As filed with the Securities and Exchange Commission on September 10, 1996
Registration Statement No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
InaCom Corp.
(Exact name of registrant as specified in its charter)
Delaware 47-0681813
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
10810 Farnam Drive
Omaha, Nebraska 68154
(402) 392-3900
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
David C. Guenthner
10810 Farnam Drive
Omaha, Nebraska 68154
(Name, address, including zip code, and telephone number, including area code,
of agent for service
----------------------
Copies to:
David L. Hefflinger Alexander Lynch
McGrath, North, Mullin & Kratz, P.C. Brobeck, Phleger & Harrison LLP
Suite 1400 1301 Avenue of the Americas
One Central Park Plaza New York, NY 10019
Omaha, NE 68102
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If the 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 being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
Title of each class of securities Proposed maximum Proposed
to be registered Amount to be offering price maximum aggregate Amount of
registered(1) per unit offering price(2) Registration Fee(1)
- -----------------------------------------------------------------------------------------------------------------------------------
6% Convertible Subordinated
Debentures due June 15,2006........... $55,250,000 100% $55,250,000 $19,052
Common Stock ($.10 par value)......... 2,302,083(2) --- --- ---
===================================================================================================================================
- ----------
(1) Calculated pursuant to Rule 457(i) of the Securities Act of 1933, as
amended.
(2) Based on a conversion price of $24 per share, but deemed to include
additional shares that may be issuable pursuant to antidilution provisions. No
additional registration fee is required pursuant to Rule 457(i).
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 the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
$55,250,000
InaCom Corp.
6% Convertible Subordinated Debentures due June 15, 2006
(Interest Payable June 15 and December 15)
-------------------
The 6% Convertible Subordinated Debentures due June 15, 2006 (the
"Debentures") of InaCom Corp., a Delaware corporation ("InaCom" or the
"Company"), and the shares of the Company's common stock, par value $.10 per
share (the "Common Stock" and, together with the Debentures, the "Securities"),
issuable upon conversion of the Debentures, may be offered for sale from time to
time for the account of certain holders of the Securities (the "Selling
Holders") as described under "Selling Holders." The Selling Holders may from
time to time sell the Securities offered hereby to or through one or more
underwriters, directly to other purchasers or through agents in ordinary
brokerage transactions, in negotiated transactions or otherwise, at prices
related to then prevailing market prices or at negotiated prices. See "Plan of
Distribution."
The Company will not receive any proceeds from the sale of the Debentures
or the shares of Common Stock by the Selling Holders.
The Debentures are convertible at any time, unless previously redeemed,
into Common Stock, at a conversion price of $24.00 per share, subject to
adjustment under certain circumstances. On September __, 1996, the last reported
sales price of the Common Stock on the Nasdaq National Market ("Nasdaq") was
$____ per share.
The Debentures are redeemable, in whole or in part, at the option of the
Company, at any time on or after June 16, 2000, at the redemption prices set
forth herein, plus accrued interest to the date of redemption. Each holder of
Debentures may require the Company to repurchase such holder's Debentures, in
whole or in part, in the event of a Change in Control (as defined herein) at a
purchase price equal to 100% of the principal amount of such Debentures plus
accrued interest to the date of repurchase.
The Debentures are general unsecured obligations of the Company issued
under an indenture dated June 14, 1996 between the Company and First National
Bank of Omaha (the "Indenture") and are subordinate in right of payment to all
Senior Debt (as defined herein) of the Company. The Indenture will not restrict
the incurrence of Senior Debt or other indebtedness by the Company or any of its
subsidiaries.
The Debentures were originally issued on June 19, 1996 in the principal
amount of $55,250,000 in a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act").
See "Risk Factors" on pages 5 through page 7 for a discussion of certain
factors that should be considered by prospective purchasers of the Securities.
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 COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
September __, 1996
1
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 Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. and at the Commission's regional
offices at 75 Park Place, New York, New York 10007 and Northwest Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material also can be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. In addition, such reports, proxy statements and other information
concerning the Company may be inspected at the offices of the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C.
20006-1506. The Commission maintains a World Wide Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of the
site is http://www.sec.gov.
The Company has filed a registration statement on Form S-3 (together with
all amendments and exhibits filed or to be filed in connection therewith, the
"Registration Statement") under the Securities Act of 1933 (the "Securities
Act") with respect to the Securities offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. Statements contained or incorporated by reference herein concerning
the provisions of documents are necessarily summaries of such documents, and
each statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are hereby incorporated by reference: (i) Annual Report on
Form 10-K for the fiscal year ended December 30, 1995; (ii) Quarterly Reports on
Form 10-Q for the quarters ended March 30, 1996 and June 29, 1996, (iii) Current
Report on Form 8-K dated June 19, 1996, and (iv) Proxy Statement for the Annual
Meeting of Stockholders held on April 18, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all of the documents
incorporated herein by reference (not including the exhibits to such documents,
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to David C. Guenthner,
Chief Financial Officer, InaCom Corp., 10810 Farnam Drive, Omaha, Nebraska
68154, Telephone: (402) 392-3900.
---------------
2
- -------------------------------------------------------------------------------
PROSPECTUS SUMMARY
The following summary information is qualified in its entirety by the more
detailed information and financial data appearing elsewhere, or incorporated by
reference, in this Prospectus.
The Company
InaCom is a leading provider of technology management services to the
end-user business client. The Company sells computer services, computer
products, and communication products and services to a targeted client base
consisting primarily of large and medium-sized corporate clients. InaCom's
products and services are offered both independently and in conjunction with one
another, thereby enabling the Company to provide a broad range of tailored
solutions to meet specific client needs. The Company is a single source,
long-term provider of products and services designed to help businesses optimize
information technology investments and control ongoing costs throughout the life
cycle of the client's technology systems.
The Company's headquarters are located at 10810 Farnam Drive, Omaha,
Nebraska 68154, and its telephone number is (402) 392-3900. The Company's
internet address on the world-wide web is "http://www.inacom.com."
Description of Debentures
The Debentures.................. $55,250,000 of 6% Convertible Subordinated
Debentures (the "Debentures") due June 15,
2006 issued under an indenture (the
"Indenture") between the Company and First
National Bank of Omaha as trustee (the
"Trustee").
Interest Payment Dates.......... June 15 and December 15, commencing
December 15, 1996.
Maturity Date................... June 15, 2006
Conversion Rights............... The holders of the Debentures are entitled
at any time, subject to prior redemption
or repurchase, to convert the Debentures,
or portions thereof (if the portions are
$1,000 or whole multiples thereof) into
shares of the Common Stock at the conversion
price of $24.00 per share (subject to certain
adjustments). See "Description of Debentures
- Conversion."
Optional Redemption............. The Debentures are not redeemable by the
Company prior to June 16, 2000. On or after
June 16, 2000 the Debentures are redeemable
on at least 20 days' notice at the option of
the Company, in whole or in part at any time,
at the redemption prices set forth herein,
in each case together with accrued interest.
See "Description of Debentures - Optional
Redemption."
Change in Control............... Upon a Change in Control, each holder of
Debentures will have the right (a "Repurchase
Right") to require the Company to repurchase
all of such holder's Debentures, or a portion
thereof (if the portions are $1,000 or whole
multiples thereof) at 100% of the principal
amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase.
See "Description of Debentures - Repurchase
at Option of Holders Upon Change in Control."
Subordination................... The payment of the principal of and premium,
if any, and interest on the Debentures is
subordinated in right of payment to the prior
payment in full of all existing and future
Senior Debt (as defined herein). The
Indenture contains no limitations on the
incurrence of additional Senior Debt or other
indebtedness by the Company. See "Description
of Debentures - Subordination."
- -------------------------------------------------------------------------------
3
- -------------------------------------------------------------------------------
Events of Default............... An Event of Default with respect to the
Debentures includes the occurrence of
any of the following: default for 30 days in
payment of interest; default in payment of
principal at maturity, upon redemption or
exercise of a Repurchase Right or otherwise;
default in payment on Debt (as defined
herein) at maturity of at least $5,000,000
principal amount; default on Debt which
results in acceleration of maturity of at
least $5,000,000 principal amount of Debt;
failure by the Company for 60 days after
notice to it to comply in any material
respect with any of its other agreements in
the Indenture or the Debentures; and certain
events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing,
the Trustee or the holders of at least 25%
in principal amount of the Debentures may
declare all the Debentures to be due and
payable immediately. See "Description of
Debentures - Defaults and Remedies"
Trading......................... There is no established market for the
Debentures. Dillon, Read & Co. Inc., the
initial purchaser of the Debentures, advised
the Company that it intended to make a market
in the Debentures but is not obligated to do
so. Any market in the Debentures which it
develops may be discontinued at any time
without notice.
