<PAGE>
As filed with the Securities and Exchange Commission on July 3, 1996.
Registration No. 33-99280
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
_______________
CompUSA Inc.
(Exact name of registrant as specified in its charter)
Delaware 75-2261497
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
14951 North Dallas Parkway
Dallas, Texas 75240
(Address of principal executive offices)
_______________
CompUSA Inc. Deferred Compensation Plan
(Full title of the Plan)
_______________
JAMES F. HALPIN
President
14951 North Dallas Parkway
Dallas, Texas 75240
(Name and address of agent for service)
(214) 982-4000
(Telephone number, including area code, of agent for service)
_______________
COPY TO:
FRED W. FULTON
Jackson & Walker, L.L.P.
901 Main Street
Suite 6000
Dallas, Texas 75202
(214) 953-5894
APPROXIMATE DATE OF PROPOSED COMMENCEMENT OF SALES PURSUANT TO THE PLAN:
From time to time after this Registration Statement becomes effective.
<PAGE>
PROSPECTUS
COMPUSA INC.
520,000 SHARES
OF
COMMON STOCK*
This Prospectus has been prepared by CompUSA Inc., a Delaware
corporation (the "Company"), for use upon resale by certain directors, officers
and employees of the Company (the "Selling Stockholders") of up to approximately
520,000 shares of the Company's common stock, par value $.01 per share ("Common
Stock"). The Selling Stockholders have acquired and/or may in the future
acquire shares of Common Stock from the Company upon conversion of a right to
receive deferred compensation under the CompUSA Inc. Deferred Compensation Plan
(the "Plan").
The Common Stock may be sold from time to time by the Selling
Stockholders or permitted transferees. Such sales may be sold on one or more
exchanges, including the New York Stock Exchange ("NYSE"), in the over-the-
counter market or in negotiated transactions, in each case at prices and at
terms then prevailing or at prices related to the then current market price or
at negotiated prices and terms. See "Plan of Distribution." Upon any sale of
the Common Stock offered hereby, the Selling Stockholders or permitted
transferees and participating agents, brokers, dealers and marketmakers may be
deemed to be underwriters as that term is defined in the Securities Act of 1933,
as amended (the "Securities Act"), and commissions or discounts or any profit
realized on the resale of such securities purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
The Common Stock is listed for trading on the NYSE under the symbol
"CPU." On July 2, 1996, the last reported sale price of the Common Stock, as
reported on the NYSE, was $37-3/4. The Company will pay all expenses in
connection with this offering, which are estimated to be approximately $22,000.
* This figure is an estimate. The Company has filed a Registration Statement on
Form S-8, Registration Number 33-99280 (of which this Prospectus is a part),
which Registration Statement covers the sale by the Company of deferred
compensation obligations of the Company under the Plan and the shares of
Common Stock issuable in certain circumstances upon exercise of a right to
receive shares of Common Stock as deferred compensation under the Plan. This
Prospectus covers the resale by the Selling Stockholders of an indeterminate
number of shares of Common Stock acquired or that may be acquired by the
Selling Stockholders upon exercise of such right.
_________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is July 3, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (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. 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.
This Prospectus constitutes part of a Registration Statement on Form
S-8 (the "Registration Statement") filed by the Company with the Commission
under the Securities Act. This Prospectus omits certain of the information
contained in the Registration Statement and the exhibits thereto, in accordance
with the rules and regulations of the Commission. For further information
concerning the Company and the Common Stock, reference is made to the
Registration Statement and the exhibits filed therewith, which may be inspected
without charge at the office of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and copies of which may be obtained from the Commission
at prescribed rates. Any statements contained herein concerning the provisions
of any documents are not necessarily complete, and, in each instance, reference
is made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.
The Company's principal executive offices are located at 14951 North
Dallas Parkway, Dallas, Texas 75240, and the Company's telephone number is (214)
982-4000.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this Prospectus:
(i) Annual Report on Form 10-K for the year ended June 24, 1995;
(ii) Quarterly Report on Form 10-Q for the quarter ended September 23,
1995;
(iii) Quarterly Report on Form 10-Q for the quarter ended December 23,
1995;
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(iv) Quarterly Report on Form 10-Q for the quarter ended March 23, 1996;
(v) Current Report on Form 8-K, filed with the Commission on May 20,
1996;
(vi) Current Report on Form 8-K, filed with the Commission on June 14,
1996; and
(vii) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A/A (No. 1-11566) filed
November 14, 1995, as amended.
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 on or 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.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common Stock
offered hereby.
SELLING STOCKHOLDERS
Information relating to the Selling Stockholders will be provided by
Prospectus Supplement.
PLAN OF DISTRIBUTION
The Common Stock offered hereby may be sold from time to time by the
Selling Stockholders or permitted transferees. The Common Stock may be disposed
of from time to time in one or more transactions through any one or more of the
following: (i) to purchasers directly, (ii) in ordinary brokerage transactions
and transactions in which the broker solicits purchasers, (iii) through
underwriters or dealers who may receive compensation in the form of
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<PAGE>
underwriting discounts, concessions or commissions from the Selling Stockholders
or permitted transferees and/or from the purchasers of the Common Stock for whom
they may act, (iv) the writing of options on the Common Stock, (v) the pledge of
the Common Stock as security for any loan or obligation, including pledges to
brokers or dealers who may, from time to time, themselves effect distributions
of the Common Stock or interests therein, (vi) purchases by a broker or dealer
as principal and resale by such broker or dealer for its own account pursuant to
this Prospectus, (vii) a block trade in which the broker or dealer engaged in
such block trade will attempt to sell the Common Stock as agent but may position
and resell a portion of the block as principal to facilitate the transaction and
(viii) an exchange distribution in accordance with the rules of the applicable
exchange, or in transactions in the over the counter market. Such sales may be
made at prices and at terms then prevailing or at prices related to the then
current market price or at negotiated prices and terms. In effecting sales,
brokers or dealers may arrange for other brokers or dealers to participate. The
Selling Stockholders or permitted transferees and any underwriters, brokers,
dealers or agents that participate in the distribution of the Common Stock may
be deemed to be "underwriters" within the meaning of the Securities Act and any
profit on the sale of the Common Stock by them and any discounts, commissions or
concessions received by any such underwriters, brokers, dealers or agents may be
deemed to be underwriting commissions or discounts under the Securities Act. In
addition, while this Prospectus covers the offering and sale of the securities
noted above, such securities may also qualify for sale pursuant to Rule 144
promulgated under the Securities Act ("Rule 144"), and accordingly such
securities may be sold under Rule 144 rather than pursuant to this Prospectus.
The Company will pay all of the expenses incident to the offering and sale
of the Common Stock to the public other than underwriting discounts or
commissions, brokers' fees and the fees and expenses of any counsel to the
Selling Stockholders related thereto.
LEGAL MATTERS
Certain legal matters in connection with the validity of the Common Stock
offered hereby have been passed upon by Jackson & Walker, L.L.P., Dallas, Texas.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report on Form 10-K for the year ended June 24, 1995, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such
consolidated financial statements are, and audited financial statements to be
included in subsequently filed documents will be, incorporated herein in
reliance upon the reports of Ernst & Young LLP pertaining to such financial
statements (to the extent covered by consents filed with the Commission) given
upon the authority of such firm as experts in accounting and auditing.
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<PAGE>
INDEMNIFICATION
The Company is a Delaware corporation and the Delaware General Corporation
Law (the "Delaware Law") empowers a corporation organized thereunder to
indemnify its directors and officers or former directors and officers and to
purchase insurance with respect to liability arising out of their capacity or
status as directors and officers.
Reference is made to Article VII of the Company's Restated and Amended
Bylaws, which provides for indemnification of directors and officers except as
to certain circumstances and except as provided by applicable law.
Additionally, Article VI ("Article VI") of the Company's Restated and
Amended Certificate of Incorporation limits the personal liability of directors
of the Company to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director, notwithstanding any provision of law
imposing such liability; provided that to the extent required from time to time
by applicable law, Article VI shall not eliminate or limit the liability of a
director, to the extent such liability is provided by applicable law, (i) for
any breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of Title 8 of
the Delaware Law, or (iv) for any transaction from which the director derived an
improper personal benefit.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of the Commission,
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
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<PAGE>
No dealer, salesperson or other person
has been authorized to give any information
or to make any representation not contained
in this Prospectus in connection with the
offering made hereby and, if given or
made, such information or representation
must not be relied upon as having been
authorized by the Company. This
Prospectus does not constitute an offer to COMPUSA INC.
sell or a solicitation of an offer to buy any
securities in any jurisdiction to any person
to whom it would be unlawful to make
such an offer or solicitation in such
jurisdiction. Neither the delivery of this 520,000 SHARES
Prospectus nor any sale made hereunder COMMON STOCK
shall, under any circumstances, create any
implication that the information contained
herein is correct as of any time subsequent
to the date hereof or that there has been no
change in the affairs of the Company since
such date.
