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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:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED
[_] Definitive Proxy Statement BY RULE 14C-5(D) (2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
CORPORATE EXPRESS, INC.
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(Name of Registrant as Specified In Its Charter
N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
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PRELIMINARY COPY
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CORPORATE EXPRESS, INC.
325 Interlocken Parkway
Broomfield, Colorado 80021
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, AUGUST 8, 1996
To the Shareholders of Corporate Express, Inc.:
The 1996 Annual Meeting of Shareholders (the "Annual Meeting") of Corporate
Express, Inc., a Colorado corporation (the "Company"), will be held on Thursday,
August 8, 1996, at 9:00 a.m. (local time), at the Boulderado Hotel, 2115 13th
Street, Boulder, Colorado, for the following purposes:
1. to elect five directors of the Company to serve until the next annual
meeting of shareholders or until their successors are duly elected and
qualified;
2. to approve an amendment to the Company's Articles of Incorporation to
increase the number of shares of Common Stock authorized from 100,000,000
to 300,000,000;
3. to approve an amendment to the Corporate Express, Inc. 1994 Stock Option
and Incentive Plan to increase the number of shares authorized for grant
from 1,875,000 to 6,375,000;
4. to approve an amendment to the Corporate Express, Inc. 1994 Executive Stock
Option Plan to increase the number of shares authorized for grant from
2,250,000 to 3,750,000;
5. to approve the Corporate Express, Inc. 1996 Stock Option Plan for Outside
Directors; and
6. to transact such other business as may properly come before the Annual
Meeting, or any adjournment(s) or postponement(s).
The Board of Directors has fixed the close of business on Friday, May 31,
1996, as the record date for determining the shareholders entitled to notice of,
and to vote at, the Annual Meeting. A complete list of shareholders entitled to
vote at the Annual Meeting will be available, upon written request, for
inspection during normal business hours by any shareholder of the Company prior
to the Annual Meeting, for a proper purpose, at the Company's Broomfield,
Colorado office. Only shareholders of record at that time are entitled to notice
of, and to vote at, the Annual Meeting and any adjournments or postponements
thereof.
A copy of the Company's Annual Report on Form 10-K for the fiscal year
ended March 2, 1996, a Proxy Statement and a proxy card accompany this notice.
These materials are first being sent to shareholders on or about July __, 1996.
The Company's 1995 Annual Report to Shareholders will follow under separate
cover.
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Shareholders are cordially invited to attend the Annual Meeting in person.
To assure your representation at the Annual Meeting, please complete and sign
the enclosed proxy card and return it promptly. If you choose, you may still
vote in person at the Annual Meeting even though you previously submitted a
proxy card.
By Order of the Board of Directors,
Gary M. Jacobs
Secretary
Broomfield, Colorado
July __, 1996
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR SHARES
MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND THAT THE PRESENCE OF A QUORUM
MAY BE ASSURED. THE PROMPT RETURN OF YOUR SIGNED PROXY, REGARDLESS OF THE NUMBER
OF SHARES YOU HOLD, WILL AID THE COMPANY IN REDUCING THE EXPENSE OF ADDITIONAL
PROXY SOLICITATION. THE GIVING OF YOUR PROXY DOES NOT AFFECT YOUR RIGHT TO VOTE
IN PERSON IF YOU ATTEND THE MEETING.
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PRELIMINARY COPY
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CORPORATE EXPRESS, INC.
325 Interlocken Parkway
Broomfield, Colorado 80021
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 8, 1996
This Proxy Statement and the accompanying proxy card are being furnished to
the shareholders of Corporate Express, Inc. (the "Company") in connection with
the solicitation of proxies by and on behalf of the Board of Directors of the
Company (the "Board") for use at its 1996 Annual Meeting of Shareholders to be
held on Thursday, August 8, 1996, at 9:00 a.m. (local time), at the Boulderado
Hotel, 2115 13th Street, Boulder, Colorado, and at any adjournment(s) or
postponement(s) thereof (the "Annual Meeting"). This Proxy Statement, the
accompanying proxy card and the Company's Annual Report on Form 10-K (the "Form
10-K") for the fiscal year ended March 2, 1996 ("fiscal 1995"), are first being
mailed to shareholders on or about July ___, 1995. The Form 10-K is not to be
considered a part of the Company's proxy solicitation materials.
PURPOSE OF ANNUAL MEETING
At the Annual Meeting, shareholders will be asked: (i) to elect five
directors of the Company to serve until the next annual meeting of shareholders
or until their successors are duly elected and qualified; (ii) to approve an
amendment to the Company's Articles of Incorporation (the "Articles") to
increase the number of shares of Common Stock authorized from 100,000,000 to
300,000,000; (iii) to approve an amendment to the Corporate Express, Inc. 1994
Stock Option and Incentive Plan (the "1994 Plan") to increase the number of
shares authorized for grant from 1,875,000 to 6,375,000; (iv) to approve an
amendment to the Corporate Express, Inc. 1994 Executive Stock Option Plan (the
"Executive Plan") to increase the number of shares authorized for grant from
2,250,000 to 3,750,000; (v) to approve the Corporate Express, Inc. 1996 Stock
Option Plan for Outside Directors (the "Directors' Plan"); and (vi) to transact
such other business as may properly be brought before the Annual Meeting. The
Board recommends a vote in favor of (i.e., "FOR") (a) the election of the five
nominees for directors of the Company listed below and (b) the proposals set
forth in (ii) through (v) above.
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QUORUM AND VOTING RIGHTS
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock is necessary to constitute a quorum at the
Annual Meeting. Only shareholders of record at the close of business on Friday,
May 31, 1996 (the "Record Date") will be entitled to notice of, and to vote at,
the Annual Meeting. As of the Record Date, there were 69,132,672 shares of
Common Stock outstanding and entitled to vote. Holders of Common Stock as of the
Record Date are entitled to one vote for each share held.
All shares of Common Stock represented by properly executed proxies will,
unless the proxies have previously been revoked, be voted in accordance with the
instructions indicated in the proxies. If no instructions are indicated, the
shares will be voted in favor of (i.e., "FOR") (i) the election of the five
nominees for directors of the Company listed under Proposal 1, (ii) the increase
in the number of shares of Common Stock authorized under the Articles, the 1994
Plan and the Executive Plan and (iii) the approval of the Directors' Plan.
Directors will be elected by a plurality of the votes cast. Approval of the
amendment to the Articles, pursuant to the Colorado Business Corporation Act,
requires the affirmative vote of the holders of a majority of the votes entitled
to be cast. Approval of each of the other proposals requires that the votes in
favor of the proposal exceed the votes against the proposal. Abstentions and
broker non-votes will not be counted as votes cast and will have no effect on
the result of a vote, although they will count towards the presence of a quorum.
Any shareholder executing a proxy has the power to revoke the proxy at any time
prior to its exercise. A proxy may be revoked prior to exercise by (a) filing
with the Company a written revocation of the proxy, (b) appearing at the Annual
Meeting and casting a vote contrary to that indicated on the proxy or (c)
submitting a duly executed proxy bearing a later date.
The cost of preparing, printing, assembling and mailing this Proxy
Statement and other material furnished to shareholders in connection with the
solicitation of proxies will be borne by the Company. In addition to the
solicitation of proxies by use of the mails, officers, directors and regular
employees of the Company may solicit proxies by written communication, by
telephone, telegraph or personal call. These persons are to receive no special
compensation for any solicitation activities. The Company has engaged the firm
of Georgeson & Company, Inc. ("Georgeson") to assist the Company in the
distribution and solicitation of proxies. The Company has agreed to pay
Georgeson a fee of approximately $6,500 plus expenses for its services. The
Company will reimburse banks, brokers and other persons holding Common Stock in
their names, or those of their nominees, for their expenses in forwarding proxy
solicitation materials to beneficial owners of Common Stock.
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PROPOSAL 1 - ELECTION OF DIRECTORS
Nominees for Election as Directors
The Board currently consists of five (5) members: Jirka Rysavy, Robert L.
King, Janet A. Hickey, Clayton K. Trier and Mo Siegel. The Board proposes that
the five current directors, listed below as nominees, be elected as directors of
the Company to hold office until the next annual meeting of shareholders or
until their successors are duly elected and qualified. Each nominee has
consented to serve if elected to the Board. If any nominee is unable to serve as
a director at the time of the Annual Meeting, proxies with respect to which no
contrary direction is made will be voted "FOR" the substitute nominee designated
by the Board to fill the vacancy.
The names of the nominees, their ages at the Record Date and certain other
information about them are set forth below:
<TABLE>
<CAPTION>
Nominee Age Position(s) with Company Director Since
- ------- --- ------------------------ --------------
<S> <C> <C> <C>
Jirka Rysavy 42 Chairman of the Board and Chief Executive Officer 1986
Robert L. King 45 President, Chief Operating Officer and Director 1993
Janet A. Hickey 51 Director 1991
Clayton K. Trier 44 Chief Executive Officer, U.S. Delivery Systems, Inc. 1996
and Director
Mo Siegel 45 Director 1996
</TABLE>
Mr. Rysavy has been Chairman of the Board and Chief Executive Officer since
1986. In addition to founding the Company's business in 1986, Mr. Rysavy has
been responsible for strategic vision and direction and initiating the Company's
acquisitions. Mr. Rysavy immigrated to the United States in 1984 and became a
U.S. citizen in July 1989.
Mr. King joined the Company in August 1993 as President, Chief Operating
Officer and a director. During the previous ten years, Mr. King held various
executive positions with Foxmeyer Corporation, a distributor of pharmaceuticals
and healthcare products, serving as its President and Chief Executive Officer
from 1989 to 1993. Prior to 1983, Mr. King served as Executive Vice President of
Narco Drug Co. and Vice President of computer services for Fox-Vliet Drug Co.
and serves as a director of Investment Technology Group, Inc.
Ms. Hickey has served as a director of the Company since December 1991. Ms.
Hickey is a general partner of several limited partnerships comprising, in part,
The Sprout Group, and is a divisional Senior Vice President of DLJ Capital
Corporation. The Sprout Group is a division of DLJ Capital Corporation. DLJ
Capital Corporation and Donaldson, Lufkin & Jenrette Securities Corporation are
each wholly owned subsidiaries of Donaldson, Lufkin & Jenrette, Inc. Prior to
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joining The Sprout Group in 1985, Ms. Hickey was with the General Electric
Company for fifteen years in a variety of positions, most recently as Vice
President-Venture Investments of the General Electric Investment Corporation and
as a Trustee of the General Electric Pension Trust. Ms. Hickey serves as a
director of Loehmann's Holdings, Inc. and Champion Healthcare, Inc., as well as
several private companies.
Mr. Trier has been a director of the Company since the merger between the
Company and U.S. Delivery Systems, Inc. ("U.S. Delivery") in March 1996. Mr.
Trier was Chairman of the Board and Chief Executive Officer of U.S. Delivery
since its founding in November 1993. From 1991 until joining U.S. Delivery, Mr.
Trier was President of Trier & Partners, Inc., a consulting firm. From 1987
through 1990, Mr. Trier served as President and Co-Chief Executive Officer and
Chief Financial Officer of Allwaste, Inc., a national environmental services
company listed on the NYSE. From 1974 to 1987, Mr. Trier was at Arthur Andersen
& Co. SC and was a partner at the firm from 1983 to 1987.
Mr. Siegel has been a director of the Company since June 1996. Mr. Siegel
has served as Chairman and Chief Executive Officer of Celestial Seasonings, Inc.
