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As filed with the Securities and Exchange Commission on July 22, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
MICRO WAREHOUSE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1192793
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
535 CONNECTICUT AVENUE
NORWALK, CONNECTICUT 06854
(203) 899-4000
(Address, including ZIP Code, and telephone number, including area code, of
registrant's principal executive offices)
BRUCE L. LEV, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
MICRO WAREHOUSE, INC.
535 CONNECTICUT AVENUE
NORWALK, CONNECTICUT 06854
(203) 899-4000
(Name, address, including ZIP Code, and telephone number, including area code,
of agent for service)
------------------------
COPIES TO:
RANDI L. STRUDLER, ESQ.
JONES, DAY, REAVIS & POGUE
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 326-3939
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement is declared effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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
====================== =================== ======================= ===================== ==================
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE AGGREGATE OFFERING AGGREGATE AMOUNT OF
REGISTERED REGISTERED (1) PRICE PER SHARE (2) OFFERING PRICE (2) REGISTRATION FEE
- ---------------------- ------------------- ----------------------- --------------------- ------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per share 350,000 shares $20.3125 $7,109,375.00 $2,100.00
====================== =================== ======================= ===================== ==================
</TABLE>
(1) The number of shares of Common Stock, par value $.01 per share, of the
Registrant to be registered has been determined based on the estimated
maximum number of shares of Common Stock to be issued in settlement of a
lawsuit.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to 457(c) under the Securities Act of 1933, as amended (the
"Securities Act").
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
- --------------------------------------------------------------------------------
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such State.
- --------------------------------------------------------------------------------
Subject to Completion, dated July 22, 1998
PROSPECTUS
350,000 SHARES
MICRO WAREHOUSE, INC.
COMMON STOCK
Micro Warehouse, Inc. (the "Company") will issue up to 350,000 shares of
the Company's Common Stock, $.01 par value per share (the "Common Stock")
(the "Settlement Shares") in connection with the settlement of lawsuits (the
"Litigation") instituted against the Company, KPMG Peat Marwick LLP and
certain individual defendants by certain purchasers of the Company's Common
Stock (the "Plaintiffs"). The exact number of shares of Common Stock to be
issued to the Plaintiffs will be determined by dividing $6.0 million by the
per share price of the Common Stock as reported by The Nasdaq Stock Market
("Nasdaq") for the final transaction on the trading date that the
Registration Statement of which this Prospectus forms a part becomes
effective, less $0.375 per share, see "Plan of Distribution." The Settlement
Shares will be distributed upon settlement of the Litigation to Kenneth A.
Eldred, as Attorney-In-Fact, for the benefit of the Plaintiffs (the
"Attorney-In-Fact"). The Company will distribute the Settlement Shares to
the Attorney-in-Fact on the day of effectiveness of the Registration
Statement of which this Prospectus forms a part. For a more detailed
description of the Litigation and of the distribution of the Settlement
Shares see "Plan of Distribution."
On July 15, 1998, the closing bid price of the Company's Common Stock was
$20 5/16 per share. The Company's Common Stock is traded on Nasdaq under the
symbol "MWHS."
------------------------
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN EVALUATING THE
COMMON STOCK OFFERED HEREBY,
SEE "RISK FACTORS" ON PAGE 5.
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.
-----------------------
The date of this Prospectus is , 1998.
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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"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the public reference facilities
maintained by the Commission at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and at 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of such materials can also be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission and that is
located at http://www.sec.gov. Documents filed by the Company can also be
inspected at the offices of The Nasdaq Stock Market, 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the information contained
in the Registration Statement, and reference is hereby made to the Registration
Statement and to the exhibits relating thereto for further information with
respect to the Company and the securities offered hereby. Any statements
contained herein concerning the provisions of any document are not necessarily
complete, and in each instance reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such reference.
The Registration Statement, including the exhibits thereto, may be inspected
without charge at the Commission's principal office in Washington, D.C., and
copies of any and all parts thereof may be obtained from such office after
payment of the fees prescribed by the Commission.
ANNUAL AND QUARTERLY REPORTS
This Prospectus is accompanied by a copy of the Company's Annual Report on
Form 10-K for the year ended December 31, 1997 and its Quarterly Report on Form
10-Q for the quarter ended March 31, 1998, both as filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus the
Company's Annual Report on Form 10-K for the year ended December 31, 1997; and
the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1998.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
made hereby, shall be deemed incorporated by reference in this Prospectus and to
be a part of this Prospectus from the date of the filing of such reports.
Any statement contained herein or 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 subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain, without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents (other than the
exhibits expressly incorporated in such documents by reference). Requests
should be directed to: Micro Warehouse, Inc., 535 Connecticut Avenue, Norwalk,
Connecticut 06854, Attention: Melinda LeVino, Director of Corporate
Communications (telephone: (203) 899-4672).
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INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
With the exception of the historical information contained in this
Prospectus, the matters described herein contain forward-looking statements that
involve risks and uncertainties including but not limited to economic,
competitive, governmental, technological and litigation factors outside of the
control of the Company. These factors more specifically include: uncertainties
attributable to Internet commerce generally; uncertainties surrounding the
demand for and supply of products manufactured by and compatible with those of
Apple Computer, Inc. products; competition from other catalog, retail store,
on-line and other resellers of computer products; issues surrounding the
Company's European businesses; uncertainties surrounding the implementation of
programs and activities described in the Company's December 1997 announced
restructuring; and the ultimate outcome of the SEC formal investigation brought
in connection with the Company's reported accounting errors. These and other
factors are described in (i) this Prospectus under "Risk Factors", (ii) the
Company's Annual Report on Form 10-K for the year ended December 31, 1997 in the
sections of Management's Discussion and Analysis of Financial Condition and
Results of Operations captioned "Liquidity and Capital Resources," "Impact of
Inflation and Seasonality", and "Outlook" and (iii) the Company's Quarterly
Report on Form 10-Q for the three months ended March 31, 1998 in the sections of
Management's Discussion and Analysis of Financial Condition and Results of
Operations captioned "Liquidity and Capital Resources" and "Outlook".
