<PAGE>
SCHEDULE 14A INFORMATION
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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 Rule 14a-11(c) or Rule 14a-12
COMPUCOM SYSTEMS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (check the appropriate box):
[ 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
[ ] 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:
<PAGE>
[COMPUCOM GRAPHIC]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, MAY 14, 1998
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of CompuCom
Systems, Inc. (the "Company") will be held at the Four Seasons Hotel, One Logan
Square, Philadelphia, Pennsylvania 19103 on Thursday, May 14, 1998, at 2:00
p.m., local time, for the following purposes:
1. To elect ten directors;
2. To consider and vote on a proposal to adopt an Employee Stock Purchase
Plan; and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors has established the close of business on March 31,
1998, as the record date for the determination of stockholders entitled to
receive notice of, and to vote at, the meeting or any adjournments thereof. You
are cordially invited to attend the meeting. However, whether or not you
expect to attend the meeting in person, you are urged to mark, sign, date, and
mail the enclosed form of Proxy promptly so that your shares may be represented
and voted in accordance with your wishes and in order that the presence of a
quorum may be assured at the meeting. No postage is required if mailed in the
United States. You may revoke your Proxy at any time prior to the effective
exercise thereof as set forth in the Proxy Statement.
By order of the Board of Directors,
/s/ James A. Ounsworth
JAMES A. OUNSWORTH
Secretary
7171 Forest Lane
Dallas, TX 75230
April 7, 1998
<PAGE>
COMPUCOM SYSTEMS, INC.
7171 Forest Lane
DALLAS, TX 75230
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
Proxies by the Board of Directors (the "Board") of CompuCom Systems, Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held on May 14,
1998 (such meeting and any adjournment or adjournments thereof referred to as
the "Annual Meeting") for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders and in this Proxy Statement. The Company intends
to mail this Proxy Statement and related form of Proxy to stockholders on or
about April 7, 1998.
VOTING SECURITIES
Only the holders of shares of common stock, par value $.01 per share (the
"Common Stock"), and Series B Cumulative Convertible Preferred Stock, par value
$.01 per share (the "Series B Stock"), of the Company of record at the close of
business on March 31, 1998 (the "Record Date") (cumulatively, the "Shares") are
entitled to receive notice of, and to vote at, the Annual Meeting. On that
date, there were 46,147,320 shares of Common Stock and 1,500,000 shares of
Series B Stock outstanding and entitled to be voted at the Annual Meeting. It
is the intention of the persons named in the Proxy to vote as instructed by the
stockholders or, if no instructions are given, to vote as recommended by the
Board. Each stockholder has one vote per Share on all business of the Annual
Meeting, except that in the election of directors each share of Series B Stock
has the right to cast five votes for each share of Common Stock into which such
Series B Stock could then be converted. Each share of Series B Stock is
convertible into 1.477104 shares of Common Stock.
The ten nominees receiving the highest number of affirmative votes of the
Shares present or represented and entitled to be voted shall be elected as
directors. Approval of the proposal to adopt the Employee Stock Purchase Plan
(the "Plan") requires the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock present at the meeting in person or by proxy.
A majority of outstanding Shares will constitute a quorum for the transaction of
business at the Annual Meeting. Votes withheld from any director, abstentions
and broker non-votes will be counted for purposes of determining the presence of
a quorum for the transaction of business at the Annual Meeting. Abstentions are
counted in tabulations of the votes cast on proposals presented to stockholders.
Broker non-votes are not counted for purposes of determining whether a proposal
has been approved.
REVOCABILITY OF PROXY
Execution of the enclosed Proxy will not affect a stockholder's right to
attend the Annual Meeting and vote in person. A stockholder, in exercising his
or her right to vote in person at the Annual Meeting, effectively revokes all
previously executed Proxies. In addition, the Proxy is revocable at any time
prior to the effective exercise thereof by filing notice of revocation with the
Secretary of the Company or by filing a duly executed Proxy bearing a later
date.
PERSONS MAKING THE SOLICITATION
The solicitation of this Proxy is made by the Company. The cost of
soliciting Proxies on behalf of the Board of Directors, including the actual
expenses incurred by brokerage houses, nominees and fiduciaries in forwarding
Proxy materials to beneficial owners, will be borne by the
<PAGE>
Company. In addition to solicitation by mail, certain officers and other
employees of the Company may solicit Proxies on behalf of the Board of Directors
in person or by telephone.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Stockholders intending to present proposals at the next Annual Meeting of
Stockholders to be held in 1999 must notify the Company of the proposal no later
than December 8, 1998.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, the Company's Common
Stock beneficially owned by each person known to the Company to be the
beneficial owner of 5% or more of the outstanding Common Stock, and the number
of shares of Common Stock owned beneficially by each director and nominee for
director, by each named executive officer, and by all executive officers and
directors as a group. In addition to the information regarding the Company's
Common Stock listed below, on the Record Date, there were 1,500,000 shares of
Series B Stock issued and outstanding. All of such Series B Stock is owned of
record by Safeguard Scientifics (Delaware), Inc. ("Safeguard Delaware"), a
wholly owned subsidiary of Safeguard Scientifics, Inc. ("Safeguard"), and
consequently is beneficially owned by Safeguard.
NUMBER OF SHARES PERCENT OF
Owned (1) CLASS
------------------ -----------
Safeguard Scientifics, Inc.
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087/(2)/..................... 25,636,838 55.6%
Charles A. Root/(3)/......................... 50,000 *
Edward R. Anderson/(4)/...................... 1,030,000 2.2%
Daniel F. Brown/(4)/......................... 725,595 1.6%
Donald R. Caldwell/(5)/...................... 17,750 *
Michael J. Emmi/(4)/......................... 13,000 *
Richard F. Ford/(4)/......................... 23,000 *
Delbert W. Johnson/(4)/...................... 11,500 *
John D. Loewenberg/(4)/...................... 23,875 *
John C. Maxwell, III......................... 0 *
Warren V. Musser/(6)/........................ 383,583 *
Edward N. Patrone/(4)/....................... 13,000 *
William Barry/(4)/........................... 80,756 *
M. Lazane Smith/(4)/......................... 42,833 *
Executive officers and directors as a group
(13 persons)/(7)/.......................... 2,414,892 5.1%
- ---------
* Less than 1%.
(1) Except as otherwise disclosed, the nature of beneficial ownership is the
sole power to vote and to dispose of the shares shown (except for shares
held jointly with spouse).
(2) Safeguard Delaware, a wholly owned subsidiary of Safeguard, is the record
owner of 22,087,848 shares of Common Stock and 1,500,000 shares of Series B
Stock, which are presently convertible into 2,215,657 shares of Common
Stock. CompuShop Incorporated, a wholly owned subsidiary of Safeguard
Delaware, is the record owner of 1,333,333 shares of Common Stock.
Consequently, such shares are beneficially owned by Safeguard, which is the
parent of the Company by virtue of its share ownership on the Record Date.
All of the shares beneficially owned by Safeguard have been pledged by
Safeguard as collateral under its bank line of credit.
<PAGE>
(3) Represents shares held by Mr. Root's spouse.
(4) Includes for Messrs. Anderson, Barry, Brown, Emmi, Ford, Johnson,
Loewenberg, Patrone and Ms. Smith 680,000 shares, 72,000 shares, 392,858
shares, 13,000 shares, 3,000 shares, 5,000 shares, 14,500 shares, 13,000
shares, and 36,000 shares, respectively, that may be acquired pursuant to
stock options that are currently exercisable or that will become
exercisable within 60 days of the Record Date.
(5) Includes 100 shares held by Mr. Caldwell's spouse, 1,500 shares held in a
trust for the benefit of his spouse and 1,150 shares held in custodial
accounts for Mr. Caldwell's children.
(6) Includes 25,564 shares held by a charitable foundation of which Mr. Musser
is an officer and director. Excludes 25,636,838 shares beneficially owned
by Safeguard, for which Mr. Musser serves as Chairman of the Board and
Chief Executive Officer. Mr. Musser disclaims beneficial ownership of the
shares beneficially owned by the charitable foundation and by Safeguard.
(7) Includes 1,229,358 shares that may be acquired upon exercise of stock
options that are currently exercisable or that will become exercisable
within 60 days of the Record Date.
As of the Record Date, Mr. Musser beneficially owned approximately 9.8% of
the outstanding common stock of Safeguard. All officers and directors of the
Company as a group, other than Mr. Musser, owned less than 1% of Safeguard's
outstanding common stock. As of the Record Date, ClientLink, Inc. was a
majority owned subsidiary of the Company. Executive officers and directors of
the Company beneficially owned as of such date the following shares of
ClientLink, Inc. common stock: Mr. Anderson, 47,100 shares, (4,710 of which may
be acquired pursuant to currently exercisable stock options), .0088%; Mr. Brown,
28,260 shares, .0053%; Mr. Barry, 4,710 shares, .000883%; Ms. Smith, 4,710
shares, .000883%; and officers and directors as a group, 84,780 shares (4,710 of
which may be acquired pursuant to currently exercisable stock options), .0158%.
