SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
CompuCom Systems, Inc.
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(Name of Registrant as Specified In Its Charter)
CompuCom Systems, Inc.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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Notes:
[COMPUCOM LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
- May 15, 2002-
Dear CompuCom Stockholder:
The 2002 Annual Meeting of stockholders of CompuCom Systems, Inc. will be held
on Wednesday, May 15, 2002, at CompuCom's principal executive offices at 7171
Forest Lane, Dallas, Texas 75230 at 2:00 p.m. local time.
Only stockholders who owned stock at the close of business on March 29, 2002 can
vote at this meeting or any adjournments that may take place. At the meeting we
will elect 11 directors, vote for approval of a proposal to increase the number
of shares for the CompuCom Employee Stock Purchase Plan by 2,000,000 shares, and
attend to any other business properly presented at the meeting. We also will
report on CompuCom's 2001 business results and other matters of interest to our
stockholders. You will have an opportunity at the meeting to ask questions, make
comments and meet our management team.
CompuCom's board of directors is a vital resource. No matter how many shares you
hold, CompuCom considers your vote important, and we encourage you to vote as
soon as possible.
All stockholders are cordially invited to attend the meeting. Whether or not you
expect to attend the meeting, please fill in, date and sign the accompanying
proxy and mail it promptly in the enclosed envelope.
This proxy statement, accompanying proxy card, and 2001 annual report are being
mailed to stockholders beginning on or about April 12, 2002, in connection with
the solicitation of proxies by the board of directors.
Please contact M. Lazane Smith, senior vice president and chief financial
officer, at (972) 856-3600 with any questions or concerns.
Sincerely,
J. Edward Coleman M. Lazane Smith
Chairman of the Board, Senior Vice President, Finance
President and Chief Executive Officer Chief Financial Officer, Secretary,
and Director
April 12, 2002
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QUESTIONS AND ANSWERS
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Q: Who is entitled to vote?
A: Stockholders of record as of the close of business on March 29, 2002, may
vote at the annual meeting.
Q: How many shares can vote?
A: On March 29, 2002, there were 48,390,302 common shares and 1,500,000 series
B preferred shares issued and outstanding. In the election of directors,
each series B preferred share may cast five votes for each common share
into which a preferred share may be converted. Each series B preferred
share is convertible into 1.477104 common shares. Every common stockholder
may cast one vote for each share owned.
Q: What may I vote on?
A: You may vote on the election of 11 directors who have been nominated to
serve on our board of directors and the adoption of an amendment to our
Employee Stock Purchase Plan to increase the number of shares authorized
for issuance.
Q: How does the board recommend I vote on the proposal?
A: The board recommends a vote FOR each board nominee and FOR the amendment to
the Employee Stock Purchase Plan.
Q: How do I vote?
A: Sign and date each proxy card you receive, mark the box indicating how you
wish to vote, and return the proxy card in the prepaid envelope provided.
If you sign your proxy card but do not mark any boxes showing how you wish
to vote, J. Edward Coleman and M. Lazane Smith will vote your shares as
recommended by the board of directors.
Q: What if I hold my CompuCom shares in a brokerage account?
A: If you hold your CompuCom shares through a broker, bank or other nominee,
you will receive a voting instruction form directly from them describing
how to vote your shares. This form will, in most cases, offer you three
ways to vote:
1. by telephone,
2. via the Internet, or
3. by returning the form to your broker.
Q: What if I want to change my vote?
A: You may change your vote at any time before the meeting in any of the
following three ways:
1. notifying our chief financial officer, M. Lazane Smith, in writing,
2. voting in person at the meeting, or
3. submitting a proxy card with a later date.
If you hold your shares through a broker, bank or other nominee and wish to
vote at the meeting, you must obtain a legal proxy from that nominee
authorizing you to vote at the meeting. We will be unable to accept a vote
from you at the meeting without that form. If you hold your shares directly
and wish to vote at the meeting, no additional forms will be required.
Q: How will directors be elected?
A: The 11 nominees who receive the highest number of affirmative votes at a
meeting at which a quorum is present will be elected as directors.
1
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QUESTIONS AND ANSWERS (cont'd.)
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Q: What vote is required to approve the amendment to the Employee Stock
Purchase Plan?
A: To approve the action noted above, a quorum must be present and voting, and
a majority of the votes cast must be in favor of the amendment.
Q: Who will count the votes?
A: A representative of CompuCom will count the votes and act as the judge of
election.
Q: What does it mean if I get more than one proxy card?
A: Your shares may be registered differently or may be in more than one
account. We encourage you to have all accounts registered in the same name
and address (whenever possible). You may obtain information about how to do
this by contacting our transfer agent at:
Mellon Investor Services LLC
Plaza of the Americas
600 North Pearl Street, Suite 1010
Dallas, TX 75201-2884
(214-922-4400)
If you provide Mellon Investor Services with photocopies of the proxy cards
that you receive or with the account numbers that appear on each proxy
card, it will be easier for Mellon Investor Services to combine your
accounts.
You also can find information on transferring shares and other useful
stockholder information on their website at www.mellon-investor.com.
Q: What is a quorum?
A: A quorum is a majority of the outstanding shares. The shares may be
represented at the meeting either in person or by proxy. To hold the
meeting, there must be a quorum present.
Q: What if I abstain or fail to give instructions to my broker?
A: If you submit a properly executed proxy, your shares will be counted as
part of the quorum even if you abstain from voting or withhold your vote
for a particular director.
Broker non-votes also are counted as part of the quorum. A broker non-vote
occurs when banks, brokers or other nominees holding shares on behalf of a
stockholder do not receive voting instructions from the stockholder by a
specified date before the meeting. In this event, banks, brokers or other
nominees may vote those shares on matters deemed routine such as the
election of directors.
Abstentions are counted in tabulations of the votes cast on proposals
presented to stockholders and have the effect of negative votes. A
"withheld" vote is treated the same as an abstention. Broker non-votes are
not counted for purposes of determining whether a proposal has been
approved.
2
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QUESTIONS AND ANSWERS (cont'd.)
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Q: Who can attend the meeting?
A: All stockholders are encouraged to attend the meeting. Admission tickets
are not required.
Q: Are there any expenses associated with collecting the stockholder votes?
A: We will reimburse brokerage firms and other custodians, nominees and
fiduciaries for their reasonable out-of-pocket expenses for forwarding
proxy and other materials to our stockholders. We do not anticipate hiring
an agency to solicit votes at this time.