Description of Common Stock
The Common Stock................ 2,302,083 shares of Common Stock are issuable
upon conversion of the Debentures. The
Debentures are convertible into Common Stock
at a conversion price of $24 per share,
subject to adjustment under certain
circumstances. See "Description of Capital
Stock" and "Description of Debentures -
Conversion."
Shares Outstanding.............. On June 29, 1996, there were 10,142,339
shares of Common Stock outstanding. As of
the date of this Prospectus, none of the
Debentures have been converted into shares of
Common Stock.
Shares Outstanding if all
Debentures are Converted........ 12,444,422 shares of Common Stock would be
outstanding if all of the Debentures were
converted into shares of Common Stock.
Dividend Policy................. The Company has never declared or paid a cash
dividend to stockholders. The Company's
Board of Directors presently intends to
retain all earnings to finance the expansion
of the Company's operations and does not
expect to authorize cash dividends in the
foreseeable future. Any payment of cash
dividends in the future will depend upon the
Company's earnings, capital requirements and
other factors considered relevant by the
Company's Board of Directors. Certain of the
Company's debt agreements restrict the amount
of dividends which may be paid.
Trading......................... The Common Stock is traded on the Nasdaq
National Market under the symbol "INAC."
- -------------------------------------------------------------------------------
4
RISK FACTORS
Prospective investors should carefully consider the specific risk
factors set forth below as well as the other information contained in this
Prospectus before deciding to invest in the Securities. This Prospectus contains
certain forward-looking statements and information relating to the Company that
are based on the beliefs of Company management as well as assumptions made by
and information currently available to Company management. Such statements
reflect the current view of the Company with respect to future events and are
subject to certain risks, uncertainties and assumptions, including the risk
factors described in this Prospectus. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described herein as believed,
estimated or expected.
Dependence Upon Key Vendors
The Company's business is dependent in large measure upon its
relationship with key vendors. A substantial portion of the Company's computer
products revenue is derived from the sales of the products of key vendors,
including IBM, COMPAQ, and Hewlett-Packard. During the fiscal year ended
December 30, 1995, sales of IBM, COMPAQ and Hewlett-Packard products accounted
for approximately 22%, 20% and 15%, respectively, of the Company's revenues. A
substantial portion of the Company's communications products and services
revenue is derived from the sales of products of other key vendors, including
products from Lucent Technologies and services from AT&T. Although the Company
considers its relationships with its key vendors to be good, there can be no
assurance that these relationships will continue as presently in effect or that
changes in marketing by one or more such key vendors and other suppliers would
not adversely affect the Company. The Company's agreements with these vendors
are on a non-exclusive basis and may be terminated by the vendors on notice
typically ranging from 30 to 90 days. Termination of, or a material change to,
or a nonrenewal of the Company's agreements with IBM, COMPAQ, Hewlett-Packard,
Lucent Technologies or AT&T, a material decrease in the level of marketing
development programs offered by computer vendors, or an insufficient or
interrupted supply of vendors' product would have a material adverse effect on
the Company's business. See "Business - Computer Products Sourcing Vendors."
Impact of Vendor Incentive Funds
The key vendors of the Company provide various incentives for promoting
and marketing their product offerings. Funds received by the Company are based
either on the sales of the vendor's products through the independent reseller
and Company-owned channels, or on the Company's purchases from the respective
vendor. The three major forms of vendor incentives received by the Company are
coop funds, market development funds and vendor rebates. The funds are earned
through performance of specific marketing programs or upon completion of
objectives outlined by the vendors. These funds from the Company's primary
vendors typically range from 1% to 3% of purchases by the Company. A material
decrease in the level of vendor incentive funding would have a material adverse
effect on the Company's business. See "Business - Computer Products Sourcing -
Vendors."
Inventory Management Risks
The personal computer industry is characterized by rapid product
improvement and technological change resulting in relatively short product life
cycles and rapid product obsolescence, which can place inventory at considerable
valuation risk. The Company's suppliers generally provide price protection
intended to reduce the risk of inventory devaluation. There can be no assurance
that vendors will continue such policies or that unforeseen new product
developments and related inventory obsolescence will not materially adversely
affect the Company's business.
Funding Requirements; Interest Rate Sensitivity
The Company's business requires significant working capital to finance
product inventory and accounts receivable. The Company has funded its working
capital requirements through a working capital financing
5
agreement involving sale of receivables, a revolving credit facility and private
placement notes. There can be no assurance that the existing creditors will
continue to finance the Company's operations at levels that are adequate or at
all. The borrowings under these agreements bear a floating rate of interest. The
Company's operating results are highly sensitive to changes in the interest
rate. Such a change in the interest rate could have a material adverse effect on
the Company's business. There can be no assurance that sufficient equity or debt
financing will be available on terms acceptable to the Company or that the
Company will be able to refinance its existing indebtedness. The inability of
the Company to refinance its existing indebtedness or to obtain a sufficient
amount of alternative financing would have a material adverse effect on the
Company's business.
Dependence Upon Key Management and Technical Personnel
The Company's success depends to a significant extent on its ability to
attract and retain key personnel. The Company is particularly dependent on its
senior management team and technical personnel. The Company's strategy for
growth in the sale of computer services and communication services depends on
its ability to attract and retain qualified technical personnel, including
systems engineers and communications specialists. Competition for technical
personnel is intense and no assurance can be given that the Company will be able
to recruit and retain such personnel. The failure to recruit and retain senior
management and technical personnel could have a material adverse effect on the
Company's business.
Acquisitions
The Company's strategy includes effecting acquisitions and strategic
relationships in selected geographic market and service areas. Acquisitions
involve a number of special risks, including the incorporation of acquired
products and services into the Company's offerings, the potential loss of key
employees of the acquired business and the valuation of the acquired business.
The Company expects to issue equity securities to consummate certain
acquisitions, which may cause dilution to investors acquiring Common Stock. No
assurance can be given that the Company will have adequate resources to
consummate acquisitions or that any such acquisitions will be successful in
enhancing the Company's business.
Proprietary Distribution Capabilities
The Company relies upon its proprietary distribution processes,
including Vision, Vista and Direct Express to provide it with a competitive
advantage. The Company seeks to protect these proprietary product procurement
processes. However, it is possible for third parties to replicate aspects of the
Company's software, systems and processes or to obtain and use information
similar to that which the Company regards as proprietary. No assurance can be
given that the protective measures taken by the Company will be sufficient to
preclude competitors from developing competing or similar proprietary software,
systems and processes. See "Business - Computer Services."
Operating Margin Risks
Gross margins from the sale of computer products have been declining
for several years as a result of computer product price reductions and intense
competition. The Company has responded with attempts to control operating costs
and with an expansion of sales of higher margin computer services and
communications services. See "Business - Strategy." There can be no assurance
that gross margins for computer products will not continue to decline or that
the Company will be successful in controlling operating costs. Furthermore,
there can be no assurance that gross margins for computer services and
communications services will not also decline or that the Company will be able
to successfully grow and compete in such service markets.
Competition
All aspects of the technology management services industry are highly
competitive. The Company's distribution network competes for potential clients,
including national accounts, with numerous other resellers and distributors.
Several computer manufacturers have expanded their channels of distribution,
pricing and product
6
positioning and compete with the Company's distribution network for potential
clients. Additionally, several computer manufacturers during 1994 lessened or
eliminated requirements upon independent resellers to purchase products from a
single source resulting in "open sourcing" of their products; previously, such
manufacturers had typically required independent resellers having contractual
relationships with the Company to purchase their products from the Company.
Other competitors operate mail-order or discount stores offering clones of major
vendor products. The Company also competes with other computer technology
sellers in the recruitment and retention of franchisees and independently-owned
resellers. The Company competes in the computer services division with a large
number of service providers, including IBM through ISSC, Andersen Consulting,
EDS and Vanstar. Competition in the communications products and services
division is also intense, and includes entities which are also significant
vendors of the Company, such as Lucent Technologies and AT&T. Certain
competitors and manufacturers are substantially larger than the Company and may
have greater financial, technical, service and marketing resources. The level of
future sales and earnings achieved by the Company in any period may be adversely
affected by a number of competitive factors, including an increase in direct
sales by vendors to independent resellers and/or clients and increased computer
client preference for mail-order or discount store purchases of clones of major
vendor products. See "Business - Competition."
Subordination
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company, or in a bankruptcy, insolvency, receivership or
similar proceeding relating to the Company or its property, the payment of the
principal and interest on the Debentures are subordinated to the prior payment
in full of all Senior Debt. No payment of principal or interest may be made by
the Company, directly or indirectly, on the Debentures at any time if a default
in payment of the principal or interest on Senior Debt exists, unless and until
such default shall have been cured or waived or shall have ceased to exist.
There are no restrictions in the Indenture upon the creation of additional
Senior Debt by the Company, or on the creation of any indebtedness by the
Company or any of its subsidiaries. See "Description of Debentures -
Subordination of Debentures."
