As filed with the Securities and Exchange Commission on September 2, 1998.
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 H. Domaz
Vice-President and 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: [ ]
<PAGE>
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: [ ] _________________________
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
================================================================================
Proposed
maximum
Proposed aggregate Amount of
Title of shares Amount to be maximum offering registration
to be registered Registered (1) price per share (2) price (2) fee
- --------------------------------------------------------------------------------
Common Stock,
$.01 par value 164,475 $13.0625 $2,148,455 $634
================================================================================
(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 August 27, 1998, 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 SEPTEMBER 2, 1998
PROSPECTUS
164,475 SHARES
MICROAGE, INC.
COMMON STOCK
This Prospectus relates to the offer and sale by Robin Kennedy, Larry
H. Anderson, Barry Noebel, and Gloria Anderson ("Selling Stockholders") of an
aggregate of 164,475 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." As of August 27, 1998, the closing sale price for the Common
Stock, as reported by the Nasdaq Stock Market, was $13.0625 per share.
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN
RISKS ASSOCIATED WITH THIS OFFERING.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
_________________ __, 1998
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<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 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, as amended, for the fiscal year ended
November 2, 1997, (ii) the Quarterly Report of the Company on Form 10-Q for the
fiscal quarter ended February 1, 1998, (iii) the Quarterly Report of the Company
on Form 10-Q for the fiscal quarter ended May 3, 1998, and (iv) the description
of the Company's Common Stock included in Registration Statements on Form 8-A,
dated June 12, 1987 (as amended on August 5, 1993, March 28, 1994, and December
30, 1994), dated February 24, 1989 (as amended on March 28, 1994 and December
30, 1994), and dated December 30, 1994. 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.
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
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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.
RECENT DEVELOPMENTS
In February 1998, the Company initiated a plan to restructure the
Company into two independent businesses -- a distribution business operated
through a wholly-owned subsidiary, Pinacor, Inc. ("Pinacor") and an integration
business operated through a wholly-owned subsidiary, MicroAge Integration Co.
("Integration"). These businesses now have separate management teams, operate
autonomously in their respective marketplaces, and contract with the Company for
a limited number of services, such as payroll processing, employee benefits, and
information services. In connection with the restructuring, the Company recorded
$5.6 million of restructuring and other one-time charges ($3.2 million, or $0.16
per share, after taxes) during the second quarter of fiscal 1998. For additional
information, see "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in Part 2 of the Company's Report on Form 10-Q for
the fiscal quarter ended May 3, 1998. In May 1998, the Company announced that it
had retained an investment banking firm to help explore financial options for
Pinacor designed to enhance shareholder value.
On August 18, 1998, the Company reported net income of $728,000 and
revenue of $1.4 billion for the third quarter ended August 2, 1998. Earnings per
share for the third quarter were $0.04 compared to a second quarter loss of
$0.27 per share.
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 resellers. The Company's integration business (MicroAge
Integration Co.) competes for sales with numerous other competitors, 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. 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,
changes in supplier incentive funds, and other competitive and economic
pressures.
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.
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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 2, 1997. They were COMPAQ
Computer Corporation ("COMPAQ"), Hewlett-Packard Company ("Hewlett- Packard"),
and International Business Machines Corporation ("IBM"). In fiscal 1997, sales
of products from COMPAQ, Hewlett-Packard, and IBM represented 23%, 20%, and 14%,
respectively, of the Company's total product sales. During fiscal 1997 and
fiscal 1996, sales of these three manufacturers' products represented
approximately 57% and 56%, 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.
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; the amount of
supplier incentive funds received by the Company (see "Dependence on Supplier
Incentive Funds" above); the results of acquired businesses; product
availability; competitive conditions; new product introductions; 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
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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. However, suppliers are taking steps to reduce
such price protection. The Company believes that it will be able to manage
inventories at levels which minimize the risk of non-protected price decreases,
but there can be no assurance that the losses from price reductions will not be
incurred. Such losses could have a material adverse effect on the Company's
business, financial condition, or results of operations. 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 effect on the
Company's business, financial condition, or results of operations.
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 $800 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 May 3, 1998, the Company had approximately $457
million outstanding under the Financing Agreements. Of the $800 million of
borrowing capacity represented by the Financing Agreements, $343 million
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was unused as of May 3, 1998. Utilization of the unused $343 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 May 3, 1998, 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.
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.
Year 2000 Issues
Many currently installed computer systems and software products,
including several used by the Company, are coded to accept only two digit
entries in the date code field. Beginning in the year 2000, these date code
fields will need to accept four digit entries to distinguish 21st century dates
from 20th century dates. Therefore, the Company's date critical functions
related to the year 2000 and beyond, such as sales, distribution, purchasing,
inventory control, merchandise, planning and replenishment, facilities, and
financial systems may be adversely affected unless these computer systems are or
become year 2000 compliant. The Company began work several years ago to prepare
its computer-based systems for the year 2000 and is utilizing both internal and
external resources to identify, correct, or reprogram, and test its systems for
year 2000 compliance. The Company is in the final stages of implementing the
required changes to its internal computer systems and has recently begun a
review of the computer systems used in recently acquired businesses and
operations. The Company continues to evaluate the estimated costs associated
with these efforts based on actual experience and does not expect the future
costs of resolving its internal year 2000 issues to materially exceed the year
2000 related costs incurred in recent years. However, no assurance can be given
that the Company's computer systems will be year 2000 compliant in a timely
manner or that the Company will not incur significant additional expenses
pursuing year 2000 compliance. Furthermore, even if the Company's
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systems are year 2000 compliant, there can be no assurance that the Company will
not be adversely affected by the failure of others to become year 2000 compliant
or by the failure of the Company's vendors to provide year 2000 compliant
products for resale or configuration by the Company. For example, the Company
may be adversely affected by, among other things, warranty and other claims made
by the Company's customers related to product failures caused by the year 2000
problem, the disruption or inaccuracy of data provided to the Company by
non-year 2000 compliant third parties, and the failure of the Company's service
providers, such as security, data processing, and independent shipping companies
to become year 2000 compliant. In an effort to evaluate and reduce its exposure
in this area, the Company has inquired of its vendors and other partners about
their progress in identifying and addressing problems that their computer
systems may face in correctly processing date information related to the year
2000. In particular, the Company has obtained written statements from a
substantial majority of its suppliers that certain of their products are year
2000 compliant, can be upgraded to meet year 2000 demands, or do not affect
"date sensitive" information. However, despite the Company's efforts to date,
there can be no assurance that the year 2000 problem will not have a material
adverse effect on the Company in the future.
