As filed with the Securities and Exchange Commission on July 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 A. 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: [ ]
<TABLE>
<CAPTION>
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 price (2) fee
(2)
- ----------------------------------- ------------------------ ------------------- ------------------ -----------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par 379,597 $14.375 $5,456,707 $1,610
value
- ----------------------------------- ------------------------ ------------------- ------------------ -----------------
</TABLE>
(1) In the event of a stock split, stock dividend, or similar transaction
involving the Company's Common Stock, in order to prevent dilution, the
number of shares registered shall be automatically increased to cover
the additional shares in accordance with Rule 416(a) under the
Securities Act.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based on the last reported sale price of the
Common Stock on June 26, 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 JULY 2, 1998
PROSPECTUS
379,597 Shares
MicroAge, Inc.
Common Stock
This Prospectus relates to the offer and sale by Leonard Boord and
Francisco Victoria ("Selling Stockholders") of an aggregate of 379,597 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 June 26, 1998, the closing sale price for the Common
Stock, as reported by the Nasdaq Stock Market, was $14.375 per share.
- - - - - - - - - - - - - - - - - - - - - - - - - -
SEE "RISK FACTORS" ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY.
- - - - - - - - - - - - - - - - - - - - - - - - - -
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
________ __, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission"). The reports,
proxy statements, and other information filed by the Company with the Commission
may be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
its regional offices located at 7 World Trade Center, 13th Floor, New York, New
York 10048, and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a World Wide Web site on
the Internet (http://www.sec.gov) that contains reports, proxy and information
statements, and other information regarding registrants, such as the Company,
that file electronically with the Commission. In addition, the Company's Common
Stock is traded on the Nasdaq Stock Market. Reports, proxy statements, and other
information filed by the Company are also available for inspection at the
offices of Nasdaq Stock Market, Reports Section, 1735 K Street, N.W.,
Washington, D.C. 20006.
This Prospectus constitutes a part of a registration statement on Form
S-3 (the "Registration Statement") that the Company has filed with the
Commission under the Securities Act of 1933, as amended (the "Securities Act").
As permitted by the rules and regulations of the Commission, this Prospectus
omits certain information contained in the Registration Statement and the
exhibits thereto and reference is hereby made to the Registration Statement and
related exhibits for further information with respect to the Company and the
Common Stock offered hereby. Statements contained in this Prospectus as to the
provisions of any document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission are not necessarily complete and, in each
instance, reference is made to the copy of such document as so filed. Each such
statement is qualified in its entirety by such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents have been filed by the Company with the
Commission and are hereby incorporated by reference in this Prospectus: (i) the
Annual Report of the Company on Form 10-K for the fiscal year ended November 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.
2
<PAGE>
The Company will cause to be furnished without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all documents
incorporated herein by reference (not including the exhibits to such documents,
unless such exhibits are specifically incorporated by reference in the document
which this Prospectus incorporates). Requests should be directed to Investor
Relations, MicroAge, Inc., 2400 South MicroAge Way, Tempe, Arizona 85282;
telephone: (602) 366-2414.
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.
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 and its reseller locations compete for
sales with numerous other computer resellers, including (i) master resellers;
(ii) direct resellers; (iii) wholesalers (resellers that do not sell to
end-users); (iv) vendors that sell directly to large purchasers; and (v) parties
that implement other sales methods, such as direct mail, computer "superstores,"
and mass merchandisers. There can be no assurance that the Company will not lose
market share, or that it will not be forced in the future to reduce its prices
in response to the actions of its competitors and thereby experience a reduction
in its gross margins.
Narrow Margins
The Company has experienced low operating and gross profit margins
caused by intense price competition within its industry. 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.
3
<PAGE>
Dependence on Supplier Incentive Funds
The Company receives funds from certain suppliers which are earned
through marketing programs or meeting purchasing, sales, or other objectives
established by the supplier. There can be no assurance that these programs will
be continued by the suppliers. A substantial reduction in the supplier funds
available to the Company would have a material adverse effect on the Company's
business, financial condition, and results of operations.
Product Supply; Dependence on Key Vendors
The computer reseller industry continues to experience product supply
shortages and customer order backlogs due to the inability of certain
manufacturers to supply certain products. In addition, certain vendors have
initiated new channels of distribution that increase competition for the
available product supply. There can be no assurance that vendors will be able to
maintain an adequate supply of products to fulfill all of the Company's customer
orders on a timely basis. Although the Company has not historically encountered
such conditions, the failure to obtain adequate product supplies, if competitors
were able to obtain them, could have a material adverse effect on the Company's
business, financial condition, and results of operations.