Lack of Public Market
There is no established market for the Debentures. There can be no
assurance as to the continued eligibility or the liquidity of any markets that
may develop for the Debentures. If any such markets were to develop, the
Debentures may trade at prices that may be higher or lower than their principal
amount, depending on many factors, such as prevailing interest rates and the
markets for similar securities. Dillon, Read & Co., Inc. (the "Initial
Purchaser") advised the Company that it intended to make a market in the
Debentures. However, the Initial Purchaser is not obligated to do so, and any
market making with respect to the Debentures may be discontinued at any time
without notice. In addition, such market making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act and may be limited
during the pendency of the Registration Statement of which this Prospectus forms
a part. The Company does not intend to apply for listing of the Debentures on
any securities exchange or to seek approval for quotation through any automated
quotation system.
Certain Anti-Takeover Effects
Certain provisions of the Company's Certificate of Incorporation and
Delaware law may be deemed to have anti-takeover effects. The Company's
Certificate of Incorporation provides that the Board of Directors may issue
additional shares of Common Stock or establish one or more classes or a series
of Preferred Stock with such designations, relative voting rights, dividend
rights, liquidation and other rights that the Board of Directors fixes without
stockholder approval. In addition, the Company is subject to the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law which
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
See "Description of Capital Stock - Preferred Stock" and "Description of Capital
Stock - Section 203 of the Delaware General Corporation Law."
7
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for each of the
periods indicated is as follows:
Year Ended December Twenty-Six Weeks Ended
1991 1992 1993 1994 1995 June 24, 1995 June 29, 1996
- ---------------------------------------- --------------------------------
2.05 2.84 2.80 0.75 2.11 1.99 2.07
The ratio of earnings to fixed charges has been computed by dividing
earnings available for fixed charges (income before interest expense, interest
income and income taxes plus fixed charges) by fixed charges. Fixed charges
consist of interest expense (including amortization of deferred financing costs)
and the portion of rental expense that is representative of the interest factor.
BUSINESS
General
InaCom is a leading provider of technology management services to the
end-user business client. The Company sells computer services, computer
products, and communication products and services to a targeted client base
consisting primarily of large and medium-sized corporate clients. InaCom's
products and services are offered both independently and in conjunction with one
another, thereby enabling the Company to provide a broad range of tailored
solutions to meet specific client needs. The Company is a single source,
long-term provider of products and services designed to help businesses optimize
information technology investments and control ongoing costs throughout the life
cycle of the client's technology systems.
Recent Events
The Company acquired Technology Express, a leading network integrator
in the Nashville, Tennessee market in April 1996 for consideration including
approximately $3,800,000 in cash and 89,286 shares of Common Stock; the business
provides network integration services in addition to procurement, help desk and
support services. The Company acquired the assets of Computer Access
International in August 1996 for consideration including approximately
$7,600,000 in cash and 238,209 shares of Common Stock; the business provides
computer sales, support and rental services in the Denver, Colorado, Chicago,
Illinois and Milwaukee, Wisconsin markets.
Technology Management Services
The Company provides a broad range of services and products which help
businesses manage the increasing complexity of information technology within
their organizations. The Company's services range from basic product sourcing to
complete life cycle management whereby the Company handles all aspects of
product procurement, configuration, distribution, integration, maintenance,
upgrades and end-of-life disposal.
Computer Products Sourcing
Computer products include microcomputers, workstations, servers,
monitors, printers and operating systems software. The Company currently
distributes computer products for leading vendors such as IBM, COMPAQ,
Hewlett-Packard, Toshiba, Apple, NEC, Epson, Okidata, Lexmark, NCR, Novell,
Banyan, Microsoft, Oracle, 3Com, SynOptics, SCO and Network General. The Company
believes it is one of IBM's largest customers on a world-wide basis. Sales of
computer products accounted for 93.0% of the Company's revenues and 46.3% of the
Company's earnings in 1995.
Procurement. Procurement involves all activities which precede transfer of
item ownership, including: business processes for purchase forecasting; needs
analysis; product specification and requisitions; purchase order
8
management; order processing, tracking, and status reporting; financing; "build
to order;" shipment tracking; order receiving, lost item tracking; order
invoicing and invoice payments; and acceptance. As a result of its quantity
purchasing capability, the Company generally obtains volume discounts from its
vendors, enabling it to sell products on a more favorable basis than clients
could attain on their own. The Company's advanced distribution and configuration
capabilities allow the Company to fully configure (add enhancement boards,
networking products and software, and test the complete system) and ship
products directly to an end-user client. The Company believes it has a
competitive advantage in providing procurement services through the use of the
Company's proprietary Vision, Vista and Direct Express systems.
o Vision -- The Company's Vision 2000 software is an automated
catalog and configurator which allows a business client to
obtain product information from the client's desk top
computer. The client can determine product and specific
feature availability, product pricing and maintenance pricing
and can also determine component compatibility to configure
the client's systems.
o Vista -- The Company's Vista software enables a business
client to enter orders directly from the client's desk top
computer, track the order status from placement through
delivery, and obtain inventory, credit and cash flow
management information.
o Direct Express -- The Company's Direct Express delivery
program reduces the number of steps in the distribution
process by shipping products directly to the address selected
by the business client.
Distribution Network. Computer products are sold through a distribution
network of more than 950 business centers located throughout the United States.
The Company has international affiliations in Europe, Asia, Central and South
America, Canada and Mexico in order to satisfy the technology management needs
of its multinational clients.
The Company's direct sales force in the Company-owned stores enables
the Company to establish relationships with major corporate clients for purposes
of marketing the Company's technology management services and communication
products and services. Through its indirect division, the Company resells
products on a wholesale basis to a large base of franchisees, independent
dealers and value-added resellers and receives a mark-up fee or, in some cases,
a royalty.
Vendors. The Company has negotiated purchase arrangements, including
price, delivery, training and support, directly with most major vendors. The
Company's extensive vendor relationships allows it to offer over 35,000 products
in providing multiple vendor solutions to its business client's needs. During
the fiscal year ended December 30, 1995, sales of IBM, COMPAQ and
Hewlett-Packard products accounted for approximately 22%, 20% and 15%,
respectively, of the Company's revenues. The Company's agreements with its
vendors are generally on a non-exclusive basis and may be terminated by the
vendors on notice typically ranging from 30 to 90 days.
The agreements with vendors generally contain provisions with respect
to product cost, price protection, returns and product allocations; the Company
is entitled to price protection with all major vendors on eligible products in
the Company's inventory in the event of vendor price reductions. Certain vendors
also sponsor payment programs with several financial service organizations to
facilitate product sales through the business centers. In addition, the primary
vendors of the Company provide various incentives for promoting and marketing
their product offerings. Funds received by the Company are based either on the
sales of the vendor's products through the independent reseller and
Company-owned channels, or on the Company's purchases from the respective
vendor. These funds from the Company's primary vendors typically range from 1%
to 3% of purchases. The funds are earned through performance of specific
marketing programs or upon completion of objectives outlined by the vendors. The
three major forms of vendor incentives received by the Company are cooperative
funds, market development funds and vendor rebates. Coop funds are earned based
upon the sale of the vendor's products and generally must be utilized to offset
the costs associated with advertising and promotion pursuant to programs
9
established by the respective vendor. Market development funds are earned based
upon the Company's purchases from the vendor and generally must be used for
market development activities approved by the respective vendor. Vendor rebates
are based upon the Company attaining purchase volume targets established with
the vendor. Rebates generally can be used at the Company's discretion.
Communication Products Sourcing
Communication products and services include phone systems, voice mail,
voice processing, data network equipment, multiple small office/home office
offerings and maintenance. The Company also offers network services including
long distance, 800 service, calling cards, wide area value-added data
networking, video conferencing and cellular communications. Communication
products and services accounted for 2.7% of the Company's revenues and 8.7% of
the Company's earnings in 1995.
Distribution Network. Communication products and services are provided
through a network of 15 direct sales offices and contractual relationships with
approximately 100 dealers.
Vendors. The products of Lucent Technologies and the services of AT&T
constitute approximately 90% of the voice and data systems sold by the Company.
The Company believes it is one of the nation's largest independent resellers of
Lucent Technologies business products and services.
Computer Services
The Company has developed a broad range of life cycle management
computer services to help its business clients manage the ever increasing
complexity of information technology. These services generally have higher gross
margins than procurement services. These services include logistics services,
support services, system integration services, and professional management
services and can be purchased individually or as components of a complete
package. The Company intends continually to add new services to further assist
its business clients with the management of information technology. Computer
services generated 4.3% of the Company's revenues and 45.0% of the Company's
earnings in 1995.
Logistics Services. Logistics services include those basic services
associated with the distribution of computer hardware and software to the
end-user client. These services include product configuration in which the
Company installs and tests the particular software and peripherals required by
the client, direct shipment of products to one or more locations for the client
and special order handling, such as electronic order entry and the management of
client-owned inventory.
