENTS NUMBER
------- ------------------------ ------
<C> <S> <C>
4.8 Fifth Waiver to Amended and Restated Subordinated Note
Purchase Agreement dated as of February 27, 1997 by and
among Merisel Americas, Inc. and the signatory Noteholders
thereto.(25)
4.9 Sixth Amendment and Waiver to Amended and Restated Senior
Note Purchase Agreement dated February 27, 1997 by and among
Merisel Americas, Inc., Merisel, Inc. and the Noteholders
signatory thereto.(25)
4.10 Form of Limited Waiver and Voting Agreement, dated as of
April 11, 1997, by and among Merisel, Inc. and the holders
of the 12 1/2% Senior Notes due December 31, 2004.(25)
4.11 Form of Limited Waiver and Agreement to Amend dated as of
April 14, 1997 by and among Merisel, Inc., Merisel Europe,
Inc., and the holders of the Revolving Credit Agreement and
the Senior Note Purchase Agreement.(25)
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
regarding legality of securities to be issued.(26)
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
regarding tax matters.(26)
10.1 Microamerica Substitute Stock Option Plan of Registrant
together with related forms of Stock Option Agreements.(4)*
10.2 1983 Stock Option Plan of Softsel Computer Products, Inc.,
as amended, together with Form of Incentive Stock Option
Agreement and Form of Nonqualified Stock Option Agreement
under 1983 Employee Stock Option Plan.(7)*
10.3 1983 Employee Stock Option Plan of Softsel Computer
Products, Inc., as amended, together with Form of Incentive
Stock Option Agreement and Form of Nonqualified Stock Option
Agreement under the 1983 Employee Stock Option Plan.(7)*
10.4 1991 Employee Stock Option Plan of Merisel, Inc. together
with Form of Incentive Stock Option Agreement and Form of
Nonqualified Stock Option Agreement under the 1991 Employee
Stock Option Plan.(8)*
10.5 Merisel, Inc. 1992 Stock Option Plan for Nonemployee
Directors.(10)*
10.6 Incentive Stock Option Agreements between Registrant and
Michael D. Pickett dated as of October 1, 1986 and March 4,
1987.(1)*
10.7 Nonqualified Stock Option Agreement between Registrant and
Michael D. Pickett dated as of December 11, 1987.(1)*
10.8 Amendment to Stock Option Agreements together with Joint
Escrow Instructions between Michael D. Pickett and
Registrant dated as of August 11, 1988.(1)*
10.9 Softsel Computer Products, Inc. Executive Deferred
Compensation Plan. (9)*
10.10 Employment Agreement between Registrant and Michael D.
Pickett dated as of August 14, 1992.(11)*
10.11 Merisel, Inc. Amended and Restated 401(k) Retirement Savings
Plan.(15)*
10.12 Asset Transfer, Assignment and Assumption Agreement dated as
of December 23, 1993 by and between Registrant and Merisel
Americas, Inc.(13)
10.13 Asset Transfer, Assignment and Assumption Agreement dated as
of December 23, 1993 by and between Registrant and Merisel
Europe, Inc.(13)
10.14 Lease between Registrant and Pacifica Holding Company dated
April 6, 1989.(2)
10.15 Lease Agreement dated October 27, 1988 by and between
Rosewood Development Corporation and Microamerica, Inc. re:
property located in Marlborough, Massachusetts.(3)
10.16 Lease Agreement dated May 23, 1990 by and between Kilroy-
Freehold El Segundo Company and Softsel/Microamerica, Inc.,
re: property located in El Segundo, California.(5)
10.17 Lease Agreement dated October 1991 by and between Koll
Hayward Associates II and Merisel, Inc.(9)
10.18 Asset Purchase Agreement dated January 31, 1994 between
ComputerLand Corporation, Merisel FAB, Inc. and for purposes
of Section 2.2 thereof, the Registrant. Portions of this
agreement have been omitted pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.(12)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENTS NUMBER
------- ------------------------ ------
<C> <S> <C>
10.19 Guaranty Agreement dated January 31, 1994 between
ComputerLand Corporation and the Registrant.(12)
10.20 Distribution and Services Agreement dated January 31, 1994
between ComputerLand Corporation and Merisel FAB, Inc.
("Services Agreement"). Portions of this agreement has been
omitted pursuant to Rule 24b-2 of the Securities Act of
1934, as amended.(12)
10.21 Amendment Number 13 to Services Agreement dated as of
January 31, 1996. Portions of this agreement have been
omitted pursuant to Rule 24b-2 of the Securities Act of
1934, as amended.(19)
10.22 Stock Purchase Agreement dated January 31, 1994 between the
Registrant and ComputerLand Corporation.(12)
10.23 Amended and Restated Senior Note Purchase Agreement by and
among each purchasers named therein and Merisel Americas,
Inc., dated as of December 23, 1993 ("Senior Note Purchase
Agreement").(13)
10.24 First Amendment, dated as of September 30, 1994 to Senior
Note Purchase Agreement, by and among the Noteholders named
therein and Merisel Americas, Inc.(16)
10.25 Form of Second Amendment dated as of June 23, 1995 to Senior
Note Purchase Agreement.(19)
10.26 Amended and Restated Subordinated Note Purchase Agreement by
and among each of the purchasers named therein and Merisel
Americas, Inc., dated as of December 23, 1993 ("Subordinated
Note Purchase Agreement").(13)
10.27 First Amendment, dated as of September 30, 1994, to
Subordinated Note Purchase Agreement, by and among the
Noteholders named therein and Merisel Americas, Inc.(16)
10.28 Revolving Credit Agreement dated as of December 23, 1993
among Merisel Americas, Inc., Merisel Europe, Inc., the
Registrant, the lender parties thereto, Citicorp USA, Inc.,
as agent, and Citibank, N.A., as designated issuer
("Revolving Credit Agreement").(13)
10.29 First Amendment, dated as of September 29, 1994, to
Revolving Credit Agreement, by and among Merisel Americas,
Inc., Merisel Europe, Inc., Merisel, Inc. and the financial
institutions named therein.(16)
10.30 Second Amendment, dated as of December 1, 1994, to Revolving
Credit Agreement, by and among Merisel, Americas, Inc.,
Merisel Europe, Inc., Merisel, Inc., and the financial
institutions named therein.(15)
10.31 Third Amendment, dated as of February 27, 1995, to Revolving
Credit Agreement, by and among Merisel Americas, Inc.,
Merisel Europe, Inc., Merisel, Inc., and the financial
institutions named therein.(15)
10.32 Receivable Transfer Agreement dated as of October 2, 1995 by
and between Merisel Americas, Inc. and Merisel Capital
Funding, Inc.(17)
10.33 Receivable Purchase and Servicing Agreement dated as of
October 2, 1995 by and among Merisel Capital Funding, Inc.,
Redwood Receivables Corporation, Merisel Americas, Inc. and
General Electric Capital Corporation.(17)
10.34 Annex X to Receivable Transfer Agreement and Receivables
Purchase and Servicing Agreement dated as of October 2,
1995.(17)
10.35 Form of Receivables Purchase Agreement between Merisel
Canada, Inc. and Canadi an Master Trust dated as of December
15, 1995.(19)
10.36 Form of Security Agreement between Merisel Properties, Inc.
and Heller Financial, Inc. dated December 29, 1995.(19)
10.37 Deed of Trust, Security Agreement, Assignment of Leases and
Rents and Fixture Filing between Merisel Properties, Inc.