Q: What is a stockholder proposal?
A: A stockholder proposal is your recommendation or requirement that CompuCom
or our board of directors take action on a matter that you intend to
present at a meeting of stockholders. However, under the proxy rules we
have the ability to exclude certain matters proposed, including those that
deal with matters relating to our ordinary business operations.
Q: Can anyone submit a stockholder proposal?
A: To be eligible to submit a proposal, you must have continuously held the
lesser of $2,000 in market value or 1% of our common stock for at least one
year by the date you submit your proposal. You also must continue to hold
those securities through the date of the meeting.
Q: If I wish to submit a stockholder proposal for the annual meeting in 2003,
what action must I take?
A: If you wish us to consider including a stockholder proposal in the proxy
statement for the annual meeting in 2003, you must submit the proposal, in
writing, so that we receive it no later than December 13, 2002. The
proposal must meet the requirements established by the SEC. Send your
proposal to:
M. Lazane Smith, Senior Vice
President and Chief Financial
Officer
CompuCom Systems, Inc.
7171 Forest Lane
Dallas, TX 75230
As to any proposal presented by a stockholder at the 2003 annual meeting
that has not been included in the proxy statement, management proxies will
be allowed to use their discretionary voting authority unless we receive
notice of such proposal no later than February 26, 2003.
Q: Who are CompuCom's largest stockholders?
A: Safeguard Scientifics, Inc. beneficially owns 52.87%, directors and
officers as a group beneficially own 4.18% and Dimensional Fund Advisors,
Inc. beneficially owns 5.97% of our common stock.
3
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ELECTION OF DIRECTORS
Item 1 on Proxy Card
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Directors are elected annually and serve a one-year term. There are 11 nominees
for election this year. The eleven nominees are currently serving as directors.
Each nominee, if elected, has consented to serve until the next annual meeting
or until his successor is elected and qualified. You will find detailed
information on each nominee below. If any director is unable to stand for
re-election after distribution of this proxy statement, the board may reduce its
size or designate a substitute. If the board designates a substitute, proxies
voting on the original director candidate will be cast for the substituted
candidate.
The board recommends a vote FOR each nominee. The 11 nominees who receive the
highest number of affirmative votes will be elected as directors.
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J. EDWARD COLEMAN Director since 2000
Age 50
Mr. Coleman has served as chairman of the board since October 2001. He also has
served as chief executive officer of CompuCom since December 1999 and as
President since July 2000. Prior to joining CompuCom, Mr. Coleman served as a
business development executive and director of marketing for Computer Sciences
Corporation from March 1995 to December 1999.
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ANTHONY L. CRAIG Director since 2002
Age 56
Mr. Craig became president, chief executive officer and director of Safeguard in
October 2001. Before joining Safeguard, Mr. Craig was chief executive officer
from January 1999 to October 2001 and remains chairman of Arbinet Holdings,
Inc., a leading online trading exchange for the telecommunications industry.
Before Arbinet, he served as president and chief executive officer of Global
Knowledge Network, a premier provider of technology learning services, from
January 1997 to February 1999.
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MICHAEL J. EMMI Director since 1994
Age 60
Mr. Emmi was chairman of the board, president and chief executive officer of
Systems & Computer Technology Corporation, a provider of computer software and
services, from May 1985 through 2001. He currently is an independent business
consultant. Mr. Emmi is a director of CDI Corp and Safeguard.
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RICHARD F. FORD Director since 1991
Age 65
Mr. Ford is a managing general partner of the management companies which act as
a general partner of Gateway Mid-America Partners, L.P., Gateway Venture
Partners II, L.P., Gateway Venture Partners III, L.P. and Gateway Partners,
L.P., private venture capital funds formed in 1984, 1987, 1990 and 1995,
respectively. Mr. Ford is a director of Stifel Financial Corporation, D&K
Healthcare Resources, Inc. and TALX, Inc.
4
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ELECTION OF DIRECTORS (cont'd.)
Item 1 on Proxy Card
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EDWIN L. HARPER Director since 2000
age 60
Mr. Harper is Senior Vice President for Public Affairs and Government Relations
for Fortis, Inc. From 1998 through July 2001, he served as Executive Vice
President, Chief Financial Officer, and Chief of Operations and Information
Technology for Fortis subsidiaries. During 1997, Mr. Harper served as Vice
Chairman and CEO of Commodore Applied Technologies.
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DELBERT W. JOHNSON Director since 1995
Age 63
Mr. Johnson served as chairman of the board and chief executive officer of
Pioneer Metal Finishing, Inc., a former division of Safeguard, until October
1997. Mr. Johnson is a director of Ault Inc. and U.S. Bancorp.
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JOHN D. LOEWENBERG Director since 1995
Age 61
Mr. Loewenberg has been the managing partner of JDL Enterprises, a consulting
firm, since March 1996. From May 1995 through March 1996, Mr. Loewenberg served
as executive vice president and chief administrative officer of Connecticut
Mutual, a life insurance company. Mr. Loewenberg is a director of Sanchez
Computer Associates, Inc., DiamondCluster International, Inc., DocuCorp
International, Inc. and Applix, Inc.
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WARREN V. MUSSER Director since 1984
Age 75
Mr. Musser is president of The Musser Group, a financial consulting company. Mr.
Musser served as chairman of Safeguard Scientifics, Inc. from 1953 until October
2001 and as chief executive officer from 1953 until April 2001. Mr. Musser is a
director of Safeguard Scientifics, Inc. and Internet Capital Group, Inc. and a
trustee of Brandywine Realty Trust. Mr. Musser serves on a variety of civic,
educational and charitable boards of directors, and serves as vice
president/development, Cradle of Liberty Council, Boy Scouts of America; vice
chairman of The Eastern Technology Council; and chairman of the Pennsylvania
Partnership on Economic Education.
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ANTHONY J. PAONI Director since 1999
Age 57
Since April 2001, Mr. Paoni has been Vice Chairman and Partner of DiamondCluster
International, Inc. Mr. Paoni is a professor of technology and E-Commerce at the
Kellogg Graduate School of Management. Before 1996, Mr. Paoni spent 28 years in
the information technology industry, most recently as the chief executive
officer of Eolas, Inc., an Internet software company. Mr. Paoni manages the
Kellogg Technology Speaker Series and is co-author of two books entitled
"Kellogg on Technology" and "TechVenture". Mr. Paoni was a strategic advisor to
the US Navy for the CVX nuclear carrier program and is a director of US
Freightways Corporation.