I. ELECTION OF DIRECTORS
It is intended that the persons named as proxies for the Annual Meeting
will vote in favor of the election of the following ten nominees as directors of
the Company to hold office until the Annual Meeting of Stockholders in 1999 and
until their successors are elected and have qualified. All of the nominees are
presently serving as directors of the Company. Each of the nominees has
consented to serve if elected. However, if any of the nominees should become
unavailable prior to the election, the holder of the Proxies may vote the
Proxies for the election of such other persons as the Board may recommend,
unless the Board reduces the number of directors to be elected.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF
THE SLATE OF NOMINEES SET FORTH IN THIS PROPOSAL. PROXIES RECEIVED BY THE BOARD
WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE ON THEIR PROXY CARDS.
THE TEN NOMINEES RECEIVING THE HIGHEST NUMBER OF AFFIRMATIVE VOTES OF THE SHARES
PRESENT OR REPRESENTED AND ENTITLED TO BE VOTED SHALL BE ELECTED AS DIRECTORS.
<TABLE>
<CAPTION>
HAS BEEN
PRINCIPAL OCCUPATION AND BUSINESS A DIRECTOR
Name EXPERIENCE DURING LAST FIVE YEARS SINCE AGE
- -------------------- ------------------------------------------- ---------- ---
<S> <C> <C> <C>
Edward R. Anderson President and Chief Executive Officer of
the Company(4)............................. 1993 51
Daniel F. Brown Executive Vice President, Sales of the
Company.................................... 1990 52
Donald R. Caldwell President and Chief Operating Officer
of Safeguard Scientifics, Inc., a strategic
information systems company,/(2)(5)/....... 1997 51
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Michael J. Emmi Chairman of the Board, President and
Chief Executive Officer, Systems &
Computer Technology Corporation, a
provider of computer software and
<S> <C> <C> <C>
services(1)(6)................................... 1994 56
Richard F. Ford Managing General Partner, GM
Management Company Limited
Partnership and Gateway Associates III,
L.P., venture capital management
companies(2)(3)(7)............................... 1991 61
Delbert W. Johnson Vice President, Safeguard Scientifics, Inc.(1)(8) 1995 59
John D. Loewenberg Managing Partner, JDL Enterprises, a
consulting firm(1)(9)............................ 1995 57
John C. Maxwell, III Managing Director, Commercial
Electronics, LLC, a venture capital fund(10)..... 1997 39
Warren V. Musser Chairman of the Board and Chief
Executive Officer, Safeguard Scientifics,
Inc.(2)(3)(11)................................... 1984 71
Edward N. Patrone Business Consultant(1)(12)....................... 1991 63
- ----------
</TABLE>
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Executive Committee.
(4) Mr. Anderson has served as President and Chief Executive Officer of the
Company since January 1994. Mr. Anderson is a director of M/A/R/C and
Diamond Technology Partners Incorporated.
(5) Mr. Caldwell served as Executive Vice President of Safeguard Scientifics,
Inc. from November 1993 until February 1996, when he was promoted to
President and Chief Operating Officer. From 1991 through 1993, Mr.
Caldwell was President of Valley Forge Capital Group, Ltd., a business
mergers and acquisition advisory firm that he founded. Mr. Caldwell is a
director of Safeguard Scientifics, Inc., Diamond Technology Partners
Incorporated, Integrated Systems Consulting Group, Inc. and Quaker Chemical
Company of Philadelphia. Mr. Caldwell also serves on a variety of civic
and charitable boards, including The Philadelphia Orchestra and The
Pennsylvania Academy of Fine Arts, of which he is Chairman.
(6) Mr. Emmi is a director of National Media Corporation and Systems & Computer
Technology Corporation.
(7) Mr. Ford is a director of Stifel Financial Corporation, D&K Healthcare
Resources, Inc. and TALX, Inc.
(8) Mr. Johnson has served as a Vice President of Safeguard since 1980. Mr.
Johnson served as the President and Chief Executive Officer of Pioneer
Metal Finishing from 1978 until October 1994, and as Chairman of the Board
and Chief Executive Officer until October 1997. Mr. Johnson is a director
of Safeguard Scientifics, Inc., Ault, Inc., US Bancorp and Tennant Company,
Inc. Mr. Johnson was the Chairman of the Ninth District Federal Reserve
Bank from 1991 to 1993 and was the 1993 Chairman of the Federal Reserve
Board Conference of Chairmen.
(9) From May 1995 through March 1996, Mr. Loewenberg served as Executive Vice
President and Chief Administrative Officer of Connecticut Mutual, a life
insurance company. Prior to joining Connecticut Mutual, Mr. Loewenberg
served as Senior Vice President of Aetna Life and Casualty, a multi-line
insurer, from March 1989 to May 1995. For the first five years, he was
Chief Executive Officer of Aetna Information Technology, the information
systems company of Aetna. Subsequently, he became Senior Vice President of
Aetna Health Plans, the managed care operations of Aetna. Mr. Loewenberg
is a director of Sanchez Computer Associates, Inc., Diamond Technology
Partners Incorporated, DocuCorp International, Inc. and Sherwood
International ( United Kingdom company).
(10) From January 1996 to November 1997, Mr. Maxwell served as Vice President of
Business Development and Market Research for the Advanced Technology and
Corporate Development Group of Compaq Computer Corporation. Prior to
joining Compaq, from June 1990 to January 1996, Mr. Maxwell served as
Managing Director of Soundview Financial Group.
<PAGE>
(11) Mr. Musser is Chairman of the Boards of Safeguard Scientifics, Inc. and
Cambridge Technology Partners (Massachusetts), Inc., a director of Coherent
Communications Systems Corporation, DocuCorp International, Inc., National
Media Corporation and Sanchez Computer Associates, Inc., and a trustee of
Brandywine Realty Trust. Mr. Musser also serves on a variety of civic,
educational and charitable Boards of Directors and serves as Vice
President/Development, Cradle of Liberty Council, Boy Scouts of America, as
Vice Chairman of The Eastern Technology Council, and as Chairman of the
Pennsylvania Partnership on Economic Education.
(12) Mr. Patrone is a director of Primesource Corporation and Bitwise, Inc.
DIRECTORS' COMPENSATION
Directors are elected annually and hold office until their successors are
elected and have qualified or until their earlier resignation or removal. For
the period January 1, 1997, through March 31, 1997, each director who was not an
employee or consultant of the Company, its subsidiaries or Safeguard, received
an annual cash retainer of $6,000, payable quarterly in arrears, and $1,200 for
each Board meeting attended, payable quarterly in arrears. Beginning April 1,
1997, each director who was not an employee or consultant of the Company, its
subsidiaries or Safeguard, received a cash retainer of $1,000, payable monthly,
and $750 for each Board or Committee meeting attended. Directors also were
reimbursed for out-of-pocket expenses incurred in connection with attendance at
meetings or other Company business.
In May 1997, Messrs. Loewenberg, Patrone, Ford and Emmi each received an
option to purchase 10,000 shares of Common Stock of the Company at an exercise
price of $7.625 per share. In October 1997, Mr. Maxwell received an option to
purchase 10,000 shares of Common Stock of the Company at an exercise price of
$10.00 per share. Each option vests 20% each year commencing on the first
anniversary of the grant date and has a term of 10 years.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board held four meetings in 1997. The Company's Board has appointed
standing Compensation, Executive and Audit Committees. The Compensation
Committee reviews and approves management's recommendations for compensation
levels, including incentive compensation for all executive officers, and
administers the Company's stock option plans. The Compensation Committee met
five times during 1997. The Executive Committee, which met three times during
1997, is authorized to act upon all matters with respect to the management of
the business and affairs of the Company, except that its authority to authorize
and approve transactions is limited to up to $5 million in the aggregate between
meetings of the Board. The Audit Committee recommends the firm to be appointed
as independent certified public accountants to audit the Company's financial
statements, discusses the scope and results of the audit with the independent
certified public accountants, reviews with management and the independent
certified public accountants the Company's interim and year-end operating
results, considers the adequacy of the internal accounting controls and audit
procedures of the Company, and reviews the non-audit services to be performed by
the independent certified public accountants. The Audit Committee met four
times during 1997. The Company does not have a Nominating Committee or any
Committee performing similar functions. All of the directors attended at least
75% of the total number of meetings of the Board and Committees of which they
were members during the period in which they served as a director.
REPORT OF THE BOARD COMPENSATION COMMITTEE
The Compensation Committee of the Board (the "Compensation Committee")
reviews and approves compensation levels recommended by management, including
incentive compensation, for the executives of the Company, and administers the
Company's stock option plans. Messrs. Ford, Caldwell and Musser currently
constitute the Compensation Committee.