and Heller Financial, Inc. dated December 29, 1995.(19)
10.38 Agreement for the Sale and Purchase of Debts between Deutche
Financial Services (UK) Limited and Merisel (UK) Limited
dated October 12, 1995.(19)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENTS NUMBER
------- ------------------------ ------
<C> <S> <C>
10.39 Form of Agreement between Merisel, Inc. and Michael D.
Pickett dated February 12, 1996.(19)*
10.40 Share Purchase Agreement between Merisel, Inc. and Merisel
Asia, Inc. and Tech Pacific Holdings Ltd. dated March 7,
1996.(19)
10.41 Form of Employment Agreement between Merisel, Inc. and the
following: James L. Brill, Paul Lemerise, John Thompson, Tom
Reeves and Marty Wolf.(17)*
10.42 Form of Retention Agreement between Merisel, Inc. and the
following: James L. Brill, Paul Lemerise, John Thompson, Tom
Reeves and Marty Wolf.(17)*
10.43 Third Amendment and Waiver to Amended and Restated Senior
Note Purchase Agreement by and among each of the purchasers
named therein and Merisel Americas, Inc., dated as of April
12, 1996.(21)
10.44 Revolving Credit Agreement among Merisel Americas, Inc.,
Merisel Europe, Inc., Merisel , Inc., the lender parties
thereto, Citicorp USA, Inc., as agent, and Citibank, N.A.,
as designated issuer, as amended and restated as of April
12, 1996.(21)
10.45 Amendment Number One and Waiver to Receivables Purchase and
Servicing Agreement among Merisel Capital Funding, Inc.,
Redwood Receivables Corporation, Merisel Americas, Inc., and
General Electric Capital Corporation, dated as of April 12,
1996.(21)
10.46 Form of Second Amendment and Waiver to Amended and Restated
Subordinated Note Purchase Agreement among the dated as of
April 12, 1996.(21)
10.47 Retention Agreement between Merisel, Inc. and Susan J.
Miller-Smith dated April 22, 1996.(18)*
10.48 Employment Agreement dated February 12, 1996 between Dwight
A. Steffensen and Merisel, Inc.(22)*
10.49 Employment Agreement dated May 2, 1996 between Ronald A.
Rittenmeyer and Merisel, Inc.(22)*
10.50 Employment Agreement dated as of May 15, 1996 between
Verilyn Smith and Merisel, Inc.(22)*
10.51 Employment Agreement between Merisel, Inc. and James Illson
dated August 19, 1996.(23)*
10.52 Severance Agreement between Merisel, Inc. and James Brill
dated August 27, 1996.(23)*
10.53 Employment Agreement, dated as of September 5, 1996, between
Merisel, Inc. and James D. Wittry.(24)*
10.54 Letter Agreement dated June 1, 1995 between Merisel
Americas, Inc. and Kristin M. Rogers.(24)*
10.55 Amendment to Letter Agreement dated April 9, 1996 between
Merisel Americas, Inc. and Kristin M. Rogers.(24)*
10.56 Amendment to Letter Agreement dated August 30, 1996 between
Merisel Americas, Inc. and Kristin M. Rogers.(24)*
10.57 Retention Agreement dated April 5, 1996 between Merisel,
Inc. and Kelly M. Martin.(24)*
10.58 Letter Agreement dated June 1, 1995 between Merisel
Americas, Inc. and Archie K. Miller.(24)*
10.59 Amendment to Letter Agreement dated August 28, 1996 between
Merisel Americas, Inc. and Archie K Miller.(24)*
10.60 Retention Agreement dated April 5, 1996 between Merisel,
Inc. and Bruce A. Zeedik.(24)*
10.61 Letter Agreement dated November 29, 1996 between Merisel,
Inc. and Timothy N. Jenson.(24)*
10.62 Amendment to Letter Agreement dated April 9, 1996 between
Merisel, Inc. and Timothy N. Jenson.(24)*
10.63 Amendment to Letter Agreement dated August 22, 1996 between
Merisel, Inc. and Timothy N. Jenson.(24)*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENTS NUMBER
------- ------------------------ ------
<C> <S> <C>
10.64 Amended and Restated Employment Agreement dated November 6,
1996 between Susan J. Miller-Smith and Merisel, Inc.(24)*
10.65 Employment Agreement between Robert McInerney and Merisel,
Inc. dated February 3, 1997.(25)*
10.66 Employment Agreement between Dwight A. Steffensen and
Merisel, Inc. dated February 12, 1997.(25)*
10.67 Amendment to the Company's 1991 Employee Stock Option Plan
(as Amended through January 16, 1997).(25)
10.68 Form of Retention Agreement between Merisel, Inc. and Karen
A. Tallman.(26)*
10.69 Form of Retention Agreement between Merisel, Inc. and
Timothy N. Jenson.(26)*
10.70 Form of First Amendment to Employment Agreement between
Merisel, Inc. and James E. Illson.(26)*
10.71 Form of First Amendment to Employment Agreement between
Merisel, Inc. and Robert J. McInerney.(26)*
10.72 Form of First Amendment to Retention Agreement between
Merisel, Inc. and Thomas P. Reeves.(26)*
10.73 Form of First Amendment to Employment Agreement between
Merisel, Inc. and James D. Wittry.(26)*
23.1 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in their opinions filed as Exhibits 5.1 and 8.1).(26)
23.2 Consent of Deloitte & Touche LLP.(26)
23.3 Consent of Donaldson, Lufkin & Jenrette Securities
Corporation.
24.1 Power of Attorney (included on page II-6 of this
Registration Statement).(26)
99.1 Form of Proxy Card (included herein as Annex I to the
Supplement).
99.2 Form of Letter of Transmittal.(26)
99.3 Form of Master Ballot for 12.5% Notes.(26)
99.4 Form of Master Ballot for Old Common Stock.(26)
99.5 Form of Beneficial Owner Ballot for 12.5% Notes.(26)
99.6 Form of Beneficial Owner Ballot for Old Common Stock.(26)
99.7 Consent of James E. Illson.(26)
99.8 Supplement to Offer to Exchange and Solicitation of
Prepackaged Plan of Reorganization and Supplement to Proxy
Statement/Prospectus and Solicitation of Prepackaged Plan
Acceptances of Merisel, Inc.
99.9 Press Release, dated September 4, 1997.
99.10 Letter dated July 14, 1997 addressed to the Company from
Stonington.(27)
99.11 Letters dated August 8, 10, and 11, 1997 addressed to the
Company from Stonington.(28)
99.12 Letter dated August 29, 1997 addressed to the Company from
Stonington.(29)
</TABLE>
- --------
* Management contract or executive compensation plan or arrangement.
(1) Filed as an exhibit to the Form S-1 Registration Statement of Softsel
Computer Products, Inc., No. 33-23700, and incorporated herein by this
reference.
(2) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1989 of Softsel Computer Products, Inc., and
incorporated herein by this reference.
(3) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended March 31, 1990 of Softsel Computer Products, Inc., and incorporated
herein by this reference.
(4) Filed as an exhibit to the Form S-8 Registration Statement of Softsel
Computer Products, Inc., No. 33-34296, filed with the Securities and
Exchange Commission on April 12, 1990, and incorporated herein by this
reference.
(5) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended June 30, 1990 of Softsel Computer Products, Inc., and incorporated
herein by this reference.
(6) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1990, and incorporated herein by this reference.
<PAGE>
(7) Filed as an exhibit to the Form S-8 Registration Statement of Softsel
Computer Products, Inc., No. 33-35648, filed with the Securities and
Exchange Commission on June 29, 1990, and incorporated herein by this
reference.
(8) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended June 30, 1991, and incorporated herein by this reference.
(9) Filed as an exhibit to the Form S-3 Registration Statement of Merisel,
Inc., No. 33-45696, filed with the Securities and Exchange Commission on
February 14, 1992 and incorporated herein by this reference.
(10) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended June 30, 1992, and incorporated herein by this reference.
(11) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1992 of Merisel, Inc., and incorporated herein by this
reference.
(12) Filed as an exhibit to the Current Report on Form 8-K dated February 14,
1994, as amended on March 24, 1994 and October 4, 1994, and incorporated
herein by this reference.
(13) Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1993, and incorporated herein by this reference.
(14) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994, and incorporated herein by this reference.
(15) Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1994, and incorporated herein by this reference.
(16) Filed as an exhibit to the Form S-3 Registration Statement of the
Registrant, No. 33-55195, filed with the Securities and Exchange
Commission on August 23, 1994, and incorporated herein by this reference.
(17) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1995, and incorporated herein by this reference.
(18) Filed as an exhibit to Amendment No. 1 to the Annual Report on Form 10-K/A
for the year ended December 31, 1995, and incorporated herein by this
reference.
(19) Filed as an exhibit to Amendment No. 2 to the Annual Report on Form 10-K/A
for the year ended December 31, 1995, and incorporated herein by this
reference.
(20) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996, and incorporated herein by this reference.
(21) Filed as an exhibit to the Current Report on Form 8-K dated April 17,
1996, and incorporated herein by this reference.
(22) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996, and incorporated herein by this reference.
(23) Filed as an exhibit to the Current Report on Form 8-K dated October 18,
1996, and incorporated herein by this reference.
(24) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996, and incorporated herein by this reference.
(25) Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1996 and incorporated herein by this reference.
(26) Previously filed.
(27) Filed as an exhibit to the Current Report on Form 8-K dated July 15, 1997,
and incorporated herein by this reference.
(28) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997, and incorporated herein by this reference.
(29) Filed as an exhibit to the Current Report on Form 8-K dated August 29,
1997, and incorporated herein by this reference.
<PAGE>
EXHIBIT 23.3
CONSENT OF DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
We hereby consent to the reference to DLJ under the caption "Recommendation
of the Board" in the Supplement to Offer to Exchange and Solicitation of
Acceptances of Prepackaged Plan of Reorganization and Supplement to Proxy
Statement/Prospectus and Solicitation of Prepackaged Plan Acceptances of
Merisel, Inc. which forms a part of this Registration Statement on Form S-4.
