<PAGE>
As filed with the Securities and Exchange Commission on September 25, 1996
Registration No. 33-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
COMPUCOM SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 38-2363156
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10100 N. Central Expressway
Dallas, Texas 75231
(214) 265-3600
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Robert J. Boutin
Chief Financial Officer
CompuCom Systems, Inc.
10100 N. Central Expressway
Dallas, Texas 75231
(214) 265-3600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
N. Jeffrey Klauder, Esq.
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, Pennsylvania 19103-6933
----------------------------
Approximate date of commencement of proposed sale to which this
Registration Statement relates: From time to time after this Registration
Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [x]
----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each class Amount Proposed maximum Proposed maximum Amount of
<S> <C> <C> <C> <C>
of securities to be to be offering price aggregate registration
registered registered per share offering price fee
- -----------------------------------------------------------------------------------
Common Stock, par 387,597 $8.0625 /(1)/ $3,125,000.81 $1,077.59
value $.01 per share shares
- --------------------------------------------------------------------------------
</TABLE>
(1) Maximum offering price per share represents average of the high and low
prices for Common Stock of the Registrant, as reported on the Nasdaq National
Market System on September 20, 1996, consistent with Rule 457(c).
----------------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
1
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration qualification under the securities laws of any such State.
PROSPECTUS
387,597 Shares
COMPUCOM SYSTEMS, INC.
Common Stock
($.01 Par Value)
----------------
This Prospectus relates to 387,597 shares (the "Shares") of common stock,
par value $.01 per share (the "Common Stock"), of CompuCom Systems, Inc., a
Delaware corporation (the "Company"). All of the Shares are being offered
hereby on behalf of Network Compatibility Group, Inc. Network Compatibility
Group, Inc. and its successors and assigns is are hereinafter referred to as the
"Selling Stockholder." The Selling Stockholder is the holder of a $3,000,000
Subordinated Convertible Note, (the "Note"), issued by the Company on October
31, 1995, or Shares issuable upon conversion thereof. The Selling Stockholder
acquired the Note in connection with the acquisition by the Company of
substantially all of the assets of the Selling Stockholder on October 31, 1995.
All proceeds from any sales of the Shares by the Selling Stockholder will
inure to the benefit of the Selling Stockholder. The Company will receive none
of the proceeds from the sale of Shares which may be offered hereby. All
expenses of registration incurred in connection herewith are being borne by the
Company, but all selling and other expenses incurred by the Selling Stockholder
will be borne by the Selling Stockholder.
The Selling Stockholder has not advised the Company of any specific plans
for the distribution of the Shares covered by this Prospectus, but it is
anticipated that the Shares will be sold from time to time primarily in
transactions (which may include block transactions) on the National Association
of Securities Dealers Automated Quotations ("Nasdaq") National Market System at
the market price then prevailing, although sales may also be made in negotiated
transactions or otherwise. The Selling Stockholder and the brokers and dealers
through whom sale of the Shares may be made may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended, and their
commissions or discounts and other compensation may be regarded as underwriters'
compensation. See "Plan of Distribution."
The Common Stock is listed on the Nasdaq National Market under the symbol
"CMPC." On September 20, 1996, the last sale price of the Common Stock as
reported on the Nasdaq National Market was $8.125.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON
STOCK OFFERED HEREBY.
-----------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------
The date of this Prospectus is September 20, 1996.
2
<PAGE>
No person has been authorized to give any information or to make any
representations, other than those contained or incorporated by reference in this
Prospectus, in connection with the offering contained herein, and, if given or
made, such information and representations must not be relied upon as having
been authorized by the Company or the Selling Stockholder. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the Company since
the date hereof.
A registration statement on Form S-3 in respect of the Shares offered by
this Prospectus (the "Registration Statement") has been filed with the
Securities and Exchange Commission (the "Commission"), 450 Fifth Street, N.W.,
Washington, D.C. 20549, under the Securities Act of 1933, as amended (the
"Act"). This Prospectus does not contain all of the information contained in
such Registration Statement, certain portions of which have been omitted
herefrom pursuant to the rules and regulations of the Commission. Accordingly,
additional information concerning the Company and the Shares is included in the
Registration Statement, including the exhibits thereto, which may be inspected
at the public reference facilities of the Commission described below.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports and other information with the Commission. These reports, proxy
statements and other information may be inspected and copied at the public
reference facility maintained by the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at its New York Regional Office, Seven World
Trade Center, Suite 1300, New York, New York 10048, and its Chicago Regional
Office, Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates.
