-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CwTU4RL/zIK9Lh5Sdd/Hir70woZ8Hpu0CcUFj15C+qetsshCubiJK0LL2rLIZnrU wtBbop3PQE8dMlqBUzc7Uw== 0000930661-96-001834.txt : 19961218 0000930661-96-001834.hdr.sgml : 19961218 ACCESSION NUMBER: 0000930661-96-001834 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19961217 EFFECTIVENESS DATE: 19961217 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPUSA INC CENTRAL INDEX KEY: 0000880323 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-COMPUTER & COMPUTER SOFTWARE STORES [5734] IRS NUMBER: 752261497 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18033 FILM NUMBER: 96681991 BUSINESS ADDRESS: STREET 1: 14951 N DALLAS PKWY CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2149824000 S-8 1 FORM S-8 Registration No. 333-______ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 _______________ COMPUSA INC. (Exact name of registrant as specified in its charter) Delaware 75-2261497 (State or other jurisdiction of (I.R.S. employer identification number) incorporation or organization) 14951 North Dallas Parkway Dallas, Texas 75240 (Address of principal executive offices) _______________ LONG-TERM INCENTIVE PLAN (Full title of the Plan) _______________ JAMES F. HALPIN President 14951 North Dallas Parkway Dallas, Texas 75240 (Name and address of agent for service) (972) 982-4000 (Telephone number, including area code, of agent for service) _______________ COPY TO: FRED W. FULTON Jackson & Walker, L.L.P. 901 Main Street Suite 6000 Dallas, Texas 75202 (214) 953-5894 APPROXIMATE DATE OF PROPOSED COMMENCEMENT OF SALES PURSUANT TO THE PLAN: From time to time after this Registration Statement becomes effective. CALCULATION OF REGISTRATION FEE
====================================================================================================== Title of Amount Proposed Maximum Maximum Amount of Securities to be Offering Price Per Offering Price Registration to be Registered Registered Share /(1)/ /(1)/ Fee/(1)/ - ------------------------------------------------------------------------------------------------------ Common Stock, par value $0.01 4,000,000 $20.50 $82,000,000 $24,848.49 per share shares ======================================================================================================
- -------------- (1) Estimated solely for the purpose of calculating the registration fee. Pursuant to Rule 457(c) and 457(h), the offering price and registration fee are based on a price of $20.50 per share, which price is an average of the high and low prices of the Common Stock on the New York Stock Exchange on December 12, 1996. In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this Registration Statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein. Pursuant to General Instruction E of Form S-8, this Registration Statement incorporates by reference the contents of the Registrant's Registration Statements Nos. 33-72718, 33-45339 and 33-99282 on Form S-8, as amended. PROSPECTUS COMPUSA INC. 16,788,736 SHARES OF COMMON STOCK* This Prospectus has been prepared by CompUSA Inc., a Delaware corporation (the "Company"), for use upon resale by certain directors, officers and employees of the Company (the "Selling Stockholders") of up to 16,788,736 shares of the Company's common stock, par value $.01 per share ("Common Stock"). The Selling Stockholders have acquired and/or may in the future acquire shares of Common Stock from the Company pursuant to awards granted from time to time to the Selling Stockholders under the Company's Long-Term Incentive Plan (the "Plan"). The Common Stock may be sold from time to time by the Selling Stockholders or permitted transferees. Such sales may be sold on one or more exchanges, including the New York Stock Exchange ("NYSE"), in the over-the- counter market or in negotiated transactions, in each case at prices and at terms then prevailing or at prices related to the then current market price or at negotiated prices and terms. See "Plan of Distribution." Upon any sale of the Common Stock offered hereby, the Selling Stockholders or permitted transferees and participating agents, brokers, dealers and marketmakers may be deemed to be underwriters as that term is defined in the Securities Act of 1933, as amended (the "Securities Act"), and commissions or discounts or any profit realized on the resale of such securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The Common Stock is listed for trading on the NYSE under the symbol "CPU." On December 13, 1996, the last reported sale price of the Common Stock, as reported on the NYSE Composite Transactions Tape, was $19.625. The Company will pay all expenses in connection with this offering, which are estimated to be approximately $22,000. * This figure is an estimate. The Company has filed Registration Statements on Form S-8, Registration Numbers 33-72718, 33-45339, 33-99282 and 333-_____ (of which this Prospectus is a part), which Registration Statements cover the sale by the Company of Common Stock issuable pursuant to awards granted or to be granted under the Plan. This Prospectus covers the resale by the Selling Stockholders of an indeterminate number of shares of Common Stock acquired or that may be acquired by the Selling Stockholders pursuant to awards granted or to be granted to the Selling Stockholders under the Plan. _________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is December 17, 1996. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and at Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of such materials can also be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, the Commission maintains a site on the Internet World Wide Web, which can be accessed at http://www.sec.gov, and which contains reports, proxy statements and other information regarding registrants that file electronically with the Commission. The Common Stock is listed on the NYSE. Reports, proxy statements and other information concerning the Company can also be inspected and copied at the offices of the NYSE at 20 Broad Street, New York, New York 10005. This Prospectus constitutes part of a Registration Statement on Form S-8 (the "Registration Statement") filed by the Company with the Commission under the Securities Act. This Prospectus omits certain of the information contained in the Registration Statement and the exhibits thereto, in accordance with the rules and regulations of the Commission. For further information concerning the Company and the Common Stock, reference is made to the Registration Statement and the exhibits filed therewith, which may be inspected without charge at the office of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and copies of which may be obtained from the Commission at prescribed rates. Any statements contained herein concerning the provisions of any documents are not necessarily complete, and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. The Company's principal executive offices are located at 14951 North Dallas Parkway, Dallas, Texas 75240, and the Company's telephone number is (972) 982-4000. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission pursuant to the Exchange Act are incorporated by reference in this Prospectus: (i) Annual Report on Form 10-K for the year ended June 29, 1996; (ii) Quarterly Report on Form 10-Q for the quarter ended September 28, 1996; (iii) Current Report on Form 8-K/A filed with the Commission on August 2, 1996; -2- (iv) Current Report on Form 8-K filed with the Commission on August 14, 1996; and (v) The description of the Company's Common Stock contained in the Company's Registration Statement on Form 8-A/A (No. 1-11566) filed December 6, 1996, as amended. All reports and other documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this Prospectus and prior to the termination of this offering (the "Offering") shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of the filing of such documents. Any statement contained in a document incorporated by reference shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein or in any accompanying prospectus supplement modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person to whom a copy of this Prospectus is delivered, upon written or oral request, a copy of any or all of the documents incorporated herein by reference (without exhibits to such documents, unless such exhibits are specifically incorporated by reference into such documents). Requests should be directed in writing to CompUSA Inc., 14951 North Dallas Parkway, Dallas, Texas 75240, Attention: Assistant Secretary, or by telephone at (972) 982-4000. USE OF PROCEEDS The Company will not receive any proceeds from the sale of the Common Stock offered hereby. SELLING STOCKHOLDERS Information relating to the Selling Stockholders will be provided by Prospectus Supplement. PLAN OF DISTRIBUTION The Common Stock offered hereby may be sold from time to time by the Selling Stockholders or permitted transferees. The Common Stock may be disposed of from time to time in one or more transactions through any one or more of the following: (i) to purchasers directly, (ii) in ordinary brokerage transactions and transactions in which the broker solicits purchasers, (iii) through underwriters or dealers who may receive compensation in the form of underwriting discounts, concessions or commissions from the Selling Stockholders or permitted transferees and/or from the -3- purchasers of the Common Stock for whom they may act, (iv) the writing of options on the Common Stock, (v) the pledge of the Common Stock as security for any loan or obligation, including pledges to brokers or dealers who may, from time to time, themselves effect distributions of the Common Stock or interests therein, (vi) purchases by a broker or dealer as principal and resale by such broker or dealer for its own account pursuant to this Prospectus, (vii) a block trade in which the broker or dealer engaged in such block trade will attempt to sell the Common Stock as agent but may position and resell a portion of the block as principal to facilitate the transaction and (viii) an exchange distribution in accordance with the rules of the applicable exchange, or in transactions in the over the counter market. Such sales may be made at prices and at terms then prevailing or at prices related to the then current market price or at negotiated prices and terms. In effecting sales, brokers or dealers may arrange