<PAGE>
EXECUTIVE COMPENSATION POLICIES
The Company is in a highly competitive industry. In order to succeed, the
Company believes that it must be able to attract and retain outstanding
executives, promote among them the economic benefits of stock ownership in the
Company and motivate and reward executives who, by their industry, loyalty and
exceptional service, make contributions of special importance to the success of
the business of the Company. The Company has structured its executive
compensation program to support the strategic goals and objectives of the
Company.
Base compensation levels and benefits are initially established for new
executives on the basis of a combination of factors, including a review of
various published industry salary surveys, which include many (but not
necessarily all) of the companies included in the Company's peer group in the
Stock Performance Graph which follows, and certain subjective factors, including
reference to experience and achievements of the individual and the level of
responsibility to be assumed in the Company. Any salary increases that are
approved by the Compensation Committee are generally awarded at the beginning of
each year based on a review of the level of achievement of financial and
strategic objectives as defined in the Company's annual strategic plan and
individual performance and contributions to the achievement of the Company's
objectives. Annual cash bonuses are intended to create an incentive for
executives who significantly contribute to and influence the Company's strategic
plans and are responsible for the Company's performance. The aims are to focus
executives' attention on areas such as profitability and asset management, to
encourage teamwork and to tie executive pay to corporate performance goals that
are consistent with the long-term goals of stockholders and other investors.
Bonuses are awarded based on the achievement of annual financial and/or
strategic goals as approved by the Compensation Committee at the beginning of
each year, which goals may include a target range of pretax earnings, earnings
per share, return on equity, or some other objective measurement that is
consistent with long-term stockholder goals. The Compensation Committee
approves a target range for specific financial and/or strategic goals and a
range of potential bonus amounts for each executive, stated as a percentage of
base salary. Ranges of potential bonuses are determined based upon the
executive's ability to impact the Company's performance, and actual bonuses are
awarded at year-end based on the actual achievement level of the specified
corporate goals compared to the target range of achievement. For fiscal 1997,
the Compensation Committee determined that bonuses would be awarded based solely
upon a target range of earnings per share.
Grants of Company stock options are intended to align the interests of
executives and key employees with the long-term interests of the Company's
stockholders and other investors and to encourage executives and key employees
to remain in the company's employ. Grants are not made in every year, but are
awarded subjectively based on a number of factors, including the individual's
level of responsibility, the amount and term of options already held by the
individual, the individual's contributions to the achievement of the Company's
financial and strategic objectives as defined in the Company's annual plan and
the Company's achievement of its financial and strategic objectives, which may
include the goals described above, and developing strategic alliances,
identifying and exploiting markets, expanding existing market share and
penetration, expanding operating capabilities and improving net operating
margins, productivity of sales representatives and return on equity.
COMPANY POLICY ON QUALIFYING COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), provides that publicly held companies may not deduct in any taxable
year compensation in excess of one million dollars paid to any of the
individuals named in the Summary Compensation Table that is not "performance-
based" as defined in Section 162(m). In order for incentive compensation to
qualify as "performance-based" compensation under Section 162(m), the
Compensation Committee's discretion to grant awards must be strictly limited.
The Compensation Committee believes that the benefit to the Company of
<PAGE>
retaining the ability to exercise discretion under the Company's incentive
compensation plans outweighs the limited risk of loss of tax deductions under
Section 162(m). Therefore, the Compensation Committee does not currently intend
to seek to qualify its incentive compensation plans under Section 162(m) .
CEO COMPENSATION
Mr. Anderson's base salary for 1997 was increased to $360,000. The
increase was based upon a review of the compensation of a relevant peer group
and the desire to keep Mr. Anderson's salary at approximately the 40th
percentile of this group. Mr. Anderson was awarded a bonus for 1997 equal to
approximately 120% of his target bonus. This decision was based on the Company
achieving 1997 earnings per share of 120% of target. A grant of options by the
Compensation Committee under the Company's 1993 Stock Option Plan was made in
1997 to Mr. Anderson for 300,000 shares.
OTHER EXECUTIVE COMPENSATION
The Compensation Committee approved executive cash bonuses equal to
approximately 120% of the applicable target bonus amounts. These decisions were
based on the Company's achieving 1997 earnings per share of 120% of target.
Grants of options by the Compensation Committee under the Company's 1993 Stock
Option Plan were made in 1997 to Mr. Brown for 300,000 shares, Mr. Barry for
320,000 shares, and Ms. Smith for 50,000 shares.
By the Compensation Committee:
Warren V. Musser Richard F. Ford Donald R. Caldwell
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning compensation paid
during the last three fiscal years to the Chief Executive Officer, and each of
the other most highly compensated executive officers of the Company whose salary
and bonus exceeded $100,000 in 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
AWARDS
- ----------------------------------------------------------------------------------------------------------------------------------
OTHER SECURITIES ALL OTHER
ANNUAL UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION COMPENSATION OPTIONS/SARS (#) ($)/(4)/
YEAR SALARY ($)(1) BONUS ($)(2) ($)/(3)/
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edward R. Anderson, 1997 $360,000 $530,122 -- 300,000 $11,875
President and Chief
Executive Officer 1996 310,000 360,907 -- -- 2,673
1995 310,000 416,020 -- 3,750
Daniel F. Brown, 1997 $297,800 $401,518 -- 300,000 $13,092
Executive Vice President,
Sales 1996 290,000 306,368 -- -- 2,519
1995 245,000 298,900 -- 150,000 3,750
William Barry, Executive 1997 $142,500 $156,385 320,000 $ 2,375
Vice President, Chief
Operating Officer (5)
M. Lazane Smith, Senior 1997 $187,000 $121,444 50,000 $ 2,375
Vice President, Finance
and Chief Financial
Officer(5)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes annual compensation that has been deferred by the named executives
pursuant to the Company's 401(k) matched savings plan.
(2) Includes 1997 bonus paid in 1998 and a portion of the deferred bonus from
1995. Approximately 9% of the bonus earned for 1995 was deferred. Of this
deferred amount, 50% was paid in February 1997 and 25% will be paid in each
of February 1998 and 1999, subject to forfeiture in the event of
termination of employment with the Company or its subsidiaries.
(3) Executives enjoy certain perquisites. However, such perquisites did not
exceed the lesser of $50,000 or 10% of such executives' salary and bonus.
(4) The amounts stated represent for Mr. Anderson $9,500 for life insurance
premiums and $2,375 for matching contributions under the Company's 401(k)
matched savings plan; and for Mr. Brown $10,717 for life insurance premiums
and $2,375 for matching contributions under the Company's 401(k) matched
savings plan. The amounts for Mr. Barry and Ms. Smith represent the
matching contributions under the Company's 401(k) matched savings plan.
(5) Mr. Barry has been an executive officer of the Company since August 1997
and Ms. Smith has been an executive officer of the Company since February
1997.
<PAGE>
STOCK OPTIONS
The following tables set forth information with respect to options granted
and exercised during fiscal year 1997 and the number of unexercised options and
the value of unexercised in-the-money options at December 31, 1997.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- --------------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
FOR OPTION TERM/(1)/
- --------------------------------------------------------------------------------------------------------------------------------
% OF TOTAL
OPTIONS/
SARS
a OPTIONS/ GRANTED TO EXERCISE OR
SARS EMPLOYEES IN BASE PRICE EXPIRATION 5%($) 10%($)
NAME GRANTED (#)/(2)/ FISCAL YEAR ($/SH)/(3)/ DATE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edward R. Anderson 300,000 18.8% $7.625 5/13/07 $1,438,596 $3,645,686
- --------------------------------------------------------------------------------------------------------------------------------
Daniel Brown 300,000 18.8 7.625 5/13/07 1,438,596 3,645,686
- --------------------------------------------------------------------------------------------------------------------------------
William Barry 20,000 1.3 5.500 3/19/07 69,178 175,312
300,000 18.8 7.625 5/13/07 1,438,596 3,645,686
- --------------------------------------------------------------------------------------------------------------------------------
M. Lazane Smith 50,000 3.1 5.500 3/19/07 172,946 438,279
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The potential realizable values are based on an assumption that the stock
price of the shares of Common Stock of the Company appreciates at the annual
rate shown (compounded annually) from the date of grant until the end of the
option term. These values do not take into account amounts required to be
paid as income taxes under the Internal Revenue Code of 1986, as amended,
and any applicable state laws or option provisions providing for termination
of an option following termination of employment, nontransferability, or
vesting over periods of four or more years. These amounts are calculated
based on the requirements promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
growth of the shares of common stock of the Company or any of its
subsidiaries or affiliates.
(2) The options granted to Mr. Barry and Ms. Smith in March 1997 vest 20% each
year commencing on January 2, 1998, and the options granted to Messrs.
Anderson, Brown and Barry in May 1997 vest 20% each year commencing on the
first anniversary of the grant date. All options have a ten-year term. The
options continue vesting and remain exercisable so long as employment with
the Company or one of its subsidiaries continues. The option exercise price
may be paid in cash, by delivery of previously acquired shares, subject to
certain conditions, or same day sales (i.e. cashless broker's exercises).