INCORPORATION BY REFERENCE
The Company will provide without charge to each person to whom this
Prospectus is delivered a copy of any or all of such documents which are
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into the documents that
this Prospectus incorporates). Written or oral requests for copies should be
directed to Robert J. Boutin, Chief Financial Officer, CompuCom Systems, Inc.,
10100 N. Central Expressway, Dallas, Texas 75231, (214) 265-3600.
3
<PAGE>
THE COMPANY
CompuCom Systems, Inc., together with its subsidiaries ("CompuCom" or "the
Company"), is a leading provider of personal computer ("PC") products and
services to large and medium sized businesses throughout the United States.
CompuCom teams with its customers, which include primarily Fortune 1000
companies and other large businesses, to apply PC technology to meet their
business objectives, which range from product procurement and configuration to
network project management and support.
The Company is an authorized dealer of major personal computer products for
a number of manufacturers, including Compaq Computer Corporation, International
Business Machines Corporation, Hewlett-Packard Company, Toshiba American
Information Systems, and Apple Computer Corporation. CompuCom also offers a
broad selection of networking and related products, computer-related peripheral
equipment and a range of computer equipment and software from a number of
vendors, including 3Com Corporation, Digital Equipment Corporation, Intel
Corporation, Kingston Technology Corporation, Lotus Development Corporation,
Microsoft Corporation, NEC Technologies, Inc. and Novell, Inc. To further meet
the needs of its customers, CompuCom provides a variety of services including
custom configuration of PC systems, field engineering, network management, help
desk services and network project management utilizing network applications such
as Novell Netware, Windows NT Server, Windows and Windows 95, IBM's OS/2 Warp
and LAN Server.
Net revenues for the Company have grown at a compounded rate of 29% over the
past five years, while net earnings have grown by 42% compounded annually over
the same period. CompuCom's strong revenue and net earnings performance is a
result of the Company's continued focus on customer satisfaction, along with the
enhancement of its product and services capabilities created by a strategy of
growth through existing operations and strategic acquisitions. The Company's
target customers are becoming increasingly dependent on information technology
to compete effectively in today's markets. As a result, the decision making
process that organizations face when planning, selecting and implementing
technology solutions is becoming more complex and requires many of these
organizations to outsource the management and support of their PC technology
needs. In an effort to enhance the Company's ability to provide customers with
value-added services designed to meet their PC technology service requirements,
the Company acquired several regional service companies during 1994 and 1995.
These acquisitions have broadened the variety of the Company's network
management platforms, increased the Company's remote network monitoring
capabilities and greatly expanded the Company's systems engineer resources.
The Company markets its product procurement, configuration, field
engineering, network management, help desk services and network project
management primarily through its direct sales force and service personnel,
operating through approximately 40 sales and service centers. The Company is
focusing on expanding its presence in the service market. This commitment is
reflected in the increase in its service personnel during 1995. As of December
31, 1995, the Company employed 1,196 service personnel, including system
engineers, field technicians, service support and engineers on-site at customer
locations, compared to 809 as of December 31, 1994. These service personnel
provide configuration, field engineering, network management, help desk services
and network project management services to the Company's customers. As of
December 31, 1995, the Company employed 258 full-time direct sales
representatives.
The Company's predecessor was incorporated in Michigan in 1981, and was
reincorporated in Delaware, and changed its name to CompuCom Systems, Inc., in
1989. The principal offices of the Company are located at 10100 N. Central
Expressway, Dallas, Texas 75231 and its telephone number is (214) 265-3600.
4
<PAGE>
RECENT DEVELOPMENTS
On September 5, 1996, the Company announced that despite continued
strong revenue growth, earnings growth will be reduced below originally
anticipated levels for the next six to nine months due to investments made to
exploit opportunities with customers and new market segments. Recent
investments include the opening of a 305,000 square-foot advanced configuration
and distribution center in New Jersey which triples the Company's custom
configuration and distribution capabilities.
RISK FACTORS
In evaluating the Company and its business, prospective investors should
consider carefully the following risk factors in addition to the other
information contained herein.