for other brokers or dealers to participate. The Selling Stockholders or permitted transferees and any underwriters, brokers, dealers or agents that participate in the distribution of the Common Stock may be deemed to be "underwriters" within the meaning of the Securities Act and any profit on the sale of the Common Stock by them and any discounts, commissions or concessions received by any such underwriters, brokers, dealers or agents may be deemed to be underwriting commissions or discounts under the Securities Act. In addition, while this Prospectus covers the offering and sale of the securities noted above, such securities may also qualify for sale pursuant to Rule 144 promulgated under the Securities Act ("Rule 144"), and accordingly such securities may be sold under Rule 144 rather than pursuant to this Prospectus. The Company will pay all of the expenses incident to the offering and sale of the Common Stock to the public other than underwriting discounts or commissions, brokers' fees and the fees and expenses of any counsel to the Selling Stockholders related thereto. LEGAL MATTERS Certain legal matters in connection with the validity of the Common Stock offered hereby have been passed upon by Jackson & Walker, L.L.P., Dallas, Texas. EXPERTS The consolidated financial statements of the Company appearing in the Company's Annual Report on Form 10-K for the year ended June 29, 1996, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements are, and audited financial statements to be included in subsequently filed documents will be, incorporated herein in reliance upon the reports of Ernst & Young LLP pertaining to such financial statements (to the extent covered by consents filed with the Commission) given upon the authority of such firm as experts in accounting and auditing. -4- INDEMNIFICATION The Company is a Delaware corporation and the Delaware General Corporation Law (the "Delaware Law") empowers a corporation organized thereunder to indemnify its directors and officers or former directors and officers and to purchase insurance with respect to liability arising out of their capacity or status as directors and officers. Reference is made to Article VII of the Company's Restated and Amended Bylaws, which provides for indemnification of directors and officers except as to certain circumstances and except as provided by applicable law. Additionally, Article VI ("Article VI") of the Company's Restated and Amended Certificate of Incorporation limits the personal liability of directors of the Company to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability; provided that to the extent required from time to time by applicable law, Article VI shall not eliminate or limit the liability of a director, to the extent such liability is provided by applicable law, (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of Title 8 of the Delaware Law, or (iv) for any transaction from which the director derived an improper personal benefit. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act"), may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. -5- No dealer, salesperson or other person has been authorized to give any information or to make any representation not contained in this Prospectus in connection with the offering made hereby and, if given or made, such information or representation must not be relied upon as having been authorized by the Company. This Prospectus does not constitute an offer to sell or a solicitation of COMPUSA INC. an offer to buy any securities in any jurisdiction to any person to whom it would be unlawful to make such an offer or solicitation in such jurisdiction. Neither the delivery of this Prospectus nor any sale made 16,788,736 SHARES hereunder shall, under any circumstances, COMMON STOCK create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that there has been no change in the affairs of the Company since such date. ---------------------- TABLE OF CONTENTS PROSPECTUS Page Incorporation of Certain Documents by Reference........................... 2 Use of Proceeds......................... 3 Selling Stockholders.................... 3 Plan of Distribution.................... 3 Legal Matters........................... 4 Experts................................. 4 Indemnification......................... 5 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents, which have been filed with the Securities and Exchange Commission (the "Commission") by the Company, are incorporated herein by reference and made a part hereof: (i) Annual Report on Form 10-K for the year ended June 29, 1996; (ii) Quarterly Report on Form 10-Q for the quarter ended September 28, 1996; (iii) Current Report on Form 8-K/A filed with the Commission on August 2, 1996; (iv) Current Report on Form 8-K filed with the Commission on August 14, 1996; and (iii) the description of the Company's common stock contained in the Company's Registration Statement on Form 8-A (No. 1- 11566) filed November 25, 1992, as amended by the Company's Registration Statements on Form 8-A/A filed November 14, 1995 and December 6, 1996, respectively, and any amendments or reports filed for the purpose of updating such description. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment that indicates that all securities offered have been sold or that deregisters all securities then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Company is a Delaware corporation and the Delaware General Corporation Law (the "Delaware Law") empowers a corporation organized thereunder to indemnify its directors and officers or former directors and officers and to purchase insurance with respect to liability arising out of their capacity or status as directors and officers. II-1 Reference is made to Article VII of the Company's Restated and Amended Bylaws, which provides for indemnification of directors and officers except as to certain circumstances and except as provided by applicable law. Additionally, Article VI ("Article VI") of the Company's Restated and Amended Certificate of Incorporation limits the personal liability of directors of the Company to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability; provided that to the extent required from time to time by applicable law, Article VI shall not eliminate or limit the liability of a director, to the extent such liability is provided by applicable law, (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of Title 8 of the Delaware Law, or (iv) for any transaction from which the director derived an improper personal benefit. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act"), may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. The following is a list of all exhibits filed as a part of this Registration Statement on Form S-8, including those incorporated herein by reference. Exhibit Number Description of Exhibit - ------- ---------------------- 4.1 Restated and Amended Certificate of Incorporation of the Registrant./(1)/ 4.2 Restated and Amended Bylaws of the Registrant./(2)/ 4.3 Specimen Common Stock Certificate (as amended)./(3)/ 4.4 Specimen 9 1/2% Senior Subordinated Note Due 2000./(4)/ 4.5 Indenture dated June 17, 1993 among CompUSA Inc., as Issuer, Compudyne Products, Inc., Compudyne Direct, Inc., CompFinance Inc., CompService Inc., as Guarantors, and U.S. Trust Company of Texas, N.A., as Trustee, relating to 9 1/2% Senior Subordinated Notes Due 2000./(5)/ II-2 4.6 First Supplemental Indenture dated as of December 1, 1995 among the Company, CompTeam Inc., CompFinance Inc., CompService Inc., and U.S. Trust Company of Texas, N.A., as Trustee./(6)/ 4.7 Second Supplemental Indenture dated as of February 7, 1996 among the Company, CompTeam Inc., CompFinance Inc., CompService Inc., CompUSA Holdings II Inc., and U.S. Trust Company of Texas, N.A., as Trustee./(7)/ 4.8 Third Supplemental Indenture dated as of May 14, 1996 among the Company, CompFinance Inc., CompService Inc., CompTeam Inc., CompUSA Holdings II Inc., Snowstorm Merger Corp. and U.S. Trust Company of Texas, N.A., as Trustee./(7)/ 4.9 Fourth Supplemental Indenture dated as of May 30, 1996 among the Company, CompFinance Inc., CompService Inc., CompTeam Inc., CompUSA Holdings II Inc., PCs Compleat, Inc. and U.S. Trust Company of Texas, N.A., as Trustee./(7)/ 4.10 Fifth Supplemental Indenture dated as of June 14, 1996 among the Company, CompFinance Inc., CompService Inc., CompTeam Inc., CompUSA Holdings II Inc., PCs Compleat, Inc., CompUSA Holdings I Inc., CompUSA Management Company, CompUSA Stores L.P., CompUSA Holdings Company and U.S. Trust Company of Texas, N.A., as Trustee./(9)/ 4.11 Subsidiary Guarantees executed by CompTeam Inc., CompUSA Holdings II Inc., PCs Compleat, Inc., CompUSA Holdings I Inc., CompUSA Management Company, CompUSA Stores L.P. and CompUSA Holdings Company./(7)/ 4.12 Rights Agreement dated April 29, 1994, between the Company and Bank One, Texas, N.A., as Rights Agent./(2)/ 4.13 Letter of the Company dated November 1, 1995, appointing First Interstate Bank of Texas, N.A., as substitute Rights Agent under the Rights Agreement./(3)/ 4.14 Letter of the Company dated August 16, 1996, appointing American Stock Transfer & Trust Company as substitute Rights Agent under the Rights Agreement./(7)/ 5 Opinion of Jackson & Walker, L.L.P./(9)/ 15 None. 23.1 Consent of Ernst & Young LLP./(9)/ 23.2 Consent of Jackson & Walker, L.L.P./(8)/ II-3 24 Power of Attorney./(9)/ 99 CompUSA Inc. Long-Term Incentive Plan, restated and amended as of November 19, 1996./(9)/ - ----------- (1) Previously filed as an exhibit to the Company's Registration Statement No. 1-11566 on Form 8-A/A filed December 6, 1996, as amended. (2) Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 26, 1994 and incorporated herein by reference. (3) Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended December 23, 1995 and incorporated herein by reference. (4) Previously filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended June 26, 1993 and incorporated herein by reference. (5) Previously filed as an exhibit to Registration Statement No. 33-62884 on Form S-3 and incorporated herein by reference. (6) Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 23, 1996 and incorporated herein by reference. (7) Previously filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended June 29, 1996 and incorporated herein by reference. (8) Included in the opinion of Jackson & Walker, L.L.P. filed herewith. (9) Filed herewith. II-4 ITEM 9. UNDERTAKINGS. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof), which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of the prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities II-5 offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. SIGNATURES THE REGISTRANT Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, State of Texas on the 12th day of December, 1996. CompUSA Inc. By /s/ James E. Skinner ---------------------------------------------- James E. Skinner, Executive Vice President POWER OF ATTORNEY Each person whose signature appears below authorizes James F. Halpin and James E. Skinner, and each of them, each of whom may act without joinder of the other, to execute in the name of each such person who is then an officer or director of the Registrant, and to file any amendments to this Registration Statement necessary or advisable to enable the Registrant to comply with the Securities Act, and any rules, regulations and requirements of the Commission, in respect thereof, in connection with the registration of the offering and sale of the securities which are the subject of this Registration Statement, which amendments may make such changes in such Registration Statement as such attorney may deem appropriate. II-6 Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signatures Title Date ---------- ----- ---- President, Chief Executive Officer December __, 1996 and Director - ---------------------------- (Principal Executive Officer) James F. Halpin Executive Vice President and Chief Financial Officer December 12, 1996 /s/ James E. Skinner (Principal Financial and - ---------------------------- Accounting Officer) James E. Skinner /s/ Giles H. Bateman Chairman of the December 12, 1996 - ---------------------------- Board of Directors Giles H. Bateman /s/ Kevin J. Roche Director December 12, 1996 - ---------------------------- Kevin J. Roche /s/ Warren D. Feldberg Director December 12, 1996 - ---------------------------- Warren D. Feldberg /s/ Leonard L. Berry, Ph.D Director December 12, 1996 - ---------------------------- Leonard L. Berry, Ph.D. /s/ Lawrence Mittman Director December 12, 1996 - ---------------------------- Lawrence Mittman II-7 INDEX TO EXHIBITS Exhibit No. Exhibit - ----------- ------- 4.1 Restated and Amended Certificate of Incorporation of the Registrant./(1)/ 4.2 Restated and Amended Bylaws of the Registrant./(2)/ 4.3 Specimen Common Stock Certificate (as amended)./(3)/ 4.4 Specimen 9 1/2% Senior Subordinated Note Due 2000./(4)/ 4.5 Indenture dated June 17, 1993 among CompUSA Inc., as Issuer, Compudyne Products, Inc., Compudyne Direct, Inc., CompFinance Inc., CompService Inc., as Guarantors, and U.S. Trust Company of Texas, N.A., as Trustee, relating to 9 1/2% Senior Subordinated Notes Due 2000./(5)/ 4.6 First Supplemental Indenture dated as of December 1, 1995 among the Company, CompTeam Inc., CompFinance Inc., CompService Inc., and U.S. Trust Company of Texas, N.A., as Trustee./(6)/ 4.7 Second Supplemental Indenture dated as of February 7, 1996 among the Company, CompTeam Inc., CompFinance Inc., CompService Inc., CompUSA Holdings II Inc., and U.S. Trust Company of Texas, N.A., as Trustee./(7)/ 4.8 Third Supplemental Indenture dated as of May 14, 1996 among the Company, CompFinance Inc., CompService Inc., CompTeam Inc., CompUSA Holdings II Inc., Snowstorm Merger Corp. and U.S. Trust Company of Texas, N.A., as Trustee./(7)/ 4.9 Fourth Supplemental Indenture dated as of May 30, 1996 among the Company, CompFinance Inc., CompService Inc., CompTeam Inc., CompUSA Holdings II Inc., PCs Compleat, Inc. and U.S. Trust Company of Texas, N.A., as Trustee./(7)/ 4.10 Fifth Supplemental Indenture dated as of June 14, 1996 among the Company, CompFinance Inc., CompService Inc., CompTeam Inc., CompUSA Holdings II Inc., PCs Compleat, Inc., CompUSA Holdings I Inc., CompUSA Management Company, CompUSA Stores L.P., CompUSA Holdings Company and U.S. Trust Company of Texas, N.A., as Trustee./(9)/ 4.11 Subsidiary Guarantees executed by CompTeam Inc., CompUSA Holdings II Inc., PCs Compleat, Inc., CompUSA Holdings I Inc., CompUSA Management Company, CompUSA Stores L.P. and CompUSA Holdings Company./(7)/ 4.12 Rights Agreement dated April 29, 1994, between the Company and Bank One, Texas, N.A., as Rights Agent./(2)/ 4.13 Letter of the Company dated November 1, 1995, appointing First Interstate Bank of Texas, N.A., as substitute Rights Agent under the Rights Agreement./(3)/ 4.14 Letter of the Company dated August 16, 1996, appointing American Stock Transfer & Trust Company as substitute Rights Agent under the Rights Agreement./(7)/ 5 Opinion of Jackson & Walker, L.L.P./(9)/ 15 None. 23.1 Consent of Ernst & Young LLP./(9)/ 23.2 Consent of Jackson & Walker, L.L.P./(8)/ 24 Power of Attorney./(9)/ 99 CompUSA Inc. Long-Term Incentive Plan, restated and amended as of November 19, 1996./(9)/ _________ (1) Previously filed as an exhibit to the Company's Registration Statement No. 1-11566 on Form 8-A/A filed December 6, 1996, as amended. (2) Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 26, 1994 and incorporated herein by reference. (3) Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended December 23, 1995 and incorporated herein by reference. (4) Previously filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended June 26, 1993 and incorporated herein by reference. (5) Previously filed as an exhibit to Registration Statement No. 33-62884 on Form S-3 and incorporated herein by reference. (6) Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 23, 1996 and incorporated herein by reference. (7) Previously filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended June 29, 1996 and incorporated herein by reference. (8) Included in the opinion of Jackson & Walker, L.L.P. filed herewith. (9) Filed herewith. EX-5 2 OPINION OF JACKSON AND WALKER EXHIBIT 5 [Jackson & Walker, L.L.P. Letterhead] December 17, 1996 CompUSA Inc. 14951 North Dallas Parkway Dallas, Texas 75240 Re: Registration Statement on Form S-8 of CompUSA Inc. Gentlemen: We are acting as counsel for CompUSA Inc., a Delaware corporation (the "Company"), in connection with the registration under the Securities Act of 1933, as amended (the "Act"), of the offering and sale of up to 4,000,000 shares of the Company's Common Stock, par value $0.01 per share (the "Shares"), in respect of the Company's Long-Term Incentive Plan (the "Plan"). A Registration Statement on Form S-8 covering the offering and sale of the Shares (the "Registration Statement") is expected to be filed with the Securities and Exchange Commission (the "Commission") on or about the date hereof. In reaching the conclusions expressed in this opinion, we have examined and relied upon the originals or certified copies of all documents, certificates and instruments as we have deemed necessary to the opinions expressed herein, including the Restated and Amended Certificate of Incorporation, the Restated and Amended Bylaws of the Company and a copy of the Plan. In making the foregoing examinations, we have assumed the genuineness of all signatures on original documents, the authenticity of all documents submitted to us as originals and the conformity to original documents of all copies submitted to us. Based solely upon the foregoing, subject to the comments hereinafter stated, and limited in all respects to the laws of the State of Texas, the General Corporation Law of the State of Delaware and the federal laws of the United States of America, it is our opinion that the Shares, when sold by the Company in respect of the Plan, will be validly issued, fully paid and nonassessable. We hereby consent to the use of this opinion as Exhibit 5 to 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 Act or the rules and regulations of the Commission promulgated thereunder. Very truly yours, /s/ Jackson & Walker, L.L.P. EX-23.1 3 CONSENT OF ERNST AND YOUNG EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement on Form S-8 and related Prospectus of CompUSA Inc. for the registration of 16,788,736 shares of its common stock pertaining to the CompUSA Inc. Long-Term Incentive Plan and to the incorporation by reference therein of our report dated August 14, 1996, with respect to the consolidated financial statements of CompUSA Inc. included in its Annual Report on Form 10-K for the year ended June 29, 1996, filed with the Securities and Exchange Commission. /s/ ERNST & YOUNG LLP ERNST & YOUNG LLP Dallas, Texas December 12, 1996 EX-99 4 COMPUSA LONG-TERM INCENTIVE PLAN EXHIBIT 99 AS RESTATED AND AMENDED NOVEMBER 19, 1996 COMPUSA INC. LONG-TERM INCENTIVE PLAN ARTICLE I DEFINITIONS As used in this Plan, the following terms will have the following meanings: 1.1. Annual Stockholders Meeting has the meaning ascribed to it in Section 4.2. 1.2. Automatic Grant Date has the meanings ascribed to it in Sections 4.2(a) and 4.2(b), as applicable. 1.3. Award means a grant of Options under Article IV of the Plan, a Restricted Stock Award under Article V of the Plan, a Stock Appreciation Rights Award under Article VI of the Plan, a Performance Share Award under Article VII of the Plan or a Stock Unit Award under Article VIII of the Plan. 1.4. Award Agreement means an Option Agreement, Restricted Stock Agreement, Stock Appreciation Rights Agreement, Performance Share Agreement or Stock Unit Agreement. 1.5. Board means the Company's Board of Directors. 1.6. Cause means an act or acts engaged in by a Participant involving (i) a felony, (ii) fraud, (iii) embezzlement, (iv) gross or willful neglect of duty or misconduct, (v) the commission of any act that causes or reasonably may be expected to cause substantial injury to the Company. 1.7. Code means the federal Internal Revenue Code of 1986, as amended. 1.8. Committee means a committee comprised of two or more Directors of the Company, appointed by the Board, the members of which satisfy the requirements for eligibility set forth in Section 3.1 and which is responsible for the administration of the Plan; provided that the full Board may at any time, in its sole discretion, exercise any or all functions and authority of the Committee. 1.9. Commission means the United States Securities and Exchange Commission. 1.10. Company means CompUSA Inc., a Delaware corporation. 1.11. Director means a member of the Board of Directors of the Company or of a subsidiary thereof. 