<PAGE>1
Registration No. 333-8715
Filed Pursuant to Rule 424(b)(2)
of the Securities Act of 1933,
as amended
PROSPECTUS
2,632,717 Shares
CompUSA Inc.
Common Stock
($0.01 par value)
This Prospectus relates to the proposed sale from time to time by
certain holders (the "Selling Stockholders") of up to 2,632,717 shares (the
"Shares") of Common Stock, par value $0.01 per share (the "Common Stock"), of
CompUSA Inc. ("CompUSA" or the "Company"). None of the proceeds from the sale of
the Shares by the Selling Stockholders will be received by the Company.
The Shares may be offered from time to time for the account of the
Selling Stockholders in the amount and in the manner and on the terms and
conditions described herein. The sale of the Shares by the Selling Stockholders
may be effected in one or more transactions (which may include block
transactions) in the over-the-counter market, on the New York Stock Exchange
(the "NYSE") or other exchanges on which the Shares may be traded, in privately
negotiated transactions, through the writing of options on the Shares (whether
such options are listed on an options exchange or otherwise) or by a combination
of such methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. Certain of the Selling Stockholders may
distribute their shares from time to time to their limited and/or general
partners, who may sell such shares pursuant to this Prospectus. Each Selling
Stockholder may pledge all or a portion of the Shares owned by him or her as
collateral in loan transactions. Upon default by such a Selling Stockholder, the
pledgee in such loan transaction would have the same rights of sale as the
Selling Stockholder under this Prospectus. Each Selling Stockholder may also
transfer shares owned by him by gift, and upon such transfer the donee would
have the same rights of sale as such Selling Stockholder under this Prospectus.
See "Selling Stockholders" and "Plan of Distribution."
The Common Stock of the Company is traded on the NYSE under the symbol
"CPU." On August 13, 1996, the last sale price for the Common Stock as reported
by the NYSE was $44.25 per share.
For a discussion of certain factors that should be considered by
prospective purchasers of the Common Stock offered hereby, see "Risk Factors"
commencing on page 6 of this Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The Company has agreed to bear certain expenses (excluding any
underwriting fees, expenses, discounts or other costs payable to any
underwriter, broker or dealer) in connection with the registration and sale of
the Shares being offered by the Selling Stockholders, estimated to be $104,117.
The Company has agreed to indemnify the Selling Stockholders against certain
liabilities, including certain liabilities under the Securities Act of 1933, as
amended (the "Securities Act").
The Selling Stockholders and any broker-dealers or agents that
participate with the Selling Stockholders in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions received by them and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
The date of this Prospectus is August 14, 1996
<PAGE>2
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER
OR SOLICITATION IS UNLAWFUL.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and
at Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of
such materials can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, the Commission maintains a site on the Internet World Wide
Web, which can be accessed at http://www.sec.gov, and which contains reports,
proxy statements and other information regarding registrants that file
electronically with the Commission. The Common Stock is listed on the NYSE.
Reports, proxy statements and other information concerning the Company can also
be inspected and copied at the offices of the NYSE at 20 Broad Street, New York,
New York 10005.
ADDITIONAL INFORMATION
The Company has filed with the Commission under the Securities Act a
Registration Statement on Form S-3 with respect to the shares of Common Stock
offered hereby, of which this Prospectus forms a part. This Prospectus omits
certain information contained in the Registration Statement, and reference is
made to the Registration Statement, including the exhibits thereto, for further
information with respect to the Company and the securities offered hereby.
Statements contained in this Prospectus concerning the provisions of such
documents are necessarily summaries of such documents and each such statement is
qualified in its entirety by reference to the copy of the applicable document
filed with the Commission. Copies of the Registration Statement and the exhibits
and schedules thereto may be inspected, without charge, at the offices of the
Commission, or obtained at prescribed rates from the Public Reference Section of
the Commission at 450 Fifth Street N.W., Washington, D.C.
