INGRAM MICRO INC, POS AM, 1996-11-13

INGRAM MICRO INC
POS AM, 1996-11-13
COMPUTERS & PERIPHERAL EQUIPMENT & SOFTWARE

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As filed with the Securities and Exchange Commission on November 13, 1996

Registration No. 333-12785

==============================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Post-Effective
Amendment No. 1 to

FORM S-1
REGISTRATION STATEMENT

Under

THE SECURITIES ACT OF 1933

INGRAM MICRO INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Delaware 5045 62-1644402
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
1600 E. St. Andrew Place
Santa Ana, CA 92705
(714) 566-1000
(Address, Including Zip Code, and Telephone Number,
Including Area Code, Of Registrant's Principal Executive Offices)
____________________

James E. Anderson, Jr., Esq.
Senior Vice President and General Counsel
Ingram Micro Inc.
1600 E. St. Andrew Place
Santa Ana, CA 92705
(714) 566-1000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, Of Agent for Service)
____________________

Approximate date of commencement of proposed sale of the
securities to the public: As soon as practicable after the Registration
Statement becomes effective.
____________________

If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [ ]

If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. [ ]

==============================================================================

PROSPECTUS

INGRAM MICRO INC.

2,867,374 Shares

CLASS A COMMON STOCK

--------------

THIS PROSPECTUS RELATES TO THE OFFER AND SALE OF UP TO
2,867,374 SHARES OF THE CLASS A COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF
INGRAM MICRO INC. AT VARIOUS PRICES PURSUANT TO THE INGRAM MICRO INC. ROLLOVER
STOCK OPTION PLAN (THE "PLAN"). PLEASE SEE THE SUMMARY OF THE PLAN BEGINNING
ON PAGE 18 AND THE FULL TEXT OF THE PLAN BEGINNING ON PAGE A-1.

Holders of Options (as defined herein) may not exercise such
Options unless the Company has available a current final prospectus with
respect to the shares issuable upon exercise of such Options. The Company has
agreed, as part of the Split-Off (as defined herein), to keep this Prospectus
available for a period of 30 days from the date of this Prospectus (or until
December 6, 1996). Although it is not obligated to do so, the Company
currently intends to allow exercises of Options until December 31, 1996, which
date may be extended in the sole discretion of the Company. The Committee (as
defined herein) has considerable discretion in determining whether to allow
the exercise of any particular Option. Although there can be no assurance,
prior to or concurrently with the date on which this Prospectus is no longer
available, the Company intends to file with the Securities and Exchange
Commission a registration statement on Form S-8 relating to shares issuable
upon exercise of Options held by employees of the Company. Holders of Options
who are not employees of the Company will not have the ability to exercise
Options thereafter, until such time as a registration statement relating to
shares issuable upon exercise of such Options has been filed and declared
effective by the Securities and Exchange Commission. See "The Plan--Exercise
of Options" for a more complete discussion of the Company's obligations with
respect to additional registration statements and other related matters.

--------------

SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN RISKS
ASSOCIATED WITH THIS OFFERING.

--------------

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.

--------------

November 6, 1996

NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE
HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS
CONTAINED IN THIS PROSPECTUS, 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 AN OFFER TO BUY BY ANY PERSON IN ANY JURISDICTION IN WHICH IT
IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFERING OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
DATE SUBSEQUENT TO THE DATE HEREOF.

--------------

TABLE OF CONTENTS

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Page
----

Prospectus Summary...........................................................4
Risk Factors.................................................................7
The Company.................................................................16
The Plan....................................................................18
Federal Income Tax Considerations...........................................21
Restrictions on Resale......................................................23
ERISA.......................................................................23
Use of Proceeds.............................................................23
Dividend Policy.............................................................23
Capitalization..............................................................24
Dilution....................................................................26
Selected Consolidated Financial Data........................................27
Management's Discussion and Analysis
of Financial Condition and Results of Operations..........................28
Business....................................................................39
Management..................................................................57
Certain Transactions........................................................69
The Split-Off and the Reorganization........................................70
Principal Stockholders......................................................76
Description of Capital Stock................................................78
Shares Eligible for Future Sale.............................................81
Legal Matters...............................................................83
Experts.....................................................................83
Additional Information......................................................83
Index to Consolidated Financial Statements.................................F-1
Ingram Micro Inc. Rollover Stock Option Plan...............................A-1

You have been granted an option (an "Option") to purchase
shares of Class A Common Stock, par value $0.01 per share ("Common Stock"),
under the Ingram Micro Inc. Rollover Stock Option Plan. This Prospectus forms
a part of a registration statement on Form S-1 filed with the Securities and
Exchange Commission (the "Commission"). The Company has registered on such
registration statement a number of shares equal to the number of shares
issuable upon exercise of Options during the period in which it expects this
Prospectus to be available. This document contains additional information
about the Plan for use by holders of Options in determining whether to
purchase shares of Common Stock pursuant to the Plan. The discussion of the
Plan beginning on page 18 is a general summary only. Please refer to the
complete text of the Plan beginning on page A-1, and, if applicable, your
Option Agreement. Capitalized terms not separately defined in this Prospectus
have the meanings set forth in the Plan. Additional information regarding the
Plan and its administrators may be obtained from David M. Finley, Ingram Micro
Inc., 1600 East St. Andrew Place, Santa Ana, California 92705 (telephone
number: (714) 566-1000).

--------------

Ingram Micro and the Ingram Micro logo are registered
trademarks of the Company. Ingram Alliance, IMpulse, "Leading the Way in
Worldwide Distribution," and "Partnership America" are trademarks of the
Company. All other trademarks or tradenames referred to in this Prospectus
are the property of their respective owners.

--------------

IN CONNECTION WITH THE COMPANY'S INITIAL PUBLIC OFFERING OF ITS
CLASS A COMMON STOCK, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF THE
COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.

--------------

Unless the context otherwise requires, the "Company" or "Ingram
Micro" refers to Ingram Micro Inc., a Delaware corporation, and its
consolidated subsidiaries. In addition, unless otherwise indicated, all
information in this Prospectus assumes (i) the occurrence of the Split-Off (as
defined herein) immediately prior to the closing of the Company's initial
public offering (including the offering of 200,000 shares of Common Stock to
the Company's Chief Executive Officer) (collectively, the "IPO") and (ii) the
exercise of the over-allotment option held by the underwriters of the IPO (the
"Underwriters") in connection with the IPO. The fiscal year of the Company is
a 52- or 53-week period ending on the Saturday nearest to December 31. Unless
the context otherwise requires, references in this Prospectus to "1991,"
"1992," "1993," "1994," and "1995" represent the fiscal years ended December
28, 1991 (52 weeks), January 2, 1993 (53 weeks), January 1, 1994 (52 weeks),
December 31, 1994 (52 weeks), and December 30, 1995 (52 weeks), respectively.
The Company's next 53-week fiscal year will be fiscal year 1997.

--------------

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the
more detailed information and consolidated financial statements and the
notes thereto appearing elsewhere in this Prospectus.

THE COMPANY

Ingram Micro is the leading wholesale distributor of
microcomputer products worldwide. The Company markets microcomputer hardware,
networking equipment, and software products to more than 100,000 reseller
customers in approximately 120 countries worldwide. Ingram Micro distributes
microcomputer products through warehouses in eight strategic locations in the
continental United States and 22 international warehouses located in Canada,
Mexico, most countries of the European Union, Norway, Malaysia, and Singapore.
The Company believes that it is the market share leader in the United States,
Canada, and Mexico, and the second largest full-line distributor in Europe.
In 1995, approximately 31% of the Company's net sales were derived from
operations outside the United States. Ingram Micro offers one-stop shopping
to its reseller customers by providing a comprehensive inventory of more than
36,000 products from over 1,100 suppliers, including most of the microcomputer
industry's leading hardware manufacturers, networking equipment suppliers, and
software publishers. The Company's suppliers include Apple Computer, Cisco
Systems, Compaq Computer, Creative Labs, Hewlett-Packard, IBM, Intel,
Microsoft, NEC, Novell, Quantum, Seagate, 3Com, Toshiba, and U.S. Robotics.

The Company conducts business with most of the leading
resellers of microcomputer products around the world, including, in the United
States, AmeriData, CDW Computer Centers, CompuCom, CompUSA, Computer City,
Electronic Data Systems, En Pointe Technologies, Entex Information Services,
Micro Warehouse, Sam's Club, Staples, and Vanstar. The Company's
international reseller customers include Complet Data A/S, Consultores en
Diagnostico Organizacional y de Sistemas, DSG Retail Ltd., 06 Software Centre
Europe, B.V., GE Capital Technologies, Jump Ordenadores, Maxima S.A., Norsk
Datasenter, Owell Svenska AB, SNI Siemens Nixdorf Infosys AG, and TC Sistema
SPA.

The Company has grown rapidly over the past five years, with
net sales and net income increasing to $8.6 billion and $84.3 million,
respectively, in 1995 from $2.0 billion and $30.2 million, respectively, in
1991, representing compound annual growth rates of 43.8% and 29.3%,
respectively. The Company's growth during this period reflects substantial
expansion of its existing domestic and international operations, resulting
from the addition of new customers, increased sales to the existing customer
base, the addition of new product categories and suppliers, and the
establishment of Ingram Alliance Reseller Company ("Ingram Alliance"), the
Company's master reseller business launched in late 1994, as well as the
successful integration of ten acquisitions worldwide. Because of intense
price competition in the microcomputer products wholesale distribution
industry, the Company's margins have historically been narrow and are expected
in the future to continue to be narrow. In addition, the Company is highly
leveraged and has relied heavily on debt financing for its increasing working
capital needs in connection with the expansion of its business.

Prior to the Split-Off, the Company was a subsidiary of Ingram
Industries Inc. ("Ingram Industries"). Immediately prior to the closing of
the IPO, Ingram Industries consummated the Split-Off (as defined herein), and
all information in this Prospectus assumes the occurrence of the Split-Off.
See "The Company" and "The Split-Off and the Reorganization."

THE OFFERING

Common Stock offered:
Total......................................... 2,867,374 Shares
Common Equity to be outstanding after the IPO(1):
Common Stock.................................... 23,200,000 Shares
Class B Common Stock(2)......................... 109,813,762 Shares
Total......................................... 133,013,762 Shares
Voting rights:
Common Stock.................................... One vote per share
Class B Common Stock............................ Ten votes per share
Use of proceeds.................................... To repay certain
outstanding indebtedness.
See "Use of Proceeds."
NYSE Symbol........................................ IM

<TABLE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(in millions, except per share data)
Thirty-nine Weeks Ended
<CAPTION> Fiscal Year -------------------------------
---------------------------------------------------------- September 30, September 28,
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT
DATA:
Net sales............... $2,016.6 $2,731.3 $4,044.2 $5,830.2 $8,616.9 $6,070.7 $8,474.7
Gross profit............ 185.4 227.6 329.6 439.0 605.7 422.5 574.5
Income from operations.. 67.6 68.9 103.0 140.3 186.9 123.9 175.9 (3)
Net income(4)........... 30.2 31.0 50.4 63.3 84.3 56.3 77.6 (3)
Earnings per share...... 0.25 0.26 0.41 0.52 0.69 0.46 0.64 (3)
Weighted average common
shares outstanding(5).. 121.4 121.4 121.4 121.4 121.4 121.4 121.7
</TABLE>

September 28, 1996
----------------------------- As Further
Actual As Adjusted(6) Adjusted(6)(7)
------ -------------- --------------
BALANCE SHEET DATA:
Working capital...... $ 828.1 $ 668.1 $ 654.6
Total assets......... 2,843.7 2,706.3 2,706.3
Total debt(8)........ 625.0 487.6 93.8
Stockholders' equity. 366.0 366.0 746.4

(footnotes on following page)

- ------------
(1) See "Principal Stockholders." Excludes approximately 21,000,000 shares
of Common Equity (including the shares of Common Stock offered hereby)
issuable in connection with outstanding stock options (including the
Options). See "Management--1996 Plan--Options" and "--Rollover Plan;
Incentive Stock Units."

(2) Each share of Class B Common Stock is convertible, at any time at the
option of the holder, into one share of Common Stock. In addition, the
Class B Common Stock will be automatically converted into Common Stock
upon the occurrence of certain events. See "Description of Capital
Stock."

(3) Reflects a non-cash compensation charge of $8.9 million ($5.4 million,
or $0.04 per share, net of tax) in connection with the granting of the
Options. See "The Split-Off and the Reorganization--The Split-Off" and
Note 11 of Notes to Consolidated Financial Statements.

(4) The 1992 results reflect the adoption of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("FAS
109").

(5) See Note 2 of Notes to Consolidated Financial Statements.

(6) As adjusted to reflect (i) the assumption by the Company of the
accounts receivable securitization program of Ingram Industries in
partial satisfaction of amounts due to Ingram Industries (resulting in
a $160.0 million decrease in each of working capital, total assets, and
total debt) and (ii) approximately $22.6 million of indebtedness to be
incurred by the Company in connection with the acquisition of certain
facilities currently utilized by the Company, as if such transactions
had occurred on September 28, 1996. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity
and Capital Resources" and "Certain Transactions."

(7) As further adjusted to give effect to the issuance of the Common Stock
offered by the Company in the IPO, the repayment of certain
indebtedness with the estimated net proceeds therefrom, and the
additional $13.4 million non-cash compensation charge related to
certain of the Options. Does not reflect the issuance of any Common
Stock offered by the Company in this offering. If all 2,867,374 shares
being offered hereby were purchased, the Company would receive net
proceeds of approximately $4.1 million. See "Use of Proceeds,"
"Capitalization," "Dilution," and "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Overview."

(8) Includes long-term debt, current maturities of long-term debt, and
amounts due to Ingram Industries.

RISK FACTORS

In evaluating the Company's business, prospective investors
should carefully consider the following factors in addition to the other
information contained in this Prospectus.

Intense Competition. The Company operates in a highly
competitive environment, both in the United States and internationally. The
microcomputer products distribution industry is characterized by intense
competition, based primarily on price, product availability, speed and
accuracy of delivery, effectiveness of sales and marketing programs, credit
availability, ability to tailor specific solutions to customer needs, quality
and breadth of product lines and services, and availability of technical and
product information. The Company's competitors include regional, national,
and international wholesale distributors, as well as hardware manufacturers,
networking equipment manufacturers, and software publishers that sell directly
to resellers and large resellers who resell to other resellers. There can be
no assurance that the Company will not lose market share in the United States
or in international markets, or that it will not be forced in the future to
reduce its prices in response to the actions of its competitors and thereby
experience a further reduction in its gross margins. See "--Narrow Margins"
and "Business--Competition."

The Company entered the "aggregator" or "master reseller"
business by launching Ingram Alliance in late 1994. See "Business--Ingram
Alliance." The Company competes with other master resellers, which sell to
groups of affiliated franchisees and third-party dealers. Many of the
Company's competitors in the master reseller business are more experienced and
have more established contacts with affiliated resellers, third-party dealers,
or suppliers, which may provide them with a competitive advantage over the
Company.

The Company is constantly seeking to expand its business into
areas closely related to its core microcomputer products distribution
business. As the Company enters new business areas, it may encounter
increased competition from current competitors and/or from new competitors,
some of which may be current customers of the Company. For example, the
Company intends to distribute media in the new digital video disc format and
may compete with traditional music and printed media distributors. In
addition, certain services the Company provides may directly compete with
those provided by the Company's reseller customers. There can be no assurance
that increased competition and adverse reaction from customers resulting from
the Company's expansion into new business areas will not have a material
adverse effect on the Company's business, financial condition, or results of
operations. See "Business--The Industry" and "--Competition."

Narrow Margins. As a result of intense price competition in
the microcomputer products wholesale distribution industry, the Company's
margins have historically been narrow and are expected in the future to
continue to be narrow. See "--Intense Competition." These narrow margins
magnify the impact on operating results of variations in operating costs. The
Company's gross margins have declined from 8.1% for 1993 to 6.8% for the
thirty-nine weeks ended September 28, 1996. The Company receives purchase
discounts from suppliers based on a number of factors, including sales or
purchase volume and breadth of customers. These purchase discounts directly
affect gross margins. Because many purchase discounts from suppliers are
based on percentage increases in sales of products, it may become more
difficult for the Company to achieve the percentage growth in sales required
for larger discounts due to the current size of the Company's revenue base.
The Company's gross margins have been further reduced by the Company's entry
into the master reseller business through Ingram Alliance, which has lower
gross margins than the Company's traditional wholesale distribution business.
See "--Risks Associated with Ingram Alliance" and "Business--Ingram Alliance."
The Company has taken a number of steps intended to address the challenges of
declining gross margins, particularly by continually improving and enhancing
its information systems and implementing procedures and systems designed to
provide greater warehousing efficiencies and greater accuracy in shipping.
However, there can be no assurance that these steps will prevent gross margins
from continuing to decline. If the Company's gross margins continue to
decline, the Company will be required to reduce operating expenses as a
percentage of net sales further in order to maintain or increase its operating
margins. While the Company will continue to explore ways to improve gross
margins and reduce operating expenses as a percentage of net sales, there can
be no assurance that the Company will be successful in such efforts or that the
Company's margins will not decline in the future. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Fluctuations in Quarterly Results. The Company's quarterly
net sales and operating results have varied significantly in the past and will
likely continue to do so in the future as a result of seasonal variations in
the demand for the products and services offered by the Company, the
introduction of new hardware and software technologies and products offering
improved features and functionality, the introduction of new products and
services by the Company and its competitors, the loss or consolidation of a
significant supplier or customer, changes in the level of operating expenses,
inventory adjustments, product supply constraints, competitive conditions
including pricing, interest rate fluctuations, the impact of acquisitions,
currency fluctuations, and general economic conditions. The Company's narrow
margins may magnify the impact of these factors on the Company's operating
results.

Specific historical seasonal variations in the Company's
operating results have included a reduction of demand in Europe during the
summer months, increased Canadian government purchasing in the first quarter,
and pre-holiday stocking in the retail channel during the September to
November period. In addition, as was the case with the introduction of
Microsoft Windows 95 in August 1995, the product cycle of major products may
materially impact the Company's business, financial condition, or results of
operations. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Quarterly Data; Seasonality." Changes in supplier
supported programs may also have a material impact on the Company's quarterly
net sales and operating results. The Company may be unable to adjust spending
sufficiently in a timely manner to compensate for any unexpected sales
shortfall, which could materially adversely affect quarterly operating
results. Accordingly, the Company believes that period-to-period comparisons
of its operating results should not be relied upon as an indication of future
performance. In addition, the results of any quarterly period are not
indicative of results to be expected for a full fiscal year. In certain
future quarters, the Company's operating results may be below the expectations
of public market analysts or investors. In such event, the market price of
the Common Stock would be materially adversely affected.

Capital Intensive Nature of Business; High Degree of Leverage.
The Company's business requires significant levels of capital to finance
accounts receivable and product inventory that is not financed by trade
creditors. The Company is highly leveraged and has relied heavily on debt
financing for its increasing working capital needs in connection with the
expansion of its business. At December 30, 1995 and September 28, 1996, the
Company's total debt was $850.5 million and $625.0 million, respectively, and
represented 73.6% and 63.0%, respectively, of the Company's total
capitalization. Pro forma for the IPO and the application of the estimated
net proceeds therefrom, and the incurrence of approximately $22.6 million of
indebtedness in connection with the acquisition of certain facilities
currently utilized by the Company, as of September 28, 1996, the Company's
total debt would have been $93.8 million and would have represented 11.1% of
the Company's total capitalization. See "Capitalization," and "Management's
Discussion and Analysis of Financial Condition and Results of Operations." In
order to continue its expansion, the Company will need additional financing,
including debt financing, which may or may not be available on terms
acceptable to the Company, or at all. The Company expects that the ratio of
total debt to total capitalization will likely increase over time. While a
portion of the Company's historical financing needs has been satisfied through
internally generated funds and trade creditors, a substantial amount has come
from intercompany borrowings under debt facilities and an accounts receivable
securitization facility maintained by Ingram Industries. No assurance can be
given that the Company will continue to be able to borrow in adequate amounts
for these or other purposes on terms acceptable to the Company, and the
failure to do so could have a material adverse effect on the Company's
business, financial condition, and results of operations.

The Company has entered into a $1 billion Credit Facility (the
"Credit Facility") with NationsBank of Texas N.A. and The Bank of Nova Scotia,
acting as Agents for a syndicate of lenders. The Credit Facility became
effective immediately prior to the closing of the IPO. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources." Concurrently with the
Split-Off, the Company used borrowings under the Credit Facility to repay (i)
intercompany indebtedness in partial satisfaction of amounts due to Ingram
Industries (the Company assumed Ingram Industries' accounts receivable
securitization program in satisfaction of the remaining amounts due to Ingram
Industries) and (ii) outstanding revolving indebtedness related to amounts
drawn by certain of the Company's subsidiaries, as participants in Ingram
Industries' then existing unsecured credit facility, which terminated
concurrently with the closing of the IPO. The net proceeds from the IPO were
used to repay a portion of the borrowings under the Credit Facility. See "Use
of Proceeds." The Company's ability in the future to satisfy its debt
obligations will be dependent upon its future performance, which is subject to
prevailing economic conditions and financial, business, and other factors,
including factors beyond the Company's control. See "--Fluctuations in
Quarterly Results," "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources," "Certain
Transactions," and "The Split-Off and the Reorganization--The Reorganization."

Management of Growth. The rapid growth of the Company's
business has required the Company to make significant recent additions in
personnel and has significantly increased the Company's working capital
requirements. Although the Company has experienced significant sales growth
in recent years, such growth should not be considered indicative of future
sales growth. Such growth has resulted in new and increased responsibilities
for management personnel and has placed and continues to place a significant
strain upon the Company's management, operating and financial systems, and
other resources. There can be no assurance that the strain placed upon the
Company's management, operating and financial systems, and other resources
will not have a material adverse effect on the Company's business, financial
condition, and results of operations, nor can there be any assurance that the
Company will be able to attract or retain sufficient personnel to continue the
expansion of its operations. Also crucial to the Company's success in
managing its growth will be its ability to achieve additional economies of
scale. There can be no assurance that the Company will be able to achieve
such economies of scale, and the failure to do so could have a material
adverse effect on the Company's business, financial condition, and results of
operations.

To manage the expansion of its operations, the Company must
continuously evaluate the adequacy of its management structure and its
existing systems and procedures, including, among others, its data processing,
financial, and internal control systems. When entering new geographic
markets, the Company will be required to implement the Company's centralized
IMpulse information processing system on a timely and cost-effective basis,
hire personnel, establish suitable distribution centers, and adapt the
Company's distribution systems and procedures to these new markets. There can
be no assurance that management will adequately anticipate all of the changing
demands that growth could impose on the Company's systems, procedures, and
structure. In addition, the Company will be required to react to changes in
the microcomputer distribution industry, and there can be no assurance that
it will be able to do so successfully. Any failure to adequately anticipate
and respond to such changing demands may have a material adverse effect on the
Company's business, financial condition, or results of operations. See
"--Dependence on Information Systems" and "Business--Information Systems."

