<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 19, 1999
REGISTRATION NO. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PC SERVICE SOURCE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 5065 52-1703687
(State or other jurisdiction of (Primary standard industrial (I.R.S. Employer
incorporation or organization) classification code number) Identification No.)
2350 VALLEY VIEW LANE
DALLAS, TEXAS 75234
(214) 406-8583
</TABLE>
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
PC SERVICE SOURCE 1992 STOCK OPTION PLAN
(Full title of the plan)
<TABLE>
<S> <C>
AVERY MORE COPIES OF COMMUNICATIONS TO:
CHIEF EXECUTIVE OFFICER
PC SERVICE SOURCE, INC. BRIAN M. LIDJI, ESQ.
2753 VALLEY VIEW LANE SAYLES & LIDJI, P.C.
DALLAS, TEXAS 75234 4400 RENAISSANCE TOWER
(214)406-8583 1201 ELM STREET
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE DALLAS, TEXAS 75270
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) (214)939-8700
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
Proposed maximum Proposed maximum
Title of each class of Amount to offering price aggregate Amount of
securities to be registered be registered per unit offering price registration fee
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01
par value per share 500,000 $4.00(1) $2,000,000(1) $556
======================================================================================================================
</TABLE>
- ----------
(1) Pursuant to Rule 457(h), based on the average of the bid and asked
prices of the common stock reported on the Nasdaq National Market as of August
16, 1999, which is within five (5) business days prior to the date of the filing
of the Registration Statement.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
PC Service Source, Inc. filed a Form S-8 with the Securities & Exchange
Commission on July 1, 1994 ("Registration No. 33-81146") and on October 17, 1995
("Registration No. 33-98176"), with respect to the same class of securities for
which this registration statement is filed. Accordingly, the contents of
Registration No. 33-81146 and No. 33-98176 are incorporated herein by reference.
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
PC Service Source, Inc. hereby incorporates by reference into this
registration statement the following documents previously filed with the SEC.:
(1) Registration statement on Form S-8, No. 33-81146, effective on
July 1, 1994;
(2) Registration statement on Form S-8, No. 33-98176, effective on
October 17, 1995;
(3) Annual Report on Form 10-K for the year ended December 31,
1998; and
(4) Quarterly Report on Form 10-Q for the quarter ended June 30,
1999.
ITEM 8. EXHIBITS
The following documents are filed as a part of this registration
statement. Where such filing is made by incorporation by reference to a
previously filed report, such report is identified. The Index to Exhibits
included with the exhibits is filed as a part of this report.
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
4.1 PC Service Source 1992 Stock Option Plan, as amended.
5.1 Opinion of Sayles & Lidji, P.C.
23.1 Consent of Sayles & Lidji, P.C. (included in the opinion filed as Exhibit
5.1)
23.2 Consent of Ernst & Young LLP
23.3 Consent of KPMG LLP
24.1 Power of Attorney (see signature page of this Registration Statement)
</TABLE>
<PAGE> 3
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and authorized this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Dallas, State of Texas, on the 19th day of August,
1999.
PC SERVICE SOURCE, INC.
By: /s/ Avery More
---------------------------------------------
Avery More,
Chairman of the Board and Chief Executive
Officer
POWER OF ATTORNEY
Each individual whose signature appears below hereby designates and
appoints Avery More and Robert J. Boutin, as such person's true and lawful
attorneys-in-fact and agent (collectively, the "Attorney-in-Fact") with full
power of substitution and resubstitution, for such person and in such person's
name, place, and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this registration statement,
which amendments may make such changes in this registration statement as either
Attorney-in-Fact deems appropriate and requests to accelerate the effectiveness
of this registration statement, and to file each such amendment with all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto such Attorney-in- Fact and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that such Attorney-in-Fact or either of them, or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 19th day of August, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
/s/ Avery More Chairman of the Board and Chief Executive Officer
- ---------------------------------------- (Principal Executive Officer)
Avery More
/s/ Robert J. Boutin Senior Vice President, Chief Financial Officer
- ---------------------------------------- and Secretary
Robert J. Boutin (Principal Financial and Accounting Officer)
/s/ Morti Tenenhaus Director
- ----------------------------------------
Morti Tenenhaus
/s/ Robert Leff Director
- ----------------------------------------
Robert Leff
Director
- ----------------------------------------
Edward Raymund
Director
- ----------------------------------------
Jay Haft
</TABLE>
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
4.1 PC Service Source 1992 Stock Option Plan, as amended.
5.1 Opinion of Sayles & Lidji, P.C.
23.1 Consent of Sayles & Lidji, P.C. (included in the opinion filed as
Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
23.3 Consent of KPMG LLP
24.1 Power of Attorney (see signature page of this Registration
Statement)
</TABLE>
<PAGE> 1
EXHIBIT 4.1
PC PARTS EXPRESS, INC.
STOCK OPTION PLAN
This PC Parts Express, Inc. Stock Option Plan (the "Plan") provides for
the granting of
(a) Incentive Options (hereinafter defined) to certain key
employees of PC Parts Express, Inc., a Delaware corporation
(the "Corporation"), or of its Affiliates (hereinafter
defined), and
(b) Nonstatutory Stock Options (hereinafter defined) to certain
key employees and non-employee directors of the Corporation or
of its Affiliates and to certain individuals and entities who
are not employees or directors of the Corporation or of its
Affiliates but who from time to time provide substantial
advice or other assistance or services to the Corporation or
its Affiliates.
The purpose of the Plan is to provide an incentive for key employees
and directors of the Corporation or its Affiliates and an incentive for
individuals who are not employees or directors of the Corporation or its
Affiliates, but who from time to time provide substantial advice or other
assistance or services to the Corporation or its Affiliates, to remain in the
service of the Corporation or its Affiliates, to extend to them the opportunity
to acquire a proprietary interest in the Corporation so that they will apply
their best efforts for the benefit of the Corporation, and to aid the
Corporation in attracting able persons to enter the service of the Corporation
and its Affiliates.
SECTION 1 Definitions.
1.1 "Act" shall mean the Securities Exchange Act of 1934, as amended.
1.2 "Affiliates" shall mean (a) any corporation, other than the
Corporation, in an unbroken chain of corporations ending with the Corporation if
each of the corporations, other than the Corporation, owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain and (b) any corporation,
other than the Corporation, in an unbroken chain of corporations beginning with
the Corporation if each of the corporations, other than the last corporation in
the unbroken chain, owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
1.3 "Agreement" shall mean the written agreement between the
Corporation and a Holder evidencing the option granted by the Company and the
understanding of the parties with respect thereto.
1.4 "Board of Directors" shall mean the board of directors of the
Corporation.
1.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.6 "Committee" shall mean the committee appointed pursuant to Section
3 hereof by the Board of Directors to administer this Plan.
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<PAGE> 2
1.7 "Disability" shall mean a physical or mental condition which is
expected to be of long, continued duration and prevents an individual from
engaging in any substantial gainful employment.
1.8 "Eligible Individuals" shall mean (a) key employees, including
officers and directors who are also employees of the corporation or of any of
its Affiliates, and (b) non-employee directors of the corporation or of any of
its Affiliates, and (c) individuals who are not employees or directors of the
corporation or its Affiliates but who from time to time provide substantial
advice or other assistance or services to the corporation or its Affiliates.