The Compensation Committee has the authority to modify the terms of
outstanding options, including acceleration of the exercise date of
outstanding options.
(3) All options have an exercise price at least equal to the fair market value
of the shares subject to each option on the date of grant.
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
- --------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES Value Of
UNDERLYING Unexercised
UNEXERCISED In-the-Money
OPTIONS/SARS Options/SARs at
SHARES AT FISCAL YEAR-END Fiscal Year-End
ACQUIRED ON Value (#) ($)(1)
NAME Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edward R. Anderson -- -- 620,000 455,000 $3,177,500 $981,875
- --------------------------------------------------------------------------------------------------------------------------------
Daniel F. Brown 357,142 $2,152,817 302,858 390,000 2,113,575 615,000
- --------------------------------------------------------------------------------------------------------------------------------
William Barry 16,000 107,000 4,000 330,000 14,500 288,250
- --------------------------------------------------------------------------------------------------------------------------------
M. Lazane Smith -- -- 20,000 80,000 78,750 206,750
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The value of unexercised in-the-money options is calculated based upon (i)
the fair market value of the stock at December 31, 1997, less the option
exercise price, multiplied by (ii) the number of shares subject to an
option. On December 31, 1997, the fair market value was $8.25. This table
is presented solely for the purpose of complying with Securities and
Exchange Commission rules and does not necessarily reflect the amounts the
optionees will actually receive upon any sale of the shares acquired upon
the exercise of the options.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENT.
In 1997, the Company entered into an employment agreement with Edward R.
Anderson providing for his employment through October 24, 1999, subject to
annual renewals, as an executive officer of the Company at a minimum monthly
salary of $30,000. The agreement provides for Mr. Anderson's participation in
management bonuses at a target rate of 120% of base salary and an additional
lump sum bonus of $175,000 payable on May 15th in 1998 and 1999 and, if the
agreement is extended, on May 15, 2000. The Company is required to obtain a
renewable term life insurance policy in the amount of $1,000,000 payable to Mr.
Anderson's designated beneficiary and a comprehensive long-term disability
insurance policy, and to afford him other standard benefits awarded to other
senior management. Upon termination of Mr. Anderson's employment by the Company
without cause, or if the Company demotes him or reduces his salary or benefits
below the level described in his employment agreement, Mr. Anderson will be
entitled to receive compensation in an amount equal to the salary that would
have been paid for the remainder of the agreement. Mr. Anderson has agreed to
refrain from competing with the Company for two years after his voluntary
termination of employment, and in the event of his termination for any reason
other than due cause, for the same period of time for which he receives
compensation pursuant to the terms of his employment agreement. In the event of
a change in control, all unvested stock options to purchase shares of the
Company or ClientLink, Inc. will be vested within ten days of the change in
control, and, if Mr. Anderson voluntarily terminates his employment within six
months of such change in control, he will be entitled to receive in a lump sum
payment all payments due to him for the remainder of the agreement.
In 1997, the Company entered into an employment agreement with M.
Lazane Smith providing for her employment through October 23, 1999, subject to
annual renewals, as an executive officer of the Company at a minimum monthly
salary of $16,666. The agreement provides for Ms. Smith's participation in
management bonuses at a target rate of 50% of base salary. The Company is
required to obtain a renewable term life insurance policy in the amount of
$1,000,000 payable to Ms. Smith's designated beneficiary and a comprehensive
long-term disability insurance policy, and to afford her other standard benefits
awarded to
<PAGE>
other senior management. Upon termination of Ms. Smith's employment by the
Company without cause, or if the Company demotes her or reduces her salary or
benefits below the level described in her employment agreement, Ms. Smith will
be entitled to receive compensation in an amount equal to the salary that would
have been paid for the remainder of the agreement. Ms. Smith has agreed to
refrain from competing with the Company for two years after her voluntary
termination of employment, and in the event of her termination for any reason
other than due cause, for the same period of time for which she receives
compensation pursuant to the terms of her employment agreement. In the event of
a change in control, all unvested stock options to purchase shares of the
Company or ClientLink, Inc. will be vested within ten days of the change in
control, and, if Ms. Smith voluntarily terminates her employment within six
months of such change in control, she will be entitled to receive in a lump sum
payment all payments due to her for the remainder of the agreement.
STOCK PERFORMANCE GRAPH
The following chart compares the cumulative total stockholder return on the
Company's Common Stock for the period December 31, 1992 through December 31,
1997, with the cumulative total return on the Nasdaq Index and the cumulative
total return for a peer group index for the same period. The peer group
consists of SIC Code 5045--Computer, Peripheral Equipment and Software
Wholesalers. The comparison assumes that $100 was invested on December 31,
1992, in the Company's Common Stock and in each of the comparison indices, and
assumes reinvestment of dividends. The Company has historically reinvested
earnings in the growth of its business and has not paid cash dividends on its
Common Stock.
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CompuCom 100 185 143 434 491 377
- ---------------------------------------------------------------------------------------------------
NASDAQ 100 115 112 159 195 240
- ---------------------------------------------------------------------------------------------------
Peer Group 100 161 104 135 182 160
- ---------------------------------------------------------------------------------------------------
</TABLE>
CERTAIN TRANSACTIONS
In August 1994, Edward R. Anderson delivered to the Company, in payment of
the purchase price for 350,000 shares of common stock of the Company that he
acquired upon exercise of stock options, a full recourse, four-year promissory
note in the amount of $1,181,250 which was secured by a pledge of the 350,000
shares of the Company. The terms of the note were renegotiated and in February
1997, Mr. Anderson delivered to the Company a new note in the amount of
$1,181,250 which extended the payment of the principal to February 15, 1999.
Interest on the note accrues at the rate of 6% per annum and is payable annually
on January 1. In March 1997, Mr. Anderson delivered $281,250 as a payment
against principal, and the Company released 83,333 of the shares that secured
the note.
In June 1997, the Company provided Mr. Brown with a loan of $661,251
evidenced by a promissory note and secured by certain shares of Common Stock of
the Company acquired upon exercise of stock options. Interest on the note
accrues at the rate of 6.25% per annum and is payable annually on June 17th.
Principal plus accrued interest on the note is due June 17, 2000.
The Company and Safeguard are parties to an Administrative Services
Agreement pursuant to which Safeguard provides the Company with administrative
support services for an annual fee equal to 1/4 of 1% of the Company's net
sales, up to a maximum annual fee of $600,000, and the reimbursement of certain
out-of-pocket expenses incurred by Safeguard in performing services under the
agreement. The administrative support services include
<PAGE>
consultation regarding the Company's general management, investor relations,
financial management, certain legal services, insurance programs administration,
and tax research and planning. The annual administrative services fee does not
cover extraordinary services provided by Safeguard to the Company or services
that are contracted out. The agreement is subject to termination by the Company
or Safeguard upon notice no later than 90 days prior to the end of any fiscal
year. The Company expensed $600,000 during 1997 for these services.
II. PROPOSAL TO ADOPT AN EMPLOYEE STOCK PURCHASE PLAN
THE BOARD BELIEVES THAT THE FOLLOWING PROPOSAL TO ADOPT AN EMPLOYEE STOCK
PURCHASE PLAN IS IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND
UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THIS PROPOSAL. PROXIES SOLICITED
BY THE BOARD WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE ON THEIR
PROXY CARDS.
The company's stockholders are being asked to approve the adoption of the
CompuCom Systems, Inc. Employee Stock Purchase Plan (the "Purchase Plan"). The
Purchase Plan was approved by the Board of Directors on February 19, 1998, with
a total of 1,000,000 shares reserved for issuance thereunder. The purpose of
the Purchase Plan is to provide employees of the Company and its majority owned
subsidiaries that adopt the Purchase Plan with an opportunity to purchase Common
Stock from the Company through payroll deductions and to provide the Company
with the ability to attract, retain, and motivate the best people available for
the successful conduct of its business. The essential features of the Purchase
Plan are outlined below. The description that follows, however, is only a
summary and is qualified in its entirety by reference to the full text of the
Purchase Plan, which is attached as Appendix A to this Proxy Statement.
OFFERING PERIOD
Offerings under the Purchase Plan have a duration of six months. The first
offering will begin on July 1, 1998, and end on December 31, 1998. A new
offering period shall begin on the first day of each six calendar month period
beginning on each January 1 and July 1 of a calendar year, starting with January
1, 1999, and ending at the end of such six month period, unless changed by the
committee appointed by the Board of Directors that administers the Purchase Plan
(the "Committee").