Forward-looking statements are typically identified by the words "believe,"
"expect," "anticipate," "intend," "estimate," and similar expressions. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of their dates.
3
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THE COMPANY
Micro Warehouse, Inc. (the "Company") is a specialty catalog retailer and
direct marketer of brand name personal computers, computer software,
accessories, peripheral and networking products to commercial and consumer
customers. The Company markets its products through frequent mailings of its
distinctive, colorful catalogs, Internet catalog and auction web sites and
telemarketing account managers who focus on corporate, education and government
accounts. The Company offers brand name hardware and software from leading
vendors such as Adobe, Apple, 3Com, Compaq, Hewlett Packard, IBM, Iomega,
Microsoft, Motorola, and Toshiba.
Through its four core catalogs, MicroWarehouse, MacWarehouse, Data Comm
Warehouse and Inmac, various specialty catalogs and its Internet sites, the
Company offers a broad assortment of more than 30,000 computer products at
competitive prices. With colorful illustrations, concise product descriptions
and relevant technical information, each catalog title focuses on a specific
segment of the computer market. The catalogs are recognized as a leading source
for computer hardware, software and other products. During the year ended
December 31, 1997 the Company distributed approximately 124 million catalogs
worldwide and as of December 31, 1997 the Company had approximately 2.2 million
customers who had purchased products within the last 12 months.
International operations represented 30% of the Company's sales in 1997.
In 1991 the Company established full-service, direct marketing operations in the
United Kingdom. In late 1992 the Company began operations in France and Germany
and in 1993 and 1994 acquired companies or initiated operations in Sweden,
Denmark, Norway, the Netherlands, Belgium, Finland and France. In this same time
frame, the Company also expanded into the non-European markets of Japan, Canada
and Mexico. In 1995 the Company acquired businesses in the United Kingdom,
Germany, Australia and Switzerland. In 1996 the Company acquired Santa Clara,
California-based Inmac Corp. ("Inmac"). Inmac was a leading international
direct-response marketer of a wide range of personal computer and networking
products with operations in the United States, Canada, France, Germany, the
Netherlands, Sweden and the United Kingdom. In 1996 the Company discontinued its
Macintosh-only operations in Belgium and Switzerland. The Company currently
publishes catalogs in seven countries outside the United States and distributed
approximately 25 million catalogs internationally in the year ended December 31,
1997. See note 12 to notes to consolidated financial statements contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997 for
information regarding the Company's operations in different geographic areas.
In November 1996 the Company completed the acquisition of the business of
USA Flex, a Bloomingdale, Illinois direct marketer of IBM PC-compatible
("Wintel") personal computer products. USA Flex had been successful in acquiring
customers and building its business from advertisements placed in domestic
computer publications, particularly Computer Shopper. In July 1997 the Company
acquired Online Interactive Inc. ("OLI"), a Seattle, Washington-based electronic
software reselling business. OLI offered customers the ability to purchase and
download software via the Internet.
In December 1997 the Company announced a major restructuring of its
operations. The restructuring objectives were to simplify the Company's business
worldwide, reduce the Company's cost structure, eliminate certain unprofitable
businesses and concentrate efforts on the productivity of the sales force and
the continued growth of the Wintel business. In connection with this
restructuring the Company discontinued its Macintosh-dependent operations in
Australia and Japan and completed the sale of three small Macintosh-dependent
operations in Denmark, Norway and Finland. In the United States the Company
consolidated its under-performing businesses, USA Flex and OLI, into the
Company's existing New Jersey and Connecticut facilities. In addition, the
Company reorganized its domestic sales force. These measures involved
eliminating approximately 600 positions or 14% of the workforce.
The Company maintains a full-service distribution center in Wilmington,
Ohio, totaling approximately 331,600 square feet and telemarketing centers in
Lakewood and Gibbsboro, New Jersey, and South Norwalk, Connecticut. The Company
operates 24 hours a day, seven days a week in the United States. The Company
also operates telemarketing and distribution facilities in the United Kingdom,
France, Germany, Sweden, the Netherlands, Canada and Mexico. The Company's
international operations generally use the same distribution and order
processing computer systems and are able to exchange data with United States
operations.
The Company began operations in 1987 as a Connecticut corporation and was
reincorporated in Delaware on October 2, 1992. The Company's principal
executive offices are located at 535 Connecticut Avenue, Norwalk, Connecticut
06884, and its telephone number at such address is (203) 899-4000.
4
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RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS,
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FACTORS DISCUSSED BELOW IN
EVALUATING THE COMPANY AND ITS BUSINESS. THIS PROSPECTUS CONTAINS
FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S
ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE
FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET
FORTH IN THE FOLLOWING RISK FACTORS AND ELSEWHERE IN THIS PROSPECTUS. SEE
"INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS."
