SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 25, 2000
EPLUS INC.
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(Exact name of registrant as specified in its charter)
Delaware 000-28926 54-1817218
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
400 Herndon Parkway, Herndon, Virginia 20176
(Address, including zip code, of principal executive office)
(703) 834-5710
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(Registrant's telephone number, including area code)
Item 5. Other Events
On February 25, 2000, ePlus inc. (formerly MLC Holdings, Inc.) ("ePlus")
announced by press release, which is attached hereto as Exhibit 99.1 and
incorporated herein by reference, that it had filed a registration statement
(the "Registration Statement") with the U.S. Securities and Exchange Commission
("SEC") for a proposed underwritten public offering of 2,500,000 shares of its
common stock (the "Offering"). Of the shares to be offered, 2,000,000 shares are
to be sold by ePlus, 400,000 shares by TC Plus, LLC (formerly TC Leasing, LLC)
("TC Plus"), an affiliate of Thayer Capital Partners, and 100,000 shares by
Centura Banks, Inc. ("Centura"). Certain stockholders of ePlus will also grant
the underwriters an over-allotment option to purchase an additional 375,000
shares of common stock.
On March 6, 2000, ePlus filed Amendment No. 1 to the Registration
Statement. In the section of the Registration Statement entitled "Business," as
amended by Amendment No. 1 and which is attached hereto as Exhibit 99.2 and
incorporated herein by reference, ePlus, a provider of Internet-based,
business-to-business supply chain management solutions for information
technology and other operating resources, described the introduction of its
remotely-hosted electronic commerce solution, ePlusSuite. ePlus has been in the
business of selling, leasing, financing, and managing information technology and
other assets for nearly ten years and currently derives most of its revenues
from such activities. The introduction of ePlusSuite reflects its transitioning
to a business-to-business electronic commerce solutions provider from its
historical sales and financing business. Over time, ePlus plans to use its
ePlusSuite platform to facilitate sales and financing transactions between its
customers and third parties rather than originate these transactions as
principal. As a result, it expects its electronic commerce revenues to
substantially increase and represent a greater portion of its total revenues.
In connection with the Offering, ePlus entered into an agreement with TC
Plus, dated February 25, 2000 (the "Agreement), which is attached hereto as
Exhibit 99.3 and incorporated herein by reference. Previously, on October 23,
1998, ePlus had (1) sold 1,111,111 shares of its common stock to TC Plus at a
price of $9.00 per share pursuant to a stock purchase agreement dated October
23, 1998, by and between MLC Holdings, Inc. and TC Leasing LLC (the "Stock
Purchase Agreement") and (2) issued a warrant dated October 23, 1998, to acquire
an additional 1,090,909 shares of its common stock at an exercise price of
$11.00 per share, subject to certain anti-dilution adjustment (the "Warrant"),
for total consideration of $10 million. In connection with Stock Purchase
Agreement and the Warrant, ePlus also entered into a stockholders agreement,
dated as of October 23, 1998, by and between MLC Holdings, Inc., TC Leasing,
LLC, Phillip G. Norton, Bruce M. Bowen, J.A.P. Investment Group, L.P., Kevin M.
Norton, and Patrick J. Norton, Jr. (the "Stockholders Agreement").
The Warrant gave ePlus the right to require TC Plus to exercise the Warrant
if its common stock closed at or above $11.00 per share for 20 consecutive days.
On December 23, 1999, this condition was satisfied, and ePlus gave notice to TC
Plus, LLC to require exercise.
The Stock Purchase Agreement imposed certain super-majority voting
requirements on ePlus' board of directors and restricted ePlus' ability to
engage in mergers or other material transactions. The Stockholders Agreement
provided for restrictions on transfers of shares, restriction on the issuance of
shares, board representation, the forced sale of ePlus by TC Plus in certain
circumstances and registration rights. The Stock Purchase Agreement, the Warrant
and the Stockholders Agreement were filed as exhibits to ePlus' Current Report
on Form 8-K filed on November 13, 1998.
