<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 13, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
TECH DATA CORPORATION
(Exact name of registrant as specified in its charter)
5350 TECH DATA DRIVE
CLEARWATER, FL 34620
(813) 539-7429
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------
<TABLE>
<S> <C>
FLORIDA NO. 59-1578329
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
---------------------
JEFFERY P. HOWELLS
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
TECH DATA CORPORATION
5350 TECH DATA DRIVE, CLEARWATER, FLORIDA 34620
(813) 539-7249
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
<TABLE>
<S> <C>
FRANK N. FLEISCHER, ESQ. G. WILLIAM SPEER, ESQ.
SCHIFINO & FLEISCHER, P.A. POWELL, GOLDSTEIN, FRAZER & MURPHY
ONE TAMPA CITY CENTER SUITE 2700 191 PEACHTREE STREET, SIXTEENTH FLOOR
TAMPA, FLORIDA 33602 ATLANTA, GEORGIA 30303
(813) 223-1535 (404) 572-6600
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALES TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective regulation statement for
the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT PRICE(1) FEE(3)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0015 Par Value(2)........ 6,900,000 Shares $21.625 $149,212,500 $51,453
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Includes 900,000 shares of Common Stock subject to Underwriters'
over-allotment option.
(3) Calculated pursuant to Rule 457(c) as of June 7, 1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
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.
SUBJECT TO COMPLETION, DATED JUNE 13, 1996
PROSPECTUS
6,000,000 SHARES
[LOGO] TECH DATA CORPORATION(R)
COMMON STOCK
All the 6,000,000 shares of Common Stock offered hereby are being sold by
the Company. Of those shares, 4,800,000 shares (the "U.S. Shares") are being
offered in the United States and Canada (the "U.S. Offering") by the U.S.
Underwriters and 1,200,000 shares (the "International Shares") are being offered
concurrently outside the United States and Canada (the "International Offering")
by the Managers. The public offering price and the underwriting discounts and
commissions are identical for both the U.S. Offering and the International
Offering (collectively, the "Offering").
------------------------------
The Common Stock is quoted on the Nasdaq National Market under the symbol
"TECD." On June 11, 1996, the last reported sale price for the Common Stock, as
reported on the Nasdaq National Market, was $23.50 per share. See "Price Range
of Common Stock."
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share......................... $ $ $
- -------------------------------------------------------------------------------------------------
Total(3).......................... $ $ $
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) See "Underwriting" for a description of the indemnification arrangements
with the U.S. Underwriters and the Managers (collectively, the
"Underwriters").
(2) Before deducting expenses payable by the Company estimated to be $275,000.
(3) A Selling Shareholder and the Company have granted to the Underwriters
30-day options to purchase up to 400,000 and 500,000 additional shares of
Common Stock, respectively, solely to cover over-allotments, if any. If the
options are exercised in full, the Price to Public, Underwriting Discount
and Proceeds to Company will be $ , $ and $ ,
respectively, and the proceeds to be received by the Selling Shareholder
will be $ . See "Underwriting."
------------------------------
The U.S. Shares are offered by the several U.S. Underwriters, subject to
prior sale, when, as and if delivered to and accepted by them, and subject to
certain other conditions. The U.S. Underwriters reserve the right to withdraw,
cancel or modify the U.S. Offering and to reject orders in whole or in part. It
is expected that delivery of the U.S. Shares will be made against payment
therefor on or about July , 1996, at the offices of Bear, Stearns & Co. Inc.,
245 Park Avenue, New York, New York 10167.
------------------------------
BEAR, STEARNS & CO. INC.
THE ROBINSON-HUMPHREY COMPANY, INC.
ROBERT W. BAIRD & CO.
INCORPORATED
THE DATE OF THIS PROSPECTUS IS JULY , 1996
<PAGE> 3
Graphics showing approximate number of the Company's suppliers and
customers (with vendor logos), the breakdown of sales by category, and types and
numbers of customers served by the Company.
---------------------
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SHARES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
IN CONNECTION WITH THE OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS, IF ANY, MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON
STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. SEE "UNDERWRITING."
2
<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and shall be read in
conjunction with, the more detailed information and financial data appearing
elsewhere or which are incorporated by reference in this Prospectus. Unless
otherwise noted, the information and data in this Prospectus do not give effect
to the exercise of the Underwriters' over-allotment option.
THE COMPANY
Tech Data Corporation ("Tech Data" or the "Company") is a leading
distributor of microcomputer-related hardware and software products to
value-added resellers ("VARs"), corporate resellers and retailers (collectively
with VARs, "resellers") throughout the United States, France, Canada, Latin
America and the Caribbean. The Company purchases its products directly from more
than 600 manufacturers of microcomputer hardware and publishers of software in
large quantities, maintains a stocking inventory of more than 25,000 products
and sells to an active base of over 50,000 customers. The Company provides a
cost-effective link between this large number of vendors and customers.
The Company provides its customers with leading products in systems,
peripherals, networking and software, which accounted for 24%, 40%, 19% and 17%,
respectively, of sales in fiscal 1996. The Company offers products from
manufacturers and publishers such as Apple, Bay Networks, Canon, Compaq,
Computer Associates, Cisco, Corel, Digital Equipment, Epson, Hewlett-Packard,
IBM, Intel, Kingston, Lotus, Microsoft, NEC Technologies, Novell, Okidata,
Quarterdeck, Seagate, Symantec, 3Com, Toshiba and U.S. Robotics. In addition,
the Company provides its customers with a high level of service including pre-
and post-sale technical support, on-line ordering, credit and low cost delivery,
generally in one-to-two days.
MSI, an industry research firm, estimates that the U.S. microcomputer
distribution market grew from $17 billion in 1992 to $33 billion in 1995,
representing a compound annual growth rate of 25%. Based on industry data
available to the Company, management estimates the overall U.S. microcomputer
industry grew at a compound annual growth rate of 13% during the same period.
The Company's U.S. sales grew during this period at a compound annual rate of
43%. MSI projects that the U.S. microcomputer distribution market will grow by
24% to $41 billion in 1996. Management believes that the rate of growth of the
wholesale distribution segment of the microcomputer industry and the faster rate
of growth of the Company are due to four principal factors. First, more
manufacturers and publishers are using the wholesale distribution channel as
they are finding it increasingly difficult to efficiently sell directly to
resellers. Second, customers are increasingly relying on distributors such as
Tech Data for inventory management and flexible customer financing. Third, the
lifting of restrictions by certain major manufacturers on sales through
wholesale distributors allows those distributors to expand their product
offerings and customer base. Fourth, consolidation in the wholesale distribution
industry continues as access to financial resources and economies of scale
become more critical. This current environment favors those large distributors,
such as the Company, which enjoy economies of scale, are well capitalized to
finance growth and have efficient operations.
Management believes that Tech Data's success is principally attributable to
its critical mass, broad assortment of products, focus on diversified and high
growth customers, strong balance sheet, and emphasis on providing advanced
technical support and other enhanced customer-oriented services. In addition,
the Company achieves operating efficiencies through centralized management and
control, stringent cost controls, use of automation and economies of scale. The
Company expects to continue to maintain its position as a leading distributor
serving the VAR market, one of the most rapidly growing segments of the
microcomputer products sales channel, which currently comprises approximately
65% of the Company's business. In addition, the Company is increasing its sales
to the fast growing mass merchant segment of the retail market. The Company's
plan is to utilize its strong financial and industry positions to continue to
expand its business internally and through possible acquisitions, by adding new
product lines, increasing market share through competitive pricing, providing
additional value-added services and expanding internationally. See "Business --
Business Strategy."
3
<PAGE> 5
THE OFFERING
Common Stock offered:
U.S. Offering................. 4,800,000 shares
International Offering........ 1,200,000 shares
---------
Total.................... 6,000,000 shares
Common Stock to be outstanding
after the Offering................. 44,238,799 shares
Use of Proceeds.................... To reduce indebtedness under revolving
credit loans and to finance continued
growth. See "Use of Proceeds."
Nasdaq National Market Symbol...... TECD
SUMMARY CONSOLIDATED FINANCIAL DATA
The following financial data should be read in conjunction with the
Company's consolidated financial statements, including the notes thereto. The
results of operations for the three months ended April 30, 1996 are not
necessarily indicative of results of operations to be expected for the full
year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED JANUARY 31, APRIL 30,
---------------------------------------------------------- -------------------
1992 1993 1994 1995 1996 1995 1996
-------- -------- ---------- ---------- ---------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.......................... $646,961 $978,862 $1,532,352 $2,418,410 $3,086,620 $633,460 $985,574
Operating profit................... 23,106 36,014 54,995 71,337 55,604 8,155 22,727
Net income......................... 11,887 19,782 30,213 34,912 21,541 1,849 10,428
Net income per common share(1)..... .44 .63 .83 .91 .56 .05 .27
</TABLE>
<TABLE>
<CAPTION>
APRIL 30, 1996
-----------------------
AS
ACTUAL ADJUSTED(2)
---------- ----------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital................................................................. $ 218,154 $ 352,887
Total assets.................................................................... 1,043,294 1,043,294
Revolving credit loans.......................................................... 300,327 165,594
Long-term debt.................................................................. 9,048 9,048
Shareholders' equity............................................................ 300,110 434,843
</TABLE>
- ---------------
(1) Amounts have been adjusted to reflect the two-for-one stock split declared
on March 21, 1994.
(2) Adjusted to reflect the sale by the Company of the 6,000,000 shares of
Common Stock offered hereby at an assumed offering price of $23.50 per
share, less the Company's estimated offering expenses and the estimated
underwriting discount. See "Use of Proceeds."
4
<PAGE> 6
USE OF PROCEEDS
Based upon the sale by the Company of the 6,000,000 shares of Common Stock
at an assumed offering price of $23.50 per share (the last reported sales price
of the Common Stock on the Nasdaq National Market on June 11, 1996), less the
Company's estimated offering expenses and the estimated underwriting discount,
the net proceeds are expected to be approximately $134.7 million. The net
proceeds will be used to reduce indebtedness under the Company's revolving
credit loans. This reduction will increase the Company's revolving credit loan
availability to approximately $360 million based on the outstanding amount at
May 31, 1996. As of that date, the Company had approximately $325 million
outstanding under the available revolving credit loans at a weighted average
interest rate of 5.6%. The Company currently maintains total committed revolving
credit loans of approximately $550 million, of which $250 million is available
in 17 different currencies.
The receipt of the proceeds of this offering will further strengthen the
Company's balance sheet and reduce its cost of borrowings. The increased
availability under the Company's revolving credit loans will provide funding for
domestic and international growth through internal expansion and possible
acquisitions. While the Company regularly reviews acquisition opportunities, no
material acquisition negotiations are currently pending.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "TECD". The following table sets forth the quarterly high and low
sale prices for the Common Stock as reported by the Nasdaq National Market.
<TABLE>
<CAPTION>
RANGE OF
SALES PRICES
------------
HIGH LOW
---- ---
<S> <C> <C>
FISCAL YEAR 1995
First quarter.................................................................. $22 1/8 $16 1/4
Second quarter................................................................. 19 1/4 14
Third quarter.................................................................. 20 15
Fourth quarter................................................................. 20 11 3/8
FISCAL YEAR 1996
First quarter.................................................................. 14 1/4 9 5/8
Second quarter................................................................. 15 1/4 8 1/4
Third quarter.................................................................. 14 3/4 11 1/8
Fourth quarter................................................................. 17 7/8 11 1/4
FISCAL YEAR 1997
First quarter.................................................................. 19 1/2 13
Second quarter (through June 11, 1996)......................................... 24 3/4 18 3/8
</TABLE>
On June 11, 1996, the last reported sale price for the Common Stock was
$23.50 per share. The Company estimates there are approximately 15,000
beneficial holders of the Company's Common Stock.
DIVIDEND POLICY
The Company has not paid cash dividends since fiscal 1983. The Board of
Directors of the Company does not intend to institute a cash dividend payment
policy in the foreseeable future. It is the policy of the Board of Directors to
retain earnings to support the growth and expansion of the Company's business.
The payment of dividends, if any, on Common Stock in the future will be
dependent upon the Company's earnings, financial condition and capital
requirements.
5
<PAGE> 7
CAPITALIZATION
The following table sets forth the capitalization of the Company at April
30, 1996, and as adjusted as described under "Use of Proceeds" to give effect to
the sale by the Company of 6,000,000 shares of Common Stock offered hereby and
the application of the estimated net proceeds of approximately $134.7 million
therefrom to reduce indebtedness under revolving credit loans. This table should
be read in conjunction with the Company's consolidated financial statements
including the notes thereto.
<TABLE>
<CAPTION>
APRIL 30, 1996
----------------------
AS
ACTUAL ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Revolving credit loans(1)............................................. $300,327 $ 165,594
Current portion of long-term debt..................................... 423 423
-------- -----------
Total short-term debt......................................... $300,750 $ 166,017
======== =========
Long-term debt:
Mortgage note, interest at 10.25%, monthly installments of $85,130,
balloon payment due 2005........................................... $ 8,981 $ 8,981
Other long-term debt.................................................. 67 67
-------- -----------
Total long-term debt.......................................... 9,048 9,048
-------- -----------
Shareholders' equity:
Preferred stock; par value $.02; 226,500 shares authorized and
outstanding........................................................ 5 5
Common stock; par value $.0015; 100,000,000 shares authorized;
38,238,799 issued and outstanding; 44,238,799 issued and
outstanding as adjusted(2)......................................... 57 66
Additional paid-in capital............................................ 134,407 269,131
Retained earnings..................................................... 163,738 163,738
Cumulative translation adjustment..................................... 1,903 1,903
-------- -----------
Total shareholders' equity.................................... 300,110 434,843
-------- -----------
Total capitalization.......................................... $309,158 $ 443,891
======== =========
</TABLE>
- ---------------
(1) On May 31, 1996, indebtedness outstanding under the revolving credit loans
was approximately $325 million.
(2) Does not include 3,625,000 shares subject to stock options outstanding as of
April 30, 1996.
6
<PAGE> 8
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data set forth below for each of the
five years ended January 31, 1996 are derived from the Company's audited
financial statements. The audited financial statements at January 31, 1995 and
1996 and for each of the three years in the period ended January 31, 1996 are
included elsewhere in this Prospectus. The data for the three months ended April
30, 1995 and 1996 have been derived from unaudited consolidated financial
statements also appearing herein and which, in the opinion of management,
include all adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of the results for the unaudited interim periods.
The operating results for the three months ended April 30, 1996 are not
necessarily indicative of the operating results for the full fiscal year. This
information should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED JANUARY 31, APRIL 30,
------------------------------------------------------------------ ---------------------
1992 1993 1994 1995 1996 1995 1996
-------- -------- ---------- ---------- ---------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales....................... $646,961 $978,862 $1,532,352 $2,418,410 $3,086,620 $633,460 $985,574
-------- -------- ---------- ---------- ---------- -------- --------
Cost and expenses:
Cost of products sold......... 579,766 885,292 1,397,967 2,219,122 2,867,226 587,244 916,562
Selling, general and
administrative expenses..... 44,089 57,556 79,390 127,951 163,790 38,061 46,285
-------- -------- ---------- ---------- ---------- -------- --------
623,855 942,848 1,477,357 2,347,073 3,031,016 625,305 962,847
-------- -------- ---------- ---------- ---------- -------- --------
Operating profit................ 23,106 36,014 54,995 71,337 55,604 8,155 22,727
Interest expense................ 4,078 3,973 5,008 13,761 20,086 5,057 5,523
-------- -------- ---------- ---------- ---------- -------- --------
Income before income taxes...... 19,028 32,041 49,987 57,576 35,518 3,098 17,204
Provision for income taxes...... 7,141 12,259 19,774 22,664 13,977 1,249 6,776
-------- -------- ---------- ---------- ---------- -------- --------
Net income...................... $ 11,887 $ 19,782 $ 30,213 $ 34,912 $ 21,541 $ 1,849 $ 10,428
========= ========= ========== ========== ========== ========= =========
Net income per common
share(1)...................... $ .44 $ .63 $ .83 $ .91 $ .56 $ .05 $ .27
========= ========= ========== ========== ========== ========= =========
Weighted average common shares
outstanding(1)................ 26,966 31,402 36,590 38,258 38,138 38,063 38,589
========= ========= ========== ========== ========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
JANUARY 31,
------------------------------------------------------------------ APRIL 30,
1992 1993 1994 1995 1996 1996
-------- -------- ---------- ---------- ---------- ---------------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital................. $ 78,445 $ 89,344 $ 165,366 $ 182,802 $ 201,704 $ 218,154
Total assets.................... 200,476 326,885 506,760 784,429 1,043,879 1,043,294
Revolving credit loans.......... 36,708 89,198 153,105 304,784 283,100 300,327
Long-term debt.................. 9,818 9,638 9,467 9,682 9,097 9,048
Shareholders' equity............ 94,565 115,047 213,326 260,826 285,698 300,110
</TABLE>
- ---------------
(1) Amounts have been adjusted to reflect the two-for-one stock split declared
on March 21, 1994.
7
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company has pursued a strategy of profitable revenue growth by
increasing sales to existing and new VARs in addition to seeking greater
penetration of other high growth sales channels such as mass merchants,
superstores and catalog resellers. Recently, margins have stabilized after a
period of decline due to intense competition. The Company has been able to
maintain profitability during this period by focusing on achieving operating
efficiencies through centralized management, stringent cost control, efficient
handling of product shipments, use of automation and by achieving economies of
scale.
For the periods indicated, the following table sets forth the percentage of
certain income statement items to net sales derived from the Company's
consolidated statement of income.
<TABLE>
<CAPTION>
PERCENTAGE OF NET SALES
-----------------------------------------
THREE MONTHS
ENDED
YEAR ENDED JANUARY 31, APRIL 30,
----------------------- --------------
1994 1995 1996 1995 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales................................................ 100.0% 100.0% 100.0% 100.0% 100.0%
Cost and expenses:
Cost of products sold.................................. 91.2 91.7 92.9 92.7 93.0
Selling, general and administrative expenses........... 5.2 5.3 5.3 6.0 4.7
----- ----- ----- ----- -----
96.4 97.0 98.2 98.7 97.7
----- ----- ----- ----- -----
Operating profit......................................... 3.6 3.0 1.8 1.3 2.3
Interest expense......................................... .3 .6 .6 .8 .5
----- ----- ----- ----- -----
Income before income taxes............................... 3.3 2.4 1.2 .5 1.8
Provision for income taxes............................... 1.3 .9 .5 .2 .7
----- ----- ----- ----- -----
Net income............................................... 2.0% 1.5% .7% .3% 1.1%
===== ===== ===== ===== =====
</TABLE>
THREE MONTHS ENDED APRIL 30, 1995 AND 1996
Net sales increased 55.6% to $985.6 million in the first quarter of fiscal
1997 compared to $633.5 million in the first quarter last year. This increase is
attributable to the addition of new product lines and the expansion of existing
product lines combined with an increase in the Company's market share. The
growth rate in the first quarter of fiscal 1997 was also positively impacted by
a lower growth rate in the prior comparable period as the Company was recovering
from the effects of the business interruptions caused by the conversion to a new
computer system in December 1994. The Company's U.S. and international sales
grew 58% and 43%, respectively, in the first quarter of fiscal 1997 compared to
the prior year first quarter. International sales were approximately 14% of
fiscal 1997 first quarter net sales compared to 15% for the first quarter of
fiscal 1996.
The cost of products sold as a percentage of net sales increased to 93.0%
in the first quarter of fiscal 1997 from 92.7% in the prior year. This increase
is a result of competitive market prices and the Company's strategy of lowering
selling prices in order to gain market share and to pass on the benefit of
operating efficiencies to its customers.
Selling, general and administrative expenses increased by 21.6% to $46.3
million in the first quarter of fiscal 1997 compared to $38.1 million in the
prior year and decreased as a percentage of net sales to 4.7% in the first
quarter of fiscal 1997 compared to 6.0% in the first quarter last year. Selling,
general and administrative expenses were a greater percentage of net sales
during the first quarter of fiscal 1996 primarily as a result of increased
hiring in anticipation of sales growth which was lower than expected due to the
effects of the business interruptions caused by the computer system conversion,
in addition to expenses related to this conversion. The dollar value increase is
primarily the result of expanded employment and increases in other
administrative expenses needed to support the increased volume of business.
8
<PAGE> 10
As a result of the factors discussed above, operating profit increased
178.7% to $22.7 million, or 2.3% of net sales, in the first quarter of fiscal
1997 compared to $8.2 million, or 1.3% of net sales for the first quarter last
year.
Interest expense increased in the first quarter of fiscal 1997 due to an
increase in the Company's average outstanding indebtedness, partially offset by
decreases in short-term interest rates on the Company's floating rate
indebtedness.
As a result of the factors discussed above, net income increased 464.0% to
$10.4 million, or $.27 per share, in the first quarter of fiscal 1997 compared
to $1.8 million, or $.05 per share, in the prior year comparable quarter.
FISCAL YEARS ENDED JANUARY 31, 1995 AND 1996
Net sales increased 27.6% to $3.09 billion in fiscal 1996 compared to $2.42
billion in the prior year. This increase is attributable to the addition of new
product lines and the expansion of existing product lines combined with
increases in the Company's market share. The rate of growth in fiscal year 1996
is lower than the rate of growth in the prior year as the Company continued to
recover from the effects of the business interruptions caused by the computer
system conversion in December 1994. The Company's international sales in fiscal
1996 were approximately 14% of net sales compared to 13% in fiscal 1995.
The cost of products sold as a percentage of net sales increased from 91.7%
in fiscal 1995 to 92.9% in fiscal 1996. This increase is a result of competitive
market conditions, the Company's strategy of lowering selling prices in order to
gain market share and to pass on the benefit of operating efficiencies to its
customers, as well as certain freight concessions, due to the computer system
conversion, made with customers in order to ensure timely delivery of product
during the first and second quarters of fiscal 1996.
Selling, general and administrative expenses increased from $128.0 million
in fiscal 1995 to $163.8 million in fiscal 1996, and as a percentage of net
sales were 5.3% in fiscal 1996 and fiscal 1995. The dollar value increase in
selling, general and administrative expenses is primarily a result of expanded
employment and increases in other administrative expenses needed to support the
increased volume of business, as well as expenses associated with the new
computer system.
As a result of the factors described above, operating profit in fiscal 1996
decreased 22.1% to $55.6 million, or 1.8% of net sales, compared to $71.3
million, or 3.0% of net sales, in fiscal 1995.
Interest expense increased due to an increase in the Company's average
outstanding indebtedness, combined with increases in short-term interest rates
on the Company's floating rate indebtedness.
Net income in fiscal 1996 decreased 38.3% to $21.5 million, or $.56 per
share, compared to $34.9 million, or $.91 per share, in the prior year.
FISCAL YEARS ENDED JANUARY 31, 1994 AND 1995
Net sales increased 57.8% to $2.42 billion in fiscal 1995 compared to $1.53
billion in the prior year. This increase is attributable to the addition of new
product lines and the expansion of existing product lines combined with an
increase in the Company's customer base. This increase is partially offset by
lower than anticipated sales growth in the fourth quarter of fiscal 1995 due to
business interruptions caused by the December 1994 computer system conversion.
Fiscal 1995 also includes the results for the two companies that were acquired
at the beginning of the year (U.S. Software Resource, Inc. and Softmart
International, S.A.). The Company's international sales in fiscal 1995 were
approximately 13% of consolidated net sales.
The cost of products sold as a percentage of net sales increased from 91.2%
in fiscal 1994 to 91.7% in fiscal 1995. This increase is a result of the
Company's strategy of lowering selling prices in order to gain market share and
to pass on the benefit of operating efficiencies to its customers.
Selling, general and administrative expenses increased from $79.4 million
in fiscal 1994 to $128.0 million in fiscal 1995, and increased as a percentage
of net sales to 5.3% in fiscal 1995 compared to 5.2% in the prior
9
<PAGE> 11
year. The increase in selling, general and administrative expenses is primarily
a result of expanded employment and increases in other administrative expenses
needed to support the increased volume of business. Additionally, the increase
in selling, general and administrative expenses as a percentage of sales in
fiscal 1995 is attributable to the lower than anticipated fourth quarter sales
growth due to business interruptions caused by the computer system conversion.
Operating profit in fiscal 1995 increased 29.7% to $71.3 million, or 3.0%
of net sales, compared to $55.0 million, or 3.6% of net sales, in fiscal 1994.
The decline in the operating profit margin was primarily the result of the lower
than anticipated sales growth in the fourth quarter of fiscal 1995 caused by the
computer system conversion.
Interest expense increased due to an increase in the Company's average
outstanding indebtedness, combined with increases in short-term interest rates
on the Company's floating rate indebtedness.
Net income in fiscal 1995 increased 15.6% to $34.9 million, or $.91 per
share, compared to $30.2 million, or $.83 per share, in the prior year.
QUARTERLY FINANCIAL DATA
The following table sets forth certain unaudited data regarding the
Company's results of operations for the first quarter of fiscal 1997 and for
each of the quarters of fiscal years 1996 and 1995. Such data is derived from
the unaudited interim consolidated financial statements of the Company and, in
the opinion of management, include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of information contained
therein.
In anticipation of continued rapid growth and to better service its
customers, the Company converted to a new computer system in December 1994. In
order to provide adequate levels of customer service before and after the
conversion, the Company hired additional employees in order to allow adequate
time for training on the new system. Business interruptions caused by the
conversion to the new computer system caused the Company's rate of growth to
decline beginning in the fourth quarter of fiscal 1995 and continuing into the
first quarter of fiscal 1996. Selling, general and administrative expenses were
a greater percentage of net sales during the first quarter of fiscal 1996
primarily as a result of increased hiring in anticipation of sales growth which
was lower than expected due to the effects of the business interruptions caused
by the computer system conversion, in addition to expenses related to this
conversion. The computer system was stabilized during the first half of fiscal
1996 and by the third quarter of fiscal 1996 the Company had resumed its growth
and reduced selling, general and administrative expenses as a percentage of
sales to pre-conversion levels.
10
<PAGE> 12
Any trends that may be reflected in the following table are not necessarily
indicative of the Company's future operations.
<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------------------------------------------------------------------------
APR. 30, JUL. 31, OCT. 31, JAN. 31, APR. 30, JUL. 31, OCT. 31, JAN. 31, APR. 30,
1994 1994 1994 1995 1995 1995 1995 1996 1996
-------- -------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales..................... $530,469 $569,655 $658,341 $659,945 $633,460 $708,836 $843,286 $901,038 $985,574
Cost and expenses:
Cost of products sold....... 485,312 521,877 604,526 607,407 587,244 658,723 784,601 836,658 916,562
Selling, general and
administrative expenses... 27,452 29,244 33,068 38,187 38,061 39,457 42,179 44,093 46,285
Operating profit.............. 17,705 18,534 20,747 14,351 8,155 10,656 16,506 20,287 22,727
Net income.................... 9,225 9,603 10,295 5,789 1,849 3,448 7,042 9,202 10,428
Net income per common share... .24 .25 .27 .15 .05 .09 .18 .24 .27
PERCENTAGE OF NET SALES:
Net sales..................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost and expenses:
Cost of products sold....... 91.5 91.6 91.8 92.0 92.7 92.9 93.0 92.9 93.0
Selling, general and
administrative expenses... 5.2 5.1 5.0 5.8 6.0 5.6 5.0 4.9 4.7
Operating profit.............. 3.3 3.3 3.2 2.2 1.3 1.5 2.0 2.2 2.3
Net income.................... 1.7 1.7 1.6 0.9 0.3 0.5 0.8 1.0 1.1
NET SALES GROWTH:
Year-over-year................ 59.6% 61.8% 63.0% 48.6% 19.4% 24.4% 28.1% 36.5% 55.6%
</TABLE>
IMPACT OF INFLATION
The Company has not been adversely affected by inflation as technological
advances and competition within the microcomputer industry have generally caused
prices of the products sold by the Company to decline. Management believes that
any price increases could be passed on to its customers, as prices charged by
the Company are not set by long-term contracts.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities of $19.5 million during the first
quarter of fiscal 1997 was primarily attributable to growth in sales and the
resulting increase in accounts receivable.
Net cash used in investing activities of $2.2 million during the first
quarter of fiscal 1997 was a result of the Company making capital expenditures
to expand its management information system capability, office facilities and
distribution centers. The Company expects to make capital expenditures of
approximately $25 million during fiscal 1997 to further expand its management
information system capability, office facilities and distribution centers.
Net cash provided by financing activities of $21.4 million during the first
quarter of fiscal 1997 was primarily provided by additional borrowings under the
Company's revolving credit loans.
In May 1996, the Company entered into a new $290 million, three-year,
multi-currency revolving credit facility. As of May 31, 1996, the Company had
total available credit lines of approximately $550 million (including the $250
million receivables securitization program), of which approximately $325 million
was outstanding. The Company believes that cash from operations, available and
obtainable bank credit lines and trade credit from its vendors will be
sufficient to satisfy its working capital and capital expenditure needs during
fiscal 1997.
The Company has historically relied upon cash generated from operations,
bank credit lines, trade credit from its vendors and proceeds from prior public
offerings of Common Stock to satisfy capital needs and finance growth. Although
management believes the Company's liquidity at April 30, 1996 is sufficient to
fund the current level of operations through fiscal 1997, completion of the
Offering will provide net proceeds of
11
<PAGE> 13
approximately $134.7 million (based on the assumptions set forth under "Use of
Proceeds"), which will further assist the Company to strengthen its financial
position and allow it to accelerate its growth.