CHANGES IN THE APPLE MICROCOMPUTER MARKET
The Company depends in large part on sales of hardware and software
products for users of Apple Macintosh computers. These products represented
approximately 35% of the Company's net sales for the quarter ended March 31,
1998. Published reports indicate that the level of demand for Apple Macintosh
products continues to be uncertain. By the end of 1997 the Apple "clone" market
had essentially disappeared. Apple also announced more restrictive price
protection and other terms for 1998 and has reduced the level of advertising
allowances and incentives available to resellers. Apple has also significantly
restricted the number of authorized resellers of its products and has commenced
direct competition with the Company and other resellers on the Internet. In
addition to the continuing impact of these matters, other ongoing uncertainties
concerning Apple may adversely affect the Company's worldwide Macintosh-related
sales and the Company's business, financial condition and results of operations.
REDUCTION IN INCENTIVE PROGRAMS; SHIFTING OF INVENTORY RISK
The Company acquires products for resale both directly from manufacturers
and indirectly through distributors and other sources. Many of these
manufacturers and distributors have historically provided the Company with
incentives in the form of supplier reimbursements, price protection payments,
rebates and other similar arrangements. The increasingly competitive
environment between and amongst computer hardware manufacturers has already
resulted in reduction and/or elimination of some of these incentive programs.
Additionally, the return rights historically offered by manufacturers have
become more limited. Manufacturers are also taking steps to reduce their
inventory exposure by supporting "build to order" programs in which distributors
and resellers are being authorized to directly manufacture computer hardware.
This trend is part of an overall effort by manufacturers to reduce their costs
and shift the burden of inventory risk to resellers like the Company, which
could have a material adverse effect on the Company's business, financial
condition and results of operations.
FOREIGN OPERATIONS
In addition to its activities in the United States, 30% of the Company's
1997 sales were generated internationally. Foreign operations are subject to
general risks attendant to the conduct of business in each foreign country,
including economic uncertainties and each foreign government's regulations. In
addition, the Company's international business may be affected by changes in
demand or pricing resulting from fluctuations in currency exchange rates or
other factors.
PRIVACY CONCERNS WITH RESPECT TO LIST DEVELOPMENT AND MAINTENANCE
The Company mails catalogs and sends electronic messages to names in its
proprietary customer database and to potential customers whose names are
obtained from rented or exchanged mailing lists. There has been increasing
world-wide public concern regarding right to privacy issues involved with the
rental and use of customer mailing lists and other customer information. Any
domestic or foreign legislation enacted limiting or prohibiting these practices
could have a material adverse effect on the Company's business, financial
condition and results of operations.
MANAGEMENT INFORMATION SYSTEMS
The Company's success is dependent on the accuracy and proper utilization
of its management information systems, including its telephone system. The
Company's ability to manage its inventory and accounts receivable collections;
to purchase, sell and ship its products efficiently and on a timely basis; and
to maintain its operations is dependent upon the quality and effective
utilization of the information generated by its management information systems.
The Company recognizes the need to continually upgrade its management
information systems to most effectively manage its operations
5
<PAGE>
and customer data base. In that regard, the Company anticipates that it will,
from time to time, require software and hardware upgrades for its present
management information systems.
INCREASES IN POSTAGE, SHIPPING AND PAPER COSTS
Increases in postal or shipping rates and paper costs could have a
significant impact on the cost of production and mailing of the Company's
catalogs and the shipment of customer orders. Postage prices and shipping rates
increase periodically, and the Company has no control over increases that may
occur in the future. The United States Postal Service has recently approved an
increase in postal rates which could go into effect in 1998. Paper prices
historically have been cyclical and significant increases have been experienced
by the Company in the past. Significant increases in postal or shipping rates
and paper costs could have a material adverse effect on the Company's business,
financial condition and result of operations, particularly to the extent the
Company is unable to pass on such increases directly to its customers or offset
such increases by reducing other costs. In addition, strikes or other service
interruptions by the postal service or third party couriers, such as Airborne
Express, could adversely affect the Company's ability to deliver products on a
timely basis.
QUARTERLY FLUCTUATIONS AND SEASONALITY
The Company's sales and results of operations have fluctuated and are
expected to continue to fluctuate on a quarterly basis as a result of a number
of factors, including: the condition of the microcomputer industry in general;
shifts in demand for hardware and software products; industry shipments of new
products or upgrades; the timing of new merchandise and catalog offerings;
fluctuations in response rates; fluctuations in postage, paper, shipping and
printing costs and in merchandise returns; adverse weather conditions that
affect response, distribution or shipping; shifts in the timing of holidays; and
changes in the Company's product offerings. The Company's operating
expenditures are based on sales forecasts. If revenues do not meet expectations
in any given quarter, operating results may be materially adversely effected.
In addition, customer response rates are subject to variations. The first
and last quarters of the year generally have higher response rates while the two
middle quarters typically have lower response rates. The slower quarters are
impacted by the summer months, particularly in Europe.
STOCK VOLATILITY
The technology sector of the United States stock markets has experienced
substantial volatility in recent periods. Numerous conditions which impact the
technology sector or the stock market in general or the Company in particular,
whether or not such events relate to or reflect upon the Company's operating
performance, could adversely affect the market price of the Company's Common
Stock. Furthermore, fluctuations in the Company's operating results,
announcements regarding litigation, the loss of a significant vendor, increased
competition, reduced vendor incentives and trade credit, higher postage and
operating expenses, and other developments, could have a significant impact on
the market price of the Company's Common Stock.