TABLE OF CONTENTS PROSPECTUS
July 3, 1996
Page
Incorporation of Certain Documents
by Reference.......................... 2
Use of Proceeds........................ 3
Selling Stockholders................... 3
Plan of Distribution................... 3
Legal Matters.......................... 4
Experts................................ 4
Indemnification........................ 5
468628.03/D
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed with the Securities and
Exchange Commission (the "Commission") by the Company, are incorporated herein
by reference and made a part hereof: (i) Annual Report on Form 10-K for the year
ended June 24, 1995; (ii) Quarterly Report on Form 10-Q for the quarter ended
September 23, 1995; (iii) Quarterly Report on Form 10-Q for the quarter ended
December 23, 1995; (iv) Quarterly Report on Form 10-Q for the quarter ended
March 23, 1996; (v) Current Report on Form 8-K, filed with the Commission on May
20, 1996; (vi) Current Report on Form 8-K, filed with the Commission on June 14,
1996; and (vii) the description of the Company's common stock contained
in the Company's Registration Statement on Form 8-A/A (No. 1-11566) filed
November 14, 1995, as amended.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or subsequent to the date of this Registration Statement and prior to
the filing of a post-effective amendment that indicates that all securities
offered have been sold or that deregisters all securities then remaining unsold,
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein 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 Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is a Delaware corporation and the Delaware General Corporation
Law (the "Delaware Law") empowers a corporation organized thereunder to
indemnify its directors and officers or former directors and officers and to
purchase insurance with respect to liability arising out of their capacity or
status as directors and officers.
II-1
<PAGE>
Reference is made to Article VII of the Company's Restated and Amended
Bylaws, which provides for indemnification directors and officers except as to
certain circumstances and except as provided by applicable law.
Additionally, Article VI ("Article VI") of the Company's Restated and
Amended Certificate of Incorporation limits the personal liability of directors
of the Company to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director, notwithstanding any provision of law
imposing such liability; provided that to the extent required from time to time
by applicable law, Article VI shall not eliminate or limit the liability of a
director, to the extent such liability is provided by applicable law, (i) for
any breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of Title 8 of
the Delaware Law, or (iv) for any transaction from which the director derived an
improper personal benefit.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of the Commission,
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-8, including those incorporated herein by
reference.
Exhibit
Number Description of Exhibit
- -------- ----------------------
4(a) Restated and Amended Certificate of Incorporation of the
Registrant./(1)/
4(b) Restated and Amended Bylaws of the Registrant./(2)/
4(c) Specimen Common Stock Certificate (as amended)./(6)/
4(d) Specimen 9 1/2% Senior Subordinated Note Due 2000./(3)/
II-2
<PAGE>
4(e) Indenture dated June 17, 1993 among CompUSA Inc., as Issuer, Compudyne
Products, Inc., Compudyne Direct, Inc., CompFinance Inc., CompService
Inc., as Guarantors and U.S. Trust Company of Texas, N.A., as Trustee
relating to 9 1/2% Senior Subordinated Notes Due 2000./(4)/
4(f) Rights Agreement dated April 29, 1994, between the Company and Bank
One, Texas, N.A. as Rights Agent. (First Interstate Bank of Texas,
N.A. became successor Rights Agent as of November 1, 1995)./(2)/
5 Opinion of Jackson & Walker, L.L.P./(1)/
15 None.
23(a) Consent of Ernst & Young LLP/(5)/
23(b) Consent of Jackson & Walker, L.L.P./(1)/
24 Power of Attorney./(1)/
25 None.
27 None.
28 None.
99(a) CompUSA Inc. Deferred Compensation Plan (as amended). /(5)/
99(b) CompUSA Inc. Deferred Compensation Trust (as amended)./(5)/
- -----------
(1) Previously filed.
(2) Previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended March 26, 1994 and incorporated herein by
reference.
(3) Previously filed as an exhibit to the Company's Annual Report on Form 10-K,
as amended, for the fiscal year ended June 26, 1993 and incorporated herein
by reference.
(4) Previously filed as an exhibit to Registration Statement No. 33-62884 on
Form S-3 and incorporated herein by reference.
(5) Filed herewith.
(6) Previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended December 23, 1995 and incorporated herein
by reference.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
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<PAGE>
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof), which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
the prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration
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<PAGE>
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
THE REGISTRANT
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Post-Effective
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Dallas, State of Texas on
the 30th day of April, 1996.
CompUSA Inc.
By /s/ James E. Skinner
------------------------------------------
James E. Skinner, Executive Vice President
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<PAGE>
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
Signatures Title Date
- -------------------------- ------------------------------ --------------
President, Chief
Executive Officer April 30, 1996
/s/ James F. Halpin* and Director
- -------------------------- (Principal Executive Officer)
James F. Halpin
Executive Vice President
/s/ James E. Skinner and Chief Financial Officer April 30, 1996
- -------------------------- (Principal Financial and
James E. Skinner Accounting Officer)
Chairman of the April 30, 1996
/s/ Giles H. Bateman* Board of Directors
- --------------------------
Giles H. Bateman
Director April 30, 1996
/s/ Kevin J. Roche*
- --------------------------
Kevin J. Roche
Director April 30, 1996
/s/ Warren D. Feldberg*
- --------------------------
Warren D. Feldberg
Director April 30, 1996
/s/ Leonard L. Berry*
- --------------------------
Leonard L. Berry, Ph.D.
Director April 30, 1996
/s/ Lawrence Mittman*
- --------------------------
Lawrence Mittman
/s/ Edith Weiner* Director April 30, 1996
- --------------------------
Edith Weiner
*By: /s/ James E. Skinner
________________________
James E. Skinner
ATTORNEY-IN-FACT
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<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
23(a) Consent of Ernst & Young LLP /*/..........................
99(a) CompUSA Inc. Deferred Compensation Plan (as amended).
/*/.......................................................
99(b) CompUSA Inc. Deferred Compensation Trust (as amended) /*/
_________
*Filed herewith.
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement of Form S-8 of CompUSA Inc. pertaining to the CompUSA
Inc. Deferred Compensation Plan and to the incorporation by reference therein of
our report dated August 9, 1995, with respect to the consolidated financial
statements of CompUSA Inc. included in its Annual Report on Form 10-K for the
year ended June 24, 1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Dallas, Texas
July 3, 1996
<PAGE>
EXHIBIT 99(a)
COMPUSA INC. DEFERRED COMPENSATION PLAN (AS AMENDED)
<PAGE>
COMPUSA INC.
DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective as of November 1, 1995)
<PAGE>
COMPUSA, INC.
DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective as of November 1, 1995)
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
1.1 "401(k) Plan".................................... 1
1.2 "401(k) Plan Election"........................... 1
1.3 "Affiliate"...................................... 1
1.4 "Beneficiary".................................... 1
1.5 "Board".......................................... 1
1.6 "Change In Control".............................. 1
1.7 "Code"........................................... 1
1.8 "Committee"...................................... 1
1.9 "Common Stock"................................... 2
1.10 "Company"........................................ 2
1.11 "Compensation"................................... 2
1.12 "Compensation Committee"......................... 2
1.13 "Compensation Deferrals"......................... 2
1.14 "Disability"..................................... 2
1.15 "Eligible Employee".............................. 2
1.16 "Employers"...................................... 2
1.17 "ERISA".......................................... 2
1.18 "Financial Hardship"............................. 2
1.19 "Hypothetical Investment Funds".................. 2
1.20 "Matching Contributions"......................... 3
1.21 "Maximum 401(k) Plan Amount"..................... 3
1.22 "Normal Retirement Date"......................... 3
1.23 "Participant".................................... 3
1.24 "Participant's Account".......................... 3
1.25 "Plan"........................................... 3
1.26 "Plan Year"...................................... 3
1.27 "Supplemental Matching Contributions"............ 3
1.28 "Trust".......................................... 3
1.29 "Year of Vesting Service"........................ 3
ARTICLE II
PARTICIPATION
2.1 Participation.................................... 3
2.1.1 Initial Elections by Current Employees.... 3
2.1.2 Initial Elections by Other Employees...... 4
<PAGE>
2.1.3 Elections for Subsequent Plan Years............ 4
2.1.4 No Election Changes During Plan Year........... 4
2.1.5 Specific Timing and Method of Election......... 4
2.2 Hardship Suspension of Participation.................. 4
2.3 Termination of Participation.......................... 4
ARTICLE III
COMPENSATION DEFERRALS, MATCHING CONTRIBUTIONS AND
SUPPLEMENTAL MATCHING CONTRIBUTIONS
3.1 Compensation Deferrals................................... 4
3.2 Crediting of Compensation Deferrals...................... 5
3.3 Matching Contributions................................... 5
3.4 Crediting of Matching Contributions...................... 5
3.5 Supplemental Matching Contributions...................... 5
3.6 Crediting of Supplemental Matching Contributions......... 5
3.7 Election Regarding 401(k) Plan........................... 6
3.7.1 401(k) Plan Election.............................. 6
3.7.2 Maximum 401(k) Plan Amount........................ 6
ARTICLE IV
ACCOUNTING
4.1 Participants' Accounts................................... 6
4.2 Participants Remain Unsecured Creditors.................. 7
4.3 Accounting Methods....................................... 7
4.4 Account Statements....................................... 7
4.5 Investments.............................................. 7
ARTICLE V
DISTRIBUTIONS
5.1 Normal Time for Distribution............................. 7
5.2 Beneficiary Designations................................. 8
5.3 Financial Hardship....................................... 8
5.4 Payments to Incompetents................................. 8
5.5 Undistributable Accounts................................. 8
5.6 Committee Discretion..................................... 8
ARTICLE VI
VESTING
6.1 Vesting in Compensation Deferral Accounts................ 9
6.2 Vesting in Matching and Supplemental Matching
Contribution Accounts.................................... 9
6.2.1 Termination........................................ 9
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6.2.2 Accelerated Vesting............................... 9
6.3 Transfers of Employment.................................. 10
ARTICLE VII
ADMINISTRATION
7.1 Plan Administrator.................................. 10
7.2 Committee........................................... 10
7.3 Actions by Committee................................ 10
7.4 Powers of Committee................................. 10
7.5 Decisions of Committee.............................. 11
7.6 Administrative Expenses............................. 11
7.7 Eligibility to Participate.......................... 11
7.8 Indemnification..................................... 11
ARTICLE VIII
FUNDING
8.1 Unfunded Plan....................................... 12
8.2 Trust............................................... 12
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 Company's Obligations Limited....................... 12
9.2 Right to Amend or Terminate......................... 12
9.3 Effect of Termination............................... 12
9.4 Disposition of Affiliates........................... 13
ARTICLE X
GENERAL PROVISIONS
10.1 Participation by Affiliates.......................... 13
10.2 Inalienability....................................... 13
10.3 Rights and Duties.................................... 13
10.4 No Enlargement of Employment Rights.................. 13
10.5 Apportionment of Costs and Duties.................... 13
10.6 Contributions Not Counted Under Other Employee Benefit
Plans................................................ 14
10.7 Applicable Law....................................... 14
10.8 Severability......................................... 14
10.9 Captions............................................. 14
10.10 Gender and Number.................................... 14
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COMPUSA INC.
DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective as of November 1, 1995)
CompUSA Inc., a Delaware corporation, established the CompUSA Inc. Deferred
Compensation Plan, effective as of November 1, 1995, for the benefit of a select
group of management and highly compensated employees of the Company and its
participating Affiliates, in order to provide such employees with certain
deferred compensation benefits. The Plan is amended and restated, in its
entirety, effective as of November 1, 1995, upon the following terms and
conditions. The Plan is an unfunded deferred compensation plan that is intended
to qualify for the exemptions provided in Sections 201, 301 and 401 of ERISA.
ARTICLE I
DEFINITIONS
As used in the Plan, the following terms have the following meanings unless
a different meaning is plainly required by the context:
1.1 "401(K) PLAN" means the CompSavings Plan for Employees of CompUSA
Inc., as amended from time to time.
1.2 "401(K) PLAN ELECTION" has the meaning ascribed to such term in
Section 3.7.
1.3 "AFFILIATE" means a corporation, trade or business which is, together
with any Employer, a member of a controlled group of corporations or an
affiliated service group or under common control (within the meaning of Section
414(b), (c) or (m) of the Code), but only for the period during which such other
entity is so affiliated with any Employer.
1.4 "BENEFICIARY" means the person or persons entitled to receive benefits
under the Plan upon the death of a Participant as provided in Section 5.2.
1.5 "BOARD" means the Board of Directors of the Company as constituted
from time to time or any committee of such Board that has been authorized by the
Board to act on behalf of the Board with respect to the Plan and the Trust.
1.6 "CHANGE IN CONTROL" has the meaning ascribed to such term in Section
6.2.2.
1.7 "CODE" means the Internal Revenue Code of 1986, as amended. Reference
to a specific section of the Code includes such section, any regulation
promulgated thereunder, and any comparable provision of any future legislation
amending, supplementing or superseding such section.
1.8 "COMMITTEE" means the CompSavings Plan Committee as it may be
constituted from time to time pursuant to the 401(k) Plan. In the
administration of the Plan, the Committee shall have all powers allocated to the
Committee in connection with the administration of the 401(k) Plan and all
powers specifically set out in Article VII of the Plan.
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1.9 "COMMON STOCK" means the common stock, par value $.01 per share, of
the Company.
1.10 "COMPANY" means CompUSA Inc., a Delaware corporation.
1.11 "COMPENSATION" has the same meaning ascribed to the term "Pay" with
respect to each Participant in the 401(k) Plan, together with all Compensation
Deferrals under the Plan by such Participant during the same period.
1.12 "COMPENSATION COMMITTEE" means the Compensation Committee of the Board
as it may be constituted from time to time.
1.13 "COMPENSATION DEFERRALS" means the amounts credited to Participants'
Accounts under the Plan pursuant to their deferral elections made in accordance
with Section 2.1.
1.14 "DISABILITY" has the same meaning ascribed to such term in the 401(k)
Plan.
1.15 "ELIGIBLE EMPLOYEE" means an employee of an Employer who (i) is
eligible to participate in the 401(k) Plan, and (ii) satisfies such additional
eligibility requirements as the Compensation Committee may establish from time
to time. It shall be the policy of the Compensation Committee to limit
eligibility for participation in the Plan to a select group of management and
highly compensated employees of the Employers.
1.16 "EMPLOYERS" means the Company and each of its Affiliates that adopts
the Plan. With respect to an individual Participant, the term "Employer" means
the Company or its Affiliate that has adopted the Plan and that directly employs
such Participant.
1.17 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended. Reference to a specific section of ERISA includes such section, any
regulation promulgated thereunder, and any comparable provision of any future
legislation amending, supplementing or superseding such section.
1.18 "FINANCIAL HARDSHIP" means a severe financial emergency that is caused
by a sudden and unexpected accident, illness or other event beyond the control
of the Participant that, without a suspension of deferrals or accelerated
distribution (as the case may be), would result in a severe financial burden to
the Participant or a member of the Participant's immediate family. A Financial
Hardship does not exist to the extent that the hardship may be relieved by (a)
reimbursement or compensation by insurance, or (b) by liquidation of the
Participant's other assets (to the extent such liquidation itself would not
cause a severe financial hardship).
1.19 "HYPOTHETICAL INVESTMENT FUNDS" means the hypothetical investment
funds used for tracking investment performance under the Plan. The number,
identity and composition of the Hypothetical Investment Funds shall be
determined from time to time by the Committee. It shall be the policy of the
Committee to maintain Hypothetical Investment Funds under the Plan that are
similar to the actual investment funds under the 401(k) Plan.
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1.20 "MATCHING CONTRIBUTIONS" means the amounts credited to Participants'
Accounts in accordance with Section 3.4.
1.21 "MAXIMUM 401(K) PLAN AMOUNT" has the meaning ascribed to such term in
Section 3.7.
1.22 "NORMAL RETIREMENT DATE" has the same meaning ascribed to such term in
the 401(k) Plan.
1.23 "PARTICIPANT" means an Eligible Employee who (a) has become a
Participant in the Plan pursuant to Section 2.1 and (b) has not ceased to be a
Participant pursuant to Section 2.3.
1.24 "PARTICIPANT'S ACCOUNT" or "ACCOUNT" means as to any Participant the
separate account maintained on the books of the Employers in order to reflect
the Participant's interest under the Plan.
1.25 "PLAN" means the CompUSA Inc. Deferred Compensation Plan as set forth
in this instrument and as hereafter amended from time to time.