("Celestial") since 1991 and as a director of Celestial since 1988. Mr. Siegel
founded Celestial, the largest manufacturer and marketer of herb teas in the
United States, in 1970, and was President and Chairman of the Board until 1986.
Prior to founding Celestial, Mr. Siegel was involved in private investments and
not-for-profit activities and, from 1990 until 1991, was a founder and Chief
Executive Officer of Earth Wise, Inc., a marketer of environmentally friendly
cleaning products and trash bags.
Michael Feuer resigned as a director of the Company in September 1995.
Donald Patrick resigned as a director of the Company in March 1996.
Committees and Meetings of the Board of Directors
During fiscal 1995, the Board held fifteen meetings and acted by consent
five times. Each director attended over 75% of the aggregate number of meetings
of the Board and of the committees of the Board on which the director served
during fiscal 1995.
The Board of the Company has three standing committees which have
responsibility for particular corporate matters. The Board does not have a
nominating committee.
Audit Committee. The Audit Committee consisted of Ms. Hickey, Mr. Patrick
and Mr. Feuer during fiscal 1995. Mr. Feuer served as chairperson of the Audit
Committee until his resignation from the Board in September 1995. The Audit
Committee has the authority to recommend the appointment of the Company's
independent auditors and review the results and scope of audits, internal
accounting controls, tax and other accounting-related matters. The Audit
Committee held two meetings during fiscal 1995.
Compensation Committee. The Compensation Committee consisted of Ms. Hickey,
Mr. Patrick and Mr. Feuer during fiscal 1995. Mr. Feuer served as a member of
the Compensation
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Committee until his resignation from the Board in September 1995. The
Compensation Committee sets compensation policies applicable to executive
officers and approves salaries, bonuses and other compensation matters for
executive officers of the Company and administers the Company's various stock
option plans and stock purchase plan. The Compensation Committee held ten
meetings during fiscal 1995 and acted by consent one time. Ms. Hickey serves as
chairperson of the Compensation Committee.
Administrative Committee. The Administrative Committee consisted of Messrs.
Rysavy and King during fiscal 1995. The Administrative Committee administers the
Company's employee benefit plans (exclusive of the stock option plans and the
stock purchase plan), approves certain acquisitions and performs other
administrative functions as requested by the Board. The Administrative Committee
held one meeting during fiscal 1995.
Director Compensation
Directors do not currently receive any fees for serving on the Board or any
committee of the Board, but are reimbursed for their reasonable expenses of
attending meetings. Non-employee directors may receive compensation in the
future and will receive stock option grants under the 1996 Stock Option Plan for
Outside Directors, if it is approved by shareholders at the Annual Meeting.
PROPOSAL 2 - AMENDMENT OF ARTICLES
On May 3, 1996, the Board of Directors approved, subject to shareholder
approval, an amendment to the Company's Articles to increase the number of
shares of voting Common Stock that the Company is authorized to issue from
100,000,000 to 300,000,000 (the "Amendment").
The Board has determined that an increase in the number of authorized
shares of Common Stock is in the best interest of the Company and its
shareholders. The Company intends to use authorized and unissued shares of the
Company's Common Stock for various corporate purposes, including, but not
limited to, possible future financing and acquisition transactions, possible
recapitalization through a stock split or stock dividend, and other corporate
purposes. Authorized and unissued shares of Common Stock may be issued for the
foregoing purposes by the Board without further shareholder action unless the
issuance is in connection with a transaction for which shareholder approval is
otherwise required under applicable law, regulation or agreement.
Pursuant to the Fourth Article of the Articles, the Company is authorized
to issue 100,000,000 shares of voting Common Stock. If the Amendment is
approved, such number will be increased to 300,000,000. As of May 31, 1996,
there were 69,132,672 outstanding shares of Common Stock.
If this proposal is adopted by the shareholders, Article IV (A) of the
Articles will be amended to read as follows:
"A. Authorized Capital Stock. The aggregate number of shares that the
------------------------
Corporation shall have authority to issue is three hundred twenty eight
million
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(328,000,000), consisting of three hundred million (300,000,000) shares of
common stock ("Common Stock"), par value $.0002 per share, three million
(3,000,000) shares of Non-Voting Common Stock ("Non-Voting Common Stock"),
par value $.0002 per share, and twenty-five million (25,000,000) shares of
preferred stock ("Preferred Stock"), par value $.0001 per share."
The full text of the Fourth Article of the Articles reflecting the
Amendment (in addition to a technical change to delete a reference to previously
issued preferred stock which is no longer relevant) is attached as Exhibit A.
The affirmative vote of a majority of the shares of Common Stock entitled
to be cast at the Annual Meeting is necessary to approve the Amendment to the
Articles.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO THE
ARTICLES TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK OF THE
COMPANY FROM 100,000,000 TO 300,000,000.
PROPOSAL 3 - AMENDMENT TO 1994 STOCK OPTION AND INCENTIVE PLAN
The Corporate Express, Inc. 1994 Stock Option and Incentive Plan (the "1994
Plan") was adopted by the Company's Board of Directors and approved by the
shareholders in August 1994. The 1994 Plan provides for the grant of incentive
stock options and nonqualified stock options to purchase shares of Common Stock
and awards of restricted stock, performance shares and performance units to
officers, key employees, directors and consultants of the Company and its
subsidiaries. The maximum aggregate number of shares of Common Stock which may
be issued under the 1994 Plan is currently 1,875,000 (subject to anti-dilution
adjustments), plus an additional number of shares equal to the number of options
granted under the 1992 Stock Option Plan that are terminated or forfeited.
The purpose of the 1994 Plan is to direct the attention and efforts of
participating employees to the long-term performance of the Company and its
subsidiaries, by relating incentive compensation to the achievement of long-term
corporate economic objectives. The 1994 Plan is also designed to retain, reward
and motivate participating employees by providing an opportunity for investment
in the Company and the advantages inherent in stock ownership in the Company.
The proposed amendment seeks to allocate an additional 4,500,000 shares for
issuance under the 1994 Plan, bringing the total number of shares authorized for
issuance thereunder to 6,375,000 shares. The remaining provisions will continue
as stated in the 1994 Plan.
The term of options granted under the plan may not exceed ten years from
the date of grant. The per share option price for incentive stock options and
nonqualified stock options granted under the plan may not be less than 100% and
85%, respectively, of the fair market value of a share of Common Stock on the
date of grant and is payable to the Company in full upon exercise. Payment may
be made in cash or, unless otherwise determined by the Compensation Committee at
the time of grant, in shares of Common Stock or by reduction in the number of
shares issuable upon such exercise.
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Options granted under the 1994 Plan typically vest in equal monthly
installments over a period of five years, beginning on the month after the first
anniversary of the grant date. The options generally expire on the earliest to
occur of (a) the seventh anniversary of the grant date or (b) a breach by the
optionee of the confidentiality and noncompete agreement with the Company.
Options and awards that expire, terminate or are cancelled or forfeited will
again be available for grant or award under the plan.
Pursuant to the 1994 Plan, the Company may also make awards of restricted
stock, performance shares and performance units to officers, employees,
directors and consultants of the Company and its subsidiaries. No awards of
restricted stock, performance units or performance shares have been made under
the 1994 Plan. A restricted stock award is an award pursuant to which a given
number of shares of Common Stock will be issued if the grantee continues to be
an employee of the Company or any of its subsidiaries during a period set by the
Compensation Committee. A performance unit is an award of a fixed dollar amount,
payable in cash, Common Stock or a combination of both, which will be paid to
the recipient after the expiration of a specified period of time, subject to the
satisfaction of vesting requirements and the attainment of specified performance
goals as may be determined by the Compensation Committee. A performance share is
an award of the right to receive Common Stock, payable in Common Stock or cash
of an equivalent value (or a combination of both), after the expiration of a
specified period. The value of a performance share will be paid to the recipient
after the expiration of a specified period of time, subject to the satisfaction
of vesting requirements and the attainment of specified performance goals as may
be determined by the Compensation Committee.
Options and awards generally are not transferable and terminate upon the
termination of employment or, in the case of options, within 30 days after an
involuntary termination without cause or one year after death, disability or
retirement. In addition, the 1994 Plan provides that, in the event of death,
disability or retirement of a participant, one-half of the participant's
unvested options will become exercisable, one-half of the restricted stock
awards will cease to be subject to forfeiture and one-half of the performance
shares and performance units will be paid out if the Compensation Committee
determines that the applicable performance goals were satisfied. The particular
terms and conditions of each option and award will be set forth in a separate
agreement which may include confidentiality and noncompetition provisions.
The 1994 Plan is administered by the Compensation Committee, which has the
authority to determine the plan's participants and the terms and conditions of
the options and awards granted under the plan, including the number of shares or
the amount of other awards, the price or performance goals and vesting and
termination provisions. The Compensation Committee, in its discretion, may at
any time amend, discontinue or terminate the 1994 Plan, provided that the rights
of a participant with respect to any outstanding grant or award under the plan
may not be diminished or impaired without the participant's consent. A summary
of options granted under the 1994 Plan during the last fiscal year is included
under the heading "Summary of Option Grants."
Under the 1994 Plan, the Compensation Committee, as of March 2, 1996, had
granted options to purchase 1,703,875 shares, net of forfeitures. In addition,
options to purchase 2,099,100 shares were granted to certain U.S. Delivery
employees pursuant to the terms of the merger agreement between Corporate
Express and U.S. Delivery approved by the Company's shareholders on
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March 1, 1996 (the "U.S. Delivery Options"). The U.S. Delivery Options, whose
terms are substantially identical to options granted under the 1994 Plan, but
have a term of ten years, will be included under the 1994 Plan if the increase
in the number of authorized shares under such plan is approved by the Company's
shareholders at the Annual Meeting. If the proposed amendment to the 1994 Plan
is not approved at the Annual Meeting, the U.S. Delivery Options will remain
outstanding outside the 1994 Plan.
The Board of Directors believes that the 1994 Plan is important in order to
recruit and retain a pool of skilled and experienced employees. The additional
4,500,000 shares will allow the Board of Directors to provide incentives to new
employees and to existing employees.
Approval of the amendment of the 1994 Plan requires that the votes in favor
of the proposal exceed the votes against the proposal.
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO THE 1994 PLAN TO
INCREASE THE AUTHORIZED NUMBER OF SHARES TO BE ISSUED UNDER THE 1994 PLAN TO
6,375,000 SHARES.
PROPOSAL 4 - AMENDMENT TO 1994 EXECUTIVE STOCK OPTION PLAN
The Corporate Express, Inc. 1994 Executive Stock Option Plan (the
"Executive Plan") was adopted by the Company's Board of Directors in June 1994.
The Executive Plan provides for the grant of stock options to purchase shares of
Company stock to executive officers of the Company and its subsidiaries. The
maximum aggregate number of shares of Common Stock which may be issued under the
Executive Plan is 2,250,000 (subject to anti-dilution adjustments). No single
executive officer may be granted options covering more than 750,000 shares of
Common Stock in any calendar year.
The Compensation Committee administers the Executive Plan and establishes
the terms of the options granted, including the number of shares, the exercise
price, vesting schedule and termination provisions. The particular terms of each
grant are set forth in separate stock option agreements entered into between the
Company and the executive officer.
In June 1994, the Compensation Committee granted options aggregating
1,575,000 shares of Common Stock to three executive officers at a price of $8.00
per share as follows: Mr. Rysavy --750,000 shares; Mr. King -- 525,000 shares;
and Mr. Jacobs -- 300,000 shares. These options vest on the tenth anniversary of
the grant date, provided the optionee is an officer of the Company on the
vesting date, and terminate on the twelfth anniversary of the grant date.
