<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 30, 1999
Commission File No. 000-14371
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
COMPUCOM SYSTEMS, INC.
7171 Forest Lane
Dallas, Texas 75230
Registrant's telephone number, including area code (972) 856-3600
<PAGE>
REQUIRED INFORMATION
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
(1) FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES:
The following financial statements, including Independent Auditors'
Report thereon of CompuCom Systems, Inc. 401(k) Matched Savings Plan
are submitted herewith:
Independent Auditors Report 1
Statements of Net Assets Available for Benefits as of December 30, 1999
and December 31, 1998 2
Statements of Changes in Net Assets Available for Benefits for the years
ended December 30, 1999 and December 31, 1998 3
Notes to Financial Statements 4
Schedule I - Schedule of Assets Held for Investment Purposes at End of
Year - December 30, 1999 11
Supplemental schedules not listed above are omitted as the required
information is not applicable or the information is presented in the
financial statements or related notes.
(2) EXHIBITS:
Exhibit 23 - Consent of Independent Auditors
</TABLE>
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SIGNATURE
---------
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the plan administrator of CompuCom Systems, Inc. 401(k) Matched Savings Plan has
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Date: July 10, 2000 By: /s/ M. Lazane Smith
------------------------
M. Lazane Smith
Senior Vice President, Finance,
and Chief Financial Officer
<PAGE>
Independent Auditors' Report
The Participants and Plan Administrator
CompuCom Systems, Inc. 401(k) Matched Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of CompuCom Systems, Inc. 401(k) Matched Savings Plan as of December 30, 1999
and December 31, 1998, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of CompuCom
Systems, Inc. 401(k) Matched Savings Plan as of December 30, 1999 and December
31, 1998, and the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year-December 30, 1999 is presented for the
purpose of additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ KPMG LLP
Dallas, Texas
July 10, 2000
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 30, 1999 and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
------------------ ------------------
<S> <C> <C>
Assets:
Investments (note 3):
Investments in stocks and mutual
funds, at quoted market prices $ 61,531,395 $ 37,283,751
Loan fund, at unpaid principal balance, which
approximates fair value 1,700,922 1,301,633
------------------ ------------------
Total investments 63,232,317 38,585,384
Cash 91,631 65,331
Receivables:
Employer's contributions 655,798 652,617
Employees' contributions 61,628 355,118
------------------ ------------------
Total assets 64,041,374 39,658,450
Liabilities - refunds payable (note 5) (146,446) (210,688)
------------------ ------------------
Net assets available for benefits $ 63,894,928 $ 39,447,762
================== ==================
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 30, 1999 and December 31, 1998
<TABLE>
<CAPTION>
1999 1998
------------------ ------------------
<S> <C> <C>
Additions to net assets attributed to:
Employer's contributions $ 2,635,122 $ 2,401,807
Employees' contributions 8,507,321 8,148,530
Net assets transferred from other plans (note 1) 12,885,780 855,443
Investment income:
Interest and dividends 3,055,486 1,902,211
Net appreciation in
fair value of investments (note 3) 7,517,872 518,350
------------------ ------------------
Net investment income 10,573,358 2,420,561
------------------ ------------------
Total additions 34,601,581 13,826,341
Deductions from net assets attributed to:
Administrative fees (165,496) (166,474)
Withdrawals (9,988,919) (4,600,347)
------------------ ------------------
Total deductions (10,154,415) (4,766,821)
------------------ ------------------
Net increase 24,447,166 9,059,520
Net assets available for benefits:
Beginning of year 39,447,762 30,388,242
------------------ ------------------
End of year $ 63,894,928 $ 39,447,762
================== ==================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
December 30, 1999 and December 31, 1998
(1) Description of the Plan
(a) General
The CompuCom Systems, Inc. 401(k) Matched Savings Plan (the "Plan") is
a defined contribution plan covering substantially all employees of
CompuCom Systems, Inc. ("CompuCom" or the "Company/Employer").
