<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-11(c) or
Section240.14a-12
</TABLE>
<TABLE>
<S> <C>
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 N. SEPULVEDA BLVD., 19(TH) FLOOR
EL SEGUNDO, CA 90245
February 14, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Annual Meeting") of En Pointe Technologies, Inc. (the "Company") to be held at
8:00 A.M. on Friday, March 17, 2000, in the Marina/Manhattan Room at the
DoubleTree Club Hotel, 1985 East Grand Avenue, El Segundo, California 90245.
At the Annual Meeting you will be asked to elect five directors of the
Company, to approve and ratify an amendment to the certificate of incorporation
to increase the number of authorized shares of common stock, and to approve the
appointment of PricewaterhouseCoopers LLP as the Company's independent public
accountants for the fiscal year ending September 30, 2000. All of these matters
are described in detail in the accompanying Notice of Annual Meeting and Proxy
Statement. In addition, we will be pleased to report on the affairs of the
Company and a discussion period will be provided for questions and comments of
general interest to stockholders.
We look forward to greeting personally those stockholders who are able to be
present at the Annual Meeting. However, whether or not you plan to be with us at
the Annual Meeting, it is important that your shares be represented.
Accordingly, you are requested to sign and date the enclosed proxy and mail it
in the envelope provided at your earliest convenience.
Very truly yours,
Bob Din
Chief Executive Officer and Chairman
of the Board of Directors
<PAGE>
EN POINTE TECHNOLOGIES, INC.
100 N. SEPULVEDA BOULEVARD, 19(TH) FLOOR
EL SEGUNDO, CALIFORNIA 90245
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 17, 2000
------------------------
To the Stockholders of
En Pointe Technologies, Inc.:
The 2000 Annual Meeting of Stockholders (the "Annual Meeting") of En
PointeTechnologies, Inc. (the "Company"), will be held at 8:00 A.M. on Friday,
March 17, 2000, in the Marina/Manhattan Room at the DoubleTree Club Hotel, 1985
East Grand Avenue, El Segundo, California 90245, for the following purposes as
more fully described in the accompanying Proxy Statement, which is incorporated
herein by reference:
(1) To elect the five directors to the Board of Directors; and
(2) To approve and ratify an amendment to the certificate of incorporation
to increase authorized common stock from 15,000,000 to 40,000,000; and
(3) To ratify the appointment of PricewaterhouseCoopers LLP as independent
auditors of the Company for the fiscal year ending September 30, 2000;
and
(4) To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The Board of Directors intends to present for election as directors the
nominees named in the accompanying Proxy Statement, whose names are incorporated
herein by reference.
Stockholders of record at the close of business on January 28, 2000 will be
entitled to notice of and to vote at the Annual Meeting or any adjournment or
postponement thereof. All stockholders are cordially invited to attend the
Annual Meeting in person. Stockholders who are unable to attend the Annual
Meeting in person are requested to complete and date the enclosed form of proxy
and return it promptly in the envelope provided. No postage is required if
mailed in the United States. Stockholders who attend the Annual Meeting in
person may revoke their proxy and vote their shares in person. Stockholders
attending the meeting whose shares are held in the name of a broker or other
nominee who desire to vote their shares at the meeting should bring with them a
proxy or letter from that firm confirming their ownership of shares.
By Order of the Board of Directors
Robert Mercer
ASSISTANT SECRETARY
February 14, 2000
<PAGE>
EN POINTE TECHNOLOGIES, INC.
100 N. SEPULVEDA BOULEVARD, 19(TH) FLOOR
EL SEGUNDO, CALIFORNIA 90245
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 17, 2000
This Proxy Statement is furnished to the holders of Common Stock, par value
$.001 per share (the "Common Stock"), of En Pointe Technologies, Inc. (the
"Company") in connection with the solicitation by the Board of Directors of the
Company of the enclosed proxy for use at the Annual Meeting of Stockholders to
be held on Friday, March 17, 2000 (the "Annual Meeting"), or at any adjournment
thereof. The purposes of the Annual Meeting and the matters to be acted upon are
set forth in the accompanying Notice of Annual Meeting of Stockholders. As of
the date of this Proxy Statement, the Board of Directors is not aware of any
other matters which will come before the Annual Meeting. However, if any other
matters properly come before the Annual Meeting, the persons named as proxies
will vote on them in accordance with their best judgment.
Proxies for use at the Annual Meeting are being solicited by the Board of
Directors of the Company. Proxies will be mailed to shareholders on or about
February 14, 2000 and will be solicited chiefly by mail. The Company will make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to the beneficial owners of
Common Stock and will reimburse them for their reasonable expenses in so doing.
Should it appear desirable to do so in order to ensure adequate representation
of shares at the Annual Meeting, officers, agents and employees of the Company
may communicate with stockholders, banks, brokerage houses and others by
telephone, facsimile or in person to request that proxies be furnished. All
expenses incurred in connection with this solicitation will be borne by the
Company. The Company has no present plans to hire special employees or paid
solicitors to assist in obtaining proxies, but reserves the option of doing so
if it should appear that a quorum at the Annual Meeting otherwise might not be
obtained.