GRANT AND EXERCISE OF OPTION
On the first day of an offering period (the "Enrollment Date"), the
participant is granted an option to purchase on the last day of the offering
period (the "Exercise Date") up to a number of shares of the Common Stock
determined by dividing 10% of the participant's Compensation (as defined in the
"Payroll Deduction" section, infra) by the exercise price, which shall not be
less than the lower of (i) 85% of the fair market value of a share of the Common
Stock on the Enrollment Date or (ii) 85% of the fair market value of a share of
Common Stock on the Exercise Date. Compensation in excess of $75,000 per
offering period will be disregarded. The exercise price shall be determined by
the Committee. The number of shares subject to such option shall be reduced, if
necessary, to maintain the limitations with respect to a participant's ownership
of stock and/or options to purchase stock possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or any
majority owned subsidiary, and to restrict a participant's right to purchase
stock under the Purchase Plan to $25,000 in fair market value of such stock
(determined at the time the option is granted) for each calendar year in which
such option is outstanding at any time. Unless the employee has withdrawn from
the offering period, his or her option for the purchase of shares will be
exercised automatically on the Exercise Date at the applicable price.
<PAGE>
SHARES AVAILABLE UNDER THE PURCHASE PLAN
The total number of shares of Common Stock that are issuable under the
Purchase Plan is 1,000,000 shares.
ELIGIBILITY AND PARTICIPATION
Any employee who is customarily employed for at least 20 hours per week and
more than five months per calendar year by the Company is eligible to
participate in offerings under the Purchase Plan. Employees of subsidiaries
that adopt the Purchase Plan with Company approval will be eligible on the same
basis. Employees become participants in the Purchase Plan by delivering to the
Company a subscription agreement authorizing payroll deductions within the
specified period of time prior to the Enrollment Date.
No employee is permitted to purchase shares under the Purchase Plan if such
employee owns 5% or more of the total combined voting power or value of all
classes of shares of stock of the Company (including shares that may be
purchased under the Purchase Plan or pursuant to any other options). In
addition, no employee is entitled to purchase more than $25,000 worth of shares
(based on the fair market value of the shares at the time the option is granted)
in any calendar year.
PURCHASE PRICE
The Committee will set the price at which shares are sold under the
Purchase Plan which will not be less than 85% of the fair market value per share
of Common Stock at either the Enrollment Date or at the Exercise Date, whichever
is lower.
PAYROLL DEDUCTIONS
The purchase price of the shares is accumulated by payroll deduction over
each offering period. The deductions may not be greater than 10% of a
participant's compensation. "Compensation" for purposes of the Purchase Plan is
the base pay or regular straight-time earnings plus commissions, and overtime,
but excluding any imputed benefits or pay, bonuses, relocation expense, expense
reimbursements, or other similar items. Compensation in excess of $75,000 per
offering period will be disregarded.
All payroll deductions of a participant are credited to his or her account
under the Purchase Plan and are deposited with the general funds of the Company.
Such funds may be used for any corporate purpose pending the purchase of shares.
ADMINISTRATION
The Purchase Plan is administered by the Committee which shall have all
powers with respect to the Purchase Plan, except for amending or terminating the
Purchase Plan.
WITHDRAWAL FROM THE PLAN
A participant may terminate his or her interest in a given offering by
withdrawing all, but not less than all, of the accumulated payroll deductions
credited to such participant's account at any time prior to the end of the
offering period. The withdrawal of accumulated payroll deductions automatically
terminates the employee's interest in that offering as the case may be. As soon
as practicable after such withdrawal, the payroll deductions credited to a
participant's account are returned to the participant without interest.
<PAGE>
A participant's withdrawal from an offering does not have any effect upon
such participant's eligibility to participate in subsequent offerings under the
Purchase Plan.
TERMINATION OF EMPLOYMENT
Termination of a participant's employment for any reason, including
retirement, death, or the failure to remain in the continuous employ of the
Company for at least 20 hours per week (except for certain leaves of absence),
cancels his or her participation in the Purchase Plan immediately. In such
event, the payroll deductions credited to the participant's account will be
returned to the participant or, in the case of death, to the person or persons
entitled thereto, without interest.
CAPITAL CHANGES
In the event of changes in the Common Stock of the Company due to a stock
split or other changes in capitalization, or in the event of any merger, sale,
reclassification, or any other reorganization, appropriate adjustments will be
made by the Company to the shares subject to purchase and to the price per
share.
NONASSIGNABILITY
No rights or accumulated payroll deductions of a participant under the Plan
may be pledged, assigned or transferred for any reason, and any such attempt may
be treated by the Committee as an election to withdraw from the Purchase Plan.
AMENDMENT AND TERMINATION OF THE PLAN
The Board of Directors of the Company may at any time amend or terminate
the Purchase Plan; however, such termination cannot affect options previously
granted nor may any amendment make any change in an existing option that
adversely affects the rights of any participant, except as necessary to comply
with tax or securities laws. No amendment may be made to the Purchase Plan
without prior approval of the stockholders of the Company if such amendment
would increase the number of shares that may be issued under the Purchase Plan,
permit payroll deductions at a rate in excess of 10% of a participant's
compensation, change the designation of the employees eligible for participation
in the Purchase Plan or constitute an amendment for which stockholder approval
is required in order to comply with Rule 16b-3, or any successor rule.
TAX INFORMATION
The Purchase Plan and the right of participants to make purchases
thereunder is intended to qualify under the provisions of Section 423 of the
Internal Revenue Code (the "Code"), which incorporates by reference the tax
treatment provisions of Section 421 of the Code. Under these provisions, no
income will be taxable to a participant at the time of grant of the option or
purchase of shares. Upon disposition of the shares, the participant generally
will be subject to tax and the amount of the tax will depend upon the holding
period. If the shares have been held by the participant for more than two (2)
years after the Enrollment Date and one (1) year from the Exercise Date, the
amount of ordinary income will be the lesser of (a) the excess of the fair
market value of the shares at the time of disposition over the purchase price,
or (b) the excess of the fair market value of the shares at the time the option
was granted over the purchase price (which purchase price will be computed as of
the Enrollment Date), and any further gain will be treated as long-term capital
gain. If the shares are disposed of before the expiration of these holding
periods, the excess of the fair market value of the shares on the Exercise Date
over the purchase price will be treated as ordinary income. The Company is not
entitled to a deduction for amounts taxed as ordinary income or capital gain to
a participant
<PAGE>
except to the extent of ordinary income reported by participants upon
disposition of shares prior to the expiration of the holding period described
above.
The foregoing is only a summary of the effect of federal income taxation
upon the participant and the Company with respect to the shares purchased under
the Purchase Plan. Reference should be made to the applicable provisions of the
Code. In addition, this summary does not discuss the tax consequences of a
participant's death or the income tax laws of any state or foreign country in
which the participant may reside.
REQUIRED VOTE
Assuming the presence of a quorum, the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock present at the meeting in
person or by proxy is necessary to approve the adoption of the Purchase Plan.
Proxies will be voted for or against such approval in accordance with the
specifications marked thereon and, if no specification is made, will be in favor
of such approval.
INDEPENDENT PUBLIC ACCOUNTANTS
Since 1987, the Company has retained KPMG Peat Marwick LLP as its
independent public accountants, and it intends to retain KPMG Peat Marwick LLP
for the current year ending December 31, 1998. Representatives of KPMG Peat
Marwick LLP are expected to be present at the Annual Meeting, will have an
opportunity at the meeting to make a statement if they desire to do so, and will
be available to respond to appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities ("10% Stockholders") to file
reports of ownership and changes in ownership of Common Stock and other equity
securities of the Company with the Securities and Exchange Commission ("SEC").
Officers, directors and 10% Stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms which they file.
Based solely on its review of the copies of such forms received by it and
written representations from certain reporting persons that no other reports
were required for those persons, the Company believes that during the period
from January 1, 1997 to December 31, 1997, all Section 16(a) filing requirements
applicable to its officers, directors and 10% Stockholders were complied with,
except for three transactions reported late by Mr. Caldwell and one transaction
reported late by Mr. Maxwell.
OTHER MATTERS
The Company is not aware of any other business to be presented at the
Annual Meeting. If any other matters should properly come before the Annual
Meeting, however, the enclosed Proxy confers discretionary authority with
respect thereto.
The Company's Annual Report for 1997, including financial statements and
other information with respect to the Company and its subsidiaries, is being
mailed simultaneously to the stockholders but is not to be regarded as proxy
solicitation material.
Dated: April 7, 1998
<PAGE>
APPENDIX A
COMPUCOM SYSTEMS, INC.
EMPLOYEE STOCK PURCHASE PLAN
THE FOLLOWING CONSTITUTE THE PROVISIONS OF THE EMPLOYEE STOCK PURCHASE PLAN OF
COMPUCOM SYSTEMS, INC.
1. PURPOSE. The purpose of the Plan is to provide Employees of the
-------
Company and its Subsidiaries with an opportunity to purchase Common Stock of the
Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Code (as defined below). The provisions of the Plan shall be
construed accordingly, so as to extend and limit participation in a manner
consistent with the requirements of that Section of the Code.
2. DEFINITIONS.
-----------
(a) "Act" shall mean the Securities Exchange Act of 1934, as amended.
---
(b) "Board" shall mean the Board of Directors of the Company.