ASSET MANAGEMENT
The Company manages its inventories by maintaining sufficient quantities to
achieve high order fill rates while attempting to stock only those products in
high demand with a rapid turnover rate. Inventory balances fluctuate as the
Company adds new product lines and when appropriate, makes large purchases,
including cash purchases from manufacturers and publishers when the terms of
such purchases are considered advantageous. The Company's contracts with most of
its vendors provide price protection and stock rotation privileges to reduce the
risk of loss due to manufacturer price reductions and slow moving or obsolete
inventory. In the event of a vendor price reduction, the Company generally
receives a credit for the impact on products in inventory. In addition, the
Company has the right to rotate a certain percentage of purchases, subject to
certain limitations. Historically, price protection and stock rotation
privileges as well as the Company's inventory management procedures have helped
to reduce the risk of loss of carrying inventory.
The Company attempts to control losses on credit sales by closely
monitoring customers' creditworthiness through its computer system which
contains detailed information on each customer's payment history and other
relevant information. In addition, the Company participates in a national credit
association which exchanges credit information on mutual customers. The Company
has recently obtained domestic credit insurance which insures a percentage of
the credit extended by the Company to certain of its larger customers against
possible loss. Customers who qualify for credit terms are typically granted net
30-day payment terms. The Company also sells products on a prepay, credit card,
cash on delivery and floorplan basis.
COMMENTS ON FORWARD-LOOKING INFORMATION
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company filed a Form 8-K with the Securities
and Exchange Commission (the "Commission") on March 26, 1996 outlining
cautionary statements and identifying important factors that could cause the
Company's actual results to differ materially from those projected in
forward-looking statements made by, or on behalf of, the Company. Such
forward-looking statements, as made within this Prospectus, should be considered
in conjunction with the information included within such Form 8-K.
RECENT ACCOUNTING PRONOUNCEMENT
In 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("FAS 123"), which is effective for the Company's fiscal year
ending January 31, 1997. FAS 123 encourages, but does not require, companies to
recognize compensation expense based on the fair value of grants of stock, stock
options and other equity investments to employees. Although expense recognition
for employee stock-based compensation is not mandatory, FAS 123 requires that
companies not adopting must disclose the pro forma effect on net income and
earnings per share. The Company will continue to apply prior accounting rules
and make pro forma disclosures in fiscal 1997.
12
<PAGE> 14
BUSINESS
The Company is a leading distributor of microcomputer-related hardware and
software products to value-added resellers ("VARs"), corporate resellers and
retailers (collectively with VARs, "resellers") throughout the United States,
France, Canada, Latin America and the Caribbean. The Company purchases its
products directly from more than 600 manufacturers of microcomputer hardware and
publishers of software in large quantities, maintains a stocking inventory of
more than 25,000 products and sells to an active base of over 50,000 customers.
The Company provides a cost-effective link between this large number of vendors
and customers.
The Company provides its customers with leading products in systems,
peripherals, networking, and software, which accounted for 24%, 40%, 19% and
17%, respectively, of sales in fiscal 1996. The Company offers products from
manufacturers and publishers such as Apple, Bay Networks, Canon, Compaq,
Computer Associates, Cisco, Corel, Digital Equipment, Epson, Hewlett-Packard,
IBM, Intel, Kingston, Lotus, Microsoft, NEC Technologies, Novell, Okidata,
Quarterdeck, Seagate, Symantec, 3Com, Toshiba and U.S. Robotics. In addition to
products, the Company provides its customers with a high-level of service
including pre- and post-sale technical support, on-line ordering, credit and low
cost delivery, generally in one-to-two days.
INDUSTRY
Wholesale distribution has proven to be well suited for manufacturers and
publishers of microcomputer products for the following reasons. The large number
and diversity of resellers makes it cost efficient for manufacturers and
publishers to rely on wholesale distributors to assume responsibility for at
least some portion of their distribution, credit, marketing and support
requirements. Similarly, due to the large number of microcomputer product
manufacturers and publishers, VARs (which integrate proprietary software with
products provided by manufacturers and distributors), computer resellers and
retailers often cannot establish direct purchasing relationships. Instead they
rely on wholesale distributors, such as Tech Data, to satisfy a significant
portion of their product, financing, marketing and technical support needs.
MSI, an industry research firm, estimates that the U.S. microcomputer
distribution market grew from $17 billion in 1992 to $33 billion in 1995,
representing a compound annual growth rate of 25%. Based on industry data
available to the Company, management estimates that the overall U.S.
microcomputer industry grew at a compound annual growth rate of 13% during the
same period. The Company's U.S. sales grew during this period at a compound
annual rate of 43%. MSI projects that the U.S. microcomputer distribution market
will grow by 24% to $41 billion in 1996. Management believes that the rate of
growth of the wholesale distribution segment of the microcomputer industry and
the faster rate of growth of the Company are due to four principal factors.
First, as a result of the use of open systems and off-the-shelf components,
hardware and software products are increasingly viewed as commodities. The
resulting price competition, coupled with rising selling costs and shorter
product life cycles, make it difficult for manufacturers and publishers to
efficiently sell directly to resellers and has prompted them to rely on more
cost-efficient methods of distribution. Second, customers are increasingly
relying on wholesale distributors such as Tech Data for inventory management and
flexible customer financing, rather than stocking large inventories themselves
and maintaining credit lines to finance working capital needs. Third,
restrictions by certain major manufacturers on sales through wholesale
distributors were gradually eased commencing in 1991. Since the beginning of
1995, the Company has been able to sell certain of those major manufacturers'
products under more competitive terms and conditions ("open sourcing"). This has
substantially reduced the advantage that aggregators had over distributors such
as the Company. Open sourcing has also contributed to price competition and
margin decline in the industry. Fourth, consolidation in the wholesale
distribution industry continues as access to financial resources and economies
of scale become more critical.
These factors have benefited distributors like Tech Data, which offer
vendors an efficient mechanism for marketing, distributing and supporting their
products. The Company has a competitive advantage over certain other
distributors which do not have the low cost structure to compete on the basis of
price and service, have not invested in sophisticated management information
systems and do not have adequate access to capital to finance their growth.
13
<PAGE> 15
BUSINESS STRATEGY
To maintain its leadership position in wholesale distribution, the
Company's business strategy includes the following main elements:
CUSTOMER FOCUS. Tech Data has historically focused its marketing on
VARs. The VAR market is considered particularly attractive by the Company
because it sources product almost exclusively from distributors and is
expected to be one of the fastest growing segments of the microcomputer
industry. Management believes this will remain one of the fastest growing
segments as businesses of all sizes increasingly rely on VARs. The Company
also has sought to increase its market share with fast growing mass
merchants and computer superstores (such as CompUSA) as well as corporate
resellers (such as CompuCom Systems) and franchisees and other affiliates
of aggregators (such as MicroAge). VARs currently represent approximately
65% of the Company's total sales with franchisees, corporate resellers and
retailers accounting for the balance.
In order to differentiate itself and foster customer loyalty, the
Company provides additional customer services such as flexible customer
financing, product specifications, electronic catalog, electronic order
entry, pre- and post-sale technical support, configuration of products,
private label delivery, low cost delivery, generally in one-to-two days,
flexible product return policies and customer education programs. The
Company believes its strategy of not competing with its customer base also
fosters customer loyalty.
OPERATING EFFICIENCIES AND ECONOMIES OF SCALE. The Company has
pursued a strategy of profitable revenue growth by achieving operating
efficiencies through centralized management and control, stringent cost
control, automation and economies of scale. The Company strictly controls
selling, general and administrative expenses; utilizes its highly automated
order placement and processing systems to efficiently manage inventory and
shipments and to reduce transaction costs; and realizes economies of scale
in product purchasing, financing and working capital management.
MANAGEMENT INFORMATION SYSTEMS. In order to further improve its
operating efficiencies and services to its customers, the Company invested
approximately $29 million in a new scalable and flexible state-of-the-art
computer information system which was implemented in December 1994. This
new system, which currently supports the Company's U.S. and Canadian
operations, will serve as the platform the Company will use to grow its
business both domestically and internationally. The system allows the
Company to improve operating efficiencies as described above and to offer
additional services such as expanding its electronic commerce capabilities,
including electronic data interchange and Tech Data On-Line electronic
ordering and information systems. The Company plans to make its ordering
and information systems available on the World Wide Web in the near future.
This system will also assist the Company in assuming more of the "back
office" functions for both its vendors and customers. The Company believes
that growth in its electronic commerce capabilities will provide
incremental economies of scale and further reduce transaction costs.
BROAD PRODUCT MIX. The Company offers its customers a broad
assortment of leading technology products. Currently the Company offers
more than 25,000 products from more than 600 manufacturers and publishers.
By offering a broad product assortment, the Company can benefit from its
customers' increasing desire to more efficiently procure product by
reducing the number of their direct vendor relationships. The Company is
continually broadening its product assortment and has recently expanded its
offerings of communication products as a result of the convergence of the
computing and telecommunication markets. The Company maintains a balanced
product line of systems, networking products, peripherals and software to
minimize the effects of fluctuations in supply and demand.
MARKET SHARE AND GEOGRAPHIC GROWTH. The Company's plan is to utilize
its strong financial and industry positions to continue to expand its
business internally and through possible acquisitions, by adding new
product lines, increasing market share through competitive pricing,
providing additional value added services and expanding internationally. In
addition, such resources allow the Company to expand complementary business
opportunities such as customer education and the outsourcing of technical
support.
14
<PAGE> 16
VENDOR RELATIONS
Due to the proliferation of relatively small VARs and computer dealers
which purchase a limited volume of products from any single manufacturer, it is
more cost efficient for most manufacturers to rely upon distributors, such as
Tech Data, rather than to maintain their own sales forces to market, distribute
and support products. The Company's strong financial and industry positions have
enabled it to obtain contracts with most leading manufacturers and publishers to
purchase large quantities of products. In addition, the advent of open sourcing
has enabled the Company to cost effectively sell the products of certain major
manufacturers to customers which it had previously been restricted from
servicing.
The Company purchases products directly from more than 600 manufacturers
and publishers generally on a nonexclusive basis. The Company's vendor
agreements are believed to be in the form customarily used by each manufacturer
and typically contain provisions which allow termination by either party upon 60
days notice. Such agreements generally contain stock rotation and price
protection provisions which reduce, in part, the Company's risk of loss due to
slow-moving inventory, vendor price reductions, product updates or obsolescence.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Asset Management." Virtually none of the Company's supplier
agreements require it to sell a specified quantity of products or restrict the
Company from selling similar products manufactured by competitors. Consequently,
the Company has the flexibility to terminate or curtail sales of one product
line in favor of another product line as a result of technological change,
pricing considerations, product availability, customer demand and vendor
distribution policies. No single vendor accounted for more than 10% of the
Company's net sales during fiscal 1996 or the three months ended April 30, 1996.
In addition to providing manufacturers and publishers with one of the
largest bases of VARs in the United States, France, Canada, Latin America and
the Caribbean, the Company also offers manufacturers and publishers the
opportunity to participate in a number of special promotions, training programs
and marketing services targeted to meet the needs of its customers.
From time to time, the demand for certain products sold by the Company
exceeds the supply available from the manufacturer or publisher. The Company
then receives an allocation of the products available. Management believes that
the Company's ability to compete is not adversely affected by these periodic
shortages and the resulting allocations.
PRODUCTS, SERVICES AND CUSTOMERS
The Company sells more than 25,000 microcomputer products in systems,
peripherals, networking and software purchased directly from manufacturers and
publishers in large quantities for sale to an active customer base of more than
50,000 VARs, corporate resellers and retailers. The Company pursues a strategy
of expanding its product line to offer its customers a broad assortment of
products. Based upon the convergence of computing and communication
technologies, the Company has expanded its offering of communication products.
The Company's VAR customers typically do not have the resources to
establish a large number of direct purchasing relationships or stock significant
product inventories. These resellers generally rely on distributors as their
principal source of computer products and financing. Corporate resellers and
retailers, on the other hand, often establish direct relationships with
manufacturers and publishers for their more popular products, but utilize
distributors for slower-moving products from numerous smaller manufacturers and
publishers and for fill-in orders of fast moving products. The Company's backlog
of orders is not considered material to an understanding of its business. No
single customer accounted for more than 4% of the Company's net sales during
fiscal 1996 or the three months ended April 30, 1996.
The Company delivers products throughout the United States, France, Canada,
Latin America and the Caribbean from its ten distribution centers in Miami,
Florida; Atlanta, Georgia; Paulsboro, New Jersey; Ft. Worth, Texas; South Bend,
Indiana; Ontario, California; Union City, California; Mississauga, Ontario
(Canada); Richmond, British Columbia (Canada); and Bobigny (Paris), France.
Locating distribution centers near its customers enables the Company to
efficiently deliver products on a timely basis, thereby reducing customers' need
to invest in inventory.
15
<PAGE> 17
To complement its distribution activities, the Company maintains a staff of
technical advisers who assist customers by telephone either for free or on a
user-fee basis. The Company offers educational and promotional seminars on the
products sold by the Company in various cities around the United States, France,
Canada, and Latin America. The Company also provides advertising and other
marketing assistance to its customers using funds and materials provided by
manufacturers and publishers. The Company provides additional customer services
such as flexible customer financing, product specifications, electronic catalog,
electronic order entry, pre- and post-sale technical support, configuration of
products, and flexible product return policies. The Company regularly offers
additional services, such as the recently introduced private label delivery
program, whereby product is drop-shipped directly to the end user, utilizing the
customer's packing slip and shipping label produced by Tech Data.
SALES AND MARKETING
Currently, the Company's sales force consists of approximately 40 field
sales representatives and 675 inside telemarketing sales representatives. Field
sales representatives are located in major metropolitan areas. Each field
representative is supported by a team of inside telemarketing sales
representatives covering a designated territory. Territories with no field
representation are serviced exclusively by the inside telemarketing sales
representatives. Customers rely upon the Company's product catalogs and frequent
mailings as sources for product information, including prices.
Customers typically call their inside sales representative toll-free to
place orders for same-day or next-day shipment. The Company's on-line computer
system allows inside sales representatives to check for current stocking levels
in each of the seven United States distribution centers. Likewise, inside sales
representatives in Canada and France can check on stocking levels in the two
Canadian and one French distribution center, respectively. Through "Tech Data
On-Line", the Company's proprietary electronic on-line system, domestic
customers can gain remote access to the Company's data processing system to
check product availability and pricing and to place an order. Certain of the
Company's larger customers have available electronic data interchange ("EDI")
services whereby orders, order acknowledgments, invoices, inventory status
reports, price catalogs and other industry standard EDI transactions are
consummated on-line which improves efficiency and timeliness for both the
Company and customers. If the product is in stock and the customer has available
credit, customer orders received by 5:00 p.m. local time are generally shipped
the same day from the distribution facility nearest to the customer. The
Company's centralized processing capability generally permits a customer located
within 250 miles of a distribution center to receive goods by cost effective
ground service the next day.
The Company provides comprehensive training to its field and inside sales
representatives regarding technical characteristics of products and the
Company's policies and procedures. Each new domestic sales representative
attends a six-week course provided in-house by the Company. In addition, the
Company's ongoing training program is supplemented by product seminars offered
by manufacturers and publishers.
COMPETITION
The Company operates in a market characterized by intense competition.
Competition within the industry is based on product availability, price, credit
availability, delivery and various services and support provided by the
distributor to the reseller. The Company believes that it is equipped to compete
effectively with other distributors in these areas. Major competitors include
Ingram Micro, Merisel, and a variety of others. Some of the Company's
competitors are larger and have greater resources than the Company.
The Company also faces competition from manufacturers and publishers who
can offer customers lower prices than the Company. The Company nevertheless
believes that in the majority of cases, manufacturers and publishers choose to
sell products though distributors rather than directly because of the relatively
small volume and high selling costs associated with numerous small orders.
Management also believes that the Company's prompt delivery of products and
efficient handling of returns provide an important competitive advantage over
manufacturers' and publishers' efforts to market their products directly.
16
<PAGE> 18
EMPLOYEES
On April 30, 1996, the Company had approximately 2,775 full-time employees.
The Company enjoys excellent relations with its employees, all of whom are
non-union.
FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES
The geographic areas in which the Company operates are the United States
(including exports to Latin America and the Caribbean), France and Canada. See
Note 10 of Notes to Consolidated Financial Statements regarding the geographical
distribution of the Company's net sales, operating income and identifiable
assets.
17
<PAGE> 19
MANAGEMENT
The executive officers of the Company, their ages, and their present
positions with the Company are as follows:
<TABLE>
<S> <C> <C>
Steven A. Raymund...................... 40 Chairman of the Board of Directors and
Chief Executive Officer
A. Timothy Godwin...................... 47 Vice Chairman, President, Chief
Operating Officer and Director
Peggy K. Caldwell...................... 50 Senior Vice President of Sales and
Marketing
Lawrence W. Hamilton................... 39 Senior Vice President of Human
Resources
Jeffery P. Howells..................... 39 Senior Vice President of Finance and
Chief Financial Officer
James T. Pollard....................... 49 Senior Vice President of Logistics and
Chief Information Officer
Patrick O. Connelly.................... 50 Vice President of Worldwide Credit
Services
Charles V. Dannewitz................... 41 Vice President of Taxes
Bruce D. Eden.......................... 53 Vice President of MIS
Yuda Saydun............................ 43 Vice President and General Manager --
Latin America
Arthur W. Singleton.................... 35 Vice President, Treasurer and Secretary
Joseph B. Trepani...................... 35 Vice President and Worldwide Controller
David R. Vetter........................ 37 Vice President and General Counsel
</TABLE>
STEVEN A. RAYMUND has been employed by the Company since 1981, serving as
Chief Executive Officer since January 1986 and as Chairman of the Board of
Directors since April 1991. He has a B.S. Degree in Economics from the
University of Oregon and a Masters Degree from the Georgetown University School
of Foreign Service.
A. TIMOTHY GODWIN joined the Company in July 1989 as Senior Vice President
of Finance and assumed the responsibilities of Chief Financial Officer in
November 1989. He was appointed to the Board of Directors in March 1991 and was
promoted to the position of President and Chief Operating Officer in November
1991. In September 1995, Mr. Godwin was appointed Vice Chairman. Prior to
joining the Company, Mr. Godwin was employed by Price Waterhouse from 1974 to
June 1989, most recently as audit partner from July 1987 to June 1989. Mr.
Godwin is a Certified Public Accountant and holds a B.S. Degree in Accounting
from the University of West Florida.
PEGGY K. CALDWELL joined the Company in May 1992 as Senior Vice President
of Marketing and in February 1996 was appointed to the position of Senior Vice
President of Sales and Marketing. Prior to joining the Company, she was employed
by International Business Machines Corporation for 25 years, most recently
serving in a variety of senior management positions in the National Distribution
Division. Ms. Caldwell holds a B.S. Degree in Mathematics and Physics from
Bucknell University.
LAWRENCE W. HAMILTON joined the Company in August 1993 as Vice President of
Human Resources and was promoted to Senior Vice President in March 1996. Prior
to joining the Company, he was employed by Bristol-Myers Squibb Company from
1985 to August 1993, most recently as Vice President -- Human Resources and
Administration of Linvatec Corporation (a division of Bristol-Myers Squibb
Company). Mr. Hamilton holds a B.A. Degree in Political Science from Fisk
University and a Masters of Public Administration, Labor Policy from the
University of Alabama.
JEFFERY P. HOWELLS joined the Company in October 1991 as Vice President of
Finance and assumed the responsibilities of Chief Financial Officer in March
1992. In March 1993, he was promoted to Senior Vice
18
<PAGE> 20
President of Finance and Chief Financial Officer. From June 1991 through
September 1991 he was employed as Vice President of Finance of Inex Vision
Systems. From 1979 to May 1991 he was employed by Price Waterhouse, most
recently as a Senior Audit Manager. Mr. Howells is a Certified Public Accountant
and holds a B.B.A. Degree in Accounting from Stetson University.
JAMES T. POLLARD joined the Company in October 1993. Prior to joining the
Company, he was employed by Florida Power Corporation from September 1990
through September 1993, most recently as Director -- Information Services. From
November 1984 to September 1990 he was employed by Southern California Gas
Company as Senior Vice President. Mr. Pollard holds a B.S. Degree in Business
Finance from the University of Utah and a Masters in Business Administration
Degree from the University of South Florida.
PATRICK O. CONNELLY joined the Company in August 1994. Prior to joining the
Company, he was employed by Unisys Corporation for nine years as Worldwide
Director of Credit. Mr. Connelly holds a B.A. Degree in History and French from
the University of Texas at Austin.
CHARLES V. DANNEWITZ joined the Company in February 1995. Prior to joining
the Company, he was employed by Price Waterhouse for 13 years, most recently as
a Tax Partner. Mr. Dannewitz is a Certified Public Accountant and holds a B.S.
Degree in Accounting from Illinois Wesleyan University.
BRUCE D. EDEN joined the Company in January 1994 as Director of Information
Technology. In February 1995, he was promoted to Vice President of MIS. Prior to
joining the Company, Mr. Eden was engaged as an independent consultant from
February 1993 to December 1993. From March 1987 to February 1993 Mr. Eden was
employed by Pacific Enterprises as Director of Information Systems. Mr. Eden
holds a B.A. Degree in Economics from CUNY.
YUDA SAYDUN joined the Company in May 1993. Prior to joining the Company,
he was employed by American Express Travel Related Services Company, Inc. from
1982 to May 1993, most recently as Division Vice President, Cardmember
Marketing. Mr. Saydun holds a B.S. Degree in Political and Diplomatic Sciences
from Universite Libre de Bruxelles and a Masters of Business Administration
Degree, Finance/Marketing from UCLA.
ARTHUR W. SINGLETON joined the Company in January 1990 as Director of
Finance and was appointed Treasurer and Secretary in April 1991. In February
1995, he was promoted to Vice President, Treasurer and Secretary. Prior to
joining the Company, Mr. Singleton was employed by Price Waterhouse from 1982 to
December 1989, most recently as an Audit Manager. Mr. Singleton is a Certified
Public Accountant and holds a B.S. Degree in Accounting from Florida State
University.
JOSEPH B. TREPANI joined the Company in March 1990 as Controller and held
the position of Director of Operations from October 1991 through January 1995.
In February 1995, he was promoted to Vice President and Worldwide Controller.
Prior to joining the Company, Mr. Trepani was Vice President of Finance for
Action Staffing, Inc. from July 1989 to February 1990. From 1982 to June 1989,
he was employed by Price Waterhouse. Mr. Trepani is a Certified Public
Accountant and holds a B.S. Degree in Accounting from Florida State University.
DAVID R. VETTER joined the Company in June 1993. Prior to joining the
Company, he was employed by the law firm of Robbins, Gaynor & Bronstein, P.A.
from 1984 to June 1993, most recently as a partner. Mr. Vetter is a member of
the Florida Bar and holds a B.A. Degree in English and Economics from Bucknell
University and a J.D. Degree from the University of Florida.
19
<PAGE> 21
SELLING SHAREHOLDER
Assuming the Underwriters exercise their option to purchase from the
Selling Shareholder up to 400,000 Shares to cover over-allotments (see
"Underwriting"), the following table sets forth certain information regarding
the beneficial ownership of the Company's Common Stock by the Selling
Shareholder and all officers and directors as a group as of May 31, 1996, both
before and after giving effect to the Offering.
<TABLE>
<CAPTION>
BEFORE THE AFTER THE
OFFERING OFFERING
----------------- -----------------
NUMBER SHARES NUMBER
OF SHARES % OF TO BE OF SHARES % OF
OWNED(2) CLASS SOLD OWNED CLASS
--------- ----- ------- --------- -----
<S> <C> <C> <C> <C> <C>
Steven A. Raymund(1)(2)............................. 3,763,056 9.8 % 400,000 3,363,056 8.8%
All executive officers and directors as a group
(19 persons)(3)................................... 5,037,296 13.2 % 400,000 4,637,296 12.1%
</TABLE>
- ---------------
(1) Includes 3,404,670 shares owned by a partnership which is indirectly owned
by Mr. Raymund; includes 38,500 shares owned by inter vivos trusts of which
he is a trustee; and includes 147,886 shares held in his Employee Stock
Ownership Plan ("ESOP") account.
(2) Under the rules of the Commission, a person is deemed to be a "beneficial
owner" of a security if that person has or shares "voting power", which
includes the power to vote or to direct the voting of such security, or
"investment power", which includes the power to dispose of or to direct the
disposition of such security. A person is also deemed to be a beneficial
owner of any securities of which that person has the right to acquire
beneficial ownership within sixty (60) days. Under these rules, more than
one person may be deemed to be a beneficial owner of the same securities
and a person may be deemed to be a beneficial owner of securities as to
which he has no beneficial interest.
(3) Includes 556,700 shares that may be acquired upon the exercise of stock
options which are exercisable within 60 days of May 1, 1996. Also includes
663,831 shares owned by the ESOP for which certain officers of the Company
serve as trustees. Such officers are deemed to be beneficial owners of such
shares.
CERTAIN UNITED STATES TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS OF COMMON STOCK
GENERAL
The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a holder who is not a United States person (a "Non-U.S. Holder"). For
this purpose, the term "Non-U.S. Holder" is defined as any person who is, as to
the United States, a foreign corporation, a non-resident alien individual, a
non-resident fiduciary of a foreign estate or trust, or a foreign partnership
one or more of the members of which is, for United States federal income tax
purposes, a foreign corporation, a non-resident alien, a non-resident individual
or a nonresident fiduciary of a foreign estate or trust. This discussion does
not address all aspects of United States federal income and estate taxes and
does not deal with foreign, state and local consequences that may be relevant to
such Non-U.S. Holders in light of their personal circumstances. (In particular,
the discussion does not consider Non-U.S. Holders subject to special tax
treatment under the federal income tax laws, including banks, insurance
companies, dealers in securities, and holders of securities as part of a
"straddle," "hedge," or "conversion transaction.") Furthermore, this discussion
is based on current provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), existing and proposed regulations promulgated thereunder and
administrative and judicial interpretations thereof, all of which are subject to
change. Each prospective purchaser of Common Stock is advised to consult a tax
advisor with respect to current and possible future tax consequences of
acquiring, holding and disposing of Common Stock.
An individual may be deemed to be a resident alien for U.S. tax purposes if
the individual is treated as a permanent U.S. resident under U.S. immigration
laws or, subject to certain exceptions, if the individual is present in the
United States on at least 31 days in the calendar year and for an aggregate of
at least 183 days during a three-calendar-year period ending with the current
calendar year (counting for such purposes all of
20
<PAGE> 22
the days present in the current year, one-third of the days present in the
immediately preceding year, and one-sixth of the days present in the second
preceding year). Resident aliens are subject to United States federal tax as if
they were United States citizens; they are also subject to the United States
estate tax (without benefit of the marital deduction for a non-citizen spouse
except where the bequest to such spouse passes through a qualified domestic
trust).
DIVIDENDS
The Company does not currently pay cash dividends on its capital stock. See
"Dividend Policy." In the event, however, that the Company pays cash dividends
in the future, such dividends paid to a Non-U.S. Holder of Common Stock will be
subject to withholding of United States federal income tax at a 30% rate or such
lower rate as may be specified by an applicable income tax treaty, unless the
dividends are effectively connected with the conduct of a trade or business of
the Non-U.S. Holder within the United States. If the dividend is effectively
connected with the conduct of a trade or business of the Non-U.S. Holder within
the United States (or, if a tax treaty applies, attributable to a "permanent
establishment," or, in the case of an individual, a "fixed base," in the United
States, through which such trade or business is conducted) (collectively, "U.S.
trade or business income"), the dividend would be subject to United States
federal income tax on a net income basis at applicable graduated individual or
corporate rates, as the case may be, and would be exempt from the 30%
withholding tax described above. Any such U.S. trade or business income received
by a corporate Non-U.S. Holder would be entitled to the 70%
dividends-received-deduction, but may, under certain circumstances, then be
subject to an additional "branch profits tax" at a 30% rate or at such lower
rate (including zero) as may be specified by an applicable income tax treaty.
Under current United States Treasury regulations, dividends paid to an
address outside the United States are presumed to be paid to a resident of such
country for purposes of the withholding discussed above and, under the current
interpretation of United States Treasury regulations, for purposes of
determining the applicability of a tax treaty rate. Under proposed United States
Treasury regulations not currently in effect, however, a Non-U.S. Holder of
Common Stock who wishes to claim the benefit of an applicable treaty rate would
be required to satisfy applicable certification and other requirements. Certain
certification and disclosure requirements must be complied with in order to be
exempt from withholding under the U.S. trade or business income exemption
discussed above.
A Non-U.S. Holder of Common Stock eligible for a reduced rate of United
States withholding tax pursuant to a tax treaty may obtain a refund of any
excess amounts of U.S. tax withheld by the Company by filing an appropriate
claim for refund with the United States Internal Revenue Service (the
"Service").