In giving such consent, we do not admit that we come within the category of
persons whose consent is required under and we do not admit that we are
"experts" for purposes of, the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
/s/ DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
Los Angeles, California
September 3, 1997
<PAGE>
EXHIBIT 99.8
(LOGO OF MERISEL(SM))
September [ ], 1997
Dear Stockholder:
Enclosed you will find a Supplement (the "Supplement") to the Proxy
Statement/Prospectus, dated July 31, 1997 (the "Proxy Statement/Prospectus"),
which describes several important recent developments that you should consider
when voting on the matters to be considered at the Special Meeting of
Stockholders which has been rescheduled to be held at 10:00 a.m., Los Angeles
time, on September 18, 1997 at the Company's headquarters located at 200
Continental Boulevard, El Segundo, California (the "Stockholders' Meeting")
and on the prepackaged plan of bankruptcy described in the Proxy
Statement/Prospectus (the "Prepackaged Plan").
As described in the Supplement, Merisel, Inc. (the "Company") has recently
received a revised proposal (the "Revised Stonington Proposal") from
Stonington Partners, Inc. ("Stonington"). Pursuant to the terms of the Revised
Stonington Proposal, as an alternative to a direct equity investment of $152
million in the Company, Stonington would lend $152 million to the Company in
the form of a convertible debt instrument in order to refinance substantially
all of the indebtedness of the operating subsidiaries of the Company. A
portion of this debt would be immediately convertible into 19% of the common
stock of the Company and the remainder of the debt would be convertible
(subject to stockholder approval in a separate stockholders' meeting) into
shares of common stock that, together with the initial conversion amount,
would aggregate 62.4% of the common stock of the Company. Under the Revised
Stonington Proposal, existing Stockholders would retain 37.6% of the common
stock of the Company.
This proposal differs significantly from the financial restructuring
described in the Proxy Statement/Prospectus (the "Restructuring") and being
voted upon at the Stockholders' Meeting. Under the Restructuring, stockholders
would retain 20% of the common equity of the Company and would receive, for
each share of common stock held, certificates for .0875 of each of two series
of warrants to purchase, in the aggregate, an additional 17.5% of the common
stock of the Company outstanding immediately after the Restructuring at
exercise prices per share (after giving effect to the proposed one-for-five
reverse stock split) of $7.15 and $8.68, respectively. Upon exercise of the
Warrants, existing Stockholders would own 31.9% of the New Common Stock.
IN EVALUATING THESE TWO PROPOSALS, THE BOARD OF DIRECTORS OF THE COMPANY
(THE "BOARD") HAS DETERMINED THAT THE REVISED STONINGTON PROPOSAL IS
SIGNIFICANTLY MORE ATTRACTIVE TO THE STOCKHOLDERS IN ECONOMIC TERMS THAN THE
RESTRUCTURING AND, IN LIGHT OF THE COMPANY'S INABILITY TO NEGOTIATE AN
IMPROVEMENT IN THE TERMS OF THE RESTRUCTURING, THE BOARD HAS WITHDRAWN ITS
RECOMMENDATION RELATING TO THE STOCKHOLDER VOTE APPROVING THE ISSUANCE OF 80%
OF THE COMPANY'S COMMON STOCK IN THE RESTRUCTURING (THE "NEW COMMON STOCK
ISSUANCE") AND ACCEPTING THE PREPACKAGED PLAN. THE BOARD CONTINUES TO
RECOMMEND THE PROPOSED AMENDMENT TO THE COMPANY'S CHARTER (THE "CHARTER
AMENDMENT"), WHICH WOULD EFFECT A ONE-FOR-FIVE REVERSE STOCK SPLIT, BECAUSE IT
WOULD PROVIDE THE COMPANY WITH MORE SHARES OF AUTHORIZED STOCK TO ISSUE IN ANY
FINANCIAL RESTRUCTURING WHICH MAY TAKE PLACE INCLUDING, BUT NOT LIMITED TO,
THE RESTRUCTURING.
The Revised Stonington Proposal is subject to certain conditions, including
execution of definitive agreements and a negative stockholder vote on the
Restructuring or the termination of the Limited Waiver and Voting Agreement,
dated April 14, 1997 (the "Limited Waiver Agreement") in accordance with its
terms. If either of these events occurs, the Company intends to enter into
definitive agreements with respect to the Revised Stonington Proposal as soon
as possible thereafter. Alternatively, the Company may consider other means of
refinancing its indebtedness. Stonington has advised the Company that all
funds necessary to fund the Revised Stonington Proposal are presently
available.
Stockholders should be aware that rejection of the Restructuring involves
certain risks. The Ad Hoc Noteholders' Committee (the "Ad Hoc Noteholders'
Committee") of holders of the Company's 12 1/2% of Senior
<PAGE>
Notes due 2004 (the "12.5% Notes") has informed the Company of its belief that
the Limited Waiver Agreement requires the Board to recommend the New Common
Stock Issuance and the Charter Amendment. Furthermore, the Ad Hoc Noteholders'
Committee has interpreted the Limited Waiver Agreement to require the Company
to file the Prepackaged Plan and, if the Prepackaged Plan is not accepted by
the requisite number of Stockholders, to seek confirmation pursuant to the
"cramdown" provisions of Section 1129(b) of the Bankruptcy Code if any of the
conditions to the Exchange Offer (as described in the Proxy
Statement/Prospectus) are not met.
The Company strongly disputes these interpretations of the Limited Waiver
Agreement and is seeking a declaratory judgment in Delaware Chancery Court
confirming its interpretation of the Company's duties under the Limited Waiver
Agreement. However, it is almost certain that the court will not rule before
the Stockholders' Meeting.
ACCORDINGLY, THE BOARD BELIEVES THAT STOCKHOLDERS SHOULD MAKE THEIR OWN
DECISION REGARDING THE BENEFITS AND RISKS OF THE RESTRUCTURING AND HAS DECIDED
TO WITHDRAW ITS RECOMMENDATION AND NOT TO TAKE A POSITION WITH RESPECT TO THE
STOCKHOLDER VOTES ON THE NEW COMMON STOCK ISSUANCE AND THE PREPACKAGED PLAN.
HOWEVER, STOCKHOLDERS SHOULD BE AWARE THAT DUE TO THE SIGNIFICANT DISPARITY IN
VALUE BETWEEN THE RESTRUCTURING AND THE REVISED STONINGTON PROPOSAL, THE
INDIVIDUAL MEMBERS OF THE BOARD AND SENIOR MANAGEMENT OF THE COMPANY THAT OWN
COMMON STOCK OF THE COMPANY HAVE INFORMED THE COMPANY THAT THEY INTEND TO VOTE
THEIR SHARES AGAINST THE NEW COMMON STOCK ISSUANCE AND THE PREPACKAGED PLAN.
The following table summarizes the Board's positions described above with
respect to the Stockholder votes on each of the Proposals and the solicitation
of acceptances with respect to the Prepackaged Plan:
<TABLE>
<CAPTION>
ITEM: BOARD POSITION:
----- ---------------
<S> <C>
Charter Amendment.................................. Recommends a vote "FOR"
New Common Stock Issuance.......................... Neutral
Stock Award and Incentive Plan..................... Recommends a vote "FOR"
Prepackaged Plan................................... Neutral
</TABLE>
You should carefully consider the information contained in the Supplement,
whether or not you have signed and returned your ballot relating to the
Prepackaged Plan and proxy relating to the proposals to be considered and voted
upon at the Stockholders' Meeting. A properly completed and signed proxy or
ballot that has been previously returned will continue to be valid and will be
voted at the Stockholders' Meeting or counted with respect to the Prepackaged
Plan, respectively, unless revoked by such stockholders prior to the
Stockholders' Meeting or Voting Deadline, respectively. Proxies or ballots may
be revoked by returning a proxy or ballot, respectively, bearing a later date
or, for proxies, by giving written notice of revocation to the Secretary of the
Company or by attending the Stockholders' Meeting and voting in person. If you
have already signed and returned a properly completed ballot for the
Prepackaged Plan, that ballot will continue to be valid and will be counted
unless revoked before 5:00 p.m., New York City time, on September 18, 1997 by
returning a ballot bearing a later date or by giving written notice of
revocation to the Voting Agent. An additional proxy and ballot are enclosed
herewith. The record date of July 22, 1997 for the proposals to be voted upon
at the Stockholders' Meeting and the solicitation of acceptances for the
Prepackaged Plan will remain the same.