1.26 "PLAN YEAR" means the calendar year. Notwithstanding the preceding
sentence, the 1995 Plan Year shall be the period from November 1, 1995 (the
effective date of the Plan), through December 31, 1995.
1.27 "SUPPLEMENTAL MATCHING CONTRIBUTIONS" means the amounts credited to
Participants' Accounts in accordance with Section 3.6.
1.28 "TRUST" means the CompUSA Inc. Deferred Compensation Trust entered
into by and between the Company and Wells Fargo Bank, N.A., as trustee.
1.29 "YEAR OF VESTING SERVICE" has the same meaning ascribed to such term
in the 401(k) Plan.
ARTICLE II
PARTICIPATION
2.1 PARTICIPATION. Each Eligible Employee's decision to become a
Participant shall be entirely voluntary.
2.1.1 INITIAL ELECTIONS BY CURRENT EMPLOYEES. An Eligible Employee
as of November 1, 1995 may elect to become a Participant in the Plan by
electing, no later than November 1, 1995, to make Compensation Deferrals
under the Plan. An election under this Section 2.1.1 to make Compensation
Deferrals shall be effective only for the 1995 Plan Year.
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2.1.2 INITIAL ELECTIONS BY OTHER EMPLOYEES. Each individual who becomes
an Eligible Employee after November 1, 1995 (whether by hire or by change
in the Plan's eligibility provisions) may elect to become a Participant in
the Plan by electing, within 30 days after the date such person becomes an
Eligible Employee, to make Compensation Deferrals under the Plan. An
election under this Section 2.1.2 to make Compensation Deferrals shall be
effective only for the whole calendar months that remain in the Plan Year
with respect to which the election is made.
2.1.3 ELECTIONS FOR SUBSEQUENT PLAN YEARS. An Eligible Employee may
elect to become a Participant (or to continue or reinstate such person's
active participation) in the Plan for any subsequent Plan Year by electing,
no later than December 31 of the preceding Plan Year, to make Compensation
Deferrals under the Plan. An election under this Section 2.1.3 to make
Compensation Deferrals shall be effective only for the Plan Year with
respect to which the election is made.
2.1.4 NO ELECTION CHANGES DURING PLAN YEAR. A Participant shall not
be permitted to change or revoke a Compensation Deferral election for a
Plan Year after the beginning of such Plan Year except as provided in
Section 2.2.
2.1.5 SPECIFIC TIMING AND METHOD OF ELECTION. Notwithstanding any
contrary provision of this Section 2.1, the Committee, in its sole
discretion, shall determine the manner and times for Participants to make
Compensation Deferral elections. The times prescribed by the Committee may
be earlier than the times specified in Sections 2.1.1, 2.1.2 and 2.1.3 but
shall not be later than the times prescribed in such Sections.
2.2 HARDSHIP SUSPENSION OF PARTICIPATION. In the event that a Participant
incurs a Financial Hardship, the Committee, in its sole discretion, may suspend
the Participant's Compensation Deferral election for the remainder of the Plan
Year. However, an election to make Compensation Deferrals under Section 2.1
shall be irrevocable as to amounts deferred through the effective date of any
suspension made in accordance with this Section 2.2.
2.3 TERMINATION OF PARTICIPATION. An Eligible Employee who has become a
Participant shall remain a Participant until such Participant's entire vested
Account is distributed. However, an Eligible Employee who has become a
Participant may or may not be an active Participant making Compensation
Deferrals for a particular Plan Year, depending upon whether such person has
elected to make Compensation Deferrals for such Plan Year.
ARTICLE III
COMPENSATION DEFERRALS, MATCHING CONTRIBUTIONS AND
SUPPLEMENTAL MATCHING CONTRIBUTIONS
3.1 COMPENSATION DEFERRALS. At the times and in the manner prescribed in
Section 2.1, each Eligible Employee may elect to defer portions of such person's
Compensation and to have the amounts of such deferrals credited to such person's
Account under the Plan on the
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books of the Employers. For each Plan Year, an Eligible Employee may elect to
defer an amount equal to any whole percentage of the Participant's Compensation,
provided that the percentage elected by the Participant shall not exceed 15% of
such Participant's Compensation.
3.2 CREDITING OF COMPENSATION DEFERRALS. The amounts deferred pursuant to
Section 3.1 shall reduce the Participant's Compensation during the Plan Year and
shall be credited to the Participant's Account as soon as practicable after the
last day of each payroll period in which the amounts (but for the deferral)
would have been paid to the Participant. For each payroll period, the dollar
amount to be deferred from each Compensation payment shall be determined by the
Committee using such procedures as it shall adopt from time to time.
3.3 MATCHING CONTRIBUTIONS. Following the end of each Plan Year in which
Compensation Deferrals are made under the Plan, each Participant's Employer
shall credit the Participant's Matching Contribution Account with an amount
equal to 25% of each Participant's Compensation Deferrals for that Plan Year.
The amount of Compensation Deferrals for any Plan Year that may be taken into
account under this Section 3.3 for any Participant shall not exceed the lesser
of the following: (a) 5% of the Participant's Compensation for the Plan Year
and (b) the limit on elective deferrals for the Plan Year as specified in
Section 402(g)(1) of the Code (and as adjusted pursuant to Section 402(g)(5) of
the Code). For each Plan Year, a Participant shall be eligible to receive an
allocation of Matching Contributions only if the Participant would have been
eligible to receive an allocation of matching contributions under the 401(k)
Plan if Participant's Compensation Deferrals had been made pursuant to the
401(k) Plan. The obligations of a Participant's Employer to credit Matching
Contributions under the Plan with respect to the Participant shall be offset by
the amount of any matching contributions paid or accrued by any Employer with
respect to the Participant under the 401(k) Plan.
3.4 CREDITING OF MATCHING CONTRIBUTIONS. Subject to the final sentence of
the preceding Section 3.3, Matching Contributions on behalf of a Participant for
a Plan Year shall be credited to the Participant's Matching Contribution Account
as soon as practicable after the last day of such Plan Year in accordance with
Section 3.3. For each Plan Year, the dollar amount of Matching Contributions
shall be determined by the Committee using such procedures as it shall adopt
from time to time.
3.5 SUPPLEMENTAL MATCHING CONTRIBUTIONS. From time to time, the
Compensation Committee may determine that Supplemental Matching Contributions
shall be credited with respect to a Participant's Compensation Deferrals on such
terms and conditions as the Compensation Committee may specify in its sole
discretion.
3.6 CREDITING OF SUPPLEMENTAL MATCHING CONTRIBUTIONS. Any Supplemental
Matching Contributions made on behalf of a Participant shall be credited to the
Participant's Supplemental Matching Account as of the date specified by the
Compensation Committee. The dollar amount of Supplemental Matching
Contributions credited to any Participant's Account shall be determined by the
Committee using such procedures as it shall adopt from time to time.
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3.7 ELECTION REGARDING 401(K) PLAN. For Plan Years beginning after
December 31, 1995, each Participant may make a 401(k) Plan Election for a Plan
Year at the same time that the Participant makes a Compensation Deferral
Election for that Plan Year. All 401(k) Plan Elections shall be made in the
form and manner and at the time specified by the Committee. If a Participant
makes a 401(k) Plan Election, the Participant's Maximum 401(k) Plan Amount shall
be transferred from the Plan to the 401(k) Plan in accordance with such
election. If a Participant fails to make a 401(k) Plan Election for a Plan
Year, the Participant's Maximum 401(k) Plan Amount for that Plan Year shall be
paid in cash to the Participant as soon as practicable following the end of the
Plan Year (but in no event later than March 15 of the immediately following Plan
Year). Any amounts not transferred or distributed in accordance with this
Section 3.7 shall continue to be subject to the provisions of the Plan.
3.7.1 401(K) PLAN ELECTION. A 401(k) Plan Election is an election by
the Participant to have the Participant's Maximum 401(k) Plan Amount for
such Plan Year transferred as soon as practicable following the end of that
Plan Year (but in no event later than March 15 of the immediately following
Plan Year) from the Plan to the 401(k) Plan.
3.7.2 MAXIMUM 401(K) PLAN AMOUNT. With respect to each Participant
for each Plan Year, the Participant's Maximum 401(k) Plan Amount is an
amount equal to the lesser of (a) or (b), where (a) is the maximum amount
of Compensation Deferrals (excluding all deemed investment earnings
thereon) for such Plan Year that could otherwise have been made for such
Plan Year on behalf of the Participant to the 401(k) Plan, subject to the
actual deferral percentage test applicable to the 401(k) Plan and the
limitation on the amount of elective deferrals under Section 402(g) of the
Code applicable to the Participant; or (b) the Participant's Compensation
Deferrals for such Plan Year.