20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended June
24, 1995, the Company's Quarterly Reports on Form 10-Q for the quarterly periods
ended September 23, 1995, December 23, 1995, and March 23, 1996, the Company's
Current Report on Form 8-K, dated May 16, 1996, the Company's Current Report on
Form 8-K, dated May 30, 1996 (including any amendments thereto), the Company's
Current Report on Form 8-K, dated August 14, 1996, and the description of the
Company's Common Stock which is contained in a Registration Statement on Form
8-A filed with the Commission on May 5, 1994, as amended by the Company's
Registration Statement on Form 8-A/A, filed with the Commission on November 14,
1995, and any amendment or reports filed for the purpose of updating such
description, are hereby incorporated by reference in this Prospectus except as
superseded or modified herein or therein.
<PAGE>3
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of this offering (the
"Offering") shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of the filing of such documents. Any
statement contained in a document incorporated by reference shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein or in any
accompanying prospectus supplement modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon written or oral request, a copy of any or
all of the documents incorporated herein by reference (without exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
such documents). Requests should be directed in writing to CompUSA Inc., 14951
North Dallas Parkway, Dallas, Texas 75240, Attention: Assistant Secretary, or by
telephone at (214) 982-4000.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements under the captions "The Company" and "Risk Factors"
and elsewhere in this Prospectus and in the documents incorporated by reference
herein constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among other things, the following: general economic and
business conditions; variability of operations; changes in product demand; the
availability of products; changes in competition; the ability of the Company to
open and operate new stores and enter new businesses on a profitable basis in
accordance with its plans; real estate market fluctuations; interest rate
fluctuations; dependence on manufacturers' product development; various
inventory risks due to changes in market conditions; business abilities and
judgment of personnel; availability of qualified personnel; changes in, or
failure to comply with, governmental regulations; ability to obtain adequate
financing in the future; and other factors indicated in this Prospectus and in
the Company's filings with the Commission incorporated by reference herein. See
"Risk Factors." See the Company's filings with the Commission for discussions
identifying some important factors that could cause actual results to vary
materially from those anticipated in the forward-looking statements made by the
Company, including but not limited to the respective "Management's Discussion
and Analysis of Financial Condition and Results of Operations" discussions in
the Company's Annual Report on Form 10-K for the fiscal year ended June 24,
1995, and in the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended September 23, 1995, December 23, 1995, and March 23, 1996, as well
as the respective "Commitments and Contingencies" notes of the "Notes to
Consolidated Financial Statements" included in such periodic reports.
<PAGE>4
THE COMPANY
The Company's fiscal year is a 52/53 week year ending on the last
Saturday of each June. As used herein, the terms "fiscal 1994," "fiscal 1995,"
"fiscal 1996" and "fiscal 1997" refer to the Company's fiscal years ended or
ending on June 25, 1994, June 24, 1995, June 29, 1996 and June 28, 1997,
respectively.
CompUSA is a leading retailer and reseller of microcomputers and
related products and services, principally through its Computer Superstores(TM)
located throughout the United States. Although retail sales through its Computer
Superstores are the largest component of the Company's business, the Company
also engages in direct marketing to corporate, government and education
customers, mail order sales, training in software applications and technical
services.
CompUSA opened its first retail store in April 1985 and its first
Computer Superstore in April 1988. The Company currently operates 106 Computer
Superstores in 50 major metropolitan markets in 33 states. The stores average
approximately 27,000 square feet and achieved average sales per square foot in
fiscal 1995 of $1,336. CompUSA's Computer Superstores offer several thousand
hardware, software, accessory and related products at competitive prices. The
Company's training and technical service businesses are operated primarily
through the stores. In addition, CompUSA has outbound sales and telemarketing
operations in each of its stores that make direct sales to corporate, government
and education customers. Certain of the Company's direct sales are fulfilled
through a central warehouse facility located in the Dallas/Fort Worth area. The
Company believes that its large format Computer Superstore concept, combined
with a high level of customer service and technical support and an innovative
merchandising strategy, provides the Company with advantages over its
competitors, enabling the Company to leverage its fixed investments more
effectively and to improve its profitability. In addition, the Company believes
that its Computer Superstores, coupled with its strategy to operate other
businesses through these stores, should position CompUSA to take advantage of
the growth opportunities and rapidly changing dynamics within the microcomputer
products and services industry.