Vesting accelerates on a scale ranging from 10% to 100% of the option shares if
(a) a change of control (as defined in the stock option agreements) occurs at
any time at a stock price per share ranging from $14.67 to $26.67 or (b) the
average closing price on the Nasdaq National Market for 90 consecutive trading
days equals or exceeds $14.67 to $26.67 per share, provided that acceleration
based upon the closing bid price will not be effective before June 30, 1996. As
of March 2, 1996, options to purchase 1,575,000 shares, or 100% of the shares,
have vested pursuant to the stock price formula.
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On August 24, 1995, the Compensation Committee approved the grant of
additional options to purchase 1,350,000 shares at a price of $20.00 per share
as follows: Mr. Rysavy -- 525,000 shares; Mr. King -- 375,000 shares; Mr. Leno
225,000 shares; and Mr. Jacobs -- 225,000 shares. The options vest in 2005 and
terminate in 2007, with accelerated vesting of 50% to 100% of such options in
the event that there is a change in control (as defined in the stock option
agreements) of the Company at a price of between $33.33 per share and $43.33 per
share or if the Common Stock trades at more than $33.33 per share before June
30, 1997 (for 50% vesting) and $43.33 per share before June 30, 1998 (for 100%
vesting) for specified periods. Holders may only exercise a 25% portion of
vested options for each year with respect to vesting that has been accelerated
due to trading price levels. These options will be included under the Executive
Plan if the increase in the number of authorized shares under the Executive Plan
to 3,750,000 is approved by the shareholders. If the proposed amendment to the
Executive Plan is not approved at the Annual Meeting, these options will remain
outstanding outside the Executive Plan.
The proposed amendment seeks to allocate an additional 1,500,000 shares for
issuance under the Executive Plan, bringing the total number of shares
authorized for issuance thereunder to 3,750,000 shares. The remaining provisions
will continue as stated in the Executive Plan. The Board of Directors believes
that the Executive Plan is required in order to recruit and retain a pool of
skilled and experienced executives. The additional 1,500,000 shares will allow
the Board of Directors to provide incentives to new and existing executive
officers.
Approval of the amendment of the Executive Plan requires that the votes in favor
of the proposal exceed the votes against the proposal.
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO THE EXECUTIVE PLAN TO
INCREASE THE AUTHORIZED NUMBER OF SHARES TO BE ISSUED UNDER THE PLAN TO
3,750,000 SHARES.
PROPOSAL 5 - APPROVAL OF 1996 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
At the Annual Meeting, a proposal will be presented for the
shareholders to approve the 1996 Stock Option Plan for Outside Directors (the
"Directors' Plan"), under which options to purchase up to 250,000 shares of
Common Stock of the Company may be granted to directors who are not officers or
employees of the Company or any of its subsidiaries.
The purpose of the Directors' Plan is to attract and retain
independent directors and to strengthen the mutuality of interests between such
directors and the Company's shareholders. On June 1996, the Company had two
directors who were eligible to receive options under the Directors' Plan, Janet
Hickey and Mo Siegel. On June 27, 1996, the average of the high and low sales
prices of the Company's Common Stock on the Nasdaq National Market was $39.38.
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The Directors' Plan will be administered by the Board of Directors. If
the Directors' Plan is approved by the Company's shareholders, each director who
is not an employee of the Company or any of its subsidiaries will be granted on
the date of the Annual Meeting (and any new director will be granted, on the
date of becoming a member of the Board) options to purchase 25,000 shares of the
Company's Common Stock, 40% of which will vest on the first anniversary of the
date of grant, 40% of which will vest on the second anniversary of the date of
grant and 20% of which will vest on the third anniversary of the date of grant.
For as long as the Directors' Plan is in effect, each eligible director will
also automatically be granted, options to purchase 10,000 shares of the
Company's Common Stock, on each anniversary of the date of grant (beginning on
the second such anniversary), provided such person is an eligible director on
such date. These options will become exercisable in two equal installments, on
the first and second anniversaries of the date on which they were granted.
The option exercise price for all options granted under the Directors'
Plan will be the fair market value of a share of the Company's Common Stock on
the date of grant. All options granted under the Directors' Plan will expire ten
years after the date of grant and will terminate if the optionee ceases to be a
director of the Company for any reason other than death or disability. If a
director dies or becomes disabled, one-half of the director's unvested options
will become immediately exercisable and such options, as well as any options
that were vested at the time of the director's death or disability, may be
exercised for a period of 90 days thereafter. Upon a Change of Control of the
Company (as defined in the Directors' Plan), one-half of all unvested options
will become immediately exercisable.
The grant by the Company of a non-qualified stock option is not a
taxable event to the optionee. Generally, an optionee recognizes ordinary income
on the date option shares are issued to him pursuant to the exercise of the
option in an amount equal to the "spread" or the excess of the fair market value
of the shares on that date over the exercise price. Any further gain or loss on
disposition of the shares will be capital gain or loss if the shares are held by
the optionee for investment.
The Company will be entitled to deduct for federal income tax purposes
any amount the optionee is required to include in ordinary income at the time
such amount is so includable, provided that such amount is not deemed to be an
"excess parachute payment" (i.e., payment payable upon a change of control of
the Company that is in excess of reasonable compensation).
Approval of the Directors' Plan requires that the votes in favor of the
proposal exceed the votes against the proposal. Exhibit B to this Proxy
Statement contains the complete text of the Director's Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE DIRECTORS' PLAN.
12
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of the Record Date, certain information
with respect to the beneficial ownership of Common Stock, for (i) each person
(or group of affiliated persons) who, insofar as the Company has been able to
ascertain, beneficially owned more than 5% of the outstanding shares of Common
Stock of the Company, (ii) each director and named executive officer, and (iii)
all current directors and named executive officers as a group.
<TABLE>
<CAPTION>
Name Number/(1)/ Percent
- ---- ----------- -------
<S> <C> <C>
Putnam Investments................................................. 5,552,538 8.0
Jirka Rysavy/(2)/.................................................. 2,728,676 3.9
DLJ Affiliates/(3)/................................................ 1,735,727 2.5
Robert L. King/(4)/................................................ 768,853 1.1
Gary M. Jacobs/(5)/................................................ 666,972 *
Sam Leno........................................................... -0- *
Janet A. Hickey/(6)/............................................... 1,747,405 2.5
Clayton K. Trier/(7)/.............................................. 490,433 *
Mo Siegel.......................................................... -0- *
All directors and named executive officers as a group (7 persons).. 6,402,339 8.9
</TABLE>
_______________________
* Less than 1.0%.
(1) A person is deemed to be the beneficial owner of securities that can be
acquired within 60 days upon the exercise of options or warrants. Each
beneficial owner's percentage ownership is determined by assuming that
options or warrants that are held by that person (but not those held by any
other person) and are exercisable within 60 days have been exercised.
Unless otherwise noted, the Company believes that all persons named in the
table have sole voting and investment power with respect to all shares of
Common Stock beneficially owned by them.
(2) Includes: (a) 898,676 shares of Common Stock owned by Synergom, Inc., a
Colorado corporation, of which Mr. Rysavy is the sole shareholder; (b)
450,000 shares of Common Stock owned by Transecon, Inc., a Colorado
corporation, of which Mr. Rysavy is the sole shareholder; (c) 75,000 shares
owned by Polly Source, Inc., a Colorado corporation of which Mr. Rysavy is
the sole shareholder; (d) warrants to purchase 375,000 shares of Common
Stock for $7.33 per share which expire on January 31, 1999; and (e) options
to purchase 750,000 shares of Common Stock for $8.00 per share which expire
on June 13, 2006.
(3) Includes: (a) 693,857 shares of Common Stock owned by Sprout Capital VI,
L.P.; (b) 501,236 shares of Common Stock owned by Sprout Growth II, L.P.;
(c) 256,087 shares of Common Stock owned by DLJ Capital Corporation; (d)
30,970 shares of Common Stock owned by DLJ Venture Capital Fund II, L.P.
(collectively, the Sprout Entities ); (e) 14,074 shares of Common Stock
held by DLJ First ESC L.L.C., an employee securities corporation of which
DLJ LBO Plans Management Corporation, an affiliate of DLJ Securities
13
<PAGE>
Corporation, is the manager and has voting and dispositive power; (f)
239,503 shares of Common Stock owned by ML Venture Partners II, L.P. All
shares held by the Sprout Entities have been deposited in a voting trust
(the "Voting Trust") under the control of an independent voting trustee,
Bank of New York, as successor Trustee (the "Trustee"). The address of the
Trustee is 101 Barclay Street, 21st Floor, New York, New York 10286. The
Trustee will have the sole power and discretion to act as, and to exercise
the voting rights and powers of, a shareholder with respect to the shares
of Common Stock held by the Trustee, except that the Sprout Entities will
retain investment power with respect to the shares held by the Trustee and
will be entitled to receive their proportionate dividends, distributions
and payments in respect of the shares of Common Stock held by the Trustee,
if and when the same are paid by the Company. Shares of Common Stock issued
as a dividend, distribution or other payment on the shares held by the
Trustee will also be subject to the Voting Trust. Does not include shares
of Common Stock held by employees of DLJ Securities Corporation and its
affiliates. DLJ Securities Corporation and its affiliates disclaim
beneficial ownership of all shares held directly or indirectly by its
employees.
(4) Includes options to purchase 750,000 shares of Common Stock which are
exercisable at prices ranging from $5.33 to $8.00 per share which expire
between September 1, 2000 and June 13, 2006.
(5) Includes: (a) warrants to purchase 75,000 shares of Common Stock for $2.67
per share which expire on February 28, 1998; and (b) options to purchase
323,672 shares of Common Stock which are exercisable at prices ranging from
$0.67 to $8.00 per share and expire between November 16, 1999 and June 13,
2006.
(6) Includes shares of Common Stock owned by the Sprout Entities which have
been deposited in the Voting Trust (see note 3). Ms. Hickey is a director
of the Company and a general partner of several limited partnerships
comprising, in part, The Sprout Group. Ms. Hickey shares voting and
investment power with respect to the shares owned by The Sprout Group and
may be deemed to be the beneficial owner of such shares. Ms. Hickey
disclaims beneficial ownership as to all of the shares deposited in the
Voting Trust. Does not include shares of Common Stock held by employees of
DLJ Securities Corporation and its affiliates. DLJ Securities Corporation
and its affiliates disclaim beneficial ownership of all shares held
directly or indirectly by its employees.
(7) Includes options to purchase 196,952 shares of Common Stock which are
exercisable at prices ranging from $6.46 to $8.33 per share and expire
between March 17, 2000 and November 23, 2000.
14
<PAGE>
EXECUTIVE COMPENSATION
Executive Officers
The executive officers of Corporate Express are:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Jirka Rysavy 42 Chief Executive Officer
Robert L. King 45 President and Chief Operating Officer
Gary M. Jacobs 49 Executive Vice President and Secretary
Sam R. Leno 50 Executive Vice President and Chief Financial Officer
Clayton K. Trier 44 Chief Executive Officer, U.S. Delivery
Joanne C. Farver 41 Vice President - Controller
Gary W. Grant 44 President - Chief Operating Officer, U.S. Delivery
</TABLE>
The business backgrounds of Messrs. Rysavy, King and Trier are included
under "Proposal 1 - Election of Directors."