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 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 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.
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.
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.
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USE OF PROCEEDS
All 164,475 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.
SELLING STOCKHOLDERS
On August 4, 1998, MicroAge Integration Co., a wholly-owned subsidiary
of the Company ("Integration"), purchased all of the issued and outstanding
shares of capital stock of Centric Resources, Inc. ("Centric") pursuant to a
Stock Purchase Agreement, dated August 4, 1998 between Integration, Robin
Kennedy, Larry H. Anderson, Barry Noebel, and Gloria Anderson. At the time of
the Agreement, Robin Kennedy, Larry H. Anderson, Barry Noebel, and Gloria
Anderson (the "Selling Stockholders") owned all of the issued and outstanding
shares of the capital stock of Centric. Centric was one of the Company's
resellers and purchased the Company's products for resale to its customers. As a
result of the Agreement, Centric became an indirect wholly-owned subsidiary of
the Company through Integration's acquisition of the Selling Stockholders'
shares of Centric common stock for 164,475 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 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 Robin Kennedy and Barry Noebel.
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 Percentage of
of Common Percentage of No. of Shares of Common Stock
Stock Owned Common Stock No. of Shares Common Stock Owned After
Prior to the Owned Prior to of Common Owned After the
Selling Stockholder Offering Offering (1) Stock Offered the Offering (2) Offering (2)
- ------------------- -------- ------------ ------------- ---------------- ------------
<S> <C> <C> <C>
Robin Kennedy 65,790 * 65,790 0 *
Larry H. Anderson 42,790 * 41,119 1,671 *
Barry Noebel 32,895 * 32,895 0 *
Gloria Anderson 24,671 * 24,671 0 *
------- ------ ------ ----- ------
166,146 * 164,475 1,671 *
</TABLE>
- ----------
* The number of shares of Common Stock is less than 1%.
(1) Includes all shares of Common Stock beneficially owned by the Selling
Stockholders as a percentage of the 20,162,233 shares of Common Stock
outstanding at August 27, 1998.
(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 164,475 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 or her 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 or her as collateral in loan transactions. Upon
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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
or her 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.
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 of MicroAge, Inc. for the fiscal
year ended November 2, 1997 have been so incorporated in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of such firm as experts in auditing and accounting.
9
<PAGE>
===================================== ========================================
No dealer, sales person, 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 164,475
upon as having been authorized by
the Company. Neither the delivery of Shares
this Prospectus nor any sale made of
hereunder shall, under any Common Stock
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 herein is
correct 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
------------------------- -------------------------
PROSPECTUS
Page -------------------------
----
Available Information............2
Information Incorporated by
Reference.......................2
Recent Developments..............3
Risk Factors.....................3
Use of Proceeds..................8
Selling Stockholders.............8
Plan of Distribution.............8
Legal Matters....................9
Experts..........................9
_________ __, 1998
===================================== ========================================
<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...... $ 634
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........................................... 1,366
-------
Total Expenses.................................. $18,000
=======
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
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 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.
II-1
<PAGE>
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 July 16, 1998
4.3 Specimen Common Stock Certificate (2)
4.4 Amended and Restated Rights Agreement dated as of September 28, 1994
between MicroAge, Inc. and First Interstate Bank of California (3)
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 (4)
5 Opinion of Snell & Wilmer L.L.P.
23.1 Consent of PricewaterhouseCoopers 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. 33-45510.
(3) Incorporated by reference to Exhibit 1.1 of the Company's Form 8-A, filed
January 13, 1994.
(4) 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 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
II-2
<PAGE>
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
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-3
<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 September 2, 1998.
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.
Signature Title Date
--------- ----- ----
/s/ Jeffrey D. McKeever Director, Chairman of the Board September 2, 1998
- --------------------------- and Chief Executive Officer
Jeffrey D. McKeever (Principal Executive Officer)
/s/ William H. Mallender Director September 2, 1998
- ---------------------------
William H. Mallender
/s/ Steven G. Mihaylo Director September 2, 1998
- ---------------------------
Steven G. Mihaylo
/s/ Lynda M. Applegate Director September 2, 1998
- ---------------------------
Lynda M. Applegate
/s/ Roy A. Herberger, Jr. Director September 2, 1998
- ---------------------------
Roy A. Herberger, Jr.
/s/ Cyrus F. Freidheim, Jr. Director September 2, 1998
- ---------------------------
Cyrus F. Freidheim, Jr.
/s/ Dianne C. Walker Director September 2, 1998
- ---------------------------
Dianne C. Walker
/s/ James R. Daniel Senior Vice President, Chief September 2, 1998
- --------------------------- Financial Officer and Treasurer
James R. Daniel (Principal Financial Officer)
/s/ Raymond L. Storck Vice President-Controller and September 2, 1998
- --------------------------- Assistant Treasurer
Raymond L. Storck (Principal Accounting Officer)
II-4
BY-LAWS
OF
MICROAGE, INC.