GAIN ON DISPOSITION OF COMMON STOCK
A Non-U.S. Holder generally will not be subject to United States federal
income tax (and generally no tax will be withheld) with respect to gain
recognized on a sale or other disposition of Common Stock unless (i) the gain is
U.S. trade or business income with respect to the Non-U.S. Holder, (ii) under
certain circumstances, in the case of a Non-U.S. Holder who is an individual and
holds the Common Stock as a capital asset, such holder is present in the United
States for 183 or more days in the taxable year of the sale or other disposition
and certain other conditions are met, or (iii) for Non-U.S. Holders of more than
5% of the Common Stock, the Company is or has been a "U.S. real property holding
corporation" for United States federal income tax purposes. The Company has not
been and does not anticipate becoming a "U.S. real property holding corporation"
for United States federal income tax purposes. Non-U.S. Holders who fall under
clause (i) or (ii) above, should consult their tax advisors regarding the tax
treatment applicable to them.
FEDERAL ESTATE TAXES
Common Stock owned, or treated as owned, by a non-resident alien individual
(as specifically determined for United States federal estate tax purposes) at
the time of death will be included in such holder's gross estate for United
States federal estate tax purposes, unless an applicable tax treaty provides
otherwise.
21
<PAGE> 23
UNITED STATES INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
The Company must report annually to the Service and to each Non-U.S. Holder
the amount of dividends paid to such holder and the tax withheld with respect to
such dividends. These information reporting requirements apply whether or not
withholding is required. Copies of the information returns reporting such
dividends and tax withheld may also be made available to the tax authorities in
the country in which the Non-U.S. Holder resides under exchange-of-information
provisions of an applicable income tax treaty.
United States backup withholding tax (which generally is a withholding tax
imposed at the rate of 31% on certain payments to persons that fail to furnish
certain information under United States information reporting requirements)
generally will not apply to (a) the payment of dividends paid on Common Stock to
a Non-U.S. Holder at an address outside the United States, or (b) the payment of
the proceeds of the sale of Common Stock to or through the foreign office of a
broker. In the case of the payment of proceeds from such a sale of Common Stock
through a foreign office of a broker that is a United States person or a "U.S.
related person," however, information reporting (but not backup withholding) is
required with respect to the payment unless the broker has documentary evidence
in its files that the owner is a Non-U.S. Holder and certain other requirements
are met or the holder otherwise establishes an exemption. For this purpose, a
"U.S. related person" is (i) a "controlled foreign corporation" for United
States federal income tax purposes, or (ii) a foreign person 50% or more of
whose gross income from all sources for the three-year period ending with the
close of its taxable year preceding the payment (or for such part of the period
that the broker has been in existence) is derived from activities that are
effectively connected with the conduct of a United States trade or business. The
payment of the proceeds of a sale of shares of Common Stock to or through a
United States office of a broker is subject to information reporting and
possible backup withholding unless the owner certifies its non-United States
status under penalties of perjury or otherwise establishes an exemption. Any
amounts withheld under the backup withholding rules from a payment to a Non-U.S.
Holder will be allowed as a refund or a credit against the Holder's United
States federal income tax liability, provided that required information is
furnished to the Service.
These information reporting and backup withholding rules are under review
by the United States Treasury, and their application to the Common Stock could
be changed prospectively by future regulations. The United States Treasury has
recently issued final regulations requiring Non-U.S. Holders to acquire U.S.
taxpayer identification numbers in situations where they are obligated to file
certain U.S. tax returns and where they file refund claims. This provision is
not applicable with respect to information returns.
THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY.
ACCORDINGLY, EACH PROSPECTIVE PURCHASER IS URGED TO CONSULT WITH HIS TAX ADVISOR
WITH RESPECT TO THE INCOME AND ESTATE TAX CONSEQUENCES OF THE OWNERSHIP AND
DISPOSITION OF COMMON STOCK, INCLUDING THE APPLICATION AND EFFECT OF UNITED
STATES FEDERAL LAWS AND THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING
JURISDICTION.
22
<PAGE> 24
UNDERWRITING
The underwriters of the U.S. Offering named below (the "U.S.
Underwriters"), for whom Bear, Stearns & Co. Inc., The Robinson-Humphrey
Company, Inc. and Robert W. Baird & Co. Incorporated are acting as
representatives, have severally agreed with the Company, subject to the terms
and conditions of the U.S. Underwriting Agreement (the form of which has been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part), to purchase from the Company the aggregate number of U.S. Shares set
forth opposite their respective names below:
<TABLE>
<CAPTION>
NUMBER OF
NAME OF U.S. UNDERWRITER U.S. SHARES
------------------------------------------------------------------------ -----------
<S> <C>
Bear, Stearns & Co. Inc. ...............................................
The Robinson-Humphrey Company, Inc. ....................................
Robert W. Baird & Co. Incorporated......................................
-----------
Total.........................................................
==========
</TABLE>
The Managers of the concurrent International Offering named below (the
"Managers"), for whom Bear, Stearns International Limited, The Robinson-Humphrey
Company, Inc. and Robert W. Baird & Co. Incorporated are acting as lead
Managers, have severally agreed with the Company, subject to the terms and
conditions of the International Underwriting Agreement (the form of which has
been filed as an exhibit to the Registration Statement of which this Prospectus
is a part), to subscribe and pay for the aggregate number of International
Shares set forth opposite their respective names below:
<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL
NAME OF MANAGER SHARES
------------------------------------------------------------------------ -------------
<S> <C>
Bear, Stearns International Limited. ...................................
The Robinson-Humphrey Company, Inc. ....................................
Robert W. Baird & Co. Incorporated......................................
-------------
Total.........................................................
==========
</TABLE>
The nature of the respective obligations of the U.S. Underwriters and the
Managers is such that all of the U.S. Shares and all of the International Shares
must be purchased if any are purchased. Those obligations are subject, however,
to various conditions, including the approval of certain matters by counsel. The
Company and Steven A. Raymund (the "Selling Shareholder") have agreed to
indemnify the U.S. Underwriters and the Managers against certain liabilities,
including liabilities under the Act, and, where such indemnification is
unavailable, to contribute to payments that the U.S. Underwriters and the
Managers may be required to make in respect of such liabilities.
The Company has been advised that the U.S. Underwriters propose to offer
the U.S. Shares in the United States and Canada and the Managers propose to
offer the International Shares outside the United States and Canada, initially
at the public offering price set forth on the cover page of this Prospectus and
to certain selected dealers at such price less a concession not to exceed
$ per share; that the U.S. Underwriters and the Managers may allow, and
such selected dealers may reallow, a concession to certain other dealers not to
exceed $ per share; and that after the commencement of the Offering,
the public offering price and the concessions may be changed.
The Selling Shareholder and the Company have granted the U.S. Underwriters
and the Managers options to purchase up to 400,000 and 500,000 additional shares
of Common Stock, respectively, solely to cover over-allotments, if any. The
options may be exercised in whole or in part at any time within 30 days after
the date of this Prospectus. To the extent the options are exercised, the U.S.
Underwriters and the Managers will be severally committed, subject to certain
conditions, to purchase the additional shares in proportion to their respective
purchase commitments as indicated in the preceding tables. If the entire
over-allotment options are not exercised, the over-allotment option granted by
the Selling Shareholder will be exercised prior to the exercise of the
over-allotment option granted by the Company.
23
<PAGE> 25
Pursuant to an agreement between the U.S. Underwriters and the Managers
(the "Agreement Between"), each U.S. Underwriter has agreed that, as part of the
distribution of the U.S. Shares and subject to certain exceptions, (a) it is not
purchasing any U.S. Shares for the account of anyone other than a U.S. or
Canadian Person (as defined below) and (b) it has not offered or sold, and will
not offer, sell, resell or deliver, directly or indirectly, any U.S. Shares or
distribute any prospectus relating to the U.S. Offering outside the United
States or Canada or to anyone other than a U.S. or Canadian Person or a dealer
who similarly agrees. Similarly, pursuant to the Agreement Between, each Manager
has agreed that, as part of the distribution of the International Shares and
subject to certain exceptions, (a) it is not purchasing any of the International
Shares for the account of any U.S. or Canadian Person and (b) it has not offered
or sold, and will not offer, sell, resell or deliver, directly or indirectly,
any of the International Shares or distribute any prospectus relating to the
International Offering in the United States or Canada or to any U.S. or Canadian
Person or a dealer who does not similarly agree. As used herein, "U.S. or
Canadian Person" means any resident or citizen of the United States or Canada,
any corporation, pension, profit sharing or other trust, or other entity
organized under or governed by the laws of the United States or Canada or of any
political subdivision thereof (other than the foreign branch of any U.S. or
Canadian Person), any estate or trust, the income of which is subject to United
States or Canadian federal income taxation regardless of the source of its
income, and any United States or Canadian branch of a person other than a U.S.
or Canadian Person. The term "United States" means the United States of America,
its territories, its possessions and other areas subject to its jurisdiction;
and "Canada" means the provinces of Canada, its territories, its possessions and
other areas subject to its jurisdictions.
Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the Managers of such number of shares of Common Stock as may be
mutually agreed upon. The price of any shares so sold shall be the public
offering price as then in effect for the Common Stock being sold by the U.S.
Underwriters and the Managers, less an amount not greater than the selling
concession allocable to such Common Stock. To the extent that there are sales
between the U.S. Underwriters and the Managers pursuant to the Agreement
Between, the number of shares initially available for sale by the U.S.
Underwriters or by the Managers may be more or less than the amount specified on
the cover page of this Prospectus.
Each Manager has represented and agreed that: (i) it has not offered or
sold, and, prior to the expiration of six months following the consummation of
the Offering, it will not offer or sell, any shares of Common Stock to any
person in the United Kingdom other than persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances that have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Common Stock in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on, and
will only issue or pass on, in the United Kingdom any document received by it in
connection with the issue of the Common Stock to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1995 or is a person to whom such document may
otherwise lawfully be issued or passed on.
Purchasers of the shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the initial public offering price set forth on the cover
page hereof.
The Company and the Selling Shareholder have agreed that, for a period of
90 days after the date of this Prospectus, they will not, without the prior
written consent of the U.S. Underwriters and the Managers, sell, offer to sell
or otherwise dispose of any shares (or securities convertible into or
exercisable for shares) of Common Stock other than the sale of the shares
offered hereby, the issuance of shares of Common Stock upon the exercise of
employee stock options and the grant of such options.
The rules of the Commission generally prohibit the U.S. Underwriters and
other members of the selling group from making a market in the Common Stock
during a two-business day "cooling-off" period immediately preceding the
commencement of sales in the Offering. The Commission has, however, adopted
24
<PAGE> 26
an exemption from these rules that permits passive market making under certain
conditions. These rules permit a U.S. Underwriter or other member of the selling
group to continue to make a market in the Common Stock subject to the
conditions, among others, that its bid not exceed the highest bid by a market
maker not connected with the Offering and that its net purchases on any one
trading day not exceed prescribed limits. Pursuant to these exemptions, certain
U.S. Underwriters and other members of the selling group (if any), may intend to
engage in passive market making in the Common Stock during the cooling-off
period.
25
<PAGE> 27
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Common Stock in Canada is being made only on a
private placement basis exempt from the requirement that the Company or the
Selling Shareholder prepare and file a prospectus with the securities regulatory
authorities in each province where trades of Common Stock are effected.
Accordingly, any resale of the Common Stock in Canada must be made in accordance
with applicable securities laws which will vary depending on the relevant
jurisdiction, and which may require resales to be made in accordance with
available statutory exemptions or pursuant to a discretionary exemption granted
by the applicable Canadian securities regulatory authority. Purchasers are
advised to seek legal advice prior to any resale of the Common Stock.
REPRESENTATIONS OF PURCHASERS
Confirmations of the acceptance of offers to purchase shares of Common
Stock will be sent to Canadian residents to whom this Prospectus has been sent
and who have not withdrawn their offers to purchase prior to the issuance of
such confirmations. Each purchaser of Common Stock in Canada who receives a
purchase confirmation will be deemed to represent to the Company, the Selling
Shareholder and the dealer from whom such purchase confirmation is received that
(i) such purchaser is entitled under applicable provincial securities laws to
purchase such Common Stock without the benefit of a prospectus qualified under
such securities laws, (ii) where required by law, such purchaser is purchasing
as principal and not as agent and (iii) such purchaser has reviewed the text
above under "Notice to Canadian Residents -- Resale Restrictions," (iv) if such
purchaser is located in Manitoba, such purchaser is not an individual and is
purchasing for investment only and not with a view to resale or distribution,
(v) if such purchaser is located in Ontario, a dealer registered as an
international dealer in Ontario may sell shares of Common Stock to such
purchaser, and (vi) if such purchaser is located in Quebec, such purchaser is a
"sophisticated purchaser" within the meaning of Section 43 of the Securities Act
(Quebec).
TAXATION
Canadian residents should consult their own legal and tax advisers with
respect to the tax consequences of an investment in the Common Stock in their
particular circumstances and with respect to the eligibility of the Common Stock
for investment by the purchaser under relevant Canadian legislation.
ENFORCEMENT OF LEGAL RIGHTS
The Company is organized under the laws of the State of Florida. All or
substantially all of the directors and officers of the Company reside outside
Canada and substantially all of the assets of the Company are located outside
Canada. As a result, it may not be possible for Canadian investors to effect
service of process within Canada upon the Company or to enforce against the
Company in Canada judgments obtained in Canadian courts that are predicated upon
the contractual rights of action, if any, granted to certain purchasers by the
Company. It may also not be possible for investors to enforce against the
Company in the United States judgments obtained in Canadian courts.
Furthermore, although the requirement for an issuer to provide to certain
purchasers the contractual right of action for damages and/or rescission
described below is consistent with contractual considerations associated with a
private placement which constitutes a primary distribution of the issuer's
securities by the issuer, an investor may not be able to enforce a contractual
right of action for rescission against the issuer where the offer or sale of the
issuer's securities is a secondary distribution being made by a third party such
as the sale of Common Stock by the Selling Stockholder.
NOTICE TO ONTARIO RESIDENTS
The Common Stock offered hereby is being issued by a foreign issuer and
Ontario purchasers will not receive the contractual right of action prescribed
by Section 32 of the Regulation under the Securities Act
26
<PAGE> 28
(Ontario). As a result, Ontario purchasers must rely on other remedies that may
be available, including common law rights of action for damages or rescission or
rights of action under the civil liability provision of the U.S. federal
securities laws.
All the Company's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Ontario purchasers to effect service of process within Canada upon the
Company or persons outside of Canada. All or a substantial portion of the assets
of the Company and such persons may be located outside of Canada and, as a
result, it may not be possible to satisfy a judgment against the Company or such
persons in Canada or to enforce a judgment obtained in Canadian courts against
the Company or persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Common Stock to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
Common Stock acquired by such purchase pursuant to the Offering. Such report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #88/5, a copy of which may be obtained from the Company. Only one such
report must be filed in respect of Common Stock acquired on the same date under
the same prospectus exemption.
NOTICE TO NOVA SCOTIA RESIDENTS
The Securities Act (Nova Scotia) provides that where a Canadian offering
document, together with any amendments thereto, contains an untrue statement of
material fact or omits to state a material fact that is required to be stated or
that is necessary to make a statement not misleading in the light of the
circumstances in which it was made (such untrue statement or omission herein
called a "misrepresentation"), a purchaser who was delivered such offering
document and who purchases such securities shall be deemed to have relied on
such misrepresentation if it was a misrepresentation at the time of purchase and
has a right of action for damages against the seller of the securities or he may
elect to exercise the right of rescission against the seller, in which case he
shall have no right of action for damages against the seller, provided that:
(a) the seller will not be liable if the seller proves that the
purchaser purchased the securities with knowledge of the misrepresentation;
(b) in an action for damages the seller will not be liable for all or
any portion of such damages that the seller proves do not represent the
depreciation in value of the security as a result of the misrepresentation
relied upon;
(c) in no case shall the amount recoverable pursuant to the right of
action exceed the price at which the securities were offered; and
(d) the action for rescission or damages conferred by the Securities
Act (Nova Scotia) is in addition to and without derogation from any of the
rights the purchaser may have at law;
but no action to enforce these rights may be commenced more than 120 days after
the date on which payment is made for the securities or after the date on which
the initial payment for the securities is made where a payment subsequent to the
initial payment are made pursuant to a contractual commitment assumed prior to,
or concurrently with, the initial payment.
NOTICE TO SASKATCHEWAN RESIDENTS
The Securities Act (Saskatchewan) provides that in the event an offering
memorandum, together with any amendment thereto, or any advertising or sales
literature (as such terms are defined in the Securities Act (Saskatchewan)) used
in connection with an offering contains a misrepresentation (as defined in the
Securities Act (Saskatchewan)) that was a misrepresentation at the time of
purchase, purchasers of securities will be deemed to have relied upon such
misrepresentation and will have a statutory right of action pursuant to
27
<PAGE> 29
the Securities Act (Saskatchewan) for damages against the issuer and the seller
of the securities, or alternatively may elect to exercise a right of rescission
against the issuer or the seller, provided that:
(a) no person or company is liable where the person or company proves
that the purchaser purchased the securities with knowledge of the
misrepresentation;
(b) no person or company, other than the issuer or selling security
holder, is liable unless that person or company: (i) failed to conduct a
reasonable investigation sufficient to provide reasonable grounds for a
belief that there had been no misrepresentation; or (ii) believed there had
been a misrepresentation; and
(c) in an action for damages, the defendant is not liable for all or
any portion of such damages that it proves does not represent the
depreciation in value of the securities as a result of the
misrepresentation relied upon,
but no action to enforce these rights may be commenced:
(i) in the case of an action for rescission, 180 days after the date
of the transaction that gave rise to the cause of action; or
(ii) in the case of an action for damages, the earlier of:
(1) 180 days after the purchaser first had knowledge of the facts
giving rise to the cause of action; or
(2) three years after the date of the transaction that gave rise to
the cause of action.
LANGUAGE OF DOCUMENTS
All Canadian purchasers of shares of Common Stock acknowledge that all
documents evidencing or relating in any way to the sale of such shares will be
drawn in the English language only. Vous reconnaissez par les presentes que
c'est votre volente express que tous les documents faisant loi ou se rapportant
de quelque maniere a la vente des valeurs mobilieres rediges en anglais
seulement.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Commission, all of which may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices at 7 World Trade
Center, Suite 1300, New York, New York 10048 and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. Copies of such material also can be obtained
at prescribed rates by writing to the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. Reports, proxy and
information statements and other information concerning the Company can also be
inspected at the Nasdaq National Market at 1735 K Street, N.W., Washington, D.C.
20006.
This Prospectus constitutes part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended. This
Prospectus omits certain of the information contained in the Registration
Statement in accordance with the rules and regulations of the Commission.
Reference is hereby made to the Registration Statement and related exhibits for
further information with respect to the Company and the Common Stock. Statements
contained herein concerning the provisions of any document are not necessarily
complete and, in each instance, where a copy of such document has been filed as
an exhibit to the Registration Statement or otherwise has been filed with the
Commission, reference is made to the copy so filed. Each such statement is
qualified in its entirety by such reference.
28
<PAGE> 30
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
pursuant to the Exchange Act, File No. 0-14625, and are incorporated herein by
reference:
1. Annual Report on Form 10-K for the fiscal year ended January 31,
1996.
2. Quarterly Report on Form 10-Q for the quarter ended April 30, 1996.
3. Current Report on Form 8-K dated March 26, 1996.
4. Proxy Statement for the Annual Meeting of Shareholders to be held
on June 25, 1996.
5. The Registration Statement on Form 8-A under the Exchange Act as
filed with the Commission on May 14, 1986.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Common Stock hereby shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any and all of the documents incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Requests for such copies should
be directed to Mr. Arthur W. Singleton, Vice President, Treasurer and Secretary
of the Company, at Tech Data Corporation, 5350 Tech Data Drive, Clearwater,
Florida 34620.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for the
Company by Schifino & Fleischer, P.A., Tampa, Florida. Certain legal matters
will be passed upon for the Underwriters by Powell, Goldstein, Frazer & Murphy,
Atlanta, Georgia.
EXPERTS
The financial statements as of January 31, 1996 and 1995 and for each of
the three years in the period ended January 31, 1996 included in this Prospectus
have been so included in reliance on the report of Price Waterhouse LLP,
independent certified public accountants, given on the authority of said firm as
experts in auditing and accounting.
29
<PAGE> 31
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of Tech Data Corporation:
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of changes in shareholders' equity and of
cash flows present fairly, in all material respects, the financial position of
Tech Data Corporation and its subsidiaries at January 31, 1996 and 1995, and the
results of their operations and their cash flows for each of the three years in
the period ended January 31, 1996, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Tampa, Florida
March 15, 1996
F-1
<PAGE> 32
TECH DATA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
JANUARY 31,
--------------------- APRIL 30,
1995 1996 1996
-------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 496 $ 1,154 $ 919
Accounts receivable, less allowance of $16,580, $22,669
and $24,008............................................ 309,846 445,202 486,297
Inventories............................................... 364,531 465,422 430,695
Prepaid and other assets.................................. 21,850 39,010 34,379
-------- ---------- ----------
Total current assets.............................. 696,723 950,788 952,290
Property and equipment, net................................. 51,042 61,610 60,366
Excess of cost over acquired net assets, net................ 10,061 6,376 6,263
Other assets, net........................................... 26,603 25,105 24,375
-------- ---------- ----------
$784,429 $1,043,879 $1,043,294
======== ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Revolving credit loans.................................... $304,784 $ 283,100 $ 300,327
Current portion of long-term debt......................... 542 519 423
Accounts payable.......................................... 194,213 433,374 400,227
Accrued expenses.......................................... 14,382 32,091 33,159
-------- ---------- ----------
Total current liabilities......................... 513,921 749,084 734,136
Long-term debt.............................................. 9,682 9,097 9,048
-------- ---------- ----------
523,603 758,181 743,184
-------- ---------- ----------
Commitments and contingencies (Note 8)
Shareholders' equity:
Preferred stock, par value $.02; 226,500 shares authorized
and issued; liquidation preference $.20 per share...... 5 5 5
Common stock, par value $.0015; 100,000,000 shares
authorized; 37,807,794; 37,930,655 and 38,238,799
issued and outstanding................................. 57 57 57
Additional paid-in capital................................ 127,947 130,045 134,407
Retained earnings......................................... 131,769 153,310 163,738
Cumulative translation adjustment......................... 1,048 2,281 1,903
-------- ---------- ----------
Total shareholders' equity........................ 260,826 285,698 300,110
-------- ---------- ----------
$784,429 $1,043,879 $1,043,294
======== ========= =========
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
F-2
<PAGE> 33
TECH DATA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED JANUARY 31, APRIL 30,
------------------------------------ -------------------
1994 1995 1996 1995 1996
---------- ---------- ---------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales............................... $1,532,352 $2,418,410 $3,086,620 $633,460 $985,574
---------- ---------- ---------- -------- --------
Cost and expenses:
Cost of products sold................. 1,397,967 2,219,122 2,867,226 587,244 916,562
Selling, general and administrative
expenses........................... 79,390 127,951 163,790 38,061 46,285
---------- ---------- ---------- -------- --------
1,477,357 2,347,073 3,031,016 625,305 962,847
---------- ---------- ---------- -------- --------
Operating profit........................ 54,995 71,337 55,604 8,155 22,727
Interest expense........................ 5,008 13,761 20,086 5,057 5,523
---------- ---------- ---------- -------- --------
Income before income taxes.............. 49,987 57,576 35,518 3,098 17,204
Provision for income taxes.............. 19,774 22,664 13,977 1,249 6,776
---------- ---------- ---------- -------- --------
Net income.............................. $ 30,213 $ 34,912 $ 21,541 $ 1,849 $ 10,428
========= ========= ========= ======== ========
Net income per common share............. $ .83 $ .91 $ .56 $ .05 $ .27
========= ========= ========= ======== ========
Weighted average common shares
outstanding........................... 36,590 38,258 38,138 38,063 38,589
========= ========= ========= ======== ========
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
F-3
<PAGE> 34
TECH DATA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK ADDITIONAL CUMULATIVE TOTAL
--------------- --------------- PAID-IN RETAINED TRANSLATION SHAREHOLDERS'
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS ADJUSTMENT EQUITY
------ ------ ------ ------ ---------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance -- January 31,
1993....................... 227 $5 31,120 $ 46 $ 58,033 $ 56,963 $ -- $ 115,047
Issuance of common stock
for stock options
exercised and related tax
benefit.................. 227 1,701 1,701
Issuance of common stock
net of offering costs.... 5,200 8 66,357 66,365
Net income................. 30,213 30,213
------ -- ------ ------ ---------- -------- ----------- -------------
Balance -- January 31,
1994....................... 227 5 36,547 54 126,091 87,176 213,326
Issuance of common stock in
business combination..... 1,144 3 9,681 9,684
Issuance of common stock
for stock options
exercised and related tax
benefit.................. 117 1,856 1,856
Net income................. 34,912 34,912
Translation adjustments.... 1,048 1,048
------ -- ------ ------ ---------- -------- ----------- -------------
Balance -- January 31, 1995 227 5 37,808 57 127,947 131,769 1,048 260,826
Issuance of common stock
for stock options
exercised and related tax
benefit.................. 123 2,098 2,098
Net income................. 21,541 21,541
Translation adjustments.... 1,233 1,233
------ -- ------ ------ ---------- -------- ----------- -------------
Balance -- January 31,
1996....................... 227 5 37,931 57 130,045 153,310 2,281 285,698
Issuance of common stock
for stock options
exercised and related tax
benefit (unaudited)...... 308 4,362 4,362
Net income (unaudited)..... 10,428 10,428
Translation adjustments
(unaudited).............. (378) (378)
------ -- ------ ------ ---------- -------- ----------- -------------
Balance -- April 30, 1996
(unaudited)................ 227 $5 38,239 $ 57 $134,407 $163,738 $ 1,903 $ 300,110
====== ======= ====== ======= ========= ========= ========== ============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
F-4
<PAGE> 35
TECH DATA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED JANUARY 31, APRIL 30,
--------------------------------------- -------------------
1994 1995 1996 1995 1996
----------- ----------- ----------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Cash received from customers................. $ 1,437,239 $ 2,326,613 $ 2,933,831 $615,340 $939,927
Cash paid to suppliers and employees......... (1,515,940) (2,382,799) (2,854,653) (585,490) (947,485)
Interest paid................................ (5,128) (13,584) (20,276) (5,112) (5,358)
Income taxes (paid) received................. (18,835) (27,974) (11,628) 591 (6,550)
----------- ----------- ----------- -------- --------
Net cash (used in) provided by
operating activities................ (102,664) (97,744) 47,274 25,329 (19,466)
----------- ----------- ----------- -------- --------
Cash flows from investing activities:
Acquisition of business, net of cash
acquired................................... (9,360)
Expenditures for property and equipment...... (12,224) (21,351) (23,596) (4,645) (1,682)
Software development costs................... (7,274) (18,696) (2,826) (81) (531)
----------- ----------- ----------- -------- --------
Net cash used in investing
activities.......................... (28,858) (40,047) (26,422) (4,726) (2,213)
----------- ----------- ----------- -------- --------
Cash flows from financing activities:
Proceeds from issuance of common stock....... 68,066 1,859 2,098 773 4,362
Net borrowings (repayments) from revolving
credit loans............................... 63,907 136,019 (21,684) (21,134) 17,227
Principal payments on long-term debt......... (164) (1,058) (608) (176) (145)
Proceeds from long-term debt................. 789
----------- ----------- ----------- -------- --------
Net cash provided by (used in)
financing activities................ 131,809 137,609 (20,194) (20,537) 21,444
----------- ----------- ----------- -------- --------
Net increase (decrease) in cash and
cash equivalents.................... 287 (182) 658 66 (235)
Cash and cash equivalents at beginning of
period....................................... 391 678 496 496 1,154
----------- ----------- ----------- -------- --------
Cash and cash equivalents at end of period..... $ 678 $ 496 $ 1,154 $ 562 $ 919
============ ============ ============ ========= =========
Reconciliation of net income to net cash (used
in) provided by operating activities:
Net income................................. $ 30,213 $ 34,912 $ 21,541 $ 1,849 $ 10,428
----------- ----------- ----------- -------- --------
Adjustments to reconcile net income to net
cash (used in) provided by operating
activities:
Depreciation and amortization.............. 5,557 9,110 17,364 3,954 4,696
Provision for losses on accounts
receivable............................... 11,346 17,768 17,433 4,042 4,552
Loss on disposal of fixed assets........... 842 1,237 603
Deferred income taxes...................... (752) (1,739) (5,603)
Change in assets and liabilities:
(Increase) in accounts receivable........ (95,113) (90,600) (152,789) (18,120) (45,647)
(Increase) decrease in inventories....... (66,979) (132,940) (100,891) 28,737 34,727
(Increase) decrease in prepaid and other
assets................................ (5,631) 2,645 (7,254) (14,898) 3,857
Increase (decrease) in accounts
payable............................... 10,483 62,132 239,161 17,695 (33,147)
Increase (decrease) in accrued
expenses.............................. 7,370 (269) 17,709 2,070 1,068
----------- ----------- ----------- -------- --------
Total adjustments..................... (132,877) (132,666) 25,733 23,480 (29,894)
----------- ----------- ----------- -------- --------
Net cash (used in) provided by
operating activities................ $ (102,664) $ (97,744) $ 47,274 $ 25,329 $(19,466)
============ ============ ============ ========= =========
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these financial statements.