Dependence on Information Systems. The Company depends on a
variety of information systems for its operations, particularly its
centralized IMpulse information processing system which supports more than 40
operational functions including inventory management, order processing,
shipping, receiving, and accounting. At the core of IMpulse is on-line,
real-time distribution software which supports basic order entry and
processing and customers' shipments and returns. The Company's information
systems require the services of over 350 of the Company's associates with
extensive knowledge of the Company's information systems and the business
environment in which the Company operates. Although the Company has not in
the past experienced significant failures or downtime of IMpulse or any of its
other information systems, any such failure or significant downtime could
prevent the Company from taking customer orders, printing product pick-lists,
and/or shipping product and could prevent customers from accessing price and
product availability information from the Company. In such event, the Company
could be at a severe disadvantage in determining appropriate product pricing
or the adequacy of inventory levels or in reacting to rapidly changing market
conditions, such as a currency devaluation. A failure of the Company's
information systems which impacts any of these functions could have a material
adverse effect on the Company's business, financial condition, or results of
operations. In addition, the inability of the Company to attract and retain
the highly skilled personnel required to implement, maintain, and operate
IMpulse and the Company's other information systems could have a material
adverse effect on the Company's business, financial condition, or results of
operations. In order to react to changing market conditions, the Company must
continuously expand and improve IMpulse and its other information systems.
From time to time the Company may acquire other businesses having information
systems and records which must be converted and integrated into IMpulse or
other Company information systems. This can be a lengthy and expensive
process that results in a significant diversion of resources from other
operations. The inability of the Company to convert the information systems
of any acquired businesses to the Company's information systems and to train
its information systems personnel in a timely manner and on a cost-effective
basis could materially adversely affect the Company's business, financial
condition, or results of operations. There can be no assurance that the
Company's information systems will not fail, that the Company will be able to
attract and retain qualified personnel necessary for the operation of such
systems, that the Company will be able to expand and improve its information
systems, or that the information systems of acquired companies will be
successfully converted and integrated into the Company's information systems
on a timely and cost-effective basis. See "Business--Information Systems."

Exposure to Foreign Markets; Currency Risk. The Company,
through its subsidiaries, operates in a number of countries outside the United
States, including Canada, Mexico, most of the countries of the European Union,
Norway, Malaysia, and Singapore. In 1994, 1995, and the first three quarters
of 1996, 29.3%, 30.7%, and 30.0%, respectively, of the Company's net sales
were derived from operations outside of the United States, and the Company
expects its international net sales to increase as a percentage of total net
sales in the future. See "Business--Geographic Tactics." The Company's
international net sales are primarily denominated in currencies other than the
U.S. dollar. Accordingly, the Company's international operations impose risks
upon its business as a result of exchange rate fluctuations. Although the
Company attempts to mitigate the effect of exchange rate fluctuations on its
business, primarily by attempting to match the currencies of sales and costs,
as well as through the use of foreign currency borrowings and derivative
financial instruments such as forward exchange contracts, the Company does not
seek to remove all risk associated with such fluctuations. Accordingly, there
can be no assurance that exchange rate fluctuations will not have a material
adverse effect on the Company's business, financial condition, or results of
operations in the future. In certain countries outside the United States,
operations are accounted for primarily on a U.S. dollar denominated basis. In
the event of an unexpected devaluation of the local currency in those
countries, the Company may experience significant foreign exchange losses. For
example, the devaluation of the Mexican peso, which began in December 1994,
significantly affected the Company's Mexican operations. The primary impact
on the Company's operating results was a foreign exchange pre-tax charge of
approximately $6.9 million and $7.8 million in 1994 and 1995, respectively.
In addition, the Company's net sales in Mexico were adversely affected in 1995
as a result of the general economic impact of the devaluation of the Mexican
peso. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

The Company's international operations are subject to other
risks such as the imposition of governmental controls, export license
requirements, restrictions on the export of certain technology, political
instability, trade restrictions, tariff changes, difficulties in staffing and
managing international operations, difficulties in collecting accounts
receivable and longer collection periods, and the impact of local economic
conditions and practices. As the Company continues to expand its
international business, its success will be dependent, in part, on its ability
to anticipate and effectively manage these and other risks. There can be no
assurance that these and other factors will not have a material adverse effect
on the Company's international operations or its business, financial condition,
and results of operations as a whole.

Dependence on Key Individuals. The Company is dependent in
large part on its ability to retain the services of its executive officers,
especially Messrs. Jerre L. Stead (Chief Executive Officer and Chairman of
the Board of Directors), Jeffrey R. Rodek (Worldwide President and Chief
Operating Officer), and David R. Dukes (Vice Chairman of Ingram Micro and
Chief Executive Officer of Ingram Alliance). The loss of any of the Company's
executive officers could have a material adverse effect on the Company. The
Company does not have employment agreements with most of its executive
officers, although it does have agreements, primarily relating to severance
arrangements, with certain of the Named Executive Officers (as defined
herein). See "Management--Employment Agreements." The Company's continued
success is also dependent upon its ability to retain and attract other
qualified employees to meet the Company's needs. See "Business--Employees."

Effective August 27, 1996, the Company appointed Jerre L. Stead
as its Chief Executive Officer and Chairman of the Board. Linwood A. (Chip)
Lacy, Jr., the Company's Chief Executive Officer since 1985, resigned effective
May 31, 1996. Although the Company believes that one of its distinguishing
characteristics is the strength of its senior and middle management personnel,
there can be no assurance that the Company will not experience a material
adverse effect on its business, financial condition, or results of operations
as a result of the resignation of Mr. Lacy. See "Management--Employment
Agreements."

Product Supply; Dependence on Key Suppliers. The ability of
the Company to obtain particular products or product lines in the required
quantities and to fulfill customer orders on a timely basis is critical to the
Company's success. In most cases, the Company has no guaranteed price or
delivery agreements with its suppliers. As a result, the Company has
experienced, and may in the future continue to experience, short-term
inventory shortages. In addition, manufacturers who currently distribute
their products through the Company may decide to distribute, or to
substantially increase their existing distribution, through other
distributors, their own dealer networks, or directly to resellers. Further,
the personal computer industry experiences significant product supply
shortages and customer order backlogs from time to time due to the inability
of certain manufacturers to supply certain products on a timely basis. There
can be no assurance that suppliers will be able to maintain an adequate supply
of products to fulfill the Company's customer orders on a timely basis or that
the Company will be able to obtain particular products or that a product line
currently offered by suppliers will continue to be available. The failure of
the Company to obtain particular products or product lines in the required
quantities or fulfill customer orders on a timely basis could have a material
adverse effect on its business, financial condition, or results of operations.

Although Ingram Micro regularly stocks products and accessories
supplied by over 1,100 suppliers, approximately 36.5%, 41.4%, 53.2%, and 55.2%
of the Company's net sales in 1993, 1994, 1995, and the first three quarters
of 1996, respectively, were derived from products provided by its ten largest
suppliers. In 1995, 23.4% of the Company's net sales were derived from sales
of products from Microsoft (12.7%), Compaq Computer (10.7%), and
Hewlett-Packard (9.5%). In the first three quarters of 1996, 33.2% of the
Company's net sales were derived from sales of products from Compaq Computer
(13.7%), Microsoft (10.4%), and Hewlett-Packard (9.1%). Certain of the
Company's non-U.S. operations are even more dependent on a limited number of
suppliers. In addition, many services that the Company provides to its
reseller customers, such as financing and technical training, are dependent on
supplier support. The loss of a major supplier, the deterioration of the
Company's relationship with a major supplier, the loss or deterioration of
supplier support for certain Company-provided services, the decline in demand
for a particular supplier's product, or the failure of the Company to
establish good relationships with major new suppliers could have a material
adverse effect on the Company's business, financial condition, or results of
operations. Such a loss, deterioration, decline, or failure could also have a
material adverse effect on the sales by the Company of products provided by
other suppliers.

The Company's ability to achieve increases in net sales or to
sustain current net sales levels depends in part on the ability and
willingness of the Company's suppliers to provide products in the quantities
the Company requires. Although the Company has written distribution
agreements with many of its suppliers, these agreements usually provide for
nonexclusive distribution rights and often include territorial restrictions
that limit the countries in which Ingram Micro is permitted to distribute the
products. The agreements are also generally short term, subject to periodic
renewal, and often contain provisions permitting termination by either party
without cause upon relatively short notice. The termination of an agreement
may have a material adverse impact on the Company's business, financial
condition, or results of operations. See "Business--Products and Suppliers."

Risks Associated with Ingram Alliance. Ingram Micro entered
the master reseller (also known as "aggregation") business in late 1994
through the launch of Ingram Alliance. Ingram Alliance is designed to offer
resellers access to products supplied by certain of the industry's leading
hardware manufacturers at competitive prices by utilizing a low-cost business
model that depends upon a higher average order size, lower product returns
percentage, and supplier-paid financing. The master reseller business is
characterized by gross margins and operating margins that are even narrower
than those of the U.S. microcomputer products wholesale distribution business
and by competition based almost exclusively on price, programs, and execution.
In the master reseller business, the Company has different supply arrangements
and financing terms than in its traditional wholesale distribution business.
There can be no assurance that the Company will be able to compete
successfully in the master reseller business. A failure by Ingram Alliance to
compete successfully could have a material adverse effect on the Company's
business, financial condition, or results of operations.

A substantial portion of Ingram Alliance's net sales
(approximately 89.9% during 1995 and 92.5% during the thirty-nine weeks ended
September 28, 1996) is derived from the sale of products supplied by Compaq
Computer, IBM, Toshiba, NEC, and Apple Computer. As a result, Ingram
Alliance's business is dependent upon price and related terms and availability
of products provided by these key suppliers. Although the Company considers
Ingram Alliance's relationships with these suppliers to be good, there can be
no assurance that these relationships will continue as presently in effect or
that changes by one or more of such key suppliers in their volume discount
schedules or other marketing programs would not adversely affect the Company's
business, financial condition or results of operations. Termination or
nonrenewal of Ingram Alliance's agreements with key suppliers would have a
material adverse effect on the Company's business, financial condition, or
results of operations.

Although the Company's wholesale distribution division sells
Hewlett-Packard products, Ingram Alliance has not historically had
authorization to sell Hewlett-Packard products in the master reseller market.
Because of Hewlett-Packard's position as a major supplier of microcomputer
hardware products, the Company believes that sales of Hewlett-Packard products
likely account for a substantial portion of sales at Ingram Alliance's
competitors in the master reseller business. The inability to offer
Hewlett-Packard's products has placed Ingram Alliance at a competitive
disadvantage to its competitors because it has been unable to provide a full
range of products to its customers. In late October 1996, Ingram Alliance,
along with Tech Data Elect, was authorized to sell Hewlett-Packard products in
the master reseller market. The arrangement with Hewlett-Packard provides that
Ingram Alliance and Tech Data Elect may commence sales of Hewlett-Packard
products in January 1997. There can be no assurance that Ingram Alliance will
be able to compete effectively in the sale of Hewlett-Packard products within
the master reseller market. See "Business--Ingram Alliance."

Acquisitions. As part of its growth strategy, the Company
pursues the acquisition of companies that either complement or expand its
existing business. As a result, the Company is continually evaluating
potential acquisition opportunities, which may be material in size and scope.
Acquisitions involve a number of risks and difficulties, including expansion
into new geographic markets and business areas, the requirement to understand
local business practices, the diversion of management's attention to the
assimilation of the operations and personnel of the acquired companies, the
integration of the acquired companies' management information systems with
those of the Company, potential adverse short-term effects on the Company's
operating results, the amortization of acquired intangible assets, and the
need to present a unified corporate image.

The Company does not currently have any commitments or
agreements with respect to any material acquisitions. The Company is
currently in negotiations regarding potential acquisitions or joint ventures,
none of which, if consummated, would be material to the Company's business.
The Company anticipates that one or more potential acquisition opportunities,
including some that could be material to the Company, may become available in
the future. The Company may issue equity securities to consummate
acquisitions, which may cause dilution to investors purchasing Common Stock in
this offering. In addition, the Company may be required to utilize cash or
increase its borrowings to consummate acquisitions. No assurance can be given
that the Company will have adequate resources to consummate any acquisition,
that any acquisition by the Company will or will not occur, that if any
acquisition does occur it will not have a material adverse effect on the
Company, its business, financial condition, or results of operations or that
any such acquisition will be successful in enhancing the Company's business.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations."

Risk of Declines in Inventory Value. The Company's business,
like that of other wholesale distributors, is subject to the risk that the
value of its inventory will be adversely affected by price reductions by
suppliers or by technological changes affecting the usefulness or desirability
of the products comprising the inventory. It is the policy of most suppliers
of microcomputer products to protect distributors such as the Company, who
purchase directly from such suppliers, from the loss in value of inventory due
to technological change or the supplier's price reductions. Under the terms
of many distribution agreements, suppliers will credit the distributor for
inventory losses resulting from the supplier's price reductions if the
distributor complies with certain conditions. In addition, under many such
agreements, the distributor has the right to return for credit or exchange for
other products a portion of the inventory items purchased, within a designated
period of time. A supplier who elects to terminate a distribution agreement
generally will repurchase from the distributor the supplier's products carried
in the distributor's inventory. The industry practices discussed above are
sometimes not embodied in written agreements and do not protect the Company in
all cases from declines in inventory value. No assurance can be given that
such practices will continue, that unforeseen new product developments will
not materially adversely affect the Company, or that the Company will be able
to successfully manage its existing and future inventories. The Company's risk
of declines in inventory value could be greater outside the United States
where agreements with suppliers are more restrictive with regard to price
protection and the Company's ability to return unsold inventory. The Company
establishes reserves for estimated losses due to obsolete inventory in the
normal course of business. Historically, the Company has not experienced
losses due to obsolete inventory materially in excess of established inventory
reserves. However, significant declines in inventory value in excess of
established inventory reserves could materially adversely affect the Company's
business, financial condition, or results of operations.

The Company sometimes purchases from suppliers, usually at
significant discounts, quantities of products that are nearing the end of
their product life cycle. In addition, the Company's purchasing staff also
seeks opportunities to purchase quantities of products from suppliers at
discounts larger than those usually available. When the Company negotiates
these purchases, it seeks to secure favorable terms for the return to
suppliers of products unwanted by resellers and end-users.

Because some of these purchase agreements contain terms
providing for a 60-day time limit on returns to suppliers, end-user or
reseller delays in returning the product to the Company may make it difficult
for the Company to meet the deadline for returns to suppliers, and the Company
could be left with unwanted product. Additionally, some suppliers may be
unwilling or unable to pay the Company for products returned to them under
purchase agreements, and this trend may accelerate as consolidation in the
industry increases. For products offered by major suppliers, each of these
events, were they to occur, could materially adversely impact the Company's
business, financial condition, or results of operations. See
"Business--Products and Suppliers."

Dependence on Independent Shipping Companies. The Company
relies almost entirely on arrangements with independent shipping companies for
the delivery of its products. Products are shipped from suppliers to the
Company through Skyway Freight Systems, Yellow Freight Systems, APL Land
Transport Services, and ABF Freight Systems. Currently, Federal Express
Corporation ("FedEx"), United Parcel Service ("UPS"), Western Package Service,
General Parcel Services, Roadway Parcel Services, and Purolator Courier
deliver the substantial majority of the Company's products to its reseller
customers in the United States and Canada. In other countries, the Company
typically relies on one or two shipping companies prominent in local markets.
The termination of the Company's arrangements with one or more of these
independent shipping companies, or the failure or inability of one or more of
these independent shipping companies to deliver products from suppliers to the
Company or products from the Company to its reseller customers or their
end-user customers could have a material adverse effect on the Company's
business, financial condition, or results of operations. For instance, an
employee work stoppage or slow-down at one or more of these independent
shipping companies could materially impair that shipping company's ability to
perform the services required by the Company. There can be no assurance that
the services of any of these independent shipping companies will continue to
be available to the Company on terms as favorable as those currently available
or that these companies will choose or be able to perform their required
shipping services for the Company. See "Business--Operations--Shipping."

Rapid Technological Change; Alternate Means of Software
Distribution. The microcomputer products industry is subject to rapid
technological change, new and enhanced product specification requirements, and
evolving industry standards. These changes may cause inventory in stock to
decline substantially in value or to become obsolete. In addition, suppliers
may give the Company limited or no access to new products being introduced.
Although the Company believes that it has adequate price protection and other
arrangements with its suppliers to avoid bearing the costs associated with
these changes, no assurance can be made that future technological or other
changes will not have a material adverse effect on the business, financial
condition, or results of operations of the Company. Outside North America,
the supplier contracts can be more restrictive and place more risks on the
Company.

Net sales of software products have decreased as a percentage
of total net sales in recent years due to a number of factors, including
bundling of software with microcomputers; sales growth in Ingram Alliance,
which is a hardware-only business; declines in software prices; and the
emergence of alternative means of software distribution, such as site licenses
and electronic distribution. The Company expects this trend to continue. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Overview" and "Business--Products and Suppliers."

Relationship with Ingram Industries, Ingram Entertainment, and
the Ingram Family Stockholders. The Company has historically depended on
Ingram Industries and other subsidiaries of Ingram Industries for financing,
cash management, tax and payroll administration, property/casualty insurance,
employee benefits administration, and certain other administrative services.
In conjunction with the Split-Off, the Company, Ingram Industries, and Ingram
Entertainment Inc. ("Ingram Entertainment"), a wholly-owned subsidiary of
Ingram Industries, entered into agreements for the continued provision after
the Split-Off of certain services formerly shared among such entities
(collectively, the "Transitional Service Agreements"), as well as a tax
sharing and tax services agreement. See "The Split-Off and the
Reorganization--The Reorganization." The Company believes that the terms of the
Transitional Service Agreements are on a basis as favorable to the Company as
those that would have been obtained from third parties on an arm's length
basis and that they are adequate to allow the Company to continue its business
as previously conducted on an independent basis. The Company's historical
financial statements reflect an allocation of expenses in connection with the
services covered by the Transitional Service Agreements. Although the Company
expects the costs and fees to be paid by it in connection with the
Transitional Service Agreements to be higher than its historical allocated
costs, it does not believe the increase in costs will be material to its
results of operations. In addition, the Transitional Service Agreements
generally terminate on December 31, 1996, although payroll services under the
Transitional Service Agreements will be provided through December 31, 1997.
After such termination, the Company will be required to provide such services
internally or find a third-party provider of such services. There can be no
assurance that the Company will be able to secure the provision of such
services on acceptable terms. Either the additional costs and fees associated
with the Transitional Service Agreements or the failure to obtain acceptable
provision of services upon termination of the Transitional Service Agreements
could have a material adverse effect on the Company's business, financial
condition, or results of operations. Each of the Company and Ingram
Industries continues to be controlled by the Ingram Family Stockholders (as
defined herein). See "--Control by Ingram Family Stockholders; Certain
Anti-takeover Provisions." After the Split-Off, Ingram Entertainment
continues to be a wholly-owned subsidiary of Ingram Industries. Although
there can be no assurance, it is contemplated that, on or after June 20, 1997,
certain remaining stockholders of Ingram Industries will exchange their
remaining shares of Ingram Industries common stock for shares of Ingram
Entertainment common stock. See "The Split-Off and the Reorganization--The
Reorganization."

Furthermore, the Company has incurred, and anticipates
incurring in the future, higher payroll costs associated with the hiring of
certain additional personnel and the addition of certain officers, previously
paid by Ingram Industries, to the Company's payroll. There can be no
assurance that the Company's results of operations will not be materially
adversely affected by such additional costs. See "--Capital Intensive Nature
of Business; High Degree of Leverage," "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources," "Certain Transactions," and "The Split-Off and the
Reorganization--The Reorganization."

In connection with the Split-Off, the Company made a $20.0
million distribution to Ingram Industries in the second quarter of 1996. The
Company may be obligated to Ingram Industries for certain liabilities, fees or
costs incurred in connection with the Split-Off. However, the Company
believes such obligations will be largely offset by amounts due from Ingram
Industries. See "The Split-Off and the Reorganization."

Control by Ingram Family Stockholders; Certain Anti-takeover
Provisions. Immediately after the Split-Off and the closing of the IPO, 67.9%
of the outstanding Common Equity (and 80.5% of the outstanding voting power)
was held by the Ingram Family Stockholders. Martha R. Ingram, her children,
certain trusts created for their benefit, and two charitable trusts and a
foundation created by the Ingram family (collectively, the "Ingram Family
Stockholders") have entered into a Board Representation Agreement (as defined
herein) with the Company, which provides that certain types of corporate
transactions, including transactions involving the potential sale or merger
of the Company; the issuance of additional equity, warrants, or options;
certain acquisitions; or the incurrence of significant indebtedness, may not
be entered into without the written approval of at least a majority of the
voting power held by certain of the Ingram Family Stockholders acting in their
sole discretion. See "The Split-Off and the Reorganization--The Split-Off,"
"Principal Stockholders," and "Description of Capital Stock." Voting control
by the Ingram Family Stockholders may discourage certain types of transactions
involving an actual or potential change of control of the Company, including
transactions in which the holders of the Company's Common Stock might receive
a premium for their shares over the prevailing market price of the Common
Stock.

Section 203 of the Delaware General Corporation Law (as amended
from time to time, the "DGCL"), which is applicable to the Company, prohibits
certain business combinations with certain stockholders for a period of three
years after they acquire 15% or more of the outstanding voting stock of a
corporation. See "Description of Capital Stock--Section 203 of the DGCL." In
addition, the authorized but unissued capital stock of the Company includes
1,000,000 shares of preferred stock. The Board of Directors is authorized to
provide for the issuance of such preferred stock in one or more series and to
fix the designations, preferences, powers and relative, participating,
optional or other rights and restrictions thereof. Accordingly, the Company
may issue a series of preferred stock in the future that will have preference
over the Common Equity with respect to the payment of dividends and upon
liquidation, dissolution or winding-up or which could otherwise adversely
affect holders of the Common Equity or discourage or make difficult any
attempt to obtain control of the Company. See "Description of Capital
Stock--Preferred Stock."

Shares Eligible for Future Sale. Upon completion of the IPO,
the Company had outstanding 23,200,000 shares of Common Stock and 109,813,762
shares of Class B Common Stock, and an additional approximately 16,200,000
shares of Common Stock and approximately 4,800,000 shares of Class B Common
Stock will be reserved for issuance upon exercise of outstanding stock options
(including the Options) held by employees and directors of the Company, Ingram
Industries, and Ingram Entertainment. See "Management." 23,000,000 of the
shares of Common Stock sold by the Company in the IPO, and any shares of
Common Stock sold by the Company in this offering, will be freely tradable
without restriction. The Company and its directors and executive officers,
and certain stockholders of the Company, have agreed, subject to certain
exceptions, not to offer, sell, contract to sell or otherwise dispose of any
Common Equity for a period of 180 days after October 31, 1996 without the
prior written consent of Morgan Stanley & Co. Incorporated. Morgan Stanley &
Co. Incorporated has informed the Company that it has no present intention to
consent to any such transactions. Despite these limitations, the sale of a
significant number of these shares could have an adverse impact on the price
of the Common Stock or on any trading market that may develop. See "Shares
Eligible for Future Sale."

Absence of Public Market; Possible Volatility of Stock Price.
Prior to the IPO, there was no public market for the Common Stock or the Class
B Common Stock. There can be no assurance that an active trading market for
the Common Stock will develop, or, if one does develop, that it will be
sustained or that the market price of the Common Stock will not decline below
the initial public offering price. The initial public offering price was
determined by negotiations between the Company and the Representatives of the
Underwriters. The market price of the Common Stock could be subject to wide
fluctuations in response to quarterly variations in the Company's results of
operations, changes in earnings estimates by research analysts, conditions in
the personal computer industry, or general market or economic conditions,
among other factors. In addition, in recent years the stock market has
experienced extreme price and volume fluctuations. These fluctuations have
had a substantial effect on the market prices of many technology companies,
often unrelated to the operating performance of the specific companies. Such
market fluctuations could materially adversely affect the market price for the
Common Stock.

Dilution. The initial public offering price of the shares of
Common Stock offered in the IPO is substantially higher than the net tangible
book value per share of the Common Equity.

THE COMPANY

Ingram Micro is the leading wholesale distributor of
microcomputer products worldwide. The Company markets microcomputer hardware,
networking equipment, and software products to more than 100,000 reseller
customers in approximately 120 countries worldwide in three principal market
sectors: the VAR sector, consisting of value-added resellers, systems
integrators, network integrators, application VARs, and original equipment
manufacturers; the Commercial sector, consisting of corporate resellers,
direct marketers, independent dealers, and owner-operated chains; and the
Consumer sector, consisting of consumer electronics stores, computer
superstores, mass merchants, office product superstores, software-only stores,
and warehouse clubs. As a wholesale distributor, the Company markets its
products to each of these types of resellers as opposed to marketing directly
to end-user customers.