5
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ELECTION OF DIRECTORS (cont'd.)
Item 1 on Proxy Card
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EDWARD N. PATRONE Director since 1991
Age 67
Mr. Patrone, retired, was a senior consultant to Alco Standard Corporation, a
national distributor of paper and office products, from 1991 to 1997. From 1988
through 1991, he was president and chief executive officer of Paper Corporation
of America. He is a director of Global Imaging Corp.
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M. LAZANE SMITH Director since 2001
Age 47
Ms. Smith has served as senior vice president, finance and chief financial
officer since February 1997 and secretary since February 2001. Ms. Smith joined
CompuCom in 1993 as corporate controller and was promoted to vice president,
finance and corporate controller in 1994.
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BOARD OF DIRECTORS -- ADDITIONAL INFORMATION
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Meetings of the Board: The board of directors held five meetings in 2001. Each
of the incumbent directors attended at least 75% of the total number of board
and committee meetings of which they were members during the period in which
they served as a director, except for Messrs. Johnson, Musser, and Paoni, who
attended 71%, 71% and 67% respectively.
Annual and Meeting Attendance Fees: Directors who are executive officers of
Safeguard or employees of CompuCom receive no additional compensation other than
their normal salary for serving on the board or its committees. Through
September 2001, non-employee directors received:
. $1,000 monthly cash retainer
. $750 for each board or committee meeting attended, and
. reimbursement of out-of-pocket expenses
Effective October 2001, the monthly cash retainer and fee for each board or
committee meeting attended was replaced by a quarterly retainer of $6,250.
Stock Options: Directors who are not executive officers of Safeguard or
employees of CompuCom receive:
. a stock option to purchase 10,000 shares of CompuCom's common stock upon
initial election to the board, and
. service grants, upon the determination of the compensation committee
Directors' options have a ten-year term and vest 25% each year starting on the
first anniversary of the grant date. The exercise price is equal to the market
price of a share of CompuCom stock on the grant date.
In October 2001, Messrs. Emmi, Ford, Harper, Johnson, Loewenberg, Paoni and
Patrone were each granted an option to purchase 13,000 shares at an exercise
price of $1.93 per share.
6
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BOARD COMMITTEE MEMBERSHIP ROSTER
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Audit Compensation Executive Nominating
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Meetings held in 2001 4 3 0 1
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Michael J. Emmi X
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Richard F. Ford X* X* X
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Edwin L. Harper X* X
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Delbert W. Johnson
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John D. Loewenberg X
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Warren V. Musser X
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Anthony J. Paoni X
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Edward N. Patrone X X*
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* Chairperson
Audit: committee of independent directors that operate under a written Audit
Committee Charter adopted by the board of directors, recommends our independent
certified public accountants, discusses the scope and results of our audit with
the independent certified public accountants, reviews with management and the
independent certified public accountants our interim and year-end operating
results, considers the adequacy of our internal accounting controls and audit
procedures, and reviews the non-audit services to be performed by the
independent certified public accountants.
Compensation: committee that reviews and approves management's recommendations
for compensation, including incentive compensation, for all of our officers, and
administers our stock option plans and management incentive plan.
Executive: committee that acts upon all matters with respect to the management
of our business and affairs, except that its authority to authorize and approve
investments, other than investments made in the normal course of business, is
limited to investments of up to $5 million in the aggregate between board
meetings.
Nominating: committee that proposes a slate of directors for appointment by
CompuCom's stockholders at each annual meeting and candidates to fill any
vacancies on the Board, as well as directors to serve on various board
committees.
7
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PROPOSAL TO AMEND THE EMPLOYEE PURCHASE PLAN
Item 2 on Proxy Card
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The board recommends a vote FOR approval of this proposal. Approval of this
amendment requires the affirmative vote of a majority of the votes cast at a
meeting at which a quorum representing a majority of all outstanding voting
stock is present, either in person or by proxy, and voting on this amendment.
CompuCom stockholders are being asked to approve the adoption of an amendment to
the CompuCom Systems, Inc. Employee Stock Purchase Plan (the "Purchase Plan") to
increase by 2,000,000 the number of shares authorized for issuance. The
amendment increases to 4,000,000 the number of shares reserved for issuance
thereunder. The Purchase Plan was approved by the board of directors on February
19, 1998, with a total of 1,000,000 shares reserved for issuance thereunder. On
May 18, 2000, CompuCom stockholders approved a proposal to increase the number
of shares reserved for issuance to 2,000,000. The purpose of the Purchase Plan
is to provide employees of CompuCom and any majority owned subsidiaries that
adopt the Purchase Plan with an opportunity to purchase common stock from
CompuCom through payroll deductions. This plan provides CompuCom with the
ability to attract, retain, and motivate the best people available for the
successful conduct of our business. The essential features of the Purchase Plan
are outlined below.
Offering Period
Offerings under the Purchase Plan have a duration of six months. A new offering
period begins on the first day of each six calendar month period beginning on
each January 1 and July 1 of a calendar year and ending at the end of such six
month period, unless changed by the committee appointed by the board of
directors that administers the Purchase Plan (the "Committee").
Grant and Exercise of Option
On the first day of an offering period (the "Enrollment Date"), the participant
is granted an option to purchase on the last day of the offering period (the
"Exercise Date") up to a number of shares of common stock determined by dividing
10% of the participant's Compensation (as defined in the "Payroll Deductions"
section, below) by the exercise price, which shall not be less than the lower of
(i) 85% of the fair market value of a share of the common stock on the
Enrollment Date or (ii) 85% of the fair market value of a share of common stock
on the Exercise Date. Compensation in excess of $75,000 per offering period will
be disregarded. The exercise price shall be determined by the committee. The
number of shares subject to such option shall be reduced, if necessary, to
maintain the limitations with respect to a participant's ownership of stock
and/or options to purchase stock possessing 5% or more of the total combined
voting power or value of all classes of stock of CompuCom or any majority owned
subsidiary, and to restrict a participant's right to purchase stock under the
Purchase Plan to $25,000 in fair market value of such stock (determined at the
time the option is granted) for each calendar year in which such option is
outstanding at any time. Unless the employee has withdrawn from the offering
period, his or her option for the purchase of shares will be exercised
automatically on the Exercise Date at the applicable price.
Shares Available Under the Purchase Plan
If this proposal is adopted, the total number of shares of common stock that are
issuable under the Purchase Plan will be 4,000,000 shares.