(AMENDED AND RESTATED AS OF JULY 16, 1998)
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office shall be
established and maintained at the office of the Corporation Trust Company, in
the City of Wilmington, in the County of New Castle, in the State of Delaware
and said corporation shall be the registered agent of this corporation.
SECTION 2. OTHER OFFICES. The Corporation may have other offices,
either within or without the State of Delaware, at such place or places as the
Board of Directors may from time to time appoint or the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. The annual meetings of stockholders for the
election of directors shall be held at such place, within or without the State
of Delaware, and at such time and on such date as may from time to time be fixed
by the Board of Directors and specified in the notice of such meeting. In the
event the Board of Directors fails to so determine the place of meeting, the
annual meeting of stockholders shall be held at the offices of MicroAge, Inc.,
2400 South MicroAge Way, Tempe, Arizona.
If the date of the annual meeting shall fall upon a legal holiday, the
meeting shall be held on the next succeeding business day. At each annual
meeting, the stockholders entitled to vote shall elect a Board of Directors and
they may transact such other corporate business as may properly come before the
meeting in accordance with these By-Laws.
SECTION 2. OTHER MEETINGS. Meetings of stockholders for any purpose
other than the election of directors may be held at such time and place, within
or without the State of Delaware, as shall be stated in the notice of the
meeting. Only such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting pursuant to the
Corporation's notice of meeting. Special meetings of the stockholders may be
held whenever and wherever called for by the Chairman of the Board and Chief
Executive Officer or the Board of Directors. The business, including the
election and/or removal of directors, which may be conducted at any such special
meeting shall be limited to the purposes stated in the notice thereof.
SECTION 2.1. NOTICE OF STOCKHOLDER NOMINATIONS AND BUSINESS.
(a) Nominations of persons for election to the board of directors of
the Corporation and the proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders: (i) pursuant to
the Corporation's notice of meeting (or any supplement thereto); (ii) by or at
the direction of
1
<PAGE>
the board of directors; or (iii) by any stockholder of the Corporation who was a
stockholder of record at the time of giving of notice provided for in this
Section, who is entitled to vote at the meeting and who complies with the notice
procedures set forth in this Section. For nominations or other business to be
properly brought before an annual meeting by a stockholder pursuant to this
Section, the stockholder must have given timely notice thereof in writing to the
Secretary of the Corporation, and such business must otherwise be a proper
subject for stockholder action under the Delaware General Corporation Law. To be
timely, a stockholder's notice shall be delivered to the Secretary at the
principal executive offices of the Corporation not less than 60 days nor more
than 90 days prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is more than 30 days before or more than 60 days after such anniversary
date, notice by the stockholder to be timely must be so delivered not earlier
than the 90th day prior to such annual meeting, and not later than the close of
business on the later of the 60th day prior to such annual meeting or the 10th
day following the day on which public announcement of the date of such meeting
is first made by the Corporation. In no event shall the public announcement of
the date of an adjournment of an annual meeting commence a new time period for
the giving of a stockholder's notice as described above.
(b) Nominations of persons for election to the board of directors may
be made at a special meeting of stockholders at which directors are to be
elected pursuant to the Corporation's notice of meeting: (i) by or at the
direction of the board of directors; or (ii) by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice
provided for in this Section, who shall be entitled to vote at the meeting and
who complies with the notice procedures set forth in this Section. Nominations
by stockholders of persons for election to the board of directors may be made at
such a special meeting of stockholders if the stockholder's notice required by
this Section shall be delivered to the Secretary at the principal executive
offices of the Corporation not earlier than the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting.
(c) Any stockholder's notice required by this Section shall set forth:
(i) as to each person whom the stockholder proposes to nominate for election or
re-election as a director all information relating to such person that is
required to be disclosed in solicitations of proxies for election of directors
in an election contest, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Rule 14a-11 thereunder (and such person's written consent to
being named in the proxy statement as a nominee and to serving as a director if
elected); (ii) as to any other business that the stockholder proposes to bring
before the meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the meeting and
any material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made, and in the event that such
business includes a proposal to amend the By-Laws of the Corporation, the
language of the proposed amendment; and (iii) as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made (A) the name and address of such stockholder, as they appear on
the Corporation's books, and of such beneficial owner, (B) the class and number
of shares of the Corporation which are owned beneficially and of record by such
stockholder and such beneficial owner, (C) a representation that the stockholder
is a holder of record of stock of the Corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to propose
such business or nomination, and (D) a representation whether the proponent
intends or is part of a group which intends to solicit proxies from other
stockholders in support of such proposal or nomination.
2
<PAGE>
(d) Only such persons who are nominated in accordance with the
procedures set forth in this Section shall be eligible for election as directors
at any meeting of stockholders. Only such business shall be conducted at a
meeting of stockholders as shall have been brought before the meeting in
accordance with procedures set forth in this Section. The chairman of the
meeting shall have the power and duty to (i) determine whether a nomination or
any business proposed to be brought before the meeting was made in accordance
with the procedures set forth in this Section and (ii) if any proposed
nomination or business is not in compliance with this Section, or if the
stockholder solicits or is part of a group which solicits proxies in support of
such stockholder's proposal without such stockholder having made the
representation required by clause (iii)(c) of Section 2.1(c) of these By-Laws,
to declare that such defective proposal or nomination shall be disregarded, and,
if any proposed nomination or business is not in compliance with this Section,
to declare that such defective proposal shall be disregarded.
(e) For purposes of this Section, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Securities Exchange Act of 1934, as amended, (the "Exchange
Act").
(f) Notwithstanding the foregoing provisions of this Section, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Section. Nothing in this Section shall be deemed to affect any
rights (i) of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of Preferred Stock to elect directors under
specified circumstances.