F-5
<PAGE> 36
TECH DATA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Tech Data
Corporation and its subsidiaries (the "Company"), all of which are wholly-owned.
All significant intercompany accounts and transactions have been eliminated in
consolidation.
METHOD OF ACCOUNTING
The Company prepares its financial statements in conformity with generally
accepted accounting principles. These principles require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
REVENUE RECOGNITION
Sales are recorded upon shipment. The Company allows its customers to
return product for exchange or credit subject to certain limitations. Provision
for estimated losses on such returns are recorded at the time of sale (see
product warranty below). Funds received from vendors for marketing programs and
product rebates are accounted for as a reduction of selling, general and
administrative expenses or product cost according to the nature of the program.
INVENTORIES
Inventories (consisting of computer related hardware and software products)
are stated at the lower of cost or market, cost being determined on the
first-in, first-out (FIFO) method.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed over
the estimated economic lives using the following methods:
<TABLE>
<CAPTION>
METHOD YEARS
------------------------------ --------
<S> <C> <C>
Buildings and improvements....................... Straight-line 31.5-39
Furniture, fixtures and equipment................ Accelerated and straight-line 3-7
</TABLE>
Expenditures for renewals and improvements that significantly add to
productive capacity or extend the useful life of an asset are capitalized.
Expenditures for maintenance and repairs are charged to operations when
incurred. When assets are sold or retired, the cost of the asset and the related
accumulated depreciation are eliminated from the accounts and any gain or loss
is recognized at such time.
EXCESS OF COST OVER ACQUIRED NET ASSETS
The excess of cost over acquired net assets is being amortized on a
straight-line basis over 15 years. Amortization expense was $654,000, $682,000,
and $31,000 in 1996, 1995 and 1994, respectively. The accumulated amortization
of goodwill is approximately $1,481,000 and $827,000 at January 31, 1996 and
1995, respectively. In fiscal 1996, the Company settled a liability related to a
previous acquisition and therefore recorded a $3,000,000 reduction in goodwill.
The Company evaluates, on a regular basis, whether events and circumstances have
occurred that indicate the carrying amount of goodwill may warrant revision or
may not be recoverable. At January 31, 1996, the net unamortized balance of
goodwill is not considered to be impaired.
F-6
<PAGE> 37
TECH DATA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CAPITALIZED DEFERRED SOFTWARE COSTS
Deferred software costs are included in other assets and represent internal
development costs and payments to vendors for the design, purchase and
implementation of the computer software for the Company's operating and
financial systems. Such deferred costs are being amortized over seven years with
amortization expense of $4,253,000 and $329,000 in 1996 and 1995, respectively.
The accumulated amortization of such costs was $4,582,000 and $329,000 at
January 31, 1996 and 1995, respectively.
PRODUCT WARRANTY
The Company does not offer warranty coverage. However, to maintain customer
goodwill, the Company facilitates vendor warranty policies by accepting for
exchange (with the Company's prior approval) defective products within 60 days
of invoicing. Defective products received by the Company are subsequently
returned to the vendor for credit or replacement.
INCOME TAXES
Income taxes are accounted for under the liability method. Deferred taxes
reflect the tax consequences on future years of differences between the tax
bases of assets and liabilities and their financial reporting amounts.
FOREIGN CURRENCY TRANSLATION
The assets and liabilities of foreign operations are translated at the
exchange rates in effect at the balance sheet date, with the related translation
gains or losses reported as a separate component of shareholders' equity. The
results of foreign operations are translated at the weighted average exchange
rates for the year. Gains or losses resulting from foreign currency transactions
are included in the statement of income.
CONCENTRATION OF CREDIT RISK
The Company sells its products to a large base of value-added resellers
("VARs"), corporate resellers and retailers throughout the United States,
France, Canada, Latin America and the Caribbean. The Company performs ongoing
credit evaluations of its customers and generally does not require collateral.
The Company makes provisions for estimated credit losses at the time of sale.
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial instruments that are subject to fair value disclosure
requirements are carried in the consolidated financial statements at amounts
that approximate fair value.
NET INCOME PER COMMON SHARE
Net income per common share is based on the weighted average number of
shares of common stock and common stock equivalents outstanding during each
period.
CASH MANAGEMENT SYSTEM
Under the Company's cash management system, disbursements cleared by the
bank are reimbursed on a daily basis from the revolving credit loans. As a
result, checks issued but not yet presented to the bank are not considered
reductions of cash or accounts payable. Included in accounts payable are
$69,789,000 and $23,127,000 at January 31, 1996 and 1995, respectively, for
which checks are outstanding.
F-7
<PAGE> 38
TECH DATA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
STATEMENT OF CASH FLOWS
Short-term investments which have an original maturity of ninety days or
less are considered cash equivalents in the statement of cash flows. The effect
of changes in foreign exchange rates on cash balances is not material. See Note
9 of Notes to Consolidated Financial Statements regarding the non-cash exchange
of common stock in connection with a business combination.
FISCAL YEAR
The Company and its subsidiaries operate on a fiscal year that ends on
January 31, except for the Company's French subsidiary which operates on a
fiscal year that ends on December 31.
INTERIM FINANCIAL DATA
The interim financial data at April 30, 1996 and for the three months ended
April 30, 1995 and 1996 are unaudited; however, in the opinion of management,
such interim data includes all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the results of the interim
periods.
NOTE 2 -- PROPERTY AND EQUIPMENT:
<TABLE>
<CAPTION>
JANUARY 31,
---------------------
1995 1996
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Land........................................................... $ 3,629 $ 3,898
Buildings and improvements..................................... 21,296 27,802
Furniture, fixtures and equipment.............................. 44,669 58,721
Construction in progress....................................... 1,755 1,778
-------- --------
71,349 92,199
Less-accumulated depreciation.................................. (20,307) (30,589)
-------- --------
$ 51,042 $ 61,610
======== ========
</TABLE>
NOTE 3 -- REVOLVING CREDIT LOANS:
The Company has an agreement (the "Receivables Securitization Program")
with a financial institution that allows the Company to transfer an undivided
interest in a designated pool of accounts receivable on an ongoing basis to
provide borrowings up to a maximum of $250,000,000 (increased from $200,000,000
in October 1995). As collections reduce accounts receivable balances included in
the pool, the Company may transfer interests in new receivables to bring the
amount available to be borrowed up to the $250,000,000 maximum. The Company pays
interest on advances under the Receivables Securitization Program at a
designated commercial paper rate, plus an agreed-upon spread. At January 31,
1996, the Company had a $250,000,000 outstanding balance under this program
which is included in the balance sheet caption "Revolving Credit Loans". This
agreement expires December 31, 1996.
The Company currently maintains domestic and foreign revolving credit loan
agreements (including the Receivables Securitization Program) with a total of
nine financial institutions which provide for maximum short-term borrowings of
approximately $450,000,000. At January 31, 1996, the weighted average interest
rate on all short-term borrowings was 5.8%. The Company can fix the interest
rate for periods of 30 to 180 days under various interest rate options. The
credit agreements contain warranties and covenants that must be complied with on
a continuing basis, including the maintenance of certain financial ratios. At
January 31, 1996, the Company was in compliance with all such covenants.
F-8
<PAGE> 39
TECH DATA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 4 -- LONG-TERM DEBT:
<TABLE>
<CAPTION>
JANUARY 31,
-------------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
Mortgage note payable, interest at 10.25%, principal and interest
of $85,130 payable monthly, balloon payment due 2005........... $ 9,099 $ 9,005
Mortgage note payable funded through Industrial Revenue Bond,
interest at 7.5%, principal and interest payable quarterly,
through 1999................................................... 368 282
Other note payable............................................... 757 329
------- -------
10,224 9,616
Less -- current maturities....................................... (542) (519)
------- -------
$ 9,682 $ 9,097
======= =======
</TABLE>
Principal maturities of long-term debt at January 31, 1996 for the
succeeding five fiscal years are as follows: 1997 -- $519,000; 1998 -- $201,000;
1999 -- $213,000; 2000 -- $162,000; 2001 -- $155,000.
Mortgage notes payable are secured by property and equipment with an
original cost of approximately $12,000,000. The Industrial Revenue Bond contains
covenants which require the Company to maintain certain financial ratios with
which the Company was in compliance at January 31, 1996.
NOTE 5 -- INCOME TAXES (IN THOUSANDS):
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets are as follows:
<TABLE>
<CAPTION>
JANUARY 31,
-------------------
1995 1996
------- -------
<S> <C> <C>
Deferred tax liabilities:
Accelerated depreciation....................................... $ 2,158 $ 4,046
Deferred revenue............................................... 5,324 3,164
Other -- net................................................... 486 1,378
------- -------
Total deferred tax liabilities......................... 7,968 8,588
------- -------
Deferred tax assets:
Accruals not currently deductible.............................. 2,472 2,947
Reserves not currently deductible.............................. 9,741 14,774
Capitalized inventory costs.................................... 760 1,144
Other -- net................................................... 7 338
------- -------
Total deferred tax assets.............................. 12,980 19,203
------- -------
Net deferred tax assets (included in prepaid and other assets)... $ 5,012 $10,615
======= =======
</TABLE>
F-9
<PAGE> 40
TECH DATA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Significant components of the provision for income taxes are as follows:
<TABLE>
<CAPTION>
JANUARY 31,
---------------------------
1994 1995 1996
------- ------- -------
<S> <C> <C> <C>
Current:
Federal................................................. $17,179 $19,670 $15,107
State................................................... 3,347 3,748 2,932
Foreign................................................. 985 1,541
------- ------- -------
Total current................................... 20,526 24,403 19,580
------- ------- -------
Deferred:
Federal................................................. (627) (1,677) (4,656)
State................................................... (125) (62) (625)
Foreign................................................. (322)
------- ------- -------
Total deferred.................................. (752) (1,739) (5,603)
------- ------- -------
$19,774 $22,664 $13,977
======= ======= =======
</TABLE>
The reconciliation of income tax attributable to continuing operations
computed at the U.S. federal statutory tax rates to income tax expense is as
follows:
<TABLE>
<CAPTION>
JANUARY 31,
--------------------
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Tax at U.S. statutory rates...................................... 35.0% 35.0% 35.0%
State income taxes, net of federal tax benefit................... 4.2 4.2 4.2
Other -- net..................................................... .4 .2 .2
---- ---- ----
39.6% 39.4% 39.4%
==== ==== ====
</TABLE>
The components of pretax earnings are as follows:
<TABLE>
<CAPTION>
JANUARY 31,
---------------------------
1994 1995 1996
------- ------- -------
<S> <C> <C> <C>
United States............................................. $49,987 $55,155 $33,164
Foreign................................................... 2,421 2,354
------- ------- -------
$49,987 $57,576 $35,518
======= ======= =======
</TABLE>
NOTE 6 -- EMPLOYEE BENEFIT PLANS:
STOCK OPTION PLANS
In August 1985, the Board of Directors adopted the 1985 Incentive Stock
Option Plan (the "1985 Plan"), which covers an aggregate of 1,050,000 shares of
common stock. The options were granted to certain officers and key employees at
or above fair market value; accordingly, no compensation expense has been
recorded with respect to these options. Options are exercisable beginning two
years from the date of grant only if the grantee is an employee of the Company
at that time. No options may be granted under the 1985 Plan after July 31, 1995.
In June 1990, the shareholders approved the 1990 Incentive and
Non-Statutory Stock Option Plan (the "1990 Plan") which covers an aggregate of
5,000,000 shares (as amended in June 1994) of common stock. The 1990 Plan
provides for the granting of incentive and non-statutory stock options, stock
appreciation rights ("SARs") and limited stock appreciation rights ("Limited
SARs") at prices determined by the stock option committee, except for incentive
stock options which are granted at the fair market value of the stock on the
F-10
<PAGE> 41
TECH DATA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
date of grant. Incentive options granted under the 1990 Plan become exercisable
over a five year period while the date of exercise of non-statutory options is
determined by the stock option committee. As of January 31, 1996, no SARs or
Limited SARs had been granted under the 1990 Plan. Options granted under the
1985 Plan and the 1990 Plan expire 10 years from the date of grant, unless a
shorter period is specified by the stock option committee.
In June 1995, the shareholders approved the 1995 Non-Employee Director's
Non-Statutory Stock Option Plan. Under this plan, the Company grants
non-employee members of its Board of Directors stock options upon their initial
appointment to the board and then annually each year thereafter. Stock options
granted to members upon their initial appointment vest and become exercisable at
a rate of 20% per year. Annual awards vest and become exercisable one year from
the date of grant. The number of shares subject to options under this plan
cannot exceed 100,000 and the options expire 10 years from the date of grant.
A summary of the status of the Company's stock option plans is as follows:
<TABLE>
<CAPTION>
JANUARY 31, JANUARY 31, JANUARY 31,
1994 1995 1996
-------------------- -------------------- ---------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
--------- -------- --------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of
year..................... 842,360 $ 6.13 1,515,956 $11.02 2,644,056 $15.62
Granted.................... 979,000 13.21 1,372,500 19.94 1,683,450 12.91
Exercised.................. (226,804) 2.76 (116,900) 5.83 (79,800) 8.53
Canceled................... (78,600) 9.86 (127,500) 15.02 (1,166,596) 18.45
--------- --------- ----------
Outstanding at year end.... 1,515,956 11.02 2,644,056 15.62 3,081,110 13.31
======== ======== =========
Options exercisable at
year end................. 127,960 180,660 494,460
Available for grant at
year end................. 1,596,000 2,351,000 1,785,000
</TABLE>
In 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("FAS 123"), which is effective for the Company's fiscal year
ending January 31, 1997. FAS 123 encourages, but does not require, companies to
recognize compensation expense based on the fair value of grants of stock, stock
options and other equity investments to employees. Although expense recognition
for employee stock-based compensation is not mandatory, FAS 123 requires that
companies not adopting must disclose pro forma net income and earnings per
share. The Company will continue to apply the prior accounting rules and make
pro forma disclosures in 1997.
STOCK OWNERSHIP AND RETIREMENT SAVINGS PLAN
In February 1984, the Company established an employee stock ownership plan
(the "ESOP") covering substantially all U.S. employees. The ESOP provides for
distribution of vested percentages of the Company's common stock to
participants. Such benefit becomes fully vested after seven years of qualified
service. The Company also offers its U.S. employees a retirement savings plan
pursuant to section 401(k) of the Internal Revenue Code which provides for the
Company to match 50% of the first $1,000 of each participant's deferrals
annually. Contributions to these plans are made in amounts approved annually by
the Board of Directors. Aggregate contributions made by the Company to these
plans were $1,659,000, $1,268,000 and $829,000 for 1996, 1995 and 1994,
respectively.
F-11
<PAGE> 42
TECH DATA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
EMPLOYEE STOCK PURCHASE PLAN
Under the 1995 Employee Stock Purchase Plan, approved in June 1995, the
Company is authorized to issue up to 1,000,000 shares of common stock to
eligible employees. Under the terms of the plan, employees can choose to have a
fixed dollar amount deducted from their compensation to purchase the Company's
common stock and/or elect to purchase shares once per calendar quarter. The
purchase price of the stock is 85% of the market value on the exercise date and
employees are limited to a maximum purchase of $25,000 fair market value each
calendar year. Since plan inception, the Company has sold 43,061 shares. All
shares purchased under this plan must be retained for a period of one year.
NOTE 7 -- CAPITAL STOCK:
Each outstanding share of preferred stock is entitled to one vote on all
matters submitted to a vote of shareholders, except for matters involving
mergers, the sale of all Company assets, amendments to the Company's charter and
exchanges of Company stock for stock of another company which require approval
by a majority of each class of capital stock. In such matters, the preferred and
common shareholders will each vote as a separate class.
NOTE 8 -- COMMITMENTS AND CONTINGENCIES:
OPERATING LEASES
The Company leases distribution facilities and certain equipment under
noncancelable operating leases which expire at various dates through 2005.
Future minimum lease payments under all such leases for the succeeding five
fiscal years are as follows: 1997 -- $7,921,000; 1998 -- $6,892,000;
1999 -- $4,080,000; 2000 -- $3,671,000; 2001 -- $3,252,000 and $7,296,000
thereafter. Rental expense for all operating leases amounted to $7,547,000,
$6,500,000 and $4,490,000 in 1996, 1995 and 1994, respectively.
NOTE 9 -- ACQUISITIONS:
On March 24, 1994 the Company completed the non-cash exchange of 1,144,000
shares of its common stock for all of the outstanding capital stock of Softmart
International, S.A. (subsequently named Tech Data France, SNC), a privately-held
distributor of microcomputer products based in Paris, France. The acquisition
was accounted for as a pooling-of-interests effective February 1, 1994, however,
due to the immaterial size of the acquisition in relation to the consolidated
financial statements, prior period financial statements were not restated. In
connection with the issuance of the 1,144,000 shares of common stock, the
Company recorded an adjustment of $9,681,000 to beginning retained earnings.
NOTE 10 -- SEGMENT INFORMATION:
The Company is engaged in one business segment, the wholesale distribution
of microcomputer hardware and software products. The geographic areas in which
the Company operates are the United States (United
F-12
<PAGE> 43
TECH DATA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
States including exports to Latin America and the Caribbean) and International
(France and Canada). The geographical distribution of net sales, operating
income and identifiable assets are as follows (in thousands):
<TABLE>
<CAPTION>
UNITED STATES INTERNATIONAL ELIMINATIONS CONSOLIDATED
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
FISCAL YEAR 1995
Net sales to unaffiliated customers..... $ 2,104,637 $ 313,773 $ -- $ 2,418,410
========== ========= ========= =========
Operating income........................ $ 65,349 5,988 $ -- $ 71,337
========== ========= ========= =========
Identifiable assets..................... $ 677,910 $ 109,703 $ (3,184) $ 784,429
========== ========= ========= =========
FISCAL YEAR 1996
Net sales to unaffiliated customers..... $ 2,654,750 $ 431,870 $ -- $ 3,086,620
========== ========= ========= =========
Operating income........................ $ 48,419 $ 7,185 $ -- $ 55,604
========== ========= ========= =========
Identifiable assets..................... $ 868,910 $ 174,969 $ -- $ 1,043,879
========== ========= ========= =========
</TABLE>
NOTE 11 -- UNAUDITED INTERIM FINANCIAL INFORMATION:
<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------------------
APRIL 30 JULY 31 OCTOBER 31 JANUARY 31
-------- -------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
FISCAL YEAR 1995
Net sales..................................... $530,469 $569,655 $658,341 $659,945
Gross profit.................................. 45,157 47,778 53,815 52,538
Net income.................................... 9,225 9,603 10,295 5,789
Net income per common share................... .24 .25 .27 .15
</TABLE>
<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------------------
APRIL 30 JULY 31 OCTOBER 31 JANUARY 31
-------- -------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
FISCAL YEAR 1996
Net sales..................................... $633,460 $708,836 $843,286 $901,038
Gross profit.................................. 46,216 50,113 58,685 64,380
Net income.................................... 1,849 3,448 7,042 9,202
Net income per common share................... .05 .09 .18 .24
</TABLE>
F-13
<PAGE> 44
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING SHAREHOLDER, ANY
UNDERWRITER OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE
REGISTERED SECURITIES TO WHICH IT RELATES, OR AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY, TO ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OF
SOLICITATION IS NOT AUTHORIZED IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
The Company........................... 3
Use of Proceeds....................... 5
Price Range of Common Stock........... 5
Dividend Policy....................... 5
Capitalization........................ 6
Selected Consolidated Financial
Data................................ 7
Management's Discussion And Analysis
of Financial Condition And Results
of Operations....................... 8
Business.............................. 13
Management............................ 18
Selling Shareholder................... 20
Certain United States Tax Consequences
to Non-United States Holders of
Common Stock........................ 20
Underwriting.......................... 23
Notice to Canadian Residents.......... 26
Available Information................. 28
Incorporation of Certain Information
by Reference........................ 29
Legal Matters......................... 29
Experts............................... 29
Financial Information................. F-1
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
6,000,000 SHARES
[LOGO] TECH DATA CORPORATION(R)
COMMON STOCK
------------------------
PROSPECTUS
------------------------
BEAR, STEARNS & CO. INC.
THE ROBINSON-HUMPHREY
COMPANY, INC.
ROBERT W. BAIRD & CO.
INCORPORATED
JULY , 1996
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 45
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.
SUBJECT TO COMPLETION, DATED JUNE 13, 1996
PROSPECTUS
6,000,000 SHARES
[LOGO] TECH DATA CORPORATION(R)
COMMON STOCK
All the 6,000,000 shares of Common Stock offered hereby are being sold by
the Company. Of those shares, 4,800,000 shares (the "U.S. Shares") are being
offered in the United States and Canada (the "U.S. Offering") by the U.S.
Underwriters and 1,200,000 shares (the "International Shares") are being offered
concurrently outside the United States and Canada (the "International Offering")
by the Managers. The public offering price and the underwriting discounts and
commissions are identical for both the U.S. Offering and the International
Offering (collectively, the "Offering").
------------------------------
The Common Stock is quoted on the Nasdaq National Market under the symbol
"TECD." On June 11, 1996, the last reported sale price for the Common Stock, as
reported on the Nasdaq National Market, was $23.50 per share. See "Price Range
of Common Stock."
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share......................... $ $ $
- -------------------------------------------------------------------------------------------------
Total(3).......................... $ $ $
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) See "Underwriting" for a description of the indemnification arrangements
with the U.S. Underwriters and the Managers (collectively, the
"Underwriters").
(2) Before deducting expenses payable by the Company estimated to be $275,000.
(3) A Selling Shareholder and the Company have granted to the Underwriters
30-day options to purchase up to 400,000 and 500,000 additional shares of
Common Stock, respectively, solely to cover over-allotments, if any. If the
options are exercised in full, the Price to Public, Underwriting Discount
and Proceeds to Company will be $ , $ and $ ,
respectively, and the proceeds to be received by the Selling Shareholder
will be $ . See "Underwriting."
------------------------------
The International Shares are offered by the several Managers, subject to
prior sale, when, as and if delivered to and accepted by them, and subject to
certain other conditions. The Managers reserve the right to withdraw, cancel or
modify the International Offering and to reject orders in whole or in part. It
is expected that delivery of the International Shares will be made against
payment therefor on or about July , 1996, at the offices of Bear, Stearns &
Co. Inc., 245 Park Avenue, New York, New York 10167.
------------------------------
BEAR, STEARNS INTERNATIONAL LIMITED
THE ROBINSON-HUMPHREY COMPANY, INC.
ROBERT W. BAIRD & CO.
INCORPORATED
THE DATE OF THIS PROSPECTUS IS JULY , 1996
<PAGE> 46
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING SHAREHOLDER, ANY
UNDERWRITER OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE
REGISTERED SECURITIES TO WHICH IT RELATES, OR AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY, TO ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OF
SOLICITATION IS NOT AUTHORIZED IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
The Company........................... 3
Use of Proceeds....................... 5
Price Range of Common Stock........... 5
Dividend Policy....................... 5
Capitalization........................ 6
Selected Consolidated Financial
Data................................ 7
Management's Discussion And Analysis
of Financial Condition And Results
of Operations....................... 8
Business.............................. 13
Management............................ 18
Selling Shareholder................... 20
Certain United States Tax Consequences
to Non-United States Holders of
Common Stock........................ 20
Underwriting.......................... 23
Notice to Canadian Residents.......... 26
Available Information................. 28
Incorporation of Certain Information
by Reference........................ 29
Legal Matters......................... 29
Experts............................... 29
Financial Information................. F-1
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
6,000,000 SHARES
[LOGO] TECH DATA CORPORATION(R)
COMMON STOCK
------------------------
PROSPECTUS
------------------------
BEAR, STEARNS
INTERNATIONAL LIMITED
THE ROBINSON-HUMPHREY
COMPANY, INC.
ROBERT W. BAIRD & CO.
INCORPORATED
JULY , 1996
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 47
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC Registration Fee...................................................... $ 51,453
NASD Filing Fee........................................................... 15,422
Printing and Engraving.................................................... 75,000
Fees of Transfer Agent.................................................... 5,000
Accountants Fees and Expenses............................................. 25,000
Legal Fees and Expenses of Registrant's Counsel........................... 45,000
Blue Sky Fees and Expenses................................................ 10,000
Miscellaneous............................................................. 48,125
--------
Total........................................................... $275,000
</TABLE>
Except for SEC registration fee and NASD filing fee, the foregoing fees are
estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's By-Laws include the following provisions:
ARTICLE NINE
INDEMNIFICATION
"9.1 Under the circumstances prescribed in Section 9.3 and 9.4, the
Corporation shall indemnify and hold harmless any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a Director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
Director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a Director, officer employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (include attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in a manner he reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in a manner which he reasonably believed to be in or not opposed to the best
interest of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that this conduct was unlawful.
9.2 Under the circumstances prescribed in Section 9.3 and 9.4, the
Corporation shall indemnify and hold harmless any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that he is or was a Director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a Director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation; except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of his
duty to the Corporation, unless and only to the extent that the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person if fairly and reasonably entitled to indemnify for such expenses
that the court shall deem proper.
II-1
<PAGE> 48
9.3 To the extent that a Director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 9.1 and 9.2, or in defense of
any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
9.4 Except as provided in Section 9.3 and except as may be ordered by a
court, any indemnification under Sections 9.1 and 9.2 shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the Director, officer, employee or agent is proper in the
circumstances because he has meet the applicable standard of conduct set forth
in Sections 9.1 and 9.2. Such a determination shall be made (1) by the Board of
Directors by a majority vote of a quorum consisting of Directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested Directors so
directs, by independent legal counsel in a written opinion, or (3) by the
affirmative vote of a majority of the shares entitle to vote thereon owned by
persons who were not parties to such action, suit or proceeding.
9.5 Expenses, including attorneys' fees, incurred in defending a civil or
criminal action, suit, or proceeding may be paid by the Corporation in advance
of the final disposition of such action, suit, or proceeding upon a preliminary
determination following one of the procedures set forth in Section 9.4 that the
Director, officer, employee or agent met the applicable standard of conduct set
forth in Section 9.1 or Section 9.2 or as authorized by the Board of Directors
in the specific case and, in either event, upon receipt of an undertaking by or
on behalf of the Director, officer, employee, or agent to repay such amount
unless it shall ultimately be determined that he is entitled to by indemnified
by the Corporation as authorized in this Section.
9.6 The Corporation shall have the power to make any other or further
indemnification of any of its Directors, officers employees, or agents, under
any By-Law, agreement, vote of shareholders or disinterested Directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, except an indemnification against
gross negligence or willful misconduct.
9.7 The indemnification provided by this Article Nine shall continue as to
a person who has ceased to be a Director, employee or agent and shall inure to
the benefit of the heirs, executors or administrators of such a person.
9.8 The Corporation may purchase and maintain insurance on behalf of any
person who is or was a Director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a Director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against any liability asserted against himself and incurred by
him in any such capacity, or arising out of his status as such, whether or not
the Corporation would have the power to indemnify him against such liability
under the provisions of this Article Nine.
9.9 If any expenses or other amounts are paid by way of indemnification,
otherwise than by court order or action by the shareholder or by an insurance
carrier pursuant to insurance maintained by the Corporation, the Corporation
shall, no later than the next annual meeting of shareholders unless such a
meeting is held within three months from the date of such payment, and, in any
event, within 15 months from the date of such payment, deliver personally or
send by first class mail to its shareholders of record at the time entitled to
vote for the election of Directors a statement specifying the persons paid, the
amounts paid, and the nature and status at the time of such payment of the
litigation or threatened litigation."
Chapter 607 of the General Statutes of the State of Florida permits a
corporation to indemnify its officers and directors against certain liabilities
and provides for the conditions thereof.
Reference is made to the Underwriting Agreement filed as part of Exhibit 1
to this Registration Statement, which contains provisions pursuant to which each
Underwriter agrees to indemnify the Company, each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act of 1933, as
amended, each director of the Company and each officer of the Company who signs
this Registration Statement against losses, liabilities, and reasonable
expenses, including attorneys' fees, arising out of claims under the Securities
Act of 1933 based upon material misstatements or omissions of material facts in
any Preliminary Prospectus, the Prospectus, or this Registration Statement, but
only to the extent that such
II-2
<PAGE> 49
misstatement or omission was made in any Preliminary Prospectus, the Prospectus,
or this Registration Statement in reliance upon and in conformity with written
information furnished to the Company by the Underwriters expressly for use
therein.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company, the Company 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 Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding ) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Company undertakes, unless in the opinion of
its counsel the matter has been settled by controlling precedent, to submit to a
court of appropriate jurisdiction the question whether such indemnification by
its is against public policy as expressed in the Act and agrees to be governed
by the final adjudication of such issue.
ITEM 16. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULE
(a) the exhibit numbers on the following list correspond to the numbers in
the exhibit table required pursuant to Item 601 of Regulation S-K.
<TABLE>
<S> <C> <C>
1-A* -- Form of U.S. Underwriting Agreement.
1-B* -- Form of International Underwriting Agreement.
4-A(1) -- Articles of Incorporation of the Company as amended to April 23, 1986.
4-B(2) -- Articles of Amendment to Articles of Incorporation of the Company filed on
August 27, 1987.
4-C(3) -- By-Laws of the Company as amended to November 28, 1995.
4-D(4) -- Articles of Amendment to Articles of Incorporation of the Company filed on July
15, 1993.