8
Eligibility and Participation
Any employee who is customarily employed for at least 20 hours per week and more
than five months per calendar year by CompuCom is eligible to participate in
offerings under the Purchase Plan. Employees of subsidiaries that adopt the
Purchase Plan with CompuCom's approval will be eligible on the same basis.
Employees become participants in the Purchase Plan by delivering to CompuCom a
subscription agreement authorizing payroll deductions within the specified
period of time prior to the Enrollment Date.
No employee is permitted to purchase shares under the Purchase Plan if the
employee owns 5% or more of the total combined voting power or value of all
classes of shares of stock of CompuCom (including shares that may be purchased
under the Purchase Plan or pursuant to any other options). In addition, no
participant is entitled to purchase more than $25,000 worth of shares (based on
the fair market value of the shares at the time the option is granted) in any
calendar year.
Purchase Price
The Committee will set the price at which shares are sold under the Purchase
Plan, which will not be less than 85% of the fair market value per share of
common stock at either the Enrollment Date or at the Exercise Date, whichever is
lower.
Payroll Deductions
The purchase price of the shares is accumulated by payroll deduction over each
offering period. The deductions may not be greater than 10% of a participant's
compensation. "Compensation" for purposes of the Purchase Plan shall mean base
pay or regular straight-time earnings plus commissions, and overtime, but
excluding any imputed benefits or pay, bonuses, relocation expense, expense
reimbursements, or other similar items. Compensation in excess of $75,000 per
offering period will be disregarded. All payroll deductions of a participant are
credited to his or her account under the Purchase Plan and are deposited with
the general funds of CompuCom. Such funds may be used for any corporate purpose
pending the purchase of shares.
Administration
The Purchase Plan is administered by the Committee, which shall have all powers
with respect to the Purchase Plan, except for amending or terminating the
Purchase Plan.
Withdrawal from the Plan
A participant may terminate his or her interest in a given offering by
withdrawing all, but not less than all, of the accumulated payroll deductions
credited to such participant's account at any time prior to the end of the
offering period. The withdrawal of accumulated payroll deductions automatically
terminates the participant's interest in that offering. As soon as practicable
after such withdrawal, the payroll deductions credited to a participant's
account are returned to the participant without interest.
A participant's withdrawal from an offering does not have any effect upon such
participant's eligibility to participate in subsequent offerings under the
Purchase Plan.
Termination of Employment
Termination of a participant's employment for any reason, including retirement,
death, or the failure to remain in the continuous employ of CompuCom for at
least 20 hours per week (except for certain leaves of absence), cancels his or
her participation in the Purchase Plan immediately. In such event, the payroll
deductions credited to the participant's account will be returned to the
participant or, in the case of death, to the person or persons entitled thereto
without interest.
9
Capital Changes
In the event of changes in the common stock of CompuCom due to a stock split or
other changes in capitalization, or in the event of any merger, sale,
reclassification, or any other reorganization, appropriate adjustments will be
made by CompuCom to the shares subject to purchase and to the price per share.
Issuance Restrictions
Beginning with the offering period starting on July 1, 2002, CompuCom may
require the recipient to agree not to sell, transfer or otherwise alienate the
shares acquired for a period not exceeding 90 days from the date of issuance,
and may require the person to represent and warrant that the shares are being
purchased only for investment and without any present intention to sell or
distribute.
Nonassignability
No rights or accumulated payroll deductions of a participant under the Purchase
Plan may be pledged, assigned or transferred for any reason, and any such
attempt may be treated by the Committee as an election to withdraw from the
Purchase Plan.
Amendment and Termination of the Purchase Plan
The board of directors of CompuCom may at any time amend or terminate the
Purchase Plan; however, such termination cannot affect options previously
granted nor may any amendment make any change in an existing option that
adversely affects the rights of any participant, except as necessary to comply
with tax or securities laws. No amendment may be made to the Purchase Plan
without prior approval of the stockholders of CompuCom if such amendment would
increase the number of shares that may be issued under the Purchase Plan, permit
payroll deductions at a rate in excess of 10% of a participant's compensation,
change the designation of the employees eligible for participation in the
Purchase Plan or constitute an amendment for which stockholder approval is
required in order to comply with Rule 16b-3, or any successor rule.
Tax Information
The Purchase Plan and the right of participants to make purchases thereunder is
intended to qualify under the provisions of Section 423 of the Internal Revenue
Code (the "Code"), which incorporates by reference the tax treatment provisions
of Section 421 of the Code. Under these provisions, no income will be taxable to
a participant at the time of grant of the option or purchase of shares. Upon
disposition of the shares, the participant generally will be subject to tax and
the amount of the tax will depend upon the holding period. If the shares have
been held by the participant for more than two (2) years after the Enrollment
Date and one (1) year from the Exercise Date, the amount of ordinary income will
be the lesser of (a) the excess of the fair market value of the shares at the
time of disposition over the purchase price, or (b) the excess of the fair
market value of the shares at the time the option was granted over the purchase
price (which purchase price will be computed as of the Enrollment Date), and any
further gain will be treated as long-term capital gain. If the shares are
disposed of before the expiration of these holding periods, the excess of the
fair market value of the shares on the Exercise Date over the purchase price
will be treated as ordinary income. The Company is not entitled to a deduction
for amounts taxed as ordinary income or capital gain to a participant except to
the extent of ordinary income reported by participants upon disposition of
shares prior to the expiration of the holding period described above.
The foregoing is only a summary of the effect of federal income taxation upon
the participant and CompuCom with respect to the shares purchased under the
Purchase Plan. Reference should be made to the applicable provisions of the
Code. In addition, this summary does not discuss the tax consequences of a
participant's death or the income tax laws of any state or foreign country in
which the participant may reside.