Support Services. Support services include leasing, providing demo
equipment, help desk, training, maintenance, and installation for computers,
communication equipment and network cabling. The Company provides extensive
services which assist both its independent reseller and end-user clients manage
ongoing support and training including help desk management and on-site and
remote training classes. Help desk services include total call center
management, call receipt, classification and problem diagnosis, problem
resolution or dispatch, and performance monitoring. The Company offers a
toll-free hotline to professionals that manage computer networks using operating
systems from a number of leading vendors including Novell, Banyan, Microsoft,
IBM, Apple and SCO. The Company's program of hardware maintenance, installation
and support provides clients with options ranging from depot repair to on-site
"break and fix" support and service coverage at multiple locations and is
supported by a central service dispatch and service call tracking organizations.
System Integration Services. System integration services include
systems design and consulting which help clients design a system and select
products that are appropriate for their specific needs and project planning and
management services. These services permit the Company to assist a client in the
actual implementation of a system, and system management services in which the
Company works with a client to implement all aspects of
10
network management, database management, security management, software
distribution and license control and data administration.
Professional Management Services. Professional management services
combine many of the services described above into a complete life cycle
management product portfolio. These services include service delivery, asset
management and procurement management. Service delivery comprises the labor and
management required actually to manage a client's service organization, such as
handling service requests, generating work orders, managing personnel (Company
and client), and managing service parts inventories. Asset management consists
of the registration, tracing and disposal of computer hardware and software as
it moves throughout an organization. Asset management services are becoming
increasingly important as businesses struggle to understand what capabilities
their existing computers have and whether, when and how to upgrade to the latest
technology. Under procurement management, the Company accepts responsibility for
the entire purchasing process for its client and generally has its own personnel
at a client location managing the process. This function draws upon the
Company's capabilities described above, including system design and planning,
needs analysis, product specification and requisitions, purchase order
management, order processing and tracking, financing and leasing, configuration,
testing and delivery and installation.
Communication Services
The Company provides communication services using its North American
Support Center as a single point of contact for all data and voice cabling and
wiring needs. The Company also offers project management, maintenance and
24-hour technical support through a network of independent certified technicians
and customer support personnel. The Company provides complete communication
system design, installation and maintenance.
Network Services. The Company provides network services with advanced
digital capabilities enabling voice, data and video communications utilizing
AT&T, Frontier and Westinghouse networks. Services include long distance,
inbound 800 service, calling cards and teleconferencing featuring account codes,
enhanced billing and customized call reports which allow business clients to
restrict and track telecommunications activity.
Convergent Technology Services. The Company offers convergence
solutions centered around wide area data networks, computer telephone
integration, desktop video conferencing and wireless data communications. These
services include specialized support programs, maintenance programs and
specialized software.
International Capabilities
To satisfy the technology management service needs of its multinational
clients, the Company has established affiliations with the International
Computer Group (Europe and Asia) and GE Hamilton Technology Services (Canada).
InaCom Latin America, the Company's 60% owned subsidiary, provides international
logistics and configuration services in Mexico, the Caribbean, Central and South
America.
Clients
The Company believes its client base of large and medium-sized
businesses is most likely to benefit from the cost savings obtainable through
the technology management services offered by the Company. The Company is not
dependent for a material part of its business upon a single or a few clients and
the loss of any one client would not have a material adverse effect on the
Company's business.
11
Service Mark and Trademark
The Company holds United States service mark and trademark
registrations for the marks "Inacom", "ValCom" and "Inacomp." The Company also
has certain state registrations. The Company claims common law rights to the
marks based on adoption and use. To the Company's knowledge, there are no
pending interference, opposition or cancellation proceedings, or litigation
threatened or claimed, with respect to the marks in any jurisdiction.
Government Regulation
The Company is subject to a substantial number of state laws regulating
franchise relationships. The Company is also subject to Federal Trade Commission
rules governing disclosure requirements in the granting of franchises. Such laws
generally impose registration and/or disclosure requirements on the Company in
the offer and sale of franchises and also regulate related advertisements. The
Company believes it is in substantial compliance with all such regulations.
Competition
All aspects of the technology management services industry are highly
competitive. The Company's distribution network competes for potential clients,
including national accounts, with numerous other resellers and distributors.
Several computer manufacturers have expanded their channels of distribution,
pricing and product positioning and compete with the Company's distribution
network for potential clients. Additionally, several computer manufacturers
during 1994 lessened or eliminated requirements upon independent resellers to
purchase products from a single source resulting in "open sourcing" of their
products; previously, such manufacturers had typically required independent
resellers having contractual relationships with the Company to purchase their
products from the Company. Other competitors operate mail-order or discount
stores offering clones of major vendor products. The Company also competes with
other computer technology sellers in the recruitment and retention of
franchisees and independently-owned resellers. The Company competes in the
computer services division with a large number of service providers, including
IBM through ISSC, Andersen Consulting, EDS, ENTEX, CompuCom and Vanstar.
Competition in communication products and services is also intense, and includes
entities which are also significant vendors of the Company, such as Lucent
Technologies and AT&T. Certain competitors and manufacturers are substantially
larger than the Company and may have greater financial, technical, service and
marketing resources. The Company's distribution network competes primarily on
the basis of professionalism and client contact, quality of product line,
availability of products, service, after-sale support, price, and quality of
end-user training.
The computer manufacturers' expansion of their channels of distribution
including direct distribution, open sourcing, employment of selective resellers,
pricing and product positioning has put pressure on hardware gross margins. The
Company believes its ability to deliver technology management services which
consist of technology procurement services, system integration services and
support services provides its client base with value added services that will
differentiate the Company from alternative distribution channels and will
mitigate the impact of added competitive pressures caused by economic conditions
and manufacturers' continuing expansion of their channels of distribution,
pricing and product positioning.
DESCRIPTION OF DEBENTURES
The Debentures were issued under an Indenture entered into between the
Company and First National Bank of Omaha, as trustee (the "Trustee") dated June
14, 1996. The following statements are subject to the detailed provisions of the
Indenture and are qualified in their entirety by reference to the Indenture, a
copy of which was previously filed as an exhibit to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 29, 1996 and incorporated herein
by reference and is also available for inspection at the office of the Trustee.
Wherever
12
particular provisions of the Indenture are referred to, such provisions are
incorporated by reference as a part of the statements made, and the statements
are qualified in their entirety by such reference.
General
The Debentures are unsecured general obligations of the Company,
subordinate in right of payment to certain other obligations of the Company as
described under "Subordination of Debentures," and convertible into Common Stock
as described under "Conversion." The Debentures will mature on June 15, 2006.
The Debentures will be limited to $55,250,000 aggregate principal amount. The
Company will pay interest on the Debentures semi-annually on June 15 and
December 15 of each year, commencing December 15, 1996 at the rate of 6% per
annum and will pay interest on the Debentures (except defaulted interest) to the
persons who are registered holders of Debentures at the close of business on the
preceding June 1 and December 1, respectively (subject to certain exceptions in
the case of Debentures redeemed or repurchased upon a Change in Control between
a record date and the next succeeding interest payment date). The Company may
pay principal and interest by check and may mail an interest check to a holder's
registered address. Holders must surrender Debentures to the Paying Agent to
collect principal payments.
The Debentures were originally sold to Qualified Institutional Buyers
("QIBs") and are represented by a restricted global Debenture in definitive,
fully registered form, deposited with The Depository Trust Company ("DTC").
Beneficial interests in the global Debentures will be shown on, and transfers
thereof will be effected only through, records maintained by DTC and its
participants.
The Debentures are issued without coupons in denominations of $1,000
and whole multiples of $1,000. A holder may transfer or exchange Debentures in
accordance with the Indenture. No service charge will be made for any
registration of transfer, exchange or conversion of Debentures, except for any
tax or other governmental charges that may be imposed in connection with any
transfers, registration of transfers or exchanges. The registrar for the
Debentures need not transfer or exchange any Debentures selected for redemption.
Also, it need not transfer or exchange any Debentures for a period of 15 days
before selecting Debentures to be redeemed. The registered holder of a Debenture
may be treated as its owner for all purposes.
The Trustee currently acts as Registrar, Paying Agent and Conversion
Agent. The Company may appoint an additional, or change any, Paying Agent,
Registrar, Conversion Agent without notice. The Company may act in any such
capacity.
The Indenture does not contain any restrictions on the payment of
dividends or on the repurchase of securities of the Company or any financial
covenants, nor does the Indenture require the Company to maintain any sinking
fund or other reserves for repayment of the Debentures.