FOR A COMPLETE DISCUSSION OF THESE NEW DEVELOPMENTS AND RELATED MATTERS,
PLEASE READ THE ATTACHED SUPPLEMENT. STOCKHOLDERS SHOULD CONSIDER THESE NEW
DEVELOPMENTS CAREFULLY BEFORE VOTING ON THE PROPOSALS OR ON THE PREPACKAGED
PLAN OR DECIDING WHETHER TO CHANGE THEIR VOTE ON THE PROPOSALS OR THE
PREPACKAGED PLAN.
Sincerely,
/s/ Dwight A. Steffensen
Dwight A. Steffensen
Chairman of the Board and Chief
Executive Officer
<PAGE>
IMPORTANT
For your convenience in voting, a new proxy card and new ballot have been
enclosed with this Supplement. However, if you have already returned and not
revoked the proxy card and/or ballot included with the Proxy
Statement/Prospectus and you do not wish to change your vote, your previously
executed proxy card and/or ballot will be voted at the Stockholders' Meeting
or any further adjournment thereof in accordance with the instructions
contained therein.
As described in the Proxy Statement/Prospectus, adoption of the Proposals
requires the presence of a quorum at the Stockholders' Meeting, either in
person or by proxy. Thus, withholding of a proxy may result in preventing the
presence of a quorum. However, voting on the Prepackaged Plan does not require
the presence of a quorum, so withholding a ballot or submitting a ballot
marked "abstain" will not have any effect on the outcome of the voting on the
Prepackaged Plan. Only ballots marked "accept" or "reject" will be counted.
If you have any questions regarding the terms of the Proposals or the
Prepackaged Plan, the procedure for voting your shares of Old Common Stock
with respect to either the Proposals or the Prepackaged Plan, or any other
aspect of the Restructuring, please call the Information Agent:
(LOGO OF MACKENZIE PARTNERS, INC.)
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL FREE (800) 322-2885
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUPPLEMENT TO
OFFER TO EXCHANGE AND
SOLICITATION OF ACCEPTANCES OF
PREPACKAGED PLAN OF REORGANIZATION
AND
SUPPLEMENT TO
PROXY STATEMENT/PROSPECTUS AND
SOLICITATION OF PREPACKAGED PLAN ACCEPTANCES
OF
MERISEL, INC.
THE SPECIAL MEETING OF STOCKHOLDERS HAS BEEN RESCHEDULED FOR 10:00 A.M., LOS
ANGELES TIME, ON SEPTEMBER 18, 1997, AND THE VOTING DEADLINE TO ACCEPT OR
REJECT THE PREPACKAGED PLAN AND THE DEADLINE FOR THE EXCHANGE OFFER HAS BEEN
EXTENDED TO 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 18, 1997, UNLESS
EXTENDED.
All capitalized terms used but not otherwise defined herein shall have the
meanings given to them in the Exchange Restructuring Prospectus, dated July 31,
1997.
Whether or not you have signed and returned your proxy (for Stockholders)
relating to the proposals to be considered and voted upon at the Special
Meeting of Stockholders, which has been rescheduled to be held on September 18,
1997 at 10:00 a.m., Los Angeles time, at the Company's headquarters located at
200 Continental Boulevard, El Segundo, California (the "Stockholders'
Meeting"), your letter of transmittal for tendering 12.5% Notes pursuant to the
Exchange Offer (for Noteholders), and/or ballot (for both Stockholders and
Noteholders) relating to the Prepackaged Plan, you should carefully consider
the changes to the Exchange Offer and Prepackaged Plan described herein. With
respect to Stockholders who have already signed or returned a properly
completed proxy, that proxy will continue to be valid and be voted at the
Stockholders' Meeting unless revoked by such Stockholders prior to the
Stockholders' Meeting. Proxies may be revoked by returning a proxy bearing a
later date, by giving written notice of revocation to the Secretary of the
Company or by attending the Stockholders' Meeting and voting in person. With
respect to Noteholders who have already signed or returned a properly completed
letter of transmittal, that letter of transmittal will continue to be valid and
12.5% Notes tendered pursuant thereto will be tendered upon consummation of the
Exchange Offer unless withdrawn prior thereto. Letters of transmittal may be
withdrawn, subject to the procedures described in Part A to the Exchange
Restructuring Prospectus, at any time before they are accepted for exchange by
the Company. With respect to both Stockholders and Noteholders who have already
signed and returned a properly completed ballot for the Prepackaged Plan, that
ballot will continue to be valid and will be counted unless revoked before 5:00
p.m., New York City time, on September 18, 1997 by returning a ballot bearing a
later date or by giving written notice of revocation to the Voting Agent. An
additional proxy (for Stockholders) or letter of transmittal (for Noteholders)
and ballot (for Stockholders and Noteholders) are enclosed herewith. The record
date of July 22, 1997 for all matters will remain the same.
The Exchange Offer is subject to certain terms and conditions. See "Changes
in Terms and Conditions of Exchange Offer and Prepackaged Restructuring" below
and "Tendering and Voting Procedures--Conditions" in the Exchange Restructuring
Prospectus, dated July 31, 1997.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS
OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
-----------
The date of this Supplement is September [ ], 1997
<PAGE>
This supplement (the "Supplement") amends and supplements the Proxy
Statement/Prospectus and Solicitation of Prepackaged Plan Acceptances, dated
July 31, 1997 (the "Proxy Statement/Prospectus"), and the Offer to Exchange
and Solicitation of Acceptances of Prepackaged Plan of Reorganization, dated
July 31, 1997 (the "Exchange Restructuring Prospectus") of Merisel, Inc., a
Delaware corporation ("Merisel" or the "Holding Company" and together with its
operating subsidiaries, unless the context otherwise requires, the "Company").
Except as set forth in this Supplement, the terms and conditions of the
Restructuring remain as stated in the Proxy Statement/Prospectus and the
Exchange Restructuring Prospectus.
Subsequent to the mailing of the Proxy Statement/Prospectus and the Exchange
Restructuring Prospectus, the Company has disclosed that it has been in active
discussions with the Ad Hoc Noteholders' Committee with regard to improving
the terms of the Restructuring for Stockholders. Unfortunately, after more
than three weeks of discussions, the Company and the Ad Hoc Noteholders'
Committee have been unable to reach an agreement. The Company also disclosed
that it has received several revised proposals from Stonington which the
Company believes must be considered by Stockholders in deciding how to vote.
These developments are summarized below.
1. RECENT DEVELOPMENTS
The August 8 Stonington Proposal
On August 8, 1997, the Company received a new proposal from Stonington (the
"August 8 Stonington Proposal") which amended the original Stonington Proposal
discussed in the Proxy Statement/Prospectus and the Exchange Restructuring
Prospectus. The August 8 Stonington Proposal was made subject to execution of
definitive agreements and the termination of the Limited Waiver Agreement
either with the Noteholders' consent or by a negative Stockholder vote with
respect to the New Common Stock Issuance and the Prepackaged Plan. Assuming
such conditions were met, under the August 8 Stonington Proposal, as an
alternative to a direct equity investment of $152 million in the Company,
Stonington would loan $152 million to the Company in the form of a convertible
debt instrument to refinance the debt outstanding under the Operating
Companies' Loan Agreements. A portion of the convertible debt would be
immediately convertible into 19% of the common stock of the Company and the
remainder of the debt would be convertible (subject to Stockholder approval in
a separate Stockholders' meeting) for an aggregate total of 63.5% of the
common stock of the Company with Stockholders retaining 36.5% of the common
stock of the Company. Thus, the convertible debt would be convertible into an
aggregate of 10,482,800 shares of New Common Stock at $14.50 per share (after
giving effect to the Reverse Split). The August 8 Stonington Proposal also
permitted the Company to offer certain incentives to the Noteholders,
including the payment of up to $200 per $1,000 face amount of 12.5% Notes
outstanding and the elimination of the optional redemption feature of the
indenture (the "Indenture") governing the 12.5% Notes, in exchange for their
agreement to support the August 8 Stonington Proposal and their agreement not
to exercise their right under the Indenture to cause the Company to purchase
their 12.5% Notes upon a Change of Control (as defined in the Indenture).
The convertible debt would act as a bridge loan, with $138.8 million of such
notes maturing on January 31, 1998 (the "Maturity Date") and the remaining
$13.2 million to mature over the period between the Maturity Date and March
10, 2000. The convertible debt would bear an initial interest rate of 11.5%
per annum, increasing at the rate of an additional 1% per month commencing two
months after the issuance of the convertible debt, subject to a cap of 18% per
annum. Such interest would be payable either in cash or with additional debt
which would likewise be convertible into common stock of the Company. The
convertible debt would be redeemable in whole but not in part at any time
prior to maturity at the option of the Company at par plus accrued interest
plus a prepayment premium of 8% (the "Redemption Price"). Upon a change of
control of the Company or an agreement by the Company to effect a change of
control, the holders of the convertible debt would have the right to require
the Company to purchase the convertible debt at the Redemption Price. In
addition, pursuant to the August 8 Stonington Proposal, Stonington would
provide the Company with a $50 million bridge loan and would assist the
Company in obtaining a permanent working capital facility.