Ingram Micro offers one-stop shopping to its reseller customers
by providing a comprehensive inventory of more than 36,000 products from over
1,100 suppliers, including most of the microcomputer industry's leading
hardware manufacturers, networking equipment suppliers, and software
publishers. The Company's broad product offerings include: desktop and
notebook personal computers ("PCs"), servers, and workstations; mass storage
devices; CD-ROM drives; monitors; printers; scanners; modems; networking hubs,
routers, and switches; network interface cards; business application software;
entertainment software; and computer supplies. The Company's suppliers
include Apple Computer, Cisco Systems, Compaq Computer, Creative Labs,
Hewlett-Packard, IBM, Intel, Microsoft, NEC, Novell, Quantum, Seagate, 3Com,
Toshiba, and U.S. Robotics.

Ingram Micro distributes microcomputer products worldwide
through warehouses in eight strategic locations in the continental United
States and 22 international warehouses located in Canada, Mexico, most
countries of the European Union, Norway, Malaysia, and Singapore. The Company
believes that it is the market share leader in the United States, Canada, and
Mexico, and the second largest full-line distributor in Europe. In 1995,
approximately 31% of the Company's net sales were derived from operations
outside the United States. The Export Division fulfills orders from U.S.
exporters and from foreign customers in countries where the Company does not
operate a distribution subsidiary, including much of Latin America, the Middle
East, Africa, Australia, and parts of Europe and Asia. The Company
participates in the master reseller business in the United States through
Ingram Alliance.

The Company's principal objective is to enhance its position as
the preeminent wholesale distributor of microcomputer products worldwide. The
Company is focused on providing a broad range of products and services, quick
and efficient order fulfillment, and consistent on-time and accurate delivery
to its reseller customers around the world. The Company believes that
IMpulse, the Company's on-line information system, provides a competitive
advantage through real-time worldwide information access and processing
capabilities. This information system, coupled with the Company's exacting
operating procedures in telesales, credit support, customer service,
purchasing, technical support, and warehouse operations, enables the Company
to provide its reseller customers with superior service in an efficient and
low cost manner. In addition, to enhance sales and support its suppliers and
reseller customers, the Company provides a wide range of value-added services,
such as technical training, order fulfillment, tailored financing programs,
systems configuration, and marketing programs.

The Company has grown rapidly over the past five years, with
net sales and net income increasing to $8.6 billion and $84.3 million,
respectively, in 1995 from $2.0 billion and $30.2 million, respectively, in
1991, representing compound annual growth rates of 43.8% and 29.3%,
respectively. The Company's growth during this period reflects substantial
expansion of its existing domestic and international operations, resulting
from the addition of new customers, increased sales to the existing customer
base, the addition of new product categories and suppliers, and the
establishment of Ingram Alliance, as well as the successful integration of ten
acquisitions worldwide. Because of intense price competition in the
microcomputer products wholesale distribution industry, the Company's margins
have historically been narrow and are expected in the future to continue to be
narrow. In addition, the Company is highly leveraged and has relied heavily
on debt financing for its increasing working capital needs in connection with
the expansion of its business. See "Risk Factors--Narrow Margins" and
"--Capital Intensive Nature of Business; High Degree of Leverage."

Prior to the Split-Off, the Company was a subsidiary of Ingram
Industries, a company controlled by the Ingram Family Stockholders. The
Company, Ingram Industries, and Ingram Entertainment have entered into certain
agreements, pursuant to which the operations of the three companies are being
reorganized (the "Reorganization"). In the Reorganization, the Company,
Ingram Industries, and Ingram Entertainment allocated certain liabilities and
obligations among themselves. Immediately prior to the closing of the IPO,
Ingram Industries consummated an exchange, pursuant to which certain existing
stockholders of Ingram Industries exchanged all or a portion of their shares
of Ingram Industries common stock for shares of Class B Common Stock of the
Company in specified ratios. Immediately after the Split-Off and the closing
of the IPO, none of the Common Equity was held by Ingram Industries, other
than the approximately 250,000 shares purchased by Ingram Industries in the
IPO. At such time, 67.9% of the outstanding Common Equity (and 80.5% of the
outstanding voting power) was held by the Ingram Family Stockholders. See
"Risk Factors--Control by Ingram Family Stockholders; Certain Anti-takeover
Provisions." Such exchange of shares of Ingram Industries common stock for
shares of Class B Common Stock of the Company, together with those elements of
the Reorganization that occurred prior to the closing of the IPO, are referred
to herein as the "Split-Off." See "Principal Stockholders" and "The Split-Off
and the Reorganization." After the Split-Off, Ingram Entertainment continues
to be a wholly-owned subsidiary of Ingram Industries. Although there can be
no assurance, it is contemplated that, on or after June 20, 1997, certain
remaining stockholders of Ingram Industries will exchange their remaining
shares of Ingram Industries common stock for shares of Ingram Entertainment
common stock. See "The Split-Off and the Reorganization."

The Company's earliest predecessor began business in 1979 as a
California corporation named Micro D, Inc. This company and its parent,
Ingram Micro Holdings Inc. ("Holdings"), grew through a series of acquisitions,
mergers, and internal growth to encompass the Company's current operations.
Ingram Micro Inc. was incorporated in Delaware on April 29, 1996, in order to
effect the reincorporation of the Company in Delaware. The successor to Micro
D, Inc. and Holdings were merged into Ingram Micro Inc. in October 1996. The
Company's principal executive office is located at 1600 East St. Andrew Place,
Santa Ana, California 92705, and its telephone number is (714) 566-1000.

THE PLAN

Purpose

The purposes of the Plan are to promote the interests of the
Company and its stockholders by providing for the granting of options to
purchase shares of the Company's Common Stock. These options are being
granted upon the conversion and cancellation of certain options to purchase
shares of, and Incentive Stock Units ("ISUs") and Stock Appreciation Rights
("SARs") relating to, common stock of Ingram Industries as provided in the
Conversion Agreement in connection with the Split-Off pursuant to the Exchange
Agreement.

The following summary of the Plan does not purport to be
complete, and reference is made to the Ingram Micro Inc. Stock Option Plan
which is reproduced beginning at page A-1.

Administration

The Plan is administered by a Committee (the "Committee") of
the Board of Directors of the Company (the "Board"). Under the Plan, the
Committee may grant Incentive Stock Options and Non-Qualified Stock Options.

Subject to the terms of the Plan and applicable law, the
Committee has full power to construe and interpret the Plan and to establish
and amend such rules and regulations as it deems necessary or advisable for
the proper administration of the Plan. Decisions of the Committee are
conclusive and binding upon all Persons, including Optionees and any persons
claiming under or through an Optionee.

The Committee, to the extent necessary to comply with Section
16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
shall consist of at least two directors of the Company chosen by the Board,
each of whom is a "non-employee director" within the meaning of Rule 16b-3
under the Exchange Act. Additional information regarding the Plan and the
Committee may be obtained by contacting the Committee: Attention: David M.
Finley, Ingram Micro Inc., 1600 East St. Andrew Place, Santa Ana, California
92705 (telephone number: (714) 566-1000).

Eligibility

Any employee or director of the Company, Ingram Industries,
Ingram Entertainment, or any of their respective subsidiaries who qualified as
a Participant as of the Closing is eligible to participate in the Plan.

This Prospectus applies only to the exercise of Options by
Participants who are also current or former employees or directors of the
Company, Ingram Industries, Ingram Entertainment, or any of their subsidiaries
("Optionees").

Shares Subject to the Plan

The maximum number of shares of Common Stock in respect of
which Options may be granted under the Plan is 12,000,000 shares.

Options

Type of Options. Subject to the provisions of the Plan, the
Committee shall have the authority to grant Incentive Stock Options (within
the meaning of Section 422 of the U.S. Internal Revenue Code of 1986, as
amended (the "Code") and Non-Qualified Stock Options, not intended to qualify
under such Section 422.

Term of Options. The term of an Option is governed by the
Option Agreement and is determined by the Committee pursuant to the Conversion
Agreement. In granting an Option, the Committee may impose such conditions
and limitations as it deems advisable.

Exercise Price. The per share exercise price of each Option
granted by the Committee shall be determined by the Committee pursuant to the
Conversion Agreement.

Option Agreement. The Option Agreement may impose restrictions
or limitations on the exercise of an Option in addition to those set forth in
this Prospectus. Each Optionee should read his or her Option Agreement with
special care.

Effect on Options of Termination of Employment

Nonqualified Stock Options

Termination of Employment. Except as the Committee may
otherwise provide, if an Optionee's employment with his or her Employer is
terminated for any reason other than death, permanent and total disability,
retirement or Cause, the Optionee's Nonqualified Stock Options shall expire 60
days following such termination of employment or, if earlier, the date such
Option would otherwise expire by its terms. Such Option will be exercisable
prior to such expiration only to the extent exercisable at the date of such
termination of employment.

Death, Disability or Retirement. Except as the Committee may
otherwise provide, if an Optionee's employment with his or her Employer is
terminated by reason of death or by permanent and total disability or
retirement (as determined by the Committee), the Optionee or his successor (if
employment is terminated by death) shall have the right to exercise any
Nonqualified Stock Option during the one-year period following such
termination of employment, to the extent exercisable at the date of such
termination of employment, but in no event later than the date the Option
would otherwise expire by its terms.

Cause. An Optionee's right to exercise any Nonqualified Stock
Option shall terminate and such Option shall expire upon termination of
employment for Cause.

Incentive Stock Options

Termination of Employment. Except as the Committee may
otherwise provide, if the Optionee's employment with his or her Employer is
terminated for any reason other than for Cause, the Optionee shall have the
right to exercise any Incentive Stock Option during the 60 days after such
termination of employment to the extent it was exercisable at the date of such
termination, but in no event later than the date the Option would have
otherwise expired by its terms. If the Optionee does not exercise such Option
to the full extent permitted by the preceding sentence, the remaining
exercisable portion of such Option automatically will be deemed a Nonqualified
Stock Option, and such Option will be exercisable as set forth above, provided
that in the event that employment is terminated because of death or the
Participant dies in such 60-day period the Option will continue to be an
Incentive Stock Option to the extent provided by Section 421 or Section 422 of
the Code, or any successor provision, and any regulations promulgated
thereunder.

Cause. An Optionee's right to exercise any Incentive Stock
Option shall terminate and such Option shall expire upon termination of
employment for Cause.

Leave Without Pay. Any time spent by an Optionee in the status
of "leave without pay" shall extend the period required for purposes of
determining the extent to which any Option or portion thereof has vested or
otherwise become exercisable or nonforfeitable.

Exercise of Options

Exercise of Options. Each Option is exercisable only during
its term.

Options under the Plan shall be exercised by delivering or
mailing to the Committee, Attention: W. Michael Head, Ingram Industries Inc.,
4400 Harding Road, Nashville, Tennessee 37205,

(1) a notice, in the form prescribed by the Committee,
specifying the number of shares to be purchased, and either

(2) a check or money order payable to the Company for the
exercise price multiplied by the number of shares to be
purchased, or

(3) shares of Common Stock owned for at least six months valued
at Fair Market Value on the date the Option is exercised
equal to the per share exercise price multiplied by the
number of shares to be purchased, or

(4) a combination of the consideration set forth in (2) and (3)
above.

Upon receipt of such notice and payment, the Company shall
promptly deliver to the Optionee a certificate or certificates for the shares
purchased, subject to compliance with applicable withholding obligations.

Restrictions on Exercise

In order to avoid violation of any applicable law or
regulation, the Committee may at any time refuse to issue or transfer shares
of Common Stock under the Plan. It is expected that the Committee will refuse
to issue shares upon exercise of Options unless there is at such time an
effective registration statement (including a current prospectus) with respect
to such shares. The Company has agreed, as part of the Split-Off, to keep
this Prospectus available for a period of 30 days from the date of this
Prospectus (or until December 6, 1996). The Company currently intends to allow
exercises of Options until January 1, 1997. However, the Company may withdraw
the registration statement of which this Prospectus forms a part at any time
after 30 days from the date of effectiveness of such registration statement,
and the Company may extend the period for exercise of Options in its sole
discretion.

Additional Registration Statement Relating to Options Held by
Employees of the Company. Although there can be no assurance, prior to or
concurrently with the end of the period in which this Prospectus is available,
the Company intends to file with the Commission a registration statement on
Form S-8 relating to shares issuable upon exercise of Options which are held
by employees of the Company. Even if such registration statement were
effective, the Committee would retain discretion to refuse to issue shares
upon exercise of Options.

Additional Registration Statement Relating to Options Held by
Non-Employees of the Company. The Company has agreed that, as soon as
practicable after it becomes eligible to use Form S-3 (generally one year
after the effectiveness of the registration statement relating to the IPO), it
will file with the Commission and keep effective until no Options remain
outstanding, a registration statement on Form S-3 relating to all shares
issuable upon exercise of Options, other than those covered by the
registration statement on Form S-8 referred to above. In addition, upon the
written request of the boards of directors of Ingram Industries and Ingram
Entertainment, at any time during the period beginning on the date that
audited financial statements are available for the Company's 1996 fiscal year
and ending on the first anniversary of the effective date of the IPO, the
Company will be required to use its best efforts to file and have declared
effective a registration statement on Form S-1 with respect to all shares
issuable upon exercise of Options then vested and exercisable. The Company
will be required to keep such registration statement effective for at least 30
days.

Amendment and Termination

The Board may amend, suspend, or terminate the Plan at any
time. However, with the exception of adjustment for changes in
capitalization, the authorization of the Company's stockholders is required if
the Committee determines that such authorization is necessary to comply with
any tax or regulatory requirement, including any approval requirement which is
a prerequisite for exemptive relief from Section 16 of the Exchange Act, for
which or with which the Committee determines that it is desirable to qualify
or comply. The Committee may amend the term of any Option but no amendment
may adversely affect any Option without the Optionee's consent.

Subject to earlier termination by the Board, the Plan will
expire 90 days after the closing of the Split-Off. Unless otherwise provided
in the Plan or Option Agreement, the authority of the Board and Committee with
respect to outstanding Options shall continue after the authority to grant new
Options under the Plan has expired.

Adjustments

In the event that the Committee shall determine that any
corporate event affects the Common Stock such that an adjustment is required
to preserve the benefits or potential benefits made available under the Plan,
then the Committee may, in such manner as the Committee may deem equitable,
adjust any or all of (i) the number and kind of shares which thereafter may be
optioned and sold, (ii) the number and kinds of shares subject to outstanding
Options, and (iii) the exercise price with respect to any Option.

Transferability

All Options granted under the Plan are nontransferable other
than by will or by the laws of descent and distribution.

FEDERAL INCOME TAX CONSIDERATIONS

The following summary contains general information on the
federal income tax consequences to Optionees and the Company with respect to
Options. For additional tax information, including information regarding
state taxes, Optionees should consult their own tax advisors.

Grant of Option

There is no tax consequence to the Optionee or to the Company
upon the grant of a Non-Qualified Stock Option or an Incentive Stock Option.

Exercise of Non-Qualified Stock Option

An Optionee realizes ordinary taxable income upon the exercise
of a Non-Qualified Stock Option to the extent of the difference between the
fair market value on the exercise date of the shares of Common Stock acquired
on exercise of the Option, and the Option price. The Company has a corporate
income tax deduction in an amount equal to the ordinary taxable income of an
Optionee who is an employee or former employee of the Company. Ingram
Industries, Ingram Micro, and Ingram Entertainment have agreed that Ingram
Micro will be paid an amount equal to the tax benefit to Ingram Industries or
Ingram Entertainment, as the case may be, in respect of Options exercised by
their current or former employees.

The exercise price of the shares plus the amount of the
Optionee's ordinary taxable income is the Optionee's cost basis for shares of
Common Stock acquired pursuant to the exercise of a Non-Qualified Stock
Option. An Optionee who sells shares of Common Stock acquired upon exercise
of a Non-Qualified Stock Option will have gain or loss equal to the difference
between the amount realized on sale and the Optionee's cost basis for the
shares. If an Optionee sells shares at a gain and such shares were held for
more than one year, the gain realized on sale will be treated as a long-term
capital gain.

If the Optionee uses previously acquired shares of Common Stock
to exercise a Non-Qualified Stock Option, the Optionee will not recognize gain
or loss on the exchange of the previously acquired shares for the Option
shares. Those shares received upon exercise that are equal in number to the
previously acquired shares exchanged therefor will have the same tax basis and
holding period as the previously acquired shares. The additional shares
received upon exercise will have a tax basis equal to the amount of ordinary
income realized on the Option exercise and a holding period beginning on the
date of exercise.

Exercise of Incentive Stock Option

An Optionee realizes no income upon the exercise of an
Incentive Stock Option. However, the difference between the Option price and
the fair market value of the shares on the exercise date is an adjustment to
taxable income in determining alternative minimum taxable income. An Optionee
must include such differential in alternative minimum taxable income in the
year of exercise. In order to realize Incentive Stock Option treatment,
Optionees who terminate employment for reasons other than death or disability
must exercise Incentive Stock Options within sixty days of termination of
employment, and Optionees who terminate employment for reason of disability
must exercise Incentive Stock Options within one year of termination of
employment. For purposes of this rule, employment is considered terminated
prior to the start of any severance pay period.

If the Optionee holds shares of Common Stock acquired upon
exercise of an Incentive Stock Option until two years from the date of grant
of the Ingram Industries incentive stock option that was converted into such
Option and for one year from the exercise date, the Optionee will realize
capital gain on the subsequent sale of the shares in an amount equal to the
excess of the amount realized on sale of the shares over the Option exercise
price.

If the Optionee disposes of the shares of Common Stock within
two years of the date of grant or within one year of the date of exercise (a
"disqualifying disposition"), the Optionee will have ordinary income equal to
the difference between the Option price and the lesser of the fair market
value of the shares on the date of exercise or the amount realized on
disposition. Any additional gain will be capital gain. A transfer of shares
acquired upon exercise of an Incentive Stock Option within two years of the
date of grant or within one year of the date of exercise will not be
considered a disqualifying disposition of the shares if the transfer is to a
spouse or to a former spouse incident to a divorce. The same tax treatment of
the transferred shares will apply to the transferee as would have applied to
the transferor.

The Internal Revenue Service has issued proposed regulations on
Incentive Stock Options. According to the proposed regulations, if the
Optionee uses previously acquired shares of Common Stock to exercise an
Incentive Stock Option, the Optionee will not recognize gain or loss on the
exchange of the previously acquired shares for such Option shares unless the
previously acquired shares were obtained through the exercise of a prior
Incentive Stock Option and the exchange of the previously acquired shares
constitutes a disqualifying disposition of such shares. If no gain or loss is
recognized on the exchange, those shares received that are equal in number to
the previously acquired shares exchanged therefor will have the same tax basis
and holding period (for determining capital gain or loss) as the previously
acquired shares. The additional shares received upon exercise of the Incentive
Stock Option will have a zero basis and a holding period beginning on the date
of the exercise. However, if a Optionee disposes of any of the shares within
one year from the Option exercise date, the disposition is taxable as a
disqualifying disposition.

The Company does not have a corporate income tax deduction in
connection with the exercise of an Incentive Stock Option except in the case
of a disqualifying disposition of shares acquired upon exercise of an
Incentive Stock Option, in which case the deduction or tax benefit of a
deduction will be available to the Company as noted above.

Tax Withholding

Upon the exercise of a Non-Qualified Stock Option, the Company
or the Optionee's Employer is required to withhold federal and state (if
applicable) income taxes, social security tax (if the Optionee's wages have not
exceeded the social security wage base) and Medicare tax. The Company or the
Optionee's Employer is not required to withhold income, social security, and
Medicare taxes from the ordinary income realized upon the disqualifying
disposition of Incentive Stock Option shares, but Optionees may elect
voluntary withholding of federal and state income taxes.

RESTRICTIONS ON RESALE

Any Person receiving Shares under the Plan who is an
"affiliate" of the Company (as the term "affiliate" is used in Rule 144
promulgated by the Commission under the Securities Act of 1933, as amended
(the "Securities Act")) may resell such Shares only pursuant to a registration
statement filed under the Securities Act (the Company having no obligation to
file any such registration statement) or within the restrictions, including
the sales volume limitations, imposed by Rule 144 other than the two-year
holding period requirement in Rule 144. In addition, certain participants may
be subject to the "short-swing profits" sanction of Section 16(b) of the
Exchange Act.

ERISA

The Plan is not "qualified" under Section 401(a) of the Code
and is not subject to any provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").

USE OF PROCEEDS

If all 2,867,374 shares of Common Stock being offered hereby
were sold, the net proceeds to the Company from this offering would be
approximately $4.1 million. The Company intends to use the proceeds from this
offering to repay outstanding revolving indebtedness under the Credit Facility.

DIVIDEND POLICY

The Company has never declared or paid any dividends on the
Common Equity other than the distribution made to Ingram Industries in
connection with the Split-Off. See "Risk Factors--Relationship with Ingram
Industries, Ingram Entertainment, and the Ingram Family Stockholders." The
Company currently intends to retain its future earnings to finance the
growth and development of its business and therefore does not anticipate
declaring or paying cash dividends on the Common Equity for the foreseeable
future. Any future determination to declare or pay dividends will be at
the discretion of the Board of Directors and will be dependent upon the
Company's financial condition, results of operations, capital requirements,
and such other factors as the Board of Directors deems relevant. In
addition, the Credit Facility and the Company's other debt facilities
contain restrictions on the declaration and payment of dividends.

CAPITALIZATION

The following table sets forth, as of September 28, 1996, (i) the
actual short-term debt and capitalization of the Company, (ii) such short-
term debt and capitalization as adjusted to give effect to the Split-Off,
and (iii) such as adjusted short-term debt and capitalization as further
adjusted to reflect the sale of the shares of Common Stock offered by the
Company in the IPO at $18.00 per share (after deducting underwriting
discounts and commissions and estimated offering expenses) and the
application of the estimated net proceeds therefrom.

<TABLE>
<CAPTION>
September 28, 1996
------------------ As Further
Actual As Adjusted (1) Adjusted (1)(2)
------ ------------------ ---------------
(in thousands except share data)
<S> <C> <C> <C>
Short-term debt:
Current maturities of long-term debt.................. $ 16,458 $ 16,458 $ 16,458
======== ======== ========
Long-term debt:
Long-term debt........................................ $128,855 $471,142 $ 77,298
Due to Ingram Industries.............................. 479,703 0 0
-------- -------- --------
Total long-term debt................................ 608,558 471,142 77,298
Redeemable Class B Common Stock........................ 17,223 17,223 17,223
-------- -------- --------
Stockholders' equity(3)(4):
Preferred Stock, $0.01 par value; 1,000,000
shares authorized; 0, 0, and 0 shares issued and
outstanding, respectively........................... 0 0 0
Class A Common Stock, $0.01 par value;
265,000,000 shares authorized; 0, 0, and
23,200,000 shares issued and outstanding,
respectively........................................ 0 0 232
Class B Common Stock, $0.01 par value;
135,000,000 shares authorized; 109,813,762
shares issued and outstanding (including
2,460,400 redeemable shares)........................ 1,074 1,074 1,074
Additional paid in capital........................... 23,140 23,140 416,752
Retained earnings.................................... 339,689 339,689 326,254
Cumulative translation adjustment.................... 2,680 2,680 2,680
Unearned compensation................................ (594) (594) (594)
-------- -------- --------
Total stockholders' equity.......................... 365,989 365,989 746,398
-------- -------- --------
Total capitalization................................ $991,770 $854,354 $840,919
======== ======== ========
<FN>
(1) As adjusted to reflect (i) the assumption by the Company of the accounts
receivable program of Ingram Industries in satisfaction of amounts due to
Ingram Industries (resulting in an increase of $319.7 million in long-term
debt, a decrease of $479.7 million in amounts due to Ingram Industries, and
a decrease of $160.0 million in trade accounts receivable, not reflected in
this table) and (ii) approximately $22.6 million of indebtedness to be
incurred by the Company in connection with the acquisition of certain
facilities currently utilized by the Company (resulting in an increase of
$22.6 million in long-term debt, which is reflected in this table, and a
similar increase in property and equipment, which is not reflected in this
table), as if such transactions had occurred on September 28, 1996. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" and "Certain Transactions."