Conversion
The holders of the Debentures are entitled at any time before the close
of business on the date of maturity of the Debentures, subject to prior
redemption or repurchase, to convert the Debentures, or portions thereof (if the
portions are $1,000 or whole multiples thereof) into shares of Common Stock at
the conversion price of $24.00 per share (subject to adjustments as described
below). Except as described below, no payment or adjustment will be made for
accrued interest on a converted Debenture or for dividends on any Common Stock
issued on conversion. If any Debenture is converted between a record date for
the payment of interest and the next succeeding interest payment date, unless
such Debenture has been called for redemption on a redemption date between such
dates, such Debenture must be accompanied by funds equal to the interest payable
to the registered holder on such interest payment date on the principal amount
so converted. A Debenture converted on an interest payment date need not be
accompanied by any payment, and the interest on the principal amount of the
Debenture being converted will be paid on such interest payment date to the
registered holder of such Debenture on the immediately preceding record date.
The Company will not issue fractional shares of Common Stock upon conversion of
Debentures and
13
instead will deliver a check in lieu of the fractional share based upon the
market value of the Common Stock on the last trading day prior to the conversion
date. In the case of Debentures called for redemption, conversion rights will
expire at the close of business on the business day preceding the redemption
date unless the Company defaults in the payment of the redemption price. In the
event any holder exercises its Repurchase Right (as defined below), such
holder's conversion right will terminate upon receipt of the written notice of
exercise of such Repurchase Right. See "Repurchase at Option of Holders Upon
Change in Control." In the case of Debentures called for redemption on a
redemption date between a record date and the opening of business on the next
succeeding interest payment date, no interest will be payable on any such
Debentures converted during such period.
The conversion price is subject to adjustment as set forth in the
Indenture in certain events, including the payment of dividends or distributions
on the Common Stock in shares of capital stock; subdivisions or combinations of
the Common Stock into a greater or smaller number of shares; a reclassification
of the Common Stock resulting in an issuance of any shares of the capital stock
of the Company; the distribution of rights or warrants to all holders of Common
Stock entitling them for a period of sixty days or less to purchase Common Stock
at less than the then current market price at that time; and the distribution to
all holders of Common Stock of assets or debt securities or any rights or
warrants to purchase securities, other than Common Stock, of the Company (other
than cash dividends or cash distributions payable out of consolidated net income
or retained earnings). No adjustment will be required for rights to purchase
Common Stock pursuant to any plan of the Company for reinvestment of dividends
or interest, or for a change in the par value of the Common Stock. To the extent
that Debentures become convertible into cash, no adjustment will be required
thereafter as to cash. No adjustment in the conversion price will be made unless
such adjustment would require a change of at least $.25 in the conversion price;
however, any adjustment that would otherwise be required to be made shall be
carried forward and taken into account at the earlier of any subsequent
adjustment or three years after the occurrence of the event giving rise to the
adjustment. The Company reserves the right to make such reductions in the
conversion price in addition to those required in the foregoing provisions as
the Company in its discretion shall determine to be advisable in order that
certain stock-related distributions hereafter made by the Company to its
stockholders shall not be taxable. Except as stated above, the conversion price
will not be adjusted for the issuance of Common Stock or any securities
convertible into or exchangeable for Common Stock, or carrying the right to
purchase any of the foregoing.
If the Company reclassifies the Common Stock or merges into, or
transfers or leases substantially all of its assets to, another corporation, the
holders of the Debentures then outstanding will be entitled thereafter to
convert such Debentures into the kind and amount of shares of capital stock,
other securities, cash or other assets which they would have owned immediately
after such event had such Debentures been converted immediately before the
effective date of the transaction.
Conversion price adjustments may in certain circumstances result in
constructive distributions that could be taxable as dividends under the Internal
Revenue Code of 1986, as amended, to holders of Debentures or to holders of
Common Stock issued upon conversion thereof.
Optional Redemption
The Debentures may be redeemed on at least 20 and not more than 60 days
notice at the option of the Company, in whole at any time or in part from time
to time, at the following redemption prices (expressed as percentages of
principal), together with accrued interest to the date fixed for redemption,
during the twelve month period beginning June 15 in the years set forth below:
14
Year Percentage
2000 . . . . . . . 103.3%
2001 . . . . . . . 102.7
2002 . . . . . . . 102.0
2003 . . . . . . . 101.3
2004 . . . . . . . 100.7
and thereafter at 100% of the principal amount, plus accrued interest; provided,
that no redemption may be made prior to June 16, 2000. If less than all the
Debentures are to be redeemed, the Trustee will select the Debentures to be
redeemed on a pro rata basis, by lot or by any other method the Trustee, in its
discretion, deems fair.
Repurchase at Option of Holders Upon Change in Control
Upon any Change in Control (as defined below) with respect to the
Company, each holder of Debentures shall have the right (the "Repurchase
Right"), at the holder's option, to require the Company to repurchase all of
such holder's Debentures, or a portion thereof which is $1,000 or any integral
multiple thereof, on the date (the "Repurchase Date") that is 45 days after the
date of the Company Notice (as defined below) at a price equal to 100% of the
principal amount of the Debentures, plus accrued interest, if any, to the
Repurchase Date.
Within 30 days after the occurrence of a Change in Control, the
Company is obligated to mail to all holders of record of the Debentures a notice
(the "Company Notice") of the occurrence of such Change in Control and the
Repurchase Right arising as a result thereof. The Company shall deliver a copy
of the Company Notice to the Trustee and shall cause a copy of such notice to be
published in The Wall Street Journal or another newspaper of national
circulation. To exercise the Repurchase Right, a holder of Debentures must
deliver on or before the 30th day after the date of the Company Notice
irrevocable written notice to the Company (or an agent designated by the Company
for such purpose) and the Trustee of the holder's exercise of such right
together with the Debentures with respect to which the right is being exercised,
duly endorsed for transfer.
Change in Control
A "Change in Control" of the Company means (i) the acquisition by any
person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act, (excluding, for this purpose, the Company or its subsidiaries,
or any employee benefit plan of the Company or its subsidiaries which acquires
beneficial ownership of voting securities of the Company) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 50% or more of either the then outstanding shares of common stock or the
combined voting power of the Company's then outstanding voting securities
entitled to vote generally in the election of directors; or (ii) individuals
who, as of the date of the Indenture, constitute the Board of Directors (as of
the date hereof the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors, provided that any person becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such person were a member of the Incumbent Board; or (iii)
approval by the stockholders of the Company of a reorganization, merger or
consolidation, in each case, with respect to which persons who were the
stockholders of the Company immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than 50% of the combined
voting power entitled to vote generally in the election of directors of the
reorganized, merged or consolidated Company's then outstanding voting
securities; or (iv) a liquidation or dissolution of the Company (other than
pursuant to the United States Bankruptcy Code) or of the conveyance, transfer or
leasing of all or substantially all of the assets of the Company.
15
No quantitative or other established meaning has been given to the
phrase "all or substantially all" (which appears in the definition of Change in
Control) by courts which have interpreted this phrase in various contexts. In
interpreting this phrase, courts make a subjective determination as to the
portion of assets conveyed, considering such factors as the value of assets
conveyed and the proportion of an entity's income derived from the assets
conveyed. To the extent the meaning of such phrase is uncertain, uncertainty
will exist as to whether or not a Change in Control may have occurred (and,
accordingly, whether or not the holders of Debentures will have the right to
require the Company to repurchase their Debentures).
The occurrence of a Change in Control would, in most cases, permit the
lenders to require prepayment of some or all amounts outstanding under the
Company's short-term and long-term debt agreements. In the event of a Change in
Control, any repurchase of the Debentures could, absent payment in full of any
amounts outstanding under such credit facilities or waiver, be prevented by the
subordination provisions of the Debentures. See "Subordination of Debentures."
Failure by the Company to repurchase the Debentures when required will result in
an Event of Default with respect to the Debentures whether or not such
repurchase is permitted by the subordination provisions. The right to require
the Company to repurchase the Debentures could delay or deter a Change in
Control of the Company, whether or not such Change in Control were supported by
the Board of Directors of the Company.
If a Change in Control occurs, there can be no assurance that the
Company would have sufficient funds or financing to repay any Senior Debt then
required to be repaid or to repurchase any or all Debentures then required to be
repurchased under the Indenture.
If an offer is made to repurchase Debentures as a result of a Change
in Control, the Company intends to comply with all tender offer rules, including
but not limited to Section 13(e) and 14(e) under the Exchange Act and Rules
13c-1 and 14c-1 thereunder, to the extent applicable to such offer.
Subordination of Debentures
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, the
payment of the principal of and premium, if any, and interest on the Debentures
will be subordinated, to the extent provided in the Indenture, in right of
payment to the prior payment in full of all Senior Debt.