SECTION 3. CONDUCT OF STOCKHOLDERS' MEETINGS. The meetings of the
stockholders shall be presided over by the Chairman of the Board and Chief
Executive Officer, or if he is not present, by an officer designated by the
Board of Directors, or if the Board of Directors fails to designate such
officer, by a chairman to be elected at the meeting. The Secretary, or any
Assistant Secretary as designated by the chairman of the meeting, of the
Corporation shall act as secretary of such meetings; if neither the Secretary
nor an Assistant Secretary is present, then a secretary shall be appointed by
the chairman of the meeting. The order of business shall be as determined by the
chairman of the meeting.
SECTION 4. CONDUCT OF MEETINGS. The date and time of the opening and
the closing of the polls for each matter upon which the stockholders will vote
at a meeting shall be announced at the meeting by the person presiding over the
meeting. The Board of Directors of the Corporation may, to the extent not
prohibited by law, adopt by resolution such rules and regulations for the
conduct of the meeting of stockholders as it shall deem appropriate. Except to
the extent inconsistent with such rules and regulations as adopted by the Board
of Directors, the chairman of any meeting of stockholders shall have the right
and authority to prescribe such rules, regulations, and procedures and to do all
such acts as, in the judgment of such chairman, are appropriate for the proper
conduct of the meeting. Such rules, regulations or procedures, whether adopted
by the Board of Directors or prescribed by the chairman of the meeting, may to
the extent not prohibited by law include, without limitation, the following: (i)
the establishment of an agenda or order of business for the meeting; (ii) rules
and procedures for maintaining order at the meeting and the safety of those
present; (iii) limitations on attendance at or participation in the meeting to
stockholders of record of the Corporation, their duly authorized and constituted
proxies, or such other persons as the chairman of the meeting shall determine;
(iv) restrictions on entry to the meeting after the time fixed for the
commencement thereof; and (v) limitations on the time allotted to questions or
comments by participants. Unless and to the
3
<PAGE>
extent determined by the Board of Directors or the chairman of the meeting,
meetings of stockholders shall not be required to be held in accordance with the
rules of parliamentary procedure.
SECTION 5. VOTING. Except as provided in the Certificate of
Incorporation and these By-Laws, each stockholder entitled to vote in accordance
with the terms of the Certificate of Incorporation and in accordance with the
provisions of these By-Laws shall be entitled to one vote, in person or by
proxy, for each share of stock entitled to be voted which is held by such
stockholder, but no proxy shall be voted after three years from its date unless
such proxy provides for a longer period. Upon the demand of any stockholder, the
vote for directors and the vote upon any question before the meeting, shall be
by ballot. Except for the election of directors, which shall be decided by a
plurality of the votes cast by the holders of shares of capital stock of the
Corporation issued and outstanding and entitled to vote in the election of
directors, present in person or represented by proxy at the meeting, all matters
shall be decided by the affirmative vote of the holders of a majority of the
voting power of the shares of capital stock of the Corporation entitled to vote
thereon, present in person or represented by proxy at the meeting, except as
otherwise provided by the Certificate of Incorporation, these By-Laws, the rules
or regulations of any stock exchange applicable to the Corporation, or as
otherwise required by law or pursuant to any regulation applicable to the
Corporation or its securities.
A complete list of the stockholders entitled to vote, arranged in
alphabetical order, with the address of each, and the number of shares held by
each, shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
SECTION 6. QUORUM. Except as otherwise required or permitted by law, by
the Certificate of Incorporation or by these By-Laws, the presence, in person or
by proxy, of stockholders holding a majority in voting power of the stock of the
Corporation outstanding and entitled to vote shall constitute a quorum at all
meetings of the stockholders. In case a quorum shall not be present at any
meeting, a majority in voting power of the stockholders entitled to vote
thereat, present in person or by proxy, shall have power to adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
the holders of the requisite amount of stock entitled to vote shall be present
if the time and place thereof are announced at the meeting at which the
adjournment is taken. At any such adjourned meeting at which the requisite
holders of the amount of stock entitled to vote shall be represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed; but only those stockholders entitled to vote at the meeting
as originally noticed shall be entitled to vote at any adjournment or
adjournments thereof. If the adjournment is for more than 30 days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting.
SECTION 7. ELECTION INSPECTORS. The Board of Directors shall, in
advance of any meeting of stockholders, appoint one or more election inspectors
to act at such meeting (and any adjournment or adjournments thereof) and make a
written report thereof. The Board of Directors may designate one or more persons
as alternate inspectors to replace any inspector who fails to act. If no
inspector or alternate is able to act at a meeting of stockholders, the chairman
of the meeting shall appoint one or more inspectors to act at the meeting. Each
inspector, before entering upon the discharge of his or her duties, shall take
and sign
4
<PAGE>
an oath faithfully to execute the duties of inspector with strict impartiality
and according to the best of his or her ability.
The election inspector or inspectors (acting through a majority of them
if there be more than one) shall: (i) ascertain the number of shares outstanding
and the voting power of each; (ii) determine the shares represented at a meeting
and the validity of proxies and ballots; (iii) count all votes and ballots; (iv)
determine and retain for a reasonable period a record of the disposition of any
challenges made to any determination by the inspectors; and (v) certify and
announce their determination of the number of shares represented at the meeting,
and their count of all votes and ballots. No such election inspector need be a
stockholder of the Corporation. No person who is a candidate for office shall
act as an inspector. The inspectors may appoint or retain other persons or
entities to assist the inspectors in the performance of the duties of the
inspectors.
The date and time of the opening and the closing of the polls for each
matter upon which the stockholders will vote at a meeting shall be announced at
the meeting. No ballot, proxies or votes, nor any revocations thereof or changes
thereto, shall be accepted by the inspectors after the closing of the polls
unless the Court of Chancery upon application by a stockholder shall determine
otherwise.