COMPETITION
The direct marketing industry and the computer products retail business, in
particular, are highly competitive. The Company competes with consumer
electronic and computer retail stores, including superstores, and other direct
marketers of hardware and software and computer related products. Certain
hardware and software vendors are selling their products directly through their
own catalogs and over the Internet. Certain competitors of the Company have
financial, marketing and other resources greater than those of the Company.
There can be no assurance that the Company can continue to compete effectively
against existing competitors or new competitors that may enter the market. In
addition, price is an important competitive factor in the personal computer
hardware and software market and there can be no assurance that the Company will
not be subject to increased price competition. An increase in the amount of
competition faced by the Company or its failure to compete effectively against
its competitors could have a material adverse effect on the Company's business,
financial condition and results of operations.
6
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ACQUISITIONS STRATEGY
The Company plans to continue to pursue acquisitions of complementary
businesses. However, there can be no assurance that suitable acquisitions will
be available to the Company on acceptable terms, that financing for future
acquisitions will be available on acceptable terms, that future acquisitions
will be advantageous to the Company or that anticipated benefits of such
acquisitions will be realized. The pursuit, timing and integration of possible
future acquisitions may cause substantial fluctuations in operating results.
STATE SALES TAX COLLECTION
The Company presently collects state sales tax, or other similar tax, only
on sales of products to residents of the states of New Jersey, Connecticut,
Ohio, Illinois, Washington and Virginia. Various states have tried to impose on
direct marketers the burden of collecting state sales taxes on the sale of
products shipped to state residents. The United States Supreme Court has
affirmed its position that it is unlawful for a state to impose state sales tax
collection obligations on an out-of-state mail order company whose only contacts
with the state are the distribution of catalogs and other advertising materials
through the mail and subsequent delivery of purchased goods by parcel post and
interstate common carriers. However, it is possible that legislation may be
passed to overturn such decision or the Supreme Court may change its position.
Additionally, it is currently uncertain as to whether electronic commerce, which
will likely include the Company's Internet and auction web site's sales
activities, will be subject to state sales tax. The imposition of new state
sales tax collection obligations on the Company in states to which it ships
products would result in additional administrative expenses to the Company and
could result in price increases to the customer, which could adversely affect
the Company's business, financial condition and results of operations.
LITIGATION
The Company will pay $19.0 million in settlement of the Litigation. On
an after tax basis and taking into account a contribution from a non-affiliated
source, the Company expects to record a charge of approximately $15.8 million in
the second quarter of 1998 in connection with the settlement. For a more
detailed description of the Litigation, see"Plan of Distribution."
In addition to the charge for the settlement of the Litigation, a pre-tax
charge of $20.7 million was recorded in the third quarter of 1997 for the then
proposed settlements of the consolidated class action and derivative lawsuit
that arose out of the facts underlying the Company's announcements in September
and October, 1996 that it intended to restate certain prior financial statements
covering years 1992 through 1995. The charge of $20.7 million was comprised of
$31.6 million for settlements of the consolidated class action and derivative
lawsuit including estimated legal fees, offset by insurance proceeds of $10.9
million. The settlements received final approval by the United States District
Court on June 2 and 3, 1998 and the relevant periods for appeal have expired.
In addition, the staff of the Securities and Exchange Commission ("SEC") is
conducting a formal investigation into the events underlying the restatement of
prior years financial statements.
YEAR 2000
The Company uses software and related technologies throughout its
business that will be affected by the Year 2000 problem common to most
businesses concerning the inability of information systems, primarily
computer software programs, to properly recognize and process date sensitive
information as the year 2000 approaches. The Company is evaluating its
software operating systems to improve its operations and achieve Year 2000
compliance. As a result, the Company will modify certain of its software
operating systems and is in the process of replacing its financial software
systems. The Company is presently finalizing its estimates with respect to
such costs and expects that such costs will not be material to the Company's
results of operations, though there can be no assurance in this regard.
In addition, the Year 2000 problem may adversely affect the manufacturers
of the products that the Company resells to its customers. While the Company
believes that the manufacturers of such products fully intend to achieve Year
2000 compliance, there can be no assurance they will or of the impact on the
Company that any such failure may cause.
7
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CERTAIN PROVISIONS OF THE COMPANY'S CERTIFICATE OF INCORPORATION
The Company's certificate of incorporation contains provisions that may
have the effect of delaying, deferring, or preventing a change in control of the
Company. The certificate of incorporation authorizes the issuance of up to
50,000,000 shares of the Company's Common Stock and 100,000 shares of preferred
stock of the Company. The Board of Directors has the power to determine the
price and terms under which any additional capital stock may be issued and to
fix the terms of the Company's Preferred Stock, and the Company's existing
stockholders will not have preemptive rights with respect thereto. See
"Description of Capital Stock."
USE OF PROCEEDS
There will be no cash proceeds to the Company from the issuance of the
Settlement Shares.
PLAN OF DISTRIBUTION
The Settlement Shares offered hereby will be issued to the Attorney-In-Fact
for the benefit of the Plaintiffs in connection with the settlement of the
Litigation. The Litigation originated with the filing of an action in 1996
against the Company, certain of its directors and officers and KPMG Peat
Marwick LLP, the Company's independent accountants, and is comprised of a
consolidation of lawsuits brought in the Superior Court of the State of
California for the County of Santa Clara by the Plaintiffs. The Plaintiffs, who
are several former shareholders of Inmac Corporation ("Inmac"), allege
violations by the Company and certain of its directors and officers of various
provisions of the federal securities laws in connection with the Company's
acquisition, by merger, of Inmac in 1996, including that there were various
misstatements and omissions made concerning the Company's financial performance
and position. While the defendants deny any wrongdoing or liability, they
recognize the risks and uncertainties inherent in major litigation of this
kind, and have agreed to the settlement in order to eliminate those risks and
uncertainties and to avoid substantial expenses and the inconvenience and
distraction of burdensome and protracted litigation.