Mr. Jacobs joined Corporate Express in November 1992 as Executive Vice
President and Chief Financial Officer, and currently serves as Executive Vice
President and Secretary of Corporate Express. Mr. Jacobs previously served
Corporate Express as a director from August 1988 through September 1990. From
1990 to 1992, Mr. Jacobs served as the Chief Executive Officer of Boulder Retail
Finance Corporation, an investment firm controlled by Mr. Jacobs. From 1978
through mid-1990, he served as Executive Vice President of Capital Associates,
Inc., an equipment leasing company. Mr. Jacobs also served as director of
Capital Associates, Inc. from 1978 to 1991 and from 1994 to date. Prior to
joining Capital Associates, Inc., Mr. Jacobs served as a director of finance for
Storage Technology Corporation, a public company which manufactures computer
peripheral devices.
Mr. Leno joined the Company as Executive Vice President and Chief Financial
Officer in July 1995. From July 1994 until July 1995, Mr. Leno was the Chief
Financial Officer of Coram Healthcare. Prior thereto, for 23 years, Mr. Leno
served in various management positions with Baxter International, a
manufacturing and multinational distribution company, including Vice President
of Finance and Information Technology.
Ms. Farver joined the Company in August 1988 and has served as Vice
President - Controller of the Company since November 1991. Ms. Farver also
served as a director of Corporate Express from July 1991 to February 1992 and as
Secretary of Corporate Express from June 1990 to November 1991. Ms. Farver
joined Commercial Office Products as Controller in August 1985. From 1982 to
1985, Ms. Farver held various financial management positions with NBI, Inc., a
computer company and the parent company of Commercial Office Products. Prior to
1982, Ms. Farver spent three years as a Certified Public Accountant with Touche
Ross & Company.
Mr. Grant joined U.S. Delivery in March 1994 as Senior Vice President -
Chief Operating Officer and currently serves as President - Chief Operating
Officer of U.S. Delivery. Mr. Grant has 18 years experience in the same-day
local delivery industry. Mr. Grant was a founder of ViaNet, Inc. (one of
Delivery's founding companies) and served as its President from 1986 to 1994.
From 1977 to 1986,
15
<PAGE>
Mr. Grant was President and co-founder of several different delivery and
transportation companies that were predecessors to ViaNet.
Summary of Cash and Certain and Other Compensation
Summary Compensation Table. The following table sets forth individual
compensation (cash and non-cash, plan and non-plan) paid to the Chief Executive
Officer and to certain other executive officers of the Company (the "Named
Executive Officers") for all services rendered in all capacities to the Company
and its subsidiaries for fiscal 1993, fiscal 1994 and fiscal 1995:
<TABLE>
<CAPTION>
Annual Long-Term
Compensation/(1)/ Compensation
----------------- ---------------------------------
Number of All Other
Name and Position Year/(2)/ Salary Bonus/(3)/ Options Compensation/(4)/
- ----------------- --------- ------ ---------- --------- -----------------
<S> <C> <C> <C> <C> <C>
Jirka Rysavy 1995 $ 256,732 - 525,000
Chairman of the Board and 1994 212,630 $141,900 750,000 12,813
Chief Executive Officer 1993 196,574 10,000 375,000/(5)/ 13,142
Robert L. King 1995 235,775 - 375,000 37,448
President and Chief 1994 194,498 $132,000 525,000 -
Operating Officer 1993 86,955/(6)/ - 450,000 -
Gary M. Jacobs 1995 $ 217,452 - 225,000
Executive Vice President, 1994 177,776 $ 92,500 300,000 -
and Secretary 1993 146,714 10,000 56,250 5,552
Sam Leno 1995 $ 274,231/(7)/ - 450,000 -
Executive Vice President
and Chief Financial Officer
Clayton Trier 1995 $ 151,769/(8)/ - 190,000 -
Chief Executive
Officer, U.S. Delivery
</TABLE>
_______
(1) With respect to each of the Named Executive Officers, the aggregate amount
of perquisites and other personal benefits, securities or property received
was less than either $50,000 or 10% of the total annual salary reported.
(2) The Company became a reporting company under the Securities Exchange Act of
1934 in September 1994 and is not required to provide information for any
period prior to fiscal 1993.
16
<PAGE>
(3) Bonuses for fiscal 1995 have not yet been determined.
(4) All other compensation includes taxable relocation, temporary housing and
other executive benefits.
(5) Represents warrants issued to Mr. Rysavy.
(6) This amount represents Mr. King's salary from August 1993, when he joined
the Company, through the end of fiscal 1993.
(7) This amount represents Mr. Leno's salary from July 1995, when he joined the
Company through the end of fiscal 1995.
(8) This amount represents Mr. Trier's salary paid by U.S. Delivery during
fiscal 1995. Mr. Trier joined the Company following the merger with U.S.
Delivery on March 1, 1996.
During August 1995, the annual base salary for Mr. Jacobs was increased to
$225,000. Effective August 14, 1995, the annual base salaries for Messrs. Rysavy
and King were increased to $275,000 and $250,000 respectively.
Certain officers of the Company and its subsidiaries earned salaries in
excess of $100,000 and bonus compensation for fiscal 1995.
17
<PAGE>
Stock Options Granted. The following table sets forth information
concerning individual grants of stock options made by the Company during fiscal
1995 to each of the Named Executive Officers:
<TABLE>
<CAPTION>
Potential Realizable
Percent of Value at Assumed
Total Annual Rates
Options of Stock Price
Granted to Appreciation for
Number Employees Exercise Option Terms/(1)/
of Options in Fiscal Price Expiration
Name Granted 1995 (per share) Date 5% 10%
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jirka Rysavy......... 525,000/(2)/ 8% $ 20.00 06/30/07 $8,358,000 $22,454,250
Robert L. King....... 375,000/(2)/ 6% $ 20.00 06/30/07 5,970,000 16,038,750
Gary M. Jacobs....... 225,000/(2)/ 3% $ 20.00 06/30/07 3,582,000 9,623,250
Sam Leno............. 225,000/(2)/ 3% $ 20.00 06/30/07 3,582,000 9,623,250
225,000/(3)/ 3% $ 20.00 08/29/02 1,831,500 4,268,250
Clayton Trier........ 190,000/(3)/ 3% $ 29.75 03/01/06 3,554,900 9,007,900
</TABLE>
__________
(1) The 5% and 10% assumed annual rates of compound stock price appreciation
over the term of the options are computed in accordance with rules and
regulations of the Securities and Exchange Commission and do not represent
the Company's estimate of stock price appreciation or a projection by the
Company of future stock prices.
(2) These options vest on June 30, 2005, which vesting accelerates if (a) a
change of control occurs at any time (with greater acceleration if a change
of control (as defined in the option agreements) occurs at or prior to
June 30, 1998) at a stock price per share greater than $43.33 or (b) the
average closing bid price for Common Stock on the Nasdaq National Market
for 90 consecutive trading days equals or exceeds $33.33 to $43.33 per
share, provided that acceleration based upon the closing bid price may not
occur before June 30, 1997. These options expire on June 30, 2007 unless
sooner terminated under the terms of the option agreements.
(3) The options vest in equal monthly installments over a period of five years,
beginning on the month after the first anniversary of the grant date. These
options expire on the earliest to occur of (a) the seventh anniversary (in
the case of Mr. Leno's options) and the tenth anniversary (in the case of
Mr. Trier's options) of the grant date or (b) a breach by the optionee of
the confidentiality and noncompetition agreement executed by the optionee,
unless sooner terminated under the terms of the option agreements.
18
<PAGE>
Option Exercises and Option Values. The following table sets forth
information concerning stock options exercised by each of the Named Executive
Officers during fiscal 1995 and the number of unexercised options and warrants
held by such persons at the end of fiscal 1995 and the value thereof:
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised "In-the-Money" Options
Number of Options at Fiscal Year End At Fiscal Year End(2)
------------------------------------------------------
Shares Acquired Value
Name on Exercise Realized(l) Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jirka Rysavy.... - - 375,000 1,275,000 $8,782,500 $22,706,250
Robert L. King.. - - 225,000 1,125,000 $5,719,500 $21,694,500
Gary M. Jacobs.. 122,500 $3,093,565 91,484 592,266 $2,500,000 $10,993,945
Sam Leno........ - - -0- 450,000 -0- $ 4,837,500
Clayton Trier... - - 196,952 190,000 $4,548,344 $ 190,000
</TABLE>
______
(1) The value realized represents the difference between the fair market value
on the date of exercise and the exercise price, multiplied by the
applicable number of options.
(2) Options or warrants are "in-the-money" if the fair market value of the
underlying securities exceeds the exercise price of the option or warrant.
The amounts set forth represent the difference between $30.75 per share,
the fair market value of the Company's Common Stock issuable upon exercise
of options or warrants at March 2, 1996, and the exercise price of the
option or warrant, multiplied by the applicable number of options or
warrants.
Employment Contracts
Mr. King has an employment agreement with the Company pursuant to which he
serves as President and Chief Operating Officer, which agreement expires on
August 31, 1997. In addition to his base salary, Mr. King is entitled to
participate in all benefit and incentive plans available to executive officers
and to receive a bonus of up to 100% of his base salary if the Company achieves
certain financial performance targets. Mr. King was also granted options to
purchase 450,000 shares of Common Stock at $5.33 per share, which options vest
in four equal annual installments beginning on September 1, 1994. If the
employment agreement is terminated other than for cause by the Company, upon the
death or disability of Mr. King or voluntarily by Mr. King following a breach of
the agreement by the Company, Mr. King will be entitled to receive salary, bonus
and benefits for twelve months following termination and one-third of any
unvested stock options granted to Mr. King will become exercisable.
Mr. Leno has an employment agreement with the Company, pursuant to which he
serves as Executive Vice President and Chief Financial Officer, which expires on
July 31, 1999. In addition to his base salary, Mr. Leno is entitled to
participate in all benefit and incentive plans available to executive officers
and to receive a bonus of up to 100% of his base salary if the Company achieves
certain financial performance targets. See "--Other Benefit Plans--Incentive
Plans." Mr. Leno also received options to purchase 225,000 shares of Common
Stock at the market price per share as of the
19
<PAGE>
grant date, which options vest in four equal annual installments beginning on
August 1, 1996. Mr. Leno was granted options to purchase an additional 225,000
shares of Common Stock under the Executive Plan. If the employment agreement is
terminated other than for cause by the Company, upon the death or disability of
Mr. Leno or voluntarily by Mr. Leno following a breach of the agreement by the
Company, Mr. Leno will be entitled to receive salary, bonus and benefits for
twelve months following termination.
Mr. Jacobs has an employment agreement with the Company pursuant to which
he serves as Executive Vice President and Chief Financial Officer. The
employment agreement expires on November 10, 1996. In addition to his base
salary, Mr. Jacobs is entitled to participate in all benefit and incentive plans
available to executive officers and to receive a bonus of up to 100% of his base
salary if the Company achieves certain financial performance targets. If the
agreement is terminated by the Company other than for cause or upon the death or
disability of Mr. Jacobs or voluntarily by Mr. Jacobs, Mr. Jacobs is entitled to
receive salary and benefits for six months following termination.
Mr. Trier has an employment agreement pursuant to which he serves as Chief
Executive Officer of U.S. Delivery. The agreement provides for an annual salary
of $150,000, subject to board review, incentive bonuses and stock options, as
well as certain other benefits. The agreement contains a non-competition
agreement and provides for certain severance payments under certain
circumstances, including upon a change in control (as defined in the employment
agreement).