2
<PAGE>
The Company shared the August 8 Stonington Proposal with the Ad Hoc
Noteholders' Committee, and presented to them for their consideration the
incentives described in the August 8 Stonington Proposal. Representatives of
the Ad Hoc Noteholders' Committee advised the Company that they would not
terminate the Limited Waiver Agreement to permit the August 8 Stonington
Proposal to be implemented and they rejected the incentives offered thereby.
The August 11 Alternative Stonington Proposal
On August 11, 1997, Stonington made an alternative proposal (the "August 11
Alternative Stonington Proposal"), conditioned on execution of definitive
documentation and on Noteholders agreeing (i) to terminate the Limited Waiver
Agreement, and (ii) not to exercise their right under the Indenture to cause
the Company to purchase their 12.5% Notes upon a Change of Control such as the
acquisition contemplated by the August 8 Proposal. Assuming such conditions
were met, the August 11 Alternative Proposal provided that Stonington would
loan $152 million to the Company in the form of a convertible debt instrument
to refinance the debt outstanding under the Operating Companies' Loan
Agreements. Pursuant to the terms of this convertible debt instrument,
Stonington would be able to convert such debt into 10,059,563 shares of New
Common Stock at $15.11 per share (after giving effect to the Reverse Split).
These shares would represent approximately 62.6% of the shares of New Common
Stock outstanding immediately following the conversion of such debt. The
August 11 Alternative Proposal contained the same incentive provisions for the
Noteholders as the August 8 Stonington Proposal, except that it increased the
potential payment to Noteholders to $250 per $1,000 face amount of 12.5% Notes
outstanding and, in addition, permitted the Company to offer warrants
exercisable for a nominal amount over a five-year period to purchase up to
approximately 7.2% of the common stock of the Company. Upon exercise of the
warrants, Stonington, the Noteholders and the Stockholders as of immediately
prior to the consummation of the transaction would own approximately 58.1%,
7.2% and 34.7% of the common stock of the Company, respectively.
The Company shared the August 11 Alternative Proposal with the Ad Hoc
Noteholders' Committee and presented to them for their consideration the
incentives described in the August 11 Alternative Proposal. The Ad Hoc
Noteholders Committee advised the Company that it would not terminate the
Limited Waiver Agreement notwithstanding the August 11 Alternative Proposal
and Stonington's proposed incentives. Because the August 11 Alternative
Proposal was conditioned upon the Noteholders' consenting to terminate the
Limited Waiver Agreement, the August 11 Alternative Proposal has been
withdrawn.
The Revised Stonington Proposal
On August 29, 1997, Stonington made a new alternative proposal (the "Revised
Stonington Proposal") which amended the August 8 Stonington Proposal. The
Revised Stonington Proposal is also conditioned on the execution of definitive
documents and the termination of the Limited Waiver Agreement either with the
Noteholders' consent or by a negative Stockholder vote with respect to the New
Common Stock Issuance and the Prepackaged Plan. Assuming such conditions were
met, the Revised Stonington Proposal provides that, as an alternative to a
direct equity investment of $152 million in the Company, Stonington would lend
$152 million to the Company in the form of a convertible debt instrument in
order to refinance substantially all of the indebtedness outstanding under the
Operating Companies' Loan Agreements. A portion of this debt would be
immediately convertible into 19% of the common stock of the Company and the
remainder of the debt would be convertible (subject to stockholder approval in
a separate stockholders' meeting) into shares of common stock that, together
with the initial conversion amount, would aggregate 62.4% of the common stock
of the Company. Under the Revised Stonington Proposal, existing Stockholders
would retain 37.6% of the common stock of the Company. Thus, the convertible
debt would be convertible into an aggregate of 10 million shares of New Common
Stock at $15.20 per share (after giving effect to the Reverse Split).
The Revised Stonington Proposal also eliminated all proposed incentive
payments to the Noteholders. The other terms of the convertible debt under the
Revised Stonington Proposal are identical to those set forth in the August 8
Stonington Proposal. In addition, on September 3, 1997, the Company received a
letter from Stonington
3
<PAGE>
extending the termination date of the Revised Stonington Proposal (which would
have terminated on September 4, 1997) to the earlier of (i) three days
following the date of termination of the Limited Waiver Agreement and (ii)
October 31, 1997. In exchange, the Company modified the circumstances in which
it would pay the fees and expenses of Stonington, in the amounts previously
agreed to upon the expiration or, under certain circumstances, termination of
the Revised Stonington Proposal.
Discussions with the Ad Hoc Noteholders' Committee
Prior to the Company's receipt of the August 8 Stonington Proposal,
representatives of the Ad Hoc Noteholders' Committee expressed their
willingness to discuss amending the Restructuring to provide for Stockholders
to retain a higher percentage of the outstanding equity of the Company
following the Restructuring. However, the parties were unable to reach an
agreement as to the terms of such an amendment.
The last proposal made by the Ad Hoc Noteholders' Committee which was under
discussion prior to August 29, 1997, the originally scheduled date for the
Stockholders' Meeting, provided that the Noteholders would receive 70% of the
shares of New Common Stock outstanding immediately following consummation of
the Restructuring, and Stockholders would retain 30% of such shares of New
Common Stock (after giving effect to the Reverse Split and assuming 100% of
the 12.5% Notes are tendered in the Exchange Offer). Stockholders would also
receive warrants to purchase up to 7.5% of the shares of New Common Stock
outstanding immediately following consummation of the Restructuring at an
exercise price of $13.71 per share (after giving effect to the Reverse Split).
This proposal would also have reduced the Minimum Tender Condition from 100%
to 80% of the outstanding principal amount of 12.5% Notes, and would have
released the Company from any liability to the Consenting Noteholders with
respect to the original Restructuring. The proposal also contemplated a rights
offering following the Restructuring to allow holders of New Common Stock to
purchase $50 million of New Common Stock from the Company at 15% below the
market price of the New Common Stock at such time. In the event Stockholders
elected to purchase less than $50 million of New Common Stock, the Noteholders
would have been obligated to make such purchase up to a maximum of $25
million.
The proposal would have prohibited the Company from engaging in discussions
with or providing any information to any party seeking to enter into an
alternative restructuring plan with the Company (including Stonington).
Furthermore, in the event that the requisite number of Stockholders did not
vote in favor of the Charter Amendment and the New Common Stock Issuance and
an amended prepackaged plan which reflected the terms of the revised
agreement, the Company would have been required to seek confirmation of the
amended prepackaged plan pursuant to the "cramdown" provision of Section
1129(b) of the Bankruptcy Code. Finally, in the event that the restructuring
contemplated by this proposal was not confirmed by a Bankruptcy Court and the
Company entered into a change of control transaction (as defined in the
proposal) with any other party, the Noteholders would have had the option of
requiring the Company to purchase their 12.5% Notes for 120% of their par
value (or $150 million) plus accrued and unpaid interest (the "Change of
Control Put").
The Company expressed its willingness to enter into this agreement, the
definitive terms of which had been fully negotiated. However, the Ad Hoc
Noteholders' Committee conditioned its willingness to execute such an
agreement upon the written agreement of Stonington to withdraw all outstanding
proposals and Stonington's agreement not to purchase or make any offers to
purchase any stock of the Company for a period of approximately ten months in
exchange for a release from the Noteholders of their claims against Stonington
for tortious interference of contract. The Company and representatives of the
Ad Hoc Noteholders' Committee requested such an agreement from Stonington but
Stonington declined to sign such an agreement. Notwithstanding this rejection
by Stonington, the Company reiterated its willingness to enter into the
previously negotiated agreement, and reaffirmed its willingness to cease all
further discussions with Stonington with respect to any alternative
transaction. However, the Ad Hoc Noteholders' Committee continued to insist on
an agreement from Stonington or, as an alternative to an agreement by
Stonington, the Ad Hoc Noteholders' Committee proposed that the Company agree
to pay a termination fee of $25 million (the "Termination Fee"), in addition
to the Change of Control Put, if the Company terminated its agreement with the
Noteholders in order to pursue a transaction with any other party or if the
revised Prepackaged Plan was not confirmed by the Bankruptcy Court.
4
<PAGE>
The Company rejected the Noteholders' proposal and discussed several
alternatives with the Noteholders, but no agreement was reached. Accordingly,
the Company informed the Ad Hoc Noteholders' Committee that it intends to
proceed with the Stockholder vote on the Restructuring as originally proposed
in the Proxy Statement/Prospectus and the Exchange Restructuring Prospectus.