REVOCABILITY AND VOTING OF PROXY
A proxy for use at the Annual Meeting and a return envelope for the proxy
are enclosed. Any stockholder who gives a proxy may revoke it at any time before
it is voted by delivering to the Secretary of the Company a written notice of
revocation or a duly executed proxy bearing a later date, or by voting in person
at the Annual Meeting. All proxies properly executed and returned will be voted
in accordance with the instructions specified thereon. If no instructions are
given, proxies will be voted FOR approval of Proposals Nos. 1, 2, and 3 as set
forth in the accompanying Notice of Annual Meeting of Stockholders.
RECORD DATE AND VOTING RIGHTS
Only stockholders of record at the close of business on January 28, 2000 are
entitled to notice of and to vote at the Annual Meeting or at any adjournment
thereof. On January 28, 2000 there were 6,267,542 shares of Common Stock
outstanding; each such share is entitled to one vote on each of the matters to
be presented at the Annual Meeting. The holders of a majority of the outstanding
shares of Common Stock, present in person or by proxy and entitled to vote, will
constitute a quorum at the Annual Meeting.
Proxies marked "withheld" as to any director nominee or "abstain" as to a
particular proposal and broker non-votes will be counted for purposes of
determining the presence or absence of a quorum. "Broker non-votes" are shares
held by brokers or nominees which are present in person or represented by proxy,
but which are not voted on a particular matter because instructions have not
been received from the beneficial owner. The effect of proxies marked "withheld"
as to any director nominee or "abstain" as to a particular proposal and broker
non-votes on Proposals Nos. 1 and 2 is discussed under each respective Proposal.
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of January 20, 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 and nominee for director of the
Company, (iii) each of the Company's executive officers named in the Summary
Compensation Table (see "Executive Compensation") 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 NUMBER PERCENTAGE
- ------------------------ --------- -----------
<S> <C> <C>
Attiazaz "Bob" Din(2)....................................... 653,702 10.5%
Naureen Din(2).............................................. 653,702 10.5%
Zubair Ahmed(3)............................................. 807,396 13.0%
Mark Briggs................................................. 14,667 0.2%
Verdell Garroutte........................................... 8,334 0.1%
Javed Latif(4).............................................. 52,860 0.8%
Jacob J. Stettin............................................ 17,377 0.3%
Kevin Schatzle(5)........................................... 95,836 1.5%
Ellis Posner(6)............................................. 48,220 0.8%
Ali Mohyuddin Din(7)........................................ 311,551 5.0%
Mediha M. Din(7)............................................ 311,551 5.0%
All executive officers and directors as a group (9
persons)(8)............................................... 2,352,094 37.8%
</TABLE>
- ------------------------
(1) Applicable percentage of ownership at January 20, 2000, is based, upon
6,218,932 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 January 20,
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 below
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
311,551 shares of Common Stock owned of record by Mediha Din, Mr. and
Mr. Din's minor child. The address of Mr. and Mrs. 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 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) Includes 1,340 shares issuable upon exercise of options within 60 days of
January 20, 2000.
(5) Includes 1,120 shares issuable upon exercise of options within 60 days of
January 20, 2000.
(6) Includes 2,680 shares issuable upon exercise of options within 60 days of
January 20, 2000.
(7) 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.
(8) Includes 5,140 shares issuable upon exercise of options within 60 days of
January 20, 2000.
2
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Currently, there are five (5) members of the Board of Directors. Directors
are elected at each annual stockholders' meeting to hold office until the next
annual meeting or until their successors are elected and have qualified. Unless
otherwise instructed, the proxy holders named in the enclosed proxy will vote
the proxies received by them for the five (5) nominees named below. All of the
nominees presently are directors of the Company. If any nominee becomes
unavailable for any reason before the election, the enclosed proxy will be voted
for the election of such substitute nominee or nominees, if any, as shall be
designated by the Board of Directors. The Board of Directors has no reason to
believe that any of the nominees will be unavailable to serve. The names and
certain information concerning the five (5) nominees for election as directors
are set forth below. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE
ELECTION OF EACH OF THE NOMINEES NAMED BELOW.