No payment of principal of or premium, if any, or interest may be made
by the Company, directly or indirectly, on the Debentures (including any
repurchase pursuant to the exercise of the Repurchase Right) or to acquire any
of the Debentures at any time if a default in payment of the principal of or
premium, if any, or interest on Senior Debt exists, unless and until such
default shall have been cured or waived or shall have ceased to exist. During
the continuance of any event of default with respect to any Senior Debt, as such
event of default is defined under any such Senior Debt or in any agreement
pursuant to which any Senior Debt has been issued (other than default in payment
of the principal of, or premium, if any, or interest on any Senior Debt),
permitting the holders thereof to accelerate the maturity thereof, no payment
may be made by the Company, directly or indirectly, with respect to principal of
or premium, if any, or interest on the Debentures for 90 days following written
notice to the Company, from any holder or holders thereof or their
representative or representatives or the trustee or trustees under any indenture
under which any instrument evidencing any such Senior Debt may have been issued,
that such an event of default has occurred and is continuing. However, if the
maturity of such Senior Debt is accelerated, no payment may be made on the
Debentures until such Senior Debt that has matured has been paid or such
acceleration has been cured or waived.
Senior Debt is defined in the Indenture as Debt (as defined below) of
the Company outstanding at any time except Debt that by its terms is subordinate
in right of payment to the Debentures or Debt that is not otherwise senior in
right of payment to the Debentures. Senior Debt does not include Debt of the
Company to any of its subsidiaries. Debt is defined with respect to any person
as the principal of, and premium, if any, and interest on
16
(a) all indebtedness of such person for borrowed money (including all
indebtedness evidenced by notes, bonds, debentures or other securities sold by
such person for money), (b) all indebtedness incurred by such person in the
acquisition (whether by way of purchase, merger, consolidation or otherwise and
whether by such person or another person) of any business, real property or
other assets (except assets acquired in the ordinary course of the conduct of
the acquiror's usual business), (c) guarantees by such person of indebtedness
described in clause (a) or (b) of any other person, (d) all renewals,
extensions, refundings, deferrals, restructurings, amendments and modifications
of any such indebtedness, obligation or guarantee (e) all reimbursement
obligations of such person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such person, (f) all
capital lease obligations of such person, and (g) all net obligations of such
person under interest rate swap or similar agreements of such person. There are
no restrictions in the Indenture upon the creation of additional Senior Debt by
the Company, or on the creation of any indebtedness by the Company or any of its
subsidiaries.
By reason of the subordination provisions described above, in the
event of insolvency, funds which would otherwise be payable to Debentureholders
will be paid to the holders of Senior Debt to the extent necessary to pay Senior
Debt in full. As a result of these payments, general creditors of the Company
may recover less, ratably, than holders of Senior Debt and such general
creditors may recover more, ratably, than holders of Debentures or other
subordinated indebtedness of the Company.
Merger or Consolidation
The Indenture will not permit the Company to consolidate with, or
merge into, or transfer or lease all or substantially all of its assets to,
another person unless such other person is a corporation organized under the
laws of the United States, any State thereof or the District of Columbia and
such person assumes by supplemental indenture all the obligations of the Company
under the Debentures and the Indenture, and immediately after giving effect to
the transaction, no default shall exist.
Defaults and Remedies
An Event of Default includes the occurrence of any of the following:
default for 30 days in payment of interest; default in payment of principal at
maturity, upon redemption or exercise of a Repurchase Right or otherwise;
default in payment on Debt at maturity of at least $5,000,000 principal amount
and continuance of such default for 30 days after notice given in accordance
with the Indenture; default on Debt which results in acceleration of maturity of
at least $5,000,000 principal amount of Debt without such acceleration having
been cured, waived, rescinded, or annulled for 30 days after notice given in
accordance with the Indenture; failure by the Company for 60 days after notice
to it to comply in any material respect with any of its other agreements in the
Indenture or the Debentures; and certain events of bankruptcy or insolvency. If
an Event of Default occurs and is continuing, the Trustee or the holders of at
least 25% in principal amount of the Debentures may declare all the Debentures
to be due and payable immediately, except for defaults due to certain events of
bankruptcy or insolvency in which case if an Event of Default occurs and is
continuing, automatically the principal of all the Debentures and the interest
thereon shall become immediately due and payable. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Debentures.
Subject to certain limitations, holders of a majority in principal amount of the
Debentures may direct the Trustee in its exercise of any trust power. The
Trustee may withhold from Debentureholders notice of any default (except a
default in payment of principal or interest) if it determines that withholding
notice is in their interests. The Company is required to file with the Trustee
annually an officers' statement as to the absence of defaults in fulfilling any
of its obligations under the Indenture.
Modifications of the Indenture
The Company and the Trustee may amend the Indenture without notice to
any Debentureholder but with the written consent of the holders of a majority in
principal amount of the outstanding Debentures. However, without the consent of
each Debentureholder affected, an amendment may not: (i) reduce the amount of
Debentures
17
whose holders must consent to an amendment; (ii) reduce the rate or change the
time for payment of interest on any Debenture; (iii) reduce the principal of or
change the fixed maturity of any Debenture (including, without limitation, the
optional redemption provisions or the Repurchase Right); (iv) make any Debenture
payable in money, other than that stated in the Debenture; (v) change the
provisions of the Indenture regarding the right of a majority of the
Debentureholders to waive defaults under the Indenture or impair the right of
any Debentureholder to institute suit for the enforcement of any payment of
principal and interest on the Debentures on and after their respective due
dates; (vi) make any change that adversely affects the rights to convert any
Debenture; or (vii) make any change in the subordination provision that
adversely affects the rights of any Debentureholder.
Satisfaction and Discharge of Indenture
The Indenture will be discharged and cancelled upon the satisfaction
of certain conditions, including the payment of all the Debentures or the
deposit with the Trustee, within not more than six months prior to the maturity
or redemption of all of the Debentures, of funds sufficient for such payment or
redemption.
Reports to Holders of Debentures
The Company will regularly furnish to each holder of Debentures copies
of its annual report to stockholders, containing audited financial statements,
and any other financial reports which the Company furnishes to its stockholders.
Trustee and Transfer Agent
The Trustee and transfer agent for the Debentures is First National
Bank of Omaha. First National Bank of Omaha currently serves as the transfer
agent for the Common Stock.
Book Entry
The Depository Trust Company ("DTC"), New York, New York acts as
securities depository for the Debentures. The Debentures were issued as
fully-registered securities bearing the name of Cede & Co. (DTC's nominee) in
the form of one "Global Debenture" and deposited with DTC on June 19, 1996.
A purchaser of Debentures may hold its interest in the Global
Debenture directly through DTC if such purchaser is a participant in DTC, or
indirectly through organizations which are participants in DTC (the
"Participants"). Transfers between Participants will be effected in the ordinary
way in accordance with DTC rules and will be settled in same day funds. The laws
of some states require that certain persons take physical delivery of securities
in definitive form. Consequently, the ability to transfer beneficial interests
in the Global Debenture to such persons may be limited.
Purchasers of Debentures who are not Participants may beneficially own
interests in the Global Debenture held by DTC only through Participants or
certain banks, brokers, dealers, trust companies and other parties that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly ("Indirect Participants"). So long as Cede, as the nominee of DTC,
is the registered owner of the Global Debenture, Cede for all purposes will be
considered the sole holder of the Global Debenture.
Payment of interest on and the redemption price of the Global
Debenture will be made to Cede, the nominee for DTC as the registered owner of
the Global Debenture by wire transfer of immediately available funds on each
interest payment date. Neither the Company, the Trustee nor any paying agent
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of a beneficial ownership interest in the Global
Debenture or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
18
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having a beneficial interest in the principal amount represented by the Global
Debenture to pledge such interest to persons or entities that do not participate
in the DTC system, or otherwise take actions in respect of such interest, may be
affected by the lack of a physical certificate evidencing such interest.
Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under the Indenture) will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations. DTC has advised the Company that it will take any action permitted
to be taken by a holder of Debentures (including, without limitation, the
presentation of Debentures for exchange as described below) only at the
direction of one or more Participants to whose account DTC interests in the
Global Debenture are credited and only in respect of the principal amount of the
Debentures represented by the Global Debenture as to which such Participant or
Participants has or have given such direction.
The Company has been informed by DTC that with respect to any payment
of the principal of, premium, if any, and interest on, the Global Debenture,
DTC's practice is to credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Debenture as shown on the records of DTC or its nominee, unless
DTC has reason to believe that it will not receive payment on such payment date.
Payments by Participants to owners of beneficial interests in the principal
amount represented by the Global Debenture held through such Participants will
be the responsibility of such Participants, as is now the case with securities
held for the accounts of customers registered in "street name."
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance and settlement
of securities transactions between Participants through electronic book-entry
changes in accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and certain other
organizations. Certain of such Participants (or their representatives), together
with other entities, own DTC. Indirect access to the DTC system is available to
others such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Debenture among participants of
DTC, it is under no obligation to perform such procedures, and such procedures
may be discontinued at any time. Neither the Company nor the Trustee will have
any responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
If DTC is at any time unwilling or unable to continue as a depositary
for the Global Debenture and a successor depositary is not appointed by the
Company, within 90 days, the Company will issue Debentures in definitive form in
exchange for the Global Debenture.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 30,000,000
shares of Common Stock, par value $.10 per share, and 1,000,000 shares of Class
A Preferred Stock, par value $1.00 per share. As of June 29, 1996, there were
10,142,339 shares of Common Stock outstanding and no shares of Class A Preferred
Stock outstanding.
