<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-12
EN POINTE TECHNOLOGIES, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
EN POINTE TECHNOLOGIES, INC.
100 NORTH SEPULVEDA BOULEVARD, 19TH FLOOR
EL SEGUNDO, CALIFORNIA 90245
------------------------
CONSENT STATEMENT
CONSENT OF STOCKHOLDERS IN LIEU OF SPECIAL MEETING
---------------------
To the Stockholders of EN POINTE TECHNOLOGIES, INC.:
This Consent Statement is furnished to the stockholders of En Pointe
Technologies, Inc., a Delaware corporation (the "Company"), in connection with
the solicitation of written consents on behalf of the Board of Directors of the
Company (the "Board of Directors") with respect to the matter set forth below.
This Consent Statement is first being mailed to stockholders of the Company on
or about August 11, 2000.
In connection with this Consent Statement, stockholders are being asked to
consider and consent to a proposal (the "Proposal") to amend the Company's 1996
Stock Incentive Plan (the "1996 Stock Plan") to increase the number authorized
shares under the 1996 Stock Plan by 1,500,000 from 1,260,000 to 2,760,000.
The purpose and effect of this amendment of the 1996 Stock Plan, which is
recommended by the Board of Directors, is to allow the future issuance or sale
of additional shares of Common Stock to the Company's employees, officers,
directors, consultants and service providers as from time to time may be
approved by the Board of Directors.
The principal executive office of the Company is 100 North Sepulveda
Boulevard, 19th Floor, El Segundo, California 90245. The telephone number of the
principal executive office of the Company is (310) 725-5200.
YOUR CONSENT IS IMPORTANT, SINCE APPROVAL OF THE AMENDMENT REQUIRES THE
WRITTEN CONSENT OF THE HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF COMMON
STOCK. ACCORDINGLY, YOU ARE URGED TO READ AND TO CONSIDER CAREFULLY THE
INFORMATION CONTAINED IN THIS CONSENT STATEMENT.
The date of this Consent Statement is August 11, 2000.
<PAGE>
GENERAL INFORMATION
Under Delaware law, unless otherwise provided in the certificate of
incorporation, any action that may be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if consents in writing, setting forth the action so taken, are signed by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize to take such action at a meeting at
which all shares entitled to vote were present and voted, and those consents are
properly delivered to the corporation. The Company's Certificate of
Incorporation does not limit the right of stockholders of the Company to take
action by written consent.
The Board of Directors has fixed the close of business on August 1, 2000 as
the record date for the determination of stockholders entitled to consent to the
Proposal (the "Record Date"). Accordingly, only stockholders of record on the
books of the Company at the close of business on the Record Date will be
entitled to consent to the Proposal. The Board has also fixed September 15, 2000
as the date on or after which the written consents will be tabulated.
On the Record Date, the Company had outstanding 6,529,354 shares of Common
Stock, which are the only outstanding voting securities of the Company. On all
matters, each share of Common Stock is entitled to one vote by written consent.
The cost of soliciting consents will be borne by the Company. In addition to
solicitation by mail, officers, directors, and other employees of the Company
may solicit consents by telephone, telegraph or personal contact without
additional compensation.
Consents in the accompanying form that are properly executed and dated, duly
returned and not revoked will be tabulated in accordance with the instructions
on such consents. If a consent is executed but no indication is made with
respect to the matter contained in such consent as to which action is to be
taken, such consent will be deemed to constitute a consent to the particular
matter(s) contained thereon with respect to which no indication is made. Any
consent may be revoked in writing at any time prior to the close of business on
the date that consents signed by a sufficient number of stockholders to take the
action are received by the Company. The unrevoked signed and dated consents of
the holders of a majority of the Common Stock outstanding as of the Record Date
are necessary to effect the approval of the Proposal.
2
<PAGE>
PROPOSAL NO. 1
AMENDMENT TO THE 1996 STOCK OPTION PLAN TO INCREASE THE TOTAL
NUMBER OF SHARES ISSUABLE UNDER THAT PLAN FROM 1,260,000 TO 2,760,000 SHARES
INTRODUCTION
The stockholders are being asked to vote on a proposal to approve an
amendment to increase the number of shares of Common Stock authorized for
issuance under the 1996 Stock Incentive Plan (the "1996 Stock Plan") by an
additional 1,500,000 shares. The amendment to the 1996 Stock Plan was approved
by the Board of Directors on May 25, 2000, subject to stockholder approval. The
proposed amendment would increase the authorized number of shares of Common
Stock issuable under the 1996 Stock Plan by 1,500,000 shares and would reserve
the additional shares for issuance under the 1996 Stock Plan, bringing the total
number of shares of Common Stock subject to the 1996 Stock Plan to 2,760,000.
The Board believes it is in the best interests of the Company to increase the
share reserve so that the Company can continue to attract and retain the
services of those persons essential to the Company's growth and financial
success.