Competition. The Company is engaged in fields within the computer
industry characterized by a high level of competition. Many established
personal computer manufacturers (including some of the Company's own vendors),
systems integrators and other resellers of personal computer or networking
products including Entex Information Services Inc., InaCom Corp., Microage, Inc.
and Vanstar Corporation, compete with the Company in the configuration and
distribution of computer systems and equipment. In addition, the PC reseller
industry is characterized by intense competition primarily in the areas of
price, product availability and breadth of product line. In the highly
fragmented computer services area, the Company competes with several larger
competitors, other corporate resellers pursuing high-end services opportunities,
as well as several smaller computer services companies. Some of these
competitors have financial, technical, manufacturing, sales, marketing and other
resources which are substantially greater than those of the Company. Although
the Company believes it currently competes favorably within the PC reseller
industry, there can be no assurance that the Company will be able to continue to
compete successfully with new or existing competition.
Inventory Management. The personal computer industry is characterized by
rapid product improvement and technological change resulting in relatively short
product life cycles and rapid product obsolescence, which can place inventory at
considerable valuation risk. Certain of the Company's suppliers provide price
protection practices to the Company intended to reduce the risk of inventory
devaluation by absorbing temporary price reductions and long-term price declines
associated with aging product life cycles. The Company also has the option of
returning a certain percentage of its current product inventories each quarter
to certain manufacturers as it assesses each product's current and forecasted
demand schedule. There can be no assurance, however, that suppliers will
continue such policies, that unforeseen new product developments will not affect
the Company adversely, or that the Company can successfully manage its existing
and future inventory.
Attraction and Retention of Technical Employees. The Company's services
business involves the delivery of professional services and is labor-intensive.
The success of the services business will depend in large part upon the
Company's ability to attract, develop, motivate and retain highly skilled
technical employees who are in particularly great demand and are likely to
remain a limited resource for the foreseeable future. Although the Company
expects to continue to be able to attract and retain sufficient numbers of
highly skilled technical employees and project managers for the foreseeable
future, there can be no assurance that the Company will be able to do so. The
inability to attract and hire additional technical personnel, or the loss of a
significant number of the Company's technical personnel, could have a material
adverse impact on the Company, including its ability to secure and retain
customers.
Management of Growth. The Company's significant growth during the past
several years has resulted in increased responsibilities for both existing and
new management personnel. In addition, the Company is in the process of
expanding its focus to emphasize growth in the service integration business.
There can be no assurance that the Company will be successful in managing its
expansion, and the failure to do so could adversely affect the Company's
financial position and results of operations.
5
<PAGE>
Product Supply. The fields within the computer industry in which the
Company competes continue to experience significant product supply shortages and
customer order backlogs due to the inability of certain manufacturers to supply
certain products on a timely basis. In addition, certain vendors have initiated
new channels of distribution that increase competition for the available product
supply. There can be no assurance that vendors will be able to maintain an
adequate supply of products to fulfill the Company's customer orders on a timely
basis. Failure to obtain adequate product supplies could have a material
adverse effect on the Company's results of operations.
Dependence on Major Vendors. A major portion of the Company's revenues
are derived from sales of computer systems and related peripherals, including
Compaq, IBM and HP personal computer products. Sales of Compaq, IBM and HP
accounted for approximately 28%, 16% and 11%, respectively, of the Company's
1995 net revenues compared to 27%, 20% and 11%, respectively, in 1994 and 23%,
24% and 10%, respectively, in 1993. The Company's agreements with these vendors
contain provisions providing for periodic renewals and permitting termination by
the vendor without cause, generally upon 30 to 90 days written notice, depending
upon the vendor. Since 1987, Compaq, IBM and HP have regularly renewed their
respective dealer agreements with the Company, although there can be no
assurance that the regular renewals of the Company's dealer agreements will
continue. The termination, or non-renewal, of the Company's Compaq dealer
agreement or IBM dealer agreement, or both, would materially adversely affect
the Company's business. The loss of HP as a supplier would adversely affect the
Company's ability to continue its expansion. The Company, however, is not aware
of any reasons for the termination, or non-renewal, of any of those dealer
agreements and believes that its relationships with Compaq, IBM and HP are
satisfactory.
Potential Fluctuations in Operating Results. The Company's results may
vary significantly from quarter to quarter depending on certain factors
including, but not limited to, demand for personal computers, customer order
deferrals, availability of products and general economic conditions. The
Company seeks to control its expense levels, but such controls are in part based
on anticipated revenues. Therefore, the Company may be unable to adjust
spending in a timely manner to compensate for any unexpected revenue shortfall.
As a result, quarterly period-to-period comparisons of the Company's financial
results are not necessarily meaningful and should not be relied upon as an
indication of future performance.
Control by Safeguard Scientifics, Inc. Safeguard Scientifics, Inc.
