-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GdaH4bJi7immv1r4lRykzEwWpUxfIb7xMc/p73USNQyMrARzr7h0aa6aqlWQadYl w7AS3JGAizxySieNg8ju0Q== 0000912057-97-028870.txt : 19970825 0000912057-97-028870.hdr.sgml : 19970825 ACCESSION NUMBER: 0000912057-97-028870 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19970822 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EGGHEAD INC /WA/ CENTRAL INDEX KEY: 0000832320 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-COMPUTER & PERIPHERAL EQUIPMENT & SOFTWARE [5045] IRS NUMBER: 911296187 STATE OF INCORPORATION: WA FISCAL YEAR END: 0330 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-40002 FILM NUMBER: 97668312 BUSINESS ADDRESS: STREET 1: 22705 EAST MISSION CITY: LIBERTY LAKE STATE: WA ZIP: 99019 BUSINESS PHONE: 5098914883 MAIL ADDRESS: STREET 1: 22705 EAST MISSION CITY: LIBERTY LAKE STATE: WA ZIP: 99019 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WOOD STEPHEN M CENTRAL INDEX KEY: 0001044762 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 22705 EAST MISSION AVE CITY: LIBERTY LAKE STATE: WA ZIP: 99019 BUSINESS PHONE: 5099227031 MAIL ADDRESS: STREET 1: 22705 EAST MISSION AVE CITY: LIBERTY LAKE STATE: WA ZIP: 99019 SC 13D 1 SCHEDULE 13-D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (Rule 13d-101) UNDER THE SECURITIES EXCHANGE ACT OF 1934 EGGHEAD, INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $.01 per Share - -------------------------------------------------------------------------------- (Title of Class of Securities) 282330109 - -------------------------------------------------------------------------------- (CUSIP Number) Stephen M. Wood Charles J. Katz, Jr., Esq. 22705 East Mission Avenue with a copy to: Perkins Coie Liberty Lake, WA 99019 1201 Third Avenue, 40th Floor (509) 922-7031 Seattle, WA 98101 (206) 583-8888 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 14, 1997 ------------------------------------------------------ (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /. SCHEDULE 13D - -------------------------------------------------------------------------------- CUSIP NO. 282330109 PAGE 2 OF 6 PAGES ---------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Stephen M. Wood ###-##-#### - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS SC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER 1,717,202 OF ------------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 82,754(1) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 1,717,202 PERSON ------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 82,754(1) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,799,956(1) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.9%(2) - -------------------------------------------------------------------------------- - ----------------- (1) Includes 82,754 shares transferred by Mr. Wood to trusts the beneficiaries of which are Mr. Wood's children. Mr. Wood disclaims beneficial ownership of such 82,754 shares. (2) Percentage is based upon 22,925,230 shares of Common Stock outstanding as of August 14, 1997. 2 of 6 - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------- 3 of 6 ITEM 1. SECURITY AND ISSUER. This Schedule 13D relates to the Common Stock, par value $.01 per share ("Common Stock"), of Egghead, Inc., a Washington corporation ("Egghead"), the principal executive office of which is located at 22705 East Mission Avenue, Liberty Lake, Washington 99019. ITEM 2. IDENTITY AND BACKGROUND. (a) This Schedule 13D relates to Stephen M. Wood. (b) The business address of Mr. Wood is 22705 East Mission Avenue, Liberty Lake, Washington 99019. (c) Mr. Wood is the Executive Vice President of Surplus Software, Inc., a wholly-owned subsidiary of Egghead, Inc., whose principal business address is 22705 East Mission Avenue, Liberty Lake, Washington 99019. (d) During the last five years, Mr. Wood has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, Mr. Wood has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Wood is a citizen of the United States of America. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. All of the shares of Common Stock reported in this Schedule 13D were acquired in exchange for Mr. Wood's shares of common stock of Surplus Software, Inc.("Surplus"), a privately-held corporation acquired by Egghead in a stock-for-stock exchange pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), dated April 30, 1997 and amended as of May 23, 1997, by and among Egghead, Surplus, North Face Merger Sub, Inc., a wholly owned subsidiary of Egghead ("Merger Sub"), and certain shareholders of Surplus. Pursuant to the Merger Agreement, Surplus merged with and into Merger Sub, and all shares of capital stock of Surplus were converted into the right to receive shares of Egghead Common Stock (the "Merger"). The Merger was consummated on August 14, 1997. ITEM 4. PURPOSE OF TRANSACTION The purpose of the transaction pursuant to which Mr. Wood acquired the Common Stock reported herein is as described in Item 3 above. Mr. Wood has no present plans or intentions that relate to or would result in any of the transactions required to be described in Item 4 of Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) Mr. Wood beneficially owns 1,799,956 shares of Common Stock of Egghead, Inc., which includes 82,754 shares transferred by Mr. Wood to trusts the beneficiaries of which are Mr. Wood's children. Mr. Wood disclaims beneficial ownership of such 82,754 shares. Mr. Wood's aggregate beneficial ownership represents approximately 7.9% of Common Stock of Egghead, Inc., based on 22,925,230 shares of Common Stock outstanding as of August 14, 1997. 