The 1996 Stock Plan was originally adopted by the Board of Directors and
approved by the stockholders in March 1996. The 1996 Stock Plan was amended by
the Board of Directors on July 21, 1998 and approved by the stockholders on
August 11, 1998.
The following is a summary of the principal features of the 1996 Stock Plan,
as recently amended for the share increase. The summary, however, does not
purport to be a complete description of all the provisions of the 1996 Stock
Plan. Any stockholder who wishes to obtain a copy of the 1996 Stock Plan may do
so by written request to the Secretary, En Pointe Technologies, Inc., 100 N.
Sepulveda Boulevard, 19th Floor, El Segundo, California 90245.
DESCRIPTION OF THE 1996 STOCK PLAN
The 1996 Stock Plan, as amended, currently authorizes up to 2,760,000 shares
of Common Stock for issuance under the terms of the 1996 Stock Plan, subject to
adjustment in the number and kind of shares subject to the 1996 Stock Plan and
to outstanding shares in the event of stock splits, stock dividends or certain
other similar changes in the capital structure of the Company. The 1996 Stock
Plan provides for grants of "incentive stock options" as defined in Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), nonqualified
stock options and rights to purchase shares of Common Stock ("Purchase Rights").
Incentive stock options, nonqualified stock options and Purchase Rights may be
granted to employees of the Company and its subsidiaries and affiliates.
Nonqualified stock options and Purchase Rights may be granted to employees of
the Company and its subsidiaries and affiliates, non-employee directors and
officers, consultants and other service providers. As of June 30, 2000,
approximately 557 persons were eligible to participate in the 1996 Stock Plan.
The Compensation Committee of the Board of Directors administers the 1996
Stock Plan (the "Administrator"). The Administrator has the full power and
authority to interpret the 1996 Stock Plan, select the recipients of options and
Purchase Rights, determine and authorize the type, terms and conditions of,
including vesting provisions, and the number of shares subject to, grants under
the 1996 Stock Plan, and adopt, amend and rescind rules relating to the 1996
Stock Plan. The term of options may not exceed 10 years from the date of grant
(5 years in the case of an incentive stock option granted to a person who owns
more than 10% of the combined voting power of all classes of stock of the
Company). The option exercise price for each share granted pursuant to a
nonqualified stock option may not be less than 80% of the fair market value of a
share of Common Stock at the time such option is granted. The option exercise
price for each share granted pursuant to an incentive stock option may not be
less than 100% of the fair market value of a share of Common Stock at the time
such option is granted (110% of fair market value in the case of an incentive
stock option granted to a
3
<PAGE>
person who owns more than 10% of the combined voting power of all classes of
stock of the Company). There is no minimum purchase price for shares of Common
Stock purchased pursuant to a Purchase Right, and any such purchase price shall
be determined by the Administrator. The maximum number of shares for which
options or Purchase Rights may be granted to any one person during any one
calendar year under the 1996 Stock Plan is 275,000. The aggregate fair market
value of the Common Stock (determined as of the date of grant) with respect to
which incentive stock options granted under the 1996 Stock Plan or any other
stock option plan of the Company become exercisable for the first time by any
optionee during any calendar year may not exceed $100,000.
The option price of an incentive stock option or nonqualified stock option
is payable in full upon exercise, and the purchase price of stock purchased
pursuant to a Purchase Right must be paid in full upon the acceptance of the
Purchase Right. Payment of the option price upon exercise of a stock option or
for shares purchased pursuant to a Purchase Right may be made in cash, by check,
by the delivery of shares of Common Stock (valued at their fair market value as
of the date of the exercise of an option or Purchase Right), by the optionee's
or purchaser's promissory note in a form and on terms acceptable to the
Administrator, by the cancellation of indebtedness of the Company to the
optionee or purchaser, by the waiver of compensation due or accrued to the
optionee or purchaser for services rendered, or by any combination of the
foregoing methods of payment. In addition, the option price for options granted
under the 1996 Stock Plan may be made by a "same day sale" commitment from the
optionee and a broker-dealer that is a member of the National Association of
Securities Dealers, Inc. ("NASD Dealer") whereby the optionee irrevocably elects
to exercise his or her option and to sell a portion of the shares so purchased
to pay for the exercise price and whereby the NASD Dealer irrevocably commits
upon receipt of such shares to forward the Exercise Price directly to the
Company, by a "margin" commitment from the optionee and an NASD Dealer whereby
the optionee irrevocably elects to exercise his or her option and to pledge the
shares so purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the exercise price, and whereby the
NASD Dealer irrevocably commits upon receipt of such shares to forward the
exercise price directly to the Company, or any combination of the foregoing
methods of payment.
Neither options nor Purchase Rights granted under the 1996 Stock Plan may be
transferred other than by will or by the laws of descent and distribution.