("Safeguard") currently owns 22,201,736 shares of Common Stock, constituting
approximately 49.6% of the outstanding Common Stock assuming no additional
purchases. In addition, Safeguard owns 1,500,000 shares of Series B Preferred
Stock. The Series B Preferred Stock is currently convertible into approximately
2,215,657 shares of Common Stock at a rate of $6.77 per share of Common Stock,
subject to anti-dilution adjustments. The shares of Series B Preferred Stock
are entitled to one vote for each share of Common Stock into which such shares
may be converted, except that, for so long as Safeguard owns at least 40% of the
Company's outstanding voting securities, in the election of directors the shares
of Series B Preferred Stock are entitled to five votes for each share of Common
Stock into which such shares of Series B Preferred Stock may be converted.
Consequently, Safeguard has approximately 59.6% of the outstanding voting power
of the Company's capital stock with respect to the election of directors and
approximately 52.0% of the outstanding voting power of the Company's capital
stock with respect to all other matters upon which the holders of Common Stock
may vote. As a result, Safeguard will have the voting power to elect the
Company's entire Board of Directors and have the practical ability to control
all other matters requiring stockholder approval. In addition, the Company has
certain arrangements pursuant to which Safeguard provides various
administrative, legal and financial services in return for an annual fee.
6
<PAGE>
Limited Trading Market; Shares Eligible for Future Sale. At September
20, 1996, the Company had 44,782,500 shares of Common Stock outstanding, not
including (i) 2,215,657 shares of Common Stock reserved for issuance upon
conversion of 1,500,000 outstanding shares of Series B Preferred Stock, (ii)
4,483,769 shares of Common Stock reserved for issuance upon the exercise of
options outstanding under the Company's Option Plans, (iii) 1,084,050 shares of
Common Stock available for future grants of options under the Option Plans, (v)
387,597 shares of Common Stock issuable upon conversion of the Note. Safeguard
has "demand" and "piggyback" registration rights with respect to certain of the
shares of Common Stock that it owns as well as with respect to the shares of
Common Stock issuable upon conversion of the Series B Preferred Stock. In
addition, the Company has granted registration rights to certain other holders
of its Common Stock. Finally, shares issued upon exercise of outstanding
options under the Company's Option Plans are registered for resale on Form S-8.
The Company is unable to predict the effect that sales made under Rule 144,
under registration statements, or otherwise, may have on the then prevailing
market price of the Common Stock, although any substantial sale of restricted
securities pursuant to Rule 144 or under registration statements may have an
adverse effect, particularly in view of the limited trading market for the
Common Stock.
No Dividends. To date, the Company has not paid any cash dividends on
its Common Stock, and does not expect to declare or pay any cash or other
dividends in the foreseeable future. Further, the Company's bank loan
agreements restrict the Company from declaring or paying dividends or other
distributions on its Common Stock.
SELLING STOCKHOLDER
The Selling Stockholder is the holder of Shares issued or issuable upon
conversion of the Note. The Selling Stockholder may be the current holder of
the Note or its transferees. Except for shares of Common Stock that the Selling
Stockholder may acquire upon conversion of the Note, the Selling Stockholder
does not currently own any shares of Common Stock of the Company. Other than
the acquisition by the Company of substantially all of the assets of the Selling
Stockholder on October 31, 1995, the Selling Stockholder has not had any
material relationship with the Company within the past three years; however, the
two stockholders of the Selling Stockholder, Mark Bradley Ristas and Robert J.
D'Orazio, are currently employees of the Company and have been employees of the
Company since October 31, 1995. The table below sets forth the number of shares
of Common Stock of the Company being offered hereby on behalf of the Selling
Stockholder and also sets forth the percentage of the outstanding Common Stock
of the Company that the Selling Stockholder would own assuming full conversion
of the Note.
Number of Shares Percent
to be sold under of
Selling Stockholder this Prospectus /1/ Class /2/
- ------------------- -------------------- -----------
Network Compatibility Group, Inc. 387,597 less than 1%
______________________
1 Additional Shares may be issuable under the Note based upon an adjustment in
- -
the conversion price of the Note. The current conversion price is $7.74.
2 The percentage for the Selling Stockholder is determined based upon
- -
44,782,500 shares of Common Stock outstanding on September 20, 1996. The number
of Shares being sold hereunder by the Selling Stockholder has been added to the
number of shares outstanding for purposes of the calculation for the Selling
Stockholder.