DIRECTORS
The nominees, their ages, the year in which each first became a director of
the Company and their principal occupations or employment during the past five
years are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- ------------------------------------------
<S> <C> <C>
Attiazaz "Bob" Din........................ 47 Chairman of the Board, Chief Executive
Officer and President
Naureen Din............................... 45 Secretary and Director
Zubair Ahmed.............................. 47 Director
Verdell Garroutte(1)...................... 56 Director
Mark Briggs(1)............................ 43 Director
</TABLE>
- ------------------------
(1) Member of Audit Committee and Compensation Committee
ATTIAZAZ "BOB" DIN is a founder of the Company and has served in various
capacities with the Company since its inception in January 1993. Mr. Din has
served as a director since April 1994, and as the Chairman of the Board and
Chief Executive Officer of the Company since January 1996. Mr. Din previously
served as the Company's President from April 1994 to September 1997. Prior to
founding the Company, from November 1985 to January 1993, Mr. Din served as
Chairman of the Board of Directors, President and Chief Executive Officer of
InfoSystems Computer Center, a Southern California-based reseller of computer
products ("InfoSystems"). On January 8, 1999, Mr. Din resumed the office of
President.
NAUREEN DIN is a founder of the Company and currently serves as Secretary
and as a director of the Company. Ms. Din previously served as President from
the Company's inception in January 1993 to April 1994, as Chief Executive
Officer from the Company's inception until January 1996 and as Chief Financial
Officer from the Company's inception until October 1995. Ms. Din was not
employed immediately prior to January 1993. Ms. Din is the wife of Bob Din.
ZUBAIR AHMED has been a director of the Company since April 1994. Mr. Ahmed
previously served as an Executive Vice President of the Company from April 1994
to December 1995 and as Director of Business Development of the Company from
May 1993 to April 1994. From January 1989 to April 1993, Mr. Ahmed served as the
General Manager of Inter Equipment Establishment, a seller of heavy equipment.
3
<PAGE>
VERDELL GARROUTTE has been a director of the Company since May 1996.
Mr. Garroutte formerly served as the Chief Executive Officer of First Source
International, Inc., the predecessor company to firstsource.com, a computer
products reseller from April 1997 to May of 1998. Mr. Garroutte has been a
financial consultant, for both the Company and firstsource.com, a subsidiary of
the Company from October 1994 to the present. From May 1993 to October 1993,
Mr. Garroutte was employed by the Company as a part-time employee and
consultant. From January 1994 until September 1994, Mr. Garroutte served as the
Chief Financial Officer of Kelly Micro Systems, Inc., a manufacturer of memory
components for personal computers. From December 1985 until May 1991,
Mr. Garroutte served in various positions at Vanstar Corporation (formerly
Computerland Corporation), a personal computer retailer, including
Vice-President and Treasurer.
MARK BRIGGS has been a director of the Company since March 1998. Since
January 1997, Mr. Briggs has been the President and Chief Executive Officer of
ClientLogic Corporation (formerly Softbank Services Group), a leading outsourcer
to the digital marketplace. From January 1993 through the end of 1996,
Mr. Briggs served as the President and Chief Executive Officer of Intelligent
Electronics, Reseller Division. Mr. Briggs is also a director for
firstsource.com, a subsidiary of the Company.
The Board of Directors of the Company held four (4) meetings during the
fiscal year ended September 30, 1999. Each incumbent director attended at least
seventy-five percent (75%) of the aggregate of the number of meetings of the
Board and the number of meetings held by all committees of the Board on which he
served. Bob Din and Naureen Din are husband and wife. Javed Latif, the CFO, is
the brother-in-law of Bob Din. There are no other family relationships among any
of the directors or executive officers of the Company.
For the fiscal year 1999, Mr. Garroutte and Mr. Briggs served on the Audit
Committee. The functions of the Audit Committee include recommending to the
Board of Directors the retention of the independent auditors, reviewing the
scope of the annual audit undertaken by the Company's independent auditors and
the progress and results of their work, and reviewing the financial statements
of the Company and its internal accounting and auditing procedures. The Audit
Committee held two meetings during fiscal 1999.
The Compensation Committee of the Board of Directors was composed of
Mr. Garroutte and Mr. Briggs. The functions of the Compensation Committee
include reviewing and approving executive compensation policies and practices,
reviewing salaries and bonuses for certain officers of the Company,
administering the Company's 1996 Stock Incentive Plan and Employee Stock
Purchase Plan, subject to the provisions set forth in each plan, and considering
such other matters as maybe referred to the Compensation Committee by the Board
of Directors from time to time. There were two meetings of the Compensation
Committee during fiscal 1999.
The Company does not have a nominating committee. Instead, the Board of
Directors, as a whole, identifies and screens candidates for membership on the
Company's Board of Directors.
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 Incentive 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
4
<PAGE>
( 1/3) of such shares twenty-seven (27) months after such election or
reelection. The term of such options shall be ten years.
VOTE REQUIRED
The five nominees receiving the highest number of affirmative votes of the
shares present in person or represented by proxy and entitled to vote for them,
a quorum being present, shall be elected as directors. Only votes cast "FOR" a
nominee will be counted, except that the accompanying proxy will be voted for
all nominees in the absence of instructions to the contrary. Broker non-votes
and proxies marked "withheld" as to one or more nominees will result in the
respective nominees receiving fewer votes. However, the number of votes
otherwise received by the nominee will not be reduced by such action.