Three vendors of the Company each represented more than 10% of total
product sales for the fiscal year ended November 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
4
<PAGE>
may not be able to control spending in a timely manner to compensate for any
unexpected revenue shortfall. As a result, quarterly period-to-period
comparisons of the Company's financial results are not necessarily meaningful
and should not be relied upon as an indication of future performance. In
addition, although the Company's financial performance has not exhibited
significant seasonality in the past, the Company and the computer industry in
general tend to follow a sales pattern with peaks occurring near the end of the
calendar year, due primarily to special vendor promotions and year-end business
purchases.
Risk of Declines in Inventory Value
The Company's business is subject to the risk that the value of its
inventory will be adversely affected by price reductions by suppliers or by
technological changes affecting the usefulness or desirability of the products
comprising the inventory. It is the policy of most suppliers of the Company's
products to protect distributors such as the Company, who purchase directly from
such suppliers, from the loss in value of inventory due to technological change
or the supplier's price reductions. Under the terms of many of the Company's
distribution agreements, suppliers will credit the Company for inventory losses
resulting from the supplier's price reductions if the Company complies with
certain conditions. 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.
5
<PAGE>
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 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.
6
<PAGE>
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 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 reseller customers. The termination of the Company's
arrangements with UPS or other independent shipping companies, or the failure or
inability of one or more of these independent shipping companies to deliver
products from suppliers to the Company, or products from the Company to its
reseller customers or their end-user customers could have a material adverse
effect on the Company's business, financial condition, or results of operations.
For instance, an employee work stoppage or slow- down at one or more of these
independent shipping companies could materially impair that shipping company's
ability to perform the services required by the Company. There can be no
assurance that the services of any of these independent shipping companies will
continue to be available to the Company on terms as favorable as those currently
available or that these companies will choose or be able to perform their
required shipping services for the Company.
7
<PAGE>
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.
USE OF PROCEEDS
All 379,597 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 November 5, 1997, a subsidiary of the Company merged with and into
Microretailing, Inc. ("Microretailing") pursuant to an Agreement and Plan of
Reorganization, dated November 5, 1997 (the "Agreement"). Prior to the merger,
Microretailing was one of the Company's resellers and purchased the Company's
products for resale to its customers. At the time of the merger, Leonard Boord
and Francisco Victoria (the "Selling Stockholders") owned all of the issued and
outstanding voting shares of the capital stock of Microretailing. As a result of
the merger, Microretailing became a wholly-owned subsidiary of the Company and
its stockholders', including the Selling Stockholders', shares of Microretailing
common stock were converted into shares of the Company's Common Stock. Pursuant
to the Agreement, the Company registered for public sale on a Registration
Statement on Form S-3 (File No. 333-40007) those shares of Common Stock issued
to Microretailing's voting and non-voting stockholders, which included the
shares of the Selling Stockholders.
On June 15, 1998, the Selling Stockholders received additional shares
of Common Stock of the Company, which the Company agreed to register for public
sale. Accordingly, this Prospectus is a part of the Registration Statement filed
by the Company.
Each Selling Stockholder is a General Manager of the Company's Latin
Division.
8
<PAGE>
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> <C> <C>
Leonard Boord 536,523 2.7% 213,523 323,000 1.6%
Francisco Victoria 507,074 2.5% 166,074 341,000 1.7%
------- --- ------- ------- ---
1,043,597 5.2% 379,597 664,000 3.3%
</TABLE>
- ------------------
(1) Includes all shares of Common Stock beneficially owned by the Selling
Stockholders as a percentage of the 19,986,008 shares of Common Stock
outstanding at June 26, 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 379,597 shares of Common Stock
by the Selling Stockholders. The Company has been advised by each Selling
Stockholder that each Selling Stockholder expects to offer his Common Stock to
or through brokers and dealers and underwriters to be selected by the Selling
Stockholder from time to time. In addition, the Common Stock may be offered for
sale through the Nasdaq Stock Market, through a market maker, in one or more
private transactions, or a combination of such methods of sale, at prices and on
terms then prevailing, at prices related to such prices, or at negotiated
prices. Each Selling Stockholder may pledge all or a portion of the Common Stock
owned by him as collateral in loan transactions. Upon default by any such
Selling Stockholder, the pledgee in such loan transaction would have the same
rights of sale as such Selling Stockholder under this Prospectus. Each Selling
Stockholder also may enter into exchange traded listed option transactions which
require the delivery of the Common Stock listed hereunder. Each Selling
Stockholder may also transfer Common Stock owned by him in other ways not
involving market makers or established trading markets, including directly by
gift, distribution, or other transfer without consideration, and upon any such
transfer the transferee would have the same rights of sale as such Selling
Stockholder under this Prospectus. In addition, any securities covered by this
Prospectus which qualify for sale pursuant to Rule 144 of the Securities Act of
1933, as amended (the "1933 Act"), may be sold under Rule 144 rather than
pursuant to this Prospectus. Finally, each Selling Stockholder and any brokers
and dealers through whom sales of the Common Stock are made may be deemed to be
"underwriters" within the meaning of the 1933 Act, and the commissions or
discounts and other compensation paid to such persons may be regarded as
underwriters' compensation.