10
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STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND
GREATER THAN 5% STOCKHOLDERS
AS OF MARCH 29, 2002:
- -------------------------------------------------------------------------------
Name Shares Options Shares
Beneficially Exercisable Beneficially Percent of
Owned Within 60 Days Owned Shares
of March 29, Assuming
2002 Exercise of
Options
- ------------------------------------------ ---------------- --------------- --------------- ---------------
Safeguard Scientifics, Inc. 26,756,538 0 26,756,538 52.87%
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
- ------------------------------------------ ---------------- --------------- --------------- ---------------
Dimensional Fund Advisors 2,890,000 0 2,890,000 5.97%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
- ------------------------------------------ ---------------- --------------- --------------- ---------------
J. Edward Coleman 50,000 520,000 570,000 1.17%
- ----------------------------------------- ---------------- --------------- --------------- ---------------
Anthony L. Craig 0 0 0 0
- ------------------------------------------ ---------------- --------------- --------------- ---------------
Michael J. Emmi 0 38,250 38,250 *
- ------------------------------------------ ---------------- --------------- --------------- ---------------
Richard F. Ford 30,000 28,250 58,250 *
- ------------------------------------------ ---------------- --------------- --------------- ---------------
Edwin L. Harper 1,000 8,750 9,750 *
- ------------------------------------------ ---------------- --------------- --------------- ---------------
Delbert W. Johnson 24,500 26,250 50,750 *
- ------------------------------------------ ---------------- --------------- --------------- ---------------
John D. Loewenberg 19,275 51,250 70,525 *
- ------------------------------------------ ---------------- --------------- --------------- ---------------
Warren V. Musser 473,983 0 473,983 *
- ------------------------------------------ ---------------- --------------- --------------- ---------------
Anthony J. Paoni 0 16,250 16,250 *
- ------------------------------------------ ---------------- --------------- --------------- ---------------
Edward N. Patrone 10,000 28,250 38,250 *
- ------------------------------------------ ---------------- --------------- --------------- ---------------
M. Lazane Smith 7,318 336,250 343,568 *
- ------------------------------------------ ---------------- --------------- --------------- ---------------
David A. Loeser 2,712 162,500 165,212 *
- ------------------------------------------ ---------------- --------------- --------------- ---------------
John F. McKenna 0 162,500 162,500 *
- ------------------------------------------ ---------------- --------------- --------------- ---------------
Anthony F. Pellegrini 500 87,500 88,000 *
- ------------------------------------------ ---------------- --------------- --------------- ---------------
Executive officers and directors as a 619,288 1,466,000 2,085,288 4.18%
group (14 persons)
- ------------------------------------------ ---------------- --------------- --------------- ---------------
* Less than 1% of CompuCom's outstanding shares of common stock
Each individual has the sole power to vote and to dispose of the shares
(other than shares held jointly with spouse) except for the following
shares:
Safeguard Scientifics, Inc. Includes 22,087,848 shares held by
Safeguard Scientifics (Delaware), Inc.,
1,119,700 shares held by Safeguard
Delaware, Inc., and 1,333,333 shares held
by CompuShop, Inc., wholly-owned
subsidiaries of Safeguard Scientifics, Inc.
Safeguard Scientifics (Delaware), Inc. also
holds 1,500,000 shares of Series B
preferred shares. Those shares are
convertible into 2,215,657 shares of
common stock, which also are included.
Dimensional Fund Advisors, Inc. Dimensional Fund Advisors Inc.
("Dimensional"), an investment advisor
registered under Section 203 of the
Investment Advisors Act of 1940, furnishes
investment advice to four investment
companies registered under the Investment
Company Act of 1940, and serves as
investment manager to certain other
commingled group trusts and separate
accounts. These investment companies,
trusts and accounts are the "Funds".
In its role as
11
investment adviser or manager, Dimensional
possesses voting and/or investment power
over the securities of the Issuer
described in this schedule that are owned
by the Funds. All securities reported in
this schedule are owned by the Funds.
Dimensional disclaims beneficial ownership
of such securities.
Delbert W. Johnson Includes 20,000 shares held in a Remainder
Trust.
Warren V. Musser Includes 30,700 shares held by a trust of
which Mr. Musser is a co-trustee.
Mr. Musser disclaims beneficial ownership
of the shares beneficially owned by the
trust.
Shares Owned by Directors and Officers of Parent and Subsidiary Corporations:
Safeguard is the parent corporation of CompuCom. As of March 29, 2002, executive
officers and directors of CompuCom beneficially owned the following percentage
of the outstanding shares of Safeguard common stock:
. Mr. Musser owns 1.22%
. all other officers and directors of CompuCom, as a group, beneficially
own less than 1% of Safeguard stock.
Section 16(a) Beneficial Ownership Reporting Compliance: The rules of the
Securities and Exchange Commission require that we disclose late filings of
reports of stock ownership by our directors and executive officers. To the best
of our knowledge, there were no late filings during 2001.
12
- --------------------------------------------------------------------------------
STOCK PERFORMANCE GRAPH
- --------------------------------------------------------------------------------
The following graph compares the cumulative total return on our common stock for
the period from December 31, 1996, through December 31, 2001, with the
cumulative total return on the Nasdaq Index and the peer group index for the
same period.
[GRAPHIC REMOVED HERE]
COMPARISON OF CUMULATIVE TOTAL RETURNS
1996 1997 1998 1999 2000 2001
CompuCom 100 77 33 38 12 21
NASDAQ 100 125 190 343 217 168
Peer Group 100 88 83 85 43 29
1. The peer group consists of SIC Code 5045--Computer, Peripheral Equipment
and Software Wholesalers.
2. We have historically reinvested earnings in the growth of our business and
have not paid cash dividends on our common stock.
3. Assumes an investment of $100 on December 31, 1996.
- --------------------------------------------------------------------------------
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
COMPENSATION PHILOSOPHY
It is the duty of the Compensation Committee to review and determine the
salaries and bonuses of executive officers of CompuCom, including the Chief
Executive Officer, and to establish the general compensation policies for these
individuals. The Compensation Committee believes that the compensation programs
for the executive officers should reflect CompuCom's performance and the value
created for our shareholders. In addition, the compensation program should
support the short-term and long-term strategic goals and objectives of CompuCom
as well as reward individual contributions to CompuCom's success. CompuCom is
engaged in a very competitive industry and its success depends upon its ability
to attract and retain qualified executives through the competitive compensation
packages it offers.
13
GENERAL COMPENSATION POLICY
The Compensation Committee's policy is to provide CompuCom's executive officers
with compensation opportunities that are based upon their personal performance,
as well as CompuCom's financial performance. The compensation packages are
targeted at market rates that are competitive in attracting and retaining highly
skilled individuals. Each executive officer's compensation package is comprised
of two elements: (i) cash compensation, which consists of a base salary and an
annual cash incentive program and (ii) long-term, stock-based incentive awards
designed to strengthen the mutuality of interests between the executive officers
and the shareholders.
CASH COMPENSATION
We seek to provide cash compensation to our executive officers, including base
salary and an annual cash bonus, at levels commensurate with cash compensation
of executives with comparable responsibility at similarly situated companies.
