As filed with the Securities and Exchange Commission on November 12, 1997.
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------
MicroAge, Inc.
(Exact name of registrant as specified in its charter)
Delaware 86-0321346
(State or other jurisdiction (I.R.S.Employer
of incorporation or organization) Identification No.)
2400 South MicroAge Way
Tempe, Arizona 85282
(602) 804-2000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
----------------------------
James A. Domaz
Corporate Counsel
MicroAge, Inc.
2400 South MicroAge Way
Tempe, Arizona 85282
(602) 804-2000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
----------------------------
Copy to:
Matthew P. Feeney
Snell & Wilmer L.L.P.
One Arizona Center
Phoenix, Arizona 85004-0001
(602) 382-6239
----------------------------
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
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 number of the earlier effective
registration statement for the same offering: [ ] _________________________
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration 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
Proposed maximum
Amount maximum aggregate Amount of
Title of shares to be price per offering registration
to be registered Registered(1) share(2) price(2) fee
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,140,737 $23.125 $26,379,543 $7,994
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) In the event of a stock split, stock dividend, or similar transaction
involving the Company's Common Stock, in order to prevent dilution, the
number of shares registered shall be automatically increased to cover
the additional shares in accordance with Rule 416(a) under the
Securities Act.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based on the last reported sale price of the
Common Stock on November 7, 1997, as reported by the Nasdaq Stock
Market.
The Company hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Company 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 the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a)
may determine.
<PAGE>
SUBJECT TO COMPLETION, DATED NOVEMBER 12, 1997
PROSPECTUS
1,140,737 Shares
MicroAge, Inc.
Common Stock
This Prospectus relates to the offer and sale by Clark I. Buch,
Mitchell R. Roth, Barry D. Myerson, Arthur D. Myerson, Kevin J. McCarthy,
Leonard Boord, Francisco Victoria, and John Hassan ("Selling Stockholders") of
an aggregate of 1,140,737 shares of the Common Stock, $0.01 par value per share
(the "Common Stock"), of MicroAge, Inc., a Delaware corporation (the "Company").
The Company will not receive any portion of the proceeds from the sale of the
Common Stock offered hereby. All expenses of registration incurred in connection
with this offering are being borne by the Company. The brokerage and other
expenses of sale incurred by the Selling Stockholders will be borne by the
Selling Stockholders. See "Plan of Distribution" and "Selling Stockholders."
The Company's Common Stock is traded on the Nasdaq Stock Market under
the symbol "MICA." On November 7, 1997, the closing sale price for the Common
Stock, as reported by the Nasdaq Stock Market, was $23.125 per share.
----------------------------
SEE "RISK FACTORS" ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
----------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
November_____1997
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.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission"). The reports,
proxy statements, and other information filed by the Company with the Commission
may be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
its regional offices located at 7 World Trade Center, 13th Floor, New York, New
York 10048, and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a World Wide Web site on
the Internet (http://www.sec.gov) that contains reports, proxy and information
statements, and other information regarding registrants, such as the Company,
that file electronically with the Commission. In addition, the Company's Common
Stock is traded on the Nasdaq Stock Market. Reports, proxy statements, and other
information filed by the Company are also available for inspection at the
offices of the Nasdaq Stock Market, Reports Section, 1735 K Street, N.W.,
Washington, D.C. 20006.
This Prospectus constitutes a part of a registration statement on Form
S-3 (the "Registration Statement") that the Company has filed with the
Commission under the Securities Act of 1933, as amended (the "Securities Act").
As permitted by the rules and regulations of the Commission, this Prospectus
omits certain information contained in the Registration Statement and the
exhibits thereto and reference is hereby made to the Registration Statement and
related exhibits for further information with respect to the Company and the
Common Stock offered hereby. Statements contained in this Prospectus as to the
provisions of any document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission are not necessarily complete and, in each
instance, reference is made to the copy of such document as so filed. Each such
statement is qualified in its entirety by such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents have been filed by the Company with the
Commission and are hereby incorporated by reference in this Prospectus: (i) the
Annual Report of the Company on Form 10-K for the fiscal year ended November 3,
1996, (ii) the Quarterly Report of the Company on Form 10-Q for the fiscal
quarter ended February 2, 1997, (iii) the Quarterly Report of the Company on
Form 10-Q for the fiscal quarter ended May 4, 1997, and (iv) the Quarterly
Report of the Company on Form 10-Q for the fiscal quarter ended August 3, 1997.