In determining the validity and counting of proxies and ballots, the
inspectors shall be limited to an examination of the proxies, any envelopes
submitted with those proxies, any information provided in accordance with the
Delaware General Corporation Law, ballots and the regular books and records of
the Corporation, except that the inspectors may consider other reliable
information for the limited purpose of reconciling proxies and ballots submitted
by or on behalf of banks, brokers, their nominees or similar persons which
represent more votes than the holder of a proxy is authorized by the record
owner to cast or more votes than the stockholder holds of record. If the
inspectors consider other reliable information for the limited purpose permitted
herein, the inspectors at the time they make their certification pursuant to
this section shall specify the precise information considered by them including
the person or persons from whom they obtained the information, when the
information was obtained, the means by which the information was obtained and
the basis for the inspectors' belief that such information is accurate and
reliable.
SECTION 8. NOTICE OF MEETINGS. Written notice, stating the place, date
and time of the meeting, and in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given to each stockholder
entitled to vote thereat at his address as it appears on the records of the
Corporation, not less than ten nor more than sixty days before the date of the
meeting, except in the case of a meeting to consider the merger or consolidation
of the Corporation or the sale, lease or exchange of all or substantially all of
the property and assets of the Corporation, notice thereof shall be given not
less than twenty nor more than sixty days before the date of the meeting.
Business transacted at a special meeting shall be limited to the purposes stated
in the notice.
SECTION 9. ACTION WITHOUT MEETING. Any action required or permitted to
be taken by the stockholders of the Corporation must be effected at a duly
called annual or special meeting of the stockholders or by the unanimous written
consent of the stockholders entitled to vote on such action.
5
<PAGE>
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TERM. The number of directors shall be seven (7).
The directors, other than those who may be elected by the holders of any series
of Preferred Stock then outstanding, shall be divided into three classes, with
the term of the first class to expire at the 1993 annual meeting of
stockholders, the term of office of the second class to expire at the 1994
annual meeting of stockholders and the term of office of the third class to
expire at the 1995 annual meeting of stockholders. At each annual meeting of
stockholders following such initial classification and election, directors
elected to succeed those directors whose terms expire shall be elected for a
term of office to expire at the third succeeding annual meeting of stockholders
after their election.
SECTION 2. RESIGNATIONS. Any director, member of a committee or officer
may resign at any time. Such resignation shall be made in writing, and shall
take effect at the time specified therein, and if no time be specified, at the
time of its receipt by the Chairman of the Board and Chief Executive Officer or
Secretary. The acceptance of a resignation shall not be necessary to make it
effective.
SECTION 3. VACANCIES. Unless otherwise provided by law or the
Certificate of Incorporation, any newly-created directorship or any vacancy
occurring in the Board of Directors for any cause may be filled only by a
majority of the remaining members of the Board of Directors, although such
majority is less than a quorum, or if the Board of Directors so directs, by a
plurality of the votes cast at a meeting of stockholders, and each director so
elected shall hold office until the expiration of the term of office of the
director whom he has replaced or until his successor is elected and qualified.
SECTION 4. QUALIFICATIONS. In order to qualify as a director, a person
must be the owner of one or more shares of the capital stock of the Corporation
at the time of assuming office and for so long thereafter as such person remains
in office. A person will cease to qualify as a director if he or she (i) is in
good faith determined by a majority of the other directors then in office to be
physically or mentally incapable of competent performance as a director for a
period, starting with inception of the incapacity, that has extended or is
likely to extend for more than six months or (ii) has failed to attend three
successive regular meetings of the Board (as determined in accordance with
Article III, Section 7 below) unless and to the extent such failure is waived by
a majority of the other directors then in office; however, disqualification
pursuant to clause (i) or (ii) of this sentence will not preclude the subsequent
election or appointment of such person as a director by the shareholders or the
Board if a majority of the directors in office immediately prior to the
submission of such person for election or appointment shall determine that his
or her prior incapacity or principal reason for prior non-attendance no longer
exists. A person will not qualify for election or appointment as a director,
whether initially or on re-election and whether by the shareholders at their
annual meeting or by the Board of Directors as contemplated in Article III,
Section 3 above, if such person's 70th birthday occurs on or has occurred before
the date of such election, appointment or re-election. A person who has
qualified by age for his or her most recent election as a director may serve
throughout the term for which such person was elected, notwithstanding the
occurrence of his or her 70th birthday between the date of such election and the
end of such term, subject, however, to his or her otherwise remaining qualified
for such office.
SECTION 5. POWERS. The business and affairs of this Corporation shall
be managed by or under the direction of its Board of Directors, which may
exercise all such powers of the Corporation and do all such
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lawful acts and things as are not by statute or by the Certificate of
Incorporation of the Corporation or by these By-Laws conferred upon or reserved
to the stockholders.
SECTION 6. COMMITTEES. The Board of Directors may, by resolution passed
by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board of Directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting
of the committee. In the absence or disqualification of any member of such
committee or committees, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
Board of Directors, or in these By-Laws, shall have and may exercise all of the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation, and may authorize the seal of the Corporation to
be affixed to all papers which may require it; but no such committee shall have
the power or authority in reference to amending the Certificate of Incorporation
except where permitted by law, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution,
or amending the By-Laws of the Corporation; and, unless the resolution, these
By-Laws, or the Certificate of Incorporation expressly so provide, no such
committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. To the extent any such action is not taken by
the Board of Directors, each committee may choose its own chairman and
secretary, fix its own rules of procedure, and meet at such times and at such
place or places as may be provided by such rules. At every meeting of the
committee, the presence of a majority of all the members thereof shall be
necessary to constitute a quorum and the affirmative vote of a majority of the
members present shall be necessary to decide any question before the committee.