In May 1996, the Company acquired PCs Compleat, Inc. ("PCs Compleat"),
a leading direct reseller of brand-name microcomputers and peripherals. PCs
Compleat operates through a centralized facility with integrated telephone,
computer and distribution systems. The Company believes that the acquisition of
PCs Compleat provides a vehicle to more rapidly expand the Company's position in
the computer mail order business.
The Company believes that its strong relationships with its vendors and
its high purchasing volume provide it with access to substantially all
microcomputer hardware, software, accessory and related products and allow it to
purchase nearly all of these products at or near the lowest price available.
Hardware products, which constitute over one-half of CompUSA's net sales,
include products from, among others, Apple, Canon, Compaq, Digital, Epson,
Hewlett-Packard, IBM, Maxtor, NEC, Packard Bell, Sony, Texas Instruments and
Toshiba. The Company also markets private label microcomputers and related
products under the Compudyne(R) brand. Software packages include products from
Broderbund, Claris, IBM, Intuit, Lotus, Microsoft, Novell and Symantec.
Accessories sold in the Company's stores include products from 3M, Avery,
Curtis, Daiseytek, Fellowes, Gemini, Hewlett-Packard, Iomega, Kensington,
Microsoft, O'Sullivan, Sony, U.S. Robotics and Western Digital.
The Company's marketing strategy is designed to convey a user friendly,
service-oriented image while communicating CompUSA's customer service, breadth
and depth of selection and competitive pricing. For its retail customers, the
Company has established an advertising program based on chain-wide color
preprint newspaper inserts that emphasize particular products and highlight the
Company's mail order telephone number, 1-800-COMPUSA. For direct sales to
corporate, government and education customers, the Company primarily uses
television, radio and print advertising to increase awareness of its direct
sales capabilities and to support the outbound marketing operations in each of
its stores.
CompUSA's store expansion strategy is to continue its geographic
diversification throughout the United States in markets that fit the Company's
expansion criteria. The Company opened 20 new stores in fiscal 1996 and plans to
open approximately 25 to 30 new stores in fiscal 1997. The Company expects that
approximately one-half
<PAGE>5
of its new stores in fiscal 1997 will open in existing markets and approximately
one-half will open in new markets. A majority of the new stores will be based on
the current store prototype of approximately 27,000 square feet, although the
Company plans to open some smaller stores designed for markets less populated
than CompUSA's traditional markets.
The Company's principal executive offices are located at 14951 North
Dallas Parkway, Dallas, Texas 75240, and its telephone number is (214) 982-4000.
<PAGE>6
RISK FACTORS
In addition to the other information contained in this Prospectus,
prospective investors should consider carefully the factors listed below in
evaluating an investment in the Shares.
Reliance on Successful Expansion
CompUSA's success is dependent to a significant degree upon its ability
to open and operate new stores profitably, particularly in new markets, to
increase sales at existing stores and in existing businesses and to enter new
businesses on a profitable basis. The Company's performance is also dependent to
a significant degree upon its ability to hire, train and integrate qualified
employees into its operations and, particularly because the Company operates on
a high-volume, low-margin basis, upon its ability to manage and control both the
anticipated growth and the expanded operations of a larger business. The Company
opened 20 new stores in fiscal 1996 and plans to open approximately 25 to 30 new
stores in fiscal 1997. There can be no assurances that the Company will be able
to locate and obtain favorable store sites to meet its expansion goals, resolve
zoning and other regulatory issues relating to those sites, attract and retain
competent personnel, open new stores on a timely and cost-efficient basis or
operate the new and existing stores on a profitable basis. CompUSA plans to open
new stores in existing markets, which may result in the diversion of sales from
existing stores and thus some reduction in comparable store sales.