All other documents and reports filed by the Company with the Commission
pursuant to Sections 13, 14, or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of this offering of the Common
Stock shall be deemed to be incorporated by reference in this Prospectus and to
be made a part hereof from their respective dates of filing.
2
<PAGE>
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 that 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 cause to be furnished without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all documents
incorporated herein by reference (not including the exhibits to such documents,
unless such exhibits are specifically incorporated by reference in the document
which this Prospectus incorporates). Requests should be directed to Investor
Relations, MicroAge, Inc., 2400 South MicroAge Way, Tempe, Arizona 85282;
telephone: (602) 366-2414.
RISK FACTORS
The purchase of the Common Stock offered hereby involves substantial
risk. The following matters, including those mentioned elsewhere, should be
considered carefully by a prospective investor in evaluating a purchase of the
Common Stock.
Intense Competition
The computer reseller industry is characterized by intense competition,
based primarily on product availability, price, speed of delivery, credit
availability, ability to tailor specific solutions to customer needs, quality
and breadth of product lines, service and post-sale support, and quality of
customer training. In addition, the Company faces competition in the recruitment
and retention of franchised and non-franchised resellers. The Company and its
reseller locations compete for sales with numerous other computer resellers,
including (i) master resellers; (ii) direct resellers; (iii) wholesalers
(resellers that do not sell to end-users); (iv) vendors that sell directly to
large purchasers; and (v) parties that implement other sales methods, such as
direct mail, computer "superstores," and mass merchandisers. There can be no
assurance that the Company will not lose market share, or that it will not be
forced in the future to reduce its prices in response to the actions of its
competitors and thereby experience a reduction in its gross margins.
Narrow Margins
The Company has experienced low operating and gross profit margins
caused by intense price competition within its industry. The Company has
partially offset the effect of the low margins by achieving increased revenue
and reduced operating expenses as a percentage of revenue; however, there can be
no assurance that the Company will maintain or increase revenue or further
reduce expenses (as a percentage of revenue) in the future. Future operating and
gross profit margins may be adversely affected by market pressures, the
introduction of new Company initiatives, changes in revenue mix, the Company's
utilization of early payment discount opportunities, vendor pricing actions, and
other competitive and economic pressures.
3
<PAGE>
Dependence on Supplier Incentive Funds
The Company receives funds from certain suppliers which are earned
through marketing programs or meeting purchasing, sales, or other objectives
established by the supplier. There can be no assurance that these programs will
be continued by the suppliers. A substantial reduction in the supplier funds
available to the Company would have a material adverse effect on the Company's
business, financial condition, and results of operations.
Product Supply; Dependence on Key Vendors
The computer reseller industry continues to experience product supply
shortages and customer order backlogs due to the inability of certain
manufacturers to supply certain products. In addition, certain vendors have
initiated new channels of distribution that increase competition for the
available product supply. There can be no assurance that vendors will be able to
maintain an adequate supply of products to fulfill all of the Company's customer
orders on a timely basis. Although the Company has not historically encountered
such conditions, the failure to obtain adequate product supplies, if competitors
were able to obtain them, could have a material adverse effect on the Company's
business, financial condition, and results of operations.
Three vendors of the Company each represented more than 10% of total
product sales for the fiscal year ended November 3, 1996. They were COMPAQ
Computer Corporation ("COMPAQ"), Hewlett-Packard Company ("Hewlett- Packard"),
and International Business Machines Corporation ("IBM"). In fiscal 1996, sales
of products from COMPAQ, Hewlett-Packard, and IBM represented 22%, 20%, and 14%,
respectively, of the Company's total product sales. During the 39 weeks ended
August 3, 1997, sales of products from COMPAQ, Hewlett-Packard, and IBM
represented 24%, 20%, and 14%, respectively, of the Company's total product
sales. During fiscal 1996 and the 39 weeks ended August 3, 1997, sales of these
three manufacturers' products represented approximately 56% and 58%,
respectively, of the Company's revenue from product sales.
The Company's agreements with these vendors generally are renewed
periodically and permit termination by the vendor without cause, generally upon
30 to 90 days' notice, depending on the vendor. In addition, the Company's
business is dependent upon price and related terms and product availability
provided by its key vendors. Although the Company considers its relationships
with COMPAQ, Hewlett-Packard, and IBM to be good, there can be no assurance that
these relationships will continue as presently in effect or that changes by one
or more of these key vendors in their volume discount schedules or other
marketing programs would not adversely affect the Company. Termination or
nonrenewal of the Company's agreements with COMPAQ, Hewlett-Packard, or IBM
would have a material adverse effect on the Company's business, financial
condition, and results of operations.