SECTION 7. MEETINGS. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
The first meeting of each newly elected Board of Directors shall be
held immediately after the annual meeting of stockholders without any notice
other than these By-Laws. The newly elected directors may hold their first
meeting for the purpose of organization and the transaction of business, if a
quorum be present, immediately after the annual meeting of the stockholders; or
the time and place of such meeting may be fixed by consent in writing of all the
directors.
Regular meetings of the directors may be held without notice at such
places and times as shall be determined from time to time by resolution of the
directors.
Special meetings of the Board of Directors may be called by the
Chairman of the Board and Chief Executive Officer, and shall be called by the
Chairman of the Board and Chief Executive Officer or the Secretary on the
request of any two directors on at least forty-eight hours' notice to each
director and shall be held at such place or places as may be determined by the
directors, or as shall be stated in the call of the meeting.
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Unless otherwise restricted by the Certificate of Incorporation or
these By-Laws, members of the Board of Directors, or any committee designated by
the Board of Directors, may participate in a meeting of the Board of Directors,
or any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at the meeting.
Notice to directors may be given in person or by facsimile
transmission, telephone, telegram, or other means of electronic transmission.
SECTION 8. QUORUM. A majority of the authorized number of directors
shall constitute a quorum for the transaction of business. If at any meeting of
the Board of Directors there shall be less than a quorum present, a majority of
those present may adjourn the meeting from time to time until a quorum is
obtained, and no further notice thereof need be given other than by announcement
at the meeting which shall be so adjourned.
SECTION 9. COMPENSATION. Unless otherwise restricted by the Certificate
of Incorporation, the Board of Directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
SECTION 10. ACTION WITHOUT MEETING. Any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting, if all members of the Board of Directors, or of
such committee as the case may be, consent thereto in writing and such written
consent is filed with the minutes of proceedings of the Board of Directors or
committee.
SECTION 11. VOTING. The vote of the majority of the directors present
at a meeting at which a quorum is present shall be the act of the board of
directors unless by provision of statute, the certificate of incorporation, or
these By-Laws, the vote of a different number of directors is required, in which
case such provision shall govern.
SECTION 12. APPROVAL OR RATIFICATION BY STOCKHOLDERS. Any contract,
transaction or act of the Corporation or of the Board of Directors or of any
committee thereof or of any officer of the Corporation which shall be approved
or ratified by the holders of a majority of the outstanding stock of the
Corporation present at any annual meeting of stockholders or any special meeting
of stockholders called for such purpose shall be as valid and binding upon the
Corporation and all of its stockholders as if it had been approved or ratified
by all the stockholders of the Corporation.
ARTICLE IV
OFFICERS
SECTION 1. OFFICERS. The officers of the Corporation shall be a
Chairman of the Board and Chief Executive Officer, a Treasurer, and a Secretary,
all of whom shall be elected by the Board of Directors and who shall hold office
until their successors are elected and qualified. In addition, the Board of
Directors may elect one or more Vice-Chairmen, a President, Vice Presidents and
such Assistant Secretaries and Assistant Treasurers as they may deem proper.
None of the officers of the Corporation need be directors.
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The officers shall be elected at the first meeting of the Board of Directors
after each annual meeting of stockholders. Any number of offices may be held by
the same person unless the Certificate of Incorporation or these By-Laws
otherwise provide.
SECTION 2. OTHER OFFICERS AND AGENTS. The Board may appoint such other
officers and agents as it may deem advisable, who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER. The
Chairman of the Board and Chief Executive Officer shall have the primary
responsibility for and the general control and management of all the business
and affairs of the Corporation and the performance by all of its other officers
of their respective duties, under the direction of the Board. He shall, if
present, be the presiding officer at all meetings of the Board of Directors and
meetings of the stockholders of the Corporation. Except as the Board of
Directors shall authorize the execution thereof in some other manner, he may
execute contracts, deeds, mortgages, indenture, bonds, consents, guaranties,
agreements or other instruments on behalf of the Corporation. Unless otherwise
ordered by the Board of Directors, the Chairman of the Board and Chief Executive
Officer shall have full power and authority on behalf of the Corporation to
attend and to act and to vote at any meeting of stockholders of any Corporation
in which the Corporation may hold stock, and also to execute and deliver for and
on behalf of the Corporation proxies in respect of such meetings, and at any
such meeting the Chairman of the Board and Chief Executive Officer or the
individual or individuals named in the proxy executed by the Chairman of the
Board and Chief Executive Officer in respect of such meeting shall possess and
may exercise any and all rights and powers incident to the ownership of such
stock and which, as the owner thereof, the Corporation might have possessed and
exercised if present; provided, however, the Board of Directors, by resolution,
from time to time may confer like powers upon any other person or persons, which
powers may be general or confined to specific instances.
SECTION 4. VICE-CHAIRMAN OF THE BOARD. The Board of Directors may elect
one or more Vice-Chairman of the Board to serve as a general executive officer
of the Corporation, and to be vested with such powers and duties as the Board
may from time to time delegate. In the absence of the Chairman of the Board and
Chief Executive Officer, he shall preside at all meetings of the Board of
Directors. Except as the Board of Directors shall authorize the execution
thereof in some other manner, he may execute contracts, deeds, mortgages,
indentures, bonds, consents, guaranties, agreements or other instruments on
behalf of the Corporation. The Vice-Chairman may represent the Corporation at
any meeting of the stockholders of any other Corporation in which this
Corporation then holds stock, and may vote this Corporation's stock in such
other Corporation in person or by proxy appointed by him, provided that the
Board of Directors may from time to time confer the foregoing authority upon any
other person or persons.