19
Common Stock
Holders of outstanding Common Stock are entitled to such dividends as
may be declared by the Company Board of Directors out of the assets legally
available for that purpose, and are entitled to one vote per share on all
matters submitted to a vote of the stockholders of the Company. The holders of
shares of Common Stock do not have cumulative voting rights. Therefore, the
holders of more than 50% of the Common Stock voting for the election of
directors can elect all the directors, and the remaining holders will not be
able to elect any directors. The holders of Common Stock have no pre-emptive or
other subscription rights, and there are no conversion or redemption or sinking
fund provisions with respect to such shares.
All of the outstanding shares of Common Stock will be, when issued
upon conversion of the Debentures, duly authorized, validly issued, fully paid
and nonassessable.
Preferred Stock
The Company Board of Directors is authorized to issue up to 1,000,000
shares of Class A Preferred Stock in one or more series, from time to time, with
such designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations and restrictions thereof, as may
be provided in a resolution or resolutions adopted by the Company Board of
Directors. The authority of the Company Board of Directors includes, but is not
limited to, the determination or fixing of the following with respect to shares
of such class or any series thereof: (i) the number of shares; (ii) the dividend
rate and the date from which dividends are to be cumulative; (iii) whether
shares are to be redeemable and, if so, the terms and amount of any sinking fund
providing for the purchase or redemption of such shares; (iv) whether shares
shall be convertible, and, if so, the terms and provisions thereof; (v) what
restrictions are to apply, if any, on the issue or reissue of any additional
Class A Preferred Stock; and (vi) whether shares have voting rights. Shares of
Class A Preferred Stock may be issued with a preference over the Common Stock as
to the payment of dividends. No shares of Class A Preferred Stock have been
issued.
Classes of stock such as the Class A Preferred Stock may be used, in
certain circumstances, to create voting impediments on extraordinary corporate
transactions or to frustrate persons seeking to effect a merger or otherwise to
gain control of the Company. For the foregoing reasons, any shares of Class A
Preferred Stock issued by the Company could have an adverse effect on the rights
of the holders of the Common Stock. The Company has no present plans to issue
any shares of Class A Preferred Stock.
Liquidation and Other Rights
Upon liquidation, the holders of Common Stock are entitled to share
ratably in assets available for distribution to stockholders after satisfaction
of any liquidation preferences of any outstanding preferred stock. The issuance
of any shares of series of Class A Preferred Stock in future financings,
acquisitions or otherwise may result in dilution of voting power and relative
equity interest of the holders of shares of Common Stock and will subject the
Common Stock to the prior dividend and liquidation rights of the outstanding
shares of the series of preferred stock.
Advance Notice Requirements in Connection with Stockholder Meetings
The Company bylaws establish an advance notice procedure for bringing
business before an annual meeting of stockholders and for nominating (other than
by or at the direction of the Board of Directors) candidates for election as
directors at a meeting of stockholders. To be timely, notice of business to be
brought before an annual meeting or nominations of candidates for election of
directors at a meeting must be received by the Secretary of the Company not less
than 30 nor more than 60 days prior to the meeting. In the event that less than
40 days' notice or prior public disclosure of the date is given or made to
stockholders, notice by the stockholder must be received
20
no later than the tenth day following the date on which notice of the date of
the meeting was mailed or public disclosure thereof was made.
Section 203 of the Delaware General Corporation Law
Section 203 of the General Corporation Law of the Delaware prohibits a
publicly-held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless
upon consummation of such transaction the interested stockholder owned 85% of
the voting stock of the corporation outstanding at the time the transaction
commenced or unless the business combination is, or the transaction in which
such person became interested stockholder was, approved in a prescribed manner.
A "business combination" includes a merger, an asset sale and any other
transaction resulting in a financial benefit to the interested stockholder. An
"interested stockholder" is a person who, together with affiliates and
associates, owns 15% or more of the corporation's voting stock.
Transfer Agent
The transfer agent for the Common Stock is First National Bank of
Omaha, Omaha, Nebraska.
SELLING HOLDERS
The Debentures were initially issued and sold pursuant to a Purchase
Agreement dated as of June 14, 1996 between the Company and Dillon, Read & Co.
Inc., the Initial Purchaser. The Debentures were acquired from the Initial
Purchaser by the Selling Holders in compliance with Rule 144A under the
Securities Act, or in other permitted resale transactions from the Initial
Purchaser or holders who acquired such Debentures from the Initial Purchaser or
other prior holders thereof in further permitted resale transactions exempt from
registration under the Securities Act. The Company agreed to indemnify and hold
the Initial Purchaser harmless against certain liabilities under the Securities
Act that would arise in connection with the sale of the Debentures by the
Initial Purchaser.
Except as otherwise indicated, the table below sets forth certain
information with respect to the Securities as of September 6, 1996. The term
"Selling Holders" includes the beneficial owners of the Securities listed below
and their transferees, pledgees, donees or other successors.
Aggregate Principal Number of Shares
Amount of Debentures of Common Stock
Name That May Be Sold That May Be Sold*
Bank of New York $ 5,373,000 223,875
Bear Stearns Securities Corp. 2,127,000 88,625
Boston Safe Deposit & Trust Co. 10,800,000 450,000
Brown Bros Harriman & Co. 6,000,000 250,000
Citibank, N.A.3,000,000 125,000
Dillon, Read & Co. Inc. 3,280,000 136,667
First Interstate Bank of California 1,945,000 81,042
Glynn (J.A.) & Company 215,000 8,958
Lehman Brothers, Inc. 750,000 31,250
Lehman Brothers International 850,000 35,417
Mercantile, Safe Deposit and
Trust Company 480,000 20,000
NBD Bank, N.A. 1,500,000 62,500
Northern Trust Co.-Trust 1,185,000 49,375
PaineWebber Incorporated 500,000 20,833
Regional Operations Group Inc. 35,000 1,458
21
Republic New York Securities Corp. 750,000 31,250
SSB Custodian 13,610,000 567,083
Wachovia Bank North Carolina 1,100,000 45,833
Wagner, Stott & Co. 1,750,000 72,917
*Assumes a conversion price of $24.00 per share.
The preceding table has been prepared based upon information furnished to the
Company by the Depository Trust Company and by or on behalf of the Selling
Holders.
The information concerning the Selling Holders may change from time to
time and will be set forth in Supplements to this Prospectus. In addition, the
per share conversion price and, therefore, the number of shares of Common Stock
issuable upon conversion of the Debentures is subject to adjustment under
certain circumstances as specified in the Indenture. Accordingly, the aggregate
principal amount of Debentures and the number of shares of Common Stock issuable
upon conversion of the Debentures may change. As of the date of this Prospectus,
the aggregate principal amount of Debentures outstanding is $55,250,000, which
may be converted into 2,302,083 shares of Common Stock.
Because the Selling Holders may offer all or some of the Debentures and
shares of Common Stock issued upon conversion thereof from time to time pursuant
to this Prospectus, no estimate can be given as to the principal amount of
Debentures or shares of Common Stock that will be held by the Selling Holders
after completion of this offering. See "Plan of Distribution."
PLAN OF DISTRIBUTION
Pursuant to a Registration Rights Agreement dated June 14, 1996 between
the Company and the Initial Purchaser, a Selling Holder may distribute
Securities under this Prospectus from time to time for a 45-day period (the
"Selling Period") only if the Selling Holder gives written notice to the Company
at least three business days prior to the Selling Period.
The Company may suspend the use of this Prospectus and any supplements
hereto in certain circumstances due to pending corporate developments, order of
the Commission or state authorities or similar events or to supplement or amend
the Prospectus. The Company is obligated in the event of such suspension to use
its best efforts to ensure that the use of the Prospectus may be resumed as soon
as practicable.
The Selling Holders may sell all or a portion of the Debentures and
shares of Common Stock beneficially owned by them and which may be offered
hereby from time to time during a Selling Period on any exchange or market on
which the securities are listed or quoted, as applicable, on terms to be
determined at the times of such sales. The Selling Holders may also make private
sales directly or through a broker or brokers. Alternatively, any of the Selling
Holders may from time to time offer the Debentures or shares of Common Stock
during a Selling Period which may be offered hereby and beneficially owned by
them through underwriters, dealers or agents, who may receive compensation in
the form of underwriting discounts, commissions or concessions from the Selling
Holders and the purchasers of the Debentures or shares of Common Stock for whom
they may act as agent. Such dealers may include the Initial Purchaser, which may
perform investment banking or other services for or engage in other transactions
with the Company from time to time in the future.