1.12. Disability of a Participant will be deemed to occur whenever a Participant is rendered unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuing period of not less than 12 months. In the case of any dispute as to whether or not a Participant is disabled within the meaning of this Section, the determination of disability will be made by a licensed physician selected by the Board and acceptable to the Participant, which physician's decision will be final and binding. 1.13. Employee means any employee of the Company or of any of its subsidiaries, as defined under Section 3401(c) of the Code and the regulations promulgated thereunder. 1.14. Employment Agreement means an agreement, if any, between the Company or any subsidiary thereof and a Participant, setting forth the terms and conditions of the Participant's employment by the Company or such subsidiary. 1.15. Exchange Act means the Securities Exchange Act of 1934, as amended. 1.16. Grant Date means, with respect to an Option, the date on which an Option is granted, as specified in Section 4.2 or, as applicable, in Section 4.3. 1.17. Incentive Option means an Option that by its terms is intended to be treated as an "incentive stock option" within the meaning of Section 422 of the Code. 1.18. Market Value means, on any date, the closing price per share of the Stock on the New York Stock Exchange on such date. 1.19. Minimum Performance Goal means the minimum objective(s) established by the Committee that must be satisfied before any portion of a Performance Share Award is earned. The Minimum Performance Goal may, in the sole discretion of the Committee, be the same as or less than the Performance Goal. 1.20. Nonemployee Director means a member of the Board who is not an Employee. 1.21. Nonstatutory Option means any Option that is not an Incentive Option. 1.22. Option means an option to purchase Stock granted under the Plan. 1.23. Option Agreement means a written agreement between the Company and a Participant setting forth the terms and conditions of an Option. -2- 1.24. Option Price means the price to be paid by a Participant for a share of Stock upon exercise of an Option. 1.25. Participant means a person to whom an Award has been granted. 1.26. Performance Cycle or Cycle means a period of years selected by the Committee during which the performance of the Company and/or the Participant is measured for the purpose of determining the extent to which Performance Shares that have been contingently awarded with respect to such Cycle are earned. 1.27. Performance Goal means the objective(s) established by the Committee at the time each Performance Share Award is granted with respect to the related Performance Cycle for the purpose of determining the extent to which Performance Shares that have been contingently awarded for such Cycle are earned. 1.28. Performance Share or Performance Share Award means an Award granted pursuant to Article VII expressed as a share of Stock. 1.29. Performance Share Agreement means a written agreement between the Company and a Participant setting forth the terms and conditions of a Performance Share Award. 1.30. Plan means this Long-Term Incentive Plan of the Company, as amended from time to time. 1.31. Restricted Stock or Restricted Stock Award means an award of Stock granted under Article V. 1.32. Restricted Stock Agreement means a written agreement between the Company and a Participant with respect to a Restricted Stock Award. 1.33. Retirement means resignation by the Participant on or after the date on which the Participant has served the Company or one or more subsidiaries thereof for at least five years in the aggregate. 1.34. Rule 16b-3 means Rule 16b-3 or its successors promulgated under the Exchange Act. 1.35. Securities Act means the Securities Act of 1933, as amended. 1.36. Section 162(m) means Section 162(m) of the Code and the regulations promulgated thereunder. -3- 1.37. Stock means Common Stock, par value $.01 per share, of the Company or, in the event the outstanding shares of such stock are hereafter changed into or exchanged for shares of a different security of the Company or some other corporation, such other security. 1.38. Stock Appreciation Right or Stock Appreciation Rights Award means an Award granted under Article VI. 1.39. Stock Appreciation Rights Agreement means an agreement between the Company and a Participant setting forth the terms and conditions of a Stock Appreciation Rights Award. 1.40. Stock Unit or Stock Unit Award means an award of Stock or units granted under Article VIII. 1.41. Stock Unit Agreement means a written agreement between the Company and a Participant setting forth the terms and conditions of a Stock Unit Award. 1.42. Ten Percent Owner means a person who owns, or is deemed within the meaning of Section 422(b)(6) of the Code to own, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company (or its parent or subsidiary corporations, within the meaning of Sections 424(e) and 424(f) of the Code). Whether a person is a Ten Percent Owner will be determined with respect to each Option based on the facts existing immediately prior to the Grant Date of such Option. 1.43. Vesting Year for any portion of any Incentive Option means the calendar year in which that portion of the Option first becomes exercisable. ARTICLE II GENERAL 2.1. PURPOSE. This Plan is intended to encourage ownership of Stock by Participants and to provide additional incentives for them to promote the success of the Company's business. The Company intends that Incentive Options granted under Article IV will qualify as "incentive stock options" within the meaning of Section 422 of the Code. 2.2. TERM OF THE PLAN. Awards may be granted not later than May 8, 2005. 2.3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 9.2 and subject to any additional restrictions elsewhere in the Plan, the maximum aggregate number of shares of Stock that may be issued from time to time pursuant to the Plan may not exceed 20,788,736 shares. The maximum aggregate number of shares of Stock with respect to which Awards may be granted to any Participant during the term of the Plan may not exceed 50% of the total number of shares of Stock that may be issued from time to time under the Plan. Shares to be issued pursuant to Awards may be either authorized but unissued shares or shares held by the Company -4- in its treasury. If shares of Stock are reacquired by the Company pursuant to the provisions of the Plan or if Options expire or terminate for any reason without having been exercised in full, the reacquired shares and/or the shares not purchased will again be available for issuance under the Plan to the extent permitted by law. 2.4. ELIGIBILITY. Any full-time or part-time Employee, Director, consultant or advisor of one or more of the Company or any subsidiary thereof will be eligible to be a Participant; provided that Incentive Options may be granted only to Employees. 2.5. ACCELERATION IN CERTAIN EVENTS. The Committee may accelerate the exercisability of any Option or Stock Appreciation Right or waive any restrictions and/or Performance Goals with respect to shares of Restricted Stock, Performance Shares or Stock Units in whole or in part at any time. In addition, notwithstanding the provisions of any Award Agreement, the following provisions will apply: (a) Mergers and Reorganizations. In the event the Company or its stockholders enter into an agreement to dispose of all or substantially all of the assets of the Company by means of a sale, merger or other reorganization, liquidation or otherwise in a transaction in which the Company is not the surviving corporation, any Option or Stock Appreciation Right will become immediately exercisable with respect to the full number of shares subject to that Option or Stock Appreciation Right and all restrictions and/or Performance Goals will be deemed lapsed, waived and/or satisfied (as applicable) with respect to any Restricted Stock Award, Performance Share Award or Stock Unit Award; provided that no Option or Stock Appreciation Right will be immediately exercisable and no restrictions or Performance Goals will be deemed lapsed, waived and/or satisfied with respect to a Restricted Stock Award, Performance Share Award or Stock Unit Award under this Section 2.5 on account of any agreement of merger or other reorganization when the stockholders of the Company immediately before the consummation of the transaction will own at least 50% of the total combined voting power of all classes of stock entitled to vote of the surviving entity immediately after the consummation of the transaction. (b) Change in Control. All Options and Stock Appreciation Rights will become immediately exercisable and all restrictions and/or Performance Goals related to any Restricted Stock Award, Performance Share Award or Stock Unit Award will be deemed lapsed, waived and/or satisfied (as applicable) in the event any Person (other than a Person meeting the requirements of clauses (i) and (ii) of Rule 13d-1(b)(1) or its successors promulgated under the Exchange Act) meets the requirements for becoming an Acquiring Person, whether or not a Distribution Date occurs or the Rights are redeemed by the Company, as those terms are defined in the Rights Agreement dated as of April 29, 1994 between the Company and Bank One, Texas, N.A., as Rights Agent (American Stock Transfer & Trust Company became successor Rights Agent August 19, 1996). -5- 2.6. RESTRICTIONS ON ISSUANCE OF SHARES. Notwithstanding any other provision of the Plan, if at any time in the reasonable opinion of the Company the issuance of shares of Stock pursuant to an Award may constitute a violation of law, then the Company may delay such issuance and the delivery of a certificate for such shares of Stock until (i) approval has been obtained from such governmental agencies, other than the Commission, as may be required under any applicable law, rule or regulation and (ii) in the case where such issuance would constitute a violation of a law administered by or a regulation of the Commission, one of the following conditions has been satisfied: (a) the issuance of shares of Stock is effectively registered under the Securities Act; or (b) a no-action letter in form and substance reasonably satisfactory to the Company with respect to the issuance of such shares has been obtained by the Company from the staff of the Commission. The Company will make all reasonable efforts to bring about the occurrence of such events. 