Notwithstanding the foregoing provisions of this Paragraph 1.8, to ensure that
the requirements of the third sentence of Paragraph 3.1 are satisfied, the Board
of Directors may from time to time specify individuals who shall not be eligible
for the grant of Options or options or stock appreciation rights or allocations
of stock under any plan of the corporation or its affiliates (as such terms are
used in subsection (d) (3) of Rule 16b-3 promulgated under the Act); provided,
however, that the Board of Directors may at any time determine that any
individual who has been so excluded from eligibility shall become eligible for
grants of Options and grants of such options or stock appreciation rights or
allocations of stock under any plans of the Corporation and its Affiliates.
1.9 "Fair Market Value" shall mean, if the Stock is traded on one or
more established markets or exchanges, the mean of the opening and closing
prices of the Stock in the primary market or exchange on which the Stock is
traded, and if the Stock is not so traded or the Stock does not trade on the
relevant date, the value determined in good faith by the Board of Directors. For
purposes of valuing Incentive Options, the Fair Market Value of stock shall be
determined without regard to any restriction other than one which, by its terms,
will never lapse.
1.10 "Holder" shall mean an Eligible Individual to whom an Option has
been granted.
1.11 "Incentive Options" shall mean stock options that are intended to
satisfy the requirements of section 422 of the Code.
1.12 "Nonstatutory Options" shall mean stock options that do not
satisfy the requirements of section 422 of the Code.
1.13 "Options" shall mean either Incentive Options or Nonstatutory
Options, or both.
1.14 "Stock" shall mean the Corporation's authorized $.01 par value
common stock together with any other securities with respect to which Options
granted hereunder may become exercisable.
SECTION 2 Stock and Maximum Number of Shares Subject to the Plan.
2.1 Description of Stock and Maximum Shares Allocated. The Stock which
Options granted hereunder give a Holder the right to purchase may be unissued or
reacquired shares of Stock, as the Board of Directors may, in its sole and
absolute discretion, from time to time determine.
Subject to the adjustments provided for in Paragraph 6.6 hereof, the
aggregate number of shares of Stock to be issued pursuant to the exercise of all
Options granted hereunder may equal but shall not exceed 200,000 shares.
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<PAGE> 3
2.2 Restoration of Unpurchased. If an Option granted hereunder expires
or terminates for any reason during the term of this Plan and prior to the
exercise thereof in full, the shares of Stock subject to but not issued under
such Option shall again be available for Options granted hereunder subsequent
thereto.
SECTION 3 Administration of the Plan.
3.1 Stock Option Committee. The Plan shall be administered by the
Committee. The Committee shall consist of not less than three (3) members of the
Board of Directors, and, except as is provided in the immediately following
sentence, may be constituted by all members of the Board of Directors. In the
event that the stock is registered under Section 12 of the Act, all members of
the committee shall be "disinterested persons," as defined in Rule l6b-3(d) (3)
promulgated under the Act; and in such event members of the Committee shall not
be eligible to receive Options or stock options, stock appreciation rights, or
an allocation of stock under any plan of the Corporation or its Affiliates (as
such terms are used in subsection (d) (3) of Rule 16b-3 promulgated under the
Act) while they are serving as members of the Committee and must not have been
eligible to receive Options or such options, stock appreciation rights, or an
allocation of stock under any plan of the Corporation or its Affiliates within
one (1) year prior to their appointment to the Committee.
3.2 Duration, Removal, Etc. The members of the Committee shall serve at
the pleasure of the Board of Directors, which shall have the power, at any time
and from tine to time, to remove members from the Committee or to add members
thereto. Vacancies on the Committee, however caused, shall be filled by action
of the Board of Directors.
3.3 Meetings and Actions of Committee. The Committee shall elect one of
its members as its Chairman and shall hold its meetings at such times and places
as it may determine. All decisions and determinations of the Committee shall be
made by the majority vote or decision of all of its members present at a
meeting; provided, however, that any decision or determination reduced to
writing and signed by all of the members of the Committee shall be as fully
effective as if it had been made at a meeting duly called and held. The
Committee may make any rules and regulations for the conduct of its business
that are not inconsistent with the provisions hereof and with the bylaws of the
Corporation as it may deem advisable.
3.4 Committee's Powers. Subject to the express provisions hereof, the
Committee shall have the authority, in its sole and absolute discretion, (a) to
adopt, amend, and rescind administrative and interpretive rules and regulations
relating to the Plan; (b) to determine the terms and provisions of the
respective Agreements (which need not be identical), including provisions
defining or otherwise relating to (i) subject to section 6 of the Plan, the term
and the period or periods and extent of exercisability of the options, (ii) the
extent to which the transferability of shares of Stock issued upon exercise of
Options is restricted, (iii) the effect of termination of employment upon the
exercisability of the Options, and (iv) the effect of approved leaves of absence
(consistent with any applicable regulations of the Internal Revenue Service);
(c) to accelerate the time of exercisability of any Option that has been
granted; (d) to construe the respective Option Agreements and the Plan; and (e)
to make all other determinations and perform all other acts necessary or
advisable for administering the Plan, including the delegation of such
ministerial acts and responsibilities as the Committee deems appropriate. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Agreement in the manner and to the extent it
shall deem expedient to carry it into effect, and it shall be the sole and final
judge of such expediency. The determinations of the Committee on the matters
referred to in this Paragraph 3.4 shall be final and conclusive.
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<PAGE> 4
SECTION 4 Eligibility and Participation.
4.1 Eligible Individuals. Options may be granted hereunder only to
persons who are Eligible Individuals at the time of the grant thereof.
Notwithstanding any provision contained herein to the contrary, a person shall
not be eligible receive an Incentive Option hereunder unless he is an employee
of the Corporation or an Affiliate, nor shall a person be eligible to receive an
Incentive Option hereunder if he, at the time such option is granted, would own
(within the meaning of sections 422 and 424 of the Code) stock possessing more
than ten percent (10%) of the total combined voting power or value of all
classes of stock of the Corporation or an Affiliate unless at the time such
Incentive Option is granted the exercise price per share of Stock is at least
one hundred and ten percent (110%) of the Fair Market Value of each share of
Stock to which the Incentive Option relates and the Incentive Option is not
exercisable after the expiration of five (5) years from the date it is granted.
4.2 No Right to Option. The adoption of the Plan shall not be deemed to
give any person a right to be granted an Option.
SECTION 5 Grant of Options and Certain Terms of the Agreements.
Subject to the express provisions hereof, the Committee shall determine
which Eligible Individuals shall be granted Options hereunder from time to time.
In making grants, the Committee shall take into consideration the contribution
the potential Holder has made or may make to the success of the Company or its
Affiliates and such other considerations as the Board of Directors may from time
to time specify. The Committee shall also determine the number of shares subject
to each of such Options, and shall authorize and cause the Corporation to grant
Options in accordance with such determinations.