Summary of Option Grants. The following table summarizes the aggregate
number of option grants during Fiscal 1995 under the Company's option plans.
Each option is exercisable for one share of the Company's Common Stock, which
had a market value of $30.75 per share as of March 2, 1996.
<TABLE>
<CAPTION>
1992 Stock 1994 Stock 1994 Executive Replacement
Name and Position Option Plan Option Plan/(1)/ Stock Option Plan/(2)/ Plan
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jirka Rysavy, Chairman of the Board
and Chief Executive Officer - - 525,000 -
Robert L. King, President and
Chief Operating Officer - - 375,000 -
Sam R. Leno, Executive Vice President and
Chief Financial Officer - 225,000 225,000 -
Gary M. Jacobs, Executive Vice President - - 225,000 -
Clayton K. Trier, CEO, U.S. Delivery 190,000 - 196,952
Current Executive Officers as a group - 415,000 1,350,000 -
Current Non-employee Directors as a group - - - -
All other employees as a group, net of forfeitures - 3,387,975 - 1,540,048
Total options granted, net of forfeitures - 3,802,975 1,350,000 1,737,000
</TABLE>
(1) Certain of the option grants shown in this column will be included under
the applicable plan only if the proposed amendment to such plan is approved by
shareholders at the Annual Meeting. See Proposals 3 and 4.
Certain Federal Tax Consequences. The following is a discussion of certain
anticipated federal income tax consequences to recipients of awards made under
the Company's stock option plans under current law. The federal income tax
consequences depend on whether the options are incentive stock options or non-
qualified stock options.
Incentive Stock Options. For incentive stock options, no tax is due until
-----------------------
the sale of the option shares. If the shares of Common Stock acquired upon
exercise of an incentive stock option are not
20
<PAGE>
sold until two years after the grant date and one year after the exercise date,
any gain (the excess of the sale price over the exercise price) or loss (the
excess of the exercise price over the sale price) will be a long-term capital
gain or loss.
If the option shares are sold within two years after the grant date or
within one year after the exercise date, the sale is a "disqualifying
disposition." The optionee will generally recognize income in the year of the
"disqualifying disposition" equal to the gain (excess of the sale price over the
exercise price). The portion of the gain equal to the excess of the fair market
value of the Common Stock on the exercise date over the exercise price will be
compensation taxable as ordinary income, and any remaining gain will be long-
term or short-term capital gain depending on whether the shares were sold more
than one year after the option was exercised. If the "disqualifying disposition"
is a sale or exchange (other than a sale or exchange with certain persons
related to the optionee), the amount of compensation taxable as ordinary income
cannot exceed the excess of the sale price over the exercise price, even if the
sale price is less than the fair market value of the Common Stock on the
exercise date. If any of the exercise price is paid by surrendering shares of
Common Stock within two years after the grant date, proposed Internal Revenue
Service regulations may require the optionee to recognize compensation taxable
as ordinary income in the amount equal to the excess of the sale price over the
exercise price.
No tax is due at the time an incentive stock option is granted or
exercised. Special rules apply to optionees who are subject to the alternative
minimum tax. The Company may be entitled to a tax deduction in the year of the
"disqualifying disposition."
Non-Qualified Stock Options. For non-qualified stock options, tax is due
---------------------------
upon exercise of the option, even if the option shares are not sold when the
option is exercised. The optionee will be taxed upon exercise for ordinary
income in an amount per share equal to the difference between the exercise price
of the non-qualified stock option and the fair market value of the Common Stock
on the exercise date. The amount of such ordinary income will be determined
based upon the fair market value of the Common Stock on the date of recognition.
The Company will (subject to any applicable limitation contained in the Internal
Revenue Code of 1986, as amended (the "Code")) be entitled to a tax deduction
for the compensation taxable as ordinary income when a non-qualified stock
option is exercised. An optionee will not be deemed to receive any taxable
income at the time a non-qualified stock option is granted, nor will the Company
be entitled to a deduction at that time.
Upon a sale of the option shares, any gain (the excess of the sale price
over the fair market value of the Common Stock on the exercise date) or loss
(the excess of the fair market value of the Common Stock on the exercise date
over the sale price) will be a long-term capital gain or loss if the sale occurs
more than one year after the date of exercise (or, if later, the date when
income was recognized by the optionee). Otherwise, if the option shares are sold
less than a year after exercise, there will be a short-term capital gain or
loss.
If any of the exercise price of a non-qualified stock option is paid by
surrendering shares of Common Stock (including, based upon proposed regulations
under the Code, shares previously acquired upon exercise of an incentive stock
option), no gain or loss will be recognized on the shares surrendered. Option
shares equal to the number of shares surrendered will have the same basis and
holding period, for purposes of determining whether subsequent dispositions
result in long-term or
21
<PAGE>
short-term capital gain or loss, as the shares surrendered. The balance of the
option shares will be treated for federal income tax purposes as though issued
for an exercise price equal to the consideration, if any, paid by the optionee
in cash. The optionee's compensation, taxable as ordinary income upon exercise,
and the Company's deduction, is the same whether the exercise price is paid in
cash or in shares of Common Stock.
If a non-qualified stock option is exercised by a controlling person under
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") within six months of the grant date, the recognition of income may be
delayed until such shares may be resold without incurring liability under
Section 16(b) of the Exchange Act (generally six months after the grant date).
The foregoing is a general summary of current federal income tax treatment.
These tax rules are complex and subject to change. Each optionee should consult
his or her own tax advisor for more detailed information regarding the tax
consequences applicable to his or her own situation.
Other Benefit Plans
Incentive Plans. The Company has adopted an incentive plan for its
executive officers and other management employees. The incentive plan provides
for annual cash bonuses based upon the performance by the Company of specified
financial objectives and, for some participants, by the participant's individual
performance. Target awards are a percentage of base salary as of fiscal year
end. Financial objectives, any applicable individual performance objectives, and
target awards for the Named Executive Officers are determined by the
Compensation Committee. For the Company's Chief Executive Officer, Chief
Operating Officer and Executive Vice Presidents, the objectives are based on the
Company's earnings per share and individual performance objectives. Target
awards are 50% of base salary if financial objectives are met and not less than
100% of base salary if financial objectives are exceeded by specified
percentages and the individual objectives are met. Target awards for other Named
Executive Officers and certain other key employees are based on earnings per
share, other Company financial performance criteria and individual performance.
Target awards are generally 30% of base salary for the other named executive
officers if the financial and individual objectives are met and up to not less
than 50% of base salary if these objectives are exceeded. Target awards,
financial objectives and individual performance objectives for all other
participants are established by the Administrative Committee beginning.
1994 Employee Stock Purchase Plan. The 1994 Employee Stock Purchase Plan
(the "Purchase Plan") was adopted by the Board and approved by the shareholders
in August 1994. The Purchase Plan permits the Company to sell shares of Common
Stock to eligible employees at a discount from the lower of the market price at
the beginning or end of the plan year with funds set aside through payroll
deductions. Participants may withdraw shares purchased for their account under
the Purchase Plan at any time. Resale of shares may be subject to a holding
period established annually by the Compensation Committee of up to one year. The
purchases under the Purchase Plan receive certain tax benefits. A maximum of
750,000 shares may be purchased by employees pursuant to the Purchase Plan. The
Purchase Plan is administered by the Compensation Committee. The Company may, in
its discretion, terminate or amend the Purchase Plan at any time.
22
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Board established a Compensation Committee on August 24, 1993. During
fiscal 1995, the Compensation Committee was comprised of Ms. Hickey and Messrs.
Patrick and Feuer (for part of the year). None of the executive officers of the
Company currently serves on the compensation committee of another entity or on
any other committee of the board of directors of another entity performing
similar functions. Members of the Compensation Committee, or their affiliates,
have entered into the following transactions with the Company.
In connection with the several rounds of private equity financing of the
Company in December 1991, J.P. Morgan Investment Corporation ("J.P. Morgan")
purchased approximately 2,698,704 shares of Common Stock (some of which were
originally issued as preferred stock) for an aggregate purchase price of
$8,427,252. J.P. Morgan sold 148,069 shares of Common Stock in the Company's
initial public offering in September 1994 and 330,000 shares of Common Stock in
the Company's subsequent public offering in March 1995. The Company, J.P. Morgan
and certain other designated shareholders are parties to Recapitalization
Agreements dated as of December 3, 1991 and August 29, 1992, pursuant to which
J.P. Morgan, or any transferee of J.P. Morgan, may exchange its voting shares of
the Company's capital stock for nonvoting shares of the same number and class.
Mr. Patrick is an officer of J.P. Morgan.
In connection with the several rounds of private equity financing of the
Company, certain entities comprising the Sprout Group purchased an aggregate of
5,697,197 shares of Common Stock (some of which were originally issued as
preferred stock) for an aggregate purchase price of $16,397,293. Some of these
shares have subsequently been transferred to other entities within the Sprout
Group or sold. Ms. Hickey is a general partner of several limited partnerships
comprising, in part, The Sprout Group, and is a divisional Senior Vice President
of DLJ Capital Corporation. The Sprout Group is a division of DLJ Capital
Corporation. DLJ Capital Corporation and DLJ Securities Corporation are each
wholly-owned subsidiaries of Donaldson, Lufkin & Jenrette, Inc. Alliance is
effectively 59% owned by The Equitable Companies Incorporated, which effectively
owns 100% of Donaldson, Lufkin & Jenrette, Inc. DLJ Securities Corporation was
one of the Underwriters for the Company's initial public offering. Sprout VI,
Sprout Growth and DLJ Venture Capital Fund II, L.P. are each limited
partnerships associated with The Sprout Group and DLJ Capital Management, a
wholly-owned subsidiary of DLJ Capital Corporation, submanages ML Venture's and
Merrill Lynch Venture Capital Inc.'s investments in the Company (collectively
with Alliance, DLJ Capital Corporation and DLJ Securities Corporation, the "DLJ
Affiliates"). As of the date hereof, the DLJ Affiliates collectively owned
approximately 2.5% of the issued and outstanding Common Stock of the Company.
DLJ Securities Corporation performed investment banking and financial advisory
services on behalf of the Company in connection with the offering of the
Company's 9 1/8% Senior Subordinated Notes due 2004, the private equity
financing in January 1994, the Hanson Acquisition, the Company's initial public
offering, and the Company's subsequent public offerings, for which it received
customary fees.
23
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Executive Compensation Philosophy
The Compensation Committee of the Board of Directors (the "Committee")
consisted of Ms. Hickey, Mr. Patrick and Mr. Feuer (for a portion of the year)
during fiscal 1995, each of whom is a disinterested person under Rule 16b-3
under the Exchange Act. The Committee sets compensation policies applicable to
executive officers, has the authority to approve salaries and bonuses and other
compensation matters for these executive officers and administers the Company's
various stock option and stock purchase plans.
Executive Compensation Components
The Company's executive compensation policy is designed with the goals of
ensuring that an appropriate relationship exists between executive pay and
corporate performance, while at the same time motivating and retaining highly
qualified executive officers, and providing total compensation that is
competitive with companies in comparable industries or other companies of
comparable growth and performance. The key components of the Company's
compensation program are base salary, annual incentive bonus awards and equity
participation in the form of stock options and warrants. Executive officers are
also entitled to customary benefits generally available to all employees of the
Company, including group medical, dental and life insurance and 401(k) and
employee stock purchase plans.