Quarterly Fluctuations; Variability of Operations
The Company's quarterly results of operations may fluctuate
significantly as the result of the timing of the opening of, and the amount of
net sales contributed by, new stores and the timing of costs associated with the
selection, leasing, construction and opening of new stores, as well as seasonal
factors, product introductions and changes in product mix. CompUSA believes that
its business is seasonal, with sales and earnings being relatively lower during
the first and fourth fiscal quarters than in the second and third fiscal
quarters. In addition, excluding the effects of new store openings, the
Company's inventories and related short-term financing needs have been seasonal,
with the greatest requirements occurring during its second fiscal quarter. The
Company's operating results may also be affected by changes in economic
conditions in the markets where its stores are located, as well as by weather
and other natural conditions.
The Company's operating results in recent years have been highly
variable. In this regard, the Company had a net loss of $16.8 million in fiscal
1994, net income of $23.0 million in fiscal 1995 and net income of $45.5 million
for the first three quarters of fiscal 1996. The Company's business remains
volatile, and there can be no assurances that the Company's recent operating
results are indicative of future performance.
Dependence on Product Development
CompUSA's operating results are, and will continue to be, subject in
part to the introduction and acceptance of new products in the microcomputer
hardware and software industry. For example, consumer demand may be affected by
the successful introduction, or lack thereof, of new hardware, peripherals and
software packages. Any decline in demand, which could be caused by lack of
successful product development, delays in product introductions, product related
difficulties or lack of consumer acceptance, could adversely affect the growth
rate of sales of microcomputer products and services and could adversely affect
the Company's operating results.
Industry and Competition
The microcomputer industry is undergoing significant change. Rapid
technological advances, in combination with an increasingly computer literate
population, have increased the use and popularity of microcomputers, resulting
in the emergence and growth of a variety of distribution channels. The Company
believes that customers, having gained familiarity with microcomputers, require
less assistance in making their purchasing decisions and have become
increasingly price sensitive. At the same time, intense competition for market
share has forced hardware and accessory manufacturers, along with software
vendors, to reduce prices and
<PAGE>7
seek new channels through which to sell their products. These factors have
resulted in widespread and intense competition among microcomputer product
resellers. In each of its businesses, CompUSA competes with a large number and
variety of competitors, some of whom are larger and have substantially greater
resources than the Company. There can be no assurances that changes in the
competitive environment or strategic direction of the microcomputer industry
would not have a material adverse effect on the Company.
CompUSA believes that the major competitive factors in its businesses
include customer service, product availability and selection, price, technical
support, and marketing and sales capabilities. The Company's utilization of
trained personnel and the ability to use national and local advertising media
are important to the Company's ability to compete in its businesses. CompUSA
would be adversely affected if its competitors were to offer their products or
services at significantly lower prices or if the Company were unable to obtain
products in a timely manner for an extended period of time. Given the highly
competitive nature of each of its businesses, no assurances can be given that
the Company will continue to compete successfully with respect to the factors
referenced above.
Management Information Systems
Because CompUSA operates on a high-volume, low-margin basis, the
Company's success is dependent to a significant degree upon the accuracy and
proper utilization of its management information systems. For example, the
Company's ability to manage its inventories, accounts receivable and accounts
payable, and to price its products appropriately, depends upon the quality and
utilization of the information generated by its management information systems.
In addition, the success of the Company's expansion plans is dependent to a
significant degree upon its management information systems. The failure of the
Company's management information systems to adapt to business needs resulting
from, among other things, expansion of its store base and the further
development of its various businesses, could have a material adverse effect on
the Company.
Reliance on Vendors
The Company has maintained long-term relationships with vendors but
does not have material long-term contracts or commitments with any of them.
Brand names and individual products are important to the Company's business.
Purchases of products from Hewlett-Packard Company constituted in excess of 10%
of the Company's aggregate purchases for fiscal 1995. Although CompUSA believes
that competitive sources of supply are currently available in substantially all
of the merchandise categories the Company carries, the loss of a key vendor
could have a material adverse effect on the Company if, as a result, certain
merchandise were not available in adequate supply or at competitive prices.