Shares purchased pursuant to Purchase Rights generally shall be restricted for a
period of time, during which such shares may be repurchased by the Company, and
therefore these shares may not be sold, assigned, pledged or transferred until
such time as the Company no longer has the right to reacquire any such shares.
The 1996 Stock Plan provides that each non-employee director of the Company
shall automatically be granted a non-qualified option to purchase 5,000 shares
of Common Stock upon his or her election and reelection to the Board of
Directors so long as such reelection occurs at least twelve months after his or
her initial election to the Board of Directors of the Company. The option price
of such options shall be at 80% of the fair market value of the Common Stock on
the date such director is elected or reelected, as the case may be, and shall
become exercisable with respect to one-third ( 1/3) of the shares subject to
such option three months after such election or reelection and the remaining
one-third ( 1/3) of such shares twenty-seven (27) months after such election or
reelection. The term of such options shall be ten years. The Board of Directors
may alter, amend, suspend or terminate the 1996 Stock Plan at any time. However,
any changes which affect or impair the rights of any person who holds an
outstanding stock option or Purchase Right may not be effected without such
person's consent. Unless sooner terminated by the Board of Directors, the 1996
Stock Plan will terminate on March 1, 2006.
4
<PAGE>
The following table contains information concerning certain stock options
granted under the Company's 1996 Stock Plan during the fiscal year ended
September 30, 1999:
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
PRICE NUMBER OF
NAME AND POSITION ($/SHARE) SHARES
----------------- ---------- ---------
<S> <C> <C>
Attiazaz "Bob" Din................................... $ -- --
Javed Latif.......................................... $ -- --
Jacob S. Stettin..................................... $ -- --
Kevin Schatzle....................................... $ -- --
Ellis Posner......................................... $ -- --
All Current Executive Officers as a Group (5
persons)........................................... $ --
Non-Executive Director Group (4 persons)............. $5.05 10,000
Non-Executive Officer Employee Group (89 persons).... $6.31 267,000
</TABLE>
------------------------
* As of September 30, 1999, the market value of the Company's Common Stock as
reported by the Nasdaq Stock Market was $10.75 per share.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax discussion set forth below is intended for general
information only. State and local income tax consequences are not discussed, and
may vary from locality to locality.
INCENTIVE STOCK OPTIONS. There is no taxable income to an employee when an
incentive stock option is granted or when that option is exercised; however,
generally the amount by which the fair market value of the shares at the time of
exercise exceeds the option price will be included in the optionee's alternative
minimum taxable income upon exercise. If stock received on exercise of an
incentive stock option is disposed of in the same year the option was exercised,
and the amount realized is less than the stock's fair market value at the time
of exercise, the amount includable in the alternative minimum taxable income
will be the amount realized upon the sale or exchange of the stock, less the
taxpayer's basis in the stock. Gain realized by an optionee upon the sale of
stock issued upon exercise of an incentive stock option is taxable as long-term
capital gain, and no tax deduction is available to the Company, unless the
optionee disposes of the stock within two years after the date of grant of the
option or within one year after the date of exercise. In such event the
difference between the option exercise price and the and fair market value of
the shares on the date of the optionee's exercise will be taxed at ordinary
income rates, and, subject to Section 162(m) of the Code (which limits the
deductibility of compensation in excess of $1,000,000 for certain executive
officers), the Company will be entitled to a deduction to the extent the
employee must recognize ordinary income.
NONQUALIFIED STOCK OPTIONS. The recipient of a nonqualified stock option
will not realize taxable income upon the grant of the option, nor will the
Company will be entitled to take any deduction. Upon the exercise of a
nonqualified stock option, the optionee will realize ordinary income and,
subject to Section 162(m) of the Code, the Company will be entitled to a
deduction in an amount equal to the difference between the option exercise price
and the fair market value of the stock on the date of exercise. The Company may
be required to withhold taxes on the ordinary income realized by an optionee
upon exercise of nonqualified stock options in order to be entitled to the tax
deduction. An optionee's basis for the stock for purposes of determining gain or
loss on any subsequent disposition of the shares generally will be the fair
market value of the stock on the date of exercise of the nonqualified stock
option.
5
<PAGE>
PURCHASE RIGHTS. The receipt of restricted stock pursuant to a Purchase
Right will not cause a recipient to realize taxable income until the expiration
of any repurchase rights retained by the Company with respect to such stock,
unless the recipient makes an election under Section 83(b) of the Code to be
taxed as of the date of purchase. If no repurchase rights are retained or if a
Section 83(b) election is made, the participant will recognize ordinary income
in an amount equal to the difference between the purchase price paid for the
shares and the fair market value of such shares on the date of purchase. If no
Section 83(b) election is made or if repurchase rights are retained, the
recipient will realize taxable income on each date that the recipient's
ownership rights vest (i.e., when the Company no longer has the right to
repurchase all or a portion of the shares). The recipient will recognize
ordinary income, and, subject to Section 162(m) of the Code, the Company will be
entitled to a deduction on each date shares vest in an amount equal to the
excess of the fair market value of such shares on that date over the purchase
price paid for such shares. However, if the recipient is subject to
Section 16(b) of the Exchange Act, and if no Section 83(b) election was made at
the time of purchase, the date that ordinary income is recognized for shares
which vest within six months of purchase date shall be deferred to six months
from the date of purchase.