Employees are eligible to participate in the plan after six months of
qualifying service. The following description of the Plan is provided
for general informational purposes only. Participants should refer to
the Plan documents for more complete information.
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). The Plan is subject
to those provisions of Title I and II of ERISA which, among other
things, require that each participant be furnished with an annual
financial report and a comprehensive description of the participant's
rights under the Plan, set minimum standards of responsibility
applicable to fiduciaries of the Plan, and establish minimum standards
for participation and vesting.
The Company serves as the Plan Administrator; however, the Plan
operates under a contract administration agreement, whereby an
independent third-party investment firm ("Investment Firm") assists
the Company in this capacity. The Investment Firm maintains a separate
account for each participant reflecting the participant's cost and
market value of investments. The Investment Firm also serves as the
trustee and makes distributions from a participant's account in
accordance with the terms of the Plan document.
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In the event
of Plan termination, participants will become 100% vested in their
accounts.
During 1999, net assets totaling approximately $12.2 million were
transferred into the Plan relating to the acquisition by Compucom of
the Technology Acquisition Services Division from ENTEX Information
Services, Inc. During 1999, the Plan changed its year-end to December
30.
(b) Vesting
Participants are fully vested in their individual contributions to the
Plan. Employer's matching contributions vest 50% after two years of
service and 100% after three years of service. A year of service is a
consecutive 12-month period during which an employee has completed
1,000 hours of service.
(c) Contributions
The Company matches 50% of each participant's qualifying contribution
up to 4% of the participant's basic compensation. The Company also
matches an additional 25% on each participant's next 2% (over and
beyond the first 4%) of qualifying contributions. During 1999
(Continued)
4
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
December 30, 1999 and December 31, 1998
and 1998, the Company contributed $2,635,122 and $2,401,807,
respectively, to participants' accounts.
Contributions are invested in one or more investment funds at the
discretion of the participant, one of which includes the Company's
Common Stock. The funds allocated to a participant's account are
received by the Trustee in cash and are held in cash until they are
invested in the appropriate funds.
(d) Participants' Accounts
Each participant's account is credited with the participant's
contribution and allocations of the Company's contribution and Plan
earnings. Forfeited balances of terminated participants' nonvested
accounts are used to reduce future Company contributions or pay
administrative expenses of the Plan. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
(e) Withdrawals
Participants may request a withdrawal of all or a portion of their
elective contribution account balances if the withdrawal qualifies as
a "Financial Hardship" as defined by the Internal Revenue Service. The
Plan Administrator must approve the request and the hardship
withdrawal will be taxed to the participant as ordinary income and may
be subject to an additional government imposed penalty tax. Upon the
attainment of age 59-1/2, participants may withdraw without penalty
from their participant's account an amount which is equal to any whole
percentage of their vested interest.
(f) Loans to Participants
Upon request of a participant, the Plan Administrator, in its sole
discretion, may make a loan to the participant. Participant loan
amounts may not exceed $50,000 or 50% of the participant's vested
account balance. The maximum term for any loan is five years. Loans
bear interest at rates determined by the Plan Administrator ranging
from 10.25% to 11.25% in 1999.
(g) Expenses of Plan
The expenses for administration of the Plan, including the expenses of
the administration and fees of the Trustee, shall be paid from the
Plan, unless CompuCom (the Sponsor) elects to make payment. The
Sponsor paid $165,496 in fees relating to the Plan during 1999 and
$166,474 in 1998.
(2) Summary of Significant Accounting Policies
The accompanying financial statements have been prepared on the accrual
basis of accounting. The investments in mutual funds and Company common
stock are stated at fair value and are based on closing market quotations.
The investment in participant loans is stated at the unpaid principal
balance of the loans, which approximates fair value. Purchases and sales of
securities are recorded on a trade date basis. Expenses relating to the
purchase or sale of investment securities are added to the cost or deducted
from the proceeds, respectively.
(Continued)
5
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
December 30, 1999 and December 31, 1998
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of additions and deductions
during the reporting period. Because of the use of estimates inherent in
the financial reporting process, actual results could differ from those
estimates.