-----
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
----
(d) "Common Stock" shall mean the common stock, $.01 par value per
------------
share, of the Company.
(e) "Committee" shall mean the committee appointed pursuant to
---------
PARAGRAPH 11.
(f) "Company" shall mean CompuCom Systems, Inc., a Delaware
-------
corporation, or any successor which adopts this Plan.
(g) "Compensation" shall mean the base pay or regular straight-time
------------
earnings plus commissions, and overtime, but excluding any imputed benefits
or pay, bonuses, relocation expense, expense reimbursements, or other
similar items. Compensation in excess of $75,000 per offering period will
be disregarded.
(h) "Continuous Status as an Employee" shall mean the absence of any
--------------------------------
interruption or termination of service as an Employee. Continuous Status
as an Employee shall not be considered interrupted in the case of a leave
of absence that meets the requirements of PARAGRAPH 9(b).
(i) "Designated Subsidiary" shall mean any Subsidiary that has adopted
---------------------
the Plan in accordance with PARAGRAPH 29.
(j) "Eligible Employee" shall have the meaning defined in PARAGRAPH
-----------------
3(a).
(k) "Employee" shall mean any person, including an officer, who is
--------
customarily employed for at least 20 hours per week and for more than five
months in the calendar year by an Employer and whose wages are subject to
withholding for purposes of federal income taxes.
<PAGE>
(l) "Employer" shall mean the Company and each of its Designated
--------
Subsidiaries.
(m) "Enrollment Date" shall mean the first day of each Offering
---------------
Period.
(n) "Exercise Date" shall mean the last day of each Offering Period.
-------------
(o) "Exercise Price" shall have the meaning as defined in PARAGRAPH
--------------
6(b).
(p) "Offering Period" shall mean that period to be determined by the
---------------
Committee beginning on the date Eligible Employees are offered the
opportunity to purchase Shares hereunder. The first Offering Period shall
begin on July 1, 1998, and shall end on December 31, 1998. Until changed
by the Committee in its sole and absolute discretion, a new Offering Period
shall begin on the first day of each six calendar month period beginning on
each January 1 and July 1 of a calendar year, starting with January 1,
1999, and shall end on the end of such six month period.
(q) "Participant" shall mean an Eligible Employee who has elected to
-----------
participate herein by authorizing payroll deductions pursuant to PARAGRAPH
4.
(r) "Payroll Deduction Account" shall mean the separate account
-------------------------
maintained hereunder to record the amount of a Participant's Compensation
that has been withheld pursuant to PARAGRAPH 5.
(s) "Plan" shall mean the CompuCom Systems, Inc. Employee Stock
----
Purchase Plan.
(t) "Share" shall mean a share of Common Stock.
-----
(u) "Subscription Agreement" shall have the meaning as defined in
----------------------
PARAGRAPH 4(a).
(v) "Subsidiary" shall mean a corporation, domestic or foreign, of
----------
which at the time of the granting of the option pursuant to PARAGRAPH 6,
not less than 50% of the total combined voting power of all classes of
stock are held by the Company or a Subsidiary, whether or not such
corporation now exists or is hereafter organized or acquired by the Company
or a Subsidiary.
3. ELIGIBILITY.
-----------
(a) General Rule. Any Employee on an Enrollment Date shall be
------------
eligible to participate as an "Eligible Employee" during the Offering
Period beginning on such Enrollment Date, subject to the requirements of
PARAGRAPH 4(a) and the limitations imposed by Section 423(b) of the Code.
(b) Exceptions. Any provisions of the Plan to the contrary
----------
notwithstanding, no Employee shall be an Eligible Employee if:
(i) Immediately after the grant, such Employee (or any other
person whose stock would be attributed to such Employee pursuant to
Section 424(d) of the Code) would own stock (including for purposes of
this PARAGRAPH 3(b) any stock he or she holds outstanding options to
purchase) possessing 5% or more of the total combined voting power or
value of all classes of stock of the Company
<PAGE>
or of any Subsidiary computed in accordance with Section 423(b)(3) of
the Code; or
(ii) Such option would permit such Employee's right to purchase
stock under all employee stock purchase plans (described in Section
423 of the Code) of the Company and its Subsidiaries to accrue at a
rate which exceeds $25,000 of the fair market value of such stock
(determined at the time such option is granted) for each calendar year
in which such option is outstanding at any time, in accordance with
the provisions of Section 423(b)(8) of the Code.
4. PARTICIPATION.
-------------
(a) An Eligible Employee may become a Participant in the Plan by
completing a Subscription Agreement authorizing payroll deductions, in a
form substantially similar to EXHIBIT A attached to this Plan
("Subscription Agreement"), and filing it with the Company's Human
Resources Department prior to the applicable Enrollment Date, unless a
later time for filing the Subscription Agreement is set by the Committee
for all Eligible Employees with respect to a given Offering Period.
(b) Payroll deductions for a Participant shall commence with the first
payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless
sooner terminated by the Participant as provided in PARAGRAPH 9.
(c) An Eligible Employee may waive his or her right to participate for
any Offering Period by declining to authorize a payroll deduction. Such
declination shall result in the Employee's waiver of participation for only
the Offering Period to which it relates and shall be irrevocable with
respect to such Offering Period. Except as otherwise provided in this
PARAGRAPH, an Employee's waiver of participation for a specified Offering
Period shall not, in and of itself, adversely impact the right of such
Employee to participate in the Plan during any subsequent Offering Periods.
5. PAYROLL DEDUCTIONS.
------------------
(a) At the time a Participant files his or her Subscription Agreement,
such Participant shall elect to have payroll deductions (in whole
percentage increments) made on each pay date during the Offering Period in
an amount of not less than 1% nor more than 10% of the Compensation which
he or she receives on each pay date during the Offering Period.
(b) All payroll deductions made by a Participant shall be credited to
his or her Payroll Deduction Account under the Plan. No interest shall
accrue on the payroll deductions in a Participant's Payroll Deduction
Account in the Plan.
(c) No changes in the rate of payroll deductions other than a
withdrawal pursuant to PARAGRAPH 9 are permitted.
6. GRANT OF OPTION.
---------------
(a) On the Enrollment Date of each Offering Period during the term of
the Plan each Participant in such Offering Period shall be granted an
option to purchase up to a number of Shares determined by dividing ten
percent (10%) of the Participant's Compensation by the Exercise Price;
provided, however, that the number of shares subject to such option shall
be reduced, if necessary, to a number of shares which
<PAGE>
would not exceed the limitations described in PARAGRAPH 3(b) or PARAGRAPH
10(a) hereof. The fair market value of a Share shall be determined as
provided in PARAGRAPH 6(b).
(b) The "Exercise Price" per Share offered in a given Offering Period
shall be determined by the Committee, but shall not be less than the lower
of: (i) 85% of the fair market value of a Share on the Enrollment Date, or
(ii) 85% of the fair market value of a Share on the Exercise Date. The
fair market value of a Share on a given date shall be the closing price of
such Share as reported by the National Association of Securities Dealers,
Incorporated Automated Quotations, Incorporated ("Nasdaq") National Market
System or reported on such other national exchange as it may, from time to
time, be reported on, on such date (or if there shall be no trading on such
date, then on the first previous date on which there is such trading),
unless the Shares cease to be traded on a national exchange. If the Shares
cease to be traded on a national exchange, fair market value shall be
determined by the Committee in its discretion consistent with Section 423
of the Code or the regulations thereunder.
(c) All grants made hereunder shall be deemed to have been made on the
applicable Enrollment Date.
7. EXERCISE OF OPTION. The Participant's option for the purchase of
------------------
Shares will be exercised automatically on the Exercise Date of each Offering
Period, and the maximum number of shares subject to such option will be
purchased for such Participant at the applicable Exercise Price with the payroll
deductions accumulated in his or her Payroll Deduction Account, unless prior to
such Exercise Date the Participant has withdrawn from the Offering Period as
provided in PARAGRAPH 9. During a Participant's lifetime a Participant's option
to purchase shares hereunder is exercisable only by such Participant.
8. DELIVERY. As soon as practicable after the Exercise Date, the
--------
Committee shall arrange the delivery to each Participant, or to his or her
account at a brokerage firm, of a certificate representing the shares purchased
upon exercise of his or her option.
9. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
-------------------------------------
(a) A Participant may withdraw all, but not less than all, of the
payroll deductions credited to his or her Payroll Deduction Account and not
yet used toward the exercise of his or her option under the Plan at any
time by giving written notice to the Committee on a form substantially
similar to EXHIBIT B attached to this Plan. All of the Participant's
payroll deductions credited to his or her Payroll Deduction Account that
have not yet been used to purchase Shares will be paid to such Participant
as soon as practicable after receipt of his or her notice of withdrawal. A
withdrawal of a Participant's Payroll Deduction Account shall terminate the
Participant's participation for the Offering Period in which the withdrawal
occurs. No further payroll deductions or the purchase of shares will be
made during the Offering Period.