Pursuant to the settlement of the Litigation, the Company will fund a
portion of the settlement with Common Stock having a value of $6.0 million with
the remainder of the settlement to be funded in cash. The number of shares of
Common Stock of the Company required to fund a portion of the settlement shall
be determined by dividing $6.0 million by the per share price of the Common
Stock as reported by Nasdaq for the final transaction on the trading date that
the Registration Statement of which this Prospectus forms a part becomes
effective, less $0.375 per share. For example, using the closing bid price of
the Company's Common Stock on July 15, 1998 of $20 5/16 as reported by Nasdaq,
this formulation would result in 300,940 Settlement Shares being issued to the
Plaintiffs.
The holders of the Settlement Shares may sell such shares pursuant to any
of the following methods: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
own account; (c) exchange distributions and/or secondary distributions in
accordance with the rules of Nasdaq; (d) ordinary brokerage transactions in
which the broker solicits purchasers; and (e) privately negotiated transactions.
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
The Company's certificate of incorporation provides that the authorized
capital stock of the Company consists of 50,000,000 shares of Common Stock of
which 34,760,519 were issued and outstanding as of June 30, 1998 and 100,000
shares of preferred stock, $0.01 par value per share ("Preferred Stock"), none
of which were issued and outstanding as of June 30, 1998.
COMMON STOCK
Each holder of Common Stock is entitled to one vote for each share held of
record on each matter submitted to a vote of stockholders and does not have
cumulative voting rights. Accordingly, the holders of a majority of the shares
of Common Stock entitled to vote in any election of directors may elect all of
the directors standing for election. Subject
8
<PAGE>
to any preferences which may be granted to the holders of Preferred Stock, each
holder of Common Stock is entitled to receive ratably such dividends, if any, as
may be declared by the Board of Directors out of funds legally available
therefor, as well as any distributions to the stockholders upon liquidation,
dissolution or winding up of the Company. Each holder of Common Stock is
entitled to share ratably in all assets of the Company remaining after payment
of all debts and other liabilities and subject to the prior rights of any
outstanding Preferred Stock. Holders of Common Stock have no conversion,
redemption, subscription or preemptive rights or other rights to subscribe for
additional shares. The outstanding shares of Common Stock are, and the shares
to be received in this offering will be, validly issued, fully paid and
nonassessable. The rights, preferences and privileges of holders of Common
Stock are subject to, and may be adversely effected by, the rights of the
holders of shares of any series of Preferred Stock which the Company may
designate and issue in the future.
PREFERRED STOCK
The Board of Directors, without stockholder approval, may issue shares of
Preferred Stock in one or more series and may fix or alter the rights,
preferences, privileges and restrictions, including the voting rights,
redemption provisions (including sinking funds provisions), dividend rights,
dividend rates, liquidation rates, liquidation preferences and conversion
rights. The issuance of Preferred Stock could decrease the amount of earnings
the Company has available for distribution to holders of Common Stock or
adversely effect the rights and powers, including voting rights, of the holders
of Common Stock. Further, the issuance of Preferred Stock could have the effect
of delaying, deferring, or preventing a change in control of the Company without
further action by the stockholders.
STOCKHOLDER RIGHTS PLAN
In June 1996, the Company adopted a Stockholder Rights Plan pursuant to
which the Company distributed a dividend of one right (a "Right") for each
outstanding share of Common Stock. Each Right entitles stockholders to buy one
one-thousandth of a share of Series A Junior Participating Preferred Stock, par
value $.01 per share (the "Preferred Share") at a price of $110.00 per one
one-thousandth of a Preferred Share upon the occurrence of certain events. The
Rights become exercisable if a person acquires 20% or more of the outstanding
Common Stock of the Company or announces a tender offer that would result in
such person owning 20% or more of the Company's Common Stock (collectively an
"Acquiring Person"). The Rights expire on June 27, 2006 unless otherwise
extended or the Rights are redeemed or exchanged. The Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right, at any time
prior to such time as a person becomes an Acquiring Person.
CERTAIN CORPORATE GOVERNANCE MATTERS
The Company's certificate of incorporation and by-laws provide, in general,
that (a) subject to certain restrictions, vacancies on the Board of Directors
and newly created directorships resulting from any increase in the authorized
number of directors may be filled by a majority of the directors then in office,
though less than a quorum, or by a sole remaining director, and the directors so
chosen shall hold office until the next annual election and until their
successors are duly elected and qualified, unless sooner displaced, (b) the
Board of Directors has the authority to fix the compensation of directors, and
(c) the Board of Directors has the authority to adopt, amend or repeal the
by-laws. Furthermore, the Company is subject to Section 203 of the Delaware
General Corporation Law.
The foregoing provisions of the Company's certificate of incorporation and
its by-laws may discourage or make more difficult the acquisition of control of
the Company by means of a tender offer, open market purchase, proxy contest, or
otherwise. These provisions are intended to discourage or may have the effect
of discouraging certain types of coercive takeover practices and inadequate
takeover bids and to encourage persons seeking to acquire control of the Company
first to negotiate with the Company. The Company's management believes that the
foregoing measures, many of which are substantially similar to the
takeover-related measures in effect for many other publicly held companies,
provide benefits by enhancing the Company's potential ability to negotiate with
the proponent of an unfriendly or unsolicited proposal to take over or
restructure the Company that outweigh the disadvantages of discouraging such
proposals because, among other things, negotiation of such proposals could
result in an improvement of their terms.