EXECUTIVE OFFICERS
JAVED LATIF, 50, has served as Executive Vice President of the Company since
May 1994, and as Chief Financial Officer of the Company since January 1, 1999.
Prior to that time, Mr. Latif served as the Controller of the Company from
April 1993 until May 1994. Prior to joining the Company, Mr. Latif served as the
Controller and Chief Financial Officer of InfoSystems from November 1985 to
January 1993. Mr. Latif is Bob Din's brother-in-law.
KEVIN B. SCHATZLE, 38, has served as Senior Vice President of the Company
since July 1995. Prior to that time, Mr. Schatzle served as Vice President of
Sales of the Company from March 1993 until July 1995. Prior to joining the
Company, Mr. Schatzle was employed by InfoSystems from June 1990 to
January 1993, where he served as Product Manager and then Director of Sales.
From 1987 to June 1990, Mr. Schatzle was employed by the Hewlett-Packard Company
where he was responsible for the sales force automation program in Southern
California. Effective October 1, 1999, Mr. Schatzle resigned his position with
the Company to become the President of Supplyaccess, Inc., a subsidiary of the
Company.
ELLIS M. POSNER, 47, has served as Vice President of Sales of the Company
since July 1995. Prior to that time, Mr. Posner served as Regional Sales
Director of the Company for the Northwest region from June 1993 until
July 1995. From May 1990 to May 1993, Mr. Posner worked for Vanstar Corporation,
a computer products reseller, as Area Director in Charge of West Coast
Operations.
5
<PAGE>
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
NAME AND PRINCIPAL FISCAL ------------------------------------ UNDERLYING
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, 1998 500,000 -- -- --
Chief Executive 1997 437,500 202,864(4) -- 50,000
Officer and President
Javed Latif.(5)......... 1999 $168,422 $200,004(6) -- 150,000(12)
Executive Vice President 1998 168,422 73,019(6) -- 25,000
and Chief Financial 1997 151,000 81,001(6) -- 50,000
Officer
Jacob J. Stettin (7).... 1999 $150,000 100,000(8) -- 75,000(12)
Senior Vice President 1998 150,000 50,000(8) -- 10,000
and General 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 1998 158,026 120,500(10) 41,500(11) 50,000
Sales 1997 123,000 106,094(10) -- 10,000
</TABLE>
- ------------------------
(1) Does not include the value of perquisites 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 the 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.
(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 was appointed Chief Financial Officer 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 fiscal year
1999, only bonus under the employment agreement was paid.
6
<PAGE>
(10) Consists of a bonus payment payable pursuant to Mr. Posner's employment
agreement in effect since fiscal 1997.
(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
--------------------------------------------------------------- POTENTIAL
PERCENT OF REALIZABLE VALUE
TOTAL AT ASSUMED
NUMBER OPTIONS ANNUAL RATES
OF GRANTED OF STOCK PRICE
SECURITIES TO APPRECIATION
UNDERLYING EMPLOYEES FOR 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% 0.125(2) 5/10/09 330,170(3) 836,715(3)
Jacob S. Stettin............. -- -- -- -- -- --
75,000(1) 1.4% 0.125(2) 5/10/09 165,085(3) 418,357(3)
Kevin Schatzle............... -- -- -- -- -- --
150,000(1) 2.7% 0.125(2) 5/10/09 330,170(3) 836,715(3)
Ellis Posner................. -- -- -- -- -- --
150,000(1) 2.7% 0.125(2) 5/10/09 330,170(3) 836,715(3)
</TABLE>
FISCAL 1999 YEAR END OPTION VALUES:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR END FISCAL YEAR END
------------------------------ -----------------------------
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.
7
<PAGE>
STOCK OPTION AND PURCHASE PLANS
1996 STOCK PLAN
The En Pointe Technologies, Inc. 1996 Stock Incentive Plan, as amended
(the"1996 Stock Plan") was adopted by the Company's Board of Directors and
stockholders in March 1996 and provides for the granting of "incentive stock
options," within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), non statutory options and rights to purchase
Common Stock. Incentive stock options may be granted only to employees of the
Company and its subsidiaries. Non statutory options and rights to purchase
Common Stock may be granted to employees and consultants to the Company and its
subsidiaries. A participant may not receive a grant of an option for or the
right to purchase more than 275,000 shares of Common Stock in any calendar year
period.
The 1996 Stock Plan authorizes up to 1,260,000 shares of the Company's
Common Stock for issuance. If options or rights to purchase are forfeited or any
shares of Common Stock are reacquired by the Company pursuant to an option or
right to purchase agreement, those shares are again available for grant under
the 1996 Stock Plan. The 1996 Stock Plan is administered by the Compensation
Committee of the Board of Directors (the "Compensation Committee"), which has
sole discretion and authority, consistent with the provisions of the 1996 Stock
Plan, to determine which eligible participants will receive options and/or
purchase rights, the time when options and/or purchase rights will be granted,
the terms of options and/or purchase rights granted and the number of shares
which will be subject to options and/or purchase rights granted under the 1996
Stock Plan. However, there is a formula grant to non-employee directors. As of
January 20, 2000, of the 1,260,000 shares of the Company's common stock
authorized for issuance under the stock plan, 326,453 shares have been issued
upon exercise of options previously granted, options to purchase 774,587 shares
have been granted and are currently outstanding, of which 374,793 shares are
exercisable as of such date.