4
<PAGE>
Potential Fluctuations in Quarterly Results
The Company's operating results may vary significantly from quarter to
quarter depending on certain factors, including, but not limited to, demand for
the Company's information technology products and services; product
availability; competitive conditions; new product introductions; the amount of
supplier incentive funds received by the Company (see "Dependence on Supplier
Incentive Funds" above); changes in customer order patterns; and general
economic conditions. In particular, the Company's operating results are
sensitive to changes in the mix of product and service revenues, product
margins, inventory adjustments, and interest rates. Although the Company
attempts to control its expense levels, these levels are based, in part, on
anticipated revenues. Therefore, the Company may not be able to control spending
in a timely manner to compensate for any unexpected revenue shortfall. As a
result, quarterly period-to-period comparisons of the Company's financial
results are not necessarily meaningful and should not be relied upon as an
indication of future performance. In addition, although the Company's financial
performance has not exhibited significant seasonality in the past, the Company
and the computer industry in general tend to follow a sales pattern with peaks
occurring near the end of the calendar year, due primarily to special vendor
promotions and year-end business purchases.
Risk of Declines in Inventory Value
The Company's business is subject to the risk that the value of its
inventory will be adversely affected by price reductions by suppliers or by
technological changes affecting the usefulness or desirability of the products
comprising the inventory. It is the policy of most suppliers of the Company's
products to protect distributors such as the Company, who purchase directly from
such suppliers, from the loss in value of inventory due to technological change
or the supplier's price reductions. Under the terms of many of the Company's
distribution agreements, suppliers will credit the Company for inventory losses
resulting from the supplier's price reductions if the Company complies with
certain conditions. In addition, under many of the Company's agreements, the
Company has the right to return for credit or exchange for other products a
portion of the inventory items purchased, within a designated period of time.
Since the Company can return only a portion of its inventory, the Company could
be forced to liquidate nonreturnable aged inventory at prices below the
Company's cost. A supplier who elects to terminate a distribution agreement may
repurchase from the distributor the supplier's products carried in the
distributor's inventory. The industry practices discussed above are sometimes
not embodied in written agreements and do not protect the Company in all cases
from declines in inventory value. No assurance can be given that such practices
will continue, that unforeseen new product developments will not materially
adversely affect the Company, or that the Company will be able to successfully
manage its existing and future inventories. The Company establishes reserves for
estimated losses due to obsolete inventory in the normal course of business.
Historically, the Company has not experienced losses due to obsolete inventory
materially in excess of established inventory reserves. However, significant
declines in inventory value in excess of established inventory reserves could
have a material adverse affect on the Company's business, financial condition,
or results of operations.
5
<PAGE>
No Assurance of Successful Acquisitions or Investments
The Company has acquired or invested in, and intends to acquire or
invest in, local or regional resellers to expand the Company's service offerings
and its reach into certain geographic areas. As a result, the Company is
continually evaluating potential acquisition and investment opportunities, which
may be material in size and scope. Any acquisitions or investments by the
Company may result in potentially dilutive issuances of equity securities, the
incurrence of additional debt, and amortization of expenses related to goodwill
and intangible assets, all of which could adversely effect the Company's
profitability. Acquisitions involve numerous risks, such as the diversion of the
attention of the Company's management from other business concerns, the entrance
of the Company into markets in which it has had no or only limited experience,
the integration of the acquired companies' management information systems with
those of the Company, and the potential loss of key employees of the acquired
companies, all of which could have a material adverse effect on the Company's
business, financial condition, or results of operations.
Capital Intensive Nature of Business
The Company's business requires significant levels of capital to
finance accounts receivable and product inventory that is not financed by trade
creditors. The Company has financed its growth and cash needs to date primarily
through working capital financing facilities, bank credit lines, common stock
offerings, and cash generated from operations. The primary uses of cash have
been to fund increases in inventory and accounts receivable resulting from
increased sales. If the Company is successful in achieving continued revenue
growth, its working capital requirements will continue to increase.
The Company maintains three primary financing agreements (the
"Financing Agreements") with an aggregate borrowing capacity of $675 million.