To the extent required, the aggregate principal amount of Debentures
and number of shares of Common Stock to be sold hereby, the names of the Selling
Holders, the purchase price, the name of any such agent, dealer or underwriter
and any applicable commissions, discounts or other terms constituting
compensation with respect to a particular offer during a Selling Period will be
set forth in an accompanying Prospectus Supplement. The aggregate proceeds to
the Selling Holders from the sale of the Debentures or shares of Common Stock
offered by
22
them hereby will be the purchase price of such Debentures or shares of Common
Stock less discounts and commissions, if any.
The Debentures and the shares of Common Stock which may be offered
hereby may be sold from time to time during a Selling Period in one or more
transactions at fixed offering prices, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices will
be determined by the holders of such securities or by agreement between such
holders and underwriters or dealers who may receive fees or commissions in
connection therewith.
The outstanding Common Stock is listed for trading on Nasdaq National
Market, and the shares of Common Stock issuable upon conversion of the
Debentures have been authorized for listing on Nasdaq National Market. There is
no assurance as to the development or liquidity of any trading market that may
develop for the Debentures.
In order to comply with the securities laws of certain states, if
applicable, the Debentures and shares of Common Stock offered hereby will be
sold in such jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states the Debentures and shares of Common
Stock offered hereby may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and compliance with same is effected.
23
The Selling Holders and any broker-dealers, agents or underwriters that
participate with the Selling Holders in the distribution of the Debentures or
shares of Common Stock offered hereby may be deemed to be "underwriters" within
the meaning of the Securities Act, in which event any commissions or discounts
received by such broker-dealers, agents or underwriters and any profit on the
resale of the Debentures or shares of Common Stock offered hereby and purchased
by them may be deemed to be underwriting commissions or discounts under the
Securities Act.
The Company and the Selling Holders have agreed to indemnify each other
against certain liabilities arising under the Securities Act. The Company has
agreed to pay all expenses incident to the offer and sale of the Debentures and
Common Stock offered hereby by the Selling Holders to the public, other than
selling commissions and fees.
LEGAL MATTERS
The validity of the Securities offered hereby have been passed upon for
the Company and the Selling Holders by McGrath, North, Mullin & Kratz, P.C.,
Omaha, Nebraska 68102.
EXPERTS
The consolidated financial statements and schedules of InaCom Corp. as
of December 30, 1995 and December 31, 1994, and for each of the years in the
three-year period ended December 30, 1995, have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
24
No dealer, salesman or other person has been authorized to give any information
or to make any representations not 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 or the Selling Stockholders. This Prospectus does
not constitute an offer of any securities other than those to which it relates
or an offer to sell, or the solicitation of an offer to buy, the Securities in
any jurisdiction where, or to any person to whom, it is unlawful to make such
offer or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
been no change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to the date
hereof.
-----------------
TABLE OF CONTENTS
Page
----
Available Information......................... 2
Incorporation of Certain
Documents By Reference....................... 2
Prospectus Summary............................ 3
Risk Factors.................................. 5
Ratio of Earnings to Fixed Charges............ 8
Business.. 8
Description of Debentures..................... 12
Description of Capital Stock.................. 19
Selling Holders............................... 21
Plan of Distribution.......................... 22
Legal Matters................................. 24
Experts....................................... 24
InaCom Corp.
--------------
PROSPECTUS
September __, 1996
-------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses and costs (other
than underwriting discounts and commissions) expected to be incurred in
connection with the sale and distribution of the securities being registered.
All of the amounts shown are estimated except the registration fees of the
Commission and the National Association of Securities Dealers, Inc.
===============================================================
Item Amount to be paid by
Company
- ---------------------------------------------------------------
SEC registration fee $ 19,052
- ---------------------------------------------------------------
NASD filing fee 17,500
- ---------------------------------------------------------------
Printing and engraving 25,000
expenses
- ---------------------------------------------------------------
Accounting fees and 10,000
expenses
- ---------------------------------------------------------------
Legal fees and expenses 20,000
- ---------------------------------------------------------------
Blue Sky fees and 10,000
expenses
- ---------------------------------------------------------------
Miscellaneous 3,448
- ---------------------------------------------------------------
Total 105,000
===============================================================
II-1
Item 15. Indemnification of Directors and Officers.
Pursuant to Article VII of the Certificate of Incorporation of InaCom,
InaCom shall, to the extent required, and may, to the extent permitted, by
Section 102 and Section 145 of the General Corporation Law of the State of
Delaware, indemnify and reimburse all persons whom it may indemnify and
reimburse pursuant thereto. No director shall be liable to InaCom or its
stockholders for monetary damages for breach of fiduciary duty as a director
with respect to acts or omissions occurring on or after May 27, 1987. A director
shall continue to be liable for (i) any breach of a director's duty of loyalty
to InaCom or its stockholders; (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (iii) paying a
dividend or approving a stock repurchase which would violate Section 174 of the
General Corporation Law of the State of Delaware; or (iv) any transaction from
which the director derived an improper personal benefit.
The by-laws of InaCom provide for indemnification of InaCom's officers
and directors against all expenses, liabilities or losses reasonably incurred or
suffered by them, including liability arising under the Securities Act of 1933,
to the extent legally permissible under section 145 of the General Corporation
Law of the State of Delaware where any such person was, is, or is threatened to
be made a party to or is involved in any action, suit or proceeding whether
civil, criminal, administrative or investigative, by reason of the fact such
person was serving InaCom in such capacity. Generally, under Delaware law,
indemnification may only be available where an officer or director can establish
that such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of InaCom.
Item 16. Exhibits.
Exhibit 4.1 Specimen Common Stock Certificate
4.2 Indenture dated June 14, 1996 by and between the Company and
First National Bank of Omaha, as trustee, and related
Debenture, incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 29,
1996.
4.3 Registration Rights Agreement dated June 14, 1996 between the
Company and Dillon, Read & Co. Inc.
4.4 Restated Certificate of Incorporation of the Company,
as amended, incorporated herein by reference to the
Company's Current Report on Form 8-K dated March 30,
1993.
4.5 Bylaws of the Company, as amended to date,
incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 24, 1994.
5.1 Opinion of McGrath, North, Mullin & Kratz, P.C.
12 Statement re Computation of Ratios
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of McGrath, North, Mullin & Kratz, P.C.
(included in Exhibit 5.1)
24 Powers of Attorney
25 Statement of Eligibility of Trustee
II-2
Item 17. Undertakings.
The undersigned registrant ("Registrant") hereby undertakes
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement 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.
(b) 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 herein, and the offering of such
Securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) 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.
(d) That, for purposes of determining any liability under the
Securities Act of 1933 (the "Securities Act"), each filing of
the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to written agreements, Bylaw provisions or the Delaware Law,
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 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-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, InaCom Corp., a Delaware corporation, 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 Omaha,
State of Nebraska, on the 10th day of September, 1996.
INACOM CORP.
/s/ BILL L. FAIRFIELD
By:_____________________________
Bill L. Fairfield, President
Pursuant to the requirements of the Securities Act of 1933 this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 10th day of September, 1996.
Signature Title
/s/ BILL L. FAIRFIELD
_____________________________________ President (Principal
Bill L. Fairfield Executive Officer) and
Director
/s/ DAVID C. GUENTHNER
_____________________________________ Executive Vice President
David C. Guenthner and Chief Financial Officer
(Principal Financial and
Accounting Officer)
Joseph Auerbach* Director
W. Grant Gregory* Director
Rick Inatome* Director
Joseph Inatome* Director
Gary Schwendiman* Director
Durward B. Varner* Director
* Bill L. Fairfield, by signing his name hereto, signs the Registration
Statement on behalf of each of the persons indicated. A Power-of-Attorney
authorizing Bill L. Fairfield to sign this Registration Statement on behalf of
each of the indicated Directors of InaCom Corp. is filed herewith as Exhibit 24.
By:/s/ BILL L. FAIRFIELD
________________________
Bill L. Fairfield
Attorney-in-Fact
II-4
EXHIBIT INDEX
Exhibit Description
4.1 Specimen Common Stock Certificate
4.2 Indenture dated June 14, 1996 by and between the Company and
First National Bank of Omaha, as trustee, and related
Debenture, incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 29,
1996.
4.3 Registration Rights Agreement dated June 14, 1996 between the Company and
Dillon, Read & Co. Inc.
4.4 Restated Certificate of Incorporation of the Company, as amended,
incorporated herein by reference to the Company's Current Report on
Form 8-K dated March 30, 1993.
4.5 Bylaws of the Company, as amended to date, incorporated herein by
reference to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 24, 1994.
5.1 Opinion of McGrath, North, Mullin & Kratz, P.C.
12 Statement re Computation of Ratios
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of McGrath, North, Mullin & Kratz, P.C.
(included in Exhibit 5.1)
24 Powers of Attorney
25 Statement of Eligibility of Trustee
- -----------
II-5