Initial base pay and subsequent increases are determined on an individual basis
based upon market data, experience, level of responsibility, and a review of
that officer's performance and contribution to various individual, departmental
and corporate objectives. Annual cash incentive bonuses are intended to provide
additional incentives to achieve these objectives and the amount of cash bonuses
depends on the extent to which these objectives are achieved. In 2001, each
officer's increase in base salary and the amount of their cash bonus reflected
the officer's performance and the accomplishment of individual, departmental and
corporate objectives.
LONG-TERM INCENTIVES
To date, long-term incentives have consisted solely of grants of options to
purchase CompuCom's common stock. Generally, stock option grants are made
annually by the Compensation Committee. Each grant is designed to align the
interests of the executive officer with those of the shareholders. Additionally
these grants are designed to provide each individual with a significant
incentive to manage CompuCom from the perspective of an owner with an equity
stake in the business. Each grant allows the officer to acquire shares of
CompuCom's common stock at a fixed price per share (the fair market value on the
grant date) over a specified period of time (up to ten years). Each option
generally becomes exercisable in a series of installments over a four-year
period, contingent upon the officer's continued employment. Accordingly, the
option will provide a return to the executive officer only if the officer
remains employed by CompuCom during the vesting period, and then only if the
fair market value of the underlying shares appreciates over the option term.
The size of the option grant is determined by the Compensation Committee. The
option grant is intended to create a meaningful opportunity for stock ownership
based upon the individual's current position, personal performance in recent
periods, and his or her potential for future responsibility and promotion over
the option term. The Compensation Committee also takes into account the number
of unvested options held by the executive officer in order to maintain an
appropriate level of equity incentive for that individual. The relevant weight
given to each of these factors varies from individual to individual.
14
CEO and other highly compensated executives' bonus compensation. The
Compensation Committee approved executive cash bonuses equal to approximately
100% of the applicable target bonus amounts.
2001 Stock Option Awards. The Compensation Committee granted stock options
during 2001 to all directors who are not employees of CompuCom or Safeguard and
other key executives and employees.
IRS Limits on Deductibility of Compensation. The Committee is aware that
Internal Revenue Code section 162(m) provides that publicly-held companies may
not deduct in any taxable year compensation in excess of one million dollars
paid to any of the individuals named in the compensation tables that is not
"performance based" as defined in section 162(m). The Committee believes that
annual levels of executive compensation that are not performance based are not
likely to exceed one million dollars in the foreseeable future.
Submitted by the Compensation Committee:
Richard F. Ford, Chairman
Michael J. Emmi
Anthony J. Paoni
15
- --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION & OTHER ARRANGEMENTS
- --------------------------------------------------------------------------------
2001 Annual Compensation for the Named Executive Officers
Long-Term
Annual Compensation Compensation
-------------------------
Awards
-------------------------------- -------------------------
Securities Underlying All Other
Options/SARS (#) Compensation
(1)
Name and Principal
Position Year Salary Bonus
- ----------------------------- ------- ------------ ---------- ------------------------- ------------
J. Edward Coleman, 2001 $ 535,000 $642,000 200,000 $ 3,825
President and Chief 2000 535,090 642,000 200,000 4,630
Executive Officer 1999 26,750 100,000 800,000
- ----------------------------- ------- ----------------- --------------- ------------------------- ------------
M. Lazane Smith, Senior 2001 $ 350,000 $ 350,000 125,000 $ 3,750
Vice President, Finance and 2000 294,705 294,615 150,000 3,750
Chief Financial Officer 1999 260,000 206,000 3,571
- ----------------------------- ------- ----------------- --------------- ------------------------- -----------
John F. McKenna 2001 $ 226,923 $226,923 100,000
Senior Vice President, 2000 200,090 200,000 150,000
Services 1999 192,387 100,000 100,000
- ----------------------------- ------- ----------------- --------------- ------------------------- -----------
David A. Loeser, Senior 2001 $ 205,385 $205,385 100,000 $ 4,202
Vice President, Human 2000 200,000 200,000 150,000 4,375
Resources 1999 142,307 100,000 100,000
- ----------------------------- ------- ----------------- --------------- ------------------------- -----------
Anthony F. Pellegrini 2001 $ 205,385 $ 205,385 100,000 $ 4,202
Senior Vice President, 2000 153,888 203,846 150,000 63,288
Sales
- ----------------------------- ------- ----------------- --------------- ------------------------- -----------
Notes to Annual Compensation Table:
(1) For 2001, all other compensation includes the following:
Company Match
Name Defined Contribution Plan
---------------------------- -----------------------------
J. Edward Coleman $3,825
M. Lazane Smith 3,750
David A. Loeser 4,202
Anthony F. Pellegrini 4,202
16
- --------------------------------------------------------------------------------
2001 Stock Option Grants
- --------------------------------------------------------------------------------
The following table relates to options to acquire CompuCom common stock,
unless otherwise noted in the footnotes.
- ---------------------------------------------------------------------------------------- -------------------------------
Potential Realizable Value
At Assumed Annual Rates Of
Individual Grants Stock Price Appreciation
For Option Term(1)
- ---------------------------------------------------------------------------------------- -------------------------------
Number of % of Total
Securities Options/
Underlying SARs
Options/ Granted To Exercise Or
SARs Employees In Base Price Expiration 5% 10%
Name Granted (#) Fiscal Year ($/Sh)(2) Date
- -------------------------- --------------- -------------- -------------- --------------- --------------- ---------------
J. Edward Coleman 200,000 7.23% $2.19 4/23/11 $713,457 $1,136,059
- -------------------------- --------------- -------------- -------------- --------------- --------------- ---------------
M. Lazane Smith 125,000 4.52% $2.19 4/23/11 $445,912 $710,039
- -------------------------- --------------- -------------- -------------- --------------- --------------- ---------------
John F. McKenna 100,000 3.62% $2.19 4/23/11 $356,728 $406,979
- -------------------------- --------------- -------------- -------------- --------------- --------------- ---------------
David A. Loeser 100,000 3.62% $2.19 4/23/11 $356,728 $406,979
- -------------------------- --------------- -------------- -------------- --------------- --------------- ---------------
Anthony F. Pellegrini 100,000 3.62% $2.19 4/23/11 $356,728 $406,979
- -------------------------- --------------- -------------- -------------- --------------- --------------- ---------------
(1) These values assume that the shares appreciate at the compounded annual
rate shown from the grant date until the end of the option term. These
values are not estimates of future price growth of our stock. Executives
will not benefit unless the common stock price increases above the stock
option exercise price.