SECTION 5. PRESIDENT. The President shall have such authority and
perform such duties relative to the business and affairs of the Corporation as
may be delegated to him by the Board. Except as the Board of Directors shall
authorize the execution thereof in some other manner, he may execute contracts,
deeds, mortgages, indentures, bonds, consents, guaranties, agreements or other
instruments on behalf of the Corporation. The President may represent the
Corporation at any meeting of the stockholders of any other Corporation in which
this Corporation then holds stock, and may vote this Corporation's stock in such
other Corporation in person or by proxy appointed by him, provided that the
Board of Directors may from time to time confer the foregoing authority upon any
other person or persons.
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SECTION 6. VICE PRESIDENTS. Each Vice President shall have such powers
and shall perform such duties as shall be assigned to him, or her, by the
directors. If authorized to do so by the Board of Directors, any Vice President
may represent the Corporation at any meeting of the stockholders of any other
Corporation in which this Corporation then holds stock, and may vote this
Corporation's stock in such other Corporation in person or by proxy appointed by
him, provided that the Board of Directors may from time to time confer the
foregoing authority upon any other person or persons.
SECTION 7. TREASURER. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate account of
receipts and disbursements in books belonging to the Corporation. He shall
deposit all moneys and other valuables in the name and to the credit of the
Corporation in such depositaries as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, the Chairman of the Board and Chief Executive
Officer or the President, taking proper vouchers for such disbursements. He
shall render to the Board of Directors at their regular meetings, or whenever
they may request it, an account of all his transactions as Treasurer and of the
financial condition of the Corporation. If required by the Board of Directors,
he shall give the Corporation a bond for the faithful discharge of his duties in
such amount and with such surety as the Board shall prescribe.
SECTION 8. SECRETARY. The Secretary shall give, or cause to be given,
notice of all meetings of stockholders and directors, and all other notices
required by law or by these By-Laws, and in case of his absence or refusal or
neglect so to do, any such notice may be given by any person thereunto directed
by the Chairman of the Board and Chief Executive Officer, or by the Board of
Directors, upon whose request the meeting is called as provided by these
By-Laws. He shall record all of the proceedings of the meetings of the
Corporation and of the Board of Directors in a book to be kept for that purpose,
and shall perform such other duties as may be assigned to him by the Board of
Directors or the Chairman of the Board and Chief Executive Officer. He shall
have the custody of the seal of the Corporation and shall affix the same to all
instruments requiring it, when authorized by the Board of Directors, the
Chairman of the Board and Chief Executive Officer or the President, and attest
the same.
SECTION 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the directors.
ARTICLE V
MISCELLANEOUS
SECTION 1. CERTIFICATES OF STOCK. Every holder of stock in the
Corporation shall be entitled to have a certificate certifying the number of
shares owned by him in the Corporation, signed by the Chairman of the Board, the
President or any Vice-President, and the Treasurer or an Assistant Treasurer, or
Secretary or an Assistant Secretary. Any or all the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
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SECTION 2. LOST CERTIFICATES. A new certificate of stock may be issued
in the place of any certificate theretofore issued by the Corporation, alleged
to have been lost, stolen or destroyed, and the directors may, in their
discretion, require the owner of the lost, stolen or destroyed certificate, or
his legal representative, to give the Corporation a bond, in such sum as they
may direct, sufficient to indemnify the Corporation against any claim that may
be made against it on account of the alleged loss, theft or destruction of any
such certificate, or the issuance of any such new certificate.
SECTION 3. TRANSFER OF SHARES. Upon surrender to the Corporation or
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books. Whenever any transfer of shares shall be made for
collateral security, and not absolutely, it shall be so expressed in the entry
of transfer if, when the certificates are presented to the Corporation for
transfer, both the transferor and the transferee request the Corporation to do
so.
SECTION 4. STOCKHOLDERS RECORD DATE. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall be in accordance with applicable law. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
SECTION 5. REGISTERED STOCKHOLDERS. The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
SECTION 6. DIVIDENDS. Subject to the provisions of the Certificate of
Incorporation and any resolution of the Board of Directors, the Board of
Directors may, out of funds legally available therefor declare dividends upon
the capital stock of the Corporation as and when they deem expedient. Dividends
may be paid in cash, in property, or in shares of capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation.
Before declaring any dividend there may be set apart out of any funds of the
Corporation available for dividends, such sum or sums as the directors from time
to time in their discretion deem proper for working capital or as a reserve fund
to meet contingencies or for equalizing dividends or for such other purposes as
the directors shall deem conducive to the interests of the Corporation.
SECTION 7. SEAL. The corporate seal shall be circular in form and shall
contain the name of the Corporation, the year of its creation and the words
"CORPORATE SEAL DELAWARE". Said seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
SECTION 8. FISCAL YEAR. The fiscal year of the Corporation shall be
determined by resolution of the Board of Directors.
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SECTION 9. CHECKS. All checks, drafts or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the
Corporation shall be signed by such officer or officers, agent or agents of the
Corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
SECTION 10. NOTICE AND WAIVER OF NOTICE. Whenever any notice is
required by these By-Laws to be given, personal notice is not meant unless
expressly so stated, and any notice so required shall be deemed to be sufficient
if given by depositing the same in the United States mail, postage prepaid,
addressed to the person entitled thereto at his address as it appears on the
records of the Corporation, and such notice shall be deemed to have been given
on the day of such mailing. Stockholders not entitled to vote shall not be
entitled to receive notice of any meetings except as otherwise provided by
statute.
Whenever any notice whatever is required to be given under the
provisions of any law, or under the provisions of the Certificate of
Incorporation of the Corporation or these By-Laws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders,
directors or members of a committee of directors need be specified in any
written waiver of notice.
SECTION 11. ELECTION NOT TO BE SUBJECT TO ARIZONA CONTROL SHARE
ACQUISITIONS STATUTE. The Corporation elects not to be subject to Title 10,
Chapter 6, Article 2 of the Arizona Revised Statutes, relating to "Control Share
Acquisitions."