The exercise price of incentive stock options is determined by the
Compensation Committee, but which must be not less than the fair market value of
a share of Common Stock on the date the option is granted (110% with respect to
optionees who own at least 10% of the outstanding Common Stock). Non statutory
options shall have such exercise price as determined by the Compensation
Committee, but which shall not be less than 80% of the fair market value per
share of Common Stock on the date the option is granted. The Compensation
Committee has the authority to determine the time or times at which options
granted under the 1996 Stock Plan become exercisable, provided that options
expire no later than ten years from the date of grant (five years with respect
to holders of incentive stock options who own at least 10% of the outstanding
Common Stock). Options and purchase rights are nontransferable, other than upon
death by will or the laws of descent and distribution. A right to purchase
Common Stock gives the offeree the right to purchase a number of shares of
Common Stock for a period and at a price (which may be less than fair market
value) all as determined by the Compensation Committee, and subject to such
other terms, conditions and restrictions as are established by the Compensation
Committee and set forth in the applicable stock purchase agreement. As of
January 20, 1999, no rights to purchase Common Stock had been granted under the
1996 Stock Plan. In the event of a "change in control" of the Company, all
outstanding options and rights to purchase Common Stock will become fully vested
and immediately exercisable. A change in control means generally (i) the
acquisition by a person or group of more than 50% of the outstanding securities
of the Company, (ii) a merger or consolidation in which the Company is not the
survivor, (iii) the sale or disposition of substantially all of the assets of
the Company, (iv) a liquidation or dissolution of the Company, or (v) or reverse
merger in which more than 50% of the combined voting power of the Company's
outstanding securities are transferred. The Board of Directors may, in its
discretion, amend or terminate the 1996 Stock Plan. However, no amendment or
termination may adversely affect a participant's rights as to prior grants. The
Plan shall terminate in any event on March 1, 2006.
8
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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 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
9
<PAGE>
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 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 to 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.
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.
10
<PAGE>
CERTAIN TRANSACTIONS
The brother of Bob Din in December of 1999 acquired a 9% interest in CCI.
CCI is a corporation that sells memory products and accounted for about 3% of
the Company's purchases during the 1999 fiscal year.
Javed Latif, Chief Financial Officer, borrowed funds from the Company during
the 1999 fiscal year. The maximum so borrowed was $84,500, which was subject to
interest at 8% and was reduced to $60,000 at September 30, 1999.
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon its review of the copies of Forms 3, 4, and 5 amendments
thereto furnished to the Company, or written representations that no annual
Form 5 reports were required, the Company believes that all filing requirements
under Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") applicable to its directors, officers and any persons holding
ten percent (10%) or more of the Company's Common Stock were made with respect
to the Company's fiscal year ended September 30, 1999.
REPORT OF THE COMPENSATION COMMITTEE
The following report is submitted by the Compensation Committee of the Board
of Directors with respect to the executive compensation policies established by
the Compensation Committee and recommended to the Board of Directors and
compensation paid or awarded to executive officers for the fiscal year ended
September 30, 1999. The Compensation Committee determines the annual salary,
bonus and other benefits, including incentive compensation awards, of the
Company's senior management and recommends new employee benefit plans and
changes to existing plans to the Company's Board of Directors. The salary and
performance bonus of Bob Din, the Company's Chief Executive Officer, is
determined in accordance with Mr. Din's Employment Agreement with the Company
(see "Employment Agreements," above). The Compensation Committee met two times
during the fiscal year ended September 30, 1999.
COMPENSATION POLICIES AND OBJECTIVES
The Company's executive compensation policy is designed to attract and
retain exceptional executives by offering compensation for superior performance
that is highly competitive with other well-managed organizations. The
Compensation Committee measures executive performance on an individual and
corporate basis. There are three components to the Company's executive
compensation program, and each is consistent with the stated philosophy as
follows:
- BASE SALARY. Base salaries for executives and other key employees are
determined by individual financial and non-financial performance, position
in salary range and general economic conditions of the Company. For
purposes of administering base pay, all executive positions are evaluated
and placed in appropriate salary grades. Salary range midpoint levels are
reviewed on an annual basis to ensure competitiveness with a peer group of
comparable computer software and systems companies. In recommending
salaries for executive officers, the Compensation Committee (i) reviews
the historical performance of the executives, and (ii) formally reviews
specific information provided by its accountants and other consultants, as
necessary, with respect to the competitiveness of salaries paid to the
Company's executives.