7
<PAGE>
PLAN OF DISTRIBUTION
The Shares offered hereby are being sold by the Selling Stockholder
acting as principal for its own account. The Company will receive none of the
proceeds from this offering.
The Selling Stockholder may sell the Shares in one or more transactions
(which may involve one or more block transactions) on the NASDAQ National
Market, in sales occurring in the public market off such system, in privately
negotiated transactions or in a combination of such transactions. Each such
sale may be made either at market prices prevailing at the time of such sale or
at negotiated prices. The Selling Stockholder may sell some or all of the
Shares in transactions involving broker-dealers, who may act as agent or acquire
the Shares as principal. Any broker-dealer participating in such transactions
as agent may receive commissions from the Selling Stockholder (and, if they act
as agent for the purchaser of such Shares, from such purchaser). Usual and
customary brokerage fees will be paid by the Selling Stockholder. Broker-
dealers may agree with the Selling Stockholder to sell a specified number of
Shares at a stipulated price per Share and, to the extent such a broker-dealer
is unable to do so acting as agent for the Selling Stockholder, to purchase as
principals any unsold Shares at the price required to fulfill the respective
broker-dealer's commitment to the Selling Stockholder. Broker-dealers who
acquire Shares as principals may thereafter resell such Shares from time to time
in transactions (which may involve cross and block transactions and which may
involve sales to and through other broker-dealers, including transactions of the
nature described above) in the over-the-counter market, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale or at
negotiated prices, and in connection with such resales may pay to or receive
from the purchasers of such Shares commissions.
At the time a particular offer of Shares is made, to the extent required,
a supplement to this Prospectus will be distributed which will identify and set
forth the aggregate amount of Shares being offered and the terms of the
offering, including the names of any underwriters, dealers or agents, the
purchase price paid by any underwriter for Shares purchased from the Selling
Stockholder, any discounts, commissions and other items constituting
compensation from the Selling Stockholder and/or the Company and any discounts,
commissions or concessions allowed or reallowed or paid to dealers, including
the proposed selling price to the public.
The Company is bearing all costs relating to the registration of the
Shares. Any commissions or other fees payable to broker-dealers in connection
with any sale of the Shares will be borne by the Selling Stockholder or other
party selling such Shares. In order to comply with certain states' securities
laws, if applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states the Shares may not
be sold unless the Shares have been registered or qualified for sale in such
state, or unless an exemption from registration or qualification is available
and is obtained. The Company has agreed, at its own expense, to take all
necessary action under the securities laws of up to ten states (as reasonably
requested by the Selling Stockholder) to ensure that the Shares may be sold in
compliance with the applicable laws.
The Company has agreed to indemnify the Selling Stockholder, certain
other persons who control the Selling Stockholder and certain other persons who
may be deemed to be "underwriters" under certain circumstances against certain
liabilities, including liabilities arising under the Securities Act. The
Selling Stockholder has agreed to indemnify the Company, each of the directors
and officers who have signed the Registration Statement and certain other
persons who control the Company under certain circumstances against certain
liabilities.
8
<PAGE>
LEGAL MATTERS
The legality of the securities being offered hereby will be passed upon
for the Company by Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania.
EXPERTS
The consolidated financial statements and schedule of CompuCom Systems,
Inc. and subsidiaries as of December 31, 1995 and 1994 and for each of the years
in the three-year period ended December 31, 1995 incorporated by reference
herein, have been incorporated by reference herein in reliance upon the reports
of KPMG Peat Marwick LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents filed by the Company
with the Commission are incorporated by reference in this Prospectus:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, which contains or incorporates by reference financial
statements and related schedules for the Company and incorporates by reference
certain other information regarding the Company set forth in the proxy statement
for the Company's 1996 Annual Meeting of Stockholders and filed with the
Commission.
(b) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1996, and June 30, 1996.
(c) The description of the Company's Common Stock which is contained in a
registration statement filed under the Exchange Act, including any amendment or
reports filed for the purpose of updating such description.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities remaining unsold,
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of the filing of such reports and documents.
Any statement contained in a document, all or a portion of which is
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained or
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------
Item 14. Other Expenses of Issuance and Distribution.*
- -----------------------------------------------------
Registration fee-Securities and Exchange Commission..............$ 1,077.59
Printing of registration statement, prospectus, etc..................100.00
Blue sky fees and expenses.........................................1,000.00
Accounting services................................................2,000.00
Legal fees.........................................................6,000.00
Miscellaneous........................................................900.00
----------
Total.........................................................$11,077.59
* No portion of these expenses will be borne by the Selling Stockholder.