(2) All options have an exercise price equal to or greater than the fair market
value on the grant date of the shares subject to each option. The option
exercise price may be paid in cash, by delivery of previously acquired
shares, subject to certain conditions, or same-day sales (that is, a
cashless exercise through a broker). The compensation committee may modify
the terms of outstanding options, including acceleration of the exercise
date.
- --------------------------------------------------------------------------------
2001 Stock Option Exercises and Year-End Stock Option Values
- --------------------------------------------------------------------------------
Number Of Securities Value Of Unexercised
Underlying Unexercised In-The-Money
Shares Options/SARs Options/SARs
Acquired At Fiscal Year-End (#) At Fiscal Year-End (1)
On Value
Name Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------- -------------- -------------- -------------- ---------------- ------------- ----------------
J. Edward Coleman 0 0 420,000 750,000 $ 0 $ 12,000
- -------------------------- -------------- -------------- -------------- ---------------- -------------- --------------
M. Lazane Smith 0 0 270,000 305,000 $ 1,563 $ 12,188
- -------------------------- -------------- -------------- -------------- ---------------- -------------- --------------
John F. McKenna 0 0 87,500 262,500 $ 1,563 $ 10,688
- -------------------------- -------------- -------------- -------------- ---------------- -------------- --------------
David A. Loeser 0 0 87,500 262,500 $ 1,563 $ 10,688
- -------------------------- -------------- -------------- -------------- ---------------- -------------- --------------
Anthony F. Pellegrini 0 0 37,500 212,500 $ 1,563 $ 10,688
- -------------------------- -------------- -------------- -------------- ---------------- -------------- --------------
(1) Value is calculated using the difference between the option exercise
price and the year-end stock price, multiplied by the number of shares
subject to the option. The year-end stock price used was $2.25 for
each share of CompuCom common stock.
17
Employment Contracts; Severance and Change-in-Control Arrangements
J. Edward Coleman entered into an amended agreement ("Agreement") with CompuCom
that provides for his employment as an executive officer until the employment
relationship is terminated under certain conditions, at a minimum monthly salary
of $44,583. Mr. Coleman is also entitled to participate in CompuCom's Management
Incentive Compensation Plan (MICP) at a rate of 120% of base salary. CompuCom
will purchase and maintain for Mr. Coleman's benefit a guaranteed renewable term
life insurance policy having a death benefit of $800,000. If Mr. Coleman is
incapacitated by accident, sickness or otherwise so as to render him mentally or
physically incapable of performing the services required of him for a period of
180 consecutive business days, CompuCom may terminate his employment under this
Agreement, in which case Mr. Coleman shall continue to receive salary
compensation and benefits continuation for a three - year period. If Mr. Coleman
is terminated without cause, is demoted or has his salary or benefits reduced
below the level described in this Agreement, he will be entitled to a lump sum
payment equal to three years salary and benefits continuation for three years
and outplacement assistance not to exceed $25,000. For Agreement purposes,
salary means the sum of Mr. Coleman's annual rate of compensation plus targeted
MICP plus the prorated amount of his current year's targeted MICP. For one year
after his termination, Mr. Coleman has agreed to not compete with CompuCom. If a
change of control of CompuCom occurs and, within six months from the date of the
change of control, Mr. Coleman voluntarily terminates his employment, he will be
entitled to receive a lump sum payment of three years salary within ten days of
the date of termination. Benefits will continue for a three-year period. Also,
if a change of control occurs, all unvested stock options granted to Mr. Coleman
will be vested within ten days of the change of control.
M. Lazane Smith entered into an amended employment agreement ("Agreement") with
CompuCom that provides for her employment as an executive officer until the
employment relationship is terminated under certain conditions at a monthly
salary of $29,167. Ms. Smith is also entitled to participate in CompuCom's
Management Incentive Compensation Plan (MICP) at a rate of 100% of base salary.
CompuCom will purchase and maintain for Ms. Smith's benefit a guaranteed
renewable term life insurance policy having a death benefit of $800,000. If Ms.
Smith is incapacitated by accident, sickness or otherwise so as to render her
mentally or physically incapable of performing the services required of her for
a period of 180 consecutive business days, CompuCom may terminate her employment
under this Agreement, in which case she shall continue to receive salary
compensation and benefits for a two year period. If Ms. Smith is terminated
without cause, is demoted or has her salary and benefits reduced below the level
described in this Agreement, she will be entitled to a lump sum payment equal to
two years salary and benefits continuation for two years and outplacement
assistance not to exceed $25,000. For Agreement purposes, salary means the sum
of Ms. Smith's annual rate of compensation plus targeted MICP plus the prorated
amount of her current year's targeted MICP. For one year after her termination,
Ms. Smith has agreed to not compete with CompuCom. If a change of control of
CompuCom occurs and, within six months from the date of the change of control,
Ms. Smith voluntarily terminates her employment, she will be entitled to receive
a lump sum payment of two years salary within ten days of the date of
termination. Benefits will continue for a two-year period. Also, if a change of
control occurs, all unvested stock options granted to Ms. Smith will be vested
within ten days of the change of control.
John F. McKenna and David A. Loeser each entered into an employment agreement
("Agreement") with CompuCom that provides for their employment as executive
officers until the employment relationship
18
is terminated under certain conditions at a monthly salary of $20,833 for Mr.
McKenna and $17,500 for Mr. Loeser. They are entitled to participate in
CompuCom's Management Incentive Compensation Plan (MICP) at a rate of 100% base
salary. CompuCom will purchase and maintain for their individual benefit a
guaranteed renewable term life insurance policy having a death benefit of three
times annual base salary up to $800,000. If either is incapacitated by accident,
sickness or otherwise so as to render him mentally or physically incapable of
performing the service required of him for a period of 180 consecutive business
days, CompuCom may terminate his employment under this Agreement, in which case
he shall continue to receive salary compensation and benefits continuation for a
two-year period. If terminated without cause, is demoted or has his salary and
benefits reduced below the level described in this Agreement, he will be
entitled to a lump sum payment equal to two years salary and benefits
continuation for two years and outplacement assistance not to exceed $25,000.
For Agreement purposes, salary means the sum of their individual annual rate of
compensation plus targeted MICP plus the prorated amount of their individual
year's targeted MICP. For one year after either's termination, each individual
has agreed to not compete with CompuCom. If a change of control of CompuCom
occurs and, within six months from the date of the change of control, either
voluntarily terminates his employment, each will be entitled to receive a lump
sum payment of two years salary within ten days of the date of termination.