5* -- Opinion of Schifino & Fleischer, P.A.
23-A* -- Consent of Schifino & Fleischer, P.A., appears in its opinion filed herewith as
Exhibit 5.
23-B* -- Consent of Price Waterhouse LLP is included on page II-6.
25* -- Power of Attorney is included on the Signature Page, page II-7.
99-A(5) -- Cautionary Statement For Purposes of the "Safe Harbor" Provisions of the
Private Securities Litigation Reform Act of 1995.
</TABLE>
- ---------------
* Filed herewith.
(1) Incorporated by reference to the Exhibits included in the Company's
Registration Statement on Form S-1, File No. 33-4135.
(2) Incorporated by reference to the Exhibits included in the Company's
Registration Statement on Form S-1, File No. 33-21997.
(3) Incorporated by reference to the Exhibits included in the Company's Form
10-K for the year ended January 31, 1996, File No. 0-14625.
(4) Incorporated by reference to the Exhibits included in the Company's Form
10-K for the year ended January 31, 1994, File No. 0-14625.
(5) Incorporated by reference to the Company's Form 8-K filed on March 26,
1996, File No. 0-14625.
II-3
<PAGE> 50
(b) Financial Statements and Schedules
Listed below are all of the financial statements and schedules filed
as part of this Registration Statement.
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
Report of Independent Certified Public Accountants........................ F-1
Consolidated Balance Sheet at January 31, 1995 and 1996 and April 30,
1996.................................................................... F-2
Consolidated Statement of Income for the years ended January 31, 1994,
1995 and 1996 and the three months ended April 30, 1995 and 1996
(unaudited)............................................................. F-3
Consolidated Statement of Changes in Shareholders' Equity for the years
ended January 31, 1994, 1995 and 1996 and the three months ended April
30, 1996 (unaudited).................................................... F-4
Consolidated Statement of Cash Flows for the years ended January 31, 1994,
1995 and 1996 and the three months ended April 30, 1995 and 1996
(unaudited)............................................................. F-5
Notes to Consolidated Financial Statements................................ F-6-F-13
Valuation and Qualifying Accounts......................................... *
</TABLE>
- ---------------
* Incorporated by reference to Schedule VIII of the Company's Annual Report on
Form 10-K for the fiscal year ended January 31, 1996.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby 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 the
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.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to who the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to who the prospectus is given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
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, suit or proceeding) is asserted by such
director, office 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.
II-4
<PAGE> 51
The undersigned registrant hereby undertakes that:
(1) For purposed of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4), or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
The undersigned registrant hereby undertakes to provide the Underwriters at
the closing specified in the underwriting documents, certificates in such
denominations and registered in such names are required by the Underwriters to
permit prompt delivery to each purchaser.
II-5
<PAGE> 52
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-3 of our report dated March 15, 1996, relating
to the consolidated financial statements of Tech Data Corporation and its
subsidiaries, which appears in such Prospectus. We also consent to the
incorporation by reference in the Prospectus constituting part of this
Registration Statement on Form S-3 of our report dated March 15, 1996, appearing
on page 13 of Tech Data Corporation's Annual Report on Form 10-K for the year
ended January 31, 1996. We also consent to the incorporation by reference of our
report on the Financial Statement Schedule which appears on page 29 of such
Annual Report on Form 10-K. We also consent to the references to us under the
heading "Experts".
PRICE WATERHOUSE
Tampa, Florida
June 12, 1996
II-6
<PAGE> 53
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-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Clearwater, State of Florida, on June 13, 1996.
TECH DATA CORPORATION
By: /s/ STEVEN A. RAYMUND
------------------------------------
Steven A. Raymund,
Chairman of the Board of Directors;
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature to this Registration Statement appears below
hereby appoints Jeffery P. Howells and Arthur W. Singleton, or either of them,
as his attorney-in-fact to sign on his behalf individually and in the capacity
stated below and to file all amendments and post-effective amendments to this
Registration Statement, and any and all instruments or documents filed as a part
of or in connection with this Registration Statement or the amendments thereto,
and the attorney-in-fact, or either of them, may make such changes and additions
to this Registration Statement as the attorney-in-fact, or either of them, may
deem necessary or appropriate.
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
- --------------------------------------------- -------------------------------- --------------
<C> <S> <C>
/s/ STEVEN A. RAYMUND Chairman of the Board of June 13, 1996
- --------------------------------------------- Directors; Chief Executive
Steven A. Raymund Officer
/s/ A. TIMOTHY GODWIN Vice Chairman; President; Chief June 13, 1996
- --------------------------------------------- Operating Officer; Director
A. Timothy Godwin
/s/ JEFFERY P. HOWELLS Senior Vice President of Finance June 13, 1996
- --------------------------------------------- and Chief Financial Officer;
Jeffery P. Howells (principal financial officer)
/s/ JOSEPH B. TREPANI Vice President and Worldwide June 13, 1996
- --------------------------------------------- Controller; (principal
Joseph B. Trepani accounting officer)
/s/ CHARLES E. ADAIR Director June 13, 1996
- ---------------------------------------------
Charles E. Adair
/s/ DANIEL M. DOYLE Director June 13, 1996
- ---------------------------------------------
Daniel M. Doyle
/s/ DONALD F. DUNN Director June 13, 1996
- ---------------------------------------------
Donald F. Dunn
/s/ LEWIS J. DUNN Director June 13, 1996
- ---------------------------------------------
Lewis J. Dunn
</TABLE>
II-7
<PAGE> 54
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- -------------------------------- --------------
<C> <S> <C>
/s/ EDWARD C. RAYMUND Director; Chairman Emeritus June 13, 1996
- ---------------------------------------------
Edward C. Raymund
/s/ JOHN Y. WILLIAMS Director June 13, 1996
- ---------------------------------------------
John Y. Williams
</TABLE>
II-8
<PAGE> 1
EXHIBIT 1-A
4,800,000 Shares of Common Stock
TECH DATA CORPORATION
U.S. UNDERWRITING AGREEMENT
July ___, 1996
BEAR, STEARNS & CO. INC.
THE ROBINSON-HUMPHREY COMPANY, INC.
ROBERT W. BAIRD & CO. INCORPORATED
as U.S. Representatives of the
several U.S. Underwriters named in
Schedule I attached hereto
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, N.Y. 10167
Dear Sirs:
Tech Data Corporation, a corporation organized and existing under the
laws of Florida (the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several U.S. underwriters named in
Schedule I hereto (the "U.S. Underwriters") an aggregate of 4,800,000 shares
(the "Firm U.S. Shares") of its common stock, par value $.0015 per share (the
"Common Stock"), and, for the sole purpose of covering over-allotments in
connection with the sale of the Firm U.S. Shares, at the option of the U.S.
Underwriters, up to an additional 400,000 shares (the "Company Additional U.S.
Shares") of Common Stock, and Steven A. Raymund (the "Selling Stockholder")
proposes to sell, for the sole purpose of covering over-allotments in
connection with the sale of Firm U.S. Shares, up to 320,000 shares (the
"Stockholder Additional U.S. Shares") of Common Stock. The Firm U.S. Shares
and any Company Additional U.S. Shares or Stockholder Additional U.S. Shares
purchased by the U.S. Underwriters are referred to herein as the "U.S. Shares."
The Company Additional U.S. Shares and the Stockholder Additional U.S. Shares
are referred to herein as the "Additional Shares." The U.S. Shares are more
fully described in the Registration Statement referred to below.
It is understood that the Company and the Selling Stockholder are
concurrently entering into an agreement dated the date hereof (the
"International Underwriting Agreement") pursuant to which the Company proposes,
subject to the terms and conditions stated therein, to issue and sell an
aggregate of 1,200,000 shares of Common Stock (the "Firm International Shares")
through
<PAGE> 2
arrangements with certain underwriters outside the United States and Canada
(the "Managers") for whom Bear, Stearns International Limited, The
Robinson-Humphrey Company, Inc. and Robert W. Baird & Co. Incorporated are
acting as representatives and, for the sole purpose of covering over-allotments
in connection with the sale of the Firm International Shares, at the option of
the Managers, up to an additional 100,000 shares (the "Company Additional
International Shares") of Common Stock, and the Selling Stockholder proposes to
sell, for the sole purpose of covering over-allotments in connection with the
sale of the Firm International Shares, up to 80,000 shares (the "Stockholder
Additional International Shares") of Common Stock. The Firm International
Shares and any Company Additional International Shares or Stockholder
Additional International Shares purchased by the Managers are referred to
herein as the "International Shares." It is understood that the Company and
the Selling Stockholder are not obligated to sell, and the U.S. Underwriters
are not obligated to purchase, any Firm U.S. Shares unless all of the Firm
International Shares are contemporaneously obligated to be purchased by the
Managers.
It is also understood and agreed to by all the parties that the U.S.
Underwriters have entered into an agreement with the Managers (the "Agreement
between U.S. Underwriters and Managers") contemplating the coordination of
certain transactions between the U.S. Underwriters and the Managers and that,
pursuant thereto and subject to the conditions set forth therein, the U.S.
Underwriters may (i) purchase from the Managers a portion of the International
Shares to be sold to the Managers pursuant to International Underwriting
Agreement or (ii) sell to the Managers a portion of the U.S. Shares to be sold
to the U.S. Underwriters pursuant to this Agreement. The Company also
understands that any such purchases and sales between the U.S. Underwriters and
the Managers shall be governed by the Agreement between U.S. Underwriters and
Managers and shall not be governed by the terms of this Agreement.
The U.S. Underwriters and the Managers are collectively referred to
herein as the "Underwriters," the Firm U.S. Shares and the Firm International
Shares are collectively referred to herein as the "Firm Shares," and the U.S.
Shares and the International Shares are collectively referred to herein as the
"Shares."
1. (a) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to, and agrees with, the U.S. Underwriters
that:
(i) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement, and may have
filed an amendment or amendments thereto, on Form S-3 (No. 333- ), for
the registration of the Shares under the Securities Act of 1933, as amended
(the "Act"). Such registration statement, including the prospectus, financial
statements and schedules, exhibits and all other documents filed as a part
thereof, as amended at the time of effectiveness of the registration statement,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434 of the Rules
and Regulations of the Commission under the Act (the "Regulations"), is herein
called the "Registration Statement" and the prospectus, in the form first filed
with the Commission pursuant to Rule 424(b) of the Regulations or filed as part
of the Registration Statement at the time of effectiveness if no Rule 424(b) or
Rule 434 filing is required, is herein called the "Prospectus." The term
2
<PAGE> 3
"preliminary prospectus" as used herein means a preliminary prospectus as
described in Rule 430 of the Regulations. Any reference herein to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), on or before the effective date
of the Registration Statement, the date of such preliminary prospectus or the
date of the Prospectus, as the case may be, and any reference herein to the
terms "amend," "amendment" or "supplement" with respect to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to
refer to and include (A) the filing of any document under the Exchange Act
after the effective date of the Registration Statement, (B) the date of such
preliminary prospectus or the date of the Prospectus, as the case may be, which
is incorporated therein by reference and (C) any such document so filed.
(ii) At the time of the effectiveness of the
Registration Statement or the effectiveness of any post-effective amendment to
the Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b) or Rule 434 of the Regulations, when any
supplement to or amendment of the Prospectus is filed with the Commission, when
any document filed under the Exchange Act is filed and at the Closing Date and
the Additional Closing Date (as hereinafter respectively defined), if any, the
Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Act and the Regulations and the Exchange Act and
the respective rules and regulations thereunder and does not or will not
contain an untrue statement of a material fact and does not or will not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein (A) in the case of the Registration Statement, not
misleading and (B) in the case of the Prospectus, in light of the circumstances
under which they were made, not misleading. When any related preliminary
prospectus was first filed with the Commission (whether filed as part of the
registration statement for the registration of the Shares or any amendment
thereto or pursuant to Rule 424(a) of the Regulations) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
preliminary prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Regulations and the Exchange Act and the respective rules and regulations
thereunder and did not contain an untrue statement of a material fact and did
not omit to state any material fact required to be stated therein or necessary
in order to make the statements therein in light of the circumstances under
which they were made not misleading. No representation and warranty is made in
this subsection (ii), however, with respect to any information contained in or
omitted from the Registration Statement or the Prospectus or any related
preliminary prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any U.S. Underwriter through you as herein stated
expressly for use in connection with the preparation thereof. If Rule 434 is
used, the Company will comply with the requirements of Rule 434.
(iii) Price Waterhouse LLP, who have certified the
financial statements and supporting schedules included in the Registration
Statement, are independent public accountants as required by the Act and the
Regulations.
(iv) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus,
except as set forth in the Registration Statement and
3
<PAGE> 4
the Prospectus, there has been no material adverse change or any development
involving a prospective material adverse change in the business, prospects,
properties, operations, condition (financial or other) or results of operations
of the Company and its subsidiaries taken as a whole, whether or not arising
from transactions in the ordinary course of business, and since the date of the
latest balance sheet presented in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries has incurred or
undertaken any liabilities or obligations, direct or contingent, which are
material to the Company and its subsidiaries taken as a whole, except for
liabilities or obligations which are reflected in the Registration Statement
and the Prospectus.
(v) This Agreement and the transactions
contemplated herein have been duly and validly authorized by the Company and
this Agreement has been duly and validly executed and delivered by the Company
and constitutes the valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, subject, as to enforcement,
to applicable bankruptcy, insolvency, reorganization and moratorium laws and
other laws relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles and, with respect to this
Agreement, except as the enforceability of rights to indemnity and contribution
under this Agreement may be limited under applicable securities laws or the
public policy underlying such laws.
(vi) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby do
not and will not (A) conflict with or result in a breach of any of the terms
and provisions of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any agreement,
instrument, franchise, license or permit to which the Company or any of its
subsidiaries is a party or by which any of such corporations or their
respective properties or assets may be bound or (B) violate or conflict with
any provision of the certificate of incorporation or by-laws of the Company or
any of its subsidiaries or any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or assets. No consent, approval, authorization,
order, registration, filing, qualification, license or permit of or with any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, including the issuance, sale and delivery of the U.S.
Shares to be issued, sold and delivered by the Company hereunder, except the
registration under the Act of the Shares and such consents, approvals,
authorizations, orders, registrations, filings, qualifications, licenses and
permits as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters.
(vii) All of the outstanding shares of Common Stock
are duly and validly authorized and issued, fully paid and nonassessable and
were not issued and are not now in violation of or subject to any preemptive
rights. The Firm U.S. Shares and the Company Additional U.S. Shares, when
issued, delivered and sold in accordance with this Agreement, will be, and the
Stockholder Additional U.S. Shares are, duly and validly issued and
outstanding, fully paid and
4
<PAGE> 5
nonassessable, and will not have been or were not issued in violation of or be
subject to any preemptive rights. The Company had, at April 30, 1996, an
authorized and outstanding capitalization as set forth in the Registration
Statement and the Prospectus. The Common Stock and the Shares conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(viii) The Company has no subsidiaries other than
those listed on Schedule II hereto. Schedule II denotes those subsidiaries of
the Company which are deemed by management of the Company to be material
subsidiaries of the Company. Each of the Company and its subsidiaries has been
duly organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation. Each of the Company and its
subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in
good standing which will not in the aggregate have a material adverse effect on
the Company and its subsidiaries taken as a whole. Each of the Company and its
subsidiaries has all requisite power and authority, and all necessary consents,
approvals, authorizations, orders, registrations, qualifications, licenses and
permits of and from all public, regulatory or governmental agencies and bodies,
to own, lease and operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and the Prospectus,
and no such consent, approval, authorization, order, registration,
qualification, license or permit contains a materially burdensome restriction
not adequately disclosed in the Registration Statement and the Prospectus.
(ix) Except as described in the Prospectus, there
is no litigation or governmental proceeding to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any of its
subsidiaries is subject or which is pending or, to the knowledge of the
Company, contemplated against the Company or any of its subsidiaries which
might result in any material adverse change or any development involving a
material adverse change in the business, prospects, properties, operations,
condition (financial or other) or results of operations of the Company and its
subsidiaries taken as a whole or which is required to be disclosed in the
Registration Statement and the Prospectus.
(x) The Company has not taken and will not take,
directly or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares.
(xi) The financial statements, including the notes
thereto, and supporting schedules included in the Registration Statement and
the Prospectus present fairly the financial position of the Company as of the
dates indicated and the results of its operations for the periods specified;
except as otherwise stated in the Registration Statement, said financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and the supporting schedules included
in or incorporated by reference into the Registration Statement present fairly
the information required to be stated therein.
5
<PAGE> 6
(xii) Except as described in the Prospectus, no
holder of securities of the Company has any rights to the registration of
securities of the Company because of the filing of the Registration Statement
or otherwise in connection with the sale of the U.S. Shares contemplated
hereby.
(xiii) The Company is not, and upon consummation of
the transactions contemplated hereby will not be, subject to registration as an
"investment company" under the Investment Company Act of 1940.
(xiv) The conditions for use of Form S-3, as set
forth in the General Instructions thereto, have been satisfied.
(xv) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material
respects with the requirements of the Exchange Act and the rules and
regulations of the Commission under the Exchange Act, and, when read together
with the other information in the Prospectus, at the time the Registration
Statement and any amendments thereto become effective and at the Closing Date,
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(xvi) To the Company's knowledge, neither the
Company nor any of its subsidiaries nor any employee or agent of the Company or
any subsidiary has made any payment of funds of the Company or any subsidiary
or received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(xvii) The Company and each of its subsidiaries have
filed all tax returns required to be filed, which returns are complete and
correct in all material respects, and neither the Company nor any of its
subsidiaries is in default in the payment of any taxes which were payable
pursuant to said returns or any assessments with respect thereto.
(xviii) The Company has complied with all provisions
of Florida Statutes, Section 517.075, relating to issuers doing business with
Cuba.
(xix) Each of the Company and its subsidiaries has
fulfilled its obligations, if any, under the minimum funding standards of
Section 302 of the United States Employee Retirement Income Security Act of
1974 ("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in ERISA and such regulations and
published interpretations) in which employees of the Company and its
subsidiaries are eligible to participate and each such plan is in compliance in
all material respects with the presently applicable provisions of ERISA and
such regulations and published interpretations, and has not incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan under Title IV
of ERISA.
6
<PAGE> 7
(xx) The Shares have been and continue to be
designated for inclusion on the Nasdaq National Market, and the Company is in
compliance with the maintenance and designation criteria applicable to Nasdaq
National Market issuers.
(b) REPRESENTATIONS AND WARRANTIES OF THE SELLING
STOCKHOLDER. The Selling Stockholder, represents and warrants to, and agrees
with, the U.S.Underwriters and the Company that:
(i) The Selling Stockholder has full right, power
and authority to enter into this Agreement and the Custody Agreement and Power
of Attorney (as hereinafter defined) and to sell, assign, transfer and deliver
to the U.S. Underwriters the Stockholder Additional U.S. Shares to be sold by
the Selling Stockholder hereunder.
(ii) The Selling Stockholder has duly executed and
delivered this Agreement and the Custody Agreement and Power of Attorney and
each constitutes the valid and binding agreement of the Selling Stockholder
enforceable against the Selling Stockholder in accordance with its terms,
subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to or affecting the
enforcement of creditors' rights generally and to general equitable principles
and, with respect to this Agreement, except as the enforceability of rights to
indemnity and contribution under this Agreement may be limited under applicable
securities laws or the public policy underlying such laws.
(iii) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with, any
court or governmental agency or body is required for the sale of the
Stockholder Additional U.S. Shares to be sold by the Selling Stockholder or the
consummation of the transactions contemplated by this Agreement or the Custody
Agreement and Power of Attorney, except the registration of the Shares under
the Act (which, if the Registration Statement is not effective as of the time
of execution hereof, shall be obtained as provided in this Agreement) and such
as may be required under state securities or blue sky laws in connection with
the offer, sale and distribution of the Shares by the Underwriters.
(iv) The sale of the Stockholder Additional U.S.
Shares to be sold by such Selling Stockholder and the performance of this
Agreement and the Custody Agreement and Power of Attorney and the consummation
of the transactions herein and therein contemplated will not conflict with, or
(with or without the giving of notice or the passage of time or both) result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which the Selling Stockholder is a party or to
which any of such Selling Stockholder's properties or assets is subject, nor
will such action conflict with or violate any statute, rule or regulation or
any order, judgment or decree of any court or governmental agency or body
having jurisdiction over the Selling Stockholder or any of the Selling
Stockholder's properties or assets.
(v) The Selling Stockholder has, and immediately
prior to the Additional Closing Date, the Selling Stockholder will have, good
and valid title to the Stockholder Additional U.S. Shares to be sold by such
Selling Stockholder hereunder, free and clear of all liens, security interests,
pledges, charges, encumbrances, defects, stockholders' agreements, voting
trusts, equities
7
<PAGE> 8
or claims of any nature whatsoever; and, upon delivery of the Stockholder
Additional U.S. Shares against payment therefor as provided herein, good and
valid title to the Stockholder Additional U.S. Shares , free and clear of all
liens, security interests, pledges, charges, encumbrances, defects,
stockholders' agreements, voting trusts, equities or claims of any nature
whatsoever, will pass to the several U.S. Underwriters.
(vi) The Selling Stockholder has not taken,
directly or indirectly, any action designed to cause or result in, or which
constitutes or might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock of the Company to
facilitate the sale or resale of the Shares.
(vii) At the time of the effectiveness of the
Registration Statement or the effectiveness of any post-effective amendment to
the Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b) or Rule 434 of the Regulations, when any
supplement to or amendment of the Prospectus is filed with the Commission, when
any document filed under the Exchange Act is filed and at the Closing Date and
the Additional Closing Date (as hereinafter respectively defined), if any, the
Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Act and the Regulations and the Exchange Act and
the respective rules and regulations thereunder and does not or will not
contain an untrue statement of a material fact and does not or will not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein (A) in the case of the Registration Statement, not
misleading and (B) in the case of the Prospectus, in light of the circumstances
under which they were made, not misleading. When any related preliminary
prospectus was first filed with the Commission (whether filed as part of the
registration statement for the registration of the Shares or any amendment
thereto or pursuant to Rule 424(a) of the Regulations) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
preliminary prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Regulations and the Exchange Act and the respective rules and regulations
thereunder and did not contain an untrue statement of a material fact and did
not omit to state any material fact required to be stated therein or necessary
in order to make the statements therein in light of the circumstances under
which they were made not misleading. No representation and warranty is made in
this subsection (vii), however, with respect to any information contained in or
omitted from the Registration Statement or the Prospectus or any related
preliminary prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any U.S. Underwriter through you as herein stated
expressly for use in connection with the preparation thereof.
In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Internal Revenue Code of 1986, as amended,
with respect to the transactions herein contemplated, the Selling Stockholder
agrees to deliver to you prior to or at the Additional Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
The Selling Stockholder represents and warrants that certificates in
negotiable form representing all of the Stockholder Additional U.S. Shares to
be sold by the Selling Stockholder
8
<PAGE> 9
hereunder have been placed in custody with Schifino & Fleischer, P.A. (the
"Custodian") for delivery under this Agreement pursuant to a Custody Agreement
and Power of Attorney (the "Custody Agreement and Power of Attorney") executed
by the Selling Stockholder appointing _____________________ and
__________________ as agents and attorneys-in-fact (the "Attorneys-in-Fact")
with authority to execute and deliver this Agreement on behalf of the Selling
Stockholder, to determine the purchase price to be paid by the U.S.
Underwriters to the Selling Stockholder as provided in Section 2 hereof, to
authorize the delivery of the Stockholder Additional U.S. Shares to be sold by
the Selling Stockholder hereunder and otherwise to act on behalf of the Selling
Stockholder in connection with the transactions contemplated by this Agreement
and the Custody Agreement and Power of Attorney.
The Selling Stockholder specifically agrees that the Stockholder
Additional U.S. Shares represented by the certificates held in custody for such
Selling Stockholder under the Custody Agreement and Power of Attorney are
subject to the interests of the U.S. Underwriters hereunder, and that the
arrangements made by the Selling Stockholder for such custody, and the
appointment by the Selling Stockholder of the Attorneys-in-Fact by the Custody
Agreement and Power of Attorney, are irrevocable. The Selling Stockholder
specifically agrees that the obligations of the Selling Stockholder hereunder
shall not be terminated by operation of law, whether by his death or incapacity
or by the occurrence of any other event.
2. PURCHASE, SALE AND DELIVERY OF THE U.S. SHARES.
(a) On the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the U.S.
Underwriters and the U.S. Underwriters, severally and not jointly, agree to
purchase from the Company, at a purchase price per share of $_______, the
number of Firm U.S. Shares set forth opposite the respective names of the U.S.
Underwriters in Schedule I hereto plus any additional number of U.S. Shares
which such U.S. Underwriter may become obligated to purchase pursuant to the
provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of
certificates for, the U.S. Shares shall be made at the office of Schifino &
Fleischer, P.A., One Tampa City Center, Suite 2700, 207 N. Franklin Street,
Tampa, Florida 33602, or at such other place as shall be agreed upon by you and
the Company, at 10:00 A.M. on the third or fourth business day (as permitted
under Rule 15c6-1 under the Exchange Act) (unless postponed in accordance with
the provisions of Section 9 hereof) following the date of the effectiveness of
the Registration Statement (or, if the Company has elected to rely upon Rule
430A of the Regulations, the third or fourth business day (as permitted under
Rule 15c6-1 under the Exchange Act) after the determination of the initial
public offering price of the U.S. Shares), or such other time not later than
ten business days after such date as shall be agreed upon by you and the
Company (such time and date of payment and delivery being herein called the
"Closing Date"). Payment shall be made to the Company by wire transfer in same
day funds, against delivery to you for the respective accounts of the U.S.
Underwriters of certificates for the U.S. Shares to be purchased by them.
Certificates for the U.S. Shares shall be registered in such name or names and
in such authorized denominations as you may request in writing at least two
full business days prior
9
<PAGE> 10
to the Closing Date. The Company will permit you to examine and package such
certificates for delivery at least one full business day prior to the Closing
Date.
(c) In addition, the Company hereby grants to the U.S.
Underwriters the option to purchase up to 400,000 Company Additional U.S.
Shares and the Selling Stockholder hereby grants to the U.S. Underwriters the
option to purchase up to 320,000 Stockholder Additional U.S. Shares at the same
purchase price per share to be paid by the U.S. Underwriters to the Company
for the Firm U.S. Shares as set forth in this Section 2, for the sole purpose
of covering over-allotments in the sale of Firm U.S. Shares by the U.S.
Underwriters. This option may be exercised at any time, in whole or in part,
on or before the thirtieth day following the date of the Prospectus, by written
notice by you to the Company and the Selling Stockholder. It is understood and
agreed, however, that such option shall be exercised first to purchase
Stockholder Additional U.S. Shares until all Stockholder Additional U.S. Shares
are purchased and then to purchase Company Additional U.S. Shares. Such notice
shall set forth the aggregate number of Additional Shares as to which the
option is being exercised and the date and time, as reasonably determined by
you, when the Additional Shares are to be delivered (such date and time being
herein sometimes referred to as the "Additional Closing Date"); provided,
however, that the Additional Closing Date shall not be earlier than the Closing
Date or earlier than the second full business day after the date on which the
option shall have been exercised nor later than the eighth full business day
after the date on which the option shall have been exercised (unless such time
and date are postponed in accordance with the provisions of Section 9 hereof).
Certificates for the Additional Shares shall be registered in such name or
names and in such authorized denominations as you may request in writing at
least two full business days prior to the Additional Closing Date. The Company
will permit you to examine and package such certificates for delivery at least
one full business day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each U.S. Underwriter
shall be the number which bears the same ratio to the aggregate number of
Additional Shares being purchased as the number of Firm U.S. Shares set forth
opposite the name of such U.S. Underwriter in Schedule I hereto (or such number
increased as set forth in Section 9 hereof) bears to 4,800,000, subject,
however, to such adjustments to eliminate any fractional shares as you in your
sole discretion shall make.
Payment for the Additional Shares shall be made by wire transfer in
same day funds at the offices of Schifino & Fleisher, P.A. at the address
specified in Section 2(b) hereof, or such other location as may be mutually
acceptable, upon delivery of the certificates for the Additional Shares to you
for the respective accounts of the U.S. Underwriters.
3. OFFERING. Upon your authorization of the release of the Firm
U.S. Shares, the U.S. Underwriters propose to offer the U.S. Shares for sale to
the public upon the terms set forth in the Prospectus.
4. (a) COVENANTS OF THE COMPANY. The Company covenants and
agrees with the U.S. Underwriters that:
(i) If the Registration Statement has not yet
been declared effective the Company will use its best efforts to cause the
Registration Statement and any amendments thereto to
10
<PAGE> 11
become effective as promptly as possible, and if Rule 430A is used or the
filing of the Prospectus is otherwise required under Rule 424(b) or Rule 434,
the Company will file the Prospectus (properly completed if Rule 430A has been
used) pursuant to Rule 424(b) or Rule 434 within the prescribed time period and
will provide evidence satisfactory to you of such timely filing. If the
Company elects to rely on Rule 434, the Company will prepare and file a term
sheet that complies with the requirements of Rule 434.