2.7. PURCHASE FOR INVESTMENT; SUBSEQUENT REGISTRATION. (a) Unless the issuance of shares of Stock to be issued pursuant to an Award has been effectively registered under the Securities Act, the Company will be under no obligation to issue any shares of Stock pursuant to an Award unless the Participant gives a written representation to the Company that is satisfactory in form and substance to its counsel and upon which the Company may reasonably rely, that he is acquiring the shares of Stock issued pursuant to such Award as an investment and not with a view to, or for sale in connection with, the distribution of any such shares of Stock. (b) If required in the opinion of counsel, each certificate representing shares of Stock issued pursuant to an Award will bear a reference to the investment representation made in accordance with this Section 2.7 and to the fact that no registration statement has been filed with the Commission in respect of the issuance of such shares of Stock. (c) If the Company deems it necessary or desirable to register under the Securities Act or other applicable statutes the issuance of any shares of Stock with respect to which an Award has been granted, or to qualify the issuance of any such shares for exemption from the Securities Act or other applicable statutes, then the Company will take such action at its own expense. The Company may require from each Participant such information in writing for use in any registration statement, prospectus, preliminary prospectus or offering circular as is reasonably necessary for such purpose and may require reasonable indemnity to the Company and its Directors and officers from such holder against all losses, claims, damages and liabilities arising from such use of the information so furnished and caused by any untrue statement of any material fact therein or caused by -6- the omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made. 2.8. WITHHOLDING; NOTICE OF DISPOSITION OF STOCK PRIOR TO EXPIRATION OF SPECIFIED HOLDING PERIOD. (a) Whenever shares of Stock are to be issued pursuant to an Award, the Company will have the right to require the Participant to remit to the Company an amount sufficient to satisfy federal, state, local or other withholding tax requirements (whether so required to secure for the Company an otherwise available tax deduction or otherwise) prior to the delivery of any certificate or certificates for such shares of Stock. (b) When a Participant is required to pay to the Company an amount required to be withheld under applicable income tax laws in connection with an Award, such payment may be made, in whole or in part, (i) in cash, (ii) by check, (iii) if permitted by the Committee, by delivery to the Company of shares of Stock already owned by the Participant having a Market Value on the date on which the amount of tax to be withheld is determined (the "Tax Date") equal to the amount required to be withheld, (iv) with respect to Options, through the withholding by the Company ("Company Withholding") of a portion of the shares of Stock acquired upon the exercise of the Options, or (v) in any other form of valid consideration, as permitted by the Committee in its sole discretion. (c) The Company may require as a condition to the issuance of shares of Stock upon exercise of an Incentive Option that the party exercising such Option give a written representation to the Company, which is satisfactory in form and substance to its counsel and upon which the Company may reasonably rely, that he will report to the Company any disposition of such shares prior to the expiration of the holding periods specified by Section 422(a)(1) of the Code. If and to the extent that the realization of income in such a disposition imposes upon the Company federal, state, local or other withholding tax requirements, or any such withholding is required to secure for the Company an otherwise available tax deduction, the Company will have the right to require that the recipient remit to the Company an amount sufficient to satisfy those requirements; and the Company may require as a condition to the issuance of shares of Stock upon exercise of an Incentive Option that the party exercising such option agree, in writing in a form satisfactory to the Company, to make such a remittance. 2.9. RESERVATION OF STOCK. The Company must at all times during the term of the Plan reserve or otherwise keep available such number of shares of Stock as will be sufficient to satisfy the requirements of the Plan and will pay all fees and expenses necessarily incurred by the Company in connection therewith. -7- 2.10. NO SPECIAL EMPLOYMENT OR OTHER RIGHTS. Nothing contained in the Plan or in any Award will confer upon any Participant any right with respect to the continuation of his employment or service with the Company (or any subsidiary), or interfere in any way with the right of the Company (or any subsidiary), subject to the terms of any separate employment or consulting agreement or provision of law or certificate of incorporation or bylaws to the contrary, at any time to terminate such employment or consulting agreement or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of an Award. ARTICLE III ADMINISTRATION 3.1. ADMINISTRATION. Subject to the provisions of the Plan, the Plan will be administered by the Committee. Each member of the Committee must qualify as a "Non-Employee Director" within the meaning of Rule 16b-3. In addition, with respect to any Award that the Company intends to qualify for the exception for qualified performance-based compensation set forth in Section 162(m), such Award must be granted solely by "outside directors" within the meaning of such section. The Committee will have sole discretion and authority to determine from time to time the Participants to whom Awards will be granted and the number of shares of Stock subject to each Award, to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine and interpret the terms and provisions of each Award Agreement or waive any conditions, restrictions and/ or Performance Goals applicable to any Option or Stock Appreciation Right (or the exercise thereof) or to any shares of Restricted Stock, Performance Shares or Stock Units, and to make all other determinations necessary or advisable for the administration of the Plan. In making such determinations, the Committee may take into account the nature of the services rendered by the respective Participants, their present and potential contributions to the success of the Company and its subsidiaries, and such other factors as the Committee in its sole discretion deems relevant. The Committee's determinations on the matters referred to in this Section 3.1 will be conclusive. ARTICLE IV OPTIONS 4.1. GRANT OF OPTIONS. The Committee may, in its sole discretion, grant Options in accordance with the terms and conditions set forth in the Plan. Each Option Agreement may contain such additional terms and conditions, not inconsistent with the terms of the Plan, as are determined by the Committee in its sole discretion. 4.2. AUTOMATIC GRANTS OF OPTIONS TO NONEMPLOYEE DIRECTORS. (a) Directors Elected or Re-Elected at Annual Stockholders Meeting. Each Nonemployee Director who is elected or re-elected to the Board at an annual stockholders meeting or special meeting in lieu of an annual meeting (an "Annual Stockholders Meeting"), or continues to serve as a Nonemployee Director after such Annual -8- Stockholders Meeting, is hereby granted, on the date of such meeting (as used in or with reference to this Section 4.2(a), an "Automatic Grant Date"), a Nonstatutory Option to purchase that whole number of shares (without any fraction) of Stock calculated by dividing $50,000 by the Market Value on the Automatic Grant Date. Each Option granted to a Participant under this Section 4.2(a) will (i) have an Option Price equal to 100% of the Market Value of the Stock on the Automatic Grant Date, (ii) terminate on the tenth anniversary of the Automatic Grant Date and (iii) become exercisable in three equal installments as follows: 33 1/3% on the first anniversary of the Automatic Grant Date, an additional 33 1/3% on the second anniversary of the Automatic Grant Date, and an additional 33 1/3% on the third anniversary of the Automatic Grant Date. (b) Directors Elected at Other Times. Each Nonemployee Director who is elected to the Board on a date other than the day of an Annual Stockholders Meeting (as used in or with reference to this Section 4.2(b), an "Automatic Grant Date") is hereby granted, on the Automatic Grant Date, an Option to purchase the number of shares of Stock set forth below, which Option will become exercisable if the Participant remains a Nonemployee Director as set forth below : (1) If such individual is elected after the day of an Annual Stockholders Meeting but on or before December 31, he is hereby granted an Option to purchase that whole number of shares (without any fraction) of Stock calculated by dividing $37,500 by the Market Value on the Automatic Grant Date, which Option will become exercisable in three equal installments as follows: 33 1/3% on the first anniversary of the Automatic Grant Date, an additional 33 1/3% on the second anniversary of the Automatic Grant Date, and an additional 33 1/3% on the third anniversary of the Automatic Grant Date. (2) If such individual is elected on or after January 1 but on or before March 31, he is hereby granted an Option to purchase that whole number of shares (without any fraction) of Stock calculated by dividing $25,000 by the Market Value on the Automatic Grant Date, which Option will become exercisable in three equal installments as follows: 33 1/3% on the first anniversary of the Automatic Grant Date, an additional 33 1/3% on the second anniversary of the Automatic Grant Date, and an additional 33 1/3% on the third anniversary of the Automatic Grant Date. (3) If such individual is elected on or after April 1 but on or before June 30, he is hereby granted an Option to purchase that whole number of shares (without any fraction) of Stock calculated by dividing $12,500 by the Market Value on the Automatic Grant Date, which Option will become exercisable in three equal installments as follows: 33 1/3% on the first anniversary of the Automatic Grant Date, an additional 33 1/3% on the second anniversary of the Automatic Grant -9- Date, and an additional 33 1/3% on the third anniversary of the Automatic Grant Date. Each Option granted to a Nonemployee Director under Section 4.2(b) will have an Option Price equal to 100% of the Market Value on the Automatic Grant Date and will terminate on the tenth anniversary of the Automatic Grant Date. 4.3. TIME OF GRANTING OPTIONS. Except as provided in Sections 4.2(a) and 4.2(b), the granting of an Option will take place at the time specified in the Option Agreement. 