The Financing Agreements expire in August 2000, but any of the Financing
Agreements may be terminated 90 days after either party gives the other party
notice of termination. At August 3, 1997, the Company had approximately $380
million outstanding under the Financing Agreements. Of the $675 million of
borrowing capacity represented by the Financing Agreements, $295 million was
unused as of August 3, 1997. Utilization of the unused $295 million is dependent
upon, among other things, the Company's collateral availability at the time the
funds would be needed.
Borrowings under the Financing Agreements are secured by substantially
all of the Company's assets, and the Financing Agreements contain certain
restrictive covenants, including working capital and tangible net worth
requirements and ratios of debt to tangible net worth and current assets to
current liabilities. At August 3, 1997, the Company was in compliance with these
covenants.
The unavailability of a significant portion of, or the loss of, the
Financing Agreements or trade credit from vendors would have a material adverse
effect on the Company's business, financial condition, and results of
operations. There can be no assurance that the Company will be able to borrow
adequate amounts on terms acceptable to the Company.
6
<PAGE>
Dependence on Information Systems
The Company depends on a variety of information systems for its
operations, particularly its centralized information processing system which
supports, among other things, inventory management, order processing, shipping,
receiving, and accounting. Although the Company has not in the past experienced
significant failures or down time of its centralized information processing
system or any of its other information systems, any such failure or significant
down time could prevent the Company from taking customer orders, printing
product pick-lists, and/or shipping product and could prevent customers from
accessing price and product availability information from the Company. In such
event, the Company could be at a severe disadvantage in determining appropriate
product pricing or the adequacy of inventory levels or in reacting to rapidly
changing market conditions. A failure of the Company's information systems which
impacts any of these functions could have a material adverse effect on the
Company's business, financial condition, or results of operations. In addition,
the inability of the Company to attract and retain the highly-skilled personnel
required to implement, maintain, and operate its centralized information
processing system and the Company's other information systems could have a
material adverse effect on the Company's business, financial condition, or
results of operations. In order to react to changing market conditions, the
Company must continuously expand and improve its centralized information
processing system and its other information systems. There can be no assurance
that the Company's information systems will not fail, that the Company will be
able to attract and retain qualified personnel necessary for the operation of
such systems, or that the Company will be able to expand and improve its
information systems.
Dependence on Independent Shipping Companies
The Company relies almost entirely on arrangements with independent
shipping companies for the delivery of its products. Products are shipped from
suppliers to the Company through a variety of independent common carriers.
Currently, United Parcel Service ("UPS") delivers a majority of the Company's
products to its reseller customers. The termination of the Company's
arrangements with UPS or other independent shipping companies, or the failure or
inability of one or more of these independent shipping companies to deliver
products from suppliers to the Company, or products from the Company to its
reseller customers or their end-user customers could have a material adverse
effect on the Company's business, financial condition, or results of operations.
For instance, an employee work stoppage or slow-down at one or more of these
independent shipping companies could materially impair that shipping company's
ability to perform the services required by the Company. The Company anticipates
that the recent UPS strike could impact its fourth quarter results by
approximately $.03 to $.05 per share. There can be no assurance that the
services of any of these independent shipping companies will continue to be
available to the Company on terms as favorable as those currently available or
that these companies will choose or be able to perform their required shipping
services for the Company.
7
<PAGE>
Rapid Technological Change
The Company's industry is subject to rapid technological change, new
and enhanced product specification requirements, and evolving industry
standards. These changes may cause inventory and stock to decline substantially
in value or to become obsolete. In addition, suppliers may give the Company
limited or no access to new products being introduced. Although the Company
believes that it has adequate price protection and other arrangements with its
suppliers to avoid bearing the costs associated with these changes, no assurance
can be given that future technological or other changes will not have a material
adverse effect on the Company's business, financial condition, or results of
operations. See "Risk of Declines in Inventory Value."
Possible Volatility of Stock Price
The market price of the Common Stock could be subject to wide
fluctuations in response to quarterly variations in the Company's results of
operations, changes in earnings estimates by research analysts, conditions in
the computer industry, or general market or economic conditions, among other
factors. In addition, in recent years the stock market has experienced
significant price and volume fluctuations. These fluctuations have had a
substantial effect on the market prices of many technology companies, often
unrelated to the operating performance of the specific companies. Such market
fluctuations could materially adversely affect the market price for the Common
Stock.
Disclosure Regarding Forward-Looking Statements
Certain statements contained in this Prospectus, including all
documents incorporated herein by reference, may be forward-looking statements
within the meaning of The Private Securities Litigation Reform Act of 1995.