The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when the Registration Statement and
any amendments thereto become effective, (ii) of any request by the Commission
for any amendment of or supplement to the Registration Statement or the
Prospectus or for any additional information, (iii) of the mailing or the
delivery to the Commission for filing of any amendment of or supplement to the
Registration Statement or the Prospectus, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of the initiation, or the
threatening, of any proceedings therefor, (v) of the receipt of any comments
from the Commission, and (vi) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for sale in
any jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time,
the Company will make every reasonable effort to prevent the issuance of any
such stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration
Statement or any amendment of or supplement to the Prospectus (including the
prospectus required to be filed pursuant to Rule 424(b)or Rule 434) that
differs from the prospectus on file at the time of the effectiveness of the
Registration Statement before or after the effective date of the Registration
Statement or file any document under the Exchange Act if such document would be
deemed to be incorporated by reference into the Prospectus to which you shall
reasonably object in writing after being timely furnished in advance a copy
thereof.
(ii) If at any time when a prospectus relating to
the U.S. Shares is required to be delivered under the Act any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would, in the judgment of the U.S. Underwriters or the Company include an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it shall
be necessary at any time to amend or supplement the Prospectus or Registration
Statement to comply with the Act or the Regulations, or to file under the
Exchange Act so as to comply therewith any document incorporated by reference
in the Registration Statement or the Prospectus or in any amendment thereof or
supplement thereto, the Company will notify you promptly and prepare and file
with the Commission an appropriate amendment or supplement (in form and
substance satisfactory to you) which will correct such statement or omission or
which will effect such compliance and will use its best efforts to have any
amendment to the Registration Statement declared effective as soon as possible.
(iii) The Company will promptly deliver to you
three signed copies of the Registration Statement, including exhibits and all
documents incorporated by reference therein and all amendments thereto, and the
Company will promptly deliver to each of the U.S. Underwriters such number of
copies of any preliminary prospectus, the Prospectus, the Registration
Statement, all
11
<PAGE> 12
amendments of and supplements to such documents, if any, and all documents
incorporated by reference in the Registration Statement and Prospectus or any
amendment thereof or supplement thereto, without exhibits as you may reasonably
request.
(iv) The Company will endeavor in good faith, in
cooperation with you, at or prior to the time of effectiveness of the
Registration Statement, to qualify the U.S. Shares for offering and sale under
the securities laws relating to the offering or sale of the U.S. Shares of such
jurisdictions as you may designate and to maintain such qualification in effect
for so long as required for the distribution thereof; except that in no event
shall the Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process.
(v) The Company will make generally available
(within the meaning of Section 11(a) of the Act) to its security holders and to
you as soon as practicable, but not later than 45 days after the end of its
fiscal quarter in which the first anniversary date of the effective date of the
Registration Statement occurs, an earning statement (in form complying with the
provisions of Rule 158 of the Regulations) covering a period of at least twelve
consecutive months beginning after the effective date of the Registration
Statement.
(vi) During the period of 90 days from the date of
the Prospectus, the Company will not, without your prior written consent,
issue, sell, offer or agree to sell, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, any Common Stock (or any
securities convertible into, exercisable for or exchangeable for Common Stock),
other than the Company's sale of Shares hereunder and under the International
Underwriting Agreement and the Company's issuance of Common Stock upon the
exercise of presently outstanding stock options and the sale of Common Stock
under and pursuant to the Company's 1995 Employee Stock Purchase Plan.
(vii) During a period of three years from the
effective date of the Registration Statement, the Company will furnish to you
copies of (i) all reports to its stockholders; and (ii) all reports, financial
statements and proxy or information statements filed by the Company with the
Commission or any national securities exchange.
(viii) The Company will apply the proceeds received
by it from the sale of Shares as set forth under "Use of Proceeds" in the
Prospectus.
(ix) The Company will use its best efforts to
cause the Shares to be listed for inclusion on the Nasdaq National Market.
(x) The Company, during the period when the
Prospectus is required to be delivered under the Act or the Exchange Act, will
file all documents required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within the time periods required by the
Exchange Act and the rules and regulations thereunder.
(b) COVENANTS OF THE SELLING STOCKHOLDER. The Selling
Stockholder covenants and agrees with the U.S. Underwriters that:
12
<PAGE> 13
(i) During the period of 90 days after the date
of the Prospectus, the Selling Stockholder will not, without your prior written
consent, sell, offer, agree to sell, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, any Common Stock or securities
convertible into, exercisable for or exchangeable for, Common Stock, except as
provided in Section 2 hereby and except as provided in the International
Underwriting Agreement.
(ii) The Selling Stockholder will not take,
directly or indirectly, any action designed to cause or to result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of shares of Common Stock of the
Company to facilitate the sale or resale of the Shares.
5. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of the obligations of the Company and the Selling Stockholder
hereunder, including, without limitation, those in connection with (i)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereof (including all
exhibits thereto), any preliminary prospectus, the Prospectus and any
amendments or supplements thereto (including, without limitation, fees and
expenses of the Company's accountants and counsel), the underwriting documents
(including this Agreement, the International Underwriting Agreement, the Master
Agreement Among Underwriters, the Master Selling Agreement and the Agreement
between U.S. Underwriters and Managers) and all other documents related to the
public offering of the Shares (including those supplied to the Underwriters in
quantities as hereinabove stated), (ii) the issuance, transfer and delivery of
the Shares to the Underwriters, including any transfer or other taxes payable
thereon, (iii) the qualification of the Shares under state or foreign
securities or Blue Sky laws, including the costs of printing and mailing a
preliminary and final "Blue Sky Survey" and the fees of counsel for the
Underwriters and such counsel's disbursements in relation thereto, (iv)
quotation of the Shares on the Nasdaq National Market, (v) filing fees of the
Commission and the National Association of Securities Dealers, Inc. (the
"NASD"); (vi) the cost of printing certificates representing the Shares, (vii)
the cost and charges of any transfer agent or registrar, and (viii) travel and
lodging expenses of employees of the Company who participate in the advertising
and marketing of the Shares.
6. CONDITIONS OF U.S. UNDERWRITERS' OBLIGATIONS. The obligations
of the U.S. Underwriters to purchase and pay for the Firm U.S. Shares and the
Additional Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholder
herein contained, as of the date hereof and as of the Closing Date (for
purposes of this Section 6 "Closing Date" shall refer to the Closing Date for
the Firm U.S. Shares and any Additional Closing Date, if different, for the
Additional Shares), to the absence from any certificates, opinions, written
statements or letters furnished to you or to Powell, Goldstein, Frazer & Murphy
("Underwriters' Counsel") pursuant to this Section 6 of any misstatement or
omission, to the performance by the Company of its obligations hereunder, and
to the following additional conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 P.M., New York time, on the date of this
Agreement or at such later time and date as shall have been consented to in
writing by you; if the Company shall have elected to rely upon Rule 430A or
Rule 434
13
<PAGE> 14
of the Regulations, the Prospectus shall have been filed with the Commission in
a timely fashion in accordance with Section 4(a) hereof; and, at or prior to
the Closing Date no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof shall have been issued and no
proceedings therefor shall have been initiated or threatened by the Commission.
(b) At the Closing Date you shall have received the
opinion of Schifino & Fleischer, P.A., counsel for the Company and the Selling
Stockholder, dated the Closing Date addressed to the U.S. Underwriters and in
form and substance satisfactory to Underwriters' Counsel, to the effect that:
(i) Each of the Company and its material
subsidiaries has been duly organized and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation. Each of
the Company and its material subsidiaries is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the character
or location of its properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary, except for those
failures to be so qualified or in good standing which will not in the aggregate
have a material adverse effect on the Company and its material subsidiaries
taken as a whole. Each of the Company and its material subsidiaries has all
requisite corporate authority to own, lease and license its respective
properties and conduct its business as now being conducted and as described in
the Registration Statement and the Prospectus. All of the issued and
outstanding capital stock of each material subsidiary of the Company has been
duly and validly issued and is fully paid and nonassessable and was not issued
in violation of preemptive rights and, is owned directly or indirectly by the
Company, free and clear of any lien, encumbrance, claim, security interest,
restriction on transfer, shareholders' agreement, voting trust or other defect
of title whatsoever.
(ii) The Company has an authorized capital stock
as set forth in the Registration Statement and the Prospectus. All of the
outstanding shares of Common Stock are duly and validly authorized and issued,
are fully paid and nonassessable and were not issued in violation of or subject
to any preemptive rights. The U.S. Shares to be delivered on the Closing Date
have been duly and validly authorized and, when delivered by the Company in
accordance with this Agreement, will be duly and validly issued, fully paid and
nonassessable and will not have been issued in violation of or subject to any
preemptive rights. The Common Stock and the Shares conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(iii) The Common Stock currently outstanding is
quoted, and the U.S. Shares to be sold under this Agreement to the U.S.
Underwriters are duly authorized for quotation, on the Nasdaq National Market.
(iv) This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(v) To the best of such counsel's knowledge,
there is no litigation or governmental or other action, suit, proceeding or
investigation before any court or before or by any public, regulatory or
governmental agency or body pending or threatened against, or involving the
properties or business of, the Company or any of its material subsidiaries,
which is of a character
14
<PAGE> 15
required to be disclosed in the Registration Statement and the Prospectus which
has not been properly disclosed therein.
(vi) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby by
the Company do not and will not (A) conflict with or result in a breach of any
of the terms and provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default) under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its material subsidiaries pursuant
to, any agreement, instrument, franchise, license or permit known to such
counsel to which the Company or any of its material subsidiaries is a party or
by which any of such corporations or their respective properties or assets may
be bound or (B) violate or conflict with any provision of the certificate of
incorporation or by-laws of the Company or any of its material subsidiaries,
or, to the best knowledge of such counsel, any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or any of its
material subsidiaries or any of their respective properties or assets. No
consent, approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any public, governmental, or
regulatory agency or body having jurisdiction over the Company or any of its
material subsidiaries or any of their respective properties or assets is
required for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except for (1) such as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters (as to which such
counsel need express no opinion) and (2) such as have been made or obtained
under the Act.
(vii) The Registration Statement and the Prospectus
and any amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial data included or incorporated by
reference therein, as to which no opinion need be rendered) comply as to form
in all material respects with the requirements of the Act and the Regulations.
The documents filed under the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus or any amendment thereof or
supplement thereto (other than the financial statements and schedules and other
financial data included or incorporated by reference therein, as to which no
opinion need be rendered) when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material respects
with the Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder; and such counsel has no reason to believe that
any of such documents, when such documents became effective or were so filed,
as they case may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material fact, or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or, in the case of other documents
which were filed under the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not misleading.
(viii) Insofar as statements in the Prospectus
purport to summarize the status of litigation or the provisions of laws, rules,
regulations, orders, judgments, decrees, contracts, agreements, instruments,
leases, or licenses, such statements are correct in all material respects.
15
<PAGE> 16
(ix) The Registration Statement is effective under
the Act, and, to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement or any post-effective amendment
thereof has been issued and no proceedings therefor have been initiated or
threatened by the Commission and all filings required by Rule 424(b) of the
Regulations have been made.
(x) In addition, such opinion shall also contain
a statement that such counsel has participated in conferences with officers and
representatives of the Company, representatives of the independent public
accountants for the Company and the Underwriters at which the contents and the
Prospectus and related matters were discussed and, no facts have come to the
attention of such counsel which would lead such counsel to believe that either
the Registration Statement at the time it became effective (including the
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) or Rule 434, if applicable), or any
amendment thereof made prior to the Closing Date as of the date of such
amendment, contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as of its date (or any
amendment thereof or supplement thereto made prior to the Closing Date as of
the date of such amendment or supplement) and as of the Closing Date contained
or contains an untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no belief or
opinion with respect to the financial statements and schedules and other
financial data included or incorporated by reference therein).
(xi) A Custody Agreement and Power of Attorney has
been duly executed and delivered by the Selling Stockholder, which is
enforceable against the Selling Stockholder in accordance with its terms
subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to or affecting the
enforcement of creditors' rights generally and to general equitable principles.
(xii) This Agreement has been duly executed and
delivered by or on behalf of the Selling Stockholder; the sale of the
Stockholder Additional U.S. Shares to be sold by the Selling Stockholder and
the performance of this Agreement and the Custody Agreement and Power of
Attorney and the consummation of the transactions herein and therein
contemplated will not conflict with, or (with or without the giving of notice
or the passage of time or both) result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
known to such counsel to which the Selling Stockholder is a party or to which
any of the Selling Stockholder's properties or assets is subject, nor will such
action conflict with or violate any statute, rule or regulation or any order,
judgment or decree known to such counsel of any court or governmental agency or
body having jurisdiction over the Selling Stockholder or any of the Selling
Stockholder's properties or assets.
(xiii) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with, any
court or governmental agency or body is required for the issue and sale of the
Stockholder Additional U.S. Shares being sold by such Selling Stockholder or
the consummation of the transactions contemplated by this Agreement or the
Custody Agreement
16
<PAGE> 17
and Power of Attorney, except the registration of the Shares under the Act and
such as may be required under state securities or blue sky laws in connection
with the offer, sale and distribution of the Shares by the Underwriters (as to
which such counsel need express no opinion).
(xiv) Upon delivery of the Stockholder Additional
U.S. Shares against payment therefor as provided herein and assuming that none
of the several U.S. Underwriters has notice of any adverse claim to the
Stockholder Additional U.S. Shares, the several U.S. Underwriters will acquire
the Stockholder Additional U.S. Shares free of any adverse claim.
In rendering such opinion, such counsel may rely: (A) as to matters
involving certain general legal matters involving the Company and its
subsidiaries, to the extent specified in such opinion, upon an opinion or
opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of the Vice President and General Counsel of the Company, familiar
with such matters; (B) as to matters involving the application of laws other
than the laws of the United States and jurisdictions in which they are
admitted, to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' Counsel) of other counsel reasonably
acceptable to Underwriters' Counsel, familiar with the applicable laws; and (C)
as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and certificates or other written
statements of officers of departments of various jurisdictions having custody
of documents respecting the corporate existence or good standing of the Company
and its subsidiaries, provided that copies of any such statements or
certificates shall be delivered to Underwriters' Counsel. The opinion of such
counsel for the Company shall state that the opinion of any such other counsel
is in form satisfactory to such counsel and, in their opinion, you and they are
justified in relying thereon.
(c) All proceedings taken in connection with the sale of
the Firm U.S. Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to you and to Underwriters' Counsel, and the
U.S. Underwriters shall have received from said Underwriters' Counsel a
favorable opinion, dated as of the Closing Date with respect to the issuance
and sale of the U.S. Shares, the Registration Statement and the Prospectus and
such other related matters as you may reasonably require, and the Company and
the Selling Stockholder shall have furnished to Underwriters' Counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(d) At the Closing Date you shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of the
Company, dated the Closing Date to the effect that (i) the condition set forth
in subsection (a) of this Section 6 has been satisfied, (ii) as of the date
hereof and as of the Closing Date the representations and warranties of the
Company set forth in Section 1 hereof are accurate, (iii) as of the Closing
Date the obligations of the Company to be performed hereunder on or prior
thereto have been duly performed and (iv) subsequent to the respective dates as
of which information is given in the Registration Statement and the Prospectus,
the Company and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, and there has
not been any material adverse change, or any development involving a material
adverse change, in the business prospects, properties,
17
<PAGE> 18
operations, condition (financial or otherwise), or results of operations of the
Company and its subsidiaries taken as a whole, except in each case as described
in or contemplated by the Prospectus.
(e) At the time this Agreement is executed and at the
Closing Date, you shall have received a letter, from Price Waterhouse LLP,
independent public accountants for the Company, dated, respectively, as of the
date of this Agreement and as of the Closing Date addressed to the U.S.
Underwriters and in form and substance satisfactory to you, to the effect that:
(i) they are independent certified public accountants with respect to the
Company within the meaning of the Act and the Regulations and stating that the
answer to Item 10 of the Registration Statement is correct insofar as it
relates to them; (ii) stating that, in their opinion, the financial statements
and schedules of the Company incorporated by reference in the Registration
Statement and the Prospectus and covered by their opinion therein comply as to
form in all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the applicable published rules and regulations
of the Commission thereunder; (iii) on the basis of procedures consisting of a
reading of the latest available unaudited interim consolidated financial
statements of the Company, and its subsidiaries, a reading of the minutes of
meetings and consents of the stockholders and boards of directors of the
Company and its subsidiaries and the committees of such boards subsequent to
January 31, 1996, inquiries of officers and other employees of the Company and
its subsidiaries who have responsibility for financial and accounting matters
of the Company and its subsidiaries with respect to transactions and events
subsequent to January 31, 1996 and other specified procedures and inquiries to
a date not more than five days prior to the date of such letter, nothing has
come to their attention that would cause them to believe that: (A) the
unaudited consolidated financial statements and schedules of the Company
presented in the Registration Statement and the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements of
the Act and, if applicable, the Exchange Act and the applicable published rules
and regulations of the Commission thereunder or that such unaudited
consolidated financial statements are not fairly presented in conformity with
generally accepted accounting principles except to the extent certain footnote
disclosures have been omitted in accordance with applicable rules of the
Commission under the Exchange Act applied on a basis substantially consistent
with that of the audited consolidated financial statements incorporated by
reference in the Registration Statement and the Prospectus; (B) with respect to
the period subsequent to January 31, 1996, there were, as of the date of the
most recent available monthly consolidated financial statements of the Company
and its subsidiaries, if any, and as of a specified date not more than five
days prior to the date of such letter, any changes in the capital stock or
long-term indebtedness of the Company or any decrease in the net current assets
or stockholders' equity of the Company, in each case as compared with the
amounts shown in the most recent balance sheet presented in the Registration
Statement and the Prospectus, except for changes or decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur
or which are set forth in such letter; or (C) that during the period from
January 31, 1996 to the date of the most recent available monthly consolidated
financial statements of the Company and its subsidiaries, if any, and to a
specified date not more than five days prior to the date of such letter, there
was any decrease, as compared with the corresponding period in the prior fiscal
year, in total revenues, or total or per share net income, except for decreases
which the Registration Statement and the Prospectus disclose have occurred or
may occur or which are set forth in such letter; and (iv) stating that they
have compared specific dollar amounts, numbers of shares, percentages of
revenues and earnings, and other financial information pertaining to the
Company and its subsidiaries set forth in the Registration Statement and
18
<PAGE> 19
the Prospectus, which have been specified by you prior to the date of this
Agreement, to the extent that such amounts, numbers, percentages, and
information may be derived from the general accounting and financial records of
the Company and its subsidiaries or from schedules furnished by the Company,
and excluding any questions requiring an interpretation by legal counsel, with
the results obtained from the application of specified readings, inquiries, and
other appropriate procedures specified by you set forth in such letter, and
found them to be in agreement.
(f) Prior to the Closing Date the Company shall have
furnished to you such further information, certificates and documents as you
may reasonably request.
(g) At the Closing Date, the Shares shall have been
approved for quotation on the Nasdaq National Market.
(h) The NASD, upon review of the terms of the
underwriting arrangements for the public offering of the Shares, shall have
raised no objections thereto.
(i) At the Additional Closing Date, you shall have
received a certificate of the Selling Stockholder, dated the Additional Closing
Date to the effect that as of the date hereof and as of the Additional Closing
Date, the representations and warranties of the Selling Stockholder set forth
in Section 1 hereof are accurate, and (ii) as of the Additional Closing Date
the obligations of the Selling Stockholder to be performed hereunder on or
prior thereto have been performed.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the U.S. Underwriters hereunder may
be cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the U.S. Underwriters to purchase the Additional Shares may be
cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing, or by
telephone, telex or telegraph, confirmed in writing.
7. INDEMNIFICATION.
(a) The Company and the Selling Stockholder agree to
indemnify and hold harmless each U.S. Underwriter and each person, if any, who
controls any U.S. Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, against any and all losses, liabilities,
claims, damages and expenses whatsoever as incurred (including but limited to
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims,
19
<PAGE> 20
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Shares, as
originally filed or any amendment thereof, or any related preliminary
prospectus or the Prospectus, or in any supplement thereto or amendment
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that neither the
Company nor the Selling Stockholder will be liable in any such case to the
extent but only to the extent that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any U.S. Underwriter through you expressly for use therein. This
indemnity agreement will be in addition to any liability which the Company and
the Selling Stockholder may otherwise have including under this Agreement.
(b) Each U.S. Underwriter severally, and not jointly,
agrees to indemnify and hold harmless the Company, each of the directors of the
Company, each of the officers of the Company who shall have signed the
Registration Statement, and each other person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, against any losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), jointly or several,
to which they or any of them may become subject under the Act, the Exchange Act
or otherwise, insofar as such losses, liabilities, claims, damages or expenses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement for the registration of the Shares, as originally filed
or any amendment thereof, or any related preliminary prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any U.S. Underwriter
through you expressly for use therein; provided, however, that in no case shall
any U.S. Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the U.S. Shares purchased by such U.S.
Underwriter hereunder. This indemnity will be in addition to any liability
which any U.S. Underwriter may otherwise have including under this Agreement.
The Company acknowledges that the statements set forth in the last paragraph of
the cover page and in the fourth, sixth, seventh and eighth paragraphs under
the caption "Underwriting" in the Prospectus constitute the only information
furnished in writing by or on behalf of any U.S. Underwriter expressly for use
in the registration statement relating to the Shares as originally filed or in
any amendment thereof, any related preliminary prospectus or the Prospectus or
in any amendment thereof or supplement thereto, as the case may be.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect
20
<PAGE> 21
thereof is to be made against the indemnifying party under such subsection,
notify each party against whom indemnification is to be sought in writing of
the commencement thereof (but the failure so to notify an indemnifying party
shall not relieve it from any liability which it may have under this Section
7). In case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent it may elect
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of such action, (ii)
the indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are
different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party
or parties), in any of which events such fees and expenses shall be borne by
the indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement
of any claim or action effected without its written consent; provided, however,
that such consent was not unreasonably withheld.
8. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company, the
Selling Stockholder and the U.S. Underwriters shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company any contribution received by the Company from persons, other than the
U.S. Underwriters, who may also be liable for contribution, including persons
who control the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company) as incurred to which the Company and
one or more of the U.S. Underwriters may be subject, in such proportions as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder, on the one hand, and the U.S. Underwriters, on the other
hand, from the offering of the U.S. Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Selling Stockholder, on the one hand, and the U.S. Underwriters, on the other
hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Stockholder, on the one hand, and the U.S. Underwriters, on the
other hand, shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting discounts
21
<PAGE> 22
and commissions but before deducting expenses) received by the Company and the
Selling Stockholder and (y) the underwriting discounts and commissions received
by the U.S. Underwriters, respectively, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault of the Company and the
Selling Stockholder, on the one hand, and of the U.S. Underwriters, on the
other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company, the Selling Stockholder or the U.S. Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Selling Stockholder and
the U.S. Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the U.S. Underwriters were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
Section 8, (i) in no case shall any U.S. Underwriter be liable or responsible
for any amount in excess of the underwriting discount applicable to the U.S.
Shares purchased by such U.S. Underwriter hereunder, and (ii) no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Notwithstanding the provisions of this
Section 8 and the preceding sentence, no U.S. Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the U.S. Shares underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages that such U.S. Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. For purposes of this Section 8,
each person, if any, who controls a U.S. Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act shall have the same
rights to contribution as such U.S. Underwriter, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed
the Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) of this Section 8. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought
from any obligation it or they may have under this Section 8 or otherwise. No
party shall be liable for contribution with respect to any action or claim
settled without its consent; provided, however, that such consent was not
unreasonably withheld.
9. DEFAULT BY U.S. UNDERWRITER.
(a) If any U.S. Underwriter or U.S. Underwriters shall
default in its or their obligation to purchase Firm U.S. Shares or Additional
Shares hereunder, and if the Firm U.S. Shares or Additional Shares with respect
to which such default relates do not (after giving effect to arrangements, if
any, made by you pursuant to subsection (b) below) exceed in the aggregate 10%
of the number of Firm U.S. Shares or Additional Shares, to which the default
relates shall be purchased by the non-defaulting U.S. Underwriters in
proportion to the respective proportions which the numbers
22
<PAGE> 23
of Firm U.S. Shares set forth opposite their respective names in Schedule I
hereto bear to the aggregate number of Firm U.S. Shares set forth opposite the
names of the non-defaulting U.S. Underwriters.
(b) In the event that such default relates to more than
10% of the Firm U.S. Shares or Additional Shares, as the case may be, you may
in your discretion arrange for yourself or for another party or parties
(including any non-defaulting U.S. Underwriter or U.S. Underwriters who so
agree) to purchase such Firm U.S. Shares or Additional Shares, as the case may
be, to which such default relates on the terms contained herein. In the event
that within 5 calendar days after such a default you do not arrange for the
purchase of the Firm U.S. Shares or Additional Shares, as the case may be, to
which such default relates as provided in this Section 9, this Agreement or, in
the case of a default with respect to the Additional Shares, the obligations of
the U.S. Underwriters to purchase and of the Company to sell the Additional
Shares shall thereupon terminate, without liability on the part of the Company
and the Selling Stockholder with respect thereto (except in each case as
provided in Section 5, 7(a) and 8 hereof) or the U.S. Underwriters, but
nothing in this Agreement shall relieve a defaulting U.S. Underwriter or U.S.
Underwriters of its or their liability, if any, to the other U.S. Underwriters
and the Company or the Selling Stockholder for damages occasioned by its or
their default hereunder.
(c) In the event that the Firm U.S. Shares or Additional
Shares to which the default relates are to be purchased by the non-defaulting
U.S. Underwriters, or are to be purchased by another party or parties as
aforesaid, you or the Company shall have the right to postpone the Closing Date
or Additional Closing Date, as the case may be, for a period, not exceeding
five business days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment or supplement to the Registration Statement or the Prospectus which,
in the opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include any
party substituted under this Section 9 with like effect as if it had originally
been a party to this Agreement with respect to such Firm U.S. Shares and
Additional Shares.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations and warranties, covenants and agreements of the
U.S.Underwriters, the Selling Stockholder and the Company contained in this
Agreement, including the agreements contained in Section 5, the indemnity
agreements contained in Section 7 and the contribution agreements contained in
Section 8, shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any U.S. Underwriter or any
controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof, or by the Selling
Stockholder, and shall survive delivery of and payment for the U.S. Shares to
and by the U.S. Underwriters. The representations contained in Section 1 and
the agreements contained in Sections 5, 7, 8 and 11(d) hereof shall survive the
termination of this Agreement, including termination pursuant to Section 9 or
11 hereof.
23
<PAGE> 24
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective, upon the later
of when (i) you and the Company shall have received notification of the
effectiveness of the Registration Statement or (ii) the execution of this
Agreement. If either the initial public offering price or the purchase price
per Share has not been agreed upon prior to 5:00 P.M., New York time, on the
fifth full business day after the Registration Statement shall have become
effective, this Agreement shall thereupon terminate without liability to the
Company, the Selling Stockholder or the U.S. Underwriters except as herein
expressly provided. Until this Agreement becomes effective as aforesaid, it
may be terminated by the Company by notifying you or by you notifying the
Company. Notwithstanding the foregoing, the provisions of this Section 11 and
of Sections 1, 5, 7 and 8 hereof shall at all times be in full force and
effect.
(b) You shall have the right to terminate this Agreement
at any time prior to the Closing Date or the obligations of the U.S.
Underwriters to purchase the Additonal Shares at any time prior to the
Additional Closing Date, as the case may be, if: (A) any domestic or
international event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, the market for the
Company's securities or securities in general; or (B) if trading on the New
York or American Stock Exchanges shall have been suspended, or minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been required, on the New York or American Stock
Exchanges by the New York or American Stock Exchanges or by order of the
Commission or any other governmental authority having jurisdiction; or (C) if a
banking moratorium has been declared by a state or federal authority or if any
new restriction materially adversely affecting the distribution of the Firm
U.S. Shares or the Additional Shares, as the case may be, shall have become
effective; or (D) (i) if the United States becomes engaged in hostilities or
there is an escalation of hostilities involving the United States or there is a
declaration of a national emergency or war by the United States or (ii) if
there shall have been such change in political, financial or economic
conditions if the effect of any such event in (i) or (ii) as in your judgment
makes it impracticable or inadvisable to proceed with the offering, sale and
delivery of the Firm U.S. Shares or the Additional Shares, as the case may be,
on the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any
of the provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if
the sale of the U.S. Shares provided for herein is not consummated because any
condition to the obligations of the U.S. Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof,
the Company will, subject to demand by you, reimburse the U.S. Underwriters for
all out-of-pocket expenses (including the fees and expenses of their counsel),
incurred by the U.S. Underwriters in connection herewith.
12. NOTICES. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to
any U.S. Underwriter, shall be mailed, delivered,
24
<PAGE> 25
or telexed or telegraphed and confirmed in writing, to such U.S. Underwriter
c/o Bear, Stearns & Co. Inc., 245 Park Avenue, New York, N.Y. 10167, Attention:
Gal Israely (and a copy thereof shall be sent in the same manner to
Underwriters' Counsel, 191 Peachtree Street, N.E., Atlanta, Georgia, Attention:
G. William Speer, Esq.); if sent to the Company, shall be mailed, delivered, or
telegraphed and confirmed in writing to the Company, 5350 Tech Data Drive,
Clearwater, Florida 34620, Attention:Jeffery P. Howells (and a copy thereof
shall be sent in the same manner to Schifino & Fleischer, P.A., One Tampa City
Center, Suite 2700, 207 N. Franklin Street, Tampa, Florida 33602, Attention:
Frank N. Fleischer, Esq.)