TRANSFER AGENT AND REGISTRAR
Boston EquiServe L.P. is the transfer agent and registrar for the Common
Stock.
9
<PAGE>
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon for
the Company by Bruce L. Lev, Esq., Executive Vice President, Secretary and
General Counsel of the Company.
EXPERTS
The consolidated financial statements and schedules of Micro Warehouse,
Inc. as of December 31, 1997 and 1996, and for each of the years in the three
year period ended December 31, 1997, have been incorporated by reference
herein in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, also incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
To the extent that KPMG Peat Marwick LLP audits and reports on financial
statements of Micro Warehouse, Inc. issued at future dates, and consents
to the use of their report thereon, such financial statements also will
be incorporated by reference in the Registration Statement of which this
Prospectus is a part in reliance upon their report and said authority.
10
<PAGE>
NO PERSON HAS BEEN AUTHORIZED 350,000 SHARES
IN CONNECTION WITH THE OFFERING
HEREBY TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION MICRO WAREHOUSE, INC.
NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST COMMON STOCK
NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES ---------------------
TO ANY PERSON OR BY ANYONE IN ANY
JURISDICTION WHERE SUCH OFFER OR PROSPECTUS
SOLICITATION WOULD BE UNLAWFUL.
NEITHER THE DELIVERY OF THIS ---------------------
PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
----------------------
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION 2
ANNUAL AND QUARTERLY REPORTS 2
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE 2
THE COMPANY 4
RISK FACTORS 5
USE OF PROCEEDS 8 , 1998
PLAN OF DISTRIBUTION 8
DESCRIPTION OF CAPITAL STOCK 8
LEGAL MATTERS 10
EXPERTS 10
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses to be incurred in connection with the issuance and
distribution of the securities covered by this Registration Statement are
estimated as follows:
Securities and Exchange Commission filing fee $ 2,100.00
Printing expenses 100.00
Accounting fees and expenses 5,000.00
Legal fees and expenses 15,000.00
Miscellaneous $ 800.00
--------------
Total $ 23,000.00
==============
The Plaintiffs are bearing no portion of the expenses of the offering.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's certificate of incorporation and by-laws provide for the
indemnification of the directors, officers, employees and agents of the Company
and its subsidiaries to the fullest extent that may be permitted by Delaware law
from time to time. Under Delaware law, directors, officers, employees and other
individuals may be indemnified against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation (a
"derivative action")) if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe their conduct was unlawful. A similar standard of care is applicable
in the case of a derivative action, except that indemnification only extends to
expenses (including attorneys' fees) incurred in connection with defense or
settlement of such an action and Delaware law requires court approval before
there can be any indemnification of expenses where the person seeking
indemnification has been found liable to the Company.
The certificate provides, among other things, that the Company will, to the
fullest extent permitted by Section 145 of the General Corporation law of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under such section from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by such section, and the indemnification provided for therein shall
not be deemed exclusive of any other rights to which those indemnified may be
entitled under any law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in their official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person. The certificate also includes a provision eliminating directors'
exposure to liability for monetary damages for breaches of their fiduciary duty
of care as directors. The provision does not eliminate the directors' (i)
liability for monetary damages for breach of the duty of loyalty to the Company
or its stockholders, (ii) liability for acts or omissions not in good faith or
involving intentional misconduct or a knowing violation of law, (iii) liability
for the improper purchase or redemption of stock or the payment of improper
dividends, and (iv) liability for any transaction from which a director
received an improper personal benefit. In addition, the provision does not
apply to claims made against directors by third parties or to persons who are
officers as well as directors when acting in their capacities as officers.
The Company is a party to indemnification agreements (the "Indemnification
Agreements") with each of its officers and directors (each an "Indemnitee").
Under these Indemnification Agreements, the Company must indemnify an Indemnitee
to the fullest extent permitted by Delaware Law for losses and expenses incurred
in connection with actions in which the Indemnitee is involved by reason of
having been a director or employee of the Company. The Company is also
obligated to advance expenses an Indemnitee may incur in connection with such
actions before any resolution of the action, and the Indemnitee may sue to
enforce his or her right to indemnification or advancement of expenses.
II-1
<PAGE>
The Company also maintains an insurance policy insuring its directors and
officers against liability for certain acts and omissions while acting in their
official capacities.