To that end, the Company has obtained an extension of the agreement
termination event date to September 18, 1997 from 100% of the original parties
to the Limited Waiver Agreement, and is seeking a waiver of the agreement
termination event date under the Extension of the Operating Companies' Loan
Agreements to September 30, 1997.
The members of the Ad Hoc Noteholders' Committee have reiterated their
threat to commence legal action against the Company if their original
Restructuring proposal is not implemented, alleging that the Company has
breached the Limited Waiver Agreement. The Company does not believe that the
Ad Hoc Noteholders' Committee members' claims for breach are valid, and it
intends to defend itself vigorously should a suit be commenced. See "3.
Additional Risk Factors--Risk of Litigation with Noteholders" below.
The Ad Hoc Noteholders' Committee has also informed the Company of its
members' intent to cause the acceleration of all outstanding indebtedness
under the 12.5% Notes in the event that the Stockholders fail to approve the
Charter Amendment and the Company does not immediately seek to implement the
Restructuring through the Prepackaged Plan. In order to minimize the effect of
this threat, the Company has deposited unpaid interest of approximately $8
million with the trustee for the 12.5% Notes and has instructed the trustee to
pay this money immediately to the Noteholders if an agreement termination
event occurs under the Limited Waiver Agreement. In addition, the Company
intends to pay the $40 million of amortization payments due to the lenders
under the Operating Companies' Loan Agreements on the date any such interest
payment is made. Upon such payments, the Company believes it will be in full
compliance with all of its outstanding debt obligations. Accordingly, the
Company does not believe the Noteholders will be able to cause the
acceleration of their indebtedness. However, should the Company be unable to
refinance a substantial portion of its remaining debt during the fourth
quarter, the Company's ability to maintain adequate trade credit and inventory
levels could be adversely affected, which would in turn have an adverse impact
on the Company's operations. See "3. Additional Risk Factors--Elimination of
Waivers" below.
2. RECOMMENDATION OF THE BOARD
The Board has compared the terms of the Restructuring and the Revised
Stonington Proposal in light of a financial analysis provided by its financial
advisor, DLJ. The financial analysis calculated the equity value attributable
to existing Stockholders at total equity values of the Company of $200
million, $250 million and $300 million. The calculations are not necessarily
indicative of actual values or future results, which may be significantly more
or less favorable than suggested by such calculations. DLJ did not attribute
any particular weight or importance to any assumptions used in such
calculations.
The per share equity value and the aggregate equity value attributable to
the existing Stockholders were calculated by adding the existing Stockholders'
share of the pro forma equity to the estimated value of the warrants. The
estimated value of the warrants under the Restructuring was calculated in two
ways: (i) by estimating the market value of the warrants and (ii) by
determining the intrinsic value of the warrants. The market value of the
warrants was estimated using the Black-Scholes option valuation model assuming
(i) a volatility of Merisel of 50.2%, which equals the average of the
volatility of Ingram Micro, Inc. (from Ingram Micro, Inc's initial public
offering on November 1, 1996 through September 2, 1997) and Tech Data
Corporation (from August 30, 1996 through September 2, 1997) and (ii) a seven
year risk free treasury rate of 6.255%. The intrinsic value of the warrants
was determined by subtracting the exercise price of the warrants from the
market price of the common stock where the market price of the common stock
exceeded the exercise price of the warrants.
5
<PAGE>
The following table presents a summary of the calculations considered by the
Board.
<TABLE>
<CAPTION>
ASSUMING $200 MILLION ASSUMING $250 MILLION ASSUMING $300 MILLION
EQUITY VALUE EQUITY VALUE EQUITY VALUE
------------------------ ------------------------ ------------------------
(IN MILLIONS, EXCEPT PER SHARE DATA)
REVISED REVISED REVISED
STONINGTON NOTEHOLDER STONINGTON NOTEHOLDER STONINGTON NOTEHOLDER
PROPOSAL RESTRUCTURING PROPOSAL RESTRUCTURING PROPOSAL RESTRUCTURING
---------- ------------- ---------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Total Shares of Common
Stock Outstanding:
Pre-Reverse Split(1)... 80.1 150.4 80.1 150.4 80.1 150.4
Post-Reverse Split..... 16.0 30.1 16.0 30.1 16.0 30.1
Total Shares of Common
Stock Held by
Stockholders of Record
on July 22, 1997:
Pre-Reverse Split...... 30.1 30.1 30.1 30.1 30.1 30.1
Post-Reverse Split..... 6.0 6.0 6.0 6.0 6.0 6.0
Total Warrants
Outstanding:
Pre-Reverse Split...... 0 26.3 0 26.3 0 26.3
Post-Reverse Split..... 0 5.3 0 5.3 0 5.3
Existing Stockholder
Ownership Percentage
Post-Transaction....... 37.6% 20.0%(2) 37.6% 26.4%(3) 37.6% 31.9%(4)
EQUITY VALUE
ATTRIBUTABLE TO
EXISTING STOCKHOLDERS:
Per-Share Equity Value
Including Estimated
Market Value of
Warrants:
Pre-Reverse Split...... $ 2.50 $1.93 $ 3.12 $ 2.48 $ 3.75 $ 3.05
Post-Reverse Split..... $12.49 $9.65 $15.61 $12.42 $18.73 $15.23
Per-Share Equity Value
Including Estimated
Intrinsic Value of
Warrants:
Pre-Reverse Split...... $ 2.50 $1.33 $ 3.12 $ 1.74 $ 3.75 $ 2.24
Post-Reverse Split..... $12.49 $6.65 $15.61 $ 8.69 $18.73 $11.20
Aggregate Equity Value
Including Estimated
Market Value of
Warrants............... $ 75.1 $58.0 $ 93.9 $ 74.7 $112.7 $ 91.6
Aggregate Equity Value
Including Estimated
Intrinsic Value of
Warrants............... $ 75.1 $40.0 $ 93.9 $ 52.3 $112.7 $ 67.4
</TABLE>
- --------
(1) References to a Reverse Split are to a one-for-five reverse split of the
common stock of the Company.
(2) Assumes both the Series A Warrants and the Series B Warrants are "out of
the money" and unexercised.
(3) Assumes only the Series A Warrants are "in the money" and exercised.
(4) Assumes both the Series A Warrants and the Series B Warrants are "in the
money" and exercised.
In light of this analysis, the Board has determined that the Revised
Stonington Proposal is economically more attractive to the Stockholders than
the Restructuring, although such proposal, by its terms, cannot be accepted
unless the Limited Waiver Agreement is terminated with Noteholder consent or
by a negative Stockholder vote with respect to the New Common Stock Issuance
and the Prepackaged Plan. Accordingly, the Board has decided to proceed with
the vote on the Restructuring and to withdraw its recommendation and be
neutral with respect to the Stockholder votes on the New Common Stock Issuance
and the Prepackaged Plan.
Accordingly, the Board believes that Stockholders should make their own
decision regarding the benefits and risks of the Restructuring and has decided
to withdraw its recommendation and not to take a position with respect to the
Stockholder votes on the New Common Stock Issuance and the Prepackaged Plan.
However, Stockholders should be aware that due to the significant disparity in
value between the Restructuring and the Revised Stonington Proposal, the
individual members of the Board and senior management of the Company that own
common stock of the Company have informed the Company that they intend to vote
their shares against the New Common Stock Issuance and the Prepackaged Plan.
6
<PAGE>
Because the Charter Amendment would provide the Company with more shares of
authorized stock to issue in any financial restructuring which may take place,
the Board continues to recommend that Stockholders vote FOR this proposal.
However, Stockholders should be aware that should the Charter Amendment
receive the requisite number of affirmative votes, and should 100% of the
12.5% Notes be tendered in the Exchange Offer, the Company will be obligated
to consummate the Exchange Restructuring under the terms of the Limited Waiver
Agreement (as described in the Proxy Statement/Prospectus). The Company
believes that the tender of 100% of the 12.5% Notes is unlikely and the
Company does not presently intend to waive this condition.
In the event that less than 100% of the 12.5% Notes are tendered in the
Exchange Offer, and the requisite number of Stockholders do not vote in favor
of the New Common Stock Issuance and the Prepackaged Plan, the Company intends
to enter into definitive agreements with respect to the Revised Stonington
Proposal as soon as possible. Alternatively, the Company may consider other
means of refinancing its indebtedness. Stonington has advised the Company that
all funds necessary to fund the Revised Stonington Proposal are presently
available.
The Company believes, however, that even if it were to seek confirmation of
the Prepackaged Plan pursuant to the "cramdown" provisions of the Bankruptcy
Code, there are significant doubts as to the ability of the Company to confirm
the Prepackaged Plan for the reasons described below. See "4. Nonconsensual
Confirmation of the Prepackaged Plan."