These forward-looking statements may include projections of revenue and net
income and issues that may affect revenue or net income; projections of capital
expenditures; plans for future operations; financing needs or plans; plans
relating to the Company's products and services; and assumptions relating to the
foregoing. Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified. Future events
and actual results could differ materially from those set forth in, contemplated
by, or underlying the forward-looking statements. Statements in this Prospectus,
including those set forth above, describe factors, among others, that could
contribute to or cause such differences.
USE OF PROCEEDS
All 1,140,737 shares of Common Stock offered hereby are being offered
by the Selling Stockholders. The Company will not receive any proceeds from the
sale of Common Stock by the Selling Stockholders.
8
<PAGE>
SELLING STOCKHOLDERS
On September 26, 1997, a subsidiary of the Company merged with and into
Cass Marketing Services, Inc. ("CMS") pursuant to an Agreement and Plan of
Reorganization, dated September 26, 1997 (the "Agreement"). Prior to the merger,
CMS was one of the Company's resellers and purchased the Company's products for
resale to its customers. At the time of the merger, Clark I. Buch, Mitchell R.
Roth, Barry D. Myerson, Arthur D. Myerson, and Kevin J. McCarthy (the "CMS
Selling Stockholders") owned all of the issued and outstanding shares of the
capital stock of CMS. As a result of the merger, CMS became a wholly-owned
subsidiary of the Company and the CMS Selling Stockholders' shares of CMS common
stock were automatically canceled and extinguished and were converted into
326,279 shares of the Company's Common Stock. Under the Agreement, the Company
is required to register for public sale those shares of Common Stock issued to
the CMS Selling Stockholders. This Prospectus is a part of the Registration
Statement filed by the Company in order to satisfy this requirement. In
addition, in connection with the Agreement, the Company entered into an
Employment Agreement with both Mitchell R. Roth and Kevin J. McCarthy, in which
each receives an annual salary of $72,000 and $132,000, respectively, plus
bonus.
On November 5, 1997, a subsidiary of the Company merged with and into
Microretailing, Inc. ("Microretailing") pusuant to an Agreement and Plan of
Reorganization, dated November 5, 1997 (the "Agreement"). Prior to the merger,
Microretailing was one of the Company's resellers and purchased the Company's
products for resale to its customers. At the time of the merger, Leonard Boord,
Francisco Victoria, and John Hassan (the "Microretailing Selling Stockholders")
owned all of the issued and outstanding shares of the capital stock of
Microretailing. As a result of the merger, Microretailing became a wholly-owned
subsidiary of the Company and the Microretailing Selling Stockholders' shares of
Microretailing common stock were automatically cancelled and extinguished and
were converted into 814,458 shares of the Company's Common Stock. Under the
Agreement , the Company is required to register for public sale those shares of
Common Stock issued to the Microretailing Selling Stockholders. This Prospectus
is a part of the Registration Statement filed by the Company in order to satisfy
this requirement. In addition, in connection with the Agreement, the Company
entered into Employment Agreements with Leonard Boord, Francisco Victoria, and
John Hassan, in which each receives an annual salary of $250,000, plus bonus.
The following table provides certain information with respect to the
Common Stock owned by the Selling Stockholders as of the date hereof.
<TABLE>
<CAPTION>
No. of Shares
of Common Percentage of No. of Shares of Percentage of
Stock Owned Common Stock No. of Shares Common Stock Common Stock
Prior to the Owned Prior to of Common Owned After Owned After the
Selling Stockholder Offering Offering(1) Stock Offered the Offering(2) Offering(2)
- ------------------- -------- ----------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Clark I. Buch 221,206 1.2% 221,206 0 0%
Mitchell R. Roth 50,140 .3% 50,140 0 0%
Barry D. Myerson 33,550 .2% 33,550 0 0%
Arthur D. Myerson 12,535 * 12,535 0 0%
Kevin J. McCarthy 8,848 * 8,848 0 0%
Leonard Boord 293,205 1.6% 293,205 0 0%
Francisco Victoria 228,048 1.2% 228,048 0 0%
John Hassan 294,205 1.6% 293,205 0 0%
--------- ---- --------- --- ---
1,141,737 6.1% 1,140,737 0 0%
* The number of shares of Common Stock is less than .1%.
</TABLE>
- ----------
(1) Includes all shares of Common Stock beneficially owned by the Selling
Stockholders as a percentage of the 18,584,759 shares of Common Stock
outstanding at November 7, 1997.
(2) Assumes that Selling Stockholders dispose of all the shares of Common
Stock covered by this Prospectus and do not acquire any additional
shares of Common Stock.