(2) As further adjusted to give effect to the issuance of the Common Stock
offered by the Company in the IPO (after deducting underwriting discounts
and commissions and estimated offering expenses in connection with the
IPO), the repayment of certain revolving indebtedness including certain
amounts outstanding under the Credit Facility with the entire net proceeds
therefrom, and the additional $13.4 million non-cash charge related to the
Options. Does not reflect the issuance of any Common Stock offered by the
Company in this offering. If all 2,867,374 shares being offered hereby
were purchased, the Company would receive net proceeds of approximately
$4.1 million. See "Use of Proceeds," "Dilution," and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Overview."

(3) Each share of Class B Common Stock is convertible, at any time at the
option of the holder, into one share of Common Stock. In addition, the
Class B Common Stock will be automatically converted into Common Stock upon
the occurrence of certain events. See "Description of Capital Stock."

(4) Excludes approximately 21,000,000 shares of Common Equity issuable in
connection with outstanding stock options (including the Options). See
"Management--1996 Plan--Options" and "--Rollover Plans; Incentive Stock
Units."
</TABLE>

DILUTION

The net tangible book value of the Common Equity of the Company
as of September 28, 1996 was $354.4 million or $3.23 per share of Common
Equity. Net tangible book value represents the amount of total tangible
assets less total liabilities.

The weighted average exercise price of the Options is less than
the book value of the Company prior to the IPO. Dilution per share to new
investors represents the difference between the amount per share paid by
purchasers of Common Stock in the IPO and the net tangible book value per
share of Common Equity immediately after the closing of the IPO. After giving
effect to the sale of 23,200,000 shares of Common Stock offered in the IPO by
the Company and after deducting underwriting discounts and commissions and
estimated offering expenses and the application of the estimated net proceeds
therefrom, the pro forma net tangible book value of the Company as of
September 28, 1996 would have been $734.8 million or $5.52 per share of Common
Equity. This represents an immediate increase in net tangible book value of
$2.29 per share of Common Equity to existing stockholders and an immediate
dilution of $12.48 per share of Common Equity to purchasers of Common Stock in
the IPO. The following table illustrates the per share dilution to new
investors:

<TABLE>
<S> <C> <C>
Initial public offering price per share......................................... $18.00
Net tangible book value per share of Common
Equity as of September 28, 1996.............................................. $3.23
Increase attributable to new investors......................................... 2.29
-----
Net tangible book value per share of Common Equity after the IPO................ 5.52
------
Dilution per share of Common Equity to new investors............................ $12.48
======
</TABLE>

The following table summarizes, as of September 28, 1996, the
difference (before deducting underwriting discounts and commissions and
estimated offering expenses) between existing stockholders, the purchasers of
shares of Common Stock in this offering, and the purchasers of shares of
Common Stock in the IPO with respect to: (i) the number of shares of Common
Equity purchased from the Company; (ii) the effective cash consideration paid;
and (iii) the average price paid per share of Common Equity.

<TABLE>
<CAPTION>
Number Percent Amount Percent Per Share
------ ------- ------ ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders(1)........... 109,813,762 80.82% $ 83,783,800 16.57% $ 0.76
Stockholders purchasing in this
offering.......................... 2,867,374 2.11 4,126,186 0.82 1.44
IPO investors...................... 23,200,000 17.07 417,600,000 82.61 18.00
----------- ------- ------------ -------
Total........................... 135,881,136 100.00% $505,509,986 100.00%
=========== ======= ------------ -------

<FN>
- --------------
(1) Excludes options issued under the Company's 1996 Plan and certain options
issued under the Rollover Plan, to purchase an aggregate of approximately
21,000,000 shares of Common Equity. To the extent any of these options are
exercised, there will be further dilution to new investors. See
"Management--1996 Plan--Options" and "--Rollover Plan; Incentive Stock
Units."
</TABLE>

SELECTED CONSOLIDATED FINANCIAL DATA

The following table presents selected consolidated financial
data of the Company. The information set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the historical consolidated financial
statements and notes thereto included elsewhere in this Prospectus. The
consolidated statement of income data set forth below for each of the three
years in the period ended December 30, 1995 and the consolidated balance sheet
data at December 31, 1994 and December 30, 1995 are derived from, and are
qualified by reference to, the audited consolidated financial statements
included elsewhere in this Prospectus, and should be read in conjunction with
those financial statements and the notes thereto. The consolidated balance
sheet data as of January 1, 1994 are derived from the audited consolidated
balance sheet of the Company as of January 1, 1994, which is not included in
this Prospectus. The consolidated statement of income data for each of the
two years in the period ended January 2, 1993 and the consolidated balance
sheet data as of December 28, 1991 and January 2, 1993 are derived from
unaudited consolidated financial statements not included in this Prospectus.
The consolidated financial data as of and for the thirty-nine weeks ended
September 30, 1995, and as of and for the thirty-nine weeks ended September
28, 1996, have been derived from unaudited consolidated financial statements
of the Company which are included in this Prospectus and which, in the opinion
of the Company, reflect all adjustments, consisting only of adjustments of a
normal and recurring nature, necessary for a fair presentation. Results for
the thirty-nine weeks ended September 28, 1996 are not necessarily indicative
of results for the full year. The historical consolidated financial data may
not be indicative of the Company's future performance and do not necessarily
reflect what the financial position and results of operations of the Company
would have been had the Company operated as a separate, stand-alone entity
during the periods covered. See "Consolidated Financial Statements."

<TABLE>
<CAPTION>
Fiscal Year Thirty-nine Weeks Ended
------------------------------------------------------------- -----------------------------
September 30, September 28,
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
(in thousands except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales....................... $2,016,586 $2,731,272 $4,044,169 $5,830,199 $8,616,867 $6,070,722 $8,474,710
Cost of sales................... 1,831,140 2,503,702 3,714,527 5,391,224 8,011,181 5,648,210 7,900,223
---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit.................... 185,446 227,570 329,642 438,975 605,686 422,512 574,487
Expenses:
Selling, general
and administrative............ 116,793 157,306 225,047 296,330 415,344 296,079 386,492
Charges allocated from
Ingram Industries........... 1,030 1,330 1,567 2,355 3,461 2,561 3,259
Non-cash compensation charge.. 0 0 0 0 0 0 8,859(2)
---------- ---------- ---------- ---------- ---------- ---------- ----------
117,823 158,636 226,614 298,685 418,805 298,640 398,610(2)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from operations.......... 67,623 68,934 103,028 140,290 186,881 123,872 175,877(2)
Other (income) expense:
Interest income............... (256) (103) (407) (937) (3,479) (3,049) (1,188)
Interest expense.............. 3,233 5,556 5,003 8,744 13,451 8,918 10,608
Interest expense charged
by Ingram Industries....... 11,859 12,405 16,089 24,189 32,606 22,977 30,912
Net foreign currency
exchange Loss.............. 0 0 111 6,873 7,751 6,572 447
Other....................... 324 2,574 (623) 716 1,936 405 1,689
---------- ---------- ---------- ---------- ---------- ---------- ----------
15,160 20,432 20,173 39,585 52,265 35,823 42,468
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income taxes
and minority interest....... 52,463 48,502 82,855 100,705 134,616 88,049 133,409(2)
Provision for income taxes...... 22,286 17,529 31,660 39,604 53,143 34,755 55,459
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before minority interest. 30,177 30,973 51,195 61,101 81,473 53,294 77,950(2)
Minority interest............... 0 0 840 (2,243) (2,834) (2,986) 383
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income(1)................... $ 30,177 $ 30,973 $ 50,355 $ 63,344 $ 84,307 $ 56,280 $ 77,567(2)
========== ========== ========== ========== ========== ========== ==========
Earnings per share.............. $ 0.25 $ 0.26 $ 0.41 $ 0.52 $ 0.69 $ 0.46 $ 0.64(2)
========== ========== ========== ========== ========== ========== ==========
Weighted average common
shares outstanding.......... 121,407 121,407 121,407 121,407 121,407 121,407 121,687
</TABLE>

<TABLE>
<CAPTION>
December 28, January 2, January 1, December 31, December 30, September 28,
1991 1993 1994 1994 1995 1996
------------ ---------- ---------- ------------ ------------ -------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Cash.................. $15,510 $25,276 $44,391 $58,369 $56,916 $43,196
Working capital....... 288,462 334,913 471,616 663,049 1,019,639 828,084
Total assets.......... 670,649 915,590 1,296,363 1,974,289 2,940,898 2,843,712
Total debt(3)......... 244,785 295,389 398,929 552,283 850,548 625,016
Stockholder's equity.. 78,972 109,418 155,459 221,344 310,795 365,989
<FN>
- -------------
(1) The 1992 results reflect the adoption of FAS 109.

(2) Reflects a non-cash compensation charge of $8.9 million ($5.4 million, or
$0.04 per share, net of tax) in connection with the granting of the
Options. See Note 11 of Notes to Consolidated Financial Statements.

(3) Includes long-term debt, current maturities of long-term debt, and amounts
due to Ingram Industries.
</TABLE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Overview

Ingram Micro is the leading wholesale distributor of
microcomputer products worldwide. The Company's net sales have grown to $8.6
billion in 1995 from $2.0 billion in 1991. This sales growth reflects
substantial expansion of its existing domestic and international operations,
resulting from the addition of new customers, increased sales to the existing
customer base, the addition of new product categories and suppliers, and the
establishment of Ingram Alliance, as well as the successful integration of ten
acquisitions worldwide. Net income has grown to $84.3 million in 1995 from
$30.2 million in 1991.

The microcomputer wholesale distribution industry in which the
Company operates is characterized by narrow gross and operating margins, which
have declined industry-wide in recent years, primarily due to intense price
competition. The Company's gross margins declined to 7.0% in 1995 from 9.2%
in 1991. To partially offset the decline in gross margins, the Company has
continually instituted operational and expense controls which have reduced
selling, general, and administrative ("SG&A") expenses (including charges
allocated from Ingram Industries) as a percentage of net sales to 4.8% in 1995
from 5.8% in 1991. As a result, the Company's operating margins and net
margins have declined less than gross margins. Operating margins declined to
2.2% in 1995 from 3.4% in 1991, and net margins declined to 1.0% in 1995 from
1.5% in 1991. There can be no assurance that the Company will be able to
continue to reduce operating expenses as a percentage of net sales to mitigate
further reductions in gross margins. Although the Company's international
operations have historically had similar gross margins to the Company's U.S.
traditional wholesale operations, the Company's international operations have
historically had lower operating margins due in part to greater economies of
scale in the U.S. operations. See "Risk Factors--Narrow Margins."

Ingram Micro entered the master reseller (also known as
"aggregation") business in late 1994 through the launch of Ingram Alliance.
Ingram Alliance is designed to offer resellers access to certain of the
industry's leading hardware manufacturers at competitive prices by utilizing a
lower cost business model that depends upon a higher average order size, lower
product returns percentage, and supplier-paid financing. In 1995, Ingram
Alliance contributed over $700 million of net sales to the Company. Since its
inception in late 1994, Ingram Alliance has operated with lower gross margins,
lower SG&A expenses as a percentage of net sales, and lower financing costs
than the Company's traditional wholesale distribution business. Accordingly,
if Ingram Alliance's sales continue to grow as a percentage of the Company's
total net sales, the Company expects such increase to cause its overall gross
margins to decline.

The Company sells microcomputer hardware, networking equipment,
and software products. Sales of hardware products (including networking
equipment) represent a majority of total net sales and have historically
generated a higher operating margin than sales of software products, although
operating margins on both hardware products and software products have
historically declined. Hardware products and networking equipment have
comprised an increasing percentage, and software products a decreasing
percentage, of the Company's net sales in recent years, and the Company
expects this trend to continue. Net sales of software products have decreased
as a percentage of total net sales in recent years due to a number of factors,
including bundling of software with microcomputers; sales growth in Ingram
Alliance, which is a hardware-only business; declines in software prices; and
the emergence of alternative means of software distribution, such as site
licenses and electronic distribution. See "Risk Factors--Rapid Technological
Change; Alternate Means of Software Distribution" and "Business--Products and
Suppliers."

Historically, the Company's sources of capital have primarily
been borrowings from Ingram Industries through debt facilities maintained by
Ingram Industries and guaranteed by the Company. The Company has entered into
the $1 billion Credit Facility, which became effective immediately prior to
the closing of the IPO. See "Liquidity and Capital Resources." Concurrently
with the Split-Off, the Company used borrowings under the Credit Facility to
repay (i) intercompany indebtedness in partial satisfaction of amounts due to
Ingram Industries (the Company assumed Ingram Industries' accounts receivable
securitization program in satisfaction of the remaining amounts due to Ingram
Industries) and (ii) outstanding revolving indebtedness related to amounts
drawn by certain of the Company's subsidiaries, as participants in Ingram
Industries' then existing unsecured credit facility, which terminated
concurrently with the closing of the IPO. The net proceeds from the IPO were
used to repay a portion of the borrowings under the Credit Facility. The
Company has historically depended on Ingram Industries and other subsidiaries
of Ingram Industries for financing, management, tax and payroll
administration, property/casualty insurance, employee benefits administration,
and certain other administrative services. In conjunction with the
Reorganization, the Company, Ingram Industries, and Ingram Entertainment
entered into the Transitional Service Agreements, as well as a tax sharing and
tax services agreement. See "The Split-Off and the Reorganization--The
Reorganization." The Company believes that the terms of the Transitional
Service Agreements are on a basis as favorable to the Company as those that
would have been obtained from third parties on an arm's length basis. The
Company's historical financial statements reflect an allocation of expenses in
connection with the services covered by the Transitional Service Agreements.
Although the Company expects the costs and fees to be paid by it in connection
with the Transitional Service Agreements to be higher than its historical
allocated costs, it does not believe the increase in costs will be material to
its results of operations. On a long-term basis, the Company will be required
to hire personnel to perform such services or contract with one or more
independent third parties to provide such services. See "Risk
Factors--Relationship with Ingram Industries, Ingram Entertainment, and the
Ingram Family Stockholders."

The microcomputer wholesale distribution business is capital
intensive. The Company's business requires significant levels of capital to
finance accounts receivable and product inventory that is not financed by trade
creditors. The Company is highly leveraged and has relied heavily on debt
financing for its increasing working capital needs in connection with the
expansion of its business. The Company will need additional capital to finance
its product inventory and accounts receivable as it expands its business. The
Company's interest expense for any current or future indebtedness will be
subject to fluctuations in interest rates and may cause fluctuations in the
Company's net income. In connection with the Split-Off, the Company assumed
Ingram Industries' accounts receivable securitization program, and financing
costs associated with this program will be classified as other expense. Prior
to the Split-Off, such expenses were reflected as interest expense charged by
Ingram Industries. While this structure will not increase the Company's cost
of financing, this change in the classification of financing costs will result
in an increase in the Company's other expenses of approximately $10.5 million
per year and a corresponding decrease in its interest expense.

In connection with the Split-Off, certain outstanding Ingram
Industries options (including the Options), incentive stock units ("ISUs"),
and stock appreciation rights ("SARs") held by certain employees of Ingram
Industries, Ingram Entertainment, and Ingram Micro were exchanged or converted
to the Options. See "The Plan," "Management--Rollover Plan; Incentive Stock
Units." The Company has recorded a pre-tax non-cash compensation charge of
approximately $8.9 million ($5.4 million net of tax) in the first three
quarters of 1996 related to the vested portion of certain of the Options as
the terms and grants of the Options were established in the first quarter of
1996. This charge was based on the difference between the estimated fair
value of such options in the first quarter of 1996 and the exercise price of
such options or SARs. In addition, at the time of the IPO, the Company was
required by applicable accounting rules to record a non-cash compensation
charge with respect to the vested portion of approximately 1,300,000 formula
plan Options included in the 11,000,000 shares. This non-cash charge was
approximately $13.4 million based on the difference between the average
exercise price of $2.63 per share and $18.00 per share, the initial public
offering price of the Common Stock. The Company will be required by
applicable accounting rules to record additional non-cash compensation charges
over the remaining vesting periods of the Options. These additional charges
will be approximately $1.0 million ($0.6 million net of tax) in the aggregate
for the fourth quarter of 1996, $7.1 million ($5.7 million net of tax) for
1997, and $4.6 million ($3.6 million net of tax) for 1998.

Results of Operations

The following table sets forth the Company's net sales by
geographic region (excluding intercompany sales), and the percentage of total
net sales represented thereby, for each of the periods indicated.
<TABLE>
<CAPTION>
Fiscal Year Thirty-nine Weeks Ended
--------------------------------------------------- ---------------------------------------
September 30, September 28,
1993 1994 1995 1995 1996
-------------- --------------- --------------- ----------------- -------------------
(dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales by Geographic
Region(1):
United States........... $3,118 77.1% $4,122 70.7% $5,970 69.3% $4,287 70.6% $5,930 70.0%
Europe.................. 485 12.0 1,078 18.5 1,849 21.4 1,239 20.4 1,745 20.6
Other international..... 441 10.9 630 10.8 798 9.3 545 9.0 800 9.4
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Total................. $4,044 100.0% $5,830 100.0% $8,617 100.0% $6,071 100.0% $8,475 100.0%
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
<FN>
- -------------
(1) Net sales are classified by location of the Company entity. For example,
products sold through Ingram Alliance or the U.S. Export Division are
classified as United States sales.
</TABLE>

The following table sets forth certain items from the Company's
Consolidated Statement of Income as a percentage of net sales, for each of the
periods indicated.

<TABLE>
<CAPTION>
Percentage of Net Sales
------------------------------------------------------------------------------
Fiscal Year Thirty-nine Weeks Ended
------------------------------- -----------------------------------
September 30, September 28,
1993 1994 1995 1995 1996
---- ---- ---- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net sales............................. 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales......................... 91.9 92.5 93.0 93.0 93.2
----- ----- ----- ----- -----
Gross profit.......................... 8.1 7.5 7.0 7.0 6.8
Expenses:
SG&A expenses and charges
allocated from Ingram Industries 5.6 5.1 4.8 5.0 4.6
Non-cash compensation charge...... 0.0 0.0 0.0 0.0 0.1
----- ----- ----- ----- -----
Income from operations................ 2.5 2.4 2.2 2.0 2.1
Other expense, net.................... 0.5 0.7 0.6 0.5 0.5
----- ----- ----- ----- -----
Income before income taxes and
minority
interest.......................... 2.0 1.7 1.6 1.5 1.6
Provision for income taxes............ 0.8 0.6 0.6 0.6 0.7
Minority interest..................... 0.0 0.0 0.0 0.0 0.0
----- ----- ----- ----- -----
Net income............................ 1.2% 1.1% 1.0% 0.9% 0.9%
===== ===== ===== ===== =====
</TABLE>

First Three Quarters 1996 Compared to First Three Quarters 1995

Consolidated net sales increased 39.6% to $8.5 billion in the
first three quarters of 1996 from $6.1 billion in the first three quarters of
1995. Microsoft Windows 95 was launched in the third quarter of 1995, and
sales of Microsoft Windows 95 accounted for $289.1 million of consolidated net
sales in the first three quarters of 1995. The increase in worldwide net
sales was attributable to growth in the microcomputer products industry in
general, the addition of new customers, increased sales to the existing
customer base, and expansion of the Company's product offerings.

Net sales from U.S. operations increased 38.3% to $5.9 billion
in the first three quarters of 1996 from $4.3 billion in the first three
quarters of 1995. In addition to the factors above that impacted net sales
worldwide, U.S. net sales were positively impacted by the strong growth in
Ingram Alliance sales. Net sales from European operations increased 40.8% to
$1.7 billion in the first three quarters of 1996 from $1.2 billion in the
first three quarters of 1995. Other international net sales increased 46.9%
to $799.8 million in the first three quarters of 1996 from $544.5 million in
the first three quarters of 1995, principally due to the growth in net sales
from the Company's Canadian operations. In the first three quarters of 1996,
net sales from U.S. operations accounted for 70.0% of consolidated net sales,
net sales from European operations accounted for 20.6% of consolidated net
sales, and other international net sales accounted for 9.4% of consolidated
net sales. In the first three quarters of 1995, net sales from U.S.
operations accounted for 70.6% of consolidated net sales, net sales from
European operations accounted for 20.4% of consolidated net sales, and other
international net sales accounted for 9.0% of consolidated net sales.

Cost of sales as a percentage of net sales increased to 93.2%
in the first three quarters of 1996 from 93.0% in the first three quarters of
1995. This increase was largely attributable to competitive pricing
pressures, especially in Europe, and the increase as a percentage of net sales
of the lower gross margin Ingram Alliance business, which more than offset an
increase in worldwide purchase discounts and rebates from the Company's
suppliers.

Total SG&A expenses and charges allocated from Ingram
Industries increased 30.5% to $389.8 million in the first three quarters of
1996 from $298.6 million in the first three quarters of 1995, but decreased as
a percentage of net sales to 4.6% in the first three quarters of 1996 from
5.0% in the first three quarters of 1995. The increased level of spending was
attributable to expenses required to support expansion of the Company's
business, consisting primarily of incremental personnel and support costs,
lease payments relating to new operating facilities, and expenses associated
with the development and maintenance of information systems. The decrease in
operating expenses as a percentage of net sales was primarily attributable to
the growth of Ingram Alliance, which utilizes a lower cost business model, and
economies of scale from higher sales volumes.

During the first three quarters of 1996, the Company recorded a
non-cash compensation charge of $8.9 million or 0.1% of net sales in
connection with the Options. The Company did not record any such charge
during the first three quarters of 1995.

Excluding the $8.9 million non-cash compensation charge in the
first three quarters of 1996, total income from operations increased as a
percentage of net sales to 2.2% in the first three quarters of 1996 from 2.0%
in the first three quarters of 1995. Income from operations in the United
States increased as a percentage of net sales to 2.7% in the first three
quarters of 1996 from 2.6% in the first three quarters of 1995. Income from
operations in Europe decreased as a percentage of net sales to 0.5% in the
first three quarters of 1996 from 0.7% in the first three quarters of 1995.
This decrease was offset by an increase in income from operations as a
percentage of net sales for geographic regions outside the United States and
Europe to 2.0% in the first three quarters of 1996 from 0.7% in the first
three quarters of 1995. The first three quarters of 1995 included the
negative impact of an inventory valuation loss of $3.8 million related to the
decline in value of the Mexican peso and the associated impact on the Mexican
economy.

For the reasons set forth above, income from operations,
including the $8.9 million non-cash compensation charge, increased 42.0% to
$175.9 million in the first three quarters of 1996 from $123.9 million in the
first three quarters of 1995, and, as a percentage of net sales, increased to
2.1% in the first three quarters of 1996 from 2.0% in the first three quarters
of 1995.

Other expense, net, which consists primarily of net interest
expense (including interest expense charged by Ingram Industries), foreign
currency exchange losses, and miscellaneous non-operating expenses, increased
18.5% to $42.5 million in the first three quarters of 1996 from $35.8 million
in the first three quarters of 1995, but remained constant as a percentage of
net sales at 0.5%. The increase in other expense was largely attributable to
a higher level of borrowings to finance the Company's worldwide business
expansion, partially offset by a period-over-period decrease in the amount of
foreign currency losses which were primarily related to the 1995 Mexican peso
devaluation.

The provision for income taxes increased 59.6% to $55.5 million
in the first three quarters of 1996 from $34.8 million in the first three
quarters of 1995, reflecting the 51.5% increase in the Company's income before
income taxes and minority interest. The Company's effective tax rate was
41.6% in the first three quarters of 1996 compared to 39.5% in the first three
quarters of 1995. The increase in the effective tax rate was primarily due to
the effect of certain international taxes in 1996.