ARTICLE IV
ACCOUNTING
4.1 PARTICIPANTS' ACCOUNTS. At the direction of the Committee, there
shall be established and maintained on the books of the Company for each
Employer a separate Account for each Participant to which shall be credited all
of the Participant's Compensation Deferrals, Matching Contributions and any
Supplemental Matching Contributions together with deemed investment earnings and
losses on such amounts. Each Participant's Account shall be comprised of one or
more separate subaccounts including without limitation the following:
4.1.1 A Compensation Deferral Account to which the Participant's
Compensation Deferrals shall be credited together with deemed investment
earnings and losses thereon;
4.1.2 A Matching Contribution Account to which the Participant's
Matching Contributions shall be credited together with deemed investment
earnings and losses thereon; and
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4.1.3 A Supplemental Matching Contribution Account to which the
Participant's Supplemental Matching Contributions (if any) shall be
credited together with deemed investment earnings and losses thereon.
The deemed investment earnings and losses on a Participant's subaccounts
shall be based on the investment performance of the Hypothetical Investment
Funds with respect to such subaccounts; provided that no actual investment shall
be made in such Hypothetical Investment Funds with respect to a Participant.
4.2 PARTICIPANTS REMAIN UNSECURED CREDITORS. All amounts credited to a
Participant's Account under the Plan shall continue for all purposes to be a
part of the general assets of the Employers. Each Participant's interest in the
Participant's Account shall make the Participant only a general, unsecured
creditor of the Employers.
4.3 ACCOUNTING METHODS. The accounting methods and procedures to be used
under the Plan for the purpose of maintaining the Participants' Accounts,
including the calculation and crediting of deemed investment earnings and
losses, shall be determined by the Committee in its sole discretion. The
accounting methods and procedures selected by the Committee may be revised from
time to time.
4.4 ACCOUNT STATEMENTS. The Committee shall cause a statement of each
Participant's Account to be furnished to the Participant at least annually.
4.5 INVESTMENTS. All amounts accumulated pursuant to the Plan shall for
all purposes be a part of the general assets of the Employers. Each
Participant's interest in the Plan shall make the Participant only a general
creditor of the Employers, and no actual investments shall be made on behalf of
Participants in the Plan. It shall be the policy of the Committee that any
assets accumulated in the Trust shall be invested in the Hypothetical Investment
Funds in accordance with each Participant's investment fund election under the
401(k) Plan. From time to time but not less often than quarterly, the Committee
shall review each Participant's 401(k) Plan investment fund election and cause
the allocation of assets in the Hypothetical Investment Funds and future
contributions thereto to be adjusted to reflect each Participant's 401(k) Plan
investment fund election. The Committee may establish such rules and procedures
as it deems necessary or appropriate to provide for the investment of any assets
accumulated in the Trust.
ARTICLE V
DISTRIBUTIONS
5.1 NORMAL TIME FOR DISTRIBUTION. Subject to Sections 5.3 and 5.6,
distribution of the balance credited to a Participant's Account shall be made in
a single payment as soon as practicable following the Participant's termination
of employment with all Affiliates, but in no event shall such amount be
distributed later than the last day of the year following the year in which the
Participant terminated employment. The distribution shall be paid in cash
except that any portion of a Participant's Account that is deemed to be invested
in a Hypothetical Investment
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Fund wholly or primarily invested in Common Stock may, if requested by the
Participant, be paid in the form of whole shares of Common Stock and cash in
lieu of fractional shares.
5.2 BENEFICIARY DESIGNATIONS. By electing to participate in the Plan,
each Participant agrees that his designated Beneficiary determined for purposes
of the 401(k) Plan shall be the Participant's designated Beneficiary for
purposes of the Plan.
5.3 FINANCIAL HARDSHIP. In the event that a Participant suffers a
Financial Hardship, the Committee, in its sole discretion and notwithstanding
any contrary provision of the Plan, may determine that all or part of the
Participant's Account shall be paid to the Participant immediately; provided
that the amount paid to the Participant pursuant to this Section 5.3 shall be
limited to the amount reasonably necessary to alleviate such Financial Hardship.
Payment under this Section 5.3 may not be made to the extent that such Financial
Hardship may be relieved by suspension of the Participant's Compensation
Deferrals in accordance with Section 2.2.
5.4 PAYMENTS TO INCOMPETENTS. If any amount is due to be paid to a minor
or if the Committee reasonably believes that any payee is legally incapable of
receiving any payment due such person, the Committee shall have the payment of
such amount or any part thereof made to the person or institution that it
reasonably believes is caring for or supporting the payee unless the Committee
has received notice of a claim for such amount from a legally appointed guardian
or conservator of the payee. Any payment shall, to the extent thereof, be a
complete discharge of any liability under the Plan and of the Employers to the
payee.
5.5 UNDISTRIBUTABLE ACCOUNTS. Each Participant and (in the event of
death) the Participant's Beneficiary shall keep the Committee advised of such
person's mailing address. If the Committee is unable to locate the Participant
or Beneficiary to whom a Participant's Account is payable under this Article 5,
the Participant's Account shall continue to be credited with deemed investment
earnings and losses in accordance with Section 4.5. Accounts that, in
accordance with the preceding sentence, have been undistributable for a period
of 36 months after the Participant's termination of employment shall be
forfeited from the Trust to the Participant's Employer as of the end of such
36th month. If a Participant whose Account is forfeited under this Section 5.5
(or the Participant's Beneficiary) files a claim for distribution of the Account
after the date that the Account is forfeited and if the Committee determines
that such claim is valid, then the forfeited Account shall be paid as soon as
practicable thereafter.
5.6 COMMITTEE DISCRETION. Within the provisions of this Article 5, the
Committee shall have sole discretion to determine the specific timing of the
payment of any Account under the Plan.
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ARTICLE VI
VESTING
6.1 VESTING IN COMPENSATION DEFERRAL ACCOUNTS. Subject to Section
8.1 (relating to creditor status) and Section 9.2 (relating to amendment and
termination of the Plan), a Participant's interest in the balance credited to
the Participant's Compensation Deferral Account shall at all times be fully
vested and nonforfeitable.
6.2 VESTING IN MATCHING AND SUPPLEMENTAL MATCHING CONTRIBUTION
ACCOUNTS. Subject to Section 8.1 and Section 9.2, a Participant's interest in
the Participant's Matching Contribution Account and Supplemental Matching
Contribution Account shall become fully vested and nonforfeitable in accordance
with the following schedule:
Number of Years
of Vesting Service Vested Percentage
------------------ ------------------
less than 1 0%
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
6.2.1 TERMINATION. Upon termination of the Participant's employment
with all Affiliates, the vested portion of the Participant's Matching
Contribution Account and Supplemental Matching Contribution Account shall
be distributable to the Participant in the manner and at the time set forth
in Article 5, and the unvested portion of such Accounts shall be
permanently forfeited from the Participant's Account. Forfeitures
resulting under the Plan shall be used to offset the amount of future
Matching Contributions and Supplemental Matching Contributions.
6.2.2 ACCELERATED VESTING. Notwithstanding the foregoing but subject
to Section 8.1 and Section 9.2, a Participant's interest in the
Participant's Matching Contribution Account and Supplemental Matching
Contribution Account shall be fully vested and nonforfeitable upon the
earlier of the following: (a) the Participant's Normal Retirement Date if
the Participant is employed by an Affiliate on that date; (b) the
Participant's termination of employment with all Affiliates due to the
Participant's death; or (c) a Change In Control. For purposes of this
Section 6.2.2, a "Change In Control" will be deemed to have occurred when
any Person meets the requirements for becoming an Acquiring Person, whether
or not a Distribution Date occurs or the Rights are redeemed by the
Company, as those terms are defined in the Rights Agreement between the
Company and Bank One, Texas, N.A. as Rights Agent (First Interstate Bank of
Texas, N.A. became successor Rights Agent as of November 1, 1995), dated as
of April 29, 1994 (the "Rights Agreement"); provided that a Change In
Control shall not be deemed to have occurred for purposes of this Section
6.2.2 with respect to any Person meeting
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the requirements of clauses (i) and (ii) of Rule 13d-1(b)(1) promulgated
under the Securities Exchange Act of 1934, as amended.
6.3 TRANSFERS OF EMPLOYMENT. The transfer of a Participant from
employment with an Employer to employment with an Affiliate shall not constitute
a termination of employment under the Plan. A Participant's employment for
purposes of the Plan shall be deemed to have terminated upon termination of the
Participant's employment with all Affiliates.