Vendors provide the Company with substantial incentives in the form of
discounts, rebates, credits, inventory financing programs, return privileges and
cooperative advertising and market development funds. A reduction in or
discontinuance of trade credit or any of the foregoing incentives, or
significant delays in receiving them, could have a material adverse effect on
the Company.
Dependence on Senior Management
CompUSA's future performance will depend to a significant degree upon
the efforts and abilities of certain members of senior management, in particular
those of James F. Halpin, President and Chief Executive Officer. The loss of the
services of any member of senior management could have a material adverse effect
on the Company.
Litigation
The Company is a defendant from time to time in lawsuits incidental to
its business. Based on currently available information, the Company believes
that resolution of all known contingencies would not have a material adverse
impact on the Company's financial statements. However, there can be no
assurances that future costs would not be material to results of operations of
the Company for a particular future period. In addition, the Company's estimates
of future costs are subject to change as events evolve and additional
information becomes available during the course of litigation.
<PAGE>8
Asserted Royalty Obligations
The Company has been approached by certain patent owners, including
computer manufacturers, that contend the Company should pay royalties in
connection with the alleged use of certain patented technology in the assembly
and sale of Compudyne microcomputers. Based on the information provided by these
patent owners to date, the Company has not concluded that it has any such
royalty obligations. However, as additional information becomes available, the
Company's assessment of these issues may change. If the Company's assessment of
these issues were to change, or if the Company were to be compelled to pay
royalties with respect to the Compudyne microcomputer line, the Company could be
materially adversely affected.
Volatility of Stock Price
The price of the Common Stock may be subject to significant
fluctuations in response to the Company's operating results, developments in the
microcomputer industry, general market movements and other factors. For example,
announcements of fluctuations in the Company's, its vendors' or its competitors'
operating results, and market conditions for growth stocks or retail industry
stocks in general, could have a significant impact on the price of the Common
Stock. In addition, the stock market in recent years has experienced price and
volume fluctuations in general that may have been unrelated or disproportionate
to the operating performance of individual companies. These fluctuations, as
well as general economic and market conditions, may adversely affect the market
price of the Common Stock and the ability of CompUSA to access the capital
markets.
Acquisitions
In May 1996, CompUSA acquired PCs Compleat, a leading direct reseller
of brand-name microcomputers and peripherals. The Company's plans may include a
strategy of identifying and acquiring additional businesses in an effort to
enhance the Company's operations and profitability. There can be no assurance
that the Company will be able to continue to identify attractive target
businesses or to acquire such businesses on satisfactory terms, that any
business acquired by the Company will prove profitable and will be integrated
successfully into the Company's operations or that such integration will not
divert management resources, cause temporary disruptions in the management of
the business or financial results of the Company or otherwise have an adverse
effect on the Company.
Certain Antitakeover Provisions Affecting Stockholders
Certain provisions of the Certificate of Incorporation and the Bylaws
of the Company, the Company's 9 1/2% Senior Subordinated Notes due 2000 (the
"Senior Subordinated Notes") and the Company's bank credit agreement could make
it more difficult for a third party to acquire, or discourage a third party from
attempting to acquire, control of CompUSA. Such provisions could limit the price
that certain investors might be willing to pay in the future for the Common
Stock. The Company's Board of Directors is divided into three classes, with
directors in each class elected for three-year terms. The Certificate of
Incorporation and the Bylaws impose various procedural and other requirements
that could make it more difficult for stockholders to effect certain corporate
actions. Shares of preferred stock may be issued by the Board of Directors
without stockholder approval on such terms and conditions, and having such
rights, privileges and preferences, as the Board of Directors may determine. The
rights of the holders of Common Stock will be subject to, and may be adversely
affected by, the rights of the holders of any preferred stock that may be issued
in the future. The Senior Subordinated Notes and the Company's bank credit
agreement trigger a redemption obligation and an event of default, respectively,
if a change in control occurs with respect to the Company. In addition, on April
29, 1994, the Company declared a dividend of one right (a "Right") to purchase
Series A Junior Participating Preferred Stock, par value $.01 per share, for
each outstanding share of Common Stock. Each share of Common Stock subsequently
issued, including each Share, will also incorporate one Right. The Rights are
exercisable only if a person or group acquires 20% or more of the Common Stock
or commences a tender or exchange offer upon consummation of which such person
or group would beneficially own 20% or more of the Common Stock and, if
exercised, would result in significant dilution of an acquiring person's
interest in the Company. The existence of the Rights may, under certain
circumstances, render more difficult or discourage attempts to acquire the
Company.