PLAN OF DISTRIBUTION
This Prospectus relates to the sale of 1,140,737 shares of Common Stock
by the Selling Stockholders. The Company has been advised by each Selling
Stockholder that each Selling Stockholder expects to offer his Common Stock to
or through brokers and dealers and underwriters to be selected by the Selling
Stockholder from time to time. In addition, the Common Stock may be offered for
sale through the Nasdaq Stock Market, through a market maker, in one or more
private transactions, or a combination of such methods of sale, at prices and on
terms then prevailing, at prices related to such prices, or at negotiated
prices. Each Selling Stockholder may pledge all or a portion of the Common Stock
owned by him as collateral in loan transactions. Upon default by any such
Selling Stockholder, the pledgee in such loan transaction would have the same
rights of sale as such Selling Stockholder under this Prospectus. Each Selling
Stockholder also may enter into exchange traded listed option transactions which
require the delivery of the Common Stock listed hereunder. Each Selling
Stockholder may also transfer Common Stock owned by him in other ways not
involving market makers or established trading markets, including directly by
gift, distribution, or other transfer without consideration, and upon any such
transfer the transferee would have the same rights of sale as such Selling
Stockholder under this Prospectus. In addition, any securities covered by this
Prospectus which qualify for sale pursuant to Rule 144 of the Securities Act of
1933, as amended (the "1933 Act"), may be sold under Rule 144 rather than
pursuant to this Prospectus. Finally, each Selling Stockholder and any brokers
and dealers through whom sales of the Common Stock are made may be deemed to be
"underwriters" within the meaning of the 1933 Act, and the commissions or
discounts and other compensation paid to such persons may be regarded as
underwriters' compensation.
9
<PAGE>
The Company will pay all of the expenses incident to the registration
of the Common Stock offered hereby, other than commissions and selling expenses
with respect to the Common Stock being sold by the Selling Stockholders.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for
the Company by Snell & Wilmer L.L.P., One Arizona Center, Phoenix, Arizona
85004.
EXPERTS
The consolidated financial statements incorporated in this Prospectus
by reference to the Annual Report on Form 10-K for the fiscal year ended
November 3, 1996, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
10
<PAGE>
======================================= =======================================
- --------------------------------------- ---------------------------------------
No dealer, salesperson, or
other person has been authorized in
connection with this offering to give
any information or to make any
representations other than those MicroAge, Inc
contained in this Prospectus and, if
given or made, such information or
representations must not be relied upon
as having been authorized by the 1,140,737
Company. Neither the delivery of this
Prospectus nor any sale made hereunder
shall, under any circumstances, create Shares
any implication that there has been no
change in the affairs of the Company of
since the date hereof or that the
information contained herein is correct Common Stock
as of any date subsequent to the date
hereof. This Prospectus does not
constitute an offer of the securities
offered hereby by anyone in any
jurisdiction in which it is unlawful to
make such offer of solicitation.
----------------------------
TABLE OF CONTENTS
----------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information......................2
Information Incorporated by Reference......2
Risk Factors...............................3
Use of Proceeds............................8
Selling Stockholders.......................9
Plan of Distribution.......................9
Legal Matters.............................10
Experts...................................10
</TABLE>
----------------------------
PROSPECTUS
----------------------------
November ____1997
======================================= =======================================
- --------------------------------------- ---------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following sets forth the expenses to be borne by the registrant in
connection with the offering being registered hereby.
Securities and Exchange Commission Registration Fee...................$ 7,994
Printing and Engraving Expenses ...................................... 2,000
Legal Fees and Expenses .............................................. 5,000
Accounting Fees and Expenses ......................................... 8,000
Blue Sky Fees and Expenses ........................................... 1,000
Other Expenses ....................................................... 1,006
-------
Total Expenses .......................................................$25,000
=======
Item 15. Indemnification of Directors and Officers
Reference is made to Section 145 of the Delaware General Corporation
Law (the "Delaware GCL"), as amended from time to time ("Section 145"), which
provides for indemnification of directors and officers of a corporation in
certain circumstances. Under Article IX of the registrant's Restated Certificate
of Incorporation, as amended, the registrant shall, to the full extent permitted
by Section 145, indemnify all persons whom it may indemnify pursuant thereto.
Additionally, Article IX provides, among other matters, that the right to
indemnification is a contract right, that the registrant is expressly authorized
to procure insurance, that advancement of expenses by the registrant is
mandatory (except as limited by law) and for certain procedural mechanisms for
the benefit of indemnified parties.