Annual Cash Compensation. The Company was privately held until September
1994. Compensation of the Named Executive Officers for fiscal 1995 was based on
the executives' duties and responsibilities, financial performance of the
Company and other factors considered by the Committee. The Committee also
considered the success of the Named Executive Officers in developing and
executing the Company's acquisition, financing and strategic plans. All of the
Named Executive Officers received salary increases for fiscal 1995 ranging from
20% to 22% over fiscal 1994. The Committee believes that executive officer base
salaries and annual cash compensation for fiscal 1995 were reasonable and below
cash compensation paid by many companies in comparable industries and other
companies of comparable growth and performance.
Stock Options. Equity participation is a key component of the Company's
executive compensation program. Stock options are granted to Named Executive
Officers primarily based on the officer's contribution to the Company's growth
and profitability. Option grants are designed to retain executive officers and
motivate them to enhance shareholder value by aligning the financial interests
of the Named Executive Officers with those of the Company's shareholders. Stock
options provide an effective incentive for management to create stockholder
value over the long term since the option value depends on appreciation in the
price of the Common Stock over a number of years.
During fiscal 1995, the Committee granted options aggregating 1,350,000
shares of stock to four Named Executive Officers at a price of $20.00 per share:
Mr. Rysavy -- 525,000 shares; Mr. King -- 375,000 shares; and Mr. Jacobs and Mr.
Leno -- 225,000 shares each. The terms of these options were identical to those
of options previously granted under the Executive Plan. In making these grants,
the Committee considered incentive compensation of companies in comparable
industries
24
<PAGE>
or other companies of comparable growth and size, the success of these Named
Executive Officers in achieving the Company's acquisition, financing and
strategic plans, and the financial performance of the Company. The options vest
in 2005 and terminate in 2007, with accelerated vesting of 50% to 100% of such
options in the event that there is a change in control (as defined in the stock
options agreements) of the Company at a price of between $33.33 per share and
$43.33 per share or if the Common Stock trades at more than $33.33 per share
before June 30, 1997 (for 50% vesting) and $43.33 per share before June 30, 1998
(for 100% vesting) for specified periods. Holders may only exercise a 25%
portion of vested options for each year with respect to vesting that has been
accelerated due to trading price levels. Mr. Leno also received a grant under
the 1994 Plan of options to purchase 225,000 shares in August 1995. Mr. Trier
received a grant of options to purchase 190,000 shares in March 1996 in
connection with the U.S. Delivery merger.
Chief Executive Officer Compensation
Mr. Rysavy received a base salary of $256,732 in fiscal 1995, a 20%
increase over his fiscal 1994 base salary. Mr. Rysavy's employment agreement
provides for annual review of his base salary and adjustment in light of his
performance and the salary increases for the Company's other executive officers.
Mr. Rysavy was granted options to purchase 525,000 shares of the Common Stock.
In deciding upon an 20% increase in Mr. Rysavy's salary, and the grant of
options to purchase 525,000 shares under the Executive Plan, the Committee
focused on the importance of Mr. Rysavy to the continued growth and development
of the Company, his expertise in the industry, his demonstrated management
skills and ability to implement the Company's acquisition, financing and
strategic plans, his role in the consummation of the Company's initial and
subsequent public offerings and numerous acquisitions, and the Company's
achievement of other milestones. The Committee also considered the range of
salary increases for the Company's other Named Executive Officers.
Future Executive Officer Compensation
During fiscal 1994, William M. Mercer, Incorporated, a national
compensation consulting firm, prepared an analysis of the cash compensation
practices of a group of comparative companies extracted from compensation data
banks, surveys and recent proxy statements. The companies surveyed included
companies from the office products industry (Office Depot, Staples and
OfficeMax) and other selected high-growth or acquisition-oriented retailers and
health care companies, general industry fast-growth companies and companies with
market capitalization or sales comparable to the Company. After examination of
the survey data, the Committee determined that the cash compensation portion of
the Company's executive compensation program is generally somewhat less than the
amounts paid by comparable companies, but that the Company's total compensation
arrangements are generally satisfactory. The Committee intends to continue to
emphasize stock options and other forms of long term compensation, and to
periodically review all forms of executive compensation to ensure that the
Company can attract and retain key executives. Management has advised the
Committee of its desire to continue to have a substantial portion of executive
compensation directly tied to corporate performance.
The Company has adopted an incentive plan for its executive officers and
other management employees. The incentive plan provides for annual cash bonuses
based upon the performance by the
25
<PAGE>
Company of specified financial objectives. Financial objectives and target
awards for the chief executive officer and the other Named Executive Officers
are determined by the Committee. For the Company's Chief Executive Officer,
Chief Operating Officer and Executive Vice Presidents, the objectives for fiscal
1996 are based on the Company's earnings per share and individual performance.
Target awards for these executives are not yet firmly established for fiscal
1996, but are expected to be 50% of base salary if financial objectives are met
and not less than 100% of base salary if financial objectives are exceeded by
specified percentages and the individual objectives are met. Target awards for
other Named Executive Officers are based on earnings per share, other Company
financial performance criteria and individual performance. Target awards are not
yet firmly established for fiscal 1996, but are expected to be 30% of base
salary for the other named executive officers if the financial and individual
objectives are met and up to not less than 50% of base salary if these
objectives are exceeded. Individual objectives have not yet been established for
any participants for fiscal 1996.
In addition, the Company anticipates that it will continue to hire, appoint
or otherwise change senior managers and other key executives as it continues to
grow. Executive compensation and compensation policies may change as the Company
continues to grow and as management changes are implemented.
Tax Considerations
Amendments to the Internal Revenue Code of 1986 enacted in 1993 generally
limit the tax deductibility of compensation paid by a public company to its
chief executive officer and four other most highly compensated executive
officers to $1 million unless the executive compensation is awarded under a
performance-based plan approved by the shareholders of the company. Although the
Committee believes that tax deductibility is of value to the Company, it has
decided not to submit its incentive plan for shareholder approval at this time
because annual cash incentive compensation for any executive officer is unlikely
to exceed $1 million in the near future. The Committee may decide to submit the
incentive plan for shareholder approval if cash incentive compensation is likely
to exceed $1 million. The Executive Plan was submitted to and approved by the
shareholders in August 1994, and complies with the performance-based
requirements of the new tax laws.
Compensation Committee
Janet A. Hickey
Donald H. Patrick, Jr.
This report of the Compensation Committee shall not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act or under the Exchange Act,
except to the extent that the Company specifically incorporates this information
by reference, and shall not otherwise be deemed filed under the Securities Act
and the Exchange Act and shall not be deemed to be soliciting material.
26
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the percentage change in cumulative total
shareholder return on the Common Stock since September 23, 1994, the date the
Company's shares began trading on the Nasdaq National Market, with the
cumulative total return on the S&P 500 Index and the peer group index over the
same period. The comparison assumes $100 was invested on September 23, 1994 in
the Common Stock and in each of the indices and assumes reinvestment of
dividends, if any, since that date. The Company has not paid cash dividends on
the Common Stock. Historic stock price is not indicative of future stock price
performance.
[GRAPH APPEARS HERE]
RESEARCH DATA GROUP TOTAL RETURN - DATA SUMMARY
CEXP
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
-------------------------------------
9/23/94 2/24/95 3/2/96
<S> <C> <C> <C> <C>
Corporate Express Inc CEXP 100 156 296
S & P 500 1500 100 104 140
S & P RETL STRS COMPOSITE IRSC 100 95 104
</TABLE>
__________
(1) Assumes $100 investment on September 23, 1994.
This Stock Performance Graph shall not be deemed incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act or under the Exchange Act, except to the
extent that the Company specifically incorporates this information by reference,
and shall not otherwise be deemed filed under the Securities Act or the Exchange
Act and are not to be deemed to be soliciting material.
27
<PAGE>
CERTAIN TRANSACTIONS
In addition to transactions described in "Compensation Committee Interlocks
and Insider Participation," the Company is party to the following transactions
with its executive officers, directors and principal shareholders.
On October 23, 1993, OfficeMax, Inc. acquired 3,825,000 shares of Common
Stock for $23.5 million. Of these shares 3,750,000 were issued by the Company
and 75,000 were sold by Synergom, Inc., a corporation which is wholly owned by
Mr. Rysavy, the Company's Chairman of the Board and Chief Executive Officer. On
September 11, 1995, the Company purchased all of the shares of Common Stock held
by OfficeMax, Inc. Upon such purchase, Michael Feuer, OfficeMax's designee to
the Company's board of directors, resigned as a director.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors,
officers (including a person performing a principal policy-making function) and
persons who own more than 10% of a registered class of the Company's equity
securities ("10% Holders") to file with the Securities and Exchange Commission
("SEC") initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Directors, officers and
10% Holders are required by SEC regulations to furnish the Company with copies
of all of the Section 16(a) reports they file. Based solely upon a review of the
copies of the forms furnished to the Company and the representations made by the
reporting persons to the Company, the Company believes that during fiscal 1995
its directors, officers and 10% Holders complied with all filing requirements
under Section 16(a) of the Exchange Act, with the exception of Clayton Trier,
Sam Humphreys and Gary Grant, who each had one late filing, each reporting one
transaction.
SHAREHOLDER PROPOSALS
Shareholders may submit proposals on matters appropriate for shareholder
action at the Company's annual meetings consistent with regulations adopted by
the SEC. For shareholder proposals to be considered for inclusion in the proxy
statement and form of proxy relating to the 1997 annual meeting of shareholders,
they must be received by the Company not later than April 10, 1997. Such
proposals should be addressed to the Company at 325 Interlocken Parkway,
Broomfield, Colorado 80021, Attention: General Counsel.
OTHER MATTERS
Management does not intend to present, and has no information as of the
date of preparation of this Proxy Statement that others will present, any
business at the Annual Meeting other than business pertaining to matters
required to be set forth in the Notice of Annual Meeting and Proxy Statement.
However, if other matters requiring the vote of the shareholders properly come
before the Annual Meeting, it is the intention of the persons named in the
enclosed proxy to vote the proxies held by them in accordance with their best
judgment on such matters.
28
<PAGE>
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR
SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND THAT THE PRESENCE OF A
QUORUM MAY BE ASSURED. THE PROMPT RETURN OF YOUR SIGNED PROXY, REGARDLESS OF THE
NUMBER OF SHARES YOU HOLD, WILL AID THE COMPANY IN REDUCING THE EXPENSE OF
ADDITIONAL PROXY SOLICITATION. THE GIVING OF YOUR PROXY DOES NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
29
<PAGE>
EXHIBIT A
---------
ARTICLES OF AMENDMENT AND RESTATEMENT
OF CORPORATE EXPRESS, INC.
"Article Fourth of the Articles of Amendment and Restatement is amended to
read in full as follows:
ARTICLE IV
SHARES OF STOCK
A. Authorized Capital Stock. The aggregate number of shares that the
------------------------
Corporation shall have authority to issue is three hundred twenty-eight million
(328,000,00), consisting of three hundred million (300,000,000) shares of common
stock ("Common Stock"), par value $.0002 per share, three million (3,000,000)
share of Non-Voting Common Stock ("Non-Voting Common Stock"), par value $.0002
per share, and twenty-five million (25,000,000) shares of preferred stock
("Preferred Stock"), par value $.0001 per share.