<PAGE>9
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
by the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
Selling Stockholders, including (i) the names of the Selling Stockholders, (ii)
the number of shares of Common Stock owned by the Selling Stockholders prior to
the offering and (iii) the maximum number of shares of such Common Stock to be
offered hereby. Because the Selling Stockholders or their transferees or
distributees may offer all, a portion or none of the Common Stock offered
pursuant to this Prospectus, no estimate can be given as to the amount of Common
Stock that will be held by the Selling Stockholders upon termination of the
offering. See "Plan of Distribution."
The Selling Stockholders acquired the Shares pursuant to an Agreement
and Plan of Merger dated as of May 15, 1996 (the "Merger Agreement"), by and
among the Company, Snowstorm Merger Corp., a Delaware corporation and
wholly-owned subsidiary of the Company ("Sub") and PCs Compleat, Inc. ("PCs
Compleat"), a Delaware corporation. Pursuant to the Merger Agreement, Sub was
merged with and into PCs Compleat on May 30, 1996, all of the issued and
outstanding capital stock of PCs Compleat was canceled, and the Company issued
to the Selling Stockholders an aggregate of 2,632,717 shares of Common Stock.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Maximum
Name of Selling Owned Prior to the Number of Shares
Stockholder Offering Being Offered
--------------- ------------------ ----------------
<S> <C> <C>
Allstate Insurance Company............................ 448,079 448,079
Allstate Life Insurance Company....................... 298,719 298,719
Matrix Partners III(1)................................ 296,020 296,020
Global Private Equity II Limited Partnership(1)....... 256,586 256,586
Atlas Venture Fund, L.P(1)............................ 217,092 217,092
Kinship Partners II(1)................................ 217,092 217,092
William Brown......................................... 156,116 (2) 156,116
Gordon Hoffstein(3)................................... 156,116 (4) 156,116
Jack Littman-Quinn(3)................................. 156,116 (4) 156,116
Aegis II Limited Partnership(1)....................... 144,696 144,696
Aegis Select Limited Partnership(1)................... 144,696 144,696
International Network Fund Limited Partnership(1)..... 79,541 79,541
Advent Crown Fund C.V.(1) ............................ 48,109 48,109
John P. Poldoian...................................... 7,569 7,569
Patrick J. Sansonetti Family Trust.................... 1,603 1,603
Advent International Investors Limited Partnership II(1) 641 641
Thomas R. Armstrong................................... 641 641
Thomas H. Lauer....................................... 641 641
Clinton Harris........................................ 481 481
Melody Morgan-Edson................................... 354 354
Brinton O.C. Young.................................... 320 320
George Sutherland..................................... 260 260
Abigail H. Harris Trusts 1988......................... 160 160
Jessica C. Harris Trusts 1988......................... 160 160
William P. Harris Trusts 1988......................... 160 160
Paul Lemire........................................... 118 118
Thomas P. Harrington.................................. 70 70
Jamie Barry........................................... 47 47
Joel H. Bertger....................................... 47 47
</TABLE>
<PAGE>10
<TABLE>
<CAPTION>
Number of Shares
Beneficially Maximum
Name of Selling Owned Prior to the Number of Shares
Stockholder Offering Being Offered
--------------- ------------------ ----------------
<S> <C> <C>
Gini Cornilla......................................... 47 47
Antonio Cunha......................................... 47 47
David Foulsham........................................ 47 47
Suzanne L. Guay....................................... 47 47
Michelle Murdock...................................... 47 47
Michael Randall....................................... 47 47
Kristin Walker........................................ 47 47
Paul Botolino......................................... 23 23
Miki D. Bryan......................................... 23 23
Peter Herz............................................ 23 23
Martin E. Lane........................................ 23 23
Lori Randall.......................................... 23 23
Rian Sousa............................................ 23 23
Totals...................................... 2,632,717 2,632,717
</TABLE>
- --------------------------
(1) The Selling Stockholder may distribute such shares to its limited
and/or general partners, who may sell such shares pursuant to this Prospectus.