4 of 6 (b) Sole voting power: 1,717,202 Sole dispositive power: 1,717,202 Shared voting power: 82,754 Shared dispositive power: 82,754 (c) Except as reported herein, during the past sixty days, Mr. Wood has not effected any transaction in the Common Stock of Egghead, Inc. (d) Not applicable. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER The shares of Egghead common stock owned by Mr. Wood are subject to a Letter Agreement, dated April 30, 1997, between Mr. Wood and Egghead that prohibits the sale, transfer or other disposition by Mr. Wood of any shares of Egghead stock owned by him until after such time as financial results covering a period of at least 30 days of combined operations of Egghead and Surplus have been published by Egghead in the form of a quarterly report, an effective registration statement filed with the Securities and Exchange Commission ("SEC"), a report to the SEC on Form 10-K, 10-Q or 8-K, or any other public filing or press release or other announcement which includes such results. The shares of Egghead common stock owned by Mr. Wood also are subject to a Letter Agreement, dated May 23, 1997, between Mr. Wood and Egghead that prohibits the sale, transfer or other disposition by Mr. Wood of fifty-five percent (55%) of the shares of Egghead Common Stock received by him pursuant to the Merger for a period of one year. In addition, ten percent (10%) of the shares of Egghead Common Stock issued to Mr. Wood pursuant to the Merger have been pledged to, and will be held by, Egghead for a period of one year, in order to satisfy any claims by Egghead for indemnification under the Merger Agreement. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS The following exhibits are filed herewith: Exhibit Number Description --------- ------------------------------------------------------ 2.1* Agreement and Plan of Merger, dated April 30, 1997 and amended as of May 23, 1997, by and among Egghead, Inc., North Face Merger Sub, Inc., Surplus Software, Inc. and certain shareholders of Surplus Software, Inc. 99.1 Letter Agreement, dated April 30, 1997, between Egghead, Inc. and Stephen M. Wood 99.2 Letter Agreement, dated May 23, 1997, between Egghead, Inc. and Stephen M. Wood * Incorporated herein by reference to Exhibit 2.1 to Egghead, Inc.'s Registration Statement on Form S-4, File No. 333-31251, as filed with the SEC on July 14, 1997. 5 of 6 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 20, 1997 - ------------------------------- By: /s/ Stephen M. Wood Date ----------------------------------- Signature Stephen M. Wood ---------------------------------- Name 6 of 6 INDEX TO EXHIBITS EXHIBIT NUMBER DESCRIPTION 2.1 Agreement and Plan of Merger, dated April 30, 1997 and amended as of May 23, 1997, by and among Egghead, Inc., North Face Merger Sub, Inc., Surplus Software, Inc. and certain shareholders of Surplus Software, Inc. (Incorporated by reference to Exhibit 2.1 to Egghead, Inc.'s Registration Statement on Form S-4, File No. 333-31251, as filed with the SEC on July 14, 1997) 99.1 Letter Agreement, dated April 30, 1997, between Egghead, Inc. and Stephen M. Wood 99.2 Letter Agreement, dated May 23, 1997, between Egghead, Inc. and Stephen M. Wood EX-99.1 2 EXHIBIT 99.1 EXHIBIT 99.1 April 30, 1997 Egghead, Inc. Attn: President 22705 E. Mission Seattle, WA 99019 RE: SHARES OF EGGHEAD COMMON STOCK Dear Sir: In connection with the proposed acquisition (the "Merger") by Egghead, Inc. ("Egghead") of Surplus Software, Inc. ("Surplus"), of which I am a shareholder, pursuant to an Agreement and Plan of Merger of even date herewith (the "Merger Agreement"), and as a material inducement to Egghead to enter into the Merger Agreement, I hereby agree that, from and after the Effective Time (as defined in the Merger Agreement), without the prior written consent of Egghead, I will not sell, transfer or otherwise dispose of any shares of Egghead capital stock received by me in the Merger or otherwise until after such time as financial results covering a period of at least 30 days of combined operations of Egghead and Surplus have been published by Egghead in the form of a quarterly earnings report, an effective registration statement filed with the SEC, a report to the SEC on Form 10-K, 10-Q or 8-K, or any other public filing or press release or other announcement which includes the combined sales and net income of Egghead and Surplus. Very truly yours, /s/ Stephen M. Wood --------------------------------------- Signature Stephen M. Wood --------------------------------------- Name (typed or printed) EX-99.2 3 EXHIBIT 99.2 Exhibit 99.2 STOCK RESTRICTION AGREEMENT Egghead, Inc. 22705 East Mission Avenue Liberty Lake, Washington 99019 Attention: George Orban, Chief Executive Officer Ladies and Gentlemen: The undersigned (the "Shareholder") is a holder of Common Stock and/or Preferred Stock of Surplus Software, Inc., an Oregon corporation (dba Surplus Direct) (the "Company"), which has entered into that certain Agreement and Plan of Merger dated as of April 30, 1997, among Egghead, Inc., a Washington corporation ("Egghead"), North Face Merger Sub, Inc., an Oregon corporation and a wholly owned subsidiary of Egghead ("Merger Sub"), the Company and certain shareholders of the Company (the "Merger Agreement"). The Merger Agreement provides for the merger of Merger Sub with and into the Company subject to the terms and conditions set forth therein (the "Merger"). Capitalized terms used in this letter agreement and not otherwise defined shall have the meanings ascribed to them in the Merger Agreement. The parties to the Merger Agreement intend that the Merger qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended. In order to provide greater assurance that the Merger will so qualify, the Company has requested that the Merger Agreement be amended to provide that the Company will be merged into Merger Sub, with Merger Sub as the surviving corporation of the Merger. Egghead has agreed to execute such an amendment in the form of the Amendment to the Agreement and Plan of Merger dated as of May 23, 1997, on the condition that this letter agreement be executed by the shareholders of the Company set forth on the attached Exhibit A. Accordingly, in consideration for Egghead's agreement to amend the Merger Agreement, the Shareholder agrees as follows: (a) Such Shareholder will not sell, transfer or otherwise dispose of more than 45% of the Egghead Common Shares received by such Shareholder pursuant to the Merger Agreement during a period of one year following the Effective Time (the "Restricted Period"). The remaining 55% of such Egghead Common Shares held by such Shareholder shall constitute restricted shares in accordance with this letter agreement (the "Tax Restricted Shares") and may not be sold, transferred or otherwise disposed of during the Restricted Period without the prior written consent of Egghead, which may be withheld in its sole discretion. (b) The Tax Restricted Shares shall include the Egghead Common Shares that constitute Holdback Shares pursuant to the Merger Agreement (c) Each certificate representing Tax Restricted Shares shall bear the following legend: "The shares represented by this certificate are subject to the terms and conditions of a certain Stock Restriction Agreement dated as of May 23, 1997, as at any time amended, and may not be sold, transferred or encumbered except in accordance with the terms and provisions of such agreement, a copy of which is on file at the principal offices of Egghead, Inc. and will be furnished to the holder of this certificate upon request without charge." Egghead shall also instruct its transfer agent to place stop transfer orders on the transfer of any Tax Restricted Shares during the Restricted Period. After the Restricted Period, Egghead shall instruct its transfer agent to remove, upon request by the Shareholder, the legend set forth above. (d) If the Shareholder is a party to that certain Registration Rights Agreement dated as of April 30, 1997 between Egghead and certain Shareholders, such Shareholder agrees not to exercise its rights to register any Tax Restricted Shares under such agreement during the Restricted Period. (e) If the Shareholder is a party to that certain Shareholders Agreement dated as of April 30, 1997 among Egghead, the Company and certain Shareholders, the Shareholder acknowledges its representations and covenants set forth therein and that this letter agreement shall not constitute a waiver or amendment to such agreement. (f) During the Restricted Period, the Shareholder shall remain the owner of the Tax Restricted Shares and shall have the right to vote the Tax Restricted Shares and to receive any dividends and distributions thereon. This letter agreement shall be governed by and construed in accordance with the laws of the State of Oregon. Please acknowledge your acceptance of this letter agreement by executing and returning to the undersigned one of the two enclosed copies hereof. Effective as of May 23, 1997. Very truly yours, Shareholder STEPHEN M. WOOD --------------------------------------- (Name of Shareholder) /s/ Stephen M. Wood --------------------------------------- (Signature) --------------------------------------- (Printed name of person signing on behalf of Shareholder) --------------------------------------- (Title of person signing on behalf of Shareholder) Accepted and Agreed: EGGHEAD, INC. By: /s/ George Orban ------------------------------ Name: George Orban ---------------------------- Title: Chief Executive Officer --------------------------- -----END PRIVACY-ENHANCED MESSAGE-----