4.4. OPTION PRICE. The Option Price under each Incentive Option may not be less than 100% of the Market Value on the Grant Date, or less than 110% of the Market Value on the Grant Date if the Participant is a Ten Percent Owner. The Option Price under each Nonstatutory Option will not be so limited solely by reason of this Section 4.4. 4.5. OPTION PERIOD. No Incentive Option may be exercised later than the tenth anniversary of the Grant Date, or, if the Participant is a Ten Percent Owner, not later than the fifth anniversary of the Grant Date. The option period under each Nonstatutory Option will not be so limited solely by reason of this Section 4.5. Options may become exercisable in such installments, cumulative or noncumulative, as the Committee may determine. 4.6. LIMIT ON INCENTIVE OPTION CHARACTERIZATION. To the extent any Option fails to qualify as an Incentive Option, such Option will be considered a Nonstatutory Option. 4.7. EXERCISE OF OPTIONS. (a) Method of Exercise. Each Option will be exercisable in accordance with the terms of the Option Agreement pursuant to which the Option was granted. No Option may be exercised for a fraction of a share of Stock. (b) Payment of Purchase Price. The purchase price of any shares of Stock purchased must be paid at the time of exercise of the Option either (i) in cash, (ii) by certified or cashier's check, (iii) by shares of Stock, if permitted by the Committee, (iv) if then permitted under the laws of the State of Delaware and approved by the Committee, by a promissory note for the total purchase price of the shares of Stock being purchased, which note will contain such terms and provisions as the Committee may approve, including without limitation the right to repay the note partially or wholly with Stock, (v) by delivery of a copy of irrevocable instructions from the Participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares of Stock purchased upon exercise of the Option or to pledge them as collateral for a loan and promptly deliver to the Company the amount of sale or loan proceeds necessary to pay such purchase price or (vi) in any other form of valid consideration, as permitted by the Committee in its sole -10- discretion. If any portion of the purchase price or a note given at the time of exercise is paid in shares of Stock, those shares will be valued at the then Market Value. 4.8. TERMINATION OF EMPLOYMENT OR ASSOCIATION WITH THE COMPANY. (a) Termination of Employment with the Company. If a Participant ceases to be employed by the Company or any subsidiary thereof because the Participant is terminated for Cause, any Options held by that Participant will automatically expire. If a Participant's employment is terminated for any reason other than for Cause or due to death, such Participant's Option will be exercisable (to the extent exercisable on the date of termination of the Participant's employment or, if the Committee, in its sole discretion, has accelerated the vesting of such Option, to the extent exercisable following such acceleration) at any time within 30 days after he ceases to be an Employee (or within (i) three months after termination if on account of Retirement or (ii) 12 months after termination if on account of Disability), unless by its terms it expires earlier or unless, with respect to any Nonstatutory Option, the Committee agrees, in its sole discretion, to extend the term of such Option; provided that the term of any such Option will not be extended beyond its original term. If a Participant dies while employed by the Company or any subsidiary thereof, or within three months after ceasing to be an Employee, such Participant's Option will be exercisable (to the extent exercisable on the date of death, or, if the Committee, in its sole discretion, has accelerated the vesting of such Option, to the extent exercisable following such acceleration) at any time within 12 months after the date of death, unless by its terms it expires earlier or unless, with respect to any Nonstatutory Option, the Committee agrees, in its sole discretion, to extend the term of such Option; provided that the term of any such Option will not be extended beyond its original term. Military or sick leave will not be deemed a termination of employment, provided that it does not exceed the longer of three months or the period during which the absent Participant's reemployment rights, if any, are guaranteed by statute or by contract. The foregoing is qualified by the following: (i) if any facts that would constitute Cause for termination of employment of a Participant are brought to the attention of the Committee after the Participant's employment with the Company or any subsidiary thereof has ended, any Options then held by the Participant may be immediately terminated by the Committee and (ii) if a Participant is an Employee employed pursuant to a written Employment Agreement, the Participant's employment with the Company will be deemed terminated for "cause" for purposes of the Plan only if the Participant's employment is considered under the circumstances to have been terminated for cause for purposes of such agreement. (b) Termination of Association with the Company. If (i) a Nonemployee Director is removed for Cause or (ii) a consultant or advisor or other Participant who is not an Employee has his relationship with the Company terminated for Cause, any Options held by any such Participant will automatically expire. In all other cases, any Options held by such a Participant, to the extent exercisable on the date of termination of the Participant's association with the Company, will remain exercisable and will expire in -11- accordance with the terms of the applicable Option Agreement; provided that (i) if any facts that would constitute cause for removal or termination of a Participant who is a Nonemployee Director, consultant or advisor or other person who is not an Employee are brought to the attention of the Committee after such Participant's association with the Company has ended, any Options held by such Participant may be immediately terminated by the Committee, and (ii) if such Participant has been retained pursuant to a written agreement, the Participant's relationship with the Company will be deemed terminated for "cause" for purposes of the Plan only if the Participant's association with the Company is considered under the circumstances to have been terminated for cause for purposes of such written agreement. 4.9. TRANSFERABILITY OF OPTIONS. (a) Incentive Options. Incentive Options may not be transferred or assigned other than by will or the laws of descent and distribution and may be exercised during the lifetime of the Participant only by the Participant or by the Participant's legally authorized representative, and each Option Agreement in respect of an Incentive Option will so provide. The designation by a Participant of a beneficiary will not constitute a transfer of the Option. (b) Nonstatutory Options. With respect to Nonstatutory Options, the Committee may, in its sole discretion, provide in any Option Agreement (or in an amendment to any existing Option Agreement) such provisions regarding transferability of the Nonstatutory Options as the Committee, in its sole discretion, deems appropriate. 4.10. LIMITATION OF RIGHTS IN STOCK. A Participant will not be deemed for any purpose to be a stockholder of the Company with respect to any of the shares of Stock covered by an Option, except to the extent the Option has been exercised with respect thereto and, in addition, a certificate has been issued therefor and delivered to the Participant or his agent. Any Stock issued pursuant to the Option will be subject to all restrictions upon the transfer thereof that may be now or hereafter imposed by the Certificate of Incorporation of the Company (as amended or restated from time to time), the Bylaws of the Company (as amended or restated from time to time) and any applicable Employment Agreement. ARTICLE V RESTRICTED STOCK 5.1. GRANT OF RESTRICTED STOCK AWARDS. The Committee may, in its sole discretion, grant Restricted Stock Awards in accordance with the terms and conditions set forth in the Plan. Each Restricted Stock Agreement may contain such additional terms and conditions, not inconsistent with the terms of the Plan, as are determined by the Committee in its sole discretion. -12- 5.2. TERMS AND CONDITIONS. Each Restricted Stock Award confers upon the recipient thereof the right to receive a specified number of shares of Stock in accordance with the terms and conditions of each Participant's Restricted Stock Agreement. The general terms and conditions of a Restricted Stock Award will be as follows: (a) Any shares of Stock awarded hereunder to a Participant will be restricted for a period of time to be determined by the Committee for each Participant at the time of the Award, which period shall be not more than ten years. The restrictions will prohibit the sale, assignment, transfer, pledge or other encumbrance of such shares, and will provide for possible reversion thereof to the Company in accordance with subparagraph (b) during the period of restriction. (b) All Restricted Stock awarded under this Plan to a Participant will be forfeited and returned to the Company in the event the Participant's employment or service with the Company or a subsidiary thereof is terminated prior to the expiration of the period of restriction, unless the Participant's termination of employment or service is due to his death, Disability or Retirement or unless the Committee, in its sole discretion, waives the restrictions established in accordance with subparagraph (a) with respect to any or all of the shares of Restricted Stock. (c) In the event of a Participant's death or Disability, the restrictions established in accordance with subparagraph (a) will lapse with respect to all Restricted Stock awarded to the Participant prior to