13. PARTIES. This Agreement shall insure solely to the benefit
of, and shall be binding upon, the U.S. Underwriters and the Company and the
controlling persons, directors, officers, employees and agents referred to in
Section 7 and 8, and their respective successors and assigns, and the Selling
Stockholder and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this
Agreement or any provision herein contained. The term "successors and assigns"
shall not include a purchaser, in its capacity as such, of U.S. Shares from any
of the U.S. Underwriters.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, but without
regard to principles of conflicts of law.
25
<PAGE> 26
If the foregoing correctly sets forth the understanding between you
and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
TECH DATA CORPORATION
By:
-------------------------------------
Jeffery P. Howells
Senior Vice President of Finance
and Chief Financial Officer
The Selling Stockholder
By:
------------------------------------
Attorney-in-Fact
Accepted as of the date first above written
BEAR, STEARNS & CO. INC.
THE ROBINSON-HUMPHREY COMPANY, INC.
ROBERT W. BAIRD & CO. INCORPORATED
By: BEAR, STEARNS & CO. INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
On behalf of themselves and the other
U.S. Underwriters named in Schedule I hereto.
26
<PAGE> 27
SCHEDULE I
<TABLE>
<CAPTION>
Number of Firm U.S.
Name of U.S. Underwriter Shares to be Purchased
- ------------------------ ----------------------
<S> <C>
Bear, Stearns & Co. Inc.
The Robinson-Humphrey Company, Inc.
Robert W. Baird & Co. Incorporated
Total. . . . . .
---------
4,800,000
=========
</TABLE>
27
<PAGE> 28
SCHEDULE II
<TABLE>
<CAPTION>
Jurisdiction of Incorporation
Name of Subsidiary or Organization
- ------------------ -------------------------------
<S> <C>
* Tech Data Canada Canada
* Tech Data France I, Inc. Florida
* Tech Data France II, Inc. Florida
* Tech Data France, SNC France
* Tech Data Finance, Inc. California
Tech Data Education, Inc. Florida
Tech Data Latin America, Inc. Florida
Tech Data Brazil, Ltda. Brazil
TD Consignment, Inc. Florida
Tech Data Pacific, Inc. Florida
Buyer's Resource, Inc. California
Tech Data International, Inc. Barbados
</TABLE>
__________________________________
* Denotes a material subsidiary.
28
<PAGE> 1
EXHIBIT 1-B
1,200,000 Shares of Common Stock
TECH DATA CORPORATION
INTERNATIONAL UNDERWRITING AGREEMENT
July ___, 1996
BEAR, STEARNS INTERNATIONAL LIMITED
THE ROBINSON-HUMPHREY COMPANY, INC.
ROBERT W. BAIRD & CO. INCORPORATED
as Lead Managers of the
several Managers named in
Schedule I attached hereto
c/o Bear, Stearns International Limited
One Canada Square
London E14 FAD, England
Dear Sirs:
Tech Data Corporation, a corporation organized and existing under the
laws of Florida (the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several managers named in Schedule I
hereto (the "Managers") an aggregate of 1,200,000 shares (the "Firm
International Shares") of its common stock, par value $.0015 per share (the
"Common Stock"), and, for the sole purpose of covering over-allotments in
connection with the sale of the Firm International Shares, at the option of the
Managers, up to an additional 100,000 shares (the "Company Additional
International Shares") of Common Stock, and Steven A. Raymund (the "Selling
Stockholder") proposes to sell, for the sole purpose of covering
over-allotments in connection with the sale of Firm International Shares, up to
80,000 shares (the "Stockholder Additional International Shares") of Common
Stock. The Firm International Shares and any Company Additional International
Shares or Stockholder Additional International Shares purchased by the
Managers are referred to herein as the "International Shares." The Company
Additional International Shares and the Stockholder Additional International
Shares are referred to herein as the "Additional Shares." The International
Shares are more fully described in the Registration Statement referred to
below.
It is understood that the Company and the Selling Stockholder are
concurrently entering into an agreement dated the date hereof (the "U.S.
Underwriting Agreement") pursuant to which the Company proposes, subject to the
terms and conditions stated therein, to issue and sell an aggregate of
4,800,000 shares of Common Stock (the "Firm U.S. Shares") through arrangements
with certain
<PAGE> 2
underwriters inside the United States and Canada (the "U.S. Underwriters") for
whom Bear, Stearns & Co. Inc., The Robinson-Humphrey Company, Inc. and Robert
W. Baird & Co. Incorporated are acting as representatives and, for the sole
purpose of covering over-allotments in connection with the sale of the Firm
U.S. Shares, at the option of the U.S. Underwriters, up to an additional
400,000 shares (the "Company Additional U.S. Shares") of Common Stock, and the
Selling Stockholder proposes to sell, for the sole purpose of covering
over-allotments in connection with the sale of the Firm U.S. Shares, up to
320,000 shares (the "Stockholder Additional U.S. Shares") of Common Stock. The
Firm U.S. Shares and any Company Additional U.S. Shares or Stockholder
Additional U.S. Shares purchased by the U.S. Underwriters are referred to
herein as the "U.S. Shares." It is understood that the Company and the
Selling Stockholder are not obligated to sell, and the Managers are not
obligated to purchase, any Firm International Shares unless all of the Firm
U.S. Shares are contemporaneously obligated to be purchased by the U.S.
Underwriters.
It is also understood and agreed to by all the parties that the U.S.
Underwriters have entered into an agreement with the Managers (the "Agreement
between U.S. Underwriters and Managers") contemplating the coordination of
certain transactions between the U.S. Underwriters and the Managers and that,
pursuant thereto and subject to the conditions set forth therein, the U.S.
Underwriters may (i) purchase from the Managers a portion of the International
Shares to be sold to the Managers pursuant to this Agreement or (ii) sell to
the Managers a portion of the U.S. Shares to be sold to the U.S. Underwriters
pursuant to the U.S. Underwriting Agreement. The Company also understands
that any such purchases and sales between the U.S. Underwriters and the
Managers shall be governed by the Agreement between U.S. Underwriters and
Managers and shall not be governed by the terms of this Agreement.
The U.S. Underwriters and the Managers are collectively referred to
herein as the "Underwriters," the Firm U.S. Shares and the Firm International
Shares are collectively referred to herein as the "Firm Shares," and the U.S.
Shares and the International Shares are collectively referred to herein as the
"Shares."
1. (a) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to, and agrees with, the Managers that:
(i) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement, and may have
filed an amendment or amendments thereto, on Form S-3 (No. 333- ), for
the registration of the Shares under the Securities Act of 1933, as amended
(the "Act"). Such registration statement, including the prospectus, financial
statements and schedules, exhibits and all other documents filed as a part
thereof, as amended at the time of effectiveness of the registration statement,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434 of the Rules
and Regulations of the Commission under the Act (the "Regulations"), is herein
called the "Registration Statement" and the prospectus, in the form first filed
with the Commission pursuant to Rule 424(b) of the Regulations or filed as part
of the Registration Statement at the time of effectiveness if no Rule 424(b) or
Rule 434 filing is required, is herein called the "Prospectus." The term
"preliminary prospectus" as used herein means a preliminary prospectus as
described in Rule 430 of
2
<PAGE> 3
the Regulations. Any reference herein to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), on or before the effective date of the Registration
Statement, the date of such preliminary prospectus or the date of the
Prospectus, as the case may be, and any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to and
include (A) the filing of any document under the Exchange Act after the
effective date of the Registration Statement, (B) the date of such preliminary
prospectus or the date of the Prospectus, as the case may be, which is
incorporated therein by reference and (C) any such document so filed.
(ii) At the time of the effectiveness of the
Registration Statement or the effectiveness of any post-effective amendment to
the Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b) or Rule 434 of the Regulations, when any
supplement to or amendment of the Prospectus is filed with the Commission, when
any document filed under the Exchange Act is filed and at the Closing Date and
the Additional Closing Date (as hereinafter respectively defined), if any, the
Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Act and the Regulations and the Exchange Act and
the respective rules and regulations thereunder and does not or will not
contain an untrue statement of a material fact and does not or will not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein (A) in the case of the Registration Statement, not
misleading and (B) in the case of the Prospectus, in light of the circumstances
under which they were made, not misleading. When any related preliminary
prospectus was first filed with the Commission (whether filed as part of the
registration statement for the registration of the Shares or any amendment
thereto or pursuant to Rule 424(a) of the Regulations) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
preliminary prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Regulations and the Exchange Act and the respective rules and regulations
thereunder and did not contain an untrue statement of a material fact and did
not omit to state any material fact required to be stated therein or necessary
in order to make the statements therein in light of the circumstances under
which they were made not misleading. No representation and warranty is made in
this subsection (ii), however, with respect to any information contained in or
omitted from the Registration Statement or the Prospectus or any related
preliminary prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Manager through you as herein stated expressly
for use in connection with the preparation thereof. If Rule 434 is used, the
Company will comply with the requirements of Rule 434.
(iii) Price Waterhouse LLP, who have certified the
financial statements and supporting schedules included in the Registration
Statement, are independent public accountants as required by the Act and the
Regulations.
(iv) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus,
except as set forth in the Registration Statement and the Prospectus, there has
been no material adverse change or any development involving a prospective
3
<PAGE> 4
material adverse change in the business, prospects, properties, operations,
condition (financial or other) or results of operations of the Company and its
subsidiaries taken as a whole, whether or not arising from transactions in the
ordinary course of business, and since the date of the latest balance sheet
presented in the Registration Statement and the Prospectus, neither the Company
nor any of its subsidiaries has incurred or undertaken any liabilities or
obligations, direct or contingent, which are material to the Company and its
subsidiaries taken as a whole, except for liabilities or obligations which are
reflected in the Registration Statement and the Prospectus.
(v) This Agreement and the transactions
contemplated herein have been duly and validly authorized by the Company and
this Agreement has been duly and validly executed and delivered by the Company
and constitutes the valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, subject, as to enforcement,
to applicable bankruptcy, insolvency, reorganization and moratorium laws and
other laws relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles and, with respect to this
Agreement, except as the enforceability of rights to indemnity and contribution
under this Agreement may be limited under applicable securities laws or the
public policy underlying such laws.
(vi) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby do
not and will not (A) conflict with or result in a breach of any of the terms
and provisions of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any agreement,
instrument, franchise, license or permit to which the Company or any of its
subsidiaries is a party or by which any of such corporations or their
respective properties or assets may be bound or (B) violate or conflict with
any provision of the certificate of incorporation or by-laws of the Company or
any of its subsidiaries or any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or assets. No consent, approval, authorization,
order, registration, filing, qualification, license or permit of or with any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, including the issuance, sale and delivery of the
International Shares to be issued, sold and delivered by the Company hereunder,
except the registration under the Act of the Shares and such consents,
approvals, authorizations, orders, registrations, filings, qualifications,
licenses and permits as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Shares by the
Underwriters.
(vii) All of the outstanding shares of Common Stock
are duly and validly authorized and issued, fully paid and nonassessable and
were not issued and are not now in violation of or subject to any preemptive
rights. The Firm International Shares and the Company Additional International
Shares, when issued, delivered and sold in accordance with this Agreement, will
be, and the Stockholder Additional International Shares are, duly and validly
issued and outstanding, fully paid and nonassessable, and will not have been or
were not issued in violation of or be subject to any
4
<PAGE> 5
preemptive rights. The Company had, at April 30, 1996, an authorized and
outstanding capitalization as set forth in the Registration Statement and the
Prospectus. The Common Stock and the Shares conform to the descriptions
thereof contained in the Registration Statement and the Prospectus.
(viii) The Company has no subsidiaries other than
those listed on Schedule II hereto. Schedule II denotes those subsidiaries of
the Company which are deemed by management of the Company to be material
subsidiaries of the Company. Each of the Company and its subsidiaries has been
duly organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation. Each of the Company and its
subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in
good standing which will not in the aggregate have a material adverse effect on
the Company and its subsidiaries taken as a whole. Each of the Company and its
subsidiaries has all requisite power and authority, and all necessary consents,
approvals, authorizations, orders, registrations, qualifications, licenses and
permits of and from all public, regulatory or governmental agencies and bodies,
to own, lease and operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and the Prospectus,
and no such consent, approval, authorization, order, registration,
qualification, license or permit contains a materially burdensome restriction
not adequately disclosed in the Registration Statement and the Prospectus.
(ix) Except as described in the Prospectus, there
is no litigation or governmental proceeding to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any of its
subsidiaries is subject or which is pending or, to the knowledge of the
Company, contemplated against the Company or any of its subsidiaries which
might result in any material adverse change or any development involving a
material adverse change in the business, prospects, properties, operations,
condition (financial or other) or results of operations of the Company and its
subsidiaries taken as a whole or which is required to be disclosed in the
Registration Statement and the Prospectus.
(x) The Company has not taken and will not take,
directly or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares.
(xi) The financial statements, including the notes
thereto, and supporting schedules included in the Registration Statement and
the Prospectus present fairly the financial position of the Company as of the
dates indicated and the results of its operations for the periods specified;
except as otherwise stated in the Registration Statement, said financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and the supporting schedules included
in or incorporated by reference into the Registration Statement present fairly
the information required to be stated therein.
(xii) Except as described in the Prospectus, no
holder of securities of the Company has any rights to the registration of
securities of the Company because of the filing of the
5
<PAGE> 6
Registration Statement or otherwise in connection with the sale of the
International Shares contemplated hereby.
(xiii) The Company is not, and upon consummation of
the transactions contemplated hereby will not be, subject to registration as an
"investment company" under the Investment Company Act of 1940.
(xiv) The conditions for use of Form S-3, as set
forth in the General Instructions thereto, have been satisfied.
(xv) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material
respects with the requirements of the Exchange Act and the rules and
regulations of the Commission under the Exchange Act, and, when read together
with the other information in the Prospectus, at the time the Registration
Statement and any amendments thereto become effective and at the Closing Date,
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(xvi) To the Company's knowledge, neither the
Company nor any of its subsidiaries nor any employee or agent of the Company or
any subsidiary has made any payment of funds of the Company or any subsidiary
or received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(xvii) The Company and each of its subsidiaries have
filed all tax returns required to be filed, which returns are complete and
correct in all material respects, and neither the Company nor any of its
subsidiaries is in default in the payment of any taxes which were payable
pursuant to said returns or any assessments with respect thereto.
(xviii) The Company has complied with all provisions
of Florida Statutes, Section 517.075, relating to issuers doing business with
Cuba.
(xix) Each of the Company and its subsidiaries has
fulfilled its obligations, if any, under the minimum funding standards of
Section 302 of the United States Employee Retirement Income Security Act of
1974 ("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in ERISA and such regulations and
published interpretations) in which employees of the Company and its
subsidiaries are eligible to participate and each such plan is in compliance in
all material respects with the presently applicable provisions of ERISA and
such regulations and published interpretations, and has not incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan under Title IV
of ERISA.
6
<PAGE> 7
(xx) The Shares have been and continue to be
designated for inclusion on the Nasdaq National Market, and the Company is in
compliance with the maintenance and designation criteria applicable to Nasdaq
National Market issuers.
(b) REPRESENTATIONS AND WARRANTIES OF THE SELLING
STOCKHOLDER. The Selling Stockholder, represents and warrants to, and agrees
with, the Managers and the Company that:
(i) The Selling Stockholder has full right, power
and authority to enter into this Agreement and the Custody Agreement and Power
of Attorney (as hereinafter defined) and to sell, assign, transfer and deliver
to the Managers the Stockholder Additional International Shares to be sold by
the Selling Stockholder hereunder.
(ii) The Selling Stockholder has duly executed and
delivered this Agreement and the Custody Agreement and Power of Attorney and
each constitutes the valid and binding agreement of the Selling Stockholder
enforceable against the Selling Stockholder in accordance with its terms,
subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to or affecting the
enforcement of creditors' rights generally and to general equitable principles
and, with respect to this Agreement, except as the enforceability of rights to
indemnity and contribution under this Agreement may be limited under applicable
securities laws or the public policy underlying such laws.
(iii) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with, any
court or governmental agency or body is required for the sale of the
Stockholder Additional International Shares to be sold by the Selling
Stockholder or the consummation of the transactions contemplated by this
Agreement or the Custody Agreement and Power of Attorney, except the
registration of the Shares under the Act (which, if the Registration Statement
is not effective as of the time of execution hereof, shall be obtained as
provided in this Agreement) and such as may be required under state securities
or blue sky laws in connection with the offer, sale and distribution of the
Shares by the Underwriters.
(iv) The sale of the Stockholder Additional
International Shares to be sold by such Selling Stockholder and the performance
of this Agreement and the Custody Agreement and Power of Attorney and the
consummation of the transactions herein and therein contemplated will not
conflict with, or (with or without the giving of notice or the passage of time
or both) result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Selling
Stockholder is a party or to which any of such Selling Stockholder's properties
or assets is subject, nor will such action conflict with or violate any
statute, rule or regulation or any order, judgment or decree of any court or
governmental agency or body having jurisdiction over the Selling Stockholder or
any of the Selling Stockholder's properties or assets.
(v) The Selling Stockholder has, and immediately
prior to the Additional Closing Date, the Selling Stockholder will have, good
and valid title to the Stockholder Additional International Shares to be sold
by such Selling Stockholder hereunder, free and clear of all liens, security
interests, pledges, charges, encumbrances, defects, stockholders' agreements,
voting trusts,
7
<PAGE> 8
equities or claims of any nature whatsoever; and, upon delivery of the
Stockholder Additional International Shares against payment therefor as
provided herein, good and valid title to the Stockholder Additional
International Shares , free and clear of all liens, security interests,
pledges, charges, encumbrances, defects, stockholders' agreements, voting
trusts, equities or claims of any nature whatsoever, will pass to the several
Managers.
(vi) The Selling Stockholder has not taken,
directly or indirectly, any action designed to cause or result in, or which
constitutes or might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock of the Company to
facilitate the sale or resale of the Shares.
(vii) At the time of the effectiveness of the
Registration Statement or the effectiveness of any post-effective amendment to
the Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b) or Rule 434 of the Regulations, when any
supplement to or amendment of the Prospectus is filed with the Commission, when
any document filed under the Exchange Act is filed and at the Closing Date and
the Additional Closing Date (as hereinafter respectively defined), if any, the
Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Act and the Regulations and the Exchange Act and
the respective rules and regulations thereunder and does not or will not
contain an untrue statement of a material fact and does not or will not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein (A) in the case of the Registration Statement, not
misleading and (B) in the case of the Prospectus, in light of the circumstances
under which they were made, not misleading. When any related preliminary
prospectus was first filed with the Commission (whether filed as part of the
registration statement for the registration of the Shares or any amendment
thereto or pursuant to Rule 424(a) of the Regulations) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
preliminary prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Regulations and the Exchange Act and the respective rules and regulations
thereunder and did not contain an untrue statement of a material fact and did
not omit to state any material fact required to be stated therein or necessary
in order to make the statements therein in light of the circumstances under
which they were made not misleading. No representation and warranty is made in
this subsection (vii), however, with respect to any information contained in or
omitted from the Registration Statement or the Prospectus or any related
preliminary prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Manager through you as herein stated expressly
for use in connection with the preparation thereof.
In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Internal Revenue Code of 1986, as amended,
with respect to the transactions herein contemplated, the Selling Stockholder
agrees to deliver to you prior to or at the Additional Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
The Selling Stockholder represents and warrants that certificates in
negotiable form representing all of the Stockholder Additional International
Shares to be sold by the Selling
8
<PAGE> 9
Stockholder hereunder have been placed in custody with Schifino & Fleischer,
P.A. (the "Custodian") for delivery under this Agreement pursuant to a Custody
Agreement and Power of Attorney (the "Custody Agreement and Power of Attorney")
executed by the Selling Stockholder appointing _____________________ and
__________________ as agents and attorneys-in-fact (the "Attorneys-in-Fact")
with authority to execute and deliver this Agreement on behalf of the Selling
Stockholder, to determine the purchase price to be paid by the Managers to the
Selling Stockholder as provided in Section 2 hereof, to authorize the delivery
of the Stockholder Additional International Shares to be sold by the Selling
Stockholder hereunder and otherwise to act on behalf of the Selling Stockholder
in connection with the transactions contemplated by this Agreement and the
Custody Agreement and Power of Attorney.
The Selling Stockholder specifically agrees that the Stockholder
Additional International Shares represented by the certificates held in custody
for such Selling Stockholder under the Custody Agreement and Power of Attorney
are subject to the interests of the Managers hereunder, and that the
arrangements made by the Selling Stockholder for such custody, and the
appointment by the Selling Stockholder of the Attorneys-in-Fact by the Custody
Agreement and Power of Attorney, are irrevocable. The Selling Stockholder
specifically agrees that the obligations of the Selling Stockholder hereunder
shall not be terminated by operation of law, whether by his death or incapacity
or by the occurrence of any other event.
2. PURCHASE, SALE AND DELIVERY OF THE INTERNATIONAL SHARES.
(a) On the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the Managers and the
Managers, severally and not jointly, agree to purchase from the Company, at a
purchase price per share of $_______, the number of Firm International Shares
set forth opposite the respective names of the Managers in Schedule I hereto
plus any additional number of International Shares which such Manager may
become obligated to purchase pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of
certificates for, the International Shares shall be made at the office of
Schifino & Fleischer, P.A., One Tampa City Center, Suite 2700, 207 N. Franklin
Street, Tampa, Florida 33602, or at such other place as shall be agreed upon by
you and the Company, at 10:00 A.M. on the third or fourth business day (as
permitted under Rule 15c6-1 under the Exchange Act) (unless postponed in
accordance with the provisions of Section 9 hereof) following the date of the
effectiveness of the Registration Statement (or, if the Company has elected to
rely upon Rule 430A of the Regulations, the third or fourth business day (as
permitted under Rule 15c6-1 under the Exchange Act) after the determination of
the initial public offering price of the International Shares), or such other
time not later than ten business days after such date as shall be agreed upon
by you and the Company (such time and date of payment and delivery being herein
called the "Closing Date"). Payment shall be made to the Company by wire
transfer in same day funds, against delivery to you for the respective accounts
of the Managers of certificates for the International Shares to be purchased by
them. Certificates for the International Shares shall be registered in such
name or names and in such authorized denominations as you may request in
writing at least two full
9
<PAGE> 10
business days prior to the Closing Date. The Company will permit you to
examine and package such certificates for delivery at least one full business
day prior to the Closing Date.
(c) In addition, the Company hereby grants to the
Managers the option to purchase up to 100,000 Company Additional International
Shares and the Selling Stockholder hereby grants to the Managers the option to
purchase up to 80,000 Stockholder Additional International Shares at the same
purchase price per share to be paid by the Managers to the Company for the Firm
International Shares as set forth in this Section 2, for the sole purpose of
covering over-allotments in the sale of Firm International Shares by the
Managers. This option may be exercised at any time, in whole or in part, on or
before the thirtieth day following the date of the Prospectus, by written
notice by you to the Company and the Selling Stockholder. It is understood and
agreed, however, that such option shall be exercised first to purchase
Stockholder Additional International Shares until all Stockholder Additional
International Shares are purchased and then to purchase Company Additional
International Shares. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised and the date and
time, as reasonably determined by you, when the Additional Shares are to be
delivered (such date and time being herein sometimes referred to as the
"Additional Closing Date"); provided, however, that the Additional Closing Date
shall not be earlier than the Closing Date or earlier than the second full
business day after the date on which the option shall have been exercised nor
later than the eighth full business day after the date on which the option
shall have been exercised (unless such time and date are postponed in
accordance with the provisions of Section 9 hereof). Certificates for the
Additional Shares shall be registered in such name or names and in such
authorized denominations as you may request in writing at least two full
business days prior to the Additional Closing Date. The Company will permit you
to examine and package such certificates for delivery at least one full
business day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Manager shall be
the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm International Shares set forth
opposite the name of such Manager in Schedule I hereto (or such number
increased as set forth in Section 9 hereof) bears to 1,200,000, subject,
however, to such adjustments to eliminate any fractional shares as you in your
sole discretion shall make.
Payment for the Additional Shares shall be made by wire transfer in
same day funds at the offices of Schifino & Fleischer, P.A. at the address
specified in Section 2(b) hereof, or such other location as may be mutually
acceptable, upon delivery of the certificates for the Additional Shares to you
for the respective accounts of the Managers.
3. OFFERING. Upon your authorization of the release of the Firm
International Shares, the Managers propose to offer the International Shares
for sale to the public upon the terms set forth in the Prospectus.
4. (a) COVENANTS OF THE COMPANY. The Company covenants and
agrees with the Managers that:
(i) If the Registration Statement has not yet
been declared effective the Company will use its best efforts to cause the
Registration Statement and any amendments thereto to
10
<PAGE> 11
become effective as promptly as possible, and if Rule 430A is used or the
filing of the Prospectus is otherwise required under Rule 424(b) or Rule 434,
the Company will file the Prospectus (properly completed if Rule 430A has been
used) pursuant to Rule 424(b) or Rule 434 within the prescribed time period and
will provide evidence satisfactory to you of such timely filing. If the
Company elects to rely on Rule 434, the Company will prepare and file a term
sheet that complies with the requirements of Rule 434.
The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when the Registration Statement and
any amendments thereto become effective, (ii) of any request by the Commission
for any amendment of or supplement to the Registration Statement or the
Prospectus or for any additional information, (iii) of the mailing or the
delivery to the Commission for filing of any amendment of or supplement to the
Registration Statement or the Prospectus, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of the initiation, or the
threatening, of any proceedings therefor, (v) of the receipt of any comments
from the Commission, and (vi) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for sale in
any jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time,
the Company will make every reasonable effort to prevent the issuance of any
such stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration
Statement or any amendment of or supplement to the Prospectus (including the
prospectus required to be filed pursuant to Rule 424(b)or Rule 434) that
differs from the prospectus on file at the time of the effectiveness of the
Registration Statement before or after the effective date of the Registration
Statement or file any document under the Exchange Act if such document would be
deemed to be incorporated by reference into the Prospectus to which you shall
reasonably object in writing after being timely furnished in advance a copy
thereof.
(ii) If at any time when a prospectus relating to
the International Shares is required to be delivered under the Act any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would, in the judgment of the Managers or the Company include an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it shall
be necessary at any time to amend or supplement the Prospectus or Registration
Statement to comply with the Act or the Regulations, or to file under the
Exchange Act so as to comply therewith any document incorporated by reference
in the Registration Statement or the Prospectus or in any amendment thereof or
supplement thereto, the Company will notify you promptly and prepare and file
with the Commission an appropriate amendment or supplement (in form and
substance satisfactory to you) which will correct such statement or omission or
which will effect such compliance and will use its best efforts to have any
amendment to the Registration Statement declared effective as soon as possible.
(iii) The Company will promptly deliver to you one
signed copy of the Registration Statement, including exhibits and all documents
incorporated by reference therein and all amendments thereto, and the Company
will promptly deliver to each of the Managers such number of copies of any
preliminary prospectus, the Prospectus, the Registration Statement, all
amendments
11
<PAGE> 12
of and supplements to such documents, if any, and all documents incorporated by
reference in the Registration Statement and Prospectus or any amendment thereof
or supplement thereto, without exhibits as you may reasonably request.
(iv) The Company will endeavor in good faith, in
cooperation with you, at or prior to the time of effectiveness of the
Registration Statement, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of such
jurisdictions as you may designate and to maintain such qualification in effect
for so long as required for the distribution thereof; except that in no event
shall the Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process.
(v) The Company will make generally available
(within the meaning of Section 11(a) of the Act) to its security holders and to
you as soon as practicable, but not later than 45 days after the end of its
fiscal quarter in which the first anniversary date of the effective date of the
Registration Statement occurs, an earning statement (in form complying with the
provisions of Rule 158 of the Regulations) covering a period of at least twelve
consecutive months beginning after the effective date of the Registration
Statement.
(vi) During the period of 90 days from the date of
the Prospectus, the Company will not, without your prior written consent,
issue, sell, offer or agree to sell, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, any Common Stock (or any
securities convertible into, exercisable for or exchangeable for Common Stock),
other than the Company's sale of Shares hereunder and under the U.S.
Underwriting Agreement and the Company's issuance of Common Stock upon the
exercise of presently outstanding stock options and the sale of Common Stock
under and pursuant to the Company's 1995 Employee Stock Purchase Plan.
(vii) During a period of three years from the
effective date of the Registration Statement, the Company will furnish to you
copies of (i) all reports to its stockholders; and (ii) all reports, financial
statements and proxy or information statements filed by the Company with the
Commission or any national securities exchange.
(viii) The Company will apply the proceeds received
by it from the sale of Shares as set forth under "Use of Proceeds" in the
Prospectus.
(ix) The Company will use its best efforts to
cause the Shares to be listed for inclusion on the Nasdaq National Market.
(x) The Company, during the period when the
Prospectus is required to be delivered under the Act or the Exchange Act, will
file all documents required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within the time periods required by the
Exchange Act and the rules and regulations thereunder.
(b) COVENANTS OF THE SELLING STOCKHOLDER. The Selling
Stockholder covenants and agrees with the Managers that:
12
<PAGE> 13
(i) During the period of 90 days after the date
of the Prospectus, the Selling Stockholder will not, without your prior written
consent, sell, offer, agree to sell, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, any Common Stock or securities
convertible into, exercisable for or exchangeable for, Common Stock, except as
provided in Section 2 hereby and except as provided in the U.S. Underwriting
Agreement.