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.
9
<PAGE>
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 Price Waterhouse LLP, independent accountants, given on the authority of such
firm as experts in auditing and accounting.
10
<PAGE>
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
No dealer, salesperson, or other
person has been authorized in
connection with this offering to give
any information or to make any
representations other than those
contained in this Prospectus and, if
given or made, such information or
representations must not be relied
upon as having been authorized by the
Company. Neither the delivery of this
Prospectus nor any sale made
hereunder shall, under any
circumstances, create any implication
that there has been no change in the MicroAge, Inc.
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. 379,597
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. Shares
of
Common Stock
---------------------------
TABLE OF CONTENTS
---------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information........................... 2
Information Incorporated by Reference........... 2 ---------------------------
PROSPECTUS
Risk Factors.................................... 3 ---------------------------
Use of Proceeds................................. 8
Selling Stockholders............................ 8
Plan of Distribution............................ 9 ________ __, 1998
Legal Matters................................... 10
Experts......................................... 10
</TABLE>
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<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 .............. $ 1,610
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 ................................................... 1,390
-------
Total Expenses ................................................... $19,000
=======
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
<PAGE>
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.
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
December 4, 1997(2)
4.3 Specimen Common Stock Certificate (3)
4.4 Amended and Restated Rights Agreement dated as of September 28,
1994 between MicroAge, Inc. and First Interstate Bank of
California (4)
4.4.1 First Amendment dated as of November 5, 1996 between MicroAge,
Inc. and American Stock Transfer and Trust Company to Amended and
Restated Rights Agreement dated as of September 28, 1994, between
MicroAge, Inc. and First Interstate Bank of California (5)
5 Opinion of Snell & Wilmer L.L.P.
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Snell & Wilmer L.L.P. (included in Exhibit 5)
24 Power of Attorney (included in signature page)
- --------------
(1) Incorporated by reference to Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended May 1, 1994.
(2) Incorporated by reference to Exhibit 3.2 to the Company's Annual Report
on Form 10-K for the fiscal year ended November 2, 1997.
(3) Incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement No. 33-45510.
<PAGE>
(4) Incorporated by reference to Exhibit 1.1 of the Company's Form 8-A, filed
January 13, 1994.
(5) Incorporated by reference to Exhibit 4.2.1 to the Company's Annual Report
on Form 10-K for the fiscal year ended November 3, 1996.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (1)(i) and (l)(ii) above do not
apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference
<PAGE>
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.
<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 July 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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey D. McKeever Director, Chairman of the Board July 2,1998
- ----------------------------------------- and Chief Executive Officer
Jeffrey D. McKeever (Principal Executive Officer)
/s/ William H. Mallender Director July 2, 1998
- -----------------------------------------
William H. Mallender
/s/ Steve G. Mihaylo Director July 2, 1998
- -----------------------------------------
Steven G. Mihaylo
/s/ Lynda M. Applegate Director July 2, 1998
- -----------------------------------------
Lynda M. Applegate
/s/ Roy A. Herberger, Jr. Director July 2, 1998
- -----------------------------------------
Roy A. Herberger, Jr.
/s/Cyrus F. Freidheim, Jr. Director July 2, 1998
- -----------------------------------------
Cyrus F. Freidheim, Jr.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Dianne C. Walker. Director July 2, 1998
- -----------------------------------------
Dianne C. Walker
/s/ James R. Daniel Senior Vice President, Chief July 2, 1998
- ----------------------------------------- Financial Officer and Treasurer
James R. Daniel (Principal Financial Officer)
/s/ Raymond L. Storck Vice President-Controller and July 2, 1998
- ----------------------------------------- Assistant Treasurer
Raymond L. Storck (Principal Accounting Officer)
</TABLE>
July 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 379,597 shares of Common Stock (the "Shares") of
MicroAge, Inc. (the "Company") by Leonard Boord and Francisco Victoria, 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
proceedings of the Board of Directors of the Company, 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,
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.
PRICE WATERHOUSE LLP
Phoenix, Arizona
June 30, 1998