Article VII of the By-Laws of the registrant provides for
indemnification of directors and officers of the registrant. The provisions of
Article VII, among other matters, require the registrant to indemnify certain
persons to the fullest extent authorized by the Delaware GCL, as the same may
now exist or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the registrant to provide broader
indemnification rights than such law permitted the registrant to provide prior
to such amendment). Article VII provides that the right to indemnification is a
contract right and makes advances of expenses incurred in defending a proceeding
mandatory, provided that if required by the Delaware GCL, the person seeking
such advances furnishes an undertaking to the registrant to repay all amounts so
advanced if it shall be determined by a final adjudication that the person who
received such expenses is not entitled to be indemnified. Article VII also
expressly provides that any person claiming indemnification may sue the
registrant for payment of amounts due, that the registrant in such case will
have the burden of proving that the claimant has not met the standards of
II-1
<PAGE>
conduct which make it permissible to indemnify the person for the amount claimed
under the Delaware GCL (except in the case of a claim for advancement of
expenses, where the required undertaking, if any, has been tendered, in which
case it shall not be a defense that the person has not met the applicable
standards of conduct) and that neither the failure by the registrant to have
made a determination that indemnification is proper, nor an actual determination
by the registrant that the claimant has not met the applicable standard of
conduct, is a defense to the action or creates a presumption that the claimant
has not met the applicable standards of conduct.
The registrant currently maintains directors' and officers' liability
insurance to supplement the protection provided in the registrant's Restated
Certificate of Incorporation, as amended, its By-Laws, and indemnification
agreements with its directors and officers, and to fund certain payments that
the registrant may be required to make under any such provisions. Such insurance
is renewable annually and is subject to standard terms and conditions, including
exclusions from coverage.
Item 16. Exhibits
Exhibit
Number Description
- ------ -----------
4.1 Restated Certificate of Incorporation of the
Company(1)
4.2 By-Laws of the Company, amended and restated as of
April 3, 1997(2)
4.3 Specimen Common Stock Certificate (3)
II-2
<PAGE>
4.4 Amended and Restated Rights Agreement dated as of
September 28, 1994 between MicroAge, Inc. and First
Interstate Bank of California(4)
4.4.1 First Amendment dated as of November 5, 1996 between
MicroAge, Inc. and American Stock Transfer and Trust
Company to Amended and Restated Rights Agreement
dated as of September 28, 1994, between MicroAge,
Inc. and First Interstate Bank of California(5)
5 Opinion of Snell & Wilmer L.L.P.
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Snell & Wilmer L.L.P. (included in Exhibit
5)
24 Power of Attorney (included in signature page)
- -----------------------
(1) Incorporated by reference to Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended May 1, 1994.
(2) Incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement No. 333-26247.
(3) Incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement No. 33-45510.
(4) Incorporated by reference to Exhibit 1.1 of the Company's Form 8-A,
filed January 13, 1994.
(5) Incorporated by reference to Exhibit 4.2.1 to the Company's Annual
Report on Form 10-K for the fiscal year ended November 3, 1996.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
II-3
<PAGE>
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (1)(i) and (l)(ii) above do
not apply if the registration statement is on Form S-3, Form
S-8 or Form F-3, and the information required to be included
in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Commission
by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
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 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.
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 provisions described in Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
II-4
<PAGE>
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, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Tempe, State of Arizona, on November 12, 1997.
MICROAGE, INC.,
a Delaware corporation
By: /s/ Jeffrey D. McKeever
------------------------
Jeffrey D. McKeever
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby authorizes Jeffrey D. McKeever and James R. Daniel, and each of them, as
attorneys-in-fact, to sign his or her name on his or her behalf, individually
and in each capacity designated below, and to file any amendments, including
post-effective amendments to this Registration Statement.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey D. McKeever Director, Chairman of the Board November 12, 1997
- ----------------------- and Chief Executive Officer
Jeffrey D. McKeever (Principal Executive Officer)
/s/ William H. Mallender Director November 12, 1997
- ------------------------
William H. Mallender
/s/ Steven G. Mihaylo Director November 12, 1997
- ---------------------
Steven G. Mihaylo
/s/ Fred Israel Director November 12, 1997
- ---------------
Fred Israel
/s/ Linda M. Applegate Director November 12, 1997
- ----------------------
Linda M. Applegate
/s/ Roy A. Herberger, Jr. Director November 12, 1997
- -------------------------
Roy A. Herberger, Jr.