(b) Upon termination of the Participant's Continuous Status as an
Employee of the Company for any reason, he or she will be deemed to have
elected to withdraw from the Plan and the payroll deductions credited to
his or her Payroll Deduction Account will be returned to such Participant
and his or her option will be canceled; provided, however, a Participant
who goes on a leave of absence shall be permitted to remain in the Plan
with respect to an Offering Period which commenced prior to the beginning
of such leave of absence. If such Participant is not guaranteed
reemployment by contract or statute and the leave of absence exceeds 90
days, such Participant shall be deemed to have terminated employment on the
91st day of such leave of absence. Payroll deductions for a Participant
who has been on a leave of absence will resume
<PAGE>
upon return to work at the same rate as in effect prior to such leave
unless the leave of absence begins in one Offering Period and ends in a
subsequent Offering Period, in which case the Participant shall not be
permitted to re-enter the Plan until a new Subscription Agreement is filed
with respect to an Offering Period which commences after such Participant
has returned to work from the leave of absence.
(c) A Participant's withdrawal from one Offering Period will not have
any effect upon his or her eligibility to participate in a different
Offering Period or in any similar plan which may hereafter be adopted by
the Company.
10. SHARES.
------
(a) The maximum number of Shares which shall be made available for
sale under the Plan shall be 1,000,000 Shares, subject to adjustment upon
changes in capitalization of the Company as provided in PARAGRAPH 16.
Either authorized and unissued Shares or issued Shares heretofore or
hereafter reacquired by the Employer may be made subject to purchase under
the Plan, in the sole and absolute discretion of the Committee. Further,
if for any reason any purchase of any Shares under the Plan is not
consummated, Shares subject to such purchase agreement may be subjected to
a new Subscription Agreement under the Plan. If, on the Exercise Date, the
number of Shares with respect to which options are to be exercised exceeds
the number of Shares then available under the Plan, the Company shall make
a pro rata allocation of the shares remaining available for purchase in as
uniform a manner as shall be practicable and as it shall determine to be
equitable. In such event, the Company shall give written notice of such
reduction of the Shares which each Employee shall be allowed to purchase.
Notwithstanding anything to the contrary herein, the Company shall not be
obligated to issue Shares hereunder if, in the opinion of counsel for the
Company, such issuance would constitute a violation of Federal or state
securities laws.
(b) The Participant will have no interest or voting right in Shares
covered by his or her option until such option has been exercised and the
Shares have been issued or transferred to the Participant.
(c) Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant or, at the prior written request
of the Participant, in the names of the Participant and his or her spouse.
11. ADMINISTRATION. The Plan shall be administered by a Committee
--------------
appointed by the Board. Such Committee shall have all powers with respect to
the Plan, except for amending or terminating the Plan as set forth in PARAGRAPH
17 hereof.
(a) Each member of the Committee shall serve until his or her
successor is appointed. Any member of the Committee may be removed at any
time by the Board, with or without cause, which shall have the power to
fill any vacancy which may occur. A Committee member may resign by giving
30 days written notice to the Company.
(b) The members of the Committee shall serve without compensation for
services as such, but the Company shall pay all expenses of the Committee.
(c) The Committee shall have the following powers and duties:
(1) To direct the administration of the Plan in accordance with
the provisions herein set forth;
<PAGE>
(2) To adopt rules of procedure and regulations necessary for the
administration of the Plan provided the rules are not inconsistent
with the terms of the Plan;
(3) To determine all questions with regard to rights of Employees
and Participants under the Plan, including, but not limited to, the
eligibility of an Employee to participate in the Plan;
(4) To enforce the terms of the Plan and the rules and
regulations it adopts;
(5) To direct the distribution of the Shares purchased hereunder;
(6) To furnish the Employer with information which the Employer
may require for tax or other purposes;
(7) To engage the service of counsel (who may, if appropriate, be
counsel for an Employer) and agents whom it may deem advisable to
assist it with the performance of its duties;
(8) To prescribe procedures to be followed by Participants in
electing to participate herein;
(9) To receive from each Employer and from Employees such
information as shall be necessary for the proper administration of the
Plan;
(10) To maintain, or cause to be maintained, separate accounts in
the name of each Participant to reflect the Participant's Payroll
Deduction Account under the Plan; and
(11) To interpret and construe the Plan.
12. DESIGNATION OF BENEFICIARY.
--------------------------
(a) A Participant may file a written designation of a beneficiary (as
indicated in the Subscription Agreement or otherwise) who is to receive any
Shares under the Plan in the event of such Participant's death subsequent
to the Exercise Date on which an option is exercised but prior to the
issuance of such shares. In addition, a Participant may file a written
designation of a beneficiary who is to receive any cash from the
Participant's Payroll Deduction Account under the Plan in the event of such
Participant's death prior to the Exercise Date of the option.
(b) Such designation of beneficiary may be changed by the Participant
at any time by written notice. In the event of the death of a Participant
and in the absence of a beneficiary validly designated under the Plan, the
Committee shall deliver such shares and/or cash to the executor or
administrator of the estate of the Participant, or if no such executor or
administrator has been appointed (to the knowledge of the Company or
Committee), the Committee, in its discretion, may deliver such shares
and/or cash to the spouse or to any one or more dependents or relatives of
the Participant, or if no spouse, dependent or relative is known to the
Committee, then to such other person as the Committee may designate.
<PAGE>
13. TRANSFERABILITY. Neither payroll deductions credited to
---------------
Participant's Payroll Deduction Account nor any rights with regard to the
exercise of an option to receive Shares under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other than by will,
the laws of descent and distribution or as provided in PARAGRAPH 12 hereof) by
the Participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect, except that the Committee may treat such
act as an election to withdraw funds in accordance with PARAGRAPH 9.
14. USE OF FUNDS. All payroll deductions received or held by the Company
------------
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
15. REPORTS. Individual Payroll Deduction Accounts will be maintained for
-------
each Participant in the Plan. Statements of Payroll Deduction Account will be
given to Participants as soon as practicable following an Exercise Date, such
statements will set forth the amounts of payroll deductions, the per share
purchase price, the number of shares purchased and the remaining cash balance,
if any.
16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If an option under this
------------------------------------------
Plan is exercised subsequent to any stock split, spinoff, recapitalization,
reorganization, reclassification, merger, consolidation, exchange of shares, or
the like occurring after such option was granted, as a result of which shares of
any class of stock shall be issued in respect of the outstanding shares, or
shares shall be changed into a different number of the same or another class or
classes, the number of Shares to which such option shall be applicable and the
option price for such Shares shall be appropriately adjusted by the Company.
Any such adjustment, however, in the Shares shall be made without change in the
total price applicable to the portion of the Shares purchased hereunder which
has not been fully paid for, but with a corresponding adjustment, if
appropriate, in the price for the Shares.
In the event of the proposed dissolution or liquidation of the Company or
upon a proposed reorganization, merger, or consolidation of the Company with one
or more corporations as a result of which the Company is not the surviving
corporation, or upon a proposed sale of substantially all of the property or
stock of the Company to another corporation, the Offering Period will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board, and the holder of each option then outstanding under the
Plan will thereafter be entitled to receive, upon the exercise of such option,
as nearly as reasonably may be determined, the cash, securities, and/or property
which a holder of one Share was entitled to receive upon and at the time of such
transaction for each Share to which such option shall be exercised. The Board
shall take such steps in connection with such transactions as the Board shall
deem necessary to assure that the provisions of this PARAGRAPH shall thereafter
be applicable, as nearly as reasonably may be determined, in relation to the
said cash, securities, and/or property as to which such holder of such option
might thereafter be entitled to receive.
17. AMENDMENT OR TERMINATION. The Board may at any time and for any
------------------------
reason terminate or amend the Plan. Except as specifically provided in the
Plan, no such termination can affect options previously granted, provided that
an Offering Period may be terminated by the Board on any Exercise Date if the
Board determines that the termination of the Plan is in the best interest of the
Company and its stockholders. Except as specifically provided in the Plan or as
required to obtain a favorable ruling from the Internal Revenue Service or to
comply with tax or securities law, no amendment may make any change in any
option theretofore granted which adversely affects the rights of any
Participant. To the extent necessary to comply with Rule 16b-3 under the Act or
Section 423 of the Code (or any successor rule or
<PAGE>
provision or any other applicable law or regulation), the Company shall obtain
stockholder approval in such manner and to such a degree as required.
18. NOTICES. All notices or other communications by a Participant to the
-------
Company or Committee under or in connection with the Plan shall be deemed to
have been duly given when received in the form specified by the Committee at the
location, or by the person, designated by the Committee for the receipt thereof.
19. STOCKHOLDER APPROVAL. Commencement of the Plan shall be subject to
--------------------
approval by the stockholders of the Company within 12 months before or after the
date the Plan is adopted. Notwithstanding any provision to the contrary,
failure to obtain such stockholder approval shall void the Plan, any options
granted under the Plan, any Share purchased pursuant to the Plan, and all rights
of all Participants.
20. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
----------------------------------
respect to an option unless the exercise of such option and the issuance and
delivery of such Shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute, such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
21. TERM OF PLAN. The Plan shall become effective upon the earlier to
------------
occur of its adoption by the Board or its approval by the stockholders of the
Company as described in PARAGRAPH 19. It shall continue in effect for a term of
ten years unless sooner terminated under PARAGRAPH 17.
22. NO RIGHTS IMPLIED. Nothing contained in this Plan or any modification
-----------------
or amendment to the Plan or in the creation of any Payroll Deduction Account, or
the execution of any participation election form, or the issuance of any Shares,
shall give any Employee or Participant any right to continue employment, any
legal or equitable right against the Employer or Company or any officer,
director, or Employee of an Employer or Company, except as expressly provided by
the Plan.
23. SEVERABILITY. In the event any provision of the Plan shall be held to
------------
be illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions of the Plan, but shall be fully severable and
the Plan shall be construed and enforced as if the illegal or invalid provision
had never been included herein.
24. WAIVER OF NOTICE. Any person entitled to notice under the Plan may
----------------
waive the notice.
25. SUCCESSORS AND ASSIGNS. The Plan shall be binding upon all persons
----------------------
entitled to purchase Shares under the Plan, their respective heirs, legatees,
and legal representatives, and upon the Employer, its successors and assigns.
<PAGE>
26. HEADINGS. The titles and headings of the Paragraphs are included for
--------
convenience of reference only and are not to be considered in construction of
the provisions hereof.
27. GOVERNING LAW. All questions arising with respect to the provisions
-------------
of this Plan shall be determined by application of the laws of the State of
Texas except to the extent Texas law is preempted by Federal statute. The
obligation of the Employer to sell and deliver Shares under the Plan is subject
to applicable laws and to the approval of any governmental authority required in
connection with the authorization, issuance, sale or delivery of such Shares.
28. NO LIABILITY FOR GOOD FAITH DETERMINATIONS. Neither the members of
------------------------------------------
the Board nor any member of the Committee (nor their delegates) shall be liable
for any act, omission, or determination taken or made in good faith with respect
to the Plan or any right to purchase Shares granted under it, and members of the
Board and the Committee (and their delegatees) shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage, or expense (including attorneys' fees, the costs of settling any suit,
provided such settlement is approved by independent legal counsel selected by
the Company, and amounts paid in satisfaction of a judgment, except a judgment
based on a finding of bad faith) arising therefrom to the full extent permitted
by law and under any directors and officers liability or similar insurance
coverage that may from time to time be in effect.
29. PARTICIPATING EMPLOYERS. This Plan shall constitute the employee
-----------------------
stock purchase plan of the Company and each Designated Subsidiary. A Designated
Subsidiary may adopt and participate in this Plan beginning as of the next
Enrollment Date, provided the Board has consented to such Designated
Subsidiary's participation. A Designated Subsidiary may withdraw from the Plan
as of any Enrollment Date by giving written notice to the Board, and such notice
must be received by the Board at least 30 days prior to such Enrollment Date.
30. NO GUARANTEE OF INTERESTS OR TAX TREATMENT. Neither the Committee nor
------------------------------------------
the Company guarantees the Common Stock from loss or depreciation. Neither the
Committee nor the Company guarantees favorable tax treatment for the purchase of
Shares hereunder.
31. PAYMENT OF EXPENSES. All expenses incident to the administration,
-------------------
termination, or protection of the Plan, including, but not limited to, legal and
accounting fees, shall be paid by the Company.
IN WITNESS WHEREOF, this Employee Stock Purchase Plan has been executed
effective this _______ day of ___________________________, 1998.
COMPUCOM SYSTEMS, INC.
ATTEST: By:__________________________________
Its_______________________________
_______________________________
Secretary
<PAGE>
EXHIBIT A
---------
COMPUCOM SYSTEMS, INC.
----------------------
EMPLOYEE STOCK PURCHASE PLAN
----------------------------
SUBSCRIPTION AGREEMENT
----------------------
I, ____________________________________, have read the attached prospectus
explanation of the CompuCom Systems, Inc. Employee Stock Purchase Plan (the
"Plan"). I have decided to participate. I wish to purchase that number of
shares of CompuCom Systems, Inc. Common Stock, $.01 par value (the "Shares")
that can be purchased with ______% of my compensation/1/ (select the percentage
of your compensation from 1 to 10, in increments of 1, that you elect to
contribute).
In order to pay for the Shares that I have elected to purchase, I hereby
authorize my Employer to deduct the percentage of my Compensation that I
specified above from my pay each pay period while this election is in effect.
I understand that said payroll deductions shall be accumulated for the
purchase of the Shares at the applicable purchase price determined in accordance
with the Plan. I further understand that, except as otherwise set forth in the
Plan, Shares will be purchased for me automatically on the Exercise Date of the
Offering Period unless I otherwise withdraw from the Offering Period or the
Plan.
I have received a copy of the CompuCom Systems, Inc.'s most recent
prospectus that describes the Plan and a copy of the complete Plan. I
understand that my participation in the Plan is in all respects subject to the
terms of the Plan.
I hereby agree to be bound by the terms of the Plan. The effectiveness of
this Subscription Agreement is dependent upon my eligibility to participate in
the Plan.
BENEFICIARY DESIGNATION. In the event of my death, I hereby designate the
-----------------------
following as my beneficiary to receive all payments and Shares due me and not
yet paid or issued under the Plan, pursuant to PARAGRAPH 12 of the Plan:
____________________________________
____________________________________
Name and Address of Participant:
____________________________________
____________________________________
Signature:
____________________________________ Date:___________________________________
/1/Please refer to the Plan document for definitions of capitalized words that
are not defined in this Subscription Agreement.
<PAGE>
EXHIBIT B
---------
COMPUCOM SYSTEMS, INC.
----------------------
EMPLOYEE STOCK PURCHASE PLAN
----------------------------
NOTICE OF WITHDRAWAL
--------------------
The undersigned Participant/2/ in the Offering Period of the CompuCom Systems,
Inc. Employee Stock Purchase Plan (the "Plan") which began on
___________________________, 19 (the "Enrollment Date") hereby notifies the
Committee that effective on the later of _______________, 19____ (the
"Withdrawal Date") or the date this form is received by the Committee, he or she
withdraws from the Offering Period.
The undersigned hereby directs CompuCom Systems, Inc. (the "Company") to pay to
the undersigned as promptly as possible following the Withdrawal Date all the
payroll deductions credited to his or her Payroll Deduction Account with respect
to such Offering Period. The undersigned understands and agrees that upon
withdrawing from the Offering Period no further payroll deductions will be made
for the purchase of shares in such Offering Period.
Name and Address of Participant:
______________________________________________
______________________________________________
______________________________________________
Signature:
______________________________________________
Date:
/2/Please refer to the Plan document for definitions of capitalized words that
are not defined in this Notice of Withdrawal
<PAGE>
P R O X Y
COMPUCOM SYSTEMS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I hereby constitute and appoint Edward R. Anderson and M. Lazane Smith, and
each of them, my true and lawful agents and proxies with full power of
substitution in each, to vote all shares held of record by me as specified on
the reverse side and, in their discretion, on all other matters which may
properly come before the 1998 Annual Meeting of Stockholders of CompuCom
Systems, Inc. to be held on May 14, 1998, and at any adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES TO THE BOARD OF DIRECTORS, FOR AN EMPLOYEE
STOCK PURCHASE PLAN AND AS THE PROXIES MAY DETERMINE, IN THEIR DISCRETION,
WITH REGARD TO ANY OTHER MATTER PROPERLY BROUGHT BEFORE THE MEETING.
PLEASE MARK, SIGN AND DATE THE PROXY CARD ON THE REVERSE SIDE
AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
<PAGE>
Your Proxy vote is important,
regardless of the number of shares you own.
Whether or not you plan to attend the meeting in person, please complete, date
and sign the above Proxy card and return it without delay in the enclosed
envelope.
COMPUCOM LOGO
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
[ X ] Please mark
your votes
as indicated
in this example
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WHILE VOTING FOR THE
REMAINDER, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST.
1. ELECTION OF DIRECTORS WITHELD
Nominees: FOR FOR ALL
Edward R. Anderson [ ] [ ]
Delbert W. Johnson
Daniel F. Brown
John D. Loewenberg
Donald R. Caldwell
John C. Maxwell, III
Michael J. Emmi
Warren V. Musser
Richard F. Ford
Edward N. Patrone
FOR WITHELD ABSTAIN
2. EMPLOYEE STOCK PURCHASE PLAN [ ] [ ] [ ]
SIGNATURE(S) _______________________________ DATE: _________________________
THIS PROXY MUST BE SIGNED EXACTLY AS NAME APPEARS HEREIN. Joint tenants must
both sign. When signing as attorney, executor, administrator, trustee or
guardian, or for a corporation or partnership, please give full title.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