Excluding the $5.4 million (net of tax) non-cash compensation
charge, net income increased 47.4% to $83.0 million in the first three
quarters of 1996 from $56.3 million in the first three quarters of 1995 and,
as a percentage of net sales, increased to 1.0% in the first three quarters of
1996 from 0.9% in the first three quarters of 1995. Net income, including the
$5.4 million (net of tax) non-cash compensation charge, increased 37.8% to
$77.6 million in the first three quarters of 1996 from $56.3 million in the
first three quarters of 1995, but remained constant as a percentage of net
sales at 0.9%.

1995 Compared to 1994

Consolidated net sales increased 47.8% to $8.6 billion in 1995
from $5.8 billion in 1994. The increase in worldwide net sales was
attributable to growth in the microcomputer products industry in general, the
addition of new customers, increased sales to the existing customer base, and
expansion of the Company's product offerings, as well as to the release of
significant new products, including the Microsoft Windows 95 operating system
in August 1995.

Net sales from U.S. operations increased 44.8% to $6.0 billion
in 1995 from $4.1 billion in 1994. The increase in U.S. net sales was largely
attributable to the growth of Ingram Alliance in 1995, its first full year of
operations, as well as an increase in the Company's customer base and product
lines. Net sales from European operations increased 71.5% to $1.8 billion in
1995 from $1.1 billion in 1994. In addition to factors affecting sales
worldwide, European net sales were positively impacted by the full year
contribution in 1995 of the Company's Scandinavian operations, which were
acquired in September 1994. Other international net sales increased 26.7% to
$798.0 million in 1995 from $629.6 million in 1994. The increase in net sales
from other international operations was entirely attributable to an increase
in Canadian sales, partially offset by a decrease in Mexican net sales
resulting from the distressed Mexican economy and the related peso
devaluation. In 1995, net sales from U.S. operations accounted for 69.3% of
consolidated net sales, net sales from European operations accounted for 21.4%
of consolidated net sales, and other international net sales accounted for
9.3% of consolidated net sales. In 1994, net sales from U.S. operations
accounted for 70.7% of consolidated net sales, net sales from European
operations accounted for 18.5% of consolidated net sales, and other
international net sales accounted for 10.8% of consolidated net sales.

Cost of sales as a percentage of net sales increased to 93.0%
in 1995 from 92.5% in 1994. This increase was largely attributable to
competitive pricing pressures worldwide and the growth of Ingram Alliance,
which is characterized by lower gross margins than the Company's traditional
wholesale distribution business. Gross margin was favorably impacted by
effective operational controls and an increase in worldwide purchase discounts
and rebates from the Company's suppliers.

Total SG&A expenses and charges allocated from Ingram
Industries increased 40.2% to $418.8 million in 1995 from $298.7 million in
1994, but decreased as a percentage of net sales to 4.8% in 1995 from 5.1% in
1994. The increased level of spending was attributable to expenses required
to support expansion of the Company's business, consisting primarily of
incremental personnel and support costs, lease payments relating to new
facilities, and expenses associated with the development and maintenance of
information systems. The decreased level of spending as a percentage of net
sales was primarily attributable to economies of scale resulting from higher
sales volumes, increased operating efficiencies, and the growth of Ingram
Alliance, which is characterized by lower SG&A expenses as a percentage of net
sales than the Company's traditional wholesale distribution business.

For the reasons set forth above, income from operations
increased 33.2% to $186.9 million in 1995 from $140.3 million in 1994, but
decreased as a percentage of net sales to 2.2% in 1995 from 2.4% in 1994.
Income from U.S. operations decreased as a percentage of net sales to 2.6% in
1995 from 3.0% in 1994. This decrease was partially offset by an increase in
income from European operations as a percentage of net sales to 1.1% in 1995
from 0.7% in 1994.

Other expense, net increased 32.0% to $52.3 million in 1995
from $39.6 million in 1994, but decreased as a percentage of net sales to 0.6%
in 1995 from 0.7% in 1994. The increase in other expense was largely
attributable to a higher level of borrowings to finance the Company's
worldwide business expansion. The Company was also negatively impacted by the
continued effect of the distressed Mexican economy and the related peso
devaluation. Primarily due to events in Mexico, the Company sustained a net
foreign currency exchange loss of $7.8 million in 1995 as compared to a $6.9
million loss in 1994.

The provision for income taxes increased 34.2% to $53.1 million
in 1995 from $39.6 million in 1994, reflecting the 33.7% increase in the
Company's income before income taxes and minority interest. The Company's
effective tax rate was 39.5% in 1995 as compared to 39.3% in 1994.

Net income increased 33.1% to $84.3 million in 1995 from $63.3
million in 1994, but decreased as a percentage of net sales to 1.0% in 1995
from 1.1% in 1994.

1994 Compared to 1993

Consolidated net sales increased 44.2% to $5.8 billion in 1994
from $4.0 billion in 1993. The increase in worldwide net sales was
attributable to growth in the microcomputer products industry in general, the
acquisition of four international distributors, the addition of new customers,
increased sales to the existing customer base, and expansion of the Company's
product offerings.

Net sales from U.S. operations increased 32.2% to $4.1 billion
in 1994 from $3.1 billion in 1993. The increase in U.S. net sales was
primarily attributable to the same factors favorably impacting worldwide
consolidated net sales. Net sales from European operations increased 122.3%
to $1.1 billion in 1994 from $485.1 million in 1993. The increase in European
net sales was due to improved operating performance by several of the European
subsidiaries (including the addition of some of the Company's suppliers to the
German operation), as well as the Company's entry through acquisitions into
the Spanish market in April 1994 and the Scandinavian market in September
1994. Net sales from other international operations increased 42.9% to $629.6
million in 1994 from $440.7 million in 1993. The increase in net sales from
other international operations was largely attributable to the continued
development of the Company's operations in Canada and Mexico. In 1994, net
sales from U.S. operations accounted for 70.7% of consolidated net sales, net
sales from European operations accounted for 18.5% of consolidated net sales,
and net sales from other international operations accounted for 10.8% of
consolidated net sales. In 1993, net sales from U.S. operations accounted for
77.1% of consolidated net sales, net sales from European operations accounted
for 12.0% of consolidated net sales, and other international net sales
accounted for 10.9% of consolidated net sales.

Cost of sales as a percentage of net sales increased to 92.5%
in 1994 from 91.9% in 1993. This increase was primarily attributable to
competitive pricing pressures worldwide.

Total SG&A expenses and charges allocated from Ingram
Industries increased 31.8% to $298.7 million in 1994 from $226.6 million in
1993 but decreased as a percentage of net sales to 5.1% in 1994 from 5.6% in
1993. The increased level of spending was attributable to expenses required
to support expansion of the Company's business, consisting primarily of
incremental personnel and support costs, lease payments relating to new
facilities, and expenses associated with the development and maintenance of
information systems. The decreased level of spending as a percentage of net
sales was primarily attributable to economies of scale resulting from higher
sales volumes, as well as increased operating efficiencies.

For the reasons set forth above, income from operations
increased 36.2% to $140.3 million in 1994 from $103.0 million in 1993, but
decreased as a percentage of net sales to 2.4% in 1994 from 2.5% in 1993.
Contributing to the increase in income from operations was income from the
European operations of $8.1 million, compared to a $3.2 million loss from such
operations in 1993.

Other expense, net increased 96.2% to $39.6 million in 1994
from $20.2 million in 1993, and increased as a percentage of net sales to 0.7%
in 1994 from 0.5% in 1993. The increase in other expense was largely
attributable to a higher level of borrowings to finance the Company's
worldwide business expansion, including acquisitions, and foreign currency
exchange losses of $6.9 million primarily related to Mexico in 1994.

The provision for income taxes increased 25.1% to $39.6 million
in 1994 from $31.7 million in 1993, reflecting the 21.5% increase in the
Company's income before income taxes and minority interest. The Company's
effective tax rate was 39.3% in 1994 as compared to 38.2% in 1993.

Net income increased 25.8% to $63.3 million in 1994 from $50.4
million in 1993, but decreased as a percentage of net sales to 1.1% in 1994
from 1.2% in 1993.

Quarterly Data; Seasonality

The Company's quarterly net sales and operating results have
varied significantly in the past and will likely continue to do so in the
future as a result of seasonal variations in the demand for the products and
services offered by the Company, the introduction of new hardware and software
technologies and products offering improved features and functionality, the
introduction of new products and services by the Company and its competitors,
the loss or consolidation of a significant supplier or customer, changes in
the level of operating expenses, inventory adjustments, product supply
constraints, competitive conditions including pricing, interest rate
fluctuations, the impact of acquisitions, currency fluctuations, and general
economic conditions. The Company's narrow operating margins may magnify any
such fluctuations. Specific historical seasonal variations in the Company's
operating results have included a reduction of demand in Europe during the
summer months, increased Canadian government purchasing in the first quarter,
and pre-holiday stocking in the retail channel during the September to November
period. In addition, as was the case with the introduction of Microsoft
Windows 95 in August 1995, the product cycle of major products may materially
impact the Company's business, financial condition, or results of operations.

The following table sets forth certain unaudited quarterly
historical consolidated financial data for each of the eleven quarters up to
the period ended September 28, 1996. This unaudited quarterly information has
been prepared on the same basis as the annual information presented elsewhere
herein and, in the Company's opinion, includes all adjustments (consisting
only of normal recurring adjustments) necessary for a fair presentation of the
selected quarterly information. This information should be read in
conjunction with the consolidated financial statements and notes thereto
included elsewhere in this Prospectus. The operating results for any quarter
shown are not necessarily indicative of results for any future period.

<TABLE>
<CAPTION>
Income Income Before
Net Gross From Income Taxes and Net Earnings
Sales Profit Operations Minority Interest Income Per Share
----- ------ ---------- ----------------- ------ ---------
(in millions, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Fiscal Year Ended
December 31, 1994
Thirteen Weeks
Ended:
April 2, 1994..... $1,266.6 $92.4 $26.1 $19.4 $11.6 $0.10
July 2, 1994...... 1,298.9 96.8 28.3 19.5 12.1 0.10
October 1, 1994... 1,387.0 105.1 32.9 24.3 14.6 0.12
December 31, 1994. 1,877.7 144.7 53.0 37.5 25.0 0.21

Fiscal Year Ended
December 30, 1995
Thirteen Weeks
Ended:
April 1, 1995..... $1,879.5 $132.4 $38.5 $24.3 $17.1 $0.14
July 1, 1995...... 1,859.6 138.9 40.2 30.0 18.4 0.15
September 30, 1995 2,331.6 151.2 45.2 33.8 20.8 0.17
December 30, 1995. 2,546.2 183.2 63.0 46.5 28.0 0.23

Fiscal Year Ended
December 30, 1995
Thirteen Weeks
Ended:
March 30, 1996.... $2,752.7 $186.6 $54.9(1) $39.6(1) $23.8(1) $0.20(1)
June 29, 1996..... 2,790.4 190.5 59.5(2) 44.9(2) 26.8(2) 0.22(2)
September 28, 1996 2,931.5 197.5 61.4(3) 48.9(3) 26.9(3) 0.22(3)

<FN>
- ------------
(1) Reflects a non-cash compensation charge of $6.7 million ($4.1 million,
or $0.03 per share, net of tax) in connection with the granting of the
Options.

(2) Reflects a non-cash compensation charge of $1.1 million ($0.7 million,
or less than $0.01 per share, net of tax) in connection with the
granting of the Options.

(3) Reflects a non-cash compensation charge of $1.1 million ($0.6 million,
or less than $0.01 per share, net of tax) in connection with the
granting of the Options.
</TABLE>

As indicated in the table above, the increases in the Company's
net sales in the fourth quarter of each fiscal year have generally been higher
than those in the other three quarters in the same fiscal year. The trend of
higher fourth quarter net sales is attributable to calendar year-end business
purchases and holiday period purchases made by customers. Additionally, gross
profit in the fourth quarter of each year has historically been favorably
impacted by attractive year-end product buying opportunities which have often
resulted in higher purchase discounts. Net sales in the third quarter of 1995
were positively impacted by the release of Microsoft Windows 95. However,
gross and operating margins were lower in the third quarter of 1995 due to the
significant volume of Microsoft Windows 95 sales, which had lower than average
gross margins.

Liquidity and Capital Resources

The Company has financed its growth and cash needs largely
through income from operations and borrowings (primarily from Ingram
Industries), as well as from trade and supplier credit.

Cash provided by operating activities increased to $273.3
million in the first three quarters of 1996 from $32.5 million in the first
three quarters of 1995. The significant increase in cash provided by
operating activities was partially due to higher net income and the difference
between accounts receivable, inventory levels, and accounts payable in the
first three quarters of 1996 as compared to the first three quarters of 1995
due to the launch of Microsoft Windows 95 in the third quarter of 1995. Net
cash used by investing activities was $64.5 million and $36.1 million in the
first three quarters of 1996 and 1995, respectively. This increase was due to
the Company's expansion of warehouse and other facilities. Net cash used for
financing activities increased to $221.6 million from $17.1 million in the
first three quarters of 1996 and 1995, respectively, as a result of higher
repayments on borrowings from Ingram Industries and the $20.0 million
distribution to Ingram Industries, both in the first three quarters of 1996.

Net cash used by operating activities was $251.3 million, $87.1
million, and $41.7 million in 1995, 1994, and 1993, respectively. The
significant increase in cash used by operating activities in 1995 over 1994
was due to the increased levels of inventory which accounted for a use of
$580.1 million in 1995 as compared to $345.5 million in 1994 and an increase
in accounts receivable which accounted for a use of $320.2 million in 1995 as
compared to $232.3 million in 1994. Cash provided by accounts payable of
$543.8 million in 1995 and $411.0 million in 1994 partially offset the use
related to inventory and accounts receivable. The increase in the difference
between inventory levels and accounts payable in 1995 as compared to 1994 was
primarily due to the launch of Microsoft Windows 95.

Net cash used by investing activities of $48.8 million, $42.6
million, and $40.7 million in 1995, 1994, and 1993, respectively, was due to
the Company's expansion of warehouse and other facilities in each year and the
acquisitions of operations in four European countries in 1994 and the
acquisition of operations in three countries in Europe and in Mexico in 1993.

Net cash provided by financing activities was $298.3 million,
$143.3 million, and $101.4 million in 1995, 1994, and 1993, respectively. The
increase in each period was primarily provided by an increase in borrowings
from Ingram Industries.

The Company's sources of capital have primarily been borrowings
from Ingram Industries. As of September 28, 1996, the Company had total debt
outstanding of $625.0 million, including $479.7 million due to Ingram
Industries. The Company has entered into the $1 billion Credit Facility with
NationsBank of Texas N.A. and The Bank of Nova Scotia, acting as Agents for a
syndicate of lenders. The Credit Facility, which became effective immediately
prior to the closing of the IPO, contains standard provisions for agreements
of its type. Under the Credit Facility, the Company can borrow up to $750
million in foreign currencies through negotiated arrangements with individual
lenders in the syndicate. The Company can use up to $250 million of the
Credit Facility for letters of credit. The Company will be required to comply
with certain financial covenants, including minimum net worth, restrictions on
funded debt, current ratio and interest coverage, which will be tested as of
the end of each fiscal quarter. The Credit Facility also restricts the
Company's ability to pay dividends. Borrowings will be subject to the
satisfaction of customary conditions, including the absence of any material
adverse change in the Company's business or financial condition. Concurrently
with the Split-Off, the Company assumed Ingram Industries' accounts receivable
securitization program in partial satisfaction of amounts due to Ingram
Industries. The Company used borrowings under the Credit Facility to repay
(i) the remaining intercompany indebtedness and (ii) outstanding revolving
indebtedness related to amounts drawn by certain of the Company's
subsidiaries, as participants in Ingram Industries' then existing unsecured
credit facility, which terminated concurrently with the closing of the IPO.

The net proceeds from the IPO were used to repay a portion of
the borrowings under the Credit Facility. After giving effect to the
foregoing transactions, including the application of the net proceeds from the
IPO, borrowings under the Credit Facility would have been approximately $17.9
million on a pro forma basis at September 28, 1996. After giving effect to the
foregoing transactions and the application of the net proceeds from the IPO,
the Company would have had available approximately $982.1 million under the
Credit Facility. The aggregate amount of long-term debt outstanding after the
Split-Off, and before application of the proceeds from the IPO, was
substantially similar to the long-term debt and debt due to Ingram Industries
immediately prior to the Split-Off, except as adjusted for the accounts
receivable securitization program assumed by the Company and the incurrence of
an additional $22.6 million of indebtedness including capital lease
obligations in connection with the acquisition of lease agreements related to
certain facilities currently utilized by the Company. See "Certain
Transactions."

Effective February 1993, the Company entered into an agreement
with Ingram Industries whereby the Company sold all of its domestic trade
accounts receivable to Ingram Industries on an ongoing basis. Ingram
Industries transferred certain trade accounts receivable from the Company and
other Ingram Industries affiliates to a trust which sold certificates
representing undivided interests in the total pool of trade receivables
without recourse. As of September 28, 1996, Ingram Industries had sold $160
million of fixed rate certificates and a variable rate certificate, under
which $13.0 million was outstanding. Ingram Industries' arrangement with the
trust extended to December 31, 1997, renewable biannually under an evergreen
provision up to a maximum term of 20 years. In connection with the Split-Off,
in partial satisfaction of amounts due to Ingram Industries, the Ingram
Industries accounts receivable securitization program was assumed by the
Company, which will be the sole seller of receivables. Under the amended
program, certain of the Company's domestic receivables will no longer be
transferred to the trust. The Company believes the amended program will
contain sufficient trade accounts receivable to support the outstanding fixed
rate certificates and an unspecified amount of the variable rate certificates.
Assumption of the securitization program results in a $160 million reduction
of trade accounts receivable and due to Ingram Industries. See Note 4 of
Notes to Consolidated Financial Statements.

The Company and its foreign subsidiaries have uncommitted lines
of credit and short-term overdraft facilities in various currencies which
aggregated $114.1 million as of September 28, 1996. These facilities are used
principally for working capital and bear interest at market rates. See Note 6
of Notes to Consolidated Financial Statements.

The Company believes that the net proceeds from the sale of the
Common Stock offered in the IPO, together with net cash provided by operating
activities, supplemented as necessary with funds available under credit
arrangements (including the Credit Facility), will provide sufficient
resources to meet its present and future working capital requirements and
other cash needs for at least the next 12 months, or earlier if the Company
were to engage in any corporate transactions not currently anticipated, in
which event the Company anticipates that additional debt or equity financing
would be required.

The Company presently expects to spend approximately $90
million in each of 1996 and 1997 for capital expenditures due to the continued
expansion of its business.

Asset Management

The Company maintains sufficient quantities of product
inventories to achieve high order fill rates. The Company believes that the
risks associated with slow moving and obsolete inventory are substantially
mitigated by protection and stock return privileges provided by suppliers. In
the event of a supplier price reduction, the Company generally receives a
credit for products in its inventory. In addition, the Company has the right
to return a certain percentage of purchases, subject to certain limitations.
Historically, price protection, stock return privileges, and inventory
management procedures have helped to reduce the risk of decline in the value
of inventory. The Company's risk of decline in the value of inventory could
be greater outside the United States, where agreements with suppliers are more
restrictive with regard to price protection and the Company's ability to return
unsold inventory. The Company establishes reserves for estimated losses due
to obsolete inventory in the normal course of business. Historically, the
Company has not experienced losses due to obsolete inventory materially in
excess of established inventory reserves. Inventory levels may vary from
period to period, due in part to the addition of new suppliers or new lines
with current suppliers and large cash purchases of inventory due to
advantageous terms offered by suppliers. See "Risk Factors--Risk of Inventory
Losses."

The Company offers various credit terms to qualifying customers
as well as prepay, credit card, and COD terms. The Company closely monitors
customers' creditworthiness through its on-line computer system which contains
detailed information on each customer's payment history and other relevant
information. In addition, the Company participates in a national credit
association which exchanges credit rating information on customers of
association members. In most markets, the Company utilizes various levels of
credit insurance to allow sales expansion and control credit risks. The
Company establishes reserves for estimated credit losses in the normal course
of business. Historically, the Company has not experienced credit losses
materially in excess of established credit loss reserves.

Changes in Accounting Standards

The Company will adopt Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of" ("FAS 121") in 1996. The Company
does not expect the adoption of FAS 121 to have a material effect on its
financial condition or results of operations.

The Company will adopt Statement of Financial Accounting
Standards No. 123, "Accounting for Stock Based Compensation" ("FAS 123") in
1996. As permitted by FAS 123, the Company will continue to measure
compensation cost in accordance with Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees." Therefore, the adoption of FAS
123 will have no impact on the Company's financial condition or results of
operations.

BUSINESS

Overview

Ingram Micro offers one-stop shopping to its reseller customers
by providing a comprehensive inventory of more than 36,000 products from over
1,100 suppliers, including most of the microcomputer industry's leading
hardware manufacturers, networking equipment suppliers, and software
publishers. The Company's broad product offerings include: desktop and
notebook PCs, servers, and workstations; mass storage devices; CD-ROM drives;
monitors; printers; scanners; modems; networking hubs, routers, and switches;
network interface cards; business application software; entertainment
software; and computer supplies. The Company's suppliers include Apple
Computer, Cisco Systems, Compaq Computer, Creative Labs, Hewlett-Packard, IBM,
Intel, Microsoft, NEC, Novell, Quantum, Seagate, 3Com, Toshiba, and U.S.
Robotics.

Ingram Micro distributes microcomputer products through
warehouses in eight strategic locations in the continental United States and
22 international warehouses located in Canada, Mexico, most countries of the
European Union, Norway, Malaysia and Singapore. The Company believes that it
is the market share leader in the United States, Canada, and Mexico, and the
second largest full-line distributor in Europe, based on publicly available
data and management's knowledge of the industry. In 1995, approximately 31%
of the Company's net sales were derived from operations outside the United
States. The Export Division fulfills orders from U.S. exporters and from
foreign customers in countries where the Company does not operate a
distribution subsidiary, including much of Latin America, the Middle East,
Africa, Australia, and parts of Europe and Asia. The Company participates in
the master reseller business in the United States through Ingram Alliance.

The Company's principal objective is to enhance its position as
the preeminent wholesale distributor of microcomputer products worldwide. The
Company's belief that it is the preeminent wholesale distributor of
microcomputer products is based on publicly available data and management's
knowledge of the industry. The Company is focused on providing a broad range
of products and services, quick and efficient order fulfillment, and
consistent on-time and accurate delivery to its reseller customers around the
world. The Company believes that IMpulse provides a competitive advantage
through real-time worldwide information access and processing capabilities.
This on-line information system, coupled with the Company's exacting operating
procedures in telesales, credit support, customer service, purchasing,
technical support, and warehouse operations, enables the Company to provide
its reseller customers with superior service in an efficient and low cost
manner. In addition, to enhance sales and to support its suppliers and
reseller customers, the Company provides a wide range of value-added services,
such as technical training, order fulfillment, tailored financing programs,
systems configuration, and marketing programs.

The Company has grown rapidly over the past five years, with
net sales and net income increasing to $8.6 billion and $84.3 million,
respectively, in 1995 from $2.0 billion and $30.2 million, respectively, in
1991, representing compound annual growth rates of 43.8% and 29.3%,
respectively. For the thirty-nine weeks ended September 28, 1996, the
Company's net sales and net income increased 39.6% and 37.8%, respectively, as
compared to the net sales and net income levels achieved in the thirty-nine
weeks ended September 30, 1995. The Company's growth during these periods
reflects substantial expansion in its existing domestic and international
operations, resulting from the addition of new customers, increased sales to
the existing customer base, the addition of new product categories and
suppliers, the establishment of Ingram Alliance, and the successful
integration of ten acquisitions worldwide. Because of intense price
competition in the microcomputer products wholesale distribution industry, the
Company's margins have historically been narrow and are expected in the future
to continue to be narrow. In addition, the Company is highly leveraged and
has relied heavily on debt financing for its increasing working capital needs
in connection with the expansion of its business. See "Risk Factors--Narrow
Margins" and "--Capital Intensive Nature of Business; High Degree of
Leverage."