Under the terms of the Agreement, ePlus agreed to allow TC Plus to defer
its exercise the Warrant and to permit TC Plus, LLC to exercise the Warrant at
the time of the Offering on a cashless basis at an exercise price of $11.88 per
share in exchange for a commitment by TC Plus to waive certain provisions of the
Stock Purchase Agreement and to amend the Stockholders Agreement.
The Agreement provides that the waiver of the provisions of the Stock
Purchase Agreement and the amendment of the Stockholders Agreement are
contingent upon TC Plus being permitted to sell in a public offering at least
(1) the greater of (a) 320,000 shares (b) 80% of the shares sold by stockholders
selling in the offering and (c) 16% of the shares to be sold by us and the
selling stockholders, including TC Plus LLC, in the offering, and (2) 40% of the
shares being sold pursuant to exercise of the underwriters' over-allotment
option in such offering.
The Agreement provides for the waiver of all super-majority voting
requirements and restrictions on mergers and material transactions contained in
the Stock Purchase Agreement. The Stockholders Agreement, as amended, which is
Exhibit A to the Agreement and incorporated herein by reference, will provide as
follows:
o ePlus' board of directors will continue to have six members with two
directors designated by TC Plus, two directors designated by the management
stockholders party to the Stockholders Agreement and two directors
designated by a nominating committee comprised of one individual designated
by TC Plus and one individual designated by the management stockholders
party to the Stockholders Agreement. The two directors named by TC Plus
will continue to be Carl J. Rickertsen, who has served as a director since
November 1996, and Paul G. Stern. Phillip G. Norton and Bruce M. Bowen
serve as the directors designated by the management stockholders.
o TC Plus has the right to have the shares of ePlus' common stock that it has
purchased and that it has acquired through exercise of the warrant included
in ePlus' shelf registration statement. If those shares are not included in
the shelf registration statement or if the shelf registration statement is
not effective, TC Plus has the right to demand registration of its shares
on three separate occasions. TC Plus also has the right to request
inclusion of its shares in any other registration by ePlus of its common
stock, such as the Offering. ePlus is responsible for all of the
registration expenses incurred in connection with TC Plus' exercise of its
registration rights. TC Plus has used its registration rights under the
Stockholders Agreement to register shares in the Offering.
o If ePlus agrees to purchase any shares of its common stock held by the
management stockholders party to the Stockholders Agreement, it must give
notice to TC Plus. If TC Plus wishes to participate, ePlus must purchase
its shares on the same terms and conditions.
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o Shares held by stockholders party to the Stockholders Agreement will no
longer be subject to the terms of the Stockholders Agreement, as amended,
when they are transferred in a registered offering or pursuant to Rule 144
under the Securities Act of 1933.
o All rights and obligations under the Stockholders Agreement, as amended,
terminate when TC Plus no longer holds 5% of ePlus' outstanding stock and
shall remain terminated even if TC Plus later acquires 5% or more of ePlus'
outstanding stock.
Under the terms of the Agreement, if for any reason the Offering is not
completed, TC Plus has agreed to exercise the Warrant pursuant to its original
terms within 30 days of receiving notice from ePlus that the Offering will not
be consummated in the next six months.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit
Number Exhibit Description
99.1 Press Release
99.2 Business Section from Amendment No. 1 to the Registration Statement on
Form S-3 (No. 333-31102)
99.3 Agreement, dated as of February 25, 2000, by and between ePlus inc. and
TC Plus, LLC.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ePlus inc.
Dated March 8, 2000 By: /s/ Phillip G. Norton
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Phillip G. Norton
Chairman, President and
Chief Executive Officer
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Exhibit Index
Exhibit
Number Exhibit Description
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99.1 Press Release
99.2 Business Section from Amendment No. 1 to the
Registration Statement on Form S-3 (No. 333- 31102)
99.3 Agreement, dated as of February 25, 2000, by
and between ePlus inc. and TC Plus, LLC.