- ANNUAL BONUS. Annual bonuses for executives and other key employees are
tied directly to the Company's financial performance as well as individual
performance. The purpose of annual cash bonuses are to reward executives
for achievements of corporate, financial and operational goals.
11
<PAGE>
Annual cash bonuses are intended to reward the achievement of outstanding
performance. When certain objective and subjective performance goals are
not met, annual bonuses would be reduced or not paid.
- LONG-TERM INCENTIVES. The purpose of these plans is to create an
opportunity for executives and other key employees to share in the
enhancement of stockholder value through stock options. The overall goal
of this component of pay is to create a strong link between the management
of the Company and its stockholders through management stock ownership and
the achievement of specific corporate financial measures that result in
the appreciation of Company share price. Stock options are awarded if the
Company and individual goals are achieved or exceeded. The Compensation
Committee previously has followed the practice of granting options
annually on terms which provide that the options become exercisable in
three (3) equal installments over a 27-month period. Beginning in August
of 1998, most options were granted with a 48-month vesting period with
pro-rata monthly vesting. The Compensation Committee believes that this
feature not only provides an employee retention factor but also makes
longer term growth in share prices important for those receiving options.
FISCAL YEAR 1999 COMPENSATION
The Company is required to disclose its policy regarding qualifying
executive compensation deductibility under Section 162(m) of the Internal
Revenue Code of 1986, as amended, which provides that, for purposes of the
regular income tax and the alternative minimum tax, the otherwise allowable
deduction for compensation paid or accrued with respect to a covered employee of
a public corporation is limited to no more than $1 million per year. It is not
expected that the compensation to be paid to the Company's executive officers
for fiscal 1999 will exceed the $1 million limit per officer. The Company's 1996
Stock Incentive Plan is structured so that any compensation deemed paid to an
executive officer when he exercises an outstanding option under the plan, with
an exercise price equal to the fair market value of the option shares on the
grant date, will qualify as performance-based compensation that will not be
subject to the $1 million limitation.
The Compensation Committee of
the Board of Directors
Mark Briggs
Verdell Garroutte
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THE COMPANY'S PREVIOUS
FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS, INCLUDING THIS
PROXY STATEMENT, IN WHOLE OR IN PART, THE FOREGOING REPORT AND THE PERFORMANCE
GRAPH ON PAGE 10 SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
12
<PAGE>
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative stockholder return
on the Company's Common Stock with the cumulative total return of the Nasdaq
Stock Market (U.S.) Index and the Hambrecht & Quist Technology Index for the
period that commenced May 8, 1996, the date on which the Company's Common Stock
was first registered under the Exchange Act, and ended on September 30, 1999.
The Performance Graph is not necessarily an indicator of future price
performance. The graph assumes the reinvestment of all dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG EN POINTE TECHNOLOGIES, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX, AND
THE HAMBRECHT & QUIST TECHNOLOGY INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPARISON OF 41 MONTH CUMULATIVE TOTAL RETURN*
AMONG EN POINTE TECHNOLOGIES, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE HAMBRECHT & QUIST TECHNOLOGY INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
5/8/96 9/96 9/97 9/98 9/99
<S> <C> <C> <C> <C> <C>
EN POINTE TECHNOLOGIES $100 $133 $263 $86 $134
NASDAQ STOCK MARKET (U.S.) $100 $104 $143 $145 $236
HAMBRECHT & QUIST TECHNOLOGY $100 $100 $150 $139 $268
</TABLE>
- ------------------------
* $100 INVESTED ON 5/8/96 IN STOCK OR INDEX--INCLUDING REINVESTMENT OF
DIVIDENDS, FISCAL YEAR ENDING SEPTEMBER 30.
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PROPOSAL 2
AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The Company's Certificate of Incorporation currently authorizes the issuance
of up to 15,000,000 shares of common stock. As of the January 20, 2000, the
Company had 6,218,932 shares of common stock issued and outstanding, and an
additional 1,204,195 shares of common stock reserved for issuance under stock
option plans and warrants. This leaves approximately 7,576,873 shares of common
stock currently available for other purposes.
At the Annual Meeting, the stockholders of the Company will be asked to
approve amendments to the Company's Certificate of Incorporation to increase the
number of authorized shares of common stock from 15,000,000 to 40,000,000. If
the stockholders approve this Proposal 2, the first paragraph of Article 4 of
the Company's Certificate of Incorporation will be amended to read in its
entirety as follows:
"SECTION 1. AUTHORIZED SHARES. The Corporation is authorized to issue two
classes of stock to be designated, respectively, "Common Stock" and
"Preferred Stock." The aggregate number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-five million
(45,000,000) shares, consisting of (i) forty million (40,000,000) shares of
Common Stock, $0.001 par value per share, and (ii) five million (5,000,000)
shares of Preferred Stock, $0.001 par value per share."
On January 21, 2000, the Board of Directors unanimously approved, subject to
stockholder approval, the foregoing amendment to the Company's Certificate of
Incorporation.