BOARD OF DIRECTORS' RESERVATION OF RIGHTS
The Board of Directors retains the authority to take or to authorize
discretionary actions as may be appropriate to carry out the purposes and
intentions of the Proposal.
NO DISSENTERS' RIGHTS
Under Delaware law, stockholders are not entitled to dissenter's rights of
appraisal with respect to the Company's increase of shares reserved for issuance
pursuant to the 1996 Stock Plan.
REQUIRED CONSENT AND RECOMMENDATION OF BOARD DIRECTORS
The affirmative written consent of a majority of the outstanding shares of
Common Stock on the Record Date will be required to approve the amendment to the
1996 Stock Plan. Both abstentions and broker non-votes are not affirmative votes
and, therefore, will have the same effect as votes against the Proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOUR WRITTEN CONSENT TO
APPROVE THE AMENDMENT TO THE 1996 STOCK PLAN.
6
<PAGE>
ADDITIONAL INFORMATION
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of August 1, 2000 by (i) each stockholder who is
known by the Company to own beneficially more than five percent of the Company's
outstanding Common Stock, (ii) each director of the Company, (iii) each of the
Company's executive officers named in the Summary Compensation Table (see
"Executive Compensation--Summary Compensation Table") and (iv) by all executive
officers and directors of the Company as a group. The information as to each
person or entity has been furnished by such person or group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
----------------------
NAME OF BENEFICIAL OWNER(1) NUMBER PERCENTAGE
--------------------------- --------- ----------
<S> <C> <C>
Attiazaz "Bob" Din(2).................................. 509,452 7.8%
Naureen Din(2)......................................... 509,452 7.8%
Zubair Ahmed(3)........................................ 642,396 9.8%
Mark Briggs............................................ -- --
Verdell Garroutte(4)................................... 3,333 *
Javed Latif(5)......................................... 8,355 *
Jacob J. Stettin....................................... 3,334 *
Kevin Schatzle(6)...................................... 30,832 *
Ellis Posner(7)........................................ 20,580 *
Ali Mohyuddin Din(8)................................... 211,551 3.2%
Mediha M. Din(8)....................................... 211,551 3.2%
All executive officers and directors as a group
(9 persons)(9)....................................... 1,727,734 26.5%
</TABLE>
------------------------
* Less than 1%.
(1) Applicable percentage of ownership at August 1, 2000, is based upon
6,529,354 shares of Common Stock outstanding. Beneficial ownership is
determined in accordance with the rules of the Securities and Exchange
Commission and includes voting and investment power with respect to shares
shown as beneficially owned. Shares of Common Stock subject to options or
warrants currently exercisable or exercisable within 60 days of August 1,
2000 are deemed outstanding for computing the shares and percentage
ownership of the person holding such options or warrants, but are not
deemed outstanding for computing the percentage ownership of any other
person or entity. Except as otherwise indicated, the persons or entities
listed above have sole voting and investment power with respect to all
shares shown as beneficially owned by them.
(2) Bob and Naureen Din are married, and each may therefore be deemed to have a
beneficial interest in each other's shares of Common Stock. Does not
include 211,551 shares of Common Stock owned of record by Mediha Din,
Mr. and Mrs. Din's child. The address of Mr. Din is at the Company's
principal executive offices, 100 North Sepulveda Boulevard, 19th Floor, El
Segundo, California 90245. Mr. and Mrs. Din have each disclaimed beneficial
ownership in each other's shares. Includes 50,000 shares issuable upon
exercise of vested options.
(3) The address of such stockholder is at the Company's principal executive
offices, 100 North Sepulveda Boulevard, 19th Floor, El Segundo, California
90245.
(4) Consists of 3,333 shares issuable upon exercise of vested options.
(5) Consists of 8,355 shares issuable upon exercise of vested options and
options vesting within 60 days of August 1, 2000.
7
<PAGE>
(6) Consists of 30,832 shares issuable upon exercise of vested options and
options vesting within 60 days of August 1, 2000.
(7) Consists of 20,580 shares issuable upon exercise of vested options and
options vesting within 60 days of August 1, 2000.
(8) Ali Mohyuddin Din and Mediha M. Din are the children of Bob and Naureen
Din. The address of such stockholders is at the Company's principal
executive offices, 100 North Sepulveda Boulevard, 19th Floor, El Segundo,
California 90245.