Benefits will continue for a two-year period. Also, if a change of control
occurs, all unvested stock options granted to either individual will be vested
within ten days of the change of control.
Anthony F. Pellegrini entered into an employment agreement with CompuCom that
provides for his employment until the employment relationship is terminated
under certain conditions, at a minimum monthly salary of $16,667. As part of the
employment agreement, Mr. Pellegrini received a one-time signing bonus of
$50,000. The agreement entitles Mr. Pellegrini to a bonus of up to 50% of his
base salary. If employment is terminated without cause, or if CompuCom demotes
him or reduces his salary or benefits below the level described in his
agreement, Mr. Pellegrini will be entitled to a lump sum payment equal to one
year's salary. Mr. Pellegrini has agreed not to compete with CompuCom for one
year after his voluntary termination of employment, and if his employment is
terminated for any reason other than due cause, for the same period of time for
which he receives compensation.
19
INDEPENDENT PUBLIC ACCOUNTANTS
Since 1987, we have retained KPMG LLP as our independent public accountants and
intend to retain KPMG LLP for the current year ending December 31, 2002.
Representatives of KPMG LLP are expected to be present at the Annual Meeting,
will have an opportunity at the meeting to make a statement if they desire to do
so, and will be available to respond to appropriate questions.
AUDIT COMMITTEE REPORT
In accordance with its written charter adopted by the board of directors, the
Audit Committee assists the board in fulfilling its responsibility for oversight
of the quality and integrity of the accounting, auditing and financial reporting
practices of CompuCom. Management is responsible for CompuCom's internal
controls. CompuCom's independent auditors are responsible for performing an
independent audit of CompuCom's consolidated financial statements in accordance
with generally accepted auditing standards and to issue a report thereon. The
Audit Committee has general oversight responsibility with respect to CompuCom's
financial reporting, and reviews the results and scope of the audit and other
services provided by CompuCom's independent auditors.
In this context, the Audit Committee has met and held discussions with
management and CompuCom's independent auditors. Management represented to the
Audit Committee that CompuCom's consolidated financial statements were prepared
in accordance with U.S. generally accepted accounting principals. The Audit
Committee has reviewed and discussed the consolidated financial statements with
management and the independent auditors. The Audit Committee discussed with the
independent auditors matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees).
CompuCom's independent auditors also provided to the Audit Committee the written
disclosures required by Independence Standards Board Standard No. 1
(independence Discussions with Audit Committees). The Audit Committee discussed
with the independent auditors' their independence and the compatibility of
non-audit services with such independence.
Based upon the Audit Committee's discussions with management and the independent
auditors and the Audit Committee's review of the representations of management
and the report of the independent auditors to the Audit Committee, the Audit
Committee recommended that the board of directors include CompuCom's audited
consolidated financial statements in CompuCom's Annual Report on Form 10-K for
the year ended December 31, 2001 filed with the Securities and Exchange
Commission.
Audit Fees. The aggregate fees billed by CompuCom's independent auditors for
professional services rendered in connection with the audit of our consolidated
financial statements included in our Annual Report on Form 10-K for fiscal year
2001, as well as for the review of our consolidated financial statements
included in CompuCom's Quarterly Reports on Form 10-Q during 2001, totaled
$300,000.
Financial Information Systems Design and Implementation Fees. KPMG LLP did not
render any professional services relating to financial information system design
and implementation in 2001.
All Other Fees. Other fees totaling $369,000 billed to CompuCom by its principal
auditors during 2001, other than those described above, related to the following
services:
Audit Related Fees
Information Systems $330,000
Security Review
Securitization Agreed $ 10,000
Upon Procedures
401(k) Audits $ 18,000
Other Non-Audit Services
Domestic Tax Service $ 11,000
20
The Audit Committee believes that the foregoing expenditures are compatible with
maintaining the independence of our auditors.
Submitted by the Audit Committee of the Board of Directors:
Edwin L. Harper, Chairman
John D. Loewenberg
Edward N. Patrone
The foregoing Audit Committee Report shall not be deemed to be incorporated by
reference into any of CompuCom's previous or future filings with the Securities
and Exchange Commission, except as otherwise explicitly specified by CompuCom in
any such filing.
21
The Board of Directors recommends a vote FOR Proposals 1 and 2.
Please mark
your votes as
indicated in [X]
this example
1. ELECTION OF DIRECTORS
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed to the right
[ ] [ ]
Nominees: 01 J. Edward Coleman, 02 Anthony L. Craig, 03 Michael J. Emmi, 04
Richard F. Ford, 05 Edwin L. Harper, 06 Delbert W. Johnson, 07 John D.
Loewenberg, 08 Warren V. Musser, 09 Anthony J. Paoni, 10 Edward N. Patrone, 11
M. Lazane Smith
To withhold authority to vote for any individual nominee while voting for the
remainder, strike a line through the nominee's name in the list.
2. AMENDMENT TO THE EMPLOYEE STOCK
PURCHASE PLAN TO INCREASE THE NUMBER
OF SHARES AUTHORIZED FOR ISSUANCE.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Signature Signature Date , 2002
------------------- ----------------- --------
YOU MUST SIGN EXACTLY AS YOUR NAME APPEARS ON THIS CARD. If shares are jointly
owned, you must both sign. Include title if you are signing as an attorney,
executor, administrator, trustee or guardian, or on behalf of a corporation or
partnership.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
[COMPUCOM LOGO]
Your vote is important,
regardless of the number of shares you own.
Whether or not you plan to attend the meeting in person, please complete,
date and sign the above proxy card and return it without delay in the
enclosed envelope.
PROXY
COMPUCOM SYSTEMS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Please sign and date this proxy, and indicate how you wish to vote, on the back
of this card. Please return this card promptly in the enclosed envelope. Your
vote is important.
When you sign and return this proxy card, you
. appoint J. Edward Coleman and M. Lazane Smith, and each of them (or any
substitutes they may appoint), as proxies to vote your shares, as you have
instructed, at the annual meeting on May 15, 2002, and at any adjournments
of that meeting,
. authorize the proxies to vote, in their discretion, upon any other business
properly presented at the meeting, and
. revoke any previous proxies you may have signed.
If you do not indicate how you wish to vote, the proxies will vote for all
nominees to the Board of Directors, and as they may determine, in their
discretion, with regard to any other matter properly presented at the meeting.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
[COMPUCOM LOGO]