3. ADDITIONAL RISK FACTORS
The following risk factors amend and supplement the risk factors contained
in the Proxy Statement/Prospectus and the Exchange Restructuring Prospectus
and should be read in conjunction with such risk factors to understand the
risks associated with the Restructuring.
Risk of Litigation with Noteholders
The Ad Hoc Noteholders' Committee has informed the Company of its belief
that the Limited Waiver Agreement requires the Company to recommend the
Proposals and, in the event that Stockholders do not vote in favor of the
Charter Amendment or the Prepackaged Plan, to file the Prepackaged Plan and to
seek confirmation pursuant to the "cramdown" provisions of Section 1129(b) of
the Bankruptcy Code.
The Company strongly disputes this interpretation of the Limited Waiver
Agreement and is seeking a declaratory judgment in Delaware Chancery Court
confirming that (i) neither the Board nor the Company is obligated under the
Limited Waiver Agreement to recommend the Restructuring, and (ii) the Company
is not obligated to seek confirmation of the Prepackaged Plan by means of the
"cramdown" provisions of the Bankruptcy Code. However, it is almost certain
that the court will not rule before the Stockholders' Meeting.
Should the Exchange Offer not be consummated and the Company not file the
Prepackaged Plan, the Company believes it is likely that a lawsuit will be
filed against the Company by certain holders of the Company's 12.5% Notes.
Regardless of the ultimate outcome, this lawsuit could create uncertainty over
the financial condition of the Company, which may cause vendors to restrict
the terms on which they supply products to the Company. In addition, the
Company believes that it is likely that its competitors will try to use any
publicity regarding the litigation to their advantage with respect to
Merisel's customers. Any restrictions imposed by vendors or loss of customers
could cause the Company to suffer a material adverse change in its operations
and financial stability. Moreover, no assurance can be given that the ultimate
outcome of such a dispute would not be materially adverse to the Company.
Elimination of Waivers
The Ad Hoc Noteholders' Committee has also informed the Company of its
members' intent to cause the acceleration of the maturity of all outstanding
indebtedness under the 12.5% Notes in the event that the
7
<PAGE>
Stockholders fail to approve the Charter Amendment and the Company does not
immediately seek to implement the Restructuring through the Prepackaged Plan.
However, the Company has deposited the accrued but unpaid interest with
respect to the interest payment originally due on June 30, 1997 of
approximately $8 million with the trustee for the 12.5% Notes and has
instructed the trustee to pay this money to the Noteholders if an agreement
termination event occurs under the Limited Waiver Agreement. In addition, the
Company will make the $40 million of amortization payments due under the
Operating Companies' Loan Agreements on the date any such interest payment is
made. Upon such payments, the Company believes it will be in full compliance
with all of its outstanding debt obligations and will continue to explore its
refinancing options. Accordingly, upon payment of such interest, the Company
does not believe the Noteholders will have the right to accelerate the payment
of their indebtedness. Should the Company be required to make the payments
described above, and should the Company be unable to refinance a substantial
portion of its remaining debt during the fourth quarter, the Company's ability
to maintain adequate trade credit and inventory levels would be adversely
affected, which would in turn have an adverse impact on the Company's
operations.
Potential De-listing of the Common Stock
On August 7, 1997, the Company met with representatives of the NASD
regarding the potential de-listing of the Old Common Stock in connection with
the Company's current non-compliance with the net tangible assets test
required for continued listing on the Nasdaq National Market. At that hearing,
the Company presented the terms of the Restructuring to the NASD and indicated
that, should the Restructuring be consummated, the Company would then be in
full compliance with all of the NASD's requirements for continued listing on
the Nasdaq National Market. The NASD responded by granting the Company an
exception with respect to such test until October 1, 1997, by which time the
Company must make a public filing with the Securities and Exchange Commission
and the NASD demonstrating compliance with all requirements for continued
listing on the Nasdaq National Market. In addition, should the Company accept
the Revised Stonington Proposal, Stonington has indicated its willingness to
consider the immediate conversion of approximately $10 million of debt to
common equity, which would bring the Company into compliance with all
applicable listing criteria of the Nasdaq National Market. Should the Company
fail to so demonstrate full compliance by such date, the NASD has indicated
that the Company's securities will be immediately de-listed from the Nasdaq
National Market. If the common stock of the Company were de-listed from the
Nasdaq National Market, there could be an adverse effect on the liquidity of
the market for the Company's common stock.
4. NONCONSENSUAL CONFIRMATION OF THE PREPACKAGED PLAN
In the event that Impaired Class 6 (Old Common Stock) does not accept the
Prepackaged Plan, the Bankruptcy Court may nevertheless confirm the
Prepackaged Plan at the Company's request pursuant to the "cramdown"
provisions of the Bankruptcy Code. The Prepackaged Plan may be confirmed
pursuant to these provisions if Class 4 (12.5% Notes) has accepted the
Prepackaged Plan and the Bankruptcy Court determines that the Prepackaged Plan
"does not discriminate unfairly" and is "fair and equitable" with respect to
Class 6. This "fair and equitable" test has been interpreted to require the
Bankruptcy Court to determine that no class of creditors or interest holders
that is senior to the nonaccepting class receives or retains more under the
plan than the allowed amount of its claims or interests, as the case may be.
See 7 L. King, Collier on Bankruptcy (P) 1129.04[4][a][ii] (15th rev. ed.
1997). Here, the aggregate claims of Class 4 are $125 million (the par value
of the 12.5% Notes) plus accrued and unpaid interest.
The Consenting Noteholders have rejected incentives proposed by Stonington
in the August 11 Alternative Stonington Proposal that, together with the
market value of 12.5% Notes, the Company believes aggregate in excess of 150%
of the par value of the 12.5% Notes. The Company believes that this strongly
implies that the Consenting Noteholders believe the value to be received by
them in the Restructuring provides a significant premium over the outstanding
principal and accrued interest owed on the 12.5% Notes (which would be
reinstated under the Revised Stonington Proposal) and, accordingly, creates
great uncertainty over the ability of a Bankruptcy Court to confirm the
Prepackaged Plan on a nonconsensual basis.
8
<PAGE>
5. REVISED LIQUIDATION ANALYSIS
The "best interest" test that must be met in order to confirm a chapter 11
reorganization plan compares the value of recoveries that Classes of Claims
and Classes of Interests are to receive under a plan with what they would
receive in a hypothetical liquidation of the debtor in a chapter 7 case on the
date of confirmation of the chapter 11 plan. In the Restructuring, the assets
of Merisel would consist principally of the stock of the Operating Companies.
Therefore, the evaluation of the recoveries of Classes of Claims and Interests
both under the Prepackaged Plan and upon a hypothetical liquidation of Merisel
starts with a valuation of the stock of the Operating Companies as a going
concern. In addition, the liquidation analysis on which application of the
"best interest" test in chapter 11 is based assumes a hypothetical analysis,
not an analysis based on an actual, pending alternative sale of the assets of
the debtor if the chapter 11 plan is not confirmed.
The hypothetical liquidation value analysis contained in the Disclosure
Statement was calculated on Merisel's estimate of a total enterprise value for
the Company derived as a market-based multiple of projected earnings before
interest, taxes, depreciation and amortization ("EBITDA"), less a discount of
25% resulting from a hypothetical rapid sale in a chapter 7 case. While an
EBITDA-multiple valuation is one accepted method of valuing an operating
company, such as the Operating Companies that would be sold in a hypothetical
liquidation of Merisel, it is not the only accepted method, nor is the
hypothetical Discount for Chapter 7 Sale of 25% assumed in the analysis for a
chapter 7 liquidation the only accepted factor used in determining
hypothetical liquidation proceeds.
The Chapter 7 Liquidation Analysis set forth in the Disclosure Statement did
not consider any valuation of the Operating Companies implied by the original
Stonington Proposal. However, as described above in this Supplement, there
have been additional developments since the completion of that liquidation
analysis. The Revised Stonington Proposal could be read to imply a total
enterprise value for the Company of approximately $400 million (rather than
the EBITDA-multiple based value of $276.8 million stated in the liquidation
analysis). In addition, the rejection by members of the Ad Hoc Noteholders'
Committee of certain incentives proposed by Stonington in the August 11
Alternative Stonington proposal could be interpreted to imply a total
enterprise value for the Company of over $400 million.
The presence of the recent developments described above and the current
situation, in which matters relating to valuation have not been resolved,
suggest that it would be difficult to determine now with reasonable certainty
a hypothetical liquidation value in a chapter 7 case for Merisel and therefore
whether the Prepackaged Plan meets the best interest test as to Class 6. If
the Bankruptcy Court were to substitute the Total Enterprise Value of
$400 million in lieu of the $276.8 million EBITDA-multiple based valuation,
then the determination of whether the Prepackaged Plan satisfies the "best
interest test" could depend on the size of the discount factor, if any,
applied to such hypothetical valuation. Such valuation could also depend on
numerous other factors, including the interest of potential acquirors in
purchasing the stock of the Operating Companies at that time.