(9) Includes 116,434 shares issuable upon exercise of vested options and
options vesting within 60 days of August 1, 2000.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows compensation paid or accrued to the Chief
Executive Officer and the four other most highly compensated officers of the
Company (the "Named Executive Officers"), who were employed by the Company
during the fiscal year ended September 30, 1999.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION(1) -------------
----------------------------------------------- SECURITIES
FISCAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OTHER OPTIONS (#)
--------------------------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
Attiazaz "Bob" Din(2)................... 1999 $835,590(3) -- -- 500,000(12)
Chairman of the Board, Chief Executive 1998 500,000 -- -- --
Officer and President 1997 437,500 $202,864(4) 50,000
Javed Latif(5).......................... 1999 $168,422 $200,004(6) -- 150,000(12)
Executive Vice President and Chief 1998 168,422 73,019(6) -- 25,000
Financial Officer 1997 151,000 81,001(6) -- 50,000
Jacob J. Stettin(7)..................... 1999 $150,000 $100,000(8) -- 75,000(12)
Senior Vice President and General 1998 150,000 50,000(8) -- 10,000
Counsel 1997 57,404 -- -- 10,000
Kevin Schatzle.......................... 1999 $150,000 $100,004(9) -- 150,000(12)
Senior Vice President 1998 150,000 395,418(9) -- 20,000
1997 150,000 689,860(9) -- 50,000
Ellis Posner............................ 1999 $153,208 $ 98,583(10) $54,000(11) 50,000(12)
Senior Vice President of Sales 1998 158,026 120,500(10) 41,500(11) 50,000
1997 123,000 106,094(10) -- 10,000
</TABLE>
------------------------
(1) Does not include the value of prerequisites and other personal benefits
granted to the Named Executive Officers which in the aggregate did not
exceed the lesser of $50,000 or 10% of such officer's salary and bonus.
(2) Mr. Din was appointed Chief Executive Officer in January 1996 and became
President of the Company on January 8, 1999.
(3) Includes $104,167 compensation for services rendered to and paid by the
Company's subsidiary, firstsource.com, for a two-month period from May 1,
1999 through June 30, 1999. Also, includes a payment by the Company of
$314,757 for accrued vacation.
8
<PAGE>
(4) Consists of a bonus payment payable pursuant to an April 1997 amendment to
Mr. Din's employment agreement. See "--Employment Agreements."
(5) Mr. Latif became Chief Financial Officer of the Company on January 1, 1999.
(6) Consists of a payment payable pursuant to the establishment of a bonus plan
for Mr. Latif in May 1997.
(7) Mr. Stettin joined the Company as General Counsel on May 7, 1997 and was
appointed Senior Vice President on May 6, 1999.
(8) Consists of a bonus payment payable pursuant to Mr. Stettin's employment
agreement in effect since fiscal 1997.
(9) Includes $374,583 and $589,860 of sales commission payments for the fiscal
years 1998 and 1997, respectively, with the remainder consisting of a bonus
payable pursuant to Mr. Schatzle's employment agreement. For the fiscal
year 1999, only bonus under the employment agreement was paid.
(10) Consists of a bonus payment payable pursuant to Mr. Posner's employment
agreement in effect since fiscal 1997. See "--Employment Agreements."
(11) Other compensation consists of unaccountable allowances for auto ($12,000
and $9,000) and expenses ($42,000 and $32,500) for the fiscal years 1998
and 1997, respectively.
(12) Relates to stock options granted by the Company's subsidiary,
firstsource.com.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth stock options granted to the Named Executive
Officers during fiscal 1999:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------
PERCENT OF
TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF
SECURITIES GRANTED TO STOCK PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES OPTION TERM
OPTIONS IN LAST EXERCISE EXPIRATION ------------------------------
NAME GRANTED FISCAL YEAR PRICE DATE 5% 10%
---- ---------- ----------- -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Attiazaz "Bob" Din......... -- -- $ -- -- $ -- $ --
500,000(1) 9.0% 0.1375(2) 5/10/09 1,100,566(3) 2,789,049(3)
Javed Latif................ -- -- $ -- -- $ -- $ --
150,000(1) 2.7% 0.1250(2) 5/10/09 330,170(3) 836,715(3)
Jacob S. Stettin........... -- -- $ -- -- $ -- $ --
75,000(1) 1.4% 0.1250(2) 5/10/09 165,085(3) 418,357(3)
Kevin Schatzle............. -- -- $ -- -- $ -- $ --
150,000(1) 2.7% 0.1250(2) 5/10/09 330,170(3) 836,715(3)
Ellis Posner............... -- -- $ -- -- $ -- $ --
50,000(1) 0.9% 0.1250(2) 5/10/09 110,057(3) 278,905(3)
</TABLE>
9
<PAGE>
FISCAL 1999 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR END AT FISCAL YEAR END(1)
------------------------------- ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C>
Attiazaz "Bob" Din...................... 50,000 -- $ 62,500(4) $ --
500,000(1) -- $1,681,250(3) $ --
Javed Latif............................. 50,180 16,070 $ 63,029(4) $47,206(4)
150,000(1) -- $ 506,250(3) $ --
Jacob S. Stettin........................ 16,667 3,333 $ 16,667(4) $ 5,833(4)
75,000(1) -- $ 253,125(3) $ --
Kevin Schatzle.......................... 93,644 12,856 $ 158,775(4) $37,765(4)
150,000(1) -- $ 506,250(3) $ --
Ellis Posner............................ 42,860 32,140 $ 122,214(4) $94,411(4)
50,000(1) -- $ 168,750(3) $ --
</TABLE>
------------------------
(1) Option grants related to firstsource.com, the Company's subsidiary.