The Industry

The worldwide microcomputer products distribution industry
generally consists of suppliers, which sell directly to wholesalers,
resellers, and end-users; wholesale distributors, which sell to resellers; and
resellers, which sell to other resellers and directly to end-users. A variety
of reseller categories exists, including corporate resellers, VARs, systems
integrators, original equipment manufacturers, direct marketers, independent
dealers, owner-operated chains, franchise chains, and computer retailers.
Different types of resellers are defined and distinguished by the end-user
market they serve, such as large corporate accounts, small and medium-sized
businesses, or home users, and by the level of value they add to the basic
products they sell. Wholesale distributors generally sell only to resellers
and purchase a wide range of products in bulk directly from manufacturers.
Different wholesale distribution models have evolved in particular countries
and geographies depending on the characteristics of the local reseller
environment, as well as other factors specific to a particular country or
region. The United States, for example, is distinguished by the presence of
master resellers, or aggregators, which are functionally similar to wholesale
distributors, but which focus on selling relatively few product
lines--typically high volume, brand name hardware systems--to a network of
franchised dealers and affiliates.

The growth of the microcomputer products wholesale distribution
industry continues to exceed that of the microcomputer industry as a whole.
Faced with the pressures of declining product prices and the increasing costs
of selling direct to a large and diverse group of resellers, suppliers are
increasingly relying upon wholesale distribution channels for a greater
proportion of their sales. To minimize costs and focus on their core
capabilities in manufacturing, product development, and marketing, many
suppliers are also outsourcing an increasing portion of certain functions such
as distribution, service, technical support, and final assembly to the
wholesale distribution channel. Growing product complexity, shorter product
life cycles, and an increasing number of microcomputer products due to the
emergence of open systems architectures and the recognition of certain
industry standards have led resellers to depend on wholesale distributors for
more of their product, marketing, and technical support needs. In addition,
resellers are relying to an increasing extent on wholesale distributors for
inventory management and credit to avoid stocking large inventories and
maintaining credit lines to finance their working capital needs. The Company
believes that new opportunities for growth in the microcomputer products
wholesale distribution industry will emerge as new product categories, such as
computer telephone integration ("CTI") and the digital video disc format,
arise from the ongoing convergence of computing, communications, and consumer
electronics.

International markets, which represent over half of the
microcomputer industry's sales, are characterized by a more fragmented
wholesale distribution channel than in the United States. Increasingly,
suppliers and resellers pursuing global growth are seeking wholesale
distributors with international sales and support capabilities. In addition,
the microcomputer products industry in international markets is less mature
and growing more rapidly than in the United States, and as such, international
growth opportunities for microcomputer wholesaler distributors are
significant.

The evolution of open sourcing during the past several years is
a phenomenon specific to the U.S. microcomputer products wholesale
distribution market. Historically, branded computer systems from large
suppliers such as Apple Computer, Compaq Computer, Hewlett-Packard, and IBM
were sold in the United States only through authorized master resellers.
Under this single sourcing model, resellers were required to purchase these
products exclusively from one master reseller. Over the past few years,
competitive pressures have led some of the major computer suppliers to
authorize second sourcing, in which resellers may purchase a supplier's product
from a source other than their primary master reseller, subject to certain
restrictive terms and conditions (such as higher prices or the elimination of
floor planning subsidies). More recently, certain computer manufacturers have
authorized open sourcing, a model under which resellers can purchase the
supplier's product from any source on equal terms and conditions. The trend
toward open sourcing has blurred the distinction between wholesale
distributors and master resellers, which are increasingly able to serve the
same reseller customers, whereas previously master resellers had a captive
reseller customer base. The Company believes that continued movement towards
second sourcing and open sourcing puts the largest and most efficient
distributors of microcomputer products, which provide the highest value
through superior service and pricing, in the best position to compete for
reseller customers.

The dynamics of the microcomputer products wholesale
distribution business favor the largest distributors which have access to
financing and are able to achieve economies of scale, breadth of geographic
coverage, and the strongest vendor relationships. Consequently, the
distributors with these characteristics are tending to take share from smaller
distributors as the industry undergoes a process of consolidation. The need
for wholesale distributors to implement high volume/low cost operations on a
worldwide basis is continuing to grow due to ongoing price competition, the
increasing demand for value-added services, the trend toward open sourcing,
and the increasing globalization of the microcomputer products industry. In
summary, the microcomputer wholesale distribution industry is growing rapidly
while simultaneously consolidating, creating an industry environment in which
market share leadership and cost efficiency are of paramount importance.

Business Strategy

The Company is the preeminent worldwide wholesale distributor
of microcomputer products and services and believes that it has developed the
capabilities and scale of operations critical for long-term success in the
microcomputer products distribution industry.

The Company's strategy of offering a full line of products and
services provides reseller customers with one-stop shopping. The Company
generally is able to purchase products in large quantities and to avail itself
of special purchase opportunities from a broad range of suppliers. This
allows the Company to take advantage of various discounts from its suppliers,
which in turn enables the Company to provide competitive pricing to its
reseller customers. The Company's international market presence provides
suppliers with access to a broad base of geographically dispersed resellers,
serviced by the Company's extensive network of distribution centers and support
offices. The Company's size has permitted it to attract highly qualified
associates and increase investment in personnel development and training.
Also, the Company benefits from being able to make large investments in
information systems, warehousing systems, and infrastructure. Further, the
Company is able to spread the costs of these investments across its worldwide
operations.

The Company is pursuing a number of strategies to further
enhance its leadership position within the microcomputer marketplace. These
include:

Expand Worldwide Market Coverage. Ingram Micro is committed to
extending its already extensive worldwide market coverage through internal
growth in all domestic and international markets in which it currently
participates. In addition, the Company intends to pursue acquisitions, joint
ventures, and strategic relationships outside the United States in order to
take advantage of growth opportunities and to leverage its strong systems,
infrastructure, and international management skills.

The Company believes that its skills in warehouse operations,
purchasing, sales, credit management, marketing, and technical support enable
it to expand effectively and quickly into new markets. The Company integrates
acquired operations by incorporating its management philosophies and exacting
operating procedures, implementing its IMpulse information system, applying
its functional expertise, and training personnel on the Ingram Micro business
model. Based upon these capabilities, the Company believes it is in the best
position to serve global resellers, which are increasingly seeking a single
source for microcomputer products and services.

By providing greater worldwide market coverage, Ingram Micro
also increases the scale of its business, which results in more cost
economies. In addition, as it increases its global reach, the Company
diversifies its business across different markets, reducing its exposure to
individual market downturns. The Company has grown its international
operations principally through acquisitions and currently has fully integrated
operations in 18 countries outside the United States: Canada, Mexico, most
countries of the European Union, Norway, Malaysia, Singapore, Japan, Argentina
and Ecuador. The Company believes that it is the market share leader in the
United States, Canada, and Mexico, and the second largest full-line
distributor in Europe, based on publicly available data and management's
knowledge of the industry. The Company's objective is to achieve the number
one market share in each of the markets in which it operates.

Ingram Micro will continue to focus on expansion of its
operations through acquisitions, joint ventures, and strategic relationships
in order to take advantage of significant growth opportunities around the
world, both in established and developing markets.

Exploit Information Systems Leadership. Ingram Micro
continually invests in its information systems which are crucial in supporting
the Company's growth and its ability to maintain high service and performance
levels. The Company has developed a scalable, full-featured information
system, IMpulse, which the Company believes is critical to its ability to
deliver worldwide, real-time information to both suppliers and reseller
customers. IMpulse is a single, standardized information system, used across
all markets worldwide, that has been customized to suit local market
requirements. The Company believes that it is the only full-line wholesale
distributor of microcomputer products in the world with such a centralized
global system.

IMpulse allows the Company's telesales representatives to
deliver real-time information on product pricing, inventory, availability, and
order status to reseller customers. Telesales representatives utilize the
Company's Sales Adjusted Gross Profit ("SAGP") pricing system to make informed
pricing decisions for each order through access to specific product and order
related costs. Considering the industry's narrow margins, the Company's
ability to make thousands of informed pricing decisions daily represents a
competitive advantage. In addition, the Company has a number of supporting
systems, including its Decision Support System ("DSS"), a multidimensional
sales and profitability analysis application. The Company continuously seeks
to make system modifications to provide greater capability and flexibility to
the Company's individual business units and markets.

The Company intends to continue to develop and expand the use
of its Customer Information Systems ("CIS"), which packages the full range of
Ingram Micro's electronic services into a single solution. CIS is designed to
improve the information flow from supplier to distributor to reseller to
end-user in order to conduct business in a cost-effective manner. It
addresses the dynamic requirements of various customer markets by offering a
core group of services through a number of different electronic media. By
using CIS, resellers can place orders directly, without the assistance of a
telesales representative. The Company plans further expansion in electronic
links with reseller customers and suppliers to provide better access to the
Company's extensive database for pricing, product availability, and technical
information.

The Company will continue to invest in the enhancement and
expansion of its systems to create additional applications and functionality.

Provide Superior Execution for Reseller Customers. Ingram
Micro continually refines its systems and processes to provide superior
execution and service to reseller customers. The Company believes that the
level of service achieved with its systems and processes is a competitive
advantage and has been a principal contributor to its success to date.

Providing superior execution involves, among other factors,
rapid response to customer calls, quick access to relevant product
information, high order fill rates, and on-time, accurate shipments. The
Company's information systems enable telesales representatives to provide
reseller customers with real-time inventory and pricing information. Ingram
Micro strives to maintain high order fill rates by keeping extensive supplies
of product in its 30 distribution centers worldwide. In the United States and
Canada, the Company has implemented control systems and processes referred to
as Bulletproof Shipping, which include stock-keeping unit ("SKU") bar coding
for all products and on-line quality assurance methods. As a result of this
program, substantially all orders in the United States received by 5:00 p.m.
are shipped on the same day, with highly accurate shipping performance.

Ingram Micro will continue to invest in the development of
systems and processes to improve execution. In the United States, the Company
is currently implementing CTI technology, which will provide automatic caller
identification, onscreen call waiting, and abandoned call management
capabilities to telesales and customer service associates. Also in the United
States, the recently installed POWER system will improve response time to
reseller customers' product returns and other customer service requests. To
support future customer requirements, the Company continues to expand and
upgrade its distribution network. For example, a new warehouse is under
construction in Millington, Tennessee. In Canada, a new returns center will
be added near Toronto, Ontario. The Company is implementing formal systems
for evaluating and tracking key performance metrics such as responsiveness to
customers, process accuracy, order processing cycle time, and order
fulfillment efficiency. Ingram Micro will use this customer satisfaction
monitoring system to identify potential areas of improvement as part of the
Company's focus on providing superior service.

Deliver World-Class Value-Added Services to Suppliers and
Resellers. Ingram Micro is committed to providing a diverse range of
value-added wholesaling and "for fee" services to its supplier and reseller
customers. Together, these services are intended to link reseller customers
and suppliers to Ingram Micro as a one-stop provider of microcomputer products
and related services, while meeting demand by suppliers and resellers to
outsource non-core business activities and thereby lower their operating
costs.

The Company's value-added wholesaling services include final
assembly and configuration of products, technical education programs, pre- and
post-sale technical support, order fulfillment, and product demo evaluation.

In addition to these value-added wholesaling services, the
Company offers a variety of "for fee" services for its reseller customers and
suppliers. These services include: contract configuration, contract
fulfillment, contract warehousing, contract telesales, contract
credit/accounts receivable management, contract inventory management, and
contract technical support for customers. The Company is focused on
identifying and developing services that directly meet reseller customer and
supplier needs.

Maintain Low Cost Leadership Through Continuous Improvements in
Systems and Processes. The microcomputer products industry is characterized
by intense competition and narrow margins, and as a result, achieving
economies of scale and controlling operating expenses are critical to
achieving and maintaining profitable growth.

Over the last five years, the Company has been successful in
reducing SG&A expenses (including expenses allocated from Ingram Industries)
as a percentage of net sales, from 5.8% in 1991 to 4.8% in 1995. The Company
has embarked on a number of programs that are designed to continue to reduce
operating expenses as a percentage of net sales.

Many U.S. developed programs continue to be adapted for
implementation in the Company's international operations. These programs
include: (i) the use of advanced inventory processes and techniques to reduce
the number of shipments from multiple warehouses to fulfill a single order;
(ii) the use of proprietary warehouse productivity programs, such as
Bulletproof Shipping and Pick Assignment; (iii) the enhancement of associates'
productivity through the use of technology such as CTI, and the expanded use
of multimedia workstations for functions such as Telesales and Customer
Service; and (iv) the electronic automation of the ordering and information
delivery process through CIS to decrease the number of non-order telesales
calls. See "--Information Systems."

The Company believes that the continued development of the
IMpulse system and related distribution processes represents an opportunity
for the Company to leverage operating costs across additional areas of the
Company's operations.

Develop Human Resources for Excellence and to Support Future
Growth. Ingram Micro's growth to date is a result of the talent, dedication,
and teamwork of its associates. Future growth and success will be
substantially dependent upon the retention and development of existing
associates, as well as the recruitment of superior talent.

The Company has invested in a number of programs and systems
designed to assist in the development and retention of its associates. The
Company recently formed its Leadership Institute to provide training on a
global basis in areas such as personal leadership and basic business
fundamentals. In addition, the Company provides specific functional training
for associates through Company programs such as the Sales, Purchasing, and
Marketing Academies. Transferring functional skills and implementing
cross-training programs across all Ingram Micro locations have proven to be
important factors in the Company's growth and international expansion. In
conjunction with these programs, the Company intends to expand its human
resource systems to provide enhanced career planning, training support,
applicant tracking, and benefits administration. Also, the Company continues
to seek top quality associates worldwide through local, professional, and
college recruiting programs.

Customers

Ingram Micro sells to more than 100,000 reseller customers in
approximately 120 countries worldwide. No single customer accounted for more
than 3% of Ingram Micro's net sales in 1993, 1994, 1995, or the first three
quarters of 1996.

Ingram Micro is firmly committed to maintaining a strong
customer focus in all of the markets it serves. To best meet this key
business objective, the Company is organized along the lines of the three
market sectors it serves: VAR, Commercial, and Consumer. This organization
permits the Company to identify and address the varying and often unique
requirements of each customer group, as opposed to applying a uniform approach
to distinctly different reseller channels. This organization model is most
fully developed in the United States and Canada, and is described as follows:

bullet VAR sector. VARs develop computer solutions for their
customers by adding tangible value to a microcomputer product. These
computer solutions range from tailored software development to systems
integration that meet specific customer needs. Systems integrators,
network integrators, application VARs, and original equipment
manufacturers ("OEMs") are classified in this sector. In 1995, this
sector contributed over 27% of Ingram Micro's U.S. net sales (inclusive
of Ingram Alliance and the Export Division).

bullet Commercial sector. The Commercial sector includes
chain/independent dealers, corporate resellers, and direct marketers
that sell a variety of computer products. This sector continues to be
Ingram Micro's largest channel and contributed over 53% of the Company's
1995 U.S. net sales.

bullet Consumer sector. The Consumer sector includes computer
superstores, office product superstores, mass merchants, consumer
electronics stores, and warehouse clubs. In 1995, over 17% of the
Company's U.S. net sales came from this sector.

In addition to focusing on the VAR, Commercial, and Consumer
market sectors, the Company also has specialized strategic business units
("SBUs") designed to provide additional focused marketing and support for
specific product categories or within specific markets. These product-focused
SBUs address the needs of resellers and suppliers for in-depth support of
particular product categories. These SBUs include the Technical Products
Division, the Macintosh and Apple Computer Division, the Enterprise Computing
Division, and the Mass Storage Division. The Company's market-focused SBUs,
which include the Consumer Markets Division, the Education Division, and the
Government Division, are designed to meet the needs of resellers and VARs who
have chosen to concentrate on a particular customer market.

Customer organization along the VAR, Commercial, and Consumer
market sectors has been implemented to varying degrees throughout the
Company's worldwide operations and may not be as well defined as in the United
States and Canada. Specific market circumstances vary from country to
country. In some markets, a few large resellers dominate; in others, the
customer base is more diversified.

Sales and Marketing

Ingram Micro's telesales department is comprised of
approximately 1,400 telesales representatives worldwide, of whom more than 800
representatives are located in the United States. These telesales
representatives assist resellers with product specifications, system
configuration, new product/service introductions, pricing, and availability.
The two main United States telesales centers are located in Santa Ana,
California and Buffalo, New York and are supported by an extensive national
field sales organization. Currently, Ingram Micro has more than 130 field
sales representatives worldwide, including more than 50 in the United States.

In addition to customer organization along the VAR, Commercial,
and Consumer market sectors, the Company utilizes a variety of product-focused
groups specializing in specific product types. Specialists in processors, mass
storage, networks, and other product categories promote sales growth and
facilitate customer contacts for their particular product group. Ingram Micro
also offers a variety of marketing programs tailored to meet specific supplier
and reseller customer needs. Services provided by the Company's in-house
marketing services group include advertising, direct mail campaigns, market
research, retail programs, sales promotions, training, and assistance with
trade shows and other events.

In Canada, Ingram Micro has been organized along customer
sector lines to render more specialized service to each customer sector.
Additionally, a Montreal telesales center was opened in 1995 specifically to
cover the French-speaking market. The Corporate Reseller Division has 13
dedicated field sales representatives to focus efforts on increasing
penetration and protecting market share. The VAR accounts have received
increasing coverage from field sales representatives, now one for each
geographic region, along with dedicated telesales operations in Vancouver and
Montreal. Retail customers served by the Consumer Markets Division benefit
from usage of the electronic ordering systems and manufacturer/customer
symposiums tailored specifically to the Consumer sector. The Company offers a
myriad of marketing programs targeted at the respective customer markets and
are similar to the United States programs that offer a graduated level of
services based on monthly purchase volume.

In Europe, Ingram Micro relies more heavily on telesales to
cover its customer base than in the United States and Canada. In addition,
the Company maintains a relatively small field sales organization to serve
larger customers in each country. Many of the country operations have
Technical Products Divisions that employ dedicated technical sales
representatives. The European operation is expanding the presence of other
product-specific divisions such as the Mass Storage Division and the Macintosh
Division. Ingram Micro employs many of the same marketing tools in Europe as
in the United States and Canada, including product guides, catalogues, and
showcases used to promote selected manufacturers' product lines.

In Mexico, the sales team is comprised of both field sales
representatives and telesales representatives serving Mexico City, Merida,
Guadalajara, Puebla, Monterrey, Leon, and Hermosillo. Complementing this
sales group are marketing associates assigned to key supplier product lines.
To best meet the individualized needs of its increasingly diverse customer
group, the Company is in the process of realigning its sales and marketing
workforce along VAR, Commercial, and Consumer sectors throughout the branch
network. This is anticipated to be a strategic advantage as the trend toward
greater customer focus on particular markets continues to evolve in Mexico.

Ingram Micro's Asia Pacific sales force is responsible for
growing the Company's sales in Singapore, Malaysia, Indonesia, The
Philippines, Thailand, India, and Hong Kong. Marketing support for this sales
effort is based on product line, but will eventually be aligned along VAR,
Commercial, and Consumer sectors. To provide greater focus on the Japanese
market, the Company opened a sales office in Tokyo during the third quarter of
1995.

The Company's Export Division is supported by a team of sales
representatives located in Miami, Florida and Santa Ana, California. The
Miami office covers the Caribbean, Puerto Rico, Ecuador, Colombia, Venezuela,
Peru, Chile, Argentina, Uruguay, and Brazil, while the Santa Ana Export
representatives sell and market Ingram Micro products and services to Japan,
the Middle East, and Australia. A satellite export sales office was opened in
Tokyo during the third quarter of 1995 to provide greater focus on the
Japanese market. The Belgian Export office, which is part of the Company's
European operations, serves Africa and areas of Europe where Ingram Micro does
not have an in-country sales and distribution operation. In addition, the
Export Division has field sales representatives based in Buenos Aires,
Argentina and Quito, Ecuador.

Products and Suppliers

Ingram Micro believes that it has the largest inventory of
products in the industry, based on a review of publicly available data with
respect to its major competitors. The Company distributes and markets more
than 36,000 products from the industry's premier microcomputer hardware
manufacturers, networking equipment suppliers, and software publishers
worldwide. Product assortments vary by market, and the relative importance
of manufacturers to Ingram Micro varies from country to country. On a
worldwide basis, the Company's sales mix is more heavily weighted toward
hardware products and networking equipment than software products. Net sales
of software products have decreased as a percentage of total net sales in
recent years due to a number of factors, including bundling of software with
microcomputers; sales growth in Ingram Alliance, which is a hardware-only
business; declines in software prices; and the emergence of alternative means
of software distribution, such as site licenses and electronic distribution.
The Company believes that this is a trend that applies to the microcomputer
products distribution industry as a whole, and the Company expects it to
continue. See "Risk Factors--Rapid Technological Change; Alternate Means of
Software Distribution" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Overview."

In the United States, Ingram Micro's suppliers include almost
all of the leading microcomputer hardware manufacturers, networking equipment
manufacturers, and software publishers such as Apple Computer, Cisco Systems,
Compaq Computer, Creative Labs, Hewlett-Packard, IBM, Intel, Microsoft, NEC,
Novell, Quantum, Seagate, 3Com, Toshiba, and U.S. Robotics. Internationally,
Ingram Micro has secured distribution agreements with most of the leading
suppliers, and products are added to the Company's mix in response to local
market demands.

New products are continually evaluated and added to the
Company's product mix upon meeting Ingram Micro's business and technical
standards. The Company evaluates on average 160 products monthly. Each
Ingram Micro entity has its own procedure for assessing new products based on
local market characteristics, but all follow general guidelines utilizing
certain business and technical criteria including market size, demand,
perceived value, industry positioning, support required, ease of set-up,
packaging quality, and error handling procedures. The Company proactively
pursues products representing the leading edge of technology.

The Company's suppliers generally warrant the products
distributed by the Company and allow the Company to return defective products,
including those that have been returned to the Company by its customers. The
Company does not independently warrant the products it distributes.

The Company's business, like that of other wholesale
distributors, is subject to the risk that the value of its inventory will be
affected adversely by suppliers' price reductions or by technological changes
affecting the usefulness or desirability of the products comprising the
inventory. It is the policy of most suppliers of microcomputer products to
protect distributors, such as the Company, who purchase directly from such
suppliers, from the loss in value of inventory due to technological change or
the supplier's price reductions. Although the Company has written
distribution agreements with many of its suppliers, these agreements usually
provide for nonexclusive distribution rights and often include territorial
restrictions that limit the countries in which Ingram Micro is permitted to
distribute the products. The agreements are also generally short term,
subject to periodic renewal, and often contain provisions permitting
termination by either party without cause upon relatively short notice. The
Company does not believe that its business is substantially dependent on the
terms of any such agreements. Under the terms of many distribution
agreements, suppliers will credit the distributor for declines in inventory
value resulting from the supplier's price reductions if the distributor
complies with certain conditions. In addition, under many such agreements,
the distributor has the right to return for credit or exchange for other
products a portion of those inventory items purchased, within a designated
period of time. A supplier who elects to terminate a distribution agreement
generally will repurchase from the distributor the supplier's products carried
in the distributor's inventory. While the industry practices discussed above
are sometimes not embodied in written agreements and do not protect the
Company in all cases from declines in inventory value, management believes that
these practices provide a significant level of protection from such declines.
No assurance can be given, however, that such practices will continue or that
they will adequately protect the Company against declines in inventory value.
The Company's risk of inventory loss could be greater outside the United
States, where agreements with suppliers are more restrictive with regard to
price protection and the Company's ability to return unsold inventory. The
Company establishes reserves for estimated losses due to obsolete inventory in
the normal course of business. Historically, the Company has not experienced
losses due to obsolete inventory materially in excess of established inventory
reserves. See "Risk Factors--Product Supply; Dependence on Key Suppliers."