(ii) The Selling Stockholder will not take,
directly or indirectly, any action designed to cause or to result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of shares of Common Stock of the
Company to facilitate the sale or resale of the Shares.
5. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of the obligations of the Company and the Selling Stockholder
hereunder, including, without limitation, those in connection with (i)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereof (including all
exhibits thereto), any preliminary prospectus, the Prospectus and any
amendments or supplements thereto (including, without limitation, fees and
expenses of the Company's accountants and counsel), the underwriting documents
(including this Agreement, the U.S. Underwriting Agreement, the Master
Agreement Among Underwriters, the Master Selling Agreement and the Agreement
between Managers and Managers) and all other documents related to the public
offering of the Shares (including those supplied to the Underwriters in
quantities as hereinabove stated), (ii) the issuance, transfer and delivery of
the Shares to the Underwriters, including any transfer or other taxes payable
thereon, (iii) the qualification of the Shares under state or foreign
securities or Blue Sky laws, including the costs of printing and mailing a
preliminary and final "Blue Sky Survey" and the fees of counsel for the
Underwriters and such counsel's disbursements in relation thereto, (iv)
quotation of the Shares on the Nasdaq National Market, (v) filing fees of the
Commission and the National Association of Securities Dealers, Inc. (the
"NASD"); (vi) the cost of printing certificates representing the Shares, (vii)
the cost and charges of any transfer agent or registrar, and (viii) travel and
lodging expenses of employees of the Company who participate in the advertising
and marketing of the Shares.
6. CONDITIONS OF MANAGERS' OBLIGATIONS. The obligations of the
Managers to purchase and pay for the Firm International Shares and the
Additional Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholder
herein contained, as of the date hereof and as of the Closing Date (for
purposes of this Section 6 "Closing Date" shall refer to the Closing Date for
the Firm International Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Powell, Goldstein, Frazer
& Murphy ("Underwriters' Counsel") pursuant to this Section 6 of any
misstatement or omission, to the performance by the Company of its obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 P.M., New York time, on the date of this
Agreement or at such later time and date as shall have been consented to in
writing by you; if the Company shall have elected to rely upon Rule 430A or
Rule 434
13
<PAGE> 14
of the Regulations, the Prospectus shall have been filed with the Commission in
a timely fashion in accordance with Section 4(a) hereof; and, at or prior to
the Closing Date no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof shall have been issued and no
proceedings therefor shall have been initiated or threatened by the Commission.
(b) At the Closing Date you shall have received the
opinion of Schifino & Fleischer, P.A., counsel for the Company and the Selling
Stockholder, dated the Closing Date addressed to the Managers and in form and
substance satisfactory to Underwriters' Counsel, to the effect that:
(i) Each of the Company and its material
subsidiaries has been duly organized and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation. Each of
the Company and its material subsidiaries is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the character
or location of its properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary, except for those
failures to be so qualified or in good standing which will not in the aggregate
have a material adverse effect on the Company and its material subsidiaries
taken as a whole. Each of the Company and its material subsidiaries has all
requisite corporate authority to own, lease and license its respective
properties and conduct its business as now being conducted and as described in
the Registration Statement and the Prospectus. All of the issued and
outstanding capital stock of each material subsidiary of the Company has been
duly and validly issued and is fully paid and nonassessable and was not issued
in violation of preemptive rights and, is owned directly or indirectly by the
Company, free and clear of any lien, encumbrance, claim, security interest,
restriction on transfer, shareholders' agreement, voting trust or other defect
of title whatsoever.
(ii) The Company has an authorized capital stock
as set forth in the Registration Statement and the Prospectus. All of the
outstanding shares of Common Stock are duly and validly authorized and issued,
are fully paid and nonassessable and were not issued in violation of or subject
to any preemptive rights. The International Shares to be delivered on the
Closing Date have been duly and validly authorized and, when delivered by the
Company in accordance with this Agreement, will be duly and validly issued,
fully paid and nonassessable and will not have been issued in violation of or
subject to any preemptive rights. The Common Stock and the Shares conform to
the descriptions thereof contained in the Registration Statement and the
Prospectus.
(iii) The Common Stock currently outstanding is
quoted, and the International Shares to be sold under this Agreement to the
Managers are duly authorized for quotation, on the Nasdaq National Market.
(iv) This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(v) To the best of such counsel's knowledge,
there is no litigation or governmental or other action, suit, proceeding or
investigation before any court or before or by any public, regulatory or
governmental agency or body pending or threatened against, or involving the
properties or business of, the Company or any of its material subsidiaries,
which is of a character
14
<PAGE> 15
required to be disclosed in the Registration Statement and the Prospectus which
has not been properly disclosed therein.
(vi) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby by
the Company do not and will not (A) conflict with or result in a breach of any
of the terms and provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default) under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its material subsidiaries pursuant
to, any agreement, instrument, franchise, license or permit known to such
counsel to which the Company or any of its material subsidiaries is a party or
by which any of such corporations or their respective properties or assets may
be bound or (B) violate or conflict with any provision of the certificate of
incorporation or by-laws of the Company or any of its material subsidiaries,
or, to the best knowledge of such counsel, any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or any of its
material subsidiaries or any of their respective properties or assets. No
consent, approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any public, governmental, or
regulatory agency or body having jurisdiction over the Company or any of its
material subsidiaries or any of their respective properties or assets is
required for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except for (1) such as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters (as to which such
counsel need express no opinion) and (2) such as have been made or obtained
under the Act.
(vii) The Registration Statement and the Prospectus
and any amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial data included or incorporated by
reference therein, as to which no opinion need be rendered) comply as to form
in all material respects with the requirements of the Act and the Regulations.
The documents filed under the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus or any amendment thereof or
supplement thereto (other than the financial statements and schedules and other
financial data included or incorporated by reference therein, as to which no
opinion need be rendered) when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material respects
with the Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder; and such counsel has no reason to believe that
any of such documents, when such documents became effective or were so filed,
as they case may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material fact, or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or, in the case of other documents
which were filed under the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not misleading.
(viii) Insofar as statements in the Prospectus
purport to summarize the status of litigation or the provisions of laws, rules,
regulations, orders, judgments, decrees, contracts, agreements, instruments,
leases, or licenses, such statements are correct in all material respects.
15
<PAGE> 16
(ix) The Registration Statement is effective under
the Act, and, to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement or any post-effective amendment
thereof has been issued and no proceedings therefor have been initiated or
threatened by the Commission and all filings required by Rule 424(b) of the
Regulations have been made.
(x) In addition, such opinion shall also contain
a statement that such counsel has participated in conferences with officers and
representatives of the Company, representatives of the independent public
accountants for the Company and the Underwriters at which the contents and the
Prospectus and related matters were discussed and, no facts have come to the
attention of such counsel which would lead such counsel to believe that either
the Registration Statement at the time it became effective (including the
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) or Rule 434, if applicable), or any
amendment thereof made prior to the Closing Date as of the date of such
amendment, contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as of its date (or any
amendment thereof or supplement thereto made prior to the Closing Date as of
the date of such amendment or supplement) and as of the Closing Date contained
or contains an untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no belief or
opinion with respect to the financial statements and schedules and other
financial data included or incorporated by reference therein).
(xi) A Custody Agreement and Power of Attorney has
been duly executed and delivered by the Selling Stockholder, which is
enforceable against the Selling Stockholder in accordance with its terms
subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to or affecting the
enforcement of creditors' rights generally and to general equitable principles.
(xii) This Agreement has been duly executed and
delivered by or on behalf of the Selling Stockholder; the sale of the
Stockholder Additional International Shares to be sold by the Selling
Stockholder and the performance of this Agreement and the Custody Agreement and
Power of Attorney and the consummation of the transactions herein and therein
contemplated will not conflict with, or (with or without the giving of notice
or the passage of time or both) result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
known to such counsel to which the Selling Stockholder is a party or to which
any of the Selling Stockholder's properties or assets is subject, nor will such
action conflict with or violate any statute, rule or regulation or any order,
judgment or decree known to such counsel of any court or governmental agency or
body having jurisdiction over the Selling Stockholder or any of the Selling
Stockholder's properties or assets.
(xiii) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with, any
court or governmental agency or body is required for the issue and sale of the
Stockholder Additional International Shares being sold by such Selling
Stockholder or the consummation of the transactions contemplated by this
Agreement or the Custody
16
<PAGE> 17
Agreement and Power of Attorney, except the registration of the Shares under
the Act and such as may be required under state securities or blue sky laws in
connection with the offer, sale and distribution of the Shares by the
Underwriters (as to which such counsel need express no opinion).
(xiv) Upon delivery of the Stockholder Additional
International Shares against payment therefor as provided herein and assuming
that none of the several Managers has notice of any adverse claim to the
Stockholder Additional International Shares, the several Managers will acquire
the Stockholder Additional International Shares free of any adverse claim.
In rendering such opinion, such counsel may rely: (A) as to matters
involving certain general legal matters involving the Company and its
subsidiaries, to the extent specified in such opinion, upon an opinion or
opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of the Vice President and General Counsel of the Company, familiar
with such matters; (B) as to matters involving the application of laws other
than the laws of the United States and jurisdictions in which they are
admitted, to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' Counsel) of other counsel reasonably
acceptable to Underwriters' Counsel, familiar with the applicable laws; and (C)
as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and certificates or other written
statements of officers of departments of various jurisdictions having custody
of documents respecting the corporate existence or good standing of the Company
and its subsidiaries, provided that copies of any such statements or
certificates shall be delivered to Underwriters' Counsel. The opinion of such
counsel for the Company shall state that the opinion of any such other counsel
is in form satisfactory to such counsel and, in their opinion, you and they are
justified in relying thereon.
(c) All proceedings taken in connection with the sale of
the Firm International Shares and the Additional Shares as herein contemplated
shall be satisfactory in form and substance to you and to Underwriters'
Counsel, and the Managers shall have received from said Underwriters' Counsel
a favorable opinion, dated as of the Closing Date with respect to the issuance
and sale of the International Shares, the Registration Statement and the
Prospectus and such other related matters as you may reasonably require, and
the Company and the Selling Stockholder shall have furnished to Underwriters'
Counsel such documents as they request for the purpose of enabling them to pass
upon such matters.
(d) At the Closing Date you shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of the
Company, dated the Closing Date to the effect that (i) the condition set forth
in subsection (a) of this Section 6 has been satisfied, (ii) as of the date
hereof and as of the Closing Date the representations and warranties of the
Company set forth in Section 1 hereof are accurate, (iii) as of the Closing
Date the obligations of the Company to be performed hereunder on or prior
thereto have been duly performed and (iv) subsequent to the respective dates as
of which information is given in the Registration Statement and the Prospectus,
the Company and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, and there has
not been any material adverse change, or any development involving a material
adverse change, in the business prospects, properties,
17
<PAGE> 18
operations, condition (financial or otherwise), or results of operations of the
Company and its subsidiaries taken as a whole, except in each case as described
in or contemplated by the Prospectus.
(e) At the time this Agreement is executed and at the
Closing Date, you shall have received a letter, from Price Waterhouse LLP,
independent public accountants for the Company, dated, respectively, as of the
date of this Agreement and as of the Closing Date addressed to the Managers and
in form and substance satisfactory to you, to the effect that: (i) they are
independent certified public accountants with respect to the Company within the
meaning of the Act and the Regulations and stating that the answer to Item 10
of the Registration Statement is correct insofar as it relates to them; (ii)
stating that, in their opinion, the financial statements and schedules of the
Company incorporated by reference in the Registration Statement and the
Prospectus and covered by their opinion therein comply as to form in all
material respects with the applicable accounting requirements of the Act and
the Exchange Act and the applicable published rules and regulations of the
Commission thereunder; (iii) on the basis of procedures consisting of a reading
of the latest available unaudited interim consolidated financial statements of
the Company, and its subsidiaries, a reading of the minutes of meetings and
consents of the stockholders and boards of directors of the Company and its
subsidiaries and the committees of such boards subsequent to January 31, 1996,
inquiries of officers and other employees of the Company and its subsidiaries
who have responsibility for financial and accounting matters of the Company and
its subsidiaries with respect to transactions and events subsequent to January
31, 1996 and other specified procedures and inquiries to a date not more than
five days prior to the date of such letter, nothing has come to their attention
that would cause them to believe that: (A) the unaudited consolidated financial
statements and schedules of the Company presented in the Registration Statement
and the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and, if applicable, the Exchange
Act and the applicable published rules and regulations of the Commission
thereunder or that such unaudited consolidated financial statements are not
fairly presented in conformity with generally accepted accounting principles
except to the extent certain footnote disclosures have been omitted in
accordance with applicable rules of the Commission under the Exchange Act
applied on a basis substantially consistent with that of the audited
consolidated financial statements incorporated by reference in the Registration
Statement and the Prospectus; (B) with respect to the period subsequent to
January 31, 1996, there were, as of the date of the most recent available
monthly consolidated financial statements of the Company and its subsidiaries,
if any, and as of a specified date not more than five days prior to the date of
such letter, any changes in the capital stock or long-term indebtedness of the
Company or any decrease in the net current assets or stockholders' equity of
the Company, in each case as compared with the amounts shown in the most recent
balance sheet presented in the Registration Statement and the Prospectus,
except for changes or decreases which the Registration Statement and the
Prospectus disclose have occurred or may occur or which are set forth in such
letter; or (C) that during the period from January 31, 1996 to the date of the
most recent available monthly consolidated financial statements of the Company
and its subsidiaries, if any, and to a specified date not more than five days
prior to the date of such letter, there was any decrease, as compared with the
corresponding period in the prior fiscal year, in total revenues, or total or
per share net income, except for decreases which the Registration Statement and
the Prospectus disclose have occurred or may occur or which are set forth in
such letter; and (iv) stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and earnings, and other financial
information pertaining to the Company and its subsidiaries set forth in the
Registration Statement and
18
<PAGE> 19
the Prospectus, which have been specified by you prior to the date of this
Agreement, to the extent that such amounts, numbers, percentages, and
information may be derived from the general accounting and financial records of
the Company and its subsidiaries or from schedules furnished by the Company,
and excluding any questions requiring an interpretation by legal counsel, with
the results obtained from the application of specified readings, inquiries, and
other appropriate procedures specified by you set forth in such letter, and
found them to be in agreement.
(f) Prior to the Closing Date the Company shall have
furnished to you such further information, certificates and documents as you
may reasonably request.
(g) At the Closing Date, the Shares shall have been
approved for quotation on the Nasdaq National Market.
(h) The NASD, upon review of the terms of the
underwriting arrangements for the public offering of the Shares, shall have
raised no objections thereto.
(i) At the Additional Closing Date, you shall have
received a certificate of the Selling Stockholder, dated the Additional Closing
Date to the effect that (i) as of the date hereof and as of the Additional
Closing Date, the representations and warranties of the Selling Stockholder set
forth in Section 1 hereof are accurate, and (ii) as of the Additional Closing
Date the obligations of the Selling Stockholder to be performed hereunder on or
prior thereto have been performed.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Managers hereunder may be
cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the Managers to purchase the Additional Shares may be cancelled
by you at, or at any time prior to, the Additional Closing Date. Notice of
such cancellation shall be given to the Company in writing, or by telephone,
telex or telegraph, confirmed in writing.
7. INDEMNIFICATION.
(a) The Company and the Selling Stockholder agree to
indemnify and hold harmless each Manager and each person, if any, who controls
any Manager within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any and all losses, liabilities, claims, damages and
expenses whatsoever as incurred (including but limited to attorneys' fees and
any and all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any
19
<PAGE> 20
supplement thereto or amendment thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that neither the Company nor the Selling Stockholder will be
liable in any such case to the extent but only to the extent that any such
loss, liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Manager through you
expressly for use therein. This indemnity agreement will be in addition to any
liability which the Company and the Selling Stockholder may otherwise have
including under this Agreement.
(b) Each Manager severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, and each other person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against
any losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), jointly or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Shares, as originally filed or any
amendment thereof, or any related preliminary prospectus or the Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that any such
loss, liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Manager through you
expressly for use therein; provided, however, that in no case shall any Manager
be liable or responsible for any amount in excess of the underwriting discount
applicable to the International Shares purchased by such Manager hereunder.
This indemnity will be in addition to any liability which any Manager may
otherwise have including under this Agreement. The Company acknowledges that
the statements set forth in the last paragraph of the cover page and in the
fourth, sixth, seventh and eighth paragraphs under the caption "Underwriting"
in the Prospectus constitute the only information furnished in writing by or on
behalf of any Manager expressly for use in the registration statement relating
to the Shares as originally filed or in any amendment thereof, any related
preliminary prospectus or the Prospectus or in any amendment thereof or
supplement thereto, as the case may be.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7). In case any such action is
brought against any indemnified party, and it notifies an indemnifying
20
<PAGE> 21
party of the commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent it may elect by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from
such indemnified party, to assume the defense thereof with counsel satisfactory
to such indemnified party. Notwithstanding the foregoing, the indemnified
party or parties shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by one of the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying parties shall
not have employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to
those available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. Anything in
this subsection to the contrary notwithstanding, an indemnifying party shall
not be liable for any settlement of any claim or action effected without its
written consent; provided, however, that such consent was not unreasonably
withheld.
8. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company, the
Selling Stockholder and the Managers shall contribute to the aggregate losses,
claims, damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company any contribution received by the Company from persons, other than the
Managers, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company) as incurred to which the Company and
one or more of the Managers may be subject, in such proportions as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder, on the one hand, and the Managers, on the other hand, from
the offering of the International Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Selling Stockholder, on the one hand, and the Managers, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Stockholder, on the one hand, and the Managers, on the other hand,
shall be deemed to be in the same proportion as (x) the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and the Selling Stockholder and (y) the
underwriting discounts and commissions received by the Managers, respectively,
in each case as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company and the Selling Stockholder, on the one hand,
and of the Managers, on the other hand, shall be determined by reference to,
among other
21
<PAGE> 22
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholder or the Managers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Selling Stockholder and the Managers agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Managers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 8, (i) in no case shall any Manager be liable or responsible
for any amount in excess of the underwriting discount applicable to the
International Shares purchased by such Manager hereunder, and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. Notwithstanding the provisions of this
Section 8 and the preceding sentence, no Manager shall be required to
contribute any amount in excess of the amount by which the total price at which
the International Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Manager has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. For purposes of this Section 8,
each person, if any, who controls a Manager within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act shall have the same rights to
contribution as such Manager, and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 8. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim for contribution may be made against
another party or parties, notify each party or parties from whom contribution
may be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 8 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent was not unreasonably
withheld.
9. DEFAULT BY MANAGER.
(a) If any Manager or Managers shall default in its or
their obligation to purchase Firm International Shares or Additional Shares
hereunder, and if the Firm International Shares or Additional Shares with
respect to which such default relates do not (after giving effect to
arrangements, if any, made by you pursuant to subsection (b) below) exceed in
the aggregate 10% of the number of Firm International Shares or Additional
Shares, to which the default relates shall be purchased by the non-defaulting
Managers in proportion to the respective proportions which the numbers of Firm
International Shares set forth opposite their respective names in Schedule I
hereto bear to the aggregate number of Firm International Shares set forth
opposite the names of the non-defaulting Managers.
(b) In the event that such default relates to more than
10% of the Firm International Shares or Additional Shares, as the case may be,
you may in your discretion arrange for yourself or
22
<PAGE> 23
for another party or parties (including any non-defaulting Manager or Managers
who so agree) to purchase such Firm International Shares or Additional Shares,
as the case may be, to which such default relates on the terms contained
herein. In the event that within 5 calendar days after such a default you do
not arrange for the purchase of the Firm International Shares or Additional
Shares, as the case may be, to which such default relates as provided in this
Section 9, this Agreement or, in the case of a default with respect to the
Additional Shares, the obligations of the Managers to purchase and of the
Company to sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company and the Selling Stockholder with respect
thereto (except in each case as provided in Section 5, 7(a) and 8 hereof) or
the Managers, but nothing in this Agreement shall relieve a defaulting Manager
or Managers of its or their liability, if any, to the other Managers and the
Company or the Selling Stockholder for damages occasioned by its or their
default hereunder.
(c) In the event that the Firm International Shares or
Additional Shares to which the default relates are to be purchased by the
non-defaulting Managers, or are to be purchased by another party or parties as
aforesaid, you or the Company shall have the right to postpone the Closing Date
or Additional Closing Date, as the case may be, for a period, not exceeding
five business days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment or supplement to the Registration Statement or the Prospectus which,
in the opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Manager" as used in this Agreement shall include any
party substituted under this Section 9 with like effect as if it had originally
been a party to this Agreement with respect to such Firm International Shares
and Additional Shares.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations and warranties, covenants and agreements of the Managers the
Selling Stockholder and the Company contained in this Agreement, including the
agreements contained in Section 5, the indemnity agreements contained in
Section 7 and the contribution agreements contained in Section 8, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Manager or any controlling person thereof or by or on
behalf of the Company, any of its officers and directors or any controlling
person thereof, or by the Selling Stockholders, and shall survive delivery of
and payment for the International Shares to and by the Managers. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8 and 11(d) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective, upon the later
of when (i) you and the Company shall have received notification of the
effectiveness of the Registration Statement or (ii) the execution of this
Agreement. If either the initial public offering price or the purchase price
per Share has not been agreed upon prior to 5:00 P.M., New York time, on the
fifth full business day after the Registration Statement shall have become
effective, this Agreement shall thereupon terminate without liability to the
Company, the Selling Stockholder or the Managers except as herein expressly
provided. Until this Agreement becomes effective as aforesaid, it may be
terminated by the Company by
23
<PAGE> 24
notifying you or by you notifying the Company. Notwithstanding the foregoing,
the provisions of this Section 11 and of Sections 1, 5, 7 and 8 hereof shall at
all times be in full force and effect.
(b) You shall have the right to terminate this Agreement
at any time prior to the Closing Date or the obligations of the Managers to
purchase the Additional Shares at any time prior to the Additional Closing
Date, as the case may be, if: (A) any domestic or international event or act or
occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, the market for the Company's securities or
securities in general; or (B) if trading on the New York or American Stock
Exchanges shall have been suspended, or minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required, on the New York or American Stock Exchanges by the New York or
American Stock Exchanges or by order of the Commission or any other
governmental authority having jurisdiction; or (C) if a banking moratorium has
been declared by a state or federal authority or if any new restriction
materially adversely affecting the distribution of the Firm International
Shares or the Additional Shares, as the case may be, shall have become
effective; or (D) (i) if the United States becomes engaged in hostilities or
there is an escalation of hostilities involving the United States or there is a
declaration of a national emergency or war by the United States or (ii) if
there shall have been such change in political, financial or economic
conditions if the effect of any such event in (i) or (ii) as in your judgment
makes it impracticable or inadvisable to proceed with the offering, sale and
delivery of the Firm International Shares or the Additional Shares, as the case
may be, on the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any
of the provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if
the sale of the International Shares provided for herein is not consummated
because any condition to the obligations of the Managers set forth herein is
not satisfied or because of any refusal, inability or failure on the part of
the Company to perform any agreement herein or comply with any provision
hereof, the Company will, subject to demand by you, reimburse the Managers for
all out-of-pocket expenses (including the fees and expenses of their counsel),
incurred by the Managers in connection herewith.
12. NOTICES. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and , if sent to
any Manager, shall be mailed, delivered, or telexed or telegraphed and
confirmed in writing, to such Manager c/o Bear, Stearns International Limited,
One Canada Square, London E14 5AD, England, Attention: Corporate Finance Dept.
(and a copy thereof shall be sent in the same manner to Bear, Stearns & Co.
Inc., 245 Park Avenue, New York, N.Y. 10167, Attention: Gal Israely, and to
Underwriters' Counsel, 191 Peachtree Street, N.E., Atlanta, Georgia, Attention:
G. William Speer, Esq.); if sent to the Company, shall be mailed, delivered, or
telegraphed and confirmed in writing to the Company, 5350 Tech Data Drive,
Clearwater, Florida 34620, Attention: Jeffery P. Howells (and a copy thereof
shall be sent in the same manner to Schifino & Fleischer, P.A., One Tampa City
Center, Suite 2700, 207 N. Franklin Street, Tampa, Florida 33602, Attention:
Frank N. Fleischer, Esq.)
24
<PAGE> 25
13. PARTIES. This Agreement shall insure solely to the benefit
of, and shall be binding upon, the Managers and the Company and the controlling
persons, directors, officers, employees and agents referred to in Section 7 and
8, and their respective successors and assigns, and the Selling Stockholder and
no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Agreement or
any provision herein contained. The term "successors and assigns" shall not
include a purchaser, in its capacity as such, of International Shares from any
of the Managers.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, but without
regard to principles of conflicts of law.
25
<PAGE> 26
If the foregoing correctly sets forth the understanding between you
and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
TECH DATA CORPORATION
By:
-------------------------------------
Jeffery P. Howells
Senior Vice President of Finance
and Chief Financial Officer
The Selling Stockholder
By:
------------------------------------
Attorney-in-Fact
Accepted as of the date first above written
BEAR, STEARNS INTERNATIONAL LIMITED
THE ROBINSON-HUMPHREY COMPANY, INC.
ROBERT W. BAIRD & CO. INCORPORATED
By: BEAR, STEARNS INTERNATIONAL LIMITED
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
On behalf of themselves and the other
Managers named in Schedule I hereto.
26
<PAGE> 27
SCHEDULE I
<TABLE>
<CAPTION>
Number of Firm International
Name of Managers Shares to be Purchased
- ----------------- ----------------------
<S> <C>
Bear, Stearns International Limited
The Robinson-Humphrey Company, Inc.
Robert W. Baird & Co. Incorporated
Total. . . . . .
---------
1,200,000
=========
</TABLE>
27
<PAGE> 28
SCHEDULE II
<TABLE>
<CAPTION>
Jurisdiction of Incorporation
Name of Subsidiary or Organization
- ------------------ -------------------------------
<S> <C>
*Tech Data Canada Canada
*Tech Data France I, Inc. Florida
*Tech Data France II, Inc. Florida
*Tech Data France, SNC France
*Tech Data Finance, Inc. California
Tech Data Education, Inc. Florida
Tech Data Latin America, Inc. Florida
T D Brazil, Ltda. Brazil
Tech Data Consignment, Inc. Florida
Tech Data Pacific, Inc. Florida
Buyer's Resource, Inc. California
Tech Data International, Inc. Barbados
</TABLE>
- -------------------------------
*Denotes a material subsidiary
28
<PAGE> 1
EXHIBIT 5
SCHIFINO & FLEISCHER, P.A.
ATTORNEYS AT LAW
WILLIAM J. SCHIFINO ONE TAMPA CITY CENTER
FRANK N. FLEISCHER SUITE 2700
BONNIE J. PINZEL 201 NORTH FRANKLIN STREET
CYNTHIA C. ELLIS TAMPA, FLORIDA 33602-5174
TELEPHONE (813) 223-1838
TELECOPIER (813) 223-3070
June 13, 1996
Tech Data Corporation
5350 Tech Data Drive
Clearwater, Florida 34620
Gentlemen:
The following opinion is furnished by us in connection with the proposed
issuance and sale by Tech Data Corporation, a Florida corporation (the
"Company"), of up to 6,000,000 shares of Common Stock, $.0015 par value,
covered by a Registration Statement filed with the Securities and Exchange
Commission on Form S-1 (the "Registration Statement").
We have examined and are familiar with the Certificate of Incorporation
and By-Laws, and amendments, thereto, of the Company and the proceedings of the
Board of Directors of the Company in connection with or with respect to the
proposed issuance and sale of the securities described herein, and we have
likewise examined such other records and documents and have made such
examination of law as we have deemed appropriate.
Based on such examination and our familiarity with such procedure, it
is our opinion that:
1. The Company is a duly incorporated and validly existing
corporation in good standing under the laws of the State of Florida with an
authorized capital stock of 100,226,500 shares, composed of 226,500 shares of
Preferred Stock having a par value of $.02 per share and 100,000,000 shares of
Common Stock having par value of $.0015 per share, of which 38,238,799 shares
of Common Stock and 226,500 shares of Preferred Stock have been duly authorized
and legally issued and are fully paid and non-assessable.
2. The issuance of an additional 6,000,000 shares of Common Stock by
the Company has been duly authorized and, at such time as the Registration
Statement becomes effective under the Securities Act of 1933, as amended, and
when such shares have been issued and sold as contemplated by the Registration
Statement and the Underwriting Agreements referred to therein, such shares will
be duly authorized, legally issued, fully paid, and non-assessable;
3. There are no restrictions upon the Company's surplus by reason of
the excess of the Preferred Stock's liquidation preference over its par value,
and no remedies will be available to holders of the Company's capital stock
before or after the payment of any dividend that would reduce surplus to an
amount less than the amount of such excess.
<PAGE> 2
June 13, 1996
Page 2
We hereby consent to this opinion being filed as an Exhibit to the
Registration Statement and we further consent to the use of our name in the
Registration Statement under the caption "Legal Opinions."
Very truly yours,
SCHIFINO & FLEISCHER, P.A.
/s/FRANK N. FLEISCHER
Frank N. Fleischer
For the Association
:lkm