The date on which the Committee completes all action constituting an
offer of an Option to an individual, including the specification of the number
of shares of Stock to be subject to the Option, shall be the date on which the
Option covered by an Agreement is granted, even though certain terms of the
Agreement may not be at such time determined and even though the Agreement may
not be executed until a later time. For purposes of the preceding sentence, an
offer shall be deemed made if the Committee has completed all such action except
communication of the grant of the Option to the potential Holder. In no event,
however, shall an Optionee gain any rights in addition to those specified by the
Committee in its grant, regardless of the time that may pass between the grant
of the Option and the actual execution of the Agreement by the Company and the
Optionee.
Each option granted hereunder shall be evidenced by an Agreement,
executed by the Corporation and the Eligible Individual to whom the Option is
granted, incorporating such terms as the committee shall deem necessary or
desirable. More than one Option may be granted hereunder to the same Eligible
Individual and be outstanding concurrently hereunder. In the event an Eligible
Individual is granted both one or more Incentive Options and one or more
Nonstatutory Options, such grants shall be evidenced by separate Agreements, one
for each of the Incentive Option grants and one for each of the Nonstatutory
Option grants.
Each Agreement may contain or otherwise provide for conditions giving
rise to the forfeiture of the Stock acquired pursuant to an Option granted
hereunder or otherwise and such restrictions on the transferability of shares of
the Stock acquired pursuant to an Option granted hereunder or otherwise as the
Committee in its sole and absolute discretion shall deem proper or advisable.
Such conditions giving rise to
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<PAGE> 5
forfeiture may include, but need not be limited to, the requirement that the
Holder render substantial services to the Corporation or its Affiliates for a
specified period of time. Such restrictions on transferability may include, but
need not be limited to, options and rights of first refusal in favor of the
Corporation and shareholders of the Corporation other than the Holder of such
share of Stock who is a party to the particular Agreement or a subsequent holder
of the shares of Stock who is bound by such Agreement.
Notwithstanding the foregoing provisions of this Section 5, the
President and/or Chief Executive Officer of the Corporation may, from time to
time, at his sole discretion but subject to the following provisions of this
Section 5, grant Options to individuals who are not at the time of grant
individuals subject to liability under section 16b of the Act. The total number
of shares of the Stock that shall at any time be subject to grant pursuant to
the immediately preceding sentence shall be specified from time to time by
resolution of the Board of Directors, and such number of shares shall be
included within the numbers of shares stated in Paragraph 2.1. The Board of
Directors may further limit the authority of the President and/or Chief
Executive Officer to grant options and may prescribe some or all the terms of
any such Options to such extent as the Board of Directors deems appropriate.
SECTION 6 Terms and Conditions of Options.
All options granted hereunder shall comply with, be deemed to include,
and shall be subject to the following terms and conditions:
6.1 Number of Shares. Each Agreement shall state the number of shares
of Stock to which it relates.
6.2 Exercise Price. Each Agreement shall state the exercise price per
share of Stock. The exercise price per share of Stock subject to an Incentive
Option shall not be less than the greater of (a) the par value per share of the
Stock or (b) 100% of the Fair Market Value per share of the Stock on the date of
the grant of the Option. The exercise price per share of Stock subject to a
Nonstatutory Option shall not be less than the Fair Market Value per share of
the Stock on the date of the grant of the Option.
6.3 Medium and Time of Payment, Method of Exercise, and Withholding
Taxes. The exercise price of an Option shall be payable upon the exercise of the
Option in cash, by certified or cashier's check, or, with the consent of the
Committee, with shares of Stock of the Corporation owned by the Holder,
including a multiple series of exchanges of such Stock, or with the consent of
the Committee, by a combination of cash and such shares. Exercise of an Option
shall not be effective until the Corporation has received written notice of
exercise. Such notice must specify the number of whole shares to be purchased
and be accompanied by payment in full of the aggregate Option price of the
number of shares purchased. The Corporation shall not in any case be required to
sell, issue, or deliver a fractional share with respect to any Option.
The Committee may, in its discretion, require a Holder to pay to the
Corporation at the time of exercise of an Option or portion thereof the amount
that the Corporation deems necessary to satisfy its obligation to withhold
Federal, state or local income or other taxes incurred by reason of the
exercise. Upon the exercise of an Option requiring tax withholding, a Holder may
make a written request to have shares of Stock withheld by the Corporation from
the shares otherwise to be received. The number of shares so withheld shall have
an aggregate Fair Market Value on the date of exercise sufficient to satisfy the
applicable
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<PAGE> 6
withholding taxes. The acceptance of any such request by a Holder shall be at
the sole discretion of the Committee. Where the exercise of an Option does not
give rise to an obligation to withhold Federal income or other taxes on the date
of exercise, the Corporation may, in its discretion, require a Holder to place
shares of Stock purchased under the Option in escrow for the benefit of the
Corporation until such time as Federal income or other tax withholding is no
longer required with respect to such Shares or until such withholding is
required on amounts included in the gross income of the Holder as a result of
the exercise of an Option or the disposition of shares of Stock acquired
pursuant thereto. At such later time, the Corporation in its discretion, may
require a Holder to pay to the Corporation the amount that the Corporation deems
necessary to satisfy its obligation to withhold Federal, state or local income
or other taxes incurred by reason of the exercise of the Option or the
disposition of shares of Stock, in which case the shares of Stock shall be
released from escrow to the Holder. Alternatively, subject to acceptance by the
Committee, in its sole discretion, a Holder may make a written request to have
shares of Stock held in escrow applied toward the Corporation's obligation to
withhold Federal, state or local income or other taxes incurred by reason of the
exercise of the option or the disposition of shares of Stock, based on the Fair
Market Value of the shares on the date of the termination of the escrow
arrangement. Upon application of such shares toward the Corporation's
withholding obligation, any shares of Stock held in escrow and not, in the
judgment of the Committee, necessary to satisfy such obligation shall be
released from escrow to the Holder.
6.4 Term, Time of Exercise, and Transferability of Options. In addition
to such other terms and conditions as may be included in a particular Agreement
granting an Option, an Option shall be exercisable during a Holder's lifetime
only by him or by his guardian or legal representative. An Option shall not be
transferable other than by will or the laws of descent and distribution. Each
Option shall also be subject to the following terms and conditions:
(a) Termination of Employment or Directorship. The provisions of
this Paragraph 6.4(a) shall apply to the extent a Holder's
Agreement does not expressly provide otherwise. If a Holder
ceases to be employed by at least one of the employers in the
group of employers consisting of the Corporation and its
Affiliates because the Holder voluntarily terminates
employment with such group of employers and the Holder does
not remain or thereupon become a director of the Corporation
or one or more of it's Affiliates, or if a Holder ceases to be
a director of at least one of the corporations in the group of
corporations consisting of the Corporation and its Affiliates
and the Holder does not remain or thereupon become an employee
of the Corporation or one or more of it's Affiliates, the
Holder shall have the right for ninety (90) days after
termination of employment to exercise the portion, if any, of
an Option that remains unexercised, including that portion, if
any, that pursuant to the Agreement is not yet exercisable, on
the date of the Holder's termination of employment or ceasing
to be a director, whichever occurs later, and thereafter the
Option shall terminate and cease to be exercisable.