B. Authority Relative to Undesignated Preferred Stock. The board of
--------------------------------------------------
directors of the Corporation shall be authorized, subject to limitations
prescribed by the Colorado Business Corporation Act and elsewhere herein, to
provide for the issuance of the shares of previously undesignated Preferred
Stock in one or more series, to establish from time to time the number of shares
to be included in such series of previously undesignated Preferred Stock, and to
fix the designation, powers, preferences and rights of each series of previously
undesignated Preferred Stock and the qualifications, limitations or restrictions
thereof.
C. Preemptive Rights. Unless otherwise approved by a resolution of the
-----------------
Corporation's board of directors, shareholders of the capital stock of the
Corporation shall not have the preemptive right to acquire unissued shares or
securities convertible into such shares or carrying a right to subscribe to or
acquire shares. Such provision shall apply to both shares outstanding and to
newly issued shares.
D. Dividends. Dividends on outstanding shares of Preferred Stock shall
---------
be paid or declared and set apart for payment before any dividends shall be paid
or declared and set apart for payment of the Common Stock with respect to the
same dividend period.
E. Liquidation, Dissolution or Winding Up. If upon any voluntary or
--------------------------------------
involuntary liquidation, dissolution or winding up of the Corporation, the
assets for distribution to holders of shares of Preferred Stock of all series
shall be insufficient to pay such holders the full preferential amount to which
they are entitled, then such assets shall be distributed ratably among the
shares of all series of Preferred Stock in accordance with the respective
preferential amounts (including unpaid cumulative dividends, if any) payable
with respect thereto.
F. Voting. Each holder of Common Stock shall have one vote on all
------
matters submitted to shareholders for each share of Common Stock standing in the
name of such holder on the books of
A-1
<PAGE>
the Corporation and entitled to vote, except that in the election of directors
each holder of Common Stock shall be entitled to vote all of the shareholder's
votes for as many persons as there are directors to be elected. Each holder of
Preferred Stock shall have the voting rights designated for such Preferred Stock
by the board of directors as authorized under Article IV, Section B hereof. In
the election of directors, cumulative voting shall not be allowed. Except as
otherwise provided herein, and except as otherwise required by law, all shares
of capital stock of the Corporation entitled to vote shall vote as a single
class on all matters submitted to the shareholders.
G. Non-Voting Common Stock. Except as required by the Colorado Business
-----------------------
Corporation Act, each holder of Non-Voting Common Stock shall not be entitled to
vote. Except for no voting rights, the rights, powers and preferences of the
Non-Voting Common Stock are identical to those of the Common Stock.
H. Quorum. At all meetings of the shareholders, the holders of a
------
majority of the shares outstanding and entitled to vote shall constitute a
quorum. If a quorum is present, the affirmative vote of a majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless the vote of a greater number or
voting by classes is required by the Colorado Business Corporation Act or these
Articles of Amendment and Restatement."
A-2
<PAGE>
EXHIBIT B
---------
CORPORATE EXPRESS, INC.
1996 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
ARTICLE I
PURPOSE
The purpose of the 1996 Stock Option Plan for Outside Directors (the
"Plan") is to enable Corporate Express, Inc. (the "Company") to attract and
retain outside directors and to strengthen the mutuality of interests between
such directors and the Company's stockholders.
ARTICLE II
DEFINITIONS
For purposes of the Plan, the following terms shall have the following
meanings:
2.1 "BOARD" shall mean the Board of Directors of the Company.
-----
2.2 "CHANGE OF CONTROL" shall mean the occurrence of any one of the
-----------------
following: (i) the Company enters into an agreement of reorganization, merger
or consolidation pursuant to which it is not the surviving corporation, other
than a transaction that is accounted for as a pooling of interests, (ii) the
Company sells all or substantially all its assets, or (iii) in excess of 50% of
the issued and outstanding shares of Common Stock is acquired by a single
purchaser or group of related purchasers (other than the Company, a subsidiary
of the Company or an employee benefit plan sponsored by the Company or a
subsidiary).
2.3 "CODE" shall mean the Internal Revenue Code of 1986, as amended,
----
and rules and regulations under the Internal Revenue Code of 1986, as amended.
2.4 "COMMON STOCK" shall mean the Common Stock, par value $.0002 per
------------
share, of the Company.
B-1
<PAGE>
2.5 "DISABILITY" shall mean a disability due to any medically
----------
determinable physical or mental impairment that prevents a director from
fulfilling his or her duties as a director, as determined in the reasonable
judgment of the Board.
2.6 "EFFECTIVE DATE" shall mean the date on which the Plan is
--------------
approved by the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock present, or represented, and entitled to vote at a duly
held meeting of the stockholders of the Company.
2.7 "ELIGIBLE DIRECTOR" shall mean any member of the Board who, on
-----------------
the date on which Options are to be granted, is not an officer or employee of
the Company or any of the Company's subsidiaries, but shall exclude any such
member of the Board who advises the Company in writing of his or her desire not
to participate in the Plan.
2.8 "FAIR MARKET VALUE" for purposes of the Plan, unless otherwise
-----------------
required by the Code, shall mean, as of any date, the average of the high and
low sales prices of a share of Common Stock as reported on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or, if not listed or traded on any such exchange, on the Nasdaq Stock
Market, or, if not so listed or traded, the fair market value as determined by
the Board, which determination shall be conclusive.
2.9 "OPTIONEE" shall mean an individual to whom a Stock Option has
--------
been granted under the Plan.
2.10 "STOCK OPTION" or "OPTION" shall mean any option to purchase
------------ ------
shares of Common Stock granted pursuant to Article VI.
ARTICLE III
ADMINISTRATION
3.1 ADMINISTRATION. The Plan shall be administered and interpreted
--------------
by the Board.
3.2 GUIDELINES. Subject to Article VII, the Board shall have the
----------
authority to adopt, alter and repeal administrative rules, guidelines and
practices governing the Plan as it, from time to time, deems advisable; to
interpret the terms and provisions of the Plan and any Option granted under the
Plan (and any related agreements); and to otherwise supervise the administration
of the Plan. The Board may correct any defect, supply any omission, conform the
Plan to any change in law or regulation, or reconcile any inconsistency or
ambiguity in the Plan or in any Option in the manner and to the extent it shall
deem necessary to carry the Plan into effect. Notwithstanding the foregoing, no
action
B-2
<PAGE>
of the Board under this Section 3.2 shall impair the rights of any Optionee
without such person's consent, unless otherwise required by law.
3.3 DECISIONS FINAL. Any decision, interpretation or other action
---------------
made or taken in good faith by the Board in accordance with the Plan shall be
final, binding and conclusive on the Company, all members of the Board and their
respective heirs, executors, administrators, successors and assigns.
3.4 DELEGATION. The Board may delegate any or all of its
----------
administrative responsibilities under the Plan to officers or employees of the
Company.
ARTICLE IV
SHARE LIMITATION
4.1 SHARES. The maximum aggregate number of shares of Common Stock
------
that may be issued under the Plan shall be 250,000 shares of Common Stock
(subject to any increase or decrease pursuant to Section 4.2), which may be
either authorized and unissued shares of Common Stock or issued shares of Common
Stock that have been reacquired by the Company. If any Option granted under the
Plan shall expire, terminate or be cancelled for any reason without having been
exercised in full, the number of unpurchased shares shall again be available for
the purposes of the Plan.
4.2 CHANGES. In the event of any merger, reorganization,
-------
consolidation, recapitalization, dividend (other than a regular cash dividend),
stock split, or other change in the capital structure of the Company affecting
the Common Stock, such substitution or adjustment shall be made in the maximum
aggregate number of shares that may be issued under the Plan, in the number of
shares for which Stock Options are to be granted to Eligible Directors pursuant
to Section 6.2 and in the number of shares subject to, and the option price of,
outstanding Options as may be determined to be appropriate by the Board, in its
sole discretion, provided that the number of shares subject to any Option shall
always be a whole number.
ARTICLE V
ELIGIBILITY
5.1 ELIGIBLE DIRECTORS. Only Eligible Directors shall be granted
------------------
Options under the Plan.
B-3
<PAGE>
ARTICLE VI
STOCK OPTIONS
6.1 OPTIONS. All Stock Options granted under the Plan shall be non-
-------
qualified stock options (i.e., options that do not qualify as incentive stock
----
options under Section 422 of the Code).
6.2 GRANTS. On the Effective Date, each Eligible Director shall
------
automatically be granted Stock Options to purchase 25,000 shares of Common
Stock, and each Eligible Director who first becomes a member of the Board after
the Effective Date shall automatically be granted Stock Options to purchase
25,000 shares of Common Stock on the date of his or her selection or election to
the Board. For as long as the Plan remains in effect, each Eligible Director
shall also automatically be granted Stock Options to purchase 10,000 shares of
Common Stock on each anniversary of the date of such initial grant (beginning on
the second such anniversary), provided such person is an Eligible Director on
such date.
6.3 TERMS OF OPTIONS. Options granted under the Plan shall be
----------------
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the Board
shall, in its discretion, determine:
(a) STOCK OPTION CERTIFICATE. Each Stock Option shall be
------------------------
evidenced by, and subject to the terms of, a Stock Option Certificate executed
by the Company. The Stock Option Certificate shall specify the number of shares
of Common Stock subject to the Stock Option, the option price, the option term,
and the other terms and conditions applicable to the Stock Option.
(b) OPTION PRICE. The option price per share of Common Stock
------------
purchasable upon exercise of a Stock Option shall be equal to the Fair Market
Value of a share of Common Stock on the date the Option is granted.
(c) OPTION TERM. The term of each Stock Option shall be ten
-----------
years from the date of grant.
(d) EXERCISABILITY. Stock Options granted on the Effective
--------------
Date or to Eligible Directors upon their first becoming members of the Board
shall become exercisable as follows: 40% on the first anniversary of the date
of grant, 40% on the second anniversary of the date of grant and 20% on the
third anniversary of the date of grant. All other Stock Options granted pursuant
to Section 6.2 shall become exercisable as follows: 50% on the first
anniversary of the date of grant and 50% on the second anniversary of the date
of grant.
B-4
<PAGE>
(e) METHOD OF EXERCISE. Stock Options may be exercised in
------------------
whole or in part at any time during the option term by giving written notice of
exercise to the Secretary or Assistant Secretary of the Company, specifying the
number of shares of Common Stock to be purchased. Such notice shall be
accompanied by payment in full of the option price and, if requested, by the
representation described in Section 9.2. The option price may be paid in cash or
by check payable to the Company or in such other form as the Board deems
acceptable. Unless otherwise determined by the Board, in its sole discretion, at
the time of grant, payment in full or in part may be made in the form of Common
Stock owned beneficially and of record by the Optionee (and for which the
Optionee has good title free and clear of any liens and encumbrances) or by
reduction in the number of shares issuable upon such exercise, based, in either
case, on the Fair Market Value of the Common Stock on the exercise date. Upon
payment in full of the option price, as provided herein, a stock certificate or
stock certificates representing the number of shares of Common Stock to which
the Optionee is entitled shall be issued and registered in the name of and
delivered to the Optionee. An Optionee shall not be deemed to be the holder of
Common Stock, or to have the rights of a holder of Common Stock, with respect to
shares subject to the Option, unless and until a stock certificate representing
such shares of Common Stock is issued to such Optionee.
(f) DEATH. If an Optionee ceases to be a member of the Board
-----
by reason of death, one-half of the Optionee's Stock Options that were not
exercisable on the date of such Optionee's death shall become immediately
exercisable and the legal representative of the Optionee's estate shall be
entitled, for a period of 90 days after the date of the Optionee's death or
until the expiration of the stated term of the Stock Option, whichever is
shorter, to exercise any of the Optionee's Stock Options that were exercisable
on the date of death and any Stock Options as to which the exercisability was
accelerated pursuant to this subsection (f).