(2) The market price per share of firstsource.com common stock on the day of
grant was $3.50.
(3) Based on a per share price of $3.50, the price per share of common stock of
the Company's subsidiary, firstsource.com, sold in a private placement on
July 28, 1999.
(4) Based on a per share price of $10.75, the closing price of the Common Stock
as reported on the Nasdaq National Market on September 30, 1999 for En
Pointe Technologies, Inc.
STOCK OPTION AND PURCHASE PLANS
1996 STOCK PLAN
See "Proposal No. 1--Description of 1996 Stock Plan."
EMPLOYEE STOCK PURCHASE PLAN
The En Pointe Technologies, Inc. Employee Stock Purchase Plan (the "Purchase
Plan") was adopted by the Board of Directors and stockholders in March 1996 and,
as amended, covers an aggregate of 500,000 shares of Common Stock. The Purchase
Plan, which is intended to qualify as an "employee stock purchase plan" under
Section 423 of the Code, will be implemented by six-month offerings with
purchases occurring at six-month intervals. The Purchase Plan is administered by
the Compensation Committee. Employees are eligible to participate if they are
employed by the Company for at least 20 hours per week, are customarily engaged
for more than five months per calendar year and if they have been employed by
the Company or a designated subsidiary for at least 90 days. The Purchase Plan
permits eligible employees to purchase Common Stock through payroll deductions,
which may not exceed 20% of an employee's annual compensation. The maximum
number of shares of Common Stock that an employee may purchase during any
offering period is 2,500 and during any calendar year is $25,000 (determined
using the fair market value at the grant date). The price of Common Stock
purchased under the Purchase Plan will be 85% of the lower of the fair market
value of the Common Stock at the beginning of the six-month offering period or
the applicable purchase date. Employees may end their participation in the
offering at any time during the offering period, and participation ends
automatically upon termination of employment. The Board of Directors may at any
time amend or terminate the Purchase Plan, except that no such amendment or
termination may adversely affect shares previously purchased under the Purchase
Plan, and amendments which (i) increase the number of shares that may be issued
under the Plan, (ii) materially modify eligibility
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requirements or (iii) materially increase the benefits accruing to participants,
must have stockholder approval. The Purchase Plan will terminate on October 31,
2006.
EMPLOYMENT AGREEMENTS
Mr. Din's employment agreement with the Company was originally entered into
as of March 1, 1996, and was amended in April 1997. This agreement provides for
an annual base salary of $500,000, plus, beginning in April 1997, a bonus equal
to 3.5% of the Company's pre-tax net income (if $4.5 million or greater) and
terminates on the later of (i) the fifth anniversary of the date the agreement
was entered into, or (ii) five years following the date on which either Mr. Din
or the Company gives a notice of non-renewal or termination. Upon termination of
Mr. Din's employment agreement by the Company for reason other than "cause", as
defined in the employment agreement, or by Mr. Din for "good reason", as defined
in the employment agreement, Mr. Din will be entitled to receive, as severance
pay, guaranteed monthly salary payments in the amount of Mr. Din's current
salary for a period of five years, plus the payment of certain additional
benefits, such as health insurance for the same term. However, Mr. Din's
agreement prohibits him from competing with the Company for five years following
the date of his termination. Pursuant to his employment agreement, Mr. Din is
obligated, subsequent to his termination, to offer first to the Company any
block of 50,000 shares or more of the Company's Common Stock offered by him or
his wife for sale, if offered for sale other than pursuant to an
over-the-counter or exchange transaction.