ARTICLE VII
ADMINISTRATION
7.1 PLAN ADMINISTRATOR. The Company is designated as the administrator of
the Plan within the meaning of Section 3(16)(A) of ERISA.
7.2 COMMITTEE. The Plan shall be administered by the Committee. The
Committee shall have the authority to control and manage the operation and
administration of the Plan. Any member of the Committee may resign at any time
by notice in writing mailed or delivered to the Secretary of the Company.
7.3 ACTIONS BY COMMITTEE. Each decision of a majority of the members of
the Committee then in office shall constitute the final and binding act of the
Committee. The Committee may act (a) at meetings called or held in person or by
conference telephone call and (b) by unanimous written consent and shall keep
minutes of all meetings held and a record of all actions taken by unanimous
written consent.
7.4 POWERS OF COMMITTEE. The Committee shall have all powers and
discretion necessary or appropriate to supervise the administration of the Plan
and to control its operation in accordance with its terms including without
limitation the following powers:
7.4.1 to interpret and determine the meaning and validity of the
provisions of the Plan and to determine any question arising under, or in
connection with, the administration, operation or validity of the Plan or
any amendment thereto;
7.4.2 to determine any and all considerations affecting the
eligibility of any employee to become a Participant or remain a Participant
in the Plan, subject to the eligibility requirements established from time
to time by the Compensation Committee;
7.4.3 to cause one or more separate Accounts to be maintained for
each Participant;
7.4.4 to cause Compensation Deferrals, Matching Contributions,
Supplemental Matching Contributions and deemed investment earnings and
losses thereon to be credited to Participants' Accounts;
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7.4.5 to establish and revise accounting methods or procedures as
provided in Section 4.3;
7.4.6 to determine the status and rights of Participants, their
spouses, Beneficiaries, and estates;
7.4.7 to employ such counsel, agents and advisers and to obtain such
legal, clerical and other services as it may deem necessary or appropriate
in carrying out the provisions of the Plan;
7.4.8 to establish rules for the performance of its powers and duties
and for the administration of the Plan;
7.4.9 to arrange for distribution to each Participant of a statement
of benefits under the Plan from time to time but not less often than
annually;
7.4.10 to publish a claims and appeal procedure satisfying the
standards of Section 503 of ERISA pursuant to which individuals or estates
may claim Plan benefits (including the exercise of rights purported to be
granted by the Plan) and appeal denials of such claims;
7.4.11 to delegate to any one or more of its members or to any other
person, severally or jointly, the authority to perform for and on behalf of
the Committee one or more of the functions of the Committee under the Plan;
and
7.4.12 to decide all issues and questions regarding Accounts and the
time, form, manner and amount of distributions to Participants.
7.5 DECISIONS OF COMMITTEE. All actions, interpretations and decisions of
the Committee shall be conclusive and binding on all persons and shall be given
the maximum deference allowed by law.
7.6 ADMINISTRATIVE EXPENSES. All expenses incurred in the administration
of the Plan by the Committee, or otherwise, including legal fees and expenses,
shall be paid and borne by the Employers.
7.7 ELIGIBILITY TO PARTICIPATE. No member of the Committee who is also an
employee of an Employer shall be excluded from participating in the Plan if
otherwise eligible, but such person shall not be entitled, as a member of the
Committee, to act or pass upon any matters pertaining specifically to such
person's own Account under the Plan.
7.8 INDEMNIFICATION. By adopting the Plan, each of the Employers agrees
to indemnify and hold harmless the members of the Committee from and against any
and all losses, claims, damages or liabilities (including attorneys' fees and
amounts paid, with the approval of the Board, in settlement of any claim)
arising out of or resulting from the implementation of a
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duty, act or decision with respect to the Plan, so long as such duty, act or
decision does not involve gross negligence or willful misconduct on the part of
any such individual.
ARTICLE VIII
FUNDING
8.1 UNFUNDED PLAN. All amounts credited to a Participant's Account under
the Plan shall continue for all purposes to be a part of the general assets of
the Employers. The interest of the Participant in the Participant's Account,
including the Participant's right to distribution thereof, shall be an unsecured
claim against the general assets of the Employers. In the event that an
Employer (other than the Company) becomes insolvent and therefore unable to make
a payment or payments under the Plan, the Company shall make such payments;
provided, however, that nothing in this sentence shall make any Participant
anything other than a general, unsecured creditor of the Company. Nothing
contained in the Plan shall give any Participant or Beneficiary any interest in
or claim against any specific assets of the Employers.
8.2 TRUST. The Company has entered into the Trust for the purpose of
funding and satisfying the Employers' obligations under the Plan. From time to
time throughout each Plan Year, the Employers shall transfer an amount in cash
to the Trust equal to the aggregate amount credited to Participants' Accounts as
contributions pursuant to the Plan. Any payments made by the Trust pursuant to
the Plan shall be in complete satisfaction of the Employers' and the Plan's
obligations to make such payments.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 COMPANY'S OBLIGATIONS LIMITED. The Company intends to continue the
Plan indefinitely and to maintain each Participant's Account until such Account
is paid to the Participant (or the Participant's Beneficiary) in accordance with
the provisions of the Plan. However, the Plan is voluntary on the part of the
Company, and the Company does not guarantee to continue the Plan. Compensation
Deferrals, Matching Contributions and Supplemental Matching Contributions may be
suspended or discontinued at any time.
9.2 RIGHT TO AMEND OR TERMINATE. The Board reserves the right to alter,
amend or terminate the Plan, or any part thereof, in such manner as it may
determine, at any time and for any reason. No amendment to the Plan shall be
effective to decrease or impair the rights of any Participant to any portion of
such Participant's Account determined under the Plan immediately prior to the
adoption of such amendment. Notwithstanding the foregoing, the Plan may be
amended (prospectively, retroactively or both) if necessary to comply with all
laws applicable to the Plan.
9.3 EFFECT OF TERMINATION. If the Plan is terminated pursuant to this
Article 9, the balances credited to the Accounts of the affected Participants
shall become fully vested and
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<PAGE>
nonforfeitable and shall be distributed to such affected Participants at the
time and in the manner set forth in Article 5; provided that the Compensation
Committee, in its sole discretion, may authorize accelerated distribution of
Participants' Accounts as of any earlier date.
9.4 DISPOSITION OF AFFILIATES. Notwithstanding any contrary provision of
the Plan, in the event that one or more Participants transfer employment to an
entity that is not an Affiliate pursuant to an agreement regarding the sale of
the stock or assets of an Affiliate, or a spin-off, split-up or other change in
the capital structure of an Affiliate (each, an "affected Participant"), the
Board, in its sole discretion, may determine that (a) the liability for amounts
credited to an affected Participant's Account shall be assumed by such entity
(or an affiliate thereof), and upon assumption by such entity (or affiliate
thereof) of such liability, no Employer shall have any liability under the Plan
to such affected Participant, or (b) the amounts credited to an affected
Participant's Account shall be distributed to the Participant in a single
payment following the affected Participant's termination of employment with all
Affiliates.
ARTICLE X
GENERAL PROVISIONS
10.1 PARTICIPATION BY AFFILIATES. Affiliates of the Company may become
participating Employers by adopting the Plan. Upon adoption of the Plan, an
Affiliate is deemed to agree to all of the Plan's terms, including without
limitation the provisions granting exclusive authority to the Board to amend the
Plan and the provisions granting exclusive authority to the Committee to
administer and interpret the Plan. Any Affiliate may terminate its
participation in the Plan at any time.
10.2 INALIENABILITY. In no event may either a Participant, a former
Participant or such person's Beneficiary, spouse or estate sell, transfer,
anticipate, assign, hypothecate or otherwise dispose of any right or interest
under the Plan; and such rights and interests shall not at any time be subject
to the claims of creditors of a Participant nor be liable to attachment,
execution or other legal process.
10.3 RIGHTS AND DUTIES. Neither the Employers nor the Committee shall be
subject to any liability or duty under the Plan except as expressly provided in
the Plan, or for any action taken, omitted or suffered in good faith.
10.4 NO ENLARGEMENT OF EMPLOYMENT RIGHTS. Neither the establishment or
maintenance of the Plan, the making of any Compensation Deferrals, nor any
action of any Employer or the Committee shall be held or construed to confer
upon any person any right to be continued as an employee of an Employer nor,
upon dismissal, any right or interest in any specific assets of the Employers
other than as provided in the Plan. Each Employer expressly reserves the right
to discharge any of its employees at any time.