REASONS FOR THE AMENDMENT
The Company's reserve of authorized but unissued shares of common stock has
been substantially depleted in recent years as a result of the Company's
financing activities through the sale of common stock, the issuance of warrants
and the granting of stock options under stock option plans. The proposed
amendment to the Company's Certificate of Incorporation will increase the number
of authorized shares of common stock from 15,000,000 to 40,000,000. The Board of
Directors has decided to increase the authorized number of shares of common
stock in order to provide that the Company will have a sufficient number of
authorized and unissued shares of common stock for corporate opportunities, such
as additional stock offerings, acquisitions, stock splits, stock dividends and
compensation plans. There are currently no arrangements, agreements or
understandings for the issuance or use of the additional shares of authorized
common stock (other than outstanding warrants and issuances permitted or
required under the Company's stock option plans or awards made pursuant to those
plans). While this is not the intent of this Proposal 2, in addition to general
corporate purposes, the proposed share increase can be used to make a change in
control of the Company more difficult. See "Potential Anti-Takeover Effect of
Authorized Securities" below.
The additional shares of common stock for which authorization is sought
would be identical to the shares of common stock of the Company authorized prior
to approval of this Proposal 2. Holders of common stock do not have preemptive
rights to subscribe to additional securities that may be issued by the Company,
which means that current stockholders do not have a prior right to purchase any
new issue of capital stock of the Company in order to maintain their
proportionate ownership of the Company.
As of the Record Date, no shares of the Corporation's preferred stock, of
which 5,000,000 shares are authorized, were issued or outstanding. No increase
in the number of authorized shares of preferred stock of the Company is proposed
or anticipated at the present time.
If approved, the increased number of authorized shares of common stock will
be available for issue from time to time for such purposes and consideration as
the Board of Directors may approve, and no further vote of the stockholders of
the Company will be required, except as provided under Delaware law
14
<PAGE>
or under applicable stock exchange or stock market rules. The availability of
additional shares for issuance, without the delay and expense of obtaining
stockholder approval at a special meeting, will restore the Company's
flexibility to issue common stock to a level that the Board of Directors
believes is advisable.
POTENTIAL ANTI-TAKEOVER EFFECT OF AUTHORIZED SECURITIES
The increase in the authorized common stock may facilitate certain
anti-takeover devices that may be advantageous to management if management
attempts to prevent or delay a change of control. The Board of Directors could
create impediments to a takeover or transfer of control of the Company by
causing such additional authorized shares to be issued to a holder or holders
who might side with the Board of Directors in opposing a takeover bid. In this
connection, the Board of Directors could issue shares of common stock to a
holder that would thereby have sufficient voting power to assure that certain
types of proposals would not receive the requisite stockholder vote, including
any proposal to remove directors, to accomplish certain business combinations
opposed by the Board of Directors, or to alter, amend or repeal provisions in
the Company's Certificate of Incorporation or Bylaws relating to any such
action. Furthermore, the existence of such shares might have the effect of
discouraging any attempt by a person or entity, through the acquisition of a
substantial number of shares of common stock, to acquire control of the Company,
since the issuance of such shares could dilute the common stock ownership of
such person or entity. Employing such devices may adversely impact stockholders
who desire a change in management or who desire to participate in a tender offer
or other sale transaction involving the Company. By use of such anti-takeover
devices, the Board of Directors may thwart a merger or tender offer even though
stockholders might be offered a substantial premium over the then current market
price of the common stock. At the present time, the Company is not aware of any
contemplated mergers, tender offers or other plans by a third party to attempt
to effect a change in control of the Company, and this Proposal 2 is not being
made in response to any such attempt.
The Certificate of Incorporation of the Company authorizes the issuance of
5,000,000 shares of preferred stock, of which all of such shares remain
undesignated ("preferred stock"). The Board of Directors, within the limitations
and restrictions contained in the Certificate of Incorporation and without
further action by the Company's stockholders, has the authority to issue the
shares of undesignated preferred stock from time to time in one or more series
and to fix the number of shares and the relative rights, conversion rights,
voting rights, rights and terms of redemption, liquidation preferences and any
other preferences, special rights and qualifications of any such series. Any
issuance of preferred stock with voting rights could, under certain
circumstances, have the effect of delaying or preventing a change in control of
the Company by increasing the number of outstanding shares entitled to vote and
increasing the number of votes required to approve a change in control of the
Company.
The Company is also governed by Section 203 of the Delaware General
Corporation Law (the "Delaware anti-takeover law"), which provides that certain
"business combinations" between a Delaware corporation whose stock is generally
traded on The Nasdaq Stock Market or held of record by more than 2,000
stockholders, such as the Company, and an "interested stockholder" (generally
defined as a stockholder who beneficially owns 15% or more of a Delaware
corporation's voting stock) are prohibited for a three-year period following the
date that such stockholder became an "interested stockholder," unless certain
exceptions apply. The term "business combination" is defined generally to
include, among other transactions, mergers, tender offers and transactions which
increase an "interested stockholder's" percentage ownership of stock in a
Delaware corporation.