II-2
<PAGE>
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
3.1******** Amended and Restated Certificate of Incorporation of the
Company
3.2******** Amended and Restated By-Laws of the Company
4.1* Stockholders Rights Plan dated June 27, 1996
5.1 Opinion of Bruce L. Lev, Esq.
10.1** 1992 Stock Option Plan
10.2*** Amendment No. 1 to 1992 Stock Option Plan
10.3**** Amendment No. 2 to 1992 Stock Option Plan
10.4******** Amended and Restated 1994 Stock Option Plan
10.5** Lease Agreements between C.P. Lakewood, L.P. and the Company
relating to the Lakewood, New Jersey facilities
10.6** Lease Agreement between Miller-Valentine Partners and the
Company relating to the Wilmington, Ohio facility
10.7** Lease Agreement between Peter Godfrey and the Company
relating to the South Norwalk, Connecticut facility
10.8** (a)Lease Agreement between Hialet Associates and the Company
relating to a South Norwalk, Connecticut facility (53 Water
Street)
10.9** (b)Lease Agreement between Hialet Associates and the Company
relating to a South Norwalk, Connecticut facility (29
Haviland Street)
10.10** Lease Agreement between 50 Water Street Associates and the
Company relating to the South Norwalk, Connecticut facility
10.11** Lease between Union Square Assoc. Ltd. Part. and the Company
relating to the South Norwalk, Connecticut facility
10.12** Lease Agreement between South Norwalk Redevelopment
Partnership and the Company relating to the South Norwalk,
Connecticut facility
10.13** Second Amendment to Lease Agreement between Peter Godfrey
and the Company relating to the South Norwalk, Connecticut
facility (47 Water Street)
10.14** Second Amendment to Lease Agreement between Hialet
Associates and the Company relating to the South Norwalk,
Connecticut facility (53 Water Street)
10.15***** Lease Agreement between BBS Norwalk One Inc. and the Company
relating to the Norwalk, Connecticut facility
10.16*** Employment Agreement between Peter Godfrey and the Company
10.17** Employment Agreement between Stephen England and the Company
10.18****** Employment Agreement between Adam W. Shaffer and the Company
10.19****** Amendment to Employment Agreement between Adam W. Shaffer
and the Company
10.20******* Employment Agreement between Linwood A. Lacy, Jr. and the
Company
10.21******* Amendment to Employment Agreement between Linwood A. Lacy,
Jr. and the Company
10.22*** Employment Agreement between Bruce L. Lev and the Company
10.23******** Consulting Services Agreement between Felix Dennis and the
Company, as amended
10.24******** Form of Indemnification Agreement with Officers and
Directors
10.25******** Amended and Restated Credit Agreement among the Company, the
Subsidiaries of the Company, and The Chase Manhattan Bank
dated as of December 31, 1997
10.26******** Resignation Agreement by and between Linwood A. Lacy, Jr.
and the Company dated December 8, 1997
10.27******** Resignation Agreement by and between Kris Rogers and the
Company dated January 28, 1998
II-3
<PAGE>
11******** Statement re Computation of Per Share Earnings
21.1******** Subsidiaries of the Company
23.1 Consent of Independent Auditors
23.2 Consent of Bruce L. Lev, Esq. (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
27******** Financial Data Schedule
* Incorporated by reference to the Company's Registration
Statement on Form 8-A (File No. 00-20730)
** Incorporated by reference to the Company's Registration
Statement on Form S-1 (File No. 33-53100)
*** Incorporated by reference to the Company's Annual Report on
Form 10-K for fiscal year 1995
**** Incorporated by reference to the Company's Annual Report on
Form 10-K for fiscal year 1996
***** Incorporated by reference to the Company's Form 10-Q for the
quarter ended June 30, 1994
****** Incorporated by reference to the Company's Registration
Statement on Form S-1 (File No. 33-66066)
******* Incorporated by reference to the Company's Form 10-Q for the
quarter ended September 30, 1996
******** Incorporated by reference to the Company's Annual Report on
Form 10-K for fiscal year 1997
ITEM 17. UNDERTAKINGS
The 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, as amended (the "Securities Act")
(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 a
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; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") that are incorporated by reference in
this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, 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;
II-4
<PAGE>
(4) The Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in this 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.
(5) That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective and (ii) for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Norwalk, State of
Connecticut on July 20, 1998.
MICRO WAREHOUSE, INC.
By: /s/ Peter Godfrey
--------------------------------
Peter Godfrey
Chairman of the Board of Directors,
President and Chief Executive Officer
SIGNATURES AND POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Peter
Godfrey and Bruce L. Lev, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for him and in his name, place and stead in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement (or any other registration statement for the same offering that is to
be effective upon filing pursuant to Rule 462(b) under the Securities Act) and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and to take such actions
in, and file with the appropriate authorities in, whatever states said
attorneys-in-fact and agents, and each of them, shall determine, such
applications, statements, consents and other documents as may be necessary or
expedient to register securities of the Company for sale, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and conforming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof and the registration hereby confers like authority on its
behalf.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
Signature Title Date
/s/ Peter Godfrey Chairman of the Board of July 20, 1998
- ------------------------- Directors, President and Chief
Peter Godfrey Executive Officer (Principal
Executive Officer)
/s/ Wayne P. Garten Executive Vice President and July 20, 1998
- ------------------------- Chief Financial Officer (Principal
Wayne P. Garten Financial Officer and Principal
Accounting Officer)