Item 15. Indemnification of Directors and Officers.
- ---------------------------------------------------
A. Section 145(a) of the Delaware General Corporation Law (the "GCL")
empowers a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he or she is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Section 145(b) of the GCL empowers a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that such person acted in
any of the capacities set forth above, against such expenses actually and
reasonably incurred by him or her in connection with the defense or settlement
of such action or suit if he or she acted under similar standards, except that
no indemnification may be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnification for such
expenses which the court shall deem proper.
Section 145(c) of the GCL further provides that, to the extent a
director, officer, employee or agent of a corporation has been successful on the
merits or otherwise in the defense of any action, suit or proceeding referred to
above or in the defense of any claim, issue or matter therein, he or she shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.
10
<PAGE>
Section 145(f) of the GCL provides that the statutory provisions on
indemnification are not exclusive of indemnification provided pursuant to, among
other things, the certificate of incorporation, by-laws or indemnification
agreements. The Certificate of Incorporation and By-laws of the Company each
contain provisions regarding the indemnification of directors and officers of
the Company. Subject to certain limitations expressed therein, Article NINTH of
the Company's Certificate of Incorporation provides for the indemnification of
the Company's officers and directors to the fullest extent permitted by the GCL.
In addition, the By-laws of the Company provide expanded rights to
indemnification beyond the indemnification expressly authorized by the GCL in
the following respects:
1. indemnification will be available without regard to the tests
applicable to the indemnified person's conduct, unless
indemnification against the particular liability is expressly
prohibited by applicable law;
2. indemnification is expressly authorized against penalties and
punitive damages, as well as against judgments and amounts paid in
settlement of derivative suits; and
3. under certain circumstances, expenses incurred by a director in
defending a third party or corporate proceeding are required to be
paid by the corporation on behalf of such director.
B. The Company has a directors' and officers' liability insurance policy
that affords directors and officers with insurance coverage for losses arising
from claims based on breaches of duty, negligence, error and other wrongful
acts.
Item 16. Exhibits and Financial Statements.
- -------------------------------------------
The following is a list of exhibits filed as part of this
Registration Statement:
Exhibit
Number Document
- ------- -----------------------------------------------------------------------
4(a) Form of Stock Certificate evidencing Common Stock, $.01 par value, of
CompuCom Systems, Inc. (1)(Exhibit 4(b))
4(b) CompuCom Systems, Inc. 1983 Stock Option Plan, as amended (2)(Exhibit
4(k)).
4(c) CompuCom Systems, Inc. 1993 Stock Option Plan, as amended (3)(Exhibit
4(c)).
4(d) CompuCom Systems, Inc. 1984 Non-Qualified Stock Option Plan, as amended
(4)(Exhibit 4(g)).
4(e) CompuCom Systems, Inc. Stock Option Plan for Directors (5)(Exhibit
4(g)).
4(f) Stock Option Agreement dated July 21, 1995 between CompuCom Systems,
Inc. and Delbert W. Johnson (5)(Exhibit 4(i)).
4(g) Form of Securities Purchase Agreement, dated as of April 29, 1991,
between CompuCom Systems, Inc. and certain members of its management as
listed on the schedule attached thereto, and including as exhibits the
Form of 15% Subordinated Debenture due October 29, 1992 and Form of
Common Stock Purchase Warrant (2)(Exhibit 4(o)).
4(h) Note Agreement and sample note representing the $18.5 million 9%
Convertible Subordinated Notes due September 24, 2002, issued by
CompuCom Systems, Inc. in September 1992 (6)(Exhibit 4).
11
<PAGE>
4(i) Certificate of Designation dated March 31, 1994, establishing Series B
Cumulative Convertible Preferred Stock of CompuCom Systems, Inc.
(7)(Exhibit 4(i)).
4(j) Form of Stock Certificate evidencing Series B Cumulative Convertible
Preferred Stock, $.01 par value, of CompuCom Systems, Inc. (8)(Exhibit
4(h)).
4(k) $3 Million Subordinated Convertible Note dated October 31, 1995 from
CompuCom Systems, Inc. to Network Compatibility Group, Inc. (3)(Exhibit
4(k)).
*5 Opinion of Morgan, Lewis & Bockius LLP as to legality of securities
being registered.
*23.1 Independent Auditors' Consent of KPMG Peat Marwick LLP.