10.5 APPORTIONMENT OF COSTS AND DUTIES. All acts required of the Employers
under the Plan may be performed by the Company for itself and all other
Employers, and the costs of
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the Plan may be equitably apportioned by the Committee among the Company and all
other Employers. Whenever an Employer is permitted or required under the terms
of the Plan to do or perform any act, matter or thing, it shall be done and
performed by any officer or employee of the Employer who is authorized by the
board of directors of the Employer.
10.6 CONTRIBUTIONS NOT COUNTED UNDER OTHER EMPLOYEE BENEFIT PLANS.
Compensation Deferrals, Matching Contributions and any Supplemental Matching
Contributions will not be considered for purposes of contributions or benefits
under any other employee benefit plan sponsored by the Employers except to the
extent specifically provided herein or therein.
10.7 APPLICABLE LAW. The Plan shall be construed, regulated and
administered under ERISA and other applicable federal laws and, where not
otherwise preempted, by the laws of the State of Texas.
10.8 SEVERABILITY. If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any other
provisions of the Plan, and in lieu of each provision that is held invalid or
unenforceable, there shall be added as part of the Plan a provision that shall
be as similar in terms to such invalid or unenforceable provision as may be
possible and be valid, legal and enforceable.
10.9 CAPTIONS. The captions contained in and the table of contents
prefixed to the Plan are inserted only as a matter of convenience and for
reference and in no way define, limit, enlarge or describe the scope or intent
of the Plan nor in any way affect the construction of any provision of the Plan.
10.10 GENDER AND NUMBER. The masculine gender shall be deemed to denote
the feminine or neuter genders, the singular to denote the plural, and the
plural to denote the singular, where the context so permits.
0440579.07/D
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EXHIBIT 99(b)
COMPUSA INC. DEFERRED COMPENSATION TRUST (AS AMENDED)
<PAGE>
COMPUSA INC.
DEFERRED COMPENSATION TRUST
(Amended and Restated Effective November 1, 1995)
This Agreement (the "Trust Agreement") is made and entered into as of
November 1, 1995, by and between CompUSA Inc. ("CompUSA") and Wells Fargo Bank,
N.A. (the "Trustee"). This Trust Agreement amends and restates, in its
entirety, the previous trust agreement entered into as of November 1, 1995, by
and between CompUSA and Trustee.
R E C I T A L S:
A. CompUSA has adopted the CompUSA Inc. Deferred Compensation Plan (the
"Plan"), a non-qualified deferred compensation plan which benefits a select
group of management and highly compensated employees of CompUSA and its
subsidiaries and affiliates (collectively referred to in this Plan as the
"Company").
B. Company has incurred or expects to incur liability under the terms of
the Plan with respect to the individuals participating in the Plan.
C. Company wishes to establish a trust (the "Trust") and to contribute to
the Trust assets that shall be held therein, subject to the claims of Company's
creditors in the event of Company's Insolvency, as herein defined, until paid to
Plan participants and their beneficiaries in such manner and at such times as
specified in the Plan.
D. It is the intention of the parties that the Trust shall constitute an
unfunded arrangement and shall not affect the status of the Plan as an unfunded
plan maintained for the purpose of providing deferred compensation for a select
group of management or highly compensated employees for purposes of Title I of
the Employee Retirement Income Security Act of 1974.
E. It is the intention of Company to make contributions to the Trust to
provide itself with a source of funds to assist it in the meeting of its
liabilities under the Plan.
NOW, THEREFORE, the parties establish the Trust and agree that the Trust
shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST.
(a) Company hereby deposits with Trustee in trust $100 which shall become
the principal of the Trust to be held, administered and disposed of by Trustee
as provided in this Trust Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"), and
shall be construed accordingly.
<PAGE>
(d) The principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used exclusively for
the uses and purposes of Plan participants and general creditors as herein set
forth. Plan participants and their beneficiaries shall have no preferred claim
on, or any beneficial ownership interest in, any assets of the Trust. Any
rights created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against Company.
Any assets held by the Trust will be subject to the claims of Company's general
creditors under federal and state law in the event of Insolvency, as defined in
Section 3(a) hereof.
SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) Company shall direct the Plan recordkeeper to deliver to Trustee a
schedule (the "Payment Schedule") that indicates the amounts payable in respect
of each Plan participant (and each participant's beneficiaries), that provides a
formula or other instructions acceptable to Trustee for determining the amounts
so payable, the form in which such amounts are to be paid (as provided for or
available under the Plan) and the time of commencement for payment of such
amounts. Except as otherwise provided herein, Trustee shall make payments to
the Plan participants and their beneficiaries in accordance with the Payment
Schedule. The Trustee shall make provision for the reporting and withholding of
any federal, state or local taxes that may be required to be withheld with
respect to the terms of the Plan and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts have been
reported, withheld and paid by Company.
(b) The entitlement of a Plan participant or participant's beneficiaries to
benefits under the Plan shall be determined by Company or such party as it shall
designate under the Plan, and any claim for such benefits shall be considered
and reviewed under the procedures set out in the Plan.
(c) Company may make payments of benefits directly to Plan participants or
their beneficiaries as they become due under the terms of the Plan. Company
shall notify Trustee of its decision to make payment of benefits directly prior
to the time amounts are payable to participants or their beneficiaries. In
addition, if the principal of the Trust, and any earnings thereon, are not
sufficient to make payments of benefits in accordance with the terms of the
Plan, Company shall make the balance of each such payment as it falls due.
Trustee shall notify Company where principal and earnings are not sufficient.
(d) Following a Change in Control, Trustee shall obtain the Payment
Schedule referenced in (a) above directly from the Plan recordkeeper, who is
designated as such immediately prior to the Change in Control. Trustee may rely
on an opinion of counsel selected by Trustee that a Change in Control has
occurred for purposes of this Trust Agreement. If the Payment Schedule provided
to Trustee by the Plan recordkeeper indicates that payment of benefits to a
participant is conditioned upon a participant's termination of employment from
the Company, Trustee shall be entitled to rely on an affidavit of termination
executed by the participant or the participant's beneficiary in a form
acceptable to the Trustee as evidence that termination of employment has
occurred.
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<PAGE>
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN
COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if Company is Insolvent. Company shall be considered "Insolvent"
for purposes of this Trust Agreement if (i) Company is unable to pay its debts
as they become due, or (ii) Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of the Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Company under federal and state laws as set forth
below.
(1) The Board of Directors and the Chief Executive Officer of Company
shall have the duty to inform Trustee in writing of Company's Insolvency.
If a person claiming to be a creditor of Company alleges in writing to
Trustee that Company has become Insolvent, Trustee shall determine whether
Company is Insolvent and, pending such determination, Trustee shall
discontinue payment of benefits to Plan participants and their
beneficiaries.
(2) Unless Trustee has actual knowledge of Company's Insolvency or has
received notice from Company of a person claiming to be a creditor alleging
that Company is Insolvent, Trustee shall have no duty to inquire whether
Company is Insolvent. Trustee may in all events rely on such evidence
concerning Company's solvency as may be furnished to Trustee and that
provides Trustee with a reasonable basis for making a determination
concerning Company's solvency.
(3) If at any time Trustee has determined that Company is Insolvent,
Trustee shall discontinue payment to Plan participants and their
beneficiaries and shall hold the assets of the Trust for the benefit of
Company's general creditors. Nothing in this Trust Agreement shall in any
way diminish any rights of Plan participants and their beneficiaries to
pursue their rights as general creditors of Company with respect to
benefits due under the Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Plan participants
and their beneficiaries in accordance with Section 2 of this Trust
Agreement only after Trustee has determined that Company is not Insolvent
(or is no longer Insolvent).
(c) Provided that there are sufficient assets in the Trust, if Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants and their beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants and their beneficiaries by Company in lieu of the payments provided
for hereunder during any such period of discontinuance.
3
<PAGE>
SECTION 4. PAYMENTS TO COMPANY.
Except as provided in Section 3 hereof, Company shall have no right or
power to direct Trustee to return to Company or to divert to others any of the
Trust assets before all payments of benefits have been made to Plan participants
and their beneficiaries pursuant to the terms of the Plan, except for the annual
transfer of assets to the CompSavings Plan for Employees of CompUSA Inc.
pursuant to the terms of the Plan.
SECTION 5. INVESTMENT AUTHORITY.
(a) Trustee may invest in securities (including stock or rights to acquire
stock) or obligations issued by CompUSA. All rights associated with assets of
the Trust shall be exercised by Trustee or the person designated by Trustee and
shall in no event be exercisable by or rest with Plan participants except that
voting rights with respect to Trust assets will be exercised by Company.
Company shall have the right at any time and from time to time, in its sole
discretion, to substitute assets of equal fair market value for any asset held
by the Trust. This right is exercisable by Company in a nonfiduciary capacity
without the approval or consent of any person in a fiduciary capacity.
(b) Except as provided below, Company shall have all power over and
responsibility for the management, disposition and investment of Trust assets,
and Trustee shall comply with proper written directions of Company concerning
the Trust assets. Company shall not issue directions in violation of the terms
of this Trust Agreement. Except as provided in this Trust Agreement, Trustee
shall have no duty or responsibility to review, initiate action or make
recommendations regarding Trust assets and shall retain assets until directed in
writing by Company to dispose of them.
(c) Company may appoint an investment manager or managers to direct,
control or manage the investment of all or a portion of the Trust assets.
Company shall notify Trustee in writing of the appointment of each investment
manager and the portion of the Trust assets subject to the investment manager's
direction. If the foregoing conditions are met, the investment manager shall
have the power to manage, acquire, retain or dispose of such portion, and
Trustee shall not be liable for the acts or omissions of the investment manager
or be under an obligation to invest or otherwise manage the portion of the Trust
assets which is subject to the direction of such investment manager.
(d) Company may also delegate all of its investment authority to Trustee
for all or part of the Trust. Upon written acceptance of that delegation,
Trustee shall have full power and authority to invest and reinvest the portion
of the Trust so designated by Company in investments of any kind.
(e) The Trust may hold assets of any kind, including shares of any
registered investment company, whether or not Trustee or any of its affiliates
is an advisor to, or other service provider to, such company and receives
compensation from such company for the services provided.
4
<PAGE>
(f) The Trust may hold that portion of the Trust Fund as is appropriate,
for the ordinary administration and for the disbursement of funds in cash,
without liability for interest, by depositing the same in any bank (including
deposits which bear a reasonable rate of interest in a bank or similar financial
institution supervised by the United States or a State, even where a bank or
financial institution is Trustee, or is otherwise a fiduciary of the Plan,
including Wells Fargo Bank, National Association), subject to the rules and
regulations governing such deposits, and without regard to the amount of such
deposit.
SECTION 6. DISPOSITION OF INCOME.
During the term of the Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
SECTION 7. ACCOUNTING BY TRUSTEE.
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements and all other transactions in Trust assets required to
be made, including such specific records as shall be agreed upon in writing
between Company and Trustee. Within 90 days following the close of each
calendar year and within 90 days after the removal or resignation of Trustee,
Trustee shall deliver to Company a written account of its administration of the
Trust during such year or during the period from the close of the last preceding
year to the date of such removal or resignation setting forth all investments,
receipts, disbursements and other transactions effected by it, including a
description of all securities and investments purchased and sold, with the cost
or net proceeds of such purchases or sales (accrued interest paid or receivable
being shown separately) and showing all cash, securities and other property held
in the Trust at the end of such year or as of the date of such removal or
resignation as the case may be.
SECTION 8. RESPONSIBILITY OF TRUSTEE.
(a) Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims; provided that Trustee shall incur no
liability to any person for any action taken pursuant to a direction, request or
approval given by Company which is contemplated by, and in conformity with, the
terms of the Plan or this Trust Agreement and is given in writing by Company.
In the event of a dispute between Company and a party, Trustee may apply to a
court of competent jurisdiction to resolve the dispute.
(b) If Trustee undertakes or defends any litigation arising in connection
with the Trust, Company agrees to indemnify Trustee against Trustee's costs,
expenses and liabilities (including without limitation attorneys' fees and
expenses) relating thereto and to be primarily liable for such payments. If
Company does not pay such costs, expenses and liabilities in a reasonably timely
manner, Trustee may obtain payment from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel for
Company generally) with respect to any of its duties or obligations hereunder.
5
<PAGE>
(d) Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals to assist in it performing any of
its duties or obligations hereunder.
(e) Trustee shall have, without exclusion, all powers conferred on trustees
by applicable law unless expressly provided otherwise herein; provided that if
an insurance policy is held as an asset of the Trust, Trustee shall have no
power to name a beneficiary of the policy other than the Trust, to assign the
policy (as distinct from conversion of the policy to a different form) other
than to a successor trustee or to loan to any person the proceeds of any
borrowing against such policy.
(f) Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that could give
the Trust the objective of carrying on a business and dividing the gains
therefrom within the meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Code.
SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE.
Company shall pay all administrative and Trustee's fees and expenses. If
not so paid, the fees and expenses shall be paid from the Trust.
SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to Company, which
shall be effective 90 days after receipt of such notice unless Company and
Trustee agree otherwise.
(b) Trustee may be removed by Company on 90 days notice or upon shorter
notice accepted by Trustee.
(c) Upon resignation or removal of Trustee and appointment of a successor
trustee, all assets shall subsequently be transferred to a successor trustee.
The transfer shall be completed within 90 days after receipt of notice of
resignation, removal or transfer unless Company extends the time limit.
(d) If Trustee resigns or is removed, a successor shall be appointed in
accordance with Section 11 hereof by the effective date of resignation or
removal under paragraph (a) or (b) of this section. If no such appointment has
been made, Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.
(e) If Trustee resigns or is removed within two years after a Change in
Control, Trustee shall select a successor trustee in accordance with the
provisions of Section 11(b) hereof prior to the effective date of Trustee's
resignation or removal.
6
<PAGE>
SECTION 11. APPOINTMENT OF SUCCESSOR.
(a) If Trustee resigns or is removed in accordance with Section 10(a) or
(b) hereof, Company may appoint any third party, such as a bank trust department
or other party that may be granted corporate trustee powers under state law, as
a successor to replace Trustee upon resignation or removal. The appointment
shall be effective when accepted in writing by the new trustee who shall have
all of the rights and powers of the former Trustee including ownership rights in
the Trust assets. The former Trustee shall execute any instrument necessary or
reasonably requested by Company or the successor trustee to evidence the
transfer.
(b) If Trustee resigns or is removed pursuant to the provisions of Section
10(e) hereof and selects a successor trustee, Trustee may appoint any third
party such as a bank trust department or other party that may be granted
corporate trustee powers under state law as a successor trustee. The
appointment of a successor trustee shall be effective when accepted in writing
by the new trustee. The new trustee shall have all the rights and powers of the
former Trustee including ownership rights in Trust assets. The former Trustee
shall execute any instrument necessary or reasonably requested by the successor
trustee to evidence the transfer.
(c) The successor trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets subject to
Sections 7 and 8 hereof. The successor trustee shall not be responsible for and
Company shall indemnify and defend the successor trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event or any condition existing at the time it becomes successor
trustee.
SECTION 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument executed by
Trustee and Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan or shall make the Trust revocable after it
has become irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which Plan participants
and their beneficiaries are no longer entitled to benefits pursuant to the terms
of the Plan. Upon termination of the Trust, any assets remaining in the Trust
shall be returned to Company.
SECTION 13. MISCELLANEOUS.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries from the
Trust may not be anticipated, assigned (either at law or in equity), alienated,
pledged, encumbered or subjected to attachment, garnishment, levy, execution or
other legal or equitable process.
(c) The Trust shall be governed by the laws of California, and this Trust
Agreement shall be construed in accordance with the laws of California.
7
<PAGE>
(d) For purposes of this Trust Agreement, a Change in Control will be
deemed to have occurred in the event any Person (other than a Person meeting the
requirements of clauses (i) and (ii) of Rule 13d-1(b)(1) or its successors
promulgated under the Securities Exchange Act of 1934, as amended) meets the
requirements for becoming an Acquiring Person, whether or not a Distribution
Date occurs or the Rights are redeemed by CompUSA, as those terms are defined in
the Rights Agreement between CompUSA and Bank One, Texas, N.A., dated as of
April 29, 1994.
(e) Each company participating in the Plan other than CompUSA is a
participating employer. By adopting the Plan and Trust Agreement, each
participating employer agrees to all of the terms of the Trust Agreement and
further agrees that CompUSA (or its delegate) shall have the exclusive authority
as the "Company" for purposes of the provisions of this Trust Agreement
respecting the administration, interpretation and amendment of this Trust
Agreement. Each such participating employer may terminate its participation in
the Trust at any time.
SECTION 14. EFFECTIVE DATE.
The effective date of the Trust and this Trust Agreement shall be
November 1, 1995.
Wells Fargo Bank, N.A. CompUSA Inc.
By /s/ Jane McKeever By /s/ Mel McCall
-------------------------- --------------------------
By /s/ Kathryn R. Reid
--------------------------
8