(g) DISABILITY. If an Optionee ceases to be a member of the
----------
Board by reason of Disability, one-half of the Optionee's Stock Options that
were not exercisable on the date on which the Optionee ceased to be a member of
the Board shall become immediately exercisable and the Optionee shall be
entitled, for a period of 90 days after such date or until the expiration of the
stated term of the Stock Option, whichever is shorter, to exercise any Stock
Options that were exercisable on the date on which the Optionee ceases to be a
member of the Board and any Stock Options as to which the exercisability was
accelerated pursuant to this subsection (g); provided, however, that if the
Optionee dies during such 90-day period, any unexercised Stock Options shall
thereafter be exercisable by the legal representative of the Optionee's estate,
to the extent it was exercisable by the Optionee at the date of death, for a
period of 90 days after the date of the Optionee's death or until the expiration
of the stated term of the Stock Option, whichever is shorter.
(h) OTHER TERMINATION. If an Optionee ceases to be a member of
-----------------
the Board by reason of retirement or for any reason other than death or
Disability, all Stock
B-5
<PAGE>
Options held by such Optionee shall terminate on the date on which the Optionee
ceases to be a member of the Board.
(i) CHANGE OF CONTROL. In the event of a Change of Control,
-----------------
one-half of all outstanding Stock Options shall immediately become fully
exercisable, and upon payment by the Optionee of the option price (and, if
requested, delivery of the representation described in Section 9.2), a stock
certificate representing the Common Stock covered thereby shall be issued and
registered in the name of and delivered to the Optionee as soon as practicable.
(j) NON-TRANSFERABILITY OF OPTION. No Stock Option shall be
-----------------------------
transferable by an Optionee otherwise than by will or by the laws of descent and
distribution, to the extent consistent with the terms of the Plan and the
Option, and all Stock Options shall be exercisable, during an Optionee's
lifetime, only by the Optionee.
ARTICLE VII
TERMINATION OR AMENDMENT
7.1 TERMINATION OR AMENDMENT OF THE PLAN. The Board may at any time
------------------------------------
amend, discontinue or terminate the Plan in whole or in part (including any
amendment deemed necessary to ensure that the Company may comply with any
regulatory requirement referred to in Article IX); provided, however, that,
unless otherwise required by law, the rights of an Optionee with respect to
Options granted prior to such amendment, discontinuance or termination, may not
be impaired without the consent of such Optionee and, provided further, without
the approval of the Company's stockholders, no amendment may be made that would
(i) materially increase the aggregate number of shares of Common Stock that may
be issued under the Plan (except by operation of Section 4.2); (ii) materially
modify the requirements as to eligibility to participate in the Plan; or (iii)
materially increase the benefits accruing to participants under the Plan.
Notwithstanding the foregoing, the provisions of Articles V and VI may not be
amended more than once every six months, other than to comport with changes in
the Code, the Employee Retirement Income Security Act, or the rules thereunder.
7.2 AMENDMENT OF OPTIONS. The Board may amend the terms of any
--------------------
Stock Options, prospectively or retroactively, but, subject to Article IV, no
such amendment or other action by the Board shall impair the rights of any
Optionee without the Optionee's consent.
B-6
<PAGE>
ARTICLE VIII
UNFUNDED PLAN
8.1 UNFUNDED STATUS OF PLAN. The Plan is intended to constitute an
-----------------------
"unfunded" plan for incentive compensation. With respect to any payment not yet
made to an Optionee by the Company, nothing contained herein shall give any such
individual any rights that are greater than those of a general creditor of the
Company.
ARTICLE IX
GENERAL PROVISIONS
9.1 NONASSIGNMENT. Except as otherwise provided in the Plan,
-------------
Options granted hereunder and the rights and privileges conferred thereby shall
not be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise), and shall not be subject to execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of such Option, right or privilege contrary to
the provisions hereof, or upon the levy of any attachment or similar process
thereon, such Option and the rights and privileges conferred thereby shall
immediately terminate and the Option shall immediately be forfeited to the
Company.
9.2 LEGEND. The Board may require each person purchasing shares
------
upon exercise of an Option to represent to the Company in writing that the
Optionee is acquiring the shares for investment only and not for resale or with
a view to distribution and to make such other representations as the Board may
require. The stock certificates representing such shares may include any legend
which the Board deems appropriate to reflect any restrictions on transfer.
All certificates representing shares of Common Stock delivered under
the Plan shall be subject to such stock transfer orders and other restrictions
as the Board may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed or traded or the Nasdaq Stock Market, any
applicable Federal or state securities law, and any applicable corporate law,
and the Board may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions.
9.3 OTHER PLANS. Nothing contained in the Plan shall prevent the
-----------
Board from adopting other or additional compensation arrangements, subject to
stockholder
B-7
<PAGE>
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
9.4 NO RIGHT TO CONTINUE RELATIONSHIP. Neither the Plan nor the
---------------------------------
grant of any Option under the Plan shall confer upon any person any right to
continue as a director of the Company or obligate the Company to nominate any
director for reelection by the Company's stockholders.
9.5 LISTING AND OTHER CONDITIONS.
----------------------------
(a) The issuance of any shares of Common Stock upon exercise of
an Option shall be conditioned upon such shares being listed on a national
securities exchange or on the Nasdaq Stock Market. The Company shall have no
obligation to issue such shares unless and until such shares are so listed, and
the right to exercise any Option shall be suspended until such listing has been
effected.
(b) If at any time counsel to the Company shall be of the
opinion that any sale or delivery of shares of Common Stock upon exercise of an
Option is or may in the circumstances be unlawful or result in the imposition of
a material amount of excise taxes under the statutes, rules or regulations of
any applicable jurisdiction, the Company shall have no obligation to make such
sale or delivery, or to make any application or to effect or to maintain any
qualification or registration under the Securities Act of 1933, as amended, or
otherwise with respect to shares of Common Stock, and the right to exercise any
Option shall be suspended until, in the opinion of such counsel, such sale or
delivery shall be lawful or shall not result in the imposition of a material
amount of excise taxes.
(c) Upon termination of any period of suspension under this
Section 9.5, any Option affected by such suspension which shall not then have
expired or terminated shall be reinstated as to all shares available before such
suspension and as to shares which would otherwise have become available during
the period of such suspension, but no such suspension shall extend the term of
any Option.
9.6 GOVERNING LAW. The Plan and actions taken in connection
-------------
herewith shall be governed and construed in accordance with the laws of the
State of Colorado.
9.7 CONSTRUCTION. Wherever any words are used in the Plan in the
------------
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.
9.8 LIABILITY OF THE BOARD. No member of the Board nor any employee
----------------------
of the Company or any of its subsidiaries shall be liable for any act or action
hereunder,
B-8
<PAGE>
whether of omission or commission, by any other member of the Board or employee
or by any agent to whom duties in connection with the administration of the Plan
have been delegated or, except in circumstances involving bad faith, gross
negligence or fraud, for anything done or omitted to be done by himself.
9.9 COSTS. The Company shall bear all expenses incurred in
-----
administering the Plan, including expenses of issuing Common Stock upon the
exercise of Options.
9.10 SEVERABILITY. If any part of the Plan shall be determined to be
------------
invalid or void in any respect, such determination shall not affect, impair,
invalidate or nullify the remaining provisions of the Plan which shall continue
in full force and effect.
9.11 SUCCESSORS. The Plan shall be binding upon and inure to the
----------
benefit of any successor or successors of the Company.
9.12 HEADINGS. Article and section headings contained in the Plan
--------
are included for convenience only and are not to be used in construing or
interpreting the Plan.
ARTICLE X
TERM OF PLAN
10.1 EFFECTIVE DATE. The Plan shall be effective as of the Effective
--------------
Date.
10.2 TERMINATION. Unless sooner terminated, the Plan shall terminate
-----------
ten years after the Effective Date and no Options shall be granted thereafter.
Termination of the Plan shall not affect Options granted before such date, which
shall continue to be exercisable, in accordance with the terms of the Plan,
after the Plan terminates.
B-9
<PAGE>
CORPORATE EXPRESS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 8, 1996
The undersigned shareholder(s) of Corporate Express, Inc., a Colorado
corporation (the "Company"), revoking all previous proxies, hereby appoints
Gary M. Jacobs and Robert L. King, and each of them acting individually, as the
attorneys and proxies of the undersigned, with full power of substitution, to
cast all votes for all shares of Common Stock of the Company which the
undersigned would be entitled to cast if personally present at the Annual
Meeting of Shareholders of the Company, to be held at the Boulderado Hotel,
2115 13th Street, Boulder, Colorado, on Thursday, August 8, 1996 at 9:00 a.m.
(local time), and any and all adjournments or postponements thereof. Said
proxies are authorized and directed to vote as indicated with respect to the
following matters:
(CONTINUED ON THE OTHER SIDE)
<PAGE>
[X] Please mark
your votes
as this
FOR all
nominees listed WITHHOLD
(except as AUTHORITY
marked to the to vote for all
contrary) nominees listed
1. ELECTION OF DIRECTORS: Jirka Rysavy, [_] [_]
Robert L. King, Janet A. Hickey,
Clayton K. Trier, Mo Siegel.
Shareholders may withhold authority to vote for any individual nominee by
striking a line through the above nominee's name.
FOR AGAINST ABSTAIN
2. To approve an amendment to the Company's [_] [_] [_]
amended and restated Articles of Incorporation
to increase the number of shares of Common Stock
authorized from 100,000,000 to 300,000,000.
3. To approve an amendment to the Corporate Express, [_] [_] [_]
Inc. 1994 Stock Option and Incentive Plan to
increase the number of shares authorized for grant
from 1,875,000 to 6,375,000.
4. To approve an amendment to the Corporate Express, [_] [_] [_]
Inc. 1994 Executive Stock Option Plan to increase
the number of shares authorized for grant from
2,250,000 to 3,750,000.
FOR AGAINST ABSTAIN
5. To approve the 1996 Corporate Express, Inc. Stock [_] [_] [_]
Option Plan for Outside Directors.
6. To vote on such other business which may properly
come before the 1996 Annual Meeting of Shareholders
and any and all adjournments or postponements thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. UNLESS OTHERWISE
SPECIFIED, THE SHARES WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES FOR
DIRECTORS AND THE OTHER PROPOSALS SET FORTH ABOVE. THIS PROXY ALSO DELEGATES
DISCRETIONARY AUTHORITY TO VOTE WITH RESPECT TO ANY OTHER BUSINESS WHICH MAY
PROPERLY COME BEFORE THE 1996 ANNUAL MEETING OF SHAREHOLDERS AND ANY AND ALL
ADJOURNMENTS OR POSTPONEMENTS THEREOF.
++
+ THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS, PROXY STATEMENT AND ANNUAL REPORT ON FORM 10-K OF CORPORATE
EXPRESS, INC.
Signature(s) ___________________________ Dated: ________________________ , 1996
NOTE: Please sign this Proxy exactly as the name(s) appear hereon. When
signing as attorney-in-fact, executor, administrator, trustee or guardian,
please add your title as such. Proxies executed in the name of a corporation
should be signed on behalf of the corporation by a duly authorized officer.
When shares are owned in the name of two or more persons, all persons should
sign.
PLEASE SIGN, DATE AND RETURN IN THE ENCLOSED POSTAGE PAID ENVELOPE.