23.2 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5).
25 Power of Attorney (included on signature pages to this Registration
Statement).
__________
* Filed herewith.
(1) Filed on April 2, 1990 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
(2) Filed on March 31, 1993 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
(3) Filed on March 29, 1996 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
(4) Filed on March 29, 1991 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
(5) Filed on October 10, 1995 as an exhibit to the Registration Statement on
Form S-8 (No. 33-63309) and incorporated herein by reference.
(6) Filed on November 13, 1992 as an exhibit to the Quarterly Report on Form 10-
Q (No. 0-14371) and incorporated herein by reference.
(7) Filed on May 15, 1994 as an exhibit to the Quarterly Report on Form 10-Q
(No. 0-14371) and incorporated herein by reference.
(8) Filed on March 31, 1995 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
12
<PAGE>
Item 17. Undertakings.
- ----------------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that subparagraphs (a)(1)(i) and (a)(1)(ii) of this
-------- -------
section do not apply if the information required to be included in a post-
effective amendment by those subparagraphs is contained in periodic reports
filed by the Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
13
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on the 20 day of September,
1996.
COMPUCOM SYSTEMS, INC.
By: /s/ Edward R. Anderson
----------------------------------
Edward R. Anderson
President and Chief Executive Officer
14
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
EACH PERSON IN SO SIGNING, ALSO MAKES, CONSTITUTES AND APPOINTS EDWARD R.
ANDERSON AND ROBERT J. BOUTIN, AND EACH OF THEM ACTING ALONE, HIS OR HER TRUE
AND LAWFUL ATTORNEY-IN-FACT, WITH FULL POWER OF SUBSTITUTION, TO EXECUTE AND
CAUSE TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO THE
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, ANY AND ALL AMENDMENTS
AND POST-EFFECTIVE AMENDMENTS TO THIS REGISTRATION STATEMENT, WITH EXHIBITS
THERETO AND OTHER DOCUMENTS IN CONNECTION THEREWITH, AND HEREBY RATIFIES AND
CONFIRMS ALL THAT SAID ATTORNEY-IN-FACT OR HIS SUBSTITUTE OR SUBSTITUTES MAY DO
OR CAUSE TO BE DONE BY VIRTUE HEREOF.
Dated: September 20, 1996 /s/ Charles A. Root
------------------------------------
Charles A. Root, Chairman of the Board
Dated: September 20, 1996 /s/ Edward R. Anderson
------------------------------------
Edward R. Anderson, President, Chief
Executive Officer and Director
(Principal Executive Officer)
Dated: September 20, 1996 /s/ Robert J. Boutin
-------------------------------------
Robert J. Boutin, Senior Vice President-
Finance and Chief Financial Officer
(Principal Financial and Accounting
Officer)
Dated: September 20, 1996 /s/ Daniel F. Brown
-------------------------------------
Daniel F. Brown, Director
Dated: September 20, 1996 /s/ James W. Dixon
-------------------------------------
James W. Dixon, Director
Dated: September 20, 1996 /s/ Michael J. Emmi
-------------------------------------
Michael J. Emmi, Director
Dated: September 20, 1996 /s/ Richard F. Ford
-------------------------------------
Richard F. Ford, Director
Dated: September 20, 1996 /s/ Delbert W. Johnson
-------------------------------------
Delbert W. Johnson, Director
Dated: September 20, 1996 /s/ John D. Loewenberg
-------------------------------------
John D. Loewenberg, Director
Dated: September 20, 1996 /s/ Ira M. Lubert
-------------------------------------
Ira M. Lubert, Director
15
<PAGE>
Dated: September 20, 1996 /s/ Warren V. Musser
-------------------------------------
Warren V. Musser, Director
Dated: September 20, 1996 /s/ Edward N. Patrone
-------------------------------------
Edward N. Patrone, Director
16
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Document
- ------ ----------------------------------------------------------------------
4(a) Form of Stock Certificate evidencing Common Stock, $.01 par value, of
CompuCom Systems, Inc. (1)(Exhibit 4(b))
4(b) CompuCom Systems, Inc. 1983 Stock Option Plan, as amended (2)(Exhibit
4(k)).
4(c) CompuCom Systems, Inc. 1993 Stock Option Plan, as amended (3)(Exhibit
4(c)).
4(d) CompuCom Systems, Inc. 1984 Non-Qualified Stock Option Plan, as amended
(4)(Exhibit 4(g)).