Value-added Services

The Company believes that there is a trend among wholesale
distributors of microcomputer products to increase available services for
suppliers and customers, and the Company is committed to being in the
forefront of this trend. Ingram Micro offers a myriad of programs and
services to its supplier and reseller customers as an integral part of its
wholesaling efforts. The Company categorizes these services into value-added
wholesale distribution and "for fee" services. Together, these services are
intended to link reseller customers and suppliers to Ingram Micro as a
one-stop provider of microcomputer products and related services, while
meeting demand by suppliers and resellers to outsource non-core business
activities and thereby lower their operating costs.

The Company's value-added wholesaling services are an important
complement to its distribution activities and include final assembly and
configuration of products, technical education programs, pre- and post-sale
technical support, order fulfillment, and product demo evaluation.

Ingram Micro offers a selection of "for fee" services which
reseller customers and suppliers may avail themselves of, independent of
product purchase transactions. Many of the value-added wholesaling services
are also included in this set of "for fee" services, which include: contract
configuration, contract fulfillment, contract warehousing, contract telesales,
contract inventory management, and contract technical support for reseller
customers and end-users. Management remains focused on adding more
value-added "for fee" services to meet reseller customer and supplier needs.

Ingram Micro's value-added services for its reseller customers
and suppliers include:

bullet System Configuration. Final assembly and configuration of
microcomputer products for suppliers and reseller customers.

bullet Order Fulfillment. Fulfillment of end-user orders on behalf
of suppliers and reseller customers. This may include order-taking,
configuration, shipping, and collection.

bullet Electronic Services. Various electronic ordering and
information delivery media integrated under the Company's CIS program
which enable suppliers and reseller customers to interface directly with
the Company's database.

bullet Technical Support. Pre- and post-sale technical support for
reseller customers.

bullet Tailored Marketing Services. A range of offerings including
trade show and symposium development, promotional advertising, end-user
briefings, and joint sales calls performed by Ingram Micro Sales and
Marketing staff for the benefit of reseller customers and suppliers.

bullet Financial Services. Includes accounts receivable financing,
a purchase order program, and credit insurance provided or arranged by
Ingram Financial Services Company for reseller customers.

bullet Inventory Management. A variety of services conducted for
reseller customers that includes contract warehousing,
inventory tracking by serial number, and other services.

bullet Telesales. Telesales performed by the Company for
suppliers and reseller customers.

bullet Warehousing. Leasing of warehouse space to suppliers and
reseller customers.

bullet Technical Education. Various computer-based and self-
study training programs, some leading to certification
from suppliers.

bullet Warranty and Repair. Comprehensive warranty coverage on
end-user systems. This service is sub-contracted by
Ingram Micro to third-party repair businesses for reseller
customers.

All of these services are currently available in the Company's
U.S. operations. The degree of implementation of these value-added services
in Ingram Micro's international operations varies depending on particular
market circumstances. Although the Company believes that value-added services
are important as a complement to its core business, such services do not, and
are not in the future expected to, generate a material percentage of the
Company's net sales. In addition, such value-added services do not, and are
not in the future expected to, require a material portion of the Company's
resources.

Ingram Alliance

Ingram Micro entered the master reseller (also known as
"aggregation") business in late 1994 with the launch of Ingram Alliance.
Ingram Alliance is designed to offer resellers access to the industry's
leading hardware manufacturers at competitive prices by utilizing a lower cost
business model that depends upon a higher average order size, lower product
returns percentage, and supplier-paid financing. See "Risk Factors--Narrow
Margins" and "--Risks Associated with Ingram Alliance."

The Company believes that it has been able to leverage its
leading traditional wholesale distribution business in the United States to
establish its master reseller business. Over 95% of Ingram Alliance's sales
are funded by floor plan financing companies. The Company typically receives
payment from these financing institutions within three business days from the
date of the sale, allowing Ingram Alliance to operate at much lower relative
working capital levels than the Company's wholesale distribution business.
Such floor plan financing is typically subsidized for Ingram Alliance's
reseller customers by its suppliers.

Since its inception, Ingram Alliance has experienced rapid
growth. In 1995, Ingram Alliance achieved net sales in excess of $700
million, and it currently has 12 suppliers and more than 800 reseller
customers. Ingram Alliance's success has, to a large degree, been
attributable to its ability to leverage Ingram Micro's distribution
infrastructure and capitalize on strong supplier relationships.

To support additional growth, Ingram Alliance remains committed
to further developing relations with key suppliers. These efforts are largely
driven by joint supplier/distributor sales calls, proposal and bid development
programs, and tailored marketing campaigns carried out by Ingram Alliance
supplier program teams.

Ingram Alliance pursues an integrated sales and marketing
strategy to gain new customers and grow its business. A fully-dedicated
telesales team is in place, which in conjunction with the Company's field sales
representatives aims to cultivate important relationships with reseller
customers. Further, Ingram Alliance provides a wide range of high quality
"for fee" value-added services for its customers including technical training
and certification, warranty and repair, fulfillment, technical support,
contract warehousing, and configuration services. Special promotional
activities and creative financing packages are additional incentives for
resellers to do business with Ingram Alliance.

Information Systems

The Company's information system, IMpulse, is central to its
ability to provide superior execution to its customers, and as such, the
Company believes that it represents an important competitive advantage. See
"Risk Factors--Dependence on Information Systems."

Ingram Micro's systems are primarily mainframe-based in order
to provide the high level of scalability and performance required to manage
such a large and complex business operation. IMpulse is a single,
standardized, real-time information system and operating environment, used
across all of the Company's worldwide operations. It has been customized as
necessary for use in every country in which the Company operates and has the
capability to handle multiple languages and currencies. On a daily basis, the
Company's systems typically handle 12 million on-line transactions, 26,000
orders, and 37,000 shipments. The Company has designed IMpulse as a scalable
system that has the capability to support increased transaction volume. The
overall on-line response time for the Company's network of over 8,000 user
stations (terminals, printers, personal computers, and radio frequency hand
held terminals) is less than one-half second.

Worldwide, Ingram Micro's centralized processing system
supports more than 40 operational functions including receiving, order
processing, shipping, inventory management, and accounting. At the core of
the IMpulse system is on-line, real-time distribution software to which
considerable enhancements and modifications have been made to support the
Company's growth and its low cost business model. The Company makes extensive
use of advanced telecommunications technologies with customer
service-enhancing features, such as Automatic Call Distribution to route
customer calls to the telesales representatives. The Telesales Department
relies on its Sales Wizard system for on-line, real-time tracking of all
customer calls and for status reports on sales statistics such as number of
customer calls, customer call intentions, and total sales generated. IMpulse
allows the Company's telesales representatives to deliver real-time
information on product pricing, inventory, availability, and order status to
reseller customers. The SAGP pricing system enables telesales representatives
to make informed pricing decisions through access to specific product and
order related costs for each order. Considering the industry's narrow
margins, these pricing decisions are particularly important, and the Company
believes that its ability to make thousands of informed pricing decisions
daily represents a competitive advantage.

In the United States, the Company is in the process of
implementing CTI technology, which will provide the telesales and customer
service representatives with Automatic Number Identification capability and
advanced telecommunications features such as on-screen call waiting and
automatic call return, thereby reducing the time required to process customer
orders and customer service requests.

To complement Ingram Micro's telesales, customer service, and
technical support capabilities, IMpulse supports CIS, which integrates all of
the Company's electronic services into a single solution. CIS offers a number
of different electronic media through which customers can conduct business
with the Company, such as the Customer Automated Purchasing System ("CAPS"),
Electronic Data Interchange ("EDI"), the Bulletin Board Service, and the
Ingram Micro Web site. The Company's latest additions to CIS are its
Internet-based Electronic Catalog and Manufacturer Information Library. The
Electronic Catalog provides reseller customers with real-time access to
product pricing and availability, with the capability to search by product
category, name, or manufacturer. The Manufacturer Information Library is a
comprehensive multi-manufacturer database of timely and accurate product,
sales, marketing, and technical information, which is updated nightly for new
information. Ingram Micro believes it is the first microcomputer wholesale
distributor to offer electronic access to real-time product pricing,
availability, and information on the World Wide Web. All of Ingram Micro's
CIS offerings are constantly being reviewed for enhancement. For instance, a
faster local network intranet solution to access the Manufacturer Information
Library is currently being tested, and ordering and configuration capabilities
through the Internet are under consideration.

The Company's warehouse operations use extensive bar-coding
technology and radio frequency technology for receiving and shipping, and
real-time links to UPS and FedEx for freight processing and shipment tracking.
The Customer Service Department uses the POWER System for on-line
documentation and faster processing of customer product returns. To ensure
that adequate inventory levels are maintained, the Company's buyers depend on
the Purchasing system to track inventory on a continual basis. Many other
features of IMpulse help to expedite the order processing cycle and reduce
operating costs for the Company as well as its reseller customers and
suppliers.

To support and augment the Company's mainframe-based systems,
the Company utilizes a number of client-server applications. Examples are the
Marketing On-line Management System, a software application that provides
management, accountability, and financial controls for over 6,000 marketing
projects; APImage, an application that facilitates imaging of invoices and
related documents in the Accounts Payable department, substantially reducing
paper processing and improving document work flow; and DSS, a data warehousing
application that enables multidimensional sales and profitability analysis.
In the United States, over 330 associates across all functions have access to
75 million lines of data through DSS. DSS is used for, among other tasks,
pricing decisions and analysis of profitability by customer market and product
category. DSS is currently being implemented in Canada and the U.K., with
plans to add other international locations thereafter. The Company has also
begun to deploy other PC-based tools for both the United States and
international locations, including workstations in Telesales and Purchasing
to assist with product acquisition and pricing decisions.

The Company employs various security measures and backup
systems designed to protect against unauthorized use or failure of its
information systems. Access to the Company's information systems is
controlled through the use of passwords and additional security measures are
taken with respect to especially sensitive information. The Company has a
five year contract with Sungard Recovery Services for disaster recovery and
twice per year performs a complete systems test, including applications and
database integrity. In addition, the Company has backup power sources for
emergency power and also has the capability to automatically reroute incoming
calls, such as from its Santa Ana (West Coast sales) facility to its Buffalo
(East Coast sales) facility. The Company has not in the past experienced
significant failures or downtime of IMpulse or any of its other information
systems, but any such failure or significant downtime could prevent the
Company from taking customer orders, printing product pick-lists, and/or
shipping product and could prevent customers from accessing price and product
availability information from the Company. See "Risk Factors--Dependence on
Information Systems."

Over 350 experienced information technology professionals
support the daily maintenance and continuous development of the Company's
systems.

Operations

Order Entry

The order entry process begins with the entry of a customer
account number by a telesales representative. With this input, IMpulse
automatically displays the customer's name, address, credit terms, financing
arrangements, and preferred shipping method. The telesales representative
assists the customer on-line with product lookups, real-time inventory
availability, price inquiries, and status of previous orders. As an order is
entered, key information is filled in by the system, such as product
description, price, availability, and adjusted gross margin. The closest
warehouse to the customer with available product is automatically determined,
and the corresponding product quantity is reserved. The system totals the
order and automatically checks the customer's credit status. The order is
released for processing, unless credit limits are exceeded or the order falls
outside acceptable profit levels. In the latter case, the order is put on
hold and immediately elevated for review by credit or sales management.

Reseller customers can also conduct business electronically
through the Company's CIS offerings such as CAPS, EDI, and IM On Line. By
using CIS, resellers can access the Company's database and place orders
directly without the assistance of a telesales representative. See
"--Information Systems."

Shipping

In most of Ingram Micro's operations, the Company's objective
is to ship substantially all orders received by 5:00 p.m. on the same day. In
Canada, France, Belgium, the U.K. and the Netherlands, the cut-off time for
same day shipment is 6:00 p.m. When an order is released, it is immediately
available for processing in the designated warehouse. IMpulse ensures cost
efficient order processing through a system called Pick Assignment which
determines pick lists based on the warehouse location of items ordered. In
the distribution centers, Ingram Micro relies on a sophisticated bar code
reading system and a flexible automated package handling system for picking,
packing, and shipping products accurately and cost effectively. In addition,
IMpulse provides on-line shipping, manifesting, freight costing, invoicing and
package tracking information.

The Company's warehouse inventories are maintained
automatically by IMpulse which updates stock levels and feeds this information
to the purchasing system for restocking as soon as an order is received.
On-line quality assurance done during receipt of inbound product and prior to
the shipment of orders ensures the integrity of warehouse stock inventory and
the accuracy of shipments to customers. See "Risk Factors--Dependence on
Independent Shipping Companies."

Purchasing

To monitor product inventory, the purchasing staff, numbering
over 260 worldwide, uses the IMpulse system inventory reports, which provide
product inventory levels, six months' sales history, month-to-date, and
year-to-date sales statistics by SKU and by warehouse location. Buyers
carefully analyze current and future inventory positions and profitability
potential. Several factors, such as inventory carrying cost, payment terms,
purchase rebates, volume discounts, and marketing funds are considered in
negotiating deals with suppliers. Buyers enter purchase orders into the
IMpulse system, indicating the SKU number, the quantity to be ordered, and the
warehouse locations to which the order should be shipped. Cost information
and supplier terms and conditions are automatically entered on the purchase
order; and can be modified if different terms have been negotiated. The
IMpulse system automatically generates purchase orders for each inventory
warehouse location and transmits these orders directly to the suppliers via
EDI or facsimile. See "Risk Factors--Risk of Declines in Inventory Value."

A number of purchasing programs have been developed to exploit
opportunities unique to certain of the Company's operations. In Europe, the
country managers work together as a group to obtain the best available
supplier terms. The European "Inventory Sharing" program, when fully
implemented, will allow sales personnel in one market to order products that
are out of stock or otherwise unavailable in the local country from another
European Ingram Micro business unit. Benefits of this program include lower
inventory costs, better inventory turnover, and improved margins. In Canada,
the U.S. Direct Fulfillment Program allows the fulfillment of individual
Canadian orders from the United States as necessary. See "--Geographic
Tactics--Canada" and "--Europe."

Geographic Tactics

Ingram Micro operates worldwide with a set of common, global
strategies. Recognizing the varying requirements of the Company's different
geographic markets, the Company has developed specific tactics to address
local market conditions. However, the Company's non-U.S. operations are
subject to certain additional risks. See "Risk Factors--Exposure to Foreign
Markets; Currency Risk."

United States

In the United States, the Company has undertaken a number of
key initiatives to enhance its position in the wholesale microcomputer
marketplace:

bullet In an effort to capture an increased share of the VAR sector,
the Company will seek to convey to the market its superior ability to
supply basic wholesaling services to VARs, as well as its breadth of
product offerings to support vertical VAR customer sets. The Premier
VAR Plus program has been developed as the prime marketing vehicle for
all VAR programs and services. This program provides VARs with
graduated levels of business services based on monthly purchase volume.
Such services include a dedicated technical sales force, end-user leads,
technology seminars, and marketing symposiums.

bullet As a cornerstone of the Company's VAR efforts, the Enterprise
Computing Division continues to expand its penetration in markets for
high-end technical products such as UNIX, Windows NT, document imaging,
and networking equipment. This will be accomplished by developing
programs which institute a Company-wide commitment to the UNIX VAR
market, providing a sophisticated sales force experienced in complex
networking technology solutions, partnering with key suppliers of
high-end technical products, and leveraging the Company's core
competencies in electronic ordering and configuration.

bullet In order to increase its share of the Consumer sector, the
Company maintains a team of sales account managers and business
development specialists dedicated to the Consumer account base. The aim
of the Consumer Markets Division is to provide a variety of value-added
services including inventory mix management, store personnel training,
marketing programs, and administration of supplier programs.

Canada

While the Company's Canadian operation closely mirrors the U.S.
operation, initiatives unique to the Canadian operating environment have been
developed and are described below:

bullet The U.S. Direct Fulfillment Program has been instituted
in Canada to take advantage of its proximity to the United
States. Through this program, Canadian customers are
currently able to receive products directly from the
Chicago distribution center. The expanded use of the U.S.
Direct Fulfillment Program will allow for greater breadth
of SKUs and manufacturers represented in the Canadian
marketplace.

bullet As part of its overall strategy to grow share in the
retail market, the Canadian operation periodically employs
Dealer Development Representatives who provide product
education, display set-up assistance, and other on-site
assistance as a special service to retail customers.

Europe

One of the Company's key objectives is to become the market
share leader in Europe. The Company entered Europe in 1989 with an
acquisition in Belgium. See "Risk Factors--Acquisitions." Through a series of
small acquisitions, it has rapidly grown to a pan-European presence with
aggregate net sales of $1.8 billion in 1995, covering 11 countries: Austria,
Belgium, Denmark, France, Germany, Italy, the Netherlands, Norway, Sweden,
Spain, and the United Kingdom. The Company believes that it has the second
largest market share position in Europe and that it has a strong base for
future growth and increased profitability. Particular areas of focus in
Europe include:

bullet The Company will seek to enhance gross margin in the
European operation through increased emphasis on high-end
and higher margin technical product sales and the
implementation of the SAGP system.

bullet A program unique to Ingram Micro is Inventory Sharing.
This program allows sales personnel in one European market
to order products that are out of stock or otherwise
unavailable in the local country from another Ingram Micro
business unit. The billing is done in the local currency
with all value-added taxes, tax reporting, and similar
functions managed automatically by the IMpulse system.
Inventory sharing allows the Company to expand its sales
base without an expansion of inventory investment or
individual country expansion of stock product assortment.
Benefits of the program include lower inventory costs,
better inventory turnover, and improved gross margin. An
important initiative is to add more country operations to
the inventory sharing program and to enhance the program
through coordinated purchasing among several countries.

bullet Continued cost reduction, as a percentage of net sales,
and cost control are important for boosting profitability
in the European operation. The Company aims to further
reduce expense ratios of the individual business units
through increased sales volume, the continued development
and refinement of operations and management processes, and
the increasing use of selected U.S. and Canadian business
programs.

Mexico/Asia Pacific

Mexico. Ingram Dicom, a 70%-owned subsidiary of Ingram Micro,
is the leading wholesale distributor of microcomputer products in Mexico.
Ingram Dicom offers over 6,000 products to more than 5,900 reseller customers
in Mexico. In 1995, over 85% of Ingram Dicom's net sales came from 1,100
resellers who primarily service the country's major banks and businesses.
Additionally, Ingram Dicom also sells to a small but growing VAR client base
and to mass merchant retailers (e.g., Sam's Club, Sanborn's, Price Club).

As the local high technology market becomes more sophisticated,
Ingram Dicom intends to add higher volume, more specialized technical (e.g.,
UNIX, networking) products to its inventory. Other important initiatives
include adding a wider selection of technical education courses, extending
CAPS electronic ordering throughout the entire Ingram Dicom operation, and
offering a broader range of financing options for reseller customers. The
Company will also continue to negotiate supplier terms and conditions aimed at
limiting the Company's exposure to foreign currency fluctuations.

Asia Pacific. Ingram Micro's Asia Pacific operations,
supported by its Singapore office and warehouse, focus on serving the
Singapore, Malaysia, Indonesia, Philippines, Thailand, India, and Hong Kong
markets. Over 800 customers are currently served from the Singapore base,
with approximately 64% of these customers concentrated in the local Singapore
market. The Company operates a sales office in Tokyo serving the Japanese
market. In addition, the Company has recently acquired a distributor in
Malaysia.

In building a solid regional Asia Pacific business, the Company
intends to leverage its systems capability, financial strength, management
experience, and excellent relationships with key suppliers. The initial aim
of the Asia Pacific strategy is to recruit new suppliers and reseller
customers while further adding experienced managers in key functional areas of
the business. The Company is currently exploring the possibility of
establishing additional operations through joint ventures or acquisitions.
See "Risk Factors--Acquisitions."

Export Markets

Ingram Micro's Export Division continues to expand in
international markets where the Company does not have a stand-alone,
in-country presence. The Miami, Santa Ana, and Belgium offices serve more
than 2,500 resellers in over 100 countries. In addition, the Export Division
has field sales representatives based in Buenos Aires, Argentina and Quito,
Ecuador.

Key strategic objectives for the Export Division include
increasing sales and market share in each of the regions it serves primarily
by providing a broad product assortment, further cultivating key supplier
relationships, and expanding reseller service offerings. The Company will
continue to position itself as a global distributor of microcomputer products
providing resellers in all markets access to the Company's vast selection of
products via its extensive network of international and U.S. warehouses.

Competition

The Company operates in a highly competitive environment, both
in the United States and internationally. The microcomputer products
distribution industry is characterized by intense competition, based primarily
on price, product availability, speed and accuracy of delivery, effectiveness
of sales and marketing programs, credit availability, ability to tailor
specific solutions to customer needs, quality and breadth of product lines and
service, and availability of technical and product information. The Company
believes it competes favorably with respect to each of these factors. As
price points have declined, the Company believes that value-added services
capabilities (such as configuration, innovative financing programs, order
fulfillment, contract telesales, and contract warehousing) will become more
important competitive factors.

The Company entered the master reseller business through Ingram
Alliance in late 1994. See "--Ingram Alliance." The Company competes with
other master resellers, which sell to groups of affiliated franchisees and
third-party dealers. Many of the Company's competitors in the master reseller
business are more experienced and have more established contacts with
affiliated resellers, third-party dealers, or suppliers, which may provide
them with a competitive advantage over the Company.

Ingram Micro's primary competitors include large U.S.-based
international distributors such as Merisel, Tech Data, and Arrow Electronics
(a worldwide industrial electronics distributor), as well as national
distributors such as AmeriQuest Technologies (majority owned by Computer
2000), Handleman, Navarre, and Avnet. Ingram Alliance's principal competitors
include such master resellers as Intelligent Electronics, MicroAge, Datago,
InaCom, and recent entrant Tech Data Elect, a division of Tech Data. Ingram
Micro competes internationally with a variety of national and regional
distributors. European competitors include international distributors such as
Computer 2000 (owned by German conglomerate Viag AG), CHS Electronics, and
Softmart/Tech Data, and several local and regional distributors, including
Actebis, Scribona, and Microtech. In Canada, Ingram Micro competes with
Merisel, Globelle, Beamscope, and Tech Data. Ingram Dicom is the leading
distributor in Mexico, competing with such companies as MPS, CHS Electronics,
Intertec, and Dataflux. In the Asia Pacific market, Ingram Micro faces both
regional and local competitors, of whom the largest is Tech Pacific, a
division of First Pacific Holdings, which operates in more than five Asia
Pacific markets.

Ingram Micro also competes with hardware manufacturers and
software publishers that sell directly to reseller customers and end-users.

Facilities

Ingram Micro's worldwide executive headquarters, as well as its
West Coast sales and support offices, are located in Santa Ana, California.
The Company also maintains an East Coast operations center in Buffalo, New
York. A new United States distribution center in Millington, Tennessee is
expected to be completed in April 1997, adding 600,000 square feet to the
Company's warehouse capacity. This distribution center will be strategically
located near several major transportation hubs and is expected to benefit from
lower regional labor costs. The U.S. network of distribution centers permits
Ingram Micro to keep an extensive supply of product close to its reseller
customers, which enables the Company to provide substantially all of its U.S.
reseller customers with one- or two-day ground delivery.