any such event, and the shares of Stock involved will cease to be Restricted Stock and will no longer be subject to forfeiture to the Company pursuant to subparagraph (b). (d) In the event of a Participant's Retirement, the restrictions established in accordance with subparagraph (a) will continue to apply unless the Committee in its sole discretion shortens the restriction period. (e) Stock certificates issued with respect to Restricted Stock Awards will be registered in the name of the Participant, but will be delivered by him to the Company together with a stock power endorsed in blank. Each such certificate will bear the following legend: "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE, RESTRICTIONS ON TRANSFER AND CERTAIN OTHER TERMS AND CONDITIONS SET FORTH IN THE COMPUSA INC. LONG-TERM INCENTIVE PLAN AND THE AGREEMENT BETWEEN THE REGISTERED OWNER OF THE SHARES REPRESENTED BY THIS CERTIFICATE AND COMPUSA INC. ENTERED INTO PURSUANT TO SUCH PLAN." -13- From the time of grant of the Restricted Stock Award, the Participant will be entitled to exercise all rights (including dividend and voting rights) with respect to the shares represented by such certificate, subject to forfeiture of such voting rights and the Stock as provided in subparagraph (b). (f) Upon the lapse of a restriction period as determined pursuant to subparagraph (a), the Company will return the stock certificates representing the shares with respect to which the restriction has lapsed to the Participant or his legal representative, and pursuant to the instruction of the Participant or his legal representative will issue a certificate for such shares that does not bear the legend set forth in subparagraph (e). (g) Any other securities or assets (other than ordinary cash dividends) that are received by a Participant with respect to Restricted Stock awarded to him, which is still subject to restrictions established in accordance with subparagraph (a), will be subject to the same restrictions and will be delivered by the Participant to the Company as provided in subparagraph (e). 5.3. NOTICE TO COMPANY OF SECTION 83(B) ELECTION. Any Participant who exercises an election under Section 83(b) of the Code to have his receipt of Shares of Restricted Stock taxed currently, without regard to restrictions, must give notice to the Company of such election immediately upon making such election. Such an election must be made within 30 days after the effective date of issuance and cannot be revoked except with the consent of the Internal Revenue Service. ARTICLE VI STOCK APPRECIATION RIGHTS 6.1. GRANT OF STOCK APPRECIATION RIGHTS. The Committee may, in its sole discretion, grant Stock Appreciation Rights in accordance with the terms and conditions set forth in the Plan. Each Stock Appreciation Rights Agreement may contain such additional terms and conditions, not inconsistent with the terms of the Plan, as are determined by the Committee in its sole discretion. 6.2. TERMS AND CONDITIONS. A Stock Appreciation Right will entitle a Participant to receive an amount equal to (or if the Committee shall so determine at the time of grant, less than) the excess of the Market Value on the date of exercise over the Market Value on the date of grant of such right (or such other price as is set by the Committee), multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised. 6.3. FORM OF GRANT. A Stock Appreciation Right may be granted in combination with, in addition to, or completely independent of, an Option or any other Award. -14- 6.4. FORM OF PAYMENT. Settlement of a Stock Appreciation Right may be made (i) in cash, (ii) by certified or cashier's check, (iii) if permitted by the Committee, in shares of Stock or (iv) in any other form of valid consideration, as determined by the Committee in its sole discretion. However, any Stock Appreciation Right exercised upon or subsequent to the occurrence of an event described in Sections 2.5(a) or 2.5(b) must be paid in cash. 6.5. EXERCISE OF STOCK APPRECIATION RIGHTS; EFFECTS ON OPTIONS AND VICE-VERSA. Each Stock Appreciation Right will be exercisable in accordance with the terms of the Stock Appreciation Rights Agreement pursuant to which the Stock Appreciation Right is granted. Whenever a Stock Appreciation Right is granted in relation to an Option and the exercise of one affects the right to exercise the other, the number of shares of Stock available under the Option to which the Stock Appreciation Right relates will decrease by a number equal to the number of shares of Stock for which the Stock Appreciation Right is exercised. Upon the exercise of an Option, any related Stock Appreciation Right will terminate as to any number of shares of Stock subject to such Stock Appreciation Right that exceeds the total number of shares of Stock for which the Option remains unexercised. 6.6. TRANSFERABILITY OF STOCK APPRECIATION RIGHTS. Subject to Section 6.8, the Committee may, in its sole discretion, provide in any Stock Appreciation Rights Agreement (or in an amendment to any existing Stock Appreciation Rights Agreement) such provisions regarding transferability of the Stock Appreciation Rights as the Committee, in its sole discretion, deems appropriate. 6.7. TERMINATION OF EMPLOYMENT OR SERVICE. Whenever a Stock Appreciation Right is granted in relation to an Option and the exercise of one affects the right to exercise the other, in the event of the termination of the Participant's employment or service with the Company, the Stock Appreciation Right may be exercised only during the period, if any, within which the Option to which it relates may be exercised. If a Stock Appreciation Right is granted independently of an Option under the Plan, the following provisions will apply: (a) Termination of Employment with the Company. If a Participant ceases to be employed by the Company or any subsidiary thereof because the Participant is terminated for Cause, any Stock Appreciation Rights held by that Participant will automatically expire. If a Participant's employment is terminated for any reason other than Cause or due to death, such Participant's Stock Appreciation Right will be exercisable (to the extent exercisable on the date of termination of the Participant's employment or, if the Committee, in its sole discretion, has accelerated the vesting of such Stock Appreciation Right, to the extent exercisable following such acceleration) at any time within 30 days after he ceases to be an Employee (or within (i) three months after termination if on account of Retirement or (ii) 12 months after termination if on account of Disability), unless by its terms it expires earlier or unless the Committee agrees, in its sole discretion, to extend the term of such Stock Appreciation Right; provided that the term of any such Stock Appreciation Right will not be extended beyond its original term. -15- If a Participant dies while employed by the Company or any subsidiary thereof, or within three months after ceasing to be an Employee, such Participant's Stock Appreciation Right will be exercisable (to the extent exercisable on the date of death, or, if the Committee, in its sole discretion, has accelerated the vesting of such Stock Appreciation Right, to the extent exercisable following such acceleration) at any time within 12 months after the date of death, unless by its terms it expires earlier or unless the Committee agrees, in its sole discretion, to extend the term of such Stock Appreciation Right; provided that the term of any such Stock Appreciation Right will not be extended beyond its original term. Military or sick leave will not be deemed a termination of employment, provided that it does not exceed the longer of three months or the period during which the absent Participant's reemployment rights, if any, are guaranteed by statute or by contract. The foregoing is qualified by the following: (i) if any facts that would constitute Cause for termination of employment of a Participant are brought to the attention of the Committee after the Participant's employment with the Company or any subsidiary thereof has ended, any Stock Appreciation Rights then held by the Participant may be immediately terminated by the Committee and (ii) if a Participant is an Employee employed pursuant to a written Employment Agreement, the Participant's employment with the Company will be deemed terminated for "cause" for purposes of the Plan only if the Participant's employment is considered under the circumstances to have been terminated for cause for purposes of such agreement. (b) Termination of Association with the Company. If a consultant or advisor or other Participant who is not an Employee has his relationship with the Company terminated for Cause, any Stock Appreciation Rights held by any such Participant will automatically expire. In all other cases, any Stock Appreciation Rights held by such a Participant, to the extent exercisable on the date of termination of the Participant's association with the Company, will remain exercisable and will expire in accordance with the terms of the applicable Stock Appreciation Rights Agreement; provided that (i) if any facts that would constitute cause for removal or termination of a Participant who is a consultant or advisor or other person who is not an Employee are brought to the attention of the Committee after such Participant's association with the Company has ended, any Stock Appreciation Rights held by such Participant may be immediately terminated by the Committee and (ii) if such Participant has been retained pursuant to a written agreement, the Participant's relationship with the Company will be deemed terminated for "cause" for purposes of the Plan only if the Participant's association with the Company is considered under the circumstances to have been terminated for cause for purposes of such written agreement. 6.8. TANDEM INCENTIVE OPTION - STOCK APPRECIATION RIGHT. Whenever an Incentive Option and a Stock Appreciation Right are granted together and the exercise of one affects the right to exercise the other, the following requirements shall apply: -16- (a) The Stock Appreciation Right will expire no later than the expiration of the underlying Incentive Option. (b) The Stock Appreciation Right may be for no more than the difference between the Option Price of the underlying Incentive Option and the Market Value of the Stock subject to the underlying Incentive Option at the time the Stock Appreciation Right is exercised. (c) The Stock Appreciation Right is transferable only when the underlying Incentive Option is transferable, and under the same conditions. (d) The Stock Appreciation Right may be exercised only when the underlying Incentive Option is eligible to be exercised. (e) The Stock Appreciation Right may be exercised only when the Market Value of the Stock subject to the underlying Incentive Option exceeds the Option Price of the underlying Incentive Option. 