/s/ James R. Daniel Senior Vice President, Chief November 12, 1997
- ------------------- Financial Officer and Treasurer
James R. Daniel (Principal Financial Officer)
/s/ Raymond L. Storck Vice President-Controller and November 12, 1997
- --------------------- Assistant Treasurer
Raymond L. Storck (Principal Accounting Officer)
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
4.1 Restated Certificate of Incorporation of the
Company(1)
4.2 By-Laws of the Company, amended and restated as of
April 3, 1997(2)
4.3 Specimen Common Stock Certificate (3)
4.4 Amended and Restated Rights Agreement dated as of
September 28, 1994 between MicroAge, Inc. and First
Interstate Bank of California(4)
4.4.1 First Amendment dated as of November 5, 1996 between
MicroAge, Inc. and American Stock Transfer and Trust
Company to Amended and Restated Rights Agreement
dated as of September 28, 1994, between MicroAge,
Inc. and First Interstate Bank of California(5)
5 Opinion of Snell & Wilmer L.L.P.
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Snell & Wilmer L.L.P. (included in Exhibit
5)
24 Power of Attorney (included in signature page)
- -----------------------
(1) Incorporated by reference to Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended May 1, 1994.
(2) Incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement No. 333-26247.
(3) Incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement No. 33-45510.
(4) Incorporated by reference to Exhibit 1.1 of the Company's Form 8-A,
filed January 13, 1994.
(5) Incorporated by reference to Exhibit 4.2.1 to the Company's Annual
Report on Form 10-K for the fiscal year ended November 3, 1996.
OPINION OF SNELL & WILMER L.L.P.
November 7, 1997
MicroAge, Inc.
2400 South MicroAge Way
Tempe, Arizona 85282-1896
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3, including
amendments and exhibits thereto (the "Registration Statement"), for the proposed
offer and sale of up to 1,140,737 shares of Common Stock (the "Shares") of
MicroAge, Inc. (the "Company") by Clark I. Buch, Mitchell R. Roth, Barry D.
Myerson, Arthur D. Myerson, Kevin J. McCarthy, Leonard Boord, Francisco
Victoria, and John Hassan, it is our opinion that the Shares are validly issued,
fully paid, and nonassessable.
In rendering this opinion, we have examined the Certificate of
Incorporation, as amended, and the By-Laws, as amended, of the Company, the
Agreement and Plan of Merger of Cass Marketing Services, Inc. and Cass Marketing
Acquisition, Inc., a wholly-owned subsidiary of the Company (the " CMS Agreement
and Plan of Merger"), the Agreement and Plan of Merger of Microretailing, Inc.
and PC Acquisition Corp., a wholly-owned subsidiary of the Company (the
"Microretailing Agreement and Plan of Merger"), the proceedings of the Board of
Directors of the Company and Cass Marketing Acquisition, Inc., authorizing the
CMS Agreement and Plan of Merger, the proceedings of the Board of Directors of
the Company and PC Acquisition Corp., authorizing the Microretailing Agreement
and Plan of Merger, and such other documents and records of the Company as we
have deemed necessary. In addition, we have assumed the following:
(i) the genuineness of all signatures and the authenticity of documents
submitted to us as originals, and the conformity to originals of all documents
submitted to us as copies;
(ii) the accuracy, completeness, and genuineness of all representations
and certifications, with respect to factual matters, made to us by officers of
the Company and public officials; and
(iii) the accuracy and completeness of Company records.
The opinions expressed herein are based upon the law and other matters
in effect on the date hereof, and we assume no obligation to revise or
supplement this opinion should such law be changed by legislative action,
judicial decision, or otherwise, or should any facts or other matters upon which
we have relied be changed.
<PAGE>
This opinion is intended solely for the use of the Company in
connection with the registration of the Shares. It may not be relied upon by any
other person or for any other purpose, or reproduced or filed publicly by any
person without the prior written consent of this firm; provided, however,
consent is hereby given to the use of this opinion as part of the Registration
Statement and to the use of our name wherever it appears in said Registration
Statement.
Very truly yours,
/s/ Snell & Wilmer L.L.P.
CONSENT OF PRICE WATERHOUSE LLP
Exhibit 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
December 11, 1996 appearing on page F-2 of MicroAge, Inc.'s Annual Report on
Form 10-K for the fiscal year ended November 3, 1996. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Phoenix, Arizona
November 11, 1997