The principal properties of the Company consist of the following:

<TABLE>
<CAPTION>
Approximate
Location Principal Use Floor Area in Sq. Ft
- ------------------------- ---------------------------------------- ---------------------
<S> <C> <C>
United States
Santa Ana, CA Executive offices 398,245
Buffalo, NY Offices 188,341
Nashville, TN Data Processing Center 11,782
Millington, TN Distribution Center (under construction) 600,000
Chicago/Carol Stream, IL Distribution Centers 456,139
Fullerton, CA Distribution Center 401,394
Harrisburg, PA Distribution Center 230,000
Memphis, TN Distribution Center 160,000
Fremont, CA Distribution Center 141,540
Carrollton, TX Distribution Center 121,654
Atlanta, GA Distribution Center 83,049
Miami, FL Distribution Center, Offices 52,080
Santa Ana, CA Returns Center, Offices 219,500
Fremont, CA Freight Consolidation Center 58,435

Europe
Brussels, Belgium Offices 33,600
Horsholm, Denmark Offices 39,682
Ballerup, Denmark Distribution Center 58,104
Lesquin, France Offices 37,088
Paris, France Offices 4,250
Roncq, France Distribution Center 96,000
Ottobrunn, Germany Offices 32,221
Kirchheim, Germany Distribution Center 75,904
Milan, Italy Offices 17,114
Milan, Italy Distribution Center 44,669
Rome, Italy Offices, Distribution Center 10,225
Utrecht, Netherlands Offices 30,999
Vianen, Netherlands Distribution Center 61,149
Oslo, Norway Offices, Distribution Center 53,595
Madrid, Spain Offices, Distribution Center 17,689
Barcelona, Spain Offices, Distribution Center 74,508
Kista, Sweden Offices 26,371
Sollentuna, Sweden Distribution Center 43,126
Milton Keynes, U.K Offices, Distribution Center 211,992

Canada
Toronto, Ontario Offices, Distribution Center 274,376
Vancouver, B.C Offices, Distribution Center 87,148
Montreal, Quebec Offices 12,000

Mexico
Mexico City, D.F Offices, Distribution Center 65,695
Puebla, Puebla Offices, Distribution Center 11,679
Leon, Guanajuato Offices, Distribution Center 11,206
Guadalajara, Jalisco Offices, Distribution Center 9,967
Merida, Yucatan Offices, Distribution Center 6,437
Monterrey, Nuevo Leon Offices, Distribution Center 6,039
Hermosillo, Sonora Offices, Distribution Center 5,156

Asia
Singapore Offices, Distribution Center 20,989
Kuala Lumpur, Malaysia Offices, Distribution Center 6,000
Tokyo, Japan Offices 720
</TABLE>

All of the Company's facilities, with the exception of the
Brussels office and the distribution centers in Chicago and Roncq, France are
leased. The Company does not anticipate any material difficulty in renewing
any of its leases as they expire or securing replacement facilities, in each
case on commercially reasonable terms. The Company has recently purchased
three undeveloped properties in Santa Ana, California totaling approximately
23.27 acres.

Trademarks and Service Marks

The Company holds various trademarks and service marks,
including, among others, "Ingram Micro," "IMpulse," the Ingram Micro logo,
"Partnership America," and "Leading the Way in Worldwide Distribution."
Certain of these marks are registered, or are in the process of being
registered, in the United States and various foreign countries. Even though
the Company's marks may not be registered in every country where the Company
conducts business, in many cases the Company has acquired rights in those
marks because of its continued use of them. Management believes that the
value of the Company's marks is increasing with the development of its
business but that the business of the Company as a whole is not materially
dependent on such marks.

Employees

As of September 28, 1996, the Company had approximately 8,434
associates located as follows: United States--5,322, Europe--1,840,
Canada--797, Mexico--405, and Asia-Pacific--70. Ingram Micro believes that
its success depends on the skill and dedication of its associates. The Company
strives to attract, develop, and retain outstanding personnel. None of the
Company's associates in the United States, Europe, Canada, Malaysia, and
Singapore are represented by unions. In Mexico, Ingram Dicom has collective
bargaining agreements with one of the national unions. The Company considers
its employee relations to be good.

Legal ProceedingsThere are no material pending legal proceedings to which the
Company is a party or to which any of its property is subject.

MANAGEMENT

Executive Officers and Directors

The following table sets forth certain information with respect
to each person who is an executive officer or director of the Company:

<TABLE>
<CAPTION>
Name Age Present and Prior Positions Held(1) Years Positions Held
- ---------------- --- ------------------------------------------- ---------------------
<S> <C> <C> <C>
Jerre L. Stead(2) 53 Chief Executive Officer and Chairman of the Aug. 1996 - Present
Board
Chief Executive Officer and Chairman of the Jan. 1995 - Aug. 1995
Board, Legent Corporation, a software
development company
Executive Vice President, Chairman and Chie May 1993 - Dec. 1994
Executive Officer, AT&T Corp. Global
Information Solutions (NCR Corp.), a
computer manufacturer
President and Chief Executive Officer, AT&T Sept. 1991 - Apr. 1993
Corp. Global Business Communication
Systems, a communications company
Chairman, President and Chief Executive Sept. 1988 - Aug. 1991
Officer, Square D Co., an electronics
manufacturer

Jeffrey R. Rodek 43 Worldwide President; Chief Operating Officer Dec. 1994 - Present
Senior Vice President, Americas and July 1991 - Sept. 1994
Caribbean, Federal Express, an overnight
courier firm
Senior Vice President, Central Support Dec. 1989 - July 1991
Services, Federal Express

David R. Dukes 52 Vice Chairman Apr. 1996 - Present
Chief Executive Officer, Ingram Alliance Jan. 1994 - Present
Co-Chairman Jan. 1992 - Apr. 1996
Chief Operating Officer Sept. 1989 - Dec. 1993
President Sept. 1989 - Dec. 1991

Sanat K. Dutta 47 Executive Vice President; President, Ingram Oct. 1996 - Present
Micro U.S.
Executive Vice President Aug. 1994 - Oct. 1996
Senior Vice President, Operations May 1988 - Aug. 1994

Michael J. Grainger 44 Executive Vice President; Worldwide Chief Oct. 1996 - Present
Financial Officer
Chief Financial Officer May 1996 - Oct. 1996
Vice President and Controller, Ingram July 1990 - Present
Industries

John Wm. Winkelhaus, II 46 Executive Vice President; President, Ingram Jan. 1996 - Oct. 1996
Micro Europe
Senior Vice President, Ingram Micro Europe Feb. 1992 - Dec. 1995
Senior Vice President, Sales Apr. 1989 - Jan. 1992

James E. Anderson, Jr. 49 Senior Vice President, Secretary, and General Jan. 1996 - Present
Counsel
Vice President, Secretary, and General Sept. 1991 - Present
Counsel, Ingram Industries
Partner, Dearborn & Ewing, a Nashville law Jan. 1986 - Sept. 1991
firm

Douglas R. Antone 43 Senior Vice President; President, Ingram July 1994 - Present
Alliance
Senior Vice President, Worldwide Sales and Nov. 1993 - May 1994
Marketing, Borland International
Senior Vice President, Worldwide Sales, July 1990 - Nov. 1993
Borland International

Larry Elchesen 46 Senior Vice President June 1994 - Present
President, Ingram Micro Canada May 1989 - Present

Philip Ellett 42 Senior Vice President; Chief Operating Officer Oct. 1996 - Present
Ingram Micro Europe
Senior Vice President; General Manager, U.S. Jan. 1996 - Oct. 1996
Consumer Markets Division
President, Gates/Arrow, an electronics Aug. 1994 - Dec. 1995
distributor
President and Chief Executive Officer, Oct. 1991 - Aug. 1994
Gates/F.A. Distributing, Inc.
President and Chief Operating Officer, Oct. 1990 - Oct. 1991
Gates/F.A. Distributing, Inc.

David M. Finley 56 Senior Vice President, Human Resources July 1996 - Present
Senior Vice President, Human Resources, May 1995 - July 1996
Budget Rent a Car, a car rental company
Vice President, Human Resources, Jan. 1977 - May 1995
The Southland Corporation, a convenience
retail company

Robert Furtado 40 Senior Vice President, Operations Aug. 1994 - Present
Vice President, Operations July 1989 - Aug. 1994

Robert Grambo 32 Senior Vice President, Telesales Oct. 1995 - Present
Vice President, Sales Apr. 1994 - Sept. 1995
Vice President, Product Marketing Apr. 1993 - Mar. 1994
President, Bloc Publishing Corp., a software Apr. 1992 - Apr. 1993
publishing firm
Senior Director, Purchasing, Ingram Micro Jan. 1990 - Apr. 1992

Ronald K. Hardaway 52 Senior Vice President; Chief Financial Officer Jan. 1992 - Present
Ingram Micro U.S.
Senior Vice President and Controller June 1990 - Jan. 1992

Gregory J. Hawkins 42 Senior Vice President, Sales Oct. 1995 - Present
Vice President, Sales Jan. 1993 - Oct. 1995
Vice President, Major Accounts Aug. 1992 - Jan. 1993
Director, Major Accounts, Consumer Markets June 1992 - Aug. 1992
Director, Marketing Jan. 1991 - June 1992

James M. Kelly 60 Senior Vice President, Management Feb. 1991 - Present
Information Systems

David W. Rutledge 43 Senior Vice President, Asia Pacific, Latin Jan. 1996 - Present
America and Export Markets
Senior Vice President, Administration Sept. 1991 - Dec. 1995
Vice President, Secretary, and General Jan. 1986 - Sept. 1991
Counsel, Ingram Industries

Martha R. Ingram(3)(4) 61 Director May 1996 - Present
Chairman of the Board of Directors May 1996 - Aug. 1996
Chairman of the Board of Directors, Ingram June 1995 - Present
Industries
Director, Ingram Industries 1981 - Present
Chief Executive Officer, Ingram Industries Apr. 1996 - Present
Director of Public Affairs, Ingram Industries 1979 - June 1995

John R. Ingram(3) 35 Director Dec. 1994 - Present
Acting Chief Executive Officer May 1996 - Aug. 1996
Co-President, Ingram Industries Jan. 1996 - Present
President, Ingram Book Company Jan. 1995 - Oct. 1996
Vice President, Purchasing, Ingram Micro Jan. 1994 - Dec. 1994
Europe
Vice President, Management Services, Ingram July 1993 - Dec. 1993
Micro Europe
Director of Management Services, Ingram Jan. 1993 - June 1993
Micro Europe
Director of Purchasing Apr. 1991 - Dec. 1992

David B. Ingram(3) 33 Director May 1996 - Present
Chairman and President, Ingram Entertainmen Mar. 1996 - Present
President and Chief Operating Officer, Ingram Aug. 1994 - Mar. 1996
Entertainment
Vice President, Major Accounts, Ingram Nov. 1993 - Aug. 1994
Entertainment
Assistant Vice President, Sales, Ingram June 1992 - Nov. 1993
Entertainment
Director, Sales, Ingram Entertainment July 1991 - June 1992

Don H. Davis, Jr. (5) 56 Director Oct. 1996 - Present
President and Chief Operating Officer, July 1995 - Oct. 1996
Rockwell International Corporation, a
diversified high-technology company
Executive Vice President and Chief Operating Jan. 1994 - July 1995
Officer, Rockwell International Corporation
Senior Vice President; President, Automation June 1993 - Jan. 1994
Group, Rockwell International Corporation
President, Allen-Bradley Company, a July 1989 - Jan. 1994
wholly-owned subsidiary of Rockwell
International Corporation

Philip M. Pfeffer 51 Director 1986 - Present
President and Chief Operating Officer, Random May 1996 - Present
House Inc., a publishing company
Executive Vice President, Ingram Industries Dec. 1981 - Mar. 1996
Chairman and Chief Executive Officer, Ingram Dec. 1981 - Dec. 1995
Distribution Group Inc.
Chairman, Ingram Micro Holdings Inc. Apr. 1989 - Oct. 1995

J. Phillip Samper (6) 62 Director Oct. 1996 - Present
Chairman and Chief Executive Officer, Cray May 1995 - Mar. 1996
Research, Inc., a computer products
company
President and Chief Executive Officer, Sun Jan. 1994 - Mar. 1995
Microsystems Computer Company, a
division of Sun Microsystems, Inc., a
computer products company
Managing Partner, FRN Group, a private Feb. 1991 - Jan. 1994
investment and consulting firm
President and Chief Executive Officer, May 1990 - Feb. 1991
Kindercare Learning Centers, Inc., a child
care and educational company

Joe B. Wyatt (7) 61 Director Oct. 1996 - Present
Chancellor, Vanderbilt University July 1982 - Present

<FN>
- ------------
(1) The first position and any other positions not given a separate corporate
identification are with the Company.

(2) Jerre L. Stead is a director of Armstrong World Industries, Inc.,
Autodesk, Inc., and TJ International, Inc.

(3) Martha R. Ingram is the mother of David B. Ingram and John R. Ingram.
There are no other family relationships among the above individuals.

(4) Martha R. Ingram is a director of Baxter International Inc., First
American Corporation, and Weyerhaeuser Co.

(5) Don H. Davis, Jr. is a director of Sybron International Corporation.

(6) J. Phillip Samper is a director of Armstrong World Industries, Inc., The
Interpublic Group of Companies, Inc., Sylvan Learning Systems, Inc.,
Network Storage Corp., and Scitex Corporation, Ltd.

(7) Joe B. Wyatt is a director of Sonat, Inc. and Reynolds Metals Company.
</TABLE>

Board of Directors

The Board of Directors currently consists of Mr. Stead, Mrs.
Ingram, and Messrs. John R. Ingram, David B. Ingram, Davis, Pfeffer,
Samper, and Wyatt. So long as the Ingram Family Stockholders and their
permitted transferees (as defined in the Board Representation Agreement) own
in excess of 25,000,000 shares of the outstanding Common Equity, the Board
Representation Agreement will provide for the designation of (i) not more than
three directors designated by the Ingram Family Stockholders, (ii) one
director designated by the Chief Executive Officer of the Company, and (iii)
four or five additional directors ("Independent Directors") who are not
members of the Ingram family or executive officers or employees of the
Company. Directors designated by the Ingram Family Stockholders may include
Martha R. Ingram, any of her legal descendants, or any of their respective
spouses. See "The Split-Off and the Reorganization--The Reorganization." Mr.
Pfeffer is an Independent Director, and Messrs. Davis, Samper, and Wyatt will
be Independent Directors. One additional Independent Director may be
designated after the closing of the IPO.

Committees. The Board Representation Agreement provides for
the formation of certain committees of the Board of Directors. The Bylaws of
the Company specifically provide for four committees: an Executive Committee,
a Nominating Committee, an Audit Committee, and a Compensation Committee.

The Executive Committee will consist of three directors, one of
whom will be a director designated by the Ingram Family Stockholders, one of
whom will be the director designated by the Chief Executive Officer of the
Company, and one of whom will be an Independent Director. The Executive
Committee may approve management decisions requiring the immediate attention
of the Board of Directors during the period of time between each regularly
scheduled meeting of the Board. The Executive Committee will not have
authority to approve any of the following items, all of which require the
approval of the Board: (i) any action that would require the approval of the
holders of a majority of the stock held by certain of the Ingram Family
Stockholders or that would require approval of the holders of a majority of
the Common Equity under applicable law or under the Certificate of
Incorporation or Bylaws of the Company; (ii) any acquisition with a total
aggregate consideration in excess of 2% of the Company's stockholders' equity;
(iii) any action outside the ordinary course of business of the Company; or
(iv) any other action involving a material shift in policy or business
strategy for the Board.

The Nominating Committee will consist of three directors, two
of whom will be directors designated by the Ingram Family Stockholders, and
one of whom will be the director designated by the Chief Executive Officer of
the Company. The function of the Nominating Committee will be to recommend to
the full Board of Directors nominees for election as directors of the Company
and to elect members of committees of the Board of Directors. The Nominating
Committee will name the respective members of an Audit Committee and a
Compensation Committee.

The Audit Committee will consist of at least three directors,
and a majority of the members of the Audit Committee will be Independent
Directors. The functions of the Audit Committee will be to recommend annually
to the Board of Directors the appointment of the independent auditors of the
Company, discuss and review in advance the scope and the fees of the annual
audit and review the results thereof with the independent auditors, review and
approve non-audit services of the independent auditors, review compliance with
existing major accounting and financial reporting policies of the Company,
review the adequacy of the financial organization of the Company, and review
management's procedures and policies relating to the adequacy of the Company's
internal accounting controls and compliance with applicable laws relating to
accounting practices.

The Compensation Committee will consist of three directors, one
of whom will be a director designated by the Ingram Family Stockholders and
two of whom will be Independent Directors. The functions of the Compensation
Committee will be to review and approve annual salaries, bonuses, and grants
of stock options pursuant to the 1996 Plan for all executive officers and key
members of the Company's management staff and to review and approve the terms
and conditions of all employee benefit plans or changes thereto.

Compensation of Directors. Directors who are not Independent
Directors will not receive any additional compensation for serving on the
Board of Directors, but will be reimbursed for expenses incurred in attending
meetings of the Board of Directors and Committees thereof. Each current
Independent Director has been, and each new Independent Director will be,
granted, at the later of (i) the date his or her service begins and (ii)
October 31, 1996, options to purchase 45,000 shares of Common Stock. These
options will have an exercise price per share equal to the market price of the
Common Stock on the date of grant and will vest in equal installments on the
first, second, and third anniversaries of the date of grant. Independent
Directors will not receive any other compensation for their service, but will
be reimbursed for expenses incurred in attending meetings of the Board of
Directors and committees thereof.

Executive Compensation

Summary Compensation Table. The following table provides
information relating to compensation for the year ended December 30, 1995 for
the Company's former Chief Executive Officer and the other four most highly
compensated executive officers of the Company (collectively, the "Named
Executive Officers") for services rendered by each Named Executive Officer
during the year ended December 30, 1995. A portion of this compensation was
paid by Ingram Industries and was included as a factor in the determination of
intercompany charges paid by the Company to Ingram Industries.
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
--------------
Annual Compensation Securities
Name and Principal --------------------------------------- Underlying All Other
Position(s) Year(1) Salary($)(2) Bonus($)(3) Option/SARs(#) Compensation
- ----------------------------------- ------- ------------ ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Linwood A. (Chip) Lacy, Jr.(5) 1995 $558,000 $414,057 -- $28,617
Former Chief Executive Officer and
Former Chairman of the Board of
Directors
Jeffrey R. Rodek 1995 392,820 267,089 240,258 (6) 163,649
Worldwide President and Chief
Operating Officer
David R. Dukes 1995 260,130 205,611 -- 10,607
Vice Chairman of the Company and
Chief Executive Officer of Ingram
Alliance
Sanat K. Dutta 1995 263,500 213,593 -- 12,365
Executive Vice President and President,
Ingram Micro U.S.
John Wm. Winkelhaus, II 1995 250,000 130,441 -- 124,287
Executive Vice President and President,
Ingram Micro Europe
<FN>
- ------------
(1) Under rules promulgated by the Securities and Exchange Commission,
since the Company was not a reporting company during the three
immediately preceding fiscal years, only the information with respect
to the most recent completed fiscal year is reported in the Summary
Compensation Table.

(2) Includes amounts deferred under qualified and nonqualified defined
contribution compensation plans and pretax insurance premium amounts.

(3) Reflects amounts paid in 1996 in respect of the fiscal year ended
December 30, 1995.

(4) Includes the following amounts: Mr. Lacy (group term life insurance,
$3,600; employer thrift plan contributions, $20,625; relocation,
$4,392); Mr. Rodek (group term life insurance, $1,632; employer
thrift plan contributions, $11,631; relocation, $150,386); Mr. Dukes
(group term life insurance, $1,152; employer thrift plan contributions,
$9,455); Mr. Dutta (group term life insurance, $2,784; employer
thrift plan contributions, $9,581); and Mr. Winkelhaus (group term
life insurance, $1,006; employer thrift plan contributions, $6,211; and
expatriate compensatory payments, $117,070).

(5) Mr. Lacy was an employee of Ingram Industries at all times during
1995. All amounts shown for Mr. Lacy were paid by Ingram Industries,
and a portion of such amounts is reflected in the Company's
consolidated statement of income under charges allocated from Ingram
Industries.

(6) Represents options exercisable for 175,000 shares of Ingram Industries
common stock, which were converted into options exercisable for 240,258
shares of Common Stock in connection with the Split-Off.

</TABLE>

Stock Option/SAR Grants in Last Fiscal Year. The following
table provides information relating to stock options granted to the Named
Executive Officers for the year ended December 30, 1995.
<TABLE>
<CAPTION>
Individual Grants(1)
----------------------------------------------------------- Potential Realizable Value at
% of Total Assumed Annual Rates of
Number of Options/SARS Stock Price Appreciation for
Securities Granted to Option Term
Underlying Employees of Exercise or ----------------------------
Options/SARs the Company Base Price Expiration
Name Granted in Fiscal Year ($/sh) Date 5%($) 10%($)
------------ ------------- ----------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Linwood A. (Chip) Lacy, Jr. -- -- -- -- -- --
Jeffrey R. Rodek(2) 240,258 22.95% $2.85 1/1/03 $326,532 $782,100
David R. Dukes -- -- -- -- -- --
Sanat K. Dutta -- -- -- -- -- --
John Wm. Winkelhaus, II -- -- -- -- -- --

<FN>
- ------------

(1) The Company has, since December 30, 1995, granted certain options to
purchase Class B Common Stock, including options to purchase 150,000,
35,000, 40,000, and 40,000 shares, respectively, to Messrs. Rodek,
Dukes, Dutta, and Winkelhaus. Additionally, options to purchase Common
Stock were granted to certain officers of the Company, including
options to purchase 200,000, 150,000, 125,000, and 75,000 shares,
respectively, to Messrs. Rodek, Dukes, Dutta, and Winkelhaus,
concurrently with the IPO at the initial public offering price. See
"--1996 Plan--Options."

(2) Represents options exercisable for 175,000 shares of Ingram Industries
common stock, which were converted into options exercisable for 240,258
shares of Common Stock in connection with the Split-Off. Mr. Rodek's
options vest according to the following schedule: 34,324 shares on
January 1, 1997, 60,064 shares on January 1, 1998, 60,064 shares on
January 1, 1999, 60,064 shares on January 1, 2000, and 25,742 shares on
January 1, 2001.

</TABLE>

Stock Options/SAR Exercises in Last Fiscal Year and Fiscal
Year-End Options/SAR Values. The following table provides information
relating to stock options and ISUs exercised by the Named Executive
Officers during the year ended December 30, 1995, as well as the number and
value of securities underlying unexercised stock options held by the Named
Executive Officers as of December 30, 1995.

<TABLE>
<CAPTION> Number of
Securities Value of
Underlying Unexercised
Shares Unexercised In-the-Money
Acquired Options/SARs Options/SARs
on at Year End at Year End
Exercise Value ----------------- -------------
During Realized Exercisable/ Exercisable/
Name 1995(1)(2) ($)(3) Unexerciseable(2) Unexercisable
- -------------------------- --------- -------- ----------------- -------------
<S> <C> <C> <C> <C>
Linwood A. (Chip) Lacy, Jr 1,613,158(4) $2,917,808 46,875/372,315(5) $119,844/$810,153(5)
Jeffrey R. Rodek -- -- 0/274,580 0/ 214,400
David R. Dukes -- 518,063 30,032/243,861 71,921/ 540,609
Sanat K. Dutta -- -- 0/258,105 0/ 455,656
John Wm. Winkelhaus, II -- 278,600 0/244,376 0/ 450,216
<FN>
- ------------
(1) Excludes Ingram Industries ISUs held by Messrs. Lacy, Dukes, and
Winkelhaus that matured in 1995 and were settled in cash.

(2) Reflects the conversion of shares of Ingram Industries common stock,
or options exercisable for shares of Ingram Industries common stock,
into shares of Class B Common Stock, or options exercisable for shares
of Common Stock, in connection with the Split-Off.

(3) Includes $830,408, $518,063, and $278,600 paid to Messrs. Lacy,
Dukes, and Winkelhaus, respectively, in connection with the settlement
of ISUs.

(4) 1,544,513 of such shares were acquired from the E. Bronson Ingram
Charitable 8% Remainder Unitrust and were deemed to be acquired from the
Company.

(5) Excludes options exercisable for 12,731/101,121 shares of Ingram
Industries common