ARTICLE VI
REPAYMENT OF SALARY AND EXPENSE REIMBURSEMENTS
Any payments made to an officer, director, employee or other agent of
the Corporation in the nature of salary, wages, other compensation or expense
reimbursements which shall be disallowed in whole or in part as a deductible
expense by the Internal Revenue Service in any judicial or administrative
proceeding, shall be repaid by such officer, director, employee, or other agent
of the Corporation to the full extent of such disallowance. In lieu of payment
by such person or persons, subject to the determination of the Board of
Directors, proportionate amounts may be withheld from his or their future
compensation payments until the amount so owed to the Corporation has been
recovered.
ARTICLE VII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
SECTION 1. RIGHT TO INDEMNIFICATION. The Corporation shall to the
fullest extent authorized by the Delaware General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide prior
to such amendment), indemnify and hold harmless any person who was or is a
party, or is threatened to be made a
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party to or is otherwise involved in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that such person is or was a director or
officer 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, including service with
respect to an employee benefit plan (hereinafter an "Indemnitee") against
expenses, liabilities and losses (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid in settlement) reasonably
incurred or suffered by such Indemnitee in connection therewith; provided,
however, that except as provided in Section 3 of this Article with respect to
proceedings to enforce rights to indemnification, the Corporation shall
indemnify any such Indemnitee in connection with a proceeding (or part thereof)
initiated by such Indemnitee only if such proceeding or part thereof was
authorized by the board of directors of this Corporation.
SECTION 2. RIGHT TO ADVANCEMENT OF EXPENSES. The right to
indemnification conferred in Section 1 of this Article shall include the right
to be paid by the Corporation the expenses (including attorneys' fees) incurred
in defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, an advancement
of expenses incurred by an Indemnitee in his capacity as a director or officer
(and not in any other capacity in which service was or is rendered by such
Indemnitee, including, without limitation, service to an employee benefit plan)
shall be made only upon receipt by the Corporation of an undertaking, by or on
behalf of such Indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal that such Indemnitee is not entitled to be indemnified
for such expenses under this Section 2 or otherwise. The rights to
indemnification and to the advancement of expenses conferred in this Article
shall be contract rights and such rights shall continue as to an Indemnitee who
has ceased to be a director, officer, employee, or agent and shall inure to the
benefit of the Indemnitee's heirs, executors and administrators.
SECTION 3. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section
1 or 2 of this Article is not paid in full by the Corporation within sixty (60)
days after a written claim has been received by the Corporation, except in the
case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty (20) days, the Indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the Indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the Indemnitee to
enforce a right to indemnification hereunder (but not in a suit brought by the
Indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that and (ii) any suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the Corporation
shall be entitled to recover such expenses upon a final adjudication that, the
Indemnitee has not met any applicable standard for indemnification set forth in
the Delaware General Corporation Law. Neither the failure of the Corporation
(including by a majority of the directors who are not parties to such action,
suit or proceeding, its independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such suit that indemnification
of the Indemnitee is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its board of
directors, independent legal counsel, or its stockholders) that the Indemnitee
has not met such applicable standard of conduct, shall create a presumption that
the Indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the Indemnitee, be a defense to such suit. In any suit
brought by the Indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or
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brought by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the Indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article or otherwise shall be on the Corporation.
SECTION 4. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and
advancement of expenses conferred in this Article VII shall not be exclusive of
any other rights to which any person may have or hereafter acquire under any
statute, the Corporation's Restated Certificate of Incorporation, these ByLaws,
any agreement, vote of stockholders or disinterested directors, or otherwise.
SECTION 5. INSURANCE. The Corporation shall have the power to purchase
and maintain insurance, at its expense, to protect itself and any director,
officer, employee or agent of the Corporation or another Corporation,
partnership, joint venture, trust or other enterprise (including an employee
benefit plan) against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
SECTION 6. DEFINITION OF Corporation. For purposes of this Article VII,
references to the "Corporation" shall include any subsidiary of this Corporation
from and after the acquisition thereof by this Corporation, so that any person
who is a director, officer, employee or agent of such subsidiary after the
acquisition thereof by this Corporation shall stand in the same position under
the provisions of this Article as such person would have had such person served
in such position for this Corporation.
SECTION 7. INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION.
The Corporation may, to the extent authorized from time to time by the board of
directors, grant rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this Article with respect to the indemnification and advancement of expenses
of directors and officers of the Corporation.
ARTICLE VIII
AMENDMENTS
Subject to the provisions of the Restated Certificate of Incorporation,
these By-Laws may be altered, amended or repealed or new by-laws may be adopted
by the stockholders or by the Board of Directors when such power is conferred
upon the Board of Directors by the Certificate of Incorporation, at any regular
meeting of the stockholders or of the Board of Directors, or at any special
meeting of the stockholders or of the Board of Directors if notice of such
alteration, amendment, repeal or adoption of new by-laws be contained in the
notice of such special meeting.
14
September 2, 1998
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 164,475 shares of Common Stock (the "Shares") of
MicroAge, Inc. (the "Company") by Robin Kennedy, Larry H. Anderson, Barry
Noebel, and Gloria Anderson, 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
Stock Purchase Agreement between MicroAge Integration Co., Robin Kennedy, Larry
H. Anderson, Barry Noebel, and Gloria Anderson (the "Agreement"), the
proceedings of the Board of Directors of the Company authorizing the Agreement,
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.
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 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 9, 1997 appearing on page F-2 of MicroAge, Inc.'s Annual Report on Form
10-K for the fiscal year ended November 2, 1997. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
Phoenix, Arizona
August 31, 1998