If a Holder ceases to be employed by at least one of the
employers in the group of employers consisting of the
Corporation and its Affiliate because any of such entities
terminates the Holder's employment for cause, the portion, if
any, of an Option that remains unexercised, including that
portion, if any, that pursuant to the Agreement is not yet
exercisable, on the date of the Holder's termination of
employment, shall terminate and cease to be exercisable as of
such date. A Holder's employment shall he deemed terminated
"for cause" if terminated by the Board of Directors of the
Corporation or the board of directors of an
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<PAGE> 7
Affiliate because of incompetence, insubordination,
dishonesty, other acts detrimental to the interest of the
Corporation or its Affiliates, or any material breach by the
Holder of any employment, nondisclosure, noncompetition, or
other contract with the Corporation or one of its Affiliates.
Whether cause exists shall be determined by such board of
directors in its sole discretion and in good faith.
If a Holder ceases to be employed by at least one of the
employers in the group of employers consisting of the
Corporation and its Affiliates because one or more of such
entities terminates the employment of the Holder but not for
cause, and the Holder does not remain or thereupon become a
director of the Corporation or one or more of it's Affiliates,
the Holder shall have the right for ninety (90) days after
such termination of employment to exercise the Option with
respect to that portion thereof that has become exercisable
pursuant to Holder's Agreement as of the date of the Holder's
termination of employment, and thereafter the Option shall
terminate and cease to be exercisable.
(b) Disability. The provisions of this Paragraph 6.4(b) shall
apply to the extent a Holder's Agreement does not expressly
provide otherwise. If a Holder ceases to be employed by at
least one of the employers in the group of employers
consisting of the Corporation and its Affiliates by reason of
Disability and does not remain or thereupon become a director
of the Corporation or one or more of its Affiliates, or if the
Holder ceases by reason of such Disability to be a director of
at least one of the corporations in the group of corporations
consisting of the Corporation and its Affiliates, the Holder
shall have the right for ninety (90) days after the date of
termination of employment with or cessation of directorship of
such group of employers by reason of Disability, whichever
occurs later, to exercise an Option to the extent such Option
is exercisable on the date of his termination of employment,
and thereafter the Option shall terminate and cease to be
exercisable.
(c) Death. The provisions of this Paragraph 6.4(c) shall apply to
the extent a Holder's Agreement does not expressly provide
otherwise. If a Holder dies while in the employ of the
Corporation or an Affiliate or dies while a director of the
Corporation or an Affiliate, an Option shall be exercisable by
the Holder's legal representatives, legatees or distributes
for ninety (90) days following the date of the Holder's death
to the extent such Option is exercisable on the Holder's date
of death, and thereafter the Option shall terminate and cease
to be exercisable.
Notwithstanding any other provision of this Plan, the provisions of
items (a), (b), and (c) of this Paragraph 6.4, no Incentive Option shall be
exercisable after the expiration of ten (10) years from the date it is granted,
or the period specified in Paragraph 4.1, if applicable. The Committee shall
have authority to prescribe in any Agreement that the Option evidenced thereby
may be exercised in full or in part as to any number of shares subject thereto
at any time or from time to time during the term of the Option, or in such
installments at such times during said term as the Committee may prescribe.
Except as provided above and unless otherwise provided in any Agreement, an
Option may be exercised at any time or from time to time during the term of the
Option. Such exercise may be as to any or all whole (but no fractional) shares
which have become purchasable under the Option.
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<PAGE> 8
Within a reasonable time or such time as may be permitted by law after
the Corporation receives written notice that the Holder has elected to exercise
all or a portion of an Option, such notice to be accompanied by payment in full
of the aggregate Option price of the number of shares purchased, the Corporation
shall issue and deliver a certificate representing the shares acquired in
consequence of the exercise and any other amounts payable in consequence of such
exercise. In the event that a Holder exercises both an Incentive Option, or
portion thereof, and a Nonstatutory Stock Option, or a portion thereof, separate
Stock certificates shall be issued, one for the Stock subject to the Incentive
Option and one for the Stock subject to the Nonstatutory Stock Option. The
number of the shares of Stock transferable due to an exercise of an Option under
this Plan shall not be increased due to the passage of time, except as may be
provided in an Agreement.
Nothing herein or in any Option granted hereunder shall require the
Corporation to issue any shares upon exercise of any Option if such issuance
would, in the opinion of counsel for the Corporation, constitute a violation of
the Securities Act of 1933, as amended, or any similar or superseding statute or
statutes, or any other applicable statute or regulation, as then in effect. At
the time of any exercise of an Option, the Corporation may, as a condition
precedent to the exercise of such Option, require from the Holder of the Option
(or in the event of his death, his legal representatives, legatees, or
distributes) such written representations, if any, concerning his intentions
with regard to the retention or disposition of the shares being acquired by
exercise of such Option and such written covenants and agreements, if any, as to
the manner of disposal of such shares as, in the opinion of counsel to the
Corporation, may be necessary to ensure that any disposition by such Holder (or
in the event of his death, his legal representatives, legatees, or distributes),
will not involve a violation of the Securities Act of 1933, as amended, or any
similar or superseding statute or Statutes, or any other applicable state or
federal statute or regulation, as then in effect. Certificates for shares of
stock, when issued, may have the following legend, or statements of other
applicable restrictions, endorsed thereon, and may not be immediately
transferable:
The shares of Stock evidenced by this certificate have been issued to
the registered owner in reliance upon written representations that
these shares have been purchased for investment. These shares may not
be sold, transferred, or assigned unless, in the opinion of the
Corporation and its legal counsel, such sale, transfer, or assignment
will not be in violation of the Securities Act of 1933, as amended,
applicable rules and regulations of the Securities and Exchange
Commission, and any applicable state securities laws.
6.5 Limitation on Aggregate Value of Shares Under Option That May
Become First Exercisable During Any Calendar Year Under an Incentive Option.
Except as is otherwise provided in the second paragraph of Paragraph 6.6 hereof,
with respect to any Incentive Option granted under this Plan, the aggregate Fair
Market Value of shares of Stock subject to such Incentive Option and the
aggregate Fair Market Value of shares of Stock or stock of any Affiliate (or a
predecessor of the Corporation or an Affiliate) subject to any other incentive
stock option (within the meaning of section 422 of the Code) of the Corporation
or its Affiliates (or a predecessor corporation of any such corporation), that
first become purchasable in any calendar year under such Option, may not (with
respect to any Holder) exceed $100,000, with such Fair Market Value to be
determined as of the date the Incentive Option is granted. For purposes of this
Paragraph 6.5, "predecessor corporation" means a corporation that was a party to
a transaction described in section 424(a) of the Code (or which would be so
described if a substitution or assumption under such section had been effected)
with the Corporation, or a corporation which, at the time the new incentive
stock option
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<PAGE> 9
(within the meaning of section 422 of the Code) is granted, is an Affiliate of
the Corporation or a predecessor corporation of any such corporations, or a
predecessor corporation of any such corporations.