4(e) CompuCom Systems, Inc. Stock Option Plan for Directors (5)(Exhibit
4(g)).
4(f) Stock Option Agreement dated July 21, 1995 between CompuCom Systems,
Inc. and Delbert W. Johnson (5)(Exhibit 4(i)).
4(g) Form of Securities Purchase Agreement, dated as of April 29, 1991,
between CompuCom Systems, Inc. and certain members of its management as
listed on the schedule attached thereto, and including as exhibits the
Form of 15% Subordinated Debenture due October 29, 1992 and Form of
Common Stock Purchase Warrant (2)(Exhibit 4(o)).
4(h) Note Agreement and sample note representing the $18.5 million 9%
Convertible Subordinated Notes due September 24, 2002, issued by
CompuCom Systems, Inc. in September 1992 (6)(Exhibit 4).
4(i) Certificate of Designation dated March 31, 1994, establishing Series B
Cumulative Convertible Preferred Stock of CompuCom Systems, Inc.
(7)(Exhibit 4(i)).
4(j) Form of Stock Certificate evidencing Series B Cumulative Convertible
Preferred Stock, $.01 par value, of CompuCom Systems, Inc. (8)(Exhibit
4(h)).
4(k) $3 Million Subordinated Convertible Note dated October 31, 1995 from
CompuCom Systems, Inc. to Network Compatibility Group, Inc. (3)(Exhibit
4(k)).
*5 Opinion of Morgan, Lewis & Bockius LLP as to legality of securities
being registered.
*23.1 Independent Auditors' Consent of KPMG Peat Marwick LLP.
23.2 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5).
25 Power of Attorney (included on signature pages to this Registration
Statement).
__________
* Filed herewith.
(1) Filed on April 2, 1990 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
17
<PAGE>
(2) Filed on March 31, 1993 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
(3) Filed on March 29, 1996 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
(4) Filed on March 29, 1991 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
(5) Filed on October 10, 1995 as an exhibit to the Registration Statement on
Form S-8 (No. 33-63309) and incorporated herein by reference.
(6) Filed on November 13, 1992 as an exhibit to the Quarterly Report on Form 10-
Q (No. 0-14371) and incorporated herein by reference.
(7) Filed on May 15, 1994 as an exhibit to the Quarterly Report on Form 10-Q
(No. 0-14371) and incorporated herein by reference.
(8) Filed on March 31, 1995 as an exhibit to the Annual Report on Form 10-K (No.
0-14371) and incorporated herein by reference.
18
<PAGE>
EXHIBIT 5
MORGAN, LEWIS & BOCKIUS LLP
COUNSELORS AT LAW
2000 ONE LOGAN SQUARE
PHILADELPHIA, PENNSYLVANIA 19103-6993
TELEPHONE: (215) 963-5000
FAX: (215) 963-5299
September 23, 1996
CompuCom Systems, Inc.
10100 N. Central Expressway
Dallas, TX 75231
Re: REGISTRATION STATEMENT ON FORM S-3 RELATING TO 387,597 SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION OF $3,000,000 SUBORDINATED CONVERTIBLE NOTE,
DATED OCTOBER 31, 1995
---------------------------------------------------------------------------
Dear Sir or Madam:
We have acted as counsel to CompuCom Systems, Inc., a Delaware corporation (the
"Company"), in connection with the Company's preparation of the subject
registration statement (the "Registration Statement"), filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the
"Act"), to register the public offering of up to 387,597 shares of the Company's
Common Stock, par value $.01 per share (the "Common Stock"), which shares are
issuable upon conversion of a $3,000,000 Subordinated Convertible Note (the
"Note"), dated October 31, 1995.
We have examined such records, documents, statutes and decisions as we have
deemed relevant in rendering this opinion. In our examination we have assumed
the genuineness of documents submitted to us as originals and the conformity
with the original of all documents submitted to us as copies thereof. We also
have assumed that the Note will be converted in accordance with the provisions
of the Note.
In our opinion, the shares of Common Stock issuable upon conversion of the Note
will be, when issued in accordance with the terms of the Note, validly issued,
fully paid and non-assessable shares of the Common Stock of the Company.
The opinion set forth above is limited to the General Corporation Law of the
State of Delaware.
We hereby consent to the use of this opinion as Exhibit 5 to the Registration
statement. In giving such opinion, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
MORGAN, LEWIS & BOCKIUS LLP
19
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
CompuCom Systems, Inc.:
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
Dallas, Texas
September 23, 1996
20