Mr. Din's agreement also contains confidentiality, intellectual property
rights and dispute resolution provisions. In fiscal 1996, the Company entered
into employment agreements with each of Javed Latif and Kevin Schatzle. Each of
these agreements has a five-year term ending in 2001, with an automatic
three-year extension. Mr. Latif's and Mr. Schatzle's agreements provide for
annual base salaries of $151,000 and $150,000, respectively. Beginning in
April 1997, Mr. Latif became entitled to a quarterly bonus equal to 2.5% of the
Company's pre-tax net income in that quarter beginning on July 1, 1997. In
addition, each of Mr. Latif and Mr. Schatzle is entitled to receive a minimum of
four weeks annual vacation, an automobile allowance of at least $1,500 per month
as well as medical and disability insurance. The Board of Directors may also, at
its discretion, award each of Mr. Latif and Mr. Schatzle a bonus, with such
bonus to be paid consistent with executive bonus programs of the Company, if
any, in existence during any of Mr. Latif's or Mr. Schatzle's period of
employment with the Company. These agreements also provide for severance
payments consisting of twelve months' salary in the event that the Company
terminates either of Mr. Latif's or Mr. Schatzle's employment without "cause"
(as defined in each of Mr. Latif's or Mr. Schatzle's employment agreement) or if
either of Mr. Latif or Mr. Schatzle terminates his employment with the Company
for "good reason" (as defined in each of Mr. Latif's and Mr. Schatzle's
employment agreement). These agreements may be terminated by the Company with or
without "cause." These agreements contain additional provisions regarding
benefits and dispute resolution.
Mr. Stettin's employment agreement with the Company was entered into May 7,
1997. The agreement provides an annual salary of $150,000 with a $50,000 bonus
payable upon the discretion of the Board of Directors. In addition, the
agreement provides a $2,500 bonus for each successful acquisition completed by
the Company and severance pay equal to one year's base salary. The agreement
contains confidentiality, conflict of interest, and non-compete provisions.
Effective October 1, 1997, the Company entered into an employment agreement
with Ellis Posner, pursuant to which Mr. Posner is entitled to receive an annual
salary of $149,000 plus a monthly draw of $7,583 against any bonus payable to
Mr. Posner, an accountable expense allowance, an automobile allowance of $1,000
per month, up to three weeks of paid vacation per year and certain other
employee benefits such as medical and disability insurance. Mr. Posner is
entitled to a quarterly bonus based upon the number of new sales offices opened
each quarter, a guaranteed quarterly bonus of $25,000 and a quarterly bonus
based upon the Company meeting certain revenue targets. Mr. Posner's
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employment agreement is scheduled to terminate on October 1, 2000. The agreement
may be terminated by the Company with or without "cause" by written notice of
the Company. In the event the Company terminates his employment without "cause"
or if Mr. Posner terminates his agreement for "good reason," the Company shall
pay a cash severance payment equal to twelve (12) months' total base salary.
Under the terms of the agreement, Mr. Posner is prohibited from competing with
the Company for a period of twelve (12) months following the date of his
termination. The agreement contains additional provisions regarding benefits and
dispute resolution.
OTHER COMPENSATION ARRANGEMENTS
401(K) PLAN
Effective as of July 1993, the Company adopted the En Pointe
Technologies, Inc. Employee Savings Plan (the "401(k) Plan"), which is a
retirement profit sharing plan that covers all U.S. employees of the Company who
are 21 years old or older and have completed six months of service. The 401(k)
Plan provides that employees may elect to defer, in the form of contributions to
the 401(k) Plan, up to 20% of the total compensation that would otherwise be
paid to the employee. However, the administrator of the 401(k) Plan has adopted
a policy of limiting the contributions of employees whose annual total
compensation is equal to or less than $66,000 up to 15% of total compensation,
and limiting the contributions of employees whose annual total compensation is
greater than $66,000 to up to 8% of total compensation that would otherwise be
paid to the employee, in either case not to exceed $10,000 in 1999 (subject to
adjustment annually as provided in the Code). The Company may make discretionary
matching contributions to the 401(k) Plan, but the Company has not made any
contributions to the 401(k) Plan to date. Contributions are held under a group
annuity contract and are invested in selected eligible investments. Employee
contributions are fully vested and non forfeitable at all times.
DIRECTORS' COMPENSATION
The Company's directors do not receive cash compensation for attendance at
Board of Directors or committee meetings, but may be reimbursed for certain
expenses in connection with attendance at Board of Directors and committee
meetings. The Company's 1996 Stock Plan provides that each non-employee director
of the Company shall automatically be granted a non-qualified option to purchase
5,000 shares of Common Stock upon his or her election and reelection to the
Board of Directors so long as such reelection occurs at least twelve months
after his or her initial election to the Board of Directors of the Company. The
option price of such options is at 80% of the fair market value of the Common
Stock on the date such director is elected or reelected, as the case maybe, and
shall become exercisable with respect to one-third ( 1/3) of the shares subject
to such option three (3) months after such election or reelection, one-third
( 1/3) of such shares nine (9) months after such election or reelection and the
remaining one-third ( 1/3) of such shares twenty-seven (27) months after such
election or reelection. The term of such options shall be ten years.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee during the fiscal year
ended September 30, 1999 consisted of Mark Briggs and Verdell Garroutte, neither
of whom has served as an executive officer or employee of the Company or any of
its subsidiaries for the five years ending September 30, 1999.