(3) Investment Programs
In September 1999, the American Institute of Certified Public Accountants
issued Statement of Position 99-3, Accounting for and Reporting of Certain
Defined Contribution Plan Investments and Other Disclosure Matters ("SOP
99-3"). SOP 99-3 simplifies the disclosure for certain investments and is
effective for plan years ending after December 15, 1999. The Plan adopted
SOP 99-3 during the Plan year ended December 30, 1999. Accordingly,
information previously required to be disclosed about participant-directed
fund investment programs is not presented in the Plan's 1999 financial
statements. The Plan's 1998 financial statements have been reclassified to
conform with the current year's presentation.
The Company's matching contributions to the Plan are invested in CompuCom's
common stock and investment funds in proportion to the participants'
contributions in connection with the matching provision of the Plan. Funds
from previous companies' plans and rollovers from qualified plans are
invested in the investment funds at the participants' direction. Provisions
of the Plan allow participant contributions in 1% increments to be invested
in any of the funds, including CompuCom common stock.
Certain Plan investments are shares of mutual funds managed by Fidelity
Investments. Fidelity Investments is the trustee as defined by the Plan
and, therefore, these transactions qualify as party-in-interest.
The investment programs of the Plan are as follows:
(a) CompuCom Stock Fund
Contributions are invested in the Company's common stock. The Company
has entered into a contractual agreement for the purchase and
liquidation of shares of Employer stock.
(b) Fidelity Magellan Fund
Contributions are invested in a pooled fund of common stocks and
securities convertible to common stock. The performance of the fund is
related to market gains and losses.
(c) Fidelity Puritan Fund
Contributions are invested in a pooled fund of a broad list of
securities, including common stocks, preferred stocks and bonds,
including high-yield, low-quality bonds. The value of this fund
depends on the performance of the stocks and bonds in which this fund
is invested.
(Continued)
6
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COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
December 30, 1999 and December 31, 1998
(d) Fidelity Managed Income Portfolio Fund
Contributions are invested in a pooled fund of investment contracts
offered by major insurance companies and other approved financial
institutions and in certain types of fixed income securities. The fund
strives to preserve the principal investment while earning interest
income.
(e) Fidelity U.S. Equity Index Fund
Contributions are invested in a pooled fund of common stocks publicly
traded in the United States. The fund attempts to duplicate the
composition and return of the Standard & Poor's 500. The performance
of the fund is related to market gains and losses.
(f) Fidelity Blue Chip Growth Fund
Contributions are invested primarily in common stocks of well-known
and established companies, by normally investing at least 65% of total
assets in blue chip companies (those with a market capitalization of
at least $200 million, if the company's stock is included in the S&P
500 or the Dow Jones Industrial Average, or $1 billion if not included
in either index).
(g) Fidelity Growth Company Fund
Contributions are invested in a pooled fund of common stocks and
securities convertible into common stock. The performance of the fund
is related to market gains and losses.
(h) Fidelity Short-Intermediate Government Fund
Contributions are invested in a pooled fund of U.S. Government
securities and instruments related to U.S. Government securities. The
fund normally maintains a dollar weighted average maturity of two to
five years.
(i) Fidelity Broadly Diversified International Equity Fund
Contributions are invested in a pooled fund of securities of any
issuer, including companies and other business organizations as well
as governments and government agencies. The fund tends to focus on the
equity securities of both large and small companies. The performance
of the fund is related to market gains and losses.
(j) Fidelity Growth and Income Portfolio
Contributions are invested in common stocks with a focus on those that
pay current dividends and show potential capital appreciation. The
fund may also invest in bonds, including lower quality debt
securities.
(Continued)
7
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
December 30, 1999 and December 31, 1998
(k) Fidelity Retirement Money Market Fund
Contributions are invested in a pooled fund of high-quality U.S.
dollar denominated money market securities of domestic and foreign
issuers, including U.S. Government securities and repurchase
agreements.
(Continued)
8
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
December 30, 1999 and December 31, 1998
The following table presents the fair values of investments.