While it may be deemed to have potential anti-takeover effects, the proposed
amendment to increase the authorized common stock is not prompted by any
specific effort or takeover threat currently perceived by the Board of
Directors. Moreover, the Board of Directors does not currently intend to propose
additional anti-takeover measures in the foreseeable future.
15
<PAGE>
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 this Proposal 2, including without limitation editorial
modifications or any other change to the proposed amendment to the Certificate
of Incorporation which the Board of Directors may adopt without stockholder vote
in accordance with the Delaware General Corporation Law.
NO DISSENTERS' RIGHTS
Under Delaware law, stockholders are not entitled to dissenters' rights of
appraisal with respect to this Proposal 2.
VOTE REQUIRED FOR APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION;
RECOMMENDATION OF BOARD DIRECTORS
Approval of this Proposal 2 to amend the Company's Certificate of
Incorporation requires the affirmative vote of the holders of a majority of the
shares of common stock of the Company present, or represented, and entitled to
vote at the Annual Meeting. Both abstentions and broker non-votes are not
affirmative votes and, therefore, will have the same effect as votes against
this Proposal 2.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THIS
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP, independent
auditors, to audit the financial statements of the Company for the fiscal year
ending September 30, 2000, and recommends that stockholders vote for
ratification of such appointment. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection.
PricewaterhouseCoopers LLP (including its predecessor, Coopers & Lybrand LLP)
has audited the Company's financial statements annually since its fiscal year
ended September 30, 1993. Its representatives are expected to be present at the
meeting with the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder desiring to submit a proposal for action at the 2000 Annual
Meeting of Stockholders and presentation in the Company's Proxy Statement with
respect to such meeting should 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
16
<PAGE>
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 MATTERS
Management is not aware of any other matters to come before the meeting. If
any other matter not mentioned in this Proxy Statement is brought before the
meeting, the proxy holders named in the enclosed Proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their
judgment.
By Order of the Board of Directors
Bob Din
CHIEF EXECUTIVE OFFICER
February 14, 2000
The Annual Report to Stockholders of the Company for the fiscal year ended
September 30, 1999 is the Company's Annual Report on Form 10-K which was filed
with the Securities and Exchange Commission on January 13, 2000 and which is
being mailed concurrently with this Proxy Statement to all stockholders of
record as of January 28, 2000. The Annual Report is not to be regarded as proxy
soliciting material or as a communication by means of which any solicitation is
to be made.
17
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PROXY
EN POINTE TECHNOLOGIES, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF THE STOCKHOLDERS--MARCH 17, 2000
The undersigned hereby nominates, constitutes and appoints Attiazaz "Bob"
Din and Zubair Ahmed, and each of them individually, the attorney, agent and
proxy of the undersigned, with full power of substitution, to vote all stock of
EN POINTE TECHNOLOGIES, INC. which the undersigned is entitled to represent and
vote at the 2000 Annual Meeting of Stockholders of the Company to be held at the
Marina/Manhattan Room at the DoubleTree Club Hotel, 1985 East Grand Avenue, El
Segundo, California 90245, on March 17, 2000, at 8:00 a.m., and at any and all
adjournments or postponements thereof, as fully as if the undersigned were
present and voting at the meeting, as follows:
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1, 2, AND 3
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<S> <C> <C> <C>
1. Election of Directors FOR all nominees listed below WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY BELOW) / / TO VOTE FOR ALL NOMINEES LISTED BELOW / /
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Election of the following nominees as directors: Attiazaz "Bob" Din,
Naureen Din, Zubair Ahmed, Verdell Garroutte, and Mark Briggs
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, PRINT THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
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2. Approve amendments to the Company's Certificate of Incorporation to increase
the number of authorized shares of common stock from 15,000,000 to 40,000,000.
/ / FOR / / AGAINST / / ABSTAIN
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3. Ratification of PricewaterhouseCoopers LLP as independent auditors of the
Company for fiscal year ending September 30, 2000:
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion, on such other business as may properly come before the
meeting or any adjournment thereof.
IMPORTANT--PLEASE SIGN AND DATE AND RETURN PROMPTLY
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED "FOR" THE
ELECTION OF THE DIRECTORS NAMED ON THE REVERSE SIDE OF THIS PROXY, "FOR" THE
AMENDMENTS TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK, AND "FOR" RATIFICATION OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS.
Date _______________________, 2000
__________________________________
__________________________________
(Signature of stockholder)
Please sign your name exactly as
it appears hereon. Executors,
administrators, guardians,
officers of corporations and
others signing in a fiduciary
capacity should state their full
titles as such.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN AND RETURN
THIS PROXY, WHICH MAY BE REVOKED AT ANY TIME PRIOR TO ITS USE.