STOCKHOLDER PROPOSALS
Any stockholder desiring to submit a proposal for action at the 2001 Annual
Meeting of Stockholders and presentation in the Company's Proxy Statement with
respect to such meeting should
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arrange for such proposal to be delivered to the Company at its principal place
of business no later than October 19, 2000 in order to be considered for
inclusion in the Company's proxy statement relating to that meeting. Matters
pertaining to such proposals, including the number and length thereof,
eligibility of persons entitled to have such proposals included and other
aspects are regulated by the Securities Exchange Act of 1934, Rules and
Regulations of the Securities and Exchange Commission and other laws and
regulations to which interested persons should refer.
On May 21, 1998 the Securities and Exchange Commission adopted an amendment
to Rule 14a-4, as promulgated under the Securities and Exchange Act of 1934, as
amended. The amendment to Rule 14a-4(c)(1) governs the Company's use of its
discretionary proxy voting authority with respect to a stockholder proposal
which is not addressed in the Company's proxy statement. The new amendment
provides that if a proponent of a proposal fails to notify the Company at least
45 days prior to the month and day of mailing of the prior year's proxy
statement, then the Company will be allowed to use its discretionary voting
authority when the proposal is raised at the meeting, without any discussion of
the matter in the proxy statement.
With respect to the Company's 2001 Annual Meeting of Stockholders, if the
Company is not provided notice of a stockholder proposal, which the stockholder
has not previously sought to include in the Company's proxy statement, by
January 3, 2001, the Company will be allowed to use its voting authority as
outlined.
OTHER INFORMATION
The Company files annual, quarterly and special reports, proxy statements
and other information with the Securities and Exchange Commission (the "SEC").
You may read and copy any reports, statements or other information filed by the
Company at the SEC's public reference rooms in Washington, D.C., New York City
and Chicago, Illinois. The Company's SEC filings are also available from
commercial document retrieval services or on the SEC's web site at
http://www.sec.gov. In addition, copies of the Company's financial statements
filed with the SEC will be mailed to stockholders without charge upon receipt of
written request to Secretary, En Pointe Technologies, Inc., 100 N. Sepulveda
Boulevard, 19th Floor, El Segundo, California 90245.
BY ORDER OF THE BOARD OF DIRECTORS
BOB DIN
CHIEF EXECUTIVE OFFICER
El Segundo, California
August 11, 2000
STOCKHOLDERS ARE URGED TO SPECIFY THEIR CHOICE AND TO DATE, SIGN, AND RETURN
THE ENCLOSED CONSENT IN THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND
YOUR COOPERATION IS APPRECIATED.
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EN POINTE TECHNOLOGIES, INC.
CONSENT
THIS CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF EN POINTE
TECHNOLOGIES, INC. (the "Company"). The Board of Directors of En Pointe
Technologies, Inc. RECOMMENDS CONSENT on the proposal.
Stockholders are urged to mark, sign, date and mail promptly this Consent
Card in the envelope provided. Consents must be received at the address of the
Company by 5:00 p.m., California time, on or before September 15, 2000, unless
the deadline is extended without further notice. If not otherwise terminated,
the Consent Solicitation Period terminates 60 days after the earliest-dated
Consent.
THIS CONSENT CARD IS INTENDED TO OBTAIN CONSENT AND THIS CARD SHALL BE
DEEMED TO INDICATE A CONSENT TO THE PROPOSAL IF NOT INDICATED TO THE CONTRARY.
EACH CONSENT MUST BE SIGNED AND DATED.
Sign exactly as addressed to you. Joint owners should each sign. If signing
as executor, administrator, attorney, trustee, or guardian, give title as such.
If a corporation, sign in full corporate name by authorized officer. If a
partnership, sign in the name of authorized person. Please do not forget to SIGN
and DATE this Consent Card.
Please return this Consent Card promptly, using the enclosed envelope. No
postage is required if mailed in the United States of America.
<PAGE>
PLEASE SIGN, DATE AND INDICATE APPROVAL BELOW.
PROPOSAL 1: / / APPROVE / / DISAPPROVE / / ABSTAIN
<TABLE>
<CAPTION>
<S> <C>
Proposal 1. To consent to the amendment of the En Pointe
Technologies, Inc. 1996 Stock Incentive Plan to increase the
authorized number of shares of Common Stock issuable
thereunder by 1,500,000 from 1,260,000 to 2,760,000.
</TABLE>
SIGNATURE(S)
____________________________________________________________
Signature
____________________________________________________________
Signature (if held jointly)
Title or authority (if applicable)
Date:___________, 2000
THIS WRITTEN CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY. MANAGEMENT AND THE BOARD OF DIRECTORS RECOMMEND A CONSENT TO "APPROVE"
PROPOSAL NO. 1. THIS CONSENT CARD WILL BE COUNTED AS YOU INDICATE ABOVE; IN THE
ABSENCE OF SUCH INDICATION, IT WILL BE DEEMED TO INDICATE CONSENT TO "APPROVE"
THE FOREGOING PROPOSAL.