Director July 20, 1998
- -------------------------
Felix Dennis
/s/ Frederick H. Fruitman Director July 20, 1998
- -------------------------
Frederick H. Fruitman
/s/ Joseph M. Walsh Director July 20, 1998
- -------------------------
Joseph M. Walsh
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
3.1******** Amended and Restated Certificate of Incorporation of the
Company
3.2******** Amended and Restated By-Laws of the Company
4.1* Stockholders Rights Plan dated June 27, 1996
5.1 Opinion of Bruce L. Lev, Esq.
10.1** 1992 Stock Option Plan
10.2*** Amendment No. 1 to 1992 Stock Option Plan
10.3**** Amendment No. 2 to 1992 Stock Option Plan
10.4******** Amended and Restated 1994 Stock Option Plan
10.5** Lease Agreements between C.P. Lakewood, L.P. and the Company
relating to the Lakewood, New Jersey facilities
10.6** Lease Agreement between Miller-Valentine Partners and the
Company relating to the Wilmington, Ohio facility
10.7** Lease Agreement between Peter Godfrey and the Company
relating to the South Norwalk, Connecticut facility
10.8** (a)Lease Agreement between Hialet Associates and the Company
relating to a South Norwalk, Connecticut facility (53 Water
Street)
10.9** (b)Lease Agreement between Hialet Associates and the Company
relating to a South Norwalk, Connecticut facility (29
Haviland Street)
10.10** Lease Agreement between 50 Water Street Associates and the
Company relating to the South Norwalk, Connecticut facility
10.11** Lease between Union Square Assoc. Ltd. Part. and the Company
relating to the South Norwalk, Connecticut facility
10.12** Lease Agreement between South Norwalk Redevelopment
Partnership and the Company relating to the South Norwalk,
Connecticut facility
10.13** Second Amendment to Lease Agreement between Peter Godfrey
and the Company relating to the South Norwalk, Connecticut
facility (47 Water Street)
10.14** Second Amendment to Lease Agreement between Hialet
Associates and the Company relating to the South Norwalk,
Connecticut facility (53 Water Street)
10.15***** Lease Agreement between BBS Norwalk One Inc. and the Company
relating to the Norwalk, Connecticut facility
10.16*** Employment Agreement between Peter Godfrey and the Company
10.17** Employment Agreement between Stephen England and the Company
10.18****** Employment Agreement between Adam W. Shaffer and the Company
10.19****** Amendment to Employment Agreement between Adam W. Shaffer
and the Company
10.20******* Employment Agreement between Linwood A. Lacy, Jr. and the
Company
10.21******* Amendment to Employment Agreement between Linwood A. Lacy,
Jr. and the Company
10.22*** Employment Agreement between Bruce L. Lev and the Company
10.23******** Consulting Services Agreement between Felix Dennis and the
Company, as amended
10.24******** Form of Indemnification Agreement with Officers and
Directors
10.25******** Amended and Restated Credit Agreement among the Company, the
Subsidiaries of the Company, and The Chase Manhattan Bank
dated as of December 31, 1997
10.26******** Resignation Agreement by and between Linwood A. Lacy, Jr.
and the Company dated December 8, 1997
10.27******** Resignation Agreement by and between Kris Rogers and the
Company dated January 28, 1998
<PAGE>
11******** Statement re Computation of Per Share Earnings
21.1******** Subsidiaries of the Company
23.1 Consent of Independent Auditors
23.2 Consent of Bruce L. Lev, Esq. (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
27******** Financial Data Schedule
* Incorporated by reference to the Company's Registration
Statement on Form 8-A (File No. 00-20730)
** Incorporated by reference to the Company's Registration
Statement on Form S-1 (File No. 33-53100)
*** Incorporated by reference to the Company's Annual Report on
Form 10-K for fiscal year 1995
**** Incorporated by reference to the Company's Annual Report on
Form 10-K for fiscal year 1996
***** Incorporated by reference to the Company's Form 10-Q for the
quarter ended June 30, 1994
****** Incorporated by reference to the Company's Registration
Statement on Form S-1 (File No. 33-66066)
******* Incorporated by reference to the Company's Form 10-Q for the
quarter ended September 30, 1996
******** Incorporated by reference to the Company's Annual Report on
Form 10-K for fiscal year 1997
<PAGE>
EXHIBIT 5.1
July 20, 1998
Micro Warehouse, Inc.
535 Connecticut Avenue
Norwalk, Connecticut 06854
Ladies and Gentlemen:
I have acted as counsel to Micro Warehouse, Inc., a Delaware corporation
(the "Company"), in connection with the Registration Statement on Form S-3 (the
"Registration Statement") of the Company filed in connection with the
registration under the Securities Act of 1933, as amended, of the sale of
approximately 350,000 shares of the Company's Common Stock, par value $.01 per
share (the "Common Stock"). The sale of the Common Stock is being registered by
the Company in connection with the settlement of lawsuits instituted against the
Company, KPMG Peat Marwick LLP and certain individual defendants by certain
purchasers of the Company's Common Stock.
For purposes of this opinion, I have examined such matters of law and
originals, or copies certified or otherwise identified to my satisfaction, of
such documents, corporate records and other instruments as I have deemed
necessary. In my examination, I have assumed the genuineness of all signatures,
the authenticity of all documents submitted to me as certified, photostatic or
conformed copies, and the authenticity of originals of all such latter
documents. I have also assumed the due execution and delivery of all documents
where due execution and delivery are prerequisites to the effectiveness thereof.
I have relied upon certificates of public officials and certificates of officers
of the Company for the accuracy of material factual matters contained therein
which were not independently established.
Based on the foregoing, it is my opinion that, subject to effectiveness
with the Securities and Exchange Commission, the Common Stock, when issued by
the Company, will be duly authorized and validly issued and will be fully paid
and nonassessable.
I hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ Bruce L. Lev
------------------------------------
Bruce L. Lev, Esq.
Executive Vice President, Secretary
and General Counsel
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
THE BOARD OF DIRECTORS AND STOCKHOLDERS OF MICRO WAREHOUSE, INC.:
We consent to incorporation by reference in the registration statement
on Form S-3 of Micro Warehouse, Inc. of our reports dated February 18, 1998,
relating to the consolidated balance sheets of Micro Warehouse, Inc. and
subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of operations, stockholders' equity and cash flows, and the related
schedule, for each of the years in the three-year period ended December 31,
1997, which reports appear in the December 31, 1997 annual report on
Form 10-K of Micro Warehouse, Inc., and to the reference to our firm under
the heading "Experts".
Stamford, Connecticut KPMG PEAT MARWICK LLP
July 20, 1998