Investments that represent 5% or more of the Plan's net assets
available for benefits are separately identified:
<TABLE>
<CAPTION>
December 30, December 31,
1999 1998
---------------- ----------------
<S> <C> <C>
Investments at estimated fair value
determined by quoted market price:
CompuCom Systems, Inc.
common stock $ 4,284,150 $ 3,504,631
Fidelity Magellan Fund 18,455,735 12,704,102
Fidelity Puritan Fund 6,997,444 7,472,528
Fidelity U.S. Equity Index Fund 9,904,789 6,514,046
Fidelity Growth Company Fund 7,662,430 2,286,999
Fidelity Blue Chip Growth Fund 3,108,889 --
Fidelity Retirement Money Market
Fund 3,005,394 2,473,480
Other 8,112,564 2,327,965
---------------- ----------------
61,531,395 37,283,751
Investments at estimated fair value -
participant loans 1,700,922 1,301,633
---------------- ----------------
$ 63,232,317 $ 38,585,384
================ ================
</TABLE>
The Plan's investments (including investments bought, sold, as well as
those held during the year) appreciated (depreciated) in fair value as
follows:
<TABLE>
<CAPTION>
December 30, December 31,
1999 1998
---------------- ----------------
<S> <C> <C>
CompuCom Systems, Inc. common stock $ 488,291 $ (3,892,255)
Fidelity Magellan Fund 1,981,137 2,511,315
Fidelity Puritan Fund (411,361) 286,904
Fidelity Blue Chip Growth Fund 553,799 --
Fidelity U.S. Equity Index Fund 1,456,434 1,147,923
Fidelity Growth Company Fund 2,756,414 408,533
Fidelity Broadly Diversified International
Equity Fund 597,710 --
Other 95,448 55,930
---------------- ----------------
$ 7,517,872 $ 518,350
================ ================
</TABLE>
(Continued)
9
<PAGE>
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Notes to Financial Statements
December 30, 1999 and December 31, 1998
(4) Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated May 31, 2000 that the Plan is designed in accordance with
applicable sections of the Internal Revenue Code ("IRC"). The Plan
Administrator and the Plan's tax counsel believe that the Plan is designed
and is currently being operated in compliance with the applicable
requirements of the IRC.
The federal income tax status of the participants with respect to their
contributions to the Plan is described in information submitted to the
participants and, subject to certain limitations, such contributions are
tax deferred.
(5) Refunds Payable
At December 30, 1999 and December 31, 1998, the Plan has recorded refunds
payable of $146,446 and $210,688, respectively. The refunds relate to
amounts due to certain employees of the Company based upon
nondiscrimination tests for deferrals and employee after-tax contributions
to the Plan.
10
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Schedule 1
COMPUCOM SYSTEMS, INC.
401(k) MATCHED SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
at End of Year - December 30, 1999
<TABLE>
<CAPTION>
Number of Current
Identity of issue shares or units value
--------------------------------------------------- --------------------- ---------------
<S> <C> <C>
CompuCom Stock Fund:
CompuCom Systems, Inc.
common stock* 1,088,038 $ 4,284,150
Fidelity Magellan Fund* 135,634 18,455,735
Fidelity Puritan Fund* 368,675 6,997,444
Fidelity Managed Income Portfolio* 1,635,557 1,635,557
Fidelity U.S. Equity Index Fund* 190,770 9,904,789
Fidelity Blue Chip Growth Fund* 51,815 3,108,889
Fidelity Growth Company Fund* 130,114 7,662,430
Fidelity Short-Intermediate
Government Fund* 191,481 1,796,097
Fidelity Broadly Diversified International
Equity Fund* 90,553 2,310,917
Fidelity Growth and Income Portfolio* 50,361 2,369,993
Fidelity Retirement Money Market Fund* 3,005,394 3,005,394
Participant loans* -- 1,700,922
-------------
$ 63,232,317
=============
</TABLE>
*Party-in-interest
See accompanying independent auditors' report.
11