9
<PAGE>
6. MARKET PRICES OF OLD COMMON STOCK; DIVIDEND HISTORY
The following table sets forth the quarterly high and low sale prices for the
Old Common Stock as reported by the Nasdaq National Market.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
FISCAL YEAR 1995
First quarter............................................ 8 1/2 3 7/8
Second quarter........................................... 7 3/4 4 1/2
Third quarter............................................ 8 3/8 5 1/2
Fourth quarter........................................... 6 5/8 4 1/8
FISCAL YEAR 1996
First quarter............................................ 5 7/8 2 1/4
Second quarter........................................... 5 1/16 2 1/4
Third quarter............................................ 3 13/16 1 13/16
Fourth quarter........................................... 2 5/16 1 5/8
FISCAL YEAR 1997
First quarter............................................ 2 1/2 1 9/16
Second quarter........................................... 2 7/16 1 1/32
Third quarter (through September 3, 1997)................ 4 1 7/8
</TABLE>
On April 11, 1997, the trading day immediately prior to the date that the
Company announced its intention to pursue the Restructuring, the closing sale
price for the Old Common Stock was $1 15/16 per share. On July 14, 1997, the
trading day immediately prior to the date that the Company announced the terms
of the original Stonington Proposal, the closing sale price for the Old Common
Stock was $2 1/32 per share. On August 29, 1997, the trading day immediately
prior to the date that the Company announced the terms of the Revised
Stonington Proposal, the closing sale price for the Old Common Stock was $3
9/16 per share. On September 3, 1997, the closing sale price for the Old Common
Stock was $4 per share.
The Old Common Stock is currently traded on the over-the-counter market and
is quoted on the Nasdaq National Market System under the symbol "MSEL." As of
the Record Date, 30,078,495 shares of Old Common Stock were outstanding, and
there were approximately 1,255 record holders of Old Common Stock. Merisel has
never declared or paid and does not expect to declare or pay dividends on the
outstanding Old Common Stock. Restrictions contained in the instruments
governing the outstanding indebtedness of Merisel restrict its ability to
provide funds that might otherwise be used by Merisel for the payment of
dividends on the Old Common Stock. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS--Liquidity and Capital
Resources."
September [ ], 1997
10
<PAGE>
ANNEX I
PROXY MERISEL, INC.
IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSALS REFERRED
TO IN (1), (2), AND (3)
The undersigned hereby appoints Dwight A. Steffensen and James E. Illson and
each of them the undersigned's true and lawful attorneys and proxies (with full
power of substitution in each) to vote all Common Stock of Merisel, Inc. (the
"Company"), standing in the undersigned's name, at the Special Meeting of
Stockholders (the "Stockholders' Meeting") of the Company to be held at 200
Continental Boulevard, El Segundo, California, on September 18, 1997 at
10:00 a.m., Los Angeles time, upon those matters as described in the Proxy
Statement/Prospectus and the Supplement for the Stockholders' Meeting and such
other matters as may properly come before such meeting or any adjournments
thereof. The Stockholder votes with respect to the New Common Stock Issuance
will not be effective unless and until the Charter Amendment is approved at the
Stockholders' Meeting and filed with the Secretary of State of Delaware and the
Exchange Restructuring has been consummated, in which event the Charter
Amendment will become effective either immediately prior to or
contemporaneously with the consummation of the Exchange Restructuring. The
Board of Directors has reserved the right, pursuant to Delaware law, to abandon
the Charter Amendment even if the Company's Stockholders authorize the Charter
Amendment.
A vote FOR the Charter Amendment and the Stock Award and Incentive Plan as
described in the Proxy Statement/Prospectus and the Supplement for the
Stockholders' Meeting is recommended. The Board makes no recommendation with
respect to the New Common Stock Issuance.
1. Approve the Charter Amendment
[_] FOR [_] AGAINST [_] ABSTAIN
2. Approve the New Common Stock Issuance
[_] FOR [_] AGAINST [_] ABSTAIN
3. Approve the Stock Award and Incentive Plan
[_] FOR [_] AGAINST [_] ABSTAIN
If any other business is transacted at the Stockholders' Meeting, the Proxy
shall be voted in accordance with the best judgment of the above-named
attorneys and proxies.
Continued on Reverse Side
MERISEL, INC.
PROXY FOR COMMON STOCK
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR SPECIAL MEETING OF STOCKHOLDERS
SEPTEMBER 18, 1997
Dated: ________________, 1997
-----------------------------
(Signature of Stockholder)
-----------------------------
(Signature of Stockholder)
Please sign your name
exactly as it appears
hereon. If acting as
attorney, executor, trustee,
or in other representative
capacity, please sign name
and title. If stock is held
jointly, each joint owner
should sign.
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN THE ENCLOSED
ENVELOPE
<PAGE>
EXHIBIT 99.9
FOR IMMEDIATE RELEASE
Contact: James Illson
Senior Vice President, Finance and CFO
(310) 615-1295
Karen Tallman
Vice President, General Counsel
(310) 615-1235
Financial Media/Investor Relations:
Charles B. Freedman, Assistant Treasurer
(310) 615-1376
Rivian Bell
(310) 615-6812
(310) 615-6868
(800) 686-1910 (24-hour pager)
MERISEL FILES PROXY SUPPLEMENT WITH SEC;
STOCKHOLDERS TO VOTE SEPT. 18
STONINGTON EXTENDS PROPOSAL DEADLINE
El Segundo, Calif. (Sept. 4, 1997)--Merisel, Inc. (NASDAQ:MSEL) today filed
its supplement to the proxy statement/prospectus and exchange restructuring
prospectus with the Securities and Exchange Commission (SEC) detailing recent
developments in the company's proposed debt restructuring plan. The supplement
and new ballots will be mailed to stockholders and noteholders immediately
following the SEC declaring the supplement effective.
At the special stockholder meeting scheduled for Sept. 18, stockholders will
vote on the existing debt restructuring plan under which they would retain 20
percent of the equity in the company and would receive warrants in two series
at exercise prices of $7.15 and $8.58, after giving effect to a one-for-five
reverse split, which would total an additional 17.5 percent of the then
outstanding common stock. Holders of the company's 12.5% Senior Notes would
exchange $125 million principal amount of notes outstanding for 80 percent of
the post-restructuring common stock. Despite extensive discussions, no
agreement could be reached with the noteholders with respect to improving
stockholder consideration under the plan.
The company also confirmed that Stonington Partners, Inc. has extended the
deadline for its revised proposal from Sept. 4 to three days following the
termination of the company's existing agreement with noteholders or October
31, 1997, whichever is sooner. In consideration for the extension, the company
has modified the circumstances under which it is obligated to pay Stonington
the fees and expenses in the amounts previously agreed to upon the expiration
or, under certain circumstances, termination of the revised proposal. Earlier
this week, Merisel reported it had received a revised proposal from Stonington
to loan $152 million in a convertible debt instrument to refinance existing
operating company debt, with a portion of the loan immediately convertible
into common stock and the remainder convertible upon a favorable stockholder
vote. Under such proposal, existing stockholders would retain 37.6 percent of
the common stock.
In evaluating these two proposals, the Board of Directors has determined
that the Stonington proposal is significantly more attractive to the
stockholders in economic terms than the noteholder restructuring and, in light
of the company's inability to negotiate an improvement in the terms of the
noteholder restructuring, the board has withdrawn its recommendation relating
to the stockholder vote on the issuance of common stock to the noteholders and
the prepackaged plan of reorganization.
<PAGE>
In addition, the company announced that it is seeking a declaratory judgment
in Delaware Chancery Court with respect to certain issues in dispute between
the company and the noteholders in connection with the interpretation of their
agreement. Further details are available in the supplement filed with the
Securities and Exchange Commission today.
Merisel, Inc. (NASDAQ:MSEL) is a leader in the distribution of computer
hardware and software products and reported 1996 sales of $3.44 billion from
its North American operations. Merisel distributes a full line of 25,000
products and services from the industry's leading manufacturers to more than
45,000 resellers throughout North America. In addition, the company provides a
full range of customized, value-added services. Merisel also offers dedicated
support to high-end resellers through the Merisel Open Computing Alliance
(MOCATM), which is dedicated to Sun Microsystems and related third-party
products. @Merisel, the company's corporate home page, is located at
http://www.merisel.com. Additional information can be obtained by fax at (310)
615-6811.
# # #