(2) Does not include 40,811 shares of Common Stock issuable upon the exercise
of options held by the Selling Stockholder.
(3) The Selling Stockholder is an officer of the Company.
(4) Does not include 46,487 shares of Common Stock issuable upon the
exercise of options held by the Selling Stockholder.
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold by the Selling Stockholders, or
by pledgees, donees, transferees or other successors in interest, from time to
time in one or more transactions (which may include block transactions) in the
over-the-counter market, on the NYSE or other exchanges on which the Shares may
be traded, in privately negotiated transactions, through the writing of options
on the Shares (whether such options are listed on an options exchange or
otherwise) or by a combination of such methods of sale, at fixed prices which
may be changed, at market prices prevailing at the time of sale, at prices
related to prevailing market prices or at negotiated prices. The Selling
Stockholders may effect such transactions by selling the Shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders and/or the
purchasers of the Shares for whom such broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). The Selling
Stockholders may deliver the Shares to close out previously established short
positions and may also pledge the Shares as collateral for margin accounts and
such Shares could be resold pursuant to the terms of such accounts.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The Selling Stockholders and any broker-dealers or agents that
participate with the Selling Stockholders in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of the Securities Act, and
<PAGE>11
any commissions received by them and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
To the extent required, the type and number of Shares to be sold, the
purchase price and public offering price, the name or names of any agent, dealer
or underwriter, and any applicable commissions or discounts with respect to a
particular offering will be set forth in an accompanying Prospectus Supplement
to this Prospectus.
Pursuant to the Merger Agreement, the Company agreed to register the
Shares under the Securities Act and to indemnify and hold the Selling
Stockholders harmless against certain liabilities, including certain liabilities
under the Securities Act, that could arise in connection with the sale by the
Selling Stockholders of the Shares. The Company has agreed to bear certain
expenses (excluding any underwriting fees, expenses, discounts or other costs
payable to any underwriter, broker or dealer) in connection with the
registration and sale of the Shares being offered by the Selling Stockholders,
estimated to be $104,117.
LEGAL MATTERS
Certain legal matters with respect to the shares of Common Stock
offered hereby will be passed upon for the Company by Willkie Farr & Gallagher,
New York, New York.
EXPERTS
The consolidated financial statements of the Company at June 24, 1995
and June 25, 1994, and for each of the three fiscal years in the period ended
June 24, 1995, incorporated by reference in this Prospectus and Registration
Statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their reports thereon incorporated by reference herein and in the
Registration Statement, and are included in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.
<PAGE>
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No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made by this Prospectus and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any securities in any jurisdiction in which
such offer or solicitation is not authorized or in which the person making such
offer or solicitation is not qualified to do so, or to any person to whom it is
unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in the affairs of the Company or
that information contained herein is correct as of any time subsequent to the
date hereof.
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TABLE OF CONTENTS
Page
Available Information.............................2
Additional Information............................2
Incorporation of Certain Documents by
Reference......................................2
Special Note Regarding Forward-Looking
Statements.....................................3
The Company.......................................4
Risk Factors......................................6
Use of Proceeds...................................9
Selling Stockholders..............................9
Plan of Distribution............................10
Legal Matters....................................11
Experts..........................................11
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2,632,717 Shares
CompUSA Inc.
Common Stock
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PROSPECTUS
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August 14, 1996
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