6.9. WRITTEN NOTICE REQUIRED. Any Stock Appreciation Right will be deemed to be exercised when written notice of exercise has been received by the Company at its principal office from the person entitled to exercise the Stock Appreciation Right. ARTICLE VII PERFORMANCE SHARES 7.1. GRANT OF PERFORMANCE SHARES. The Committee may, in its sole discretion, grant Performance Shares in accordance with the terms and conditions set forth in the Plan. Each Performance Share Agreement may contain such additional terms and conditions, not inconsistent with the terms of the Plan, as are determined by the Committee in its sole discretion. 7.2. TERMS AND CONDITIONS. Performance Shares may be earned based on the attainment of Performance Goals established by the Committee for a particular Performance Cycle. The Committee may establish Performance Goals on the basis of such criteria and to accomplish such objectives as the Committee may from time to time select. 7.3. AMOUNT OF PAYMENT. After the end of each Performance Cycle, the Committee will determine the number of Performance Shares earned by each Participant with respect to the Performance Cycle in accordance with the following: (a) If the Performance Goal is attained or exceeded, a Participant will be deemed to have earned the full number of Performance Shares granted to the Participant. -17- (b) If the Minimum Performance Goal is not attained, a Participant will be deemed to have earned no Performance Shares. (c) If the Performance Goal is not attained, but the Minimum Performance Goal is attained or exceeded, the number of Performance Shares deemed to have been earned by a Participant will be a portion of the Performance Shares, as determined based on a formula established by the Committee at the time of grant. (d) If a Participant's employment or service with the Company or any subsidiary thereof has terminated because of death, Disability or Retirement prior to the end of a Performance Cycle, the number of Performance Shares such Participant will be deemed to have earned shall be the number of Performance Shares determined as though such Participant's employment or service had not terminated, multiplied by a fraction, the numerator of which is the number of months such Participant was employed or served the Company or a subsidiary thereof during the Performance Cycle (including the month during which employment or service terminated) and the denominator of which is the total number of months in the Performance Cycle. (e) If the Participant's employment or service has terminated for any reason other than death, Disability or Retirement, such Participant will be deemed to have earned no Performance Shares except as and to the extent the Committee may determine; provided that the number of Performance Shares that may be so determined by the Committee to have been earned may not exceed the number that would have been earned had the provisions of Section 7.3(a) been applicable. (f) At any time prior to the end of a Performance Cycle, the Committee may adjust downward (but not upward) the Performance Goal and/or the Minimum Performance Goal as a result of major events unforeseen at the time the Performance Shares were awarded, such as changes in the economy, the industry, laws affecting the operation of the Company or any subsidiary thereof, changes in applicable tax laws or accounting principles or any other event the Committee determines would have a significant impact upon the probability of attaining the previously established Performance Goal and/or Minimum Performance Goal. 7.4. FORM OF PAYMENT. Payment in respect of earned Performance Shares will be made to the Participant or, if the Participant has died, to the Participant's designated beneficiary, as soon as practicable after the expiration of the Performance Cycle and the Committee's determination under Section 7.3. Payment in respect of earned Performance Shares may be made in cash, in shares of Stock or a combination thereof, as determined by the Committee in its sole discretion at the time of payment. -18- 7.5. ADDITIONAL AWARDS. In the sole discretion of the Committee, a Performance Share Award may provide the Participant with (i) dividends or dividend equivalents (payable on a current or deferred basis) and (ii) cash payments in lieu of or in addition to such Award. ARTICLE VIII STOCK UNIT AWARDS 8.1. GRANT OF STOCK UNIT AWARDS. The Committee may, in its sole discretion, grant Stock Unit Awards in accordance with the terms and conditions set forth in the Plan. Each Stock Unit Agreement may contain such additional terms and conditions, not inconsistent with the terms of the Plan, as are determined by the Committee in its sole discretion. 8.2. TERMS AND CONDITIONS. Stock Unit Awards may be in the form of Stock or units, the value of which is based, in whole or in part, on the Market Value of Stock. Stock Unit Awards will be subject to such terms, restrictions, conditions, vesting requirements and payment requirements as the Committee may determine in its sole discretion at the time of grant, including without limitation the following: (a) Any shares of Stock that are part of a Stock Unit Award may be subject to restrictions on sale, assignment, transfer, pledge or other encumbrance. (b) Stock Unit Awards may provide for the payment of cash consideration by the Participant or provide that the Award, and any Stock to be issued in connection therewith, if applicable, shall be delivered without the payment of cash consideration. (c) Stock Unit Awards may relate in whole or in part to certain performance criteria established by the Committee. (d) Stock Unit Awards may provide for deferred payment schedules and/or vesting over a specified period of employment or service with the Company or any subsidiary thereof. 8.3. ADDITIONAL AWARDS. In the sole discretion of the Committee, a Stock Unit Award may provide the Participant with (i) dividends or dividend equivalents (payable on a current or deferred basis) and (ii) cash payments in lieu of or in addition to such Award. ARTICLE IX TERMINATION, AMENDMENT AND ADJUSTMENT 9.1. TERMINATION AND AMENDMENT OF THE PLAN. The Board (or, if the Board has specifically delegated this authority to the Committee, the Committee) may at any time terminate the Plan or make such modifications of the Plan as it deems advisable; provided that no amendment may be made without approval of the stockholders of the Company if such approval -19- is required under the Code or any requirement under applicable state law. No termination or amendment of the Plan may, without the consent of the Participant to whom any Award has theretofore been granted, adversely affect the rights of such Participant under such Award. 9.2. ADJUSTMENT. In the event of any stock dividend payable in Stock or any split-up or contraction of the number of shares of Stock after the date an Award is granted and prior to the exercise in full of an Option or Stock Appreciation Right or the lapse, waiver and/or satisfaction of any restrictions or Performance Goals related to a Restricted Stock Award, Performance Share Award or Stock Unit Award, the number of shares subject to such Award and, if applicable, the Option Price, will be proportionately adjusted. In the event of any reclassification or change of outstanding shares of Stock or in case of any consolidation or merger of the Company with or into another company or in case of any sale or conveyance to another company or entity of the property of the Company as a whole or substantially as a whole, shares of stock or other securities equivalent in kind and value to those shares a Participant would have received if he had held the full number of shares of Stock subject to the Award immediately prior to such reclassification, change, consolidation, merger, sale or conveyance (together with all other shares, stock and securities thereafter issued in respect thereof) will thereupon be subject to the Award. Upon dissolution or liquidation of the Company, all Awards will terminate, but the Participant will have the right, immediately prior to such dissolution or liquidation, to exercise any Option or Stock Appreciation Right to the extent exercisable on the date of such dissolution or liquidation. No fraction of a share of Stock will be purchasable or deliverable upon exercise, but in the event any adjustment hereunder of the number of shares covered by the Award will cause such number to include a fraction of a share, such number of shares will be adjusted to the nearest smaller whole number of shares. In the event of changes in the outstanding Stock by reason of any stock dividend, split-up, contraction, reclassification, or change of outstanding shares of Stock of the nature contemplated by this Section 9.2, the number of shares of Stock available for the purpose of the Plan as stated in Section 2.3 will be correspondingly adjusted. ARTICLE X MISCELLANEOUS 10.1. NOTICES AND OTHER COMMUNICATIONS. All notices and other communications required or permitted under the Plan will be effective if in writing and if delivered or sent by certified or registered mail, return receipt requested (a) if to the Participant, at his residence address last filed with the Company and (b) if to the Company, at 14951 North Dallas Parkway, Dallas, Texas 75240 Attention: President, with a copy to the Chairman of the Board of Directors of the Company, presently at 14951 North Dallas Parkway, Dallas, Texas 75240, or to such other persons or addresses as the Participant or the Company may specify by a written notice to the other from time to time. 10.2. PLAN BINDING ON SUCCESSORS. The Plan will be binding upon the successors and assigns of the Company. -20- 10.3. NUMBER AND GENDER. Whenever used herein, nouns in the singular will include the plural where appropriate, and the masculine pronoun will include the female gender. -21- -----END PRIVACY-ENHANCED MESSAGE-----