6.6 Adjustments Upon Chances in Capitalization, Merger, Etc.
Notwithstanding any other provision hereof, in the event of any change in the
number of outstanding shares of Stock effected without receipt of consideration
therefor by the Corporation, by reason of a stock dividend, or split,
combination, exchange of shares or other recapitalization, merger, or otherwise,
in which the Corporation is the surviving corporation, the aggregate number and
class of the reserved shares, the number and class of shares subject to each
outstanding Option and the exercise price of each outstanding Option shall be
automatically adjusted to accurately and equitably reflect the effect thereon of
such change, provided that any fractional share resulting from such adjustment
may be eliminated. In the event of a dispute concerning such adjustment, the
decision of the Committee shall be conclusive. The number of reserved shares or
the number of shares subject to any outstanding Option shall be automatically
reduced by any fraction included therein which results from any adjustment made
pursuant to this Paragraph 6.6.
The following provisions of this Paragraph 6.6 shall apply unless a
Holder's Agreement provides otherwise. A dissolution or liquidation of the
Corporation, a merger or consolidation (other than a merger effecting a
reincorporation of the Corporation in another state or any other merger or a
consolidation in which the shareholders of the surviving corporation and their
proportionate interests therein immediately after the merger or consolidation
are substantially identical to the shareholders of the Corporation and their
proportionate interests therein immediately prior to the merger or
consolidation) in which the Corporation is not the surviving corporation (or
survives only as a subsidiary of another corporation in a transaction in which
the shareholders of the parent of the Corporation and their proportionate
interests therein immediately after the transaction are not substantially
identical to the shareholders of the Corporation and their proportionate
interests therein immediately prior to the transaction; provided that the Board
of Directors may at any time prior to such a merger or consolidation provide by
resolution that the foregoing provisions of this parenthetical shall not apply
if a majority of the board of directors of such parent immediately after the
transaction consists of individuals who constituted a majority of the Board of
Directors immediately prior to the transaction), or a transaction in which
another corporation becomes the owner of 50% or more of the total combined
voting power of all classes of stock of the Corporation (provided that the Board
of Directors may at any time prior to such transaction provide by resolution
that the provision immediately preceding this parenthetical and following the
immediately preceding comma shall not apply if a majority of the board of
directors of the acquiring corporation immediately after the transaction
consists of individuals who constituted a majority of the Board of Directors
immediately prior to the acquisition of such 50% or more total combined voting
power) shall cause every Option then outstanding to terminate, but the holders
of each such then outstanding Options shall, in any event, have the right,
immediately prior to such dissolution, liquidation, merger, consolidation, or
transaction, to exercise much options, to the extent not theretofore exercised,
without regard to the determination as to the periods and installments of
exercisability made pursuant to a Holder's Agreement if (and only if) such
Options have not at that time expired or been terminated. Such acceleration of
exercisability shall not apply to a given Option if any surviving or acquiring
corporation agrees to assume such Option in connection with the merger,
consolidation, or transaction.
6.7 Rights as a Shareholder. A Holder shall have no right as a
shareholder with respect to any shares covered by his Option until a certificate
representing such shares is issued to him. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash or other property) or
distributions or
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<PAGE> 10
other rights for which the record date is prior to the date such certificate is
issued, except as provided in Paragraph 6.6 hereof.
6.8 Modification, Extension and renewal of Options. Subject to the
terms and conditions of and within the limitations of the Plan, the Committee
may modify, extend or renew outstanding Options granted under the Plan, or
accept the surrender of Options outstanding hereunder (to the extent not
theretofore exercised) and authorize the granting of new options hereunder in
substitution therefor (to the extent not theretofore exercised). The Committee
may not, however, without the consent of the Holder, modify any outstanding
Options so as to specify a lower exercise price or Base Amount or accept the
surrender of outstanding Incentive Options and authorize the granting of new
Options in substitution therefor specifying a lower option price. In addition,
no modification of an Option granted hereunder shall, without the consent of the
Holder, alter or impair any rights or obligations under any Option theretofore
granted hereunder to such Holder under the Plan, except as may be necessary,
with respect to Incentive Options, to satisfy the requirements of section 422 of
the Code.
6.9 Furnish Information. Each Holder shall furnish to the Corporation
all information requested by the Corporation to enable it to comply with any
reporting or other requirement imposed upon the Corporation by or under any
applicable statute or regulation.
6.10 Obligation to Exerciser; Termination of Employment. The granting
of an Option hereunder shall impose no obligation upon the Holder to exercise
the same or any part thereof. In the event of a Holder's termination of
employment with the Corporation or an Affiliate, the unexercised portion of an
option granted hereunder shall terminate in accordance with Paragraph 6.4
hereof.
6.11 Agreement Provisions. The Agreements authorized under the Plan
shall contain such provisions in addition to those required by the Plan
(including, without limitation, restrictions or the removal of restrictions upon
the exercise of the Option and the retention or transfer of shares thereby
acquired) as the Committee shall deem advisable. Each Agreement shall identify
the Option evidenced thereby as an Incentive Option or Nonstatutory Option, as
the case may be, and no Agreement shall cover both an Incentive Option and
Nonstatutory Option. Each Agreement relating to an Incentive Option granted
hereunder shall contain such limitations and restrictions upon the exercise of
the Incentive Option to which it relates as shall be necessary for the Incentive
Option to which such Agreement relates to constitute an incentive stock option,
as defined in section 422 of the Code.
6.12 Redemption. At such time that the Stock is not registered under
section 12 of the Securities Exchange Act, if a Holder or any other holder of
the Stock received upon exercise of an Option proposes to sell, give, pledge,
exchange or otherwise transfer or dispose of any of the Stock received upon
exercise of an Option, or of any interests therein owned by him, whether for
cash or other consideration, the Holder or such other holder shall promptly give
notice (the "Redemption Notice") to the Committee setting forth in detail the
circumstances of such event. The Redemption Notice shall state the name and
address of the proposed transferee and the proposed consideration for and terms
of the transfer. The Corporation shall have an option to purchase such Stock
within ten (10) days after receipt by the Committee of the Redemption Notice, on
the terms hereinafter set forth and as may be set forth in the Agreement. The
Corporation shall exercise such option by giving the Holder or such other holder
notice thereof. Such option may be exercised by the Corporation as to all, but
not less than all, of such Stock, and such option shall expire to the extent not
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<PAGE> 11
exercised by the Corporation within ten (10) days after receipt by the Committee
of the Redemption Notice. The price per share for the Stock purchased by the
Corporation pursuant to this Paragraph 6.11 shall be:
(a) the Fair Market Value per share of such Stock on the date the
Committee receives the Redemption Notice, if the proposed
transfer is a gift, or
(b) the price per share for which the Holder has received a bona
fide offer, as described in the Redemption Notice, if the
proposed transfer is other than a gift.
The value of any noncash consideration included in such bona fide offer
shall be determined in good faith by the Board of Directors, with the assistance
of a third party to the extent the Board of Directors deems appropriate.
Upon exercise of its option pursuant to this Paragraph 6.11, the
Corporation shall pay the Holder or such other holder the purchase price (i)
within 60 days after receipt of the Redemption Notice by the Committee in the
manner provided in the Agreement between Corporation and the Holder or (ii) at
the election of the Corporation, in accordance with the terms embodied in any
bona fide offer received by the Holder or such other holder and described in the
Redemption Notice. Any Stock that the Corporation does not purchase as herein
provided may be transferred by the Holder or such other holder to the persons
and Upon terms and conditions no more favorable to the purchasers than those set
forth in the Redemption Notice, such transfer must be consummated within ninety
(90) days after receipt of the Redemption Notice by the Committee, and not
otherwise.
SECTION 7 Remedies and Legend
7.1 Remedies. The corporation shall be entitled to recover from a
Holder reasonable attorneys' fees incurred in connection with the enforcement of
the terms and provisions of the Plan and any Agreement whether by an action to
enforce specific performance or for damages for its breach or otherwise .
7.2 Legend. Each certificate representing shares issued to a Holder
upon exercise of an Option granted under the Plan shall be subject to a right of
first refusal as provided in the Bylaws of the Corporation and shall bear a
legend that complies with applicable law with respect to such restrictions on
transferability such as:
The shares represented by this certificate are subject to restrictions
on transferability imposed by the Bylaws of PC Parts Express, mc. which
grant to the Corporation an option to purchase such shares in certain
instances. A copy of such Bylaw provision is on file at the principal
office of the Corporation, and is subject to the same right of
examination by a shareholder of the Corporation (in person or by agent,
attorney, or accountant) as are the books and records of the
Corporation.
SECTION 8 Duration of Plan.
No Options may be granted hereunder after the date that is ten (10)
years from the earlier of (i) the date the Plan is adopted by the Board of
Directors or (ii) the date the Plan is approved by the shareholders of the
Corporation.
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<PAGE> 12
SECTION 9 Amendment of Plan.
The Board of Directors may, insofar as permitted by law, with respect
to any shares at the time are not subject to Options, suspend or discontinue the
Plan or revise or amend it in any respect whatsoever; provided, however, that,
without the approval of the holders of a majority of the outstanding shares of
voting stock of all classes of the Corporation, no such revision or amendment
shall (a) change the number of shares of the Stock subject to the Plan, (b)
change the designation of the class of employees eligible to receive Options,
(c) decrease the price at which Incentive Options may be granted, (d) remove the
administration of the Plan from the Committee, (e) render the members of the
committee eligible to receive Options under the Plan while serving as such, or
(f) without the consent of the affected Holder, cause the Incentive options
granted hereunder and outstanding at such time that satisfied the requirements
of Section 422 of the Code to no longer satisfy such requirements. Furthermore,
the Plan shall not, without such approval of the shareholders, be amended in any
manner that will cause Incentive Options issued under it to fail to satisfy the
requirements applicable to incentive stock options as defined in section 422 of
the Code.
SECTION 10 General.
10.1 Application of Funds. The proceeds received by the Corporation
from the sale of shares pursuant to Options shall be used for general corporate
purposes.
10.2 Right of the Corporation and Affiliates to Terminate Employment.
Nothing contained in the Plan, or in any Agreement, shall confer upon any Holder
the right to continue in the employ of the Corporation or any Affiliate, or
interfere in any way with the rights of the Corporation or any Affiliate to
terminate his employment any time.
10.3 No Liability for Good Faith Determinations. Neither the members of
the Board of Directors nor any member of the Committee shall be liable for any
act, omission, or determination taken or made in good faith with respect to the
Plan or any Option granted under it, and members of the Board of Directors and
the Committee shall be entitled to indemnification and reimbursement by the
Corporation in respect of any claim, loss, damage, or expense (including
attorneys' fees, the costs of settling any suit, provided such settlement is
approved by independent legal counsel selected by the Corporation, and amounts
paid in satisfaction of a judgment, except a judgment based on a finding of bad
faith) arising therefrom to the full extent permitted by law and under any
directors and officers liability or similar insurance coverage that may from
time to time be in effect.
10.4 Information Confidential. As partial consideration for the
granting of each option hereunder, the Holder shall agree with the Corporation
that he will keep confidential all information and knowledge that he has
relating to the manner and amount of his participation in the Plan; provided,
however, that such information may be disclosed as required by law and may be
given in confidence to the Holder's spouse, tax and financial advisors, or to a
financial institution to the extent that such information is necessary to secure
a loan. In the event any breach of this promise comes to the attention of the
Committee, it shall take into consideration such breach, in determining whether
to recommend the grant of any future Option to such Holder, as a factor
militating against the advisability of granting any such future Option to such
individual.
10.5 Other Benefits. Participation in the Plan shall not preclude the
Holder from eligibility in any other stock option plan of the Corporation or any
Affiliate or any old age benefit, insurance, pension, profit sharing retirement,
bonus, or other extra compensation plans which the Corporation or any Affiliate
has adopted, or may, at any time, adopt for the benefit of its employees.
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<PAGE> 13
10.6 Execution of Receipts and Releases. Any issuance or transfer of
shares of Stock to the Holder, or to his legal representative, heir, legatee, or
distribute, in accordance with the provisions hereof, shall, to the extent
thereof, be in full satisfaction of all claims of such persons hereunder. The
Committee may require any Holder, legal representative, heir, legatee, or
distribute, as a condition precedent to such payment, to execute a release and
receipt therefor in such form as it shall determine.
10.7 No Guarantee of Interests. Neither the Committee nor the
Corporation guarantees the Stock of the Corporation from loss or depreciation.
10.8 Payment of Expenses. All expenses incident to the administration,
termination, or protection of the Plan, including, but not limited to, legal and
accounting fees, shall be paid by the Corporation or its Affiliates; provided,
however, the Corporation or an Affiliate may recover any and all damages, fees,
expenses and/or costs arising out of any actions taken by the Corporation to
enforce its right to purchase Stock under Paragraph 5.11 hereof.
10.9 Corporation Records. Records of the Corporation or its Affiliates
regarding the Holder's period of employment, termination of employment and the
reason therefor, leaves of absence, re-employment, and other matters shall be
conclusive for all purposes hereunder, unless determined by the Committee to be
incorrect.
10.10 Information. The Corporation and its Affiliates shall, upon
request or as may be specifically required hereunder, furnish or cause to be
furnished, all of the information or documentation which is necessary or
required by the Committee to perform its duties and functions under the Plan.
10.11 No Liability of Corporation. The Corporation assumes no
obligation or responsibility to the Holder or his personal representatives,
heirs, legatees, or distributes for any act of, or failure to act on the part
of, the Committee.
10.12 Corporation Action. Any action required of the Corporation shall
be by resolution of its Board of Directors or by a person authorized to act by
resolution of the Board of Directors.
10.13 Severability. If any provision of this Plan is held to be illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions hereof, but such provision shall be fully severable and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included herein.
10.14 Notices. whenever any notice is required or permitted hereunder,
such notice must be in writing and personally delivered or sent by mail. Any
notice required or permitted to be delivered hereunder shall be deemed to be
delivered on the date on which it is personally delivered, or, whether actually
received or not, on the third business day after it is deposited in the United
States mail, certified or registered, postage prepaid, addressed to the person
who is to receive it at the address which such person has theretofore specified
by written notice delivered in accordance herewith. The corporation or a Holder
may change, at any time and from time to tine, by written notice to the other,
the address which it or he had theretofore specified for receiving notices.
Until changed in accordance herewith, the Corporation and each Holder shall
specify as its and his address for receiving notices the address set forth in
the Agreement pertaining to the shares to which such notice relates.
10.15 Waiver of Notice. Any person entitled to notice hereunder may
waive such notice.
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<PAGE> 14
10.16 Successors. The Plan shall be binding upon the Holder, his heirs,
legatees, and legal representatives, upon the corporation, its successors, and
assigns, and upon the Committee, and its successors.
10.17 Headings. The titles and headings of Sections and Paragraphs are
included for convenience of reference only and are not to be considered in
construction of the provisions hereof.
10.18 Governing Law. All question arising with respect to the
provisions of the Plan shall be determined by application of the laws of the
State of Texas except to the extent Texas law is preempted by Federal law.
Questions arising with respect to the provisions of an Agreement that are
matters of contract law shall be governed by the laws of the state specified in
the Agreement, except to the extent Texas corporate law conflicts with the
contract law of much state, in which event Texas corporate law shall govern. The
obligation of the Corporation to sell and deliver Stock hereunder is subject to
applicable laws and to the approval of any governmental authority required in
connection with the authorization, issuance, sale, or delivery of such Stock.
10.19 Word Usage. Words used in the masculine shall apply to the
feminine where applicable, and wherever the context of this Plan dictates, the
plural shall be read as the singular and the singular as the plural.
SECTION 11 Approval of Shareholders.
The Plan shall take effect on the date it is adopted by the Board of
Directors. However, if this Plan is not approved by the holders of a majority of
the outstanding shares of common stock, par value $.01 per share, of the
Corporation, within the period ending twelve (12) months after the date the Plan
is adopted by the Board of Directors, none of the Options granted hereunder
shall constitute Incentive Options; and in the event that the Plan is not so
approved on or before the first annual meeting of stockholders of the
Corporation following the date the Board of Directors adopts the Plan, if any
Options are granted under the Plan before the date such stockholders do approve
the Plan to individuals subject to suit under Section 16b of the Act at the time
of grant, such Options shall be null, void, and of no force and effect as of
their grant date.
IN WITNESS WHEREOF, PC Parts Express, Inc., acting by and through its
officers hereunto duly authorized has executed this instrument, this______day of
______________, 1992.
PC PARTS EXPRESS, INC.
By: /s/ Mark T. Hilz
--------------------------------
Its: President
--------------------------------
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<PAGE> 15
FIRST AMENDMENT TO PC PARTS EXPRESS, INC. STOCK OPTION PLAN
PC Parts Express, Inc. (the "Company") adopted a Stock Option Plan
dated as of August 28, 1992 (the "Plan"), providing for up to 200,000 shares of
the Company's Common Stock, $.01 par value per share (the "Common Stock"), to be
issued under the Plan on the terms and conditions stated therein. By Unanimous
Written Consent of Directors dated November 23, 1993, the Board of Directors of
the Company adopted a resolution amending the Plan to increase the number of
shares of Common Stock which could be issued thereunder from 200,000 shares to
500,000 shares. By Unanimous Written Consent of Shareholders dated November 23,
1993, the shareholders of the Company approved the amendment of the Plan
increasing the number of shares of Common Stock to be subject to the terms
thereof from 200,000 shares to 500,000 shares and amending Section 6.4(a) of the
Plan to provide that the holder of an Option (as defined in the Plan) shall have
the right for three (3) months after termination of employment to exercise the
portion, if any, of an Option that remains unexercised at the time of
termination of employment.
As a result of the approvals of the Board of Directors and shareholders
of the Company as referred to in the preceding paragraph, the Plan has been
amended effective as of the 23rd day of November, 1993, (i) to increase the
number of shares of Common Stock for which options may be granted under the Plan
from 200,000 shares to 500,000 shares and (ii) to amend the first and third
paragraphs of Section 6.4(a) of the Plan to provide that the holder of an option
shall have the right for three (3) months (rather than ninety (90) days) after
termination of employment (other than in the instance of a termination "for
cause") to exercise the portion, if any, of an option that remains unexercised
at the time of such termination of employment.
IN WITNESS WHEREOF, the Company, acting by and through its officers
hereunto duly authorized, has executed this instrument this 8th day of December,
1993 to be effective as of November 23, 1993.
PC PARTS EXPRESS INC.
By: /s/ Robert J. Boutin
--------------------------------
Its: Secretary
--------------------------------
<PAGE> 16
SECOND AMENDMENT TO PC PARTS EXPRESS, INC. STOCK OPTION PLAN
PC Parts Express, Inc. (the "Company") adopted a Stock Option Plan
dated as of August 28, 1992 (the "Plan"), providing for up to 200,000 shares of
the Company's Common Stock, $.01 par value per share (the "Common Stock"), to be
issued under the Plan on the terms and conditions stated therein. By Unanimous
Written Consent of Directors dated November 23, 1993, the Board of Directors of
the Company adopted resolutions amending the Plan (i) to increase the number of
shares of Common Stock which could be issued thereunder from 200,000 shares to
500,000 shares and (ii) to provide that a Holder (as defined in the Plan) may
exercise Options (as defined in the Plan) for a period of three (3) months after
the Holder's termination of employment for reasons other than for cause (as
defined in the Plan). By Unanimous written Consent of Shareholders dated
November 23, 1993, the shareholders of the Company approved the amendment of the
Plan increasing the number of. shares of Common Stock to be subject to the terms
thereof from 200,000 shares to 500,000 shares. By Unanimous Written Consent of
Directors dated December 15, 1993, the Board of Directors of the Company adopted
a resolution further amending the Plan for Options granted on or after such
date, to provide that upon termination of employment for reasons other than for
cause (as defined in the Plan) or death or disability the Holder of an option
may only exercise that portion, if any, of the Option that has become
exercisable by the Holder but which the Holder has not yet exercised on the date
of the Holder's termination of employment. By Unanimous Written Consent of
Shareholders dated December 15, 1993, the shareholders of the Company approved
the foregoing amendments of the Plan as described in the preceding sentences.
As a result of the approvals of the Board of Directors and Shareholders
of the Company as referred to in the preceding Paragraph, Section 6.4 of the
Plan is hereby amended to provide that the Holder of an Option shall have the
right for a period of three (3) months after termination of employment (other
than in the instance of a termination for cause, death or disability) to
exercise such Option but only to the extent of that portion, if any, of such
Option that has become exercisable by the Holder but which the Holder has not
yet exercised at the time of such termination of employment.
IN WITNESS WHEREOF, the Company, acting by and through its officers
hereunto duly authorized, has executed this instrument this 15th day of
December, 1993 to be effective as of December 15, 1993.
PC PARTS EXPRESS INC.
By: /s/ Robert J. Boutin
--------------------------------
Its: Secretary
--------------------------------
<PAGE> 17
THIRD AMENDMENT
TO
PC PARTS EXPRESS, INC. STOCK OPTION PLAN
PC Parts Express, Inc. (the "Company") adopted a Stock Option Plan
dated as of August 28, 1992 (the "Plan"), providing for shares of the Company's
Common Stock, $.01 par value per share (the "Common Stock"), to be issued under
the Plan on the terms and conditions stated therein. In a meeting on February
28, 1994, the Board of Directors of the Company adopted resolutions amending the
Plan (i) to provide that the Stock Option Committee shall consist of not less
than two (2) members of the Board of Directors, and (ii) to delete section 7.2
of the Plan.
As a result of the approval of the Board of Directors as referred to in
the preceding paragraph, Section 3.1 of the Plan is hereby amended to provide
that the Stock Option Committee shall consist of not less than two (2) members
of the Board of Directors, and Section 7.2 of the Plan is hereby deleted.
IN WITNESS WHEREOF, the Company, acting by and through its officers
hereunto duly authorized has executed this instrument this 3rd day of March,
1994.
PC PARTS EXPRESS INC.
By: /s/ Brian Ervine
--------------------------------
Its: Secretary
--------------------------------
<PAGE> 18
FOURTH AMENDMENT TO
PC SERVICE SOURCE, INC.
STOCK OPTION PLAN
PC Service Source, Inc. (the "Company"), adopted a Stock Option Plan
dated as of August 28, 1992 (the "Plan"), providing for shares of the Company's
common stock, $.01 par value per share (the "Common Stock"), to be issued under
the Plan under the terms and conditions stated therein. In a meeting on July 21,
1994, the Board of Directors of the Company adopted resolutions amending the
Plan to increase the total number of shares for which options may be granted
under the Plan from 500,000 to 1,000,000. Also, at the 1995 Annual Meeting of
Stockholders of the Company, the stockholders approved such amendment.
As a result of the approval of the Board of Directors and the
stockholders as referred to in the preceding paragraph, the Plan is hereby
amended to increase the total number of shares for which options may be granted
under the Plan from 500,000 to 1,000,000.
IN WITNESS WHEREOF, the Company, acting by and through its officers
hereunto duly authorized, has executed this instrument this 18th day of May,
1995.
PC PARTS EXPRESS INC.
By: /s/ Mark T. Hilz
--------------------------------
Mark T. Hilz, President
<PAGE> 19
FIFTH AMENDMENT TO
PC SERVICE SOURCE, INC.
STOCK OPTION PLAN
PC Service Source, Inc., a Delaware corporation (the "Company"),
adopted a Stock Option Plan dated as of August 28, 1992 (the "Plan"), providing
for shares of the Company's common stock, $.01 par value per share (the "Common
Stock"), to be issued under the Plan pursuant to the terms and conditions stated
in the Plan. Subject to stockholder approval, at a meeting held on October 21,
1998, the Board of Directors of the Company adopted resolutions amending the
Plan to increase the aggregate number of shares subject to issuance under the
Plan from 1,000,000 to 1,750,000. On December 7, 1998, the Board of Directors
amended the resolution adopted by it at the October 21, 1998, meeting by
adopting a resolution to increase the aggregate number of shares subject to
issuance under the plan from 1,000,000 to 1,500,000. Also, at a Special Meeting
of stockholders of the Company held on December 18, 1998, the stockholders of
the Company approved the amendment to the Plan.
As a result of the approval by the Company's Board of Directors and the
stockholders, the Plan is hereby amended to increase the total number of shares
subject to issuance under the Plan from 1,000,000 to 1,500,000.
IN WITNESS WHEREOF, the Company, acting by and through its officers
hereunto duly authorized, has executed this instrument as of the 18th day of
December, 1998.
PC SERVICE SOURCE, INC.
By: /s/ Robert J. Boutin
------------------------------------------
Robert J. Boutin, Senior Vice President,
Chief Financial Officer and Secretary
<PAGE> 1
EXHIBIT 5.1
August 19, 1999
PC Service Source, Inc.
2350 Valley View Lane
Dallas, TX 75234
Re: PC Service Source, Inc. - Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to PC Service Source, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-8 (the "Registration Statement"), filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), relating to 500,000 shares of the $0.01 par
value common stock (the "Common Stock") of the Company that are offered on the
exercise of Incentive Stock Options ("Options") granted or that may be granted
under the PC Service Source 1992 Stock Option Plan (the "Plan"), as more fully
described in the Registration Statement.
You have requested the opinion of this firm with respect to certain
legal aspects of the proposed offering. In connection therewith, we have
examined and relied upon the original, or copies certified to our satisfaction,
of (1) the Certificate of Incorporation and the Bylaws of the Company, as
amended; (2) minutes and records of the corporate proceedings of the Company
with respect to the establishment of the Plan, the issuance of shares of Common
Stock pursuant to the Plan and related matters; (3) the Registration Statement
and exhibits deemed necessary for the expression of opinions herein contained.
In making the foregoing examinations, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals,
and the conformity to original documents of all documents submitted to us as
certified or photostatic copies. As to various questions of fact material to
this opinion, and as to the content and form of the Certificate of
Incorporation, the Bylaws, minutes, records, resolutions and other documents or
writings of the Company, we have relied, to the extent we deem reasonably
appropriate, upon representations or certificates of officers or directors of
the Company and upon documents, records and instruments furnished to us by the
Company, without independent check or verification of their accuracy.
Based upon our examination, consideration of, and reliance on the
documents and other matters described above, and subject to the comments and
exceptions noted below, we are of the opinion that the Company presently has
available at least 500,000 shares of authorized but unissued stock and/or
treasury shares from which the 500,000 shares of Common Stock proposed to be
sold pursuant to exercise of the Options granted under the Plan may be issued.
Assuming that the Company maintains an adequate number of authorized but
unissued shares and/or treasury shares available for issuance to those persons
who exercise Options granted under the Plan, and assuming that the consideration
for shares of Common Stock issued pursuant to such Options is actually received
by the Company as provided in the Plan and exceeds the par value of such shares,
then the shares of Common Stock issued pursuant to the exercise of the Options
granted under and in accordance with the terms of the Plan will be duly and
validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to references to our firm included in or made a part
of the Registration Statement. In giving this consent, we do not admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act or the Rules and Regulations of the Securities and Exchange
Commission thereunder.
Sincerely,
SAYLES & LIDJI,
A Professional Corporation
By: /s/ Michael R. Dorey
-----------------------------
Michael R. Dorey
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 Reg. No. 333-00000, No. 333-09333, No. 333-09335, No. 33-81146 and No.
33-98176) of PC Service Source, Inc. of our report dated February 12, 1999,
except for the last paragraph of Note 1 and the first paragraph of Note 3, for
which the date is March 11, 1999, with respect to the consolidated financial
statements and schedule of PC Service Source, Inc. and subsidiaries, included in
its Annual Report (Form 10-K) for the year ended December 31, 1998, filed with
the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Dallas, Texas
August 19, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
PC Service Source, Inc.:
We consent to the incorporation by reference in the Registration Statement
(Reg. No. 333-00000) on Form S-8 of PC Service Source, Inc. of our report dated
February 13, 1998, relating to the consolidated balance sheet of PC Service
Source, Inc. and subsidiaries as of December 31, 1997, and the related
consolidated statements of operations, stockholders' equity, and cash flows and
the related financial statement schedule for the years ended December 31, 1997
and 1996, which report appears in the December 31, 1998 annual report on Form
10-K of PC Service Source, Inc.
/s/ KPMG LLP
Dallas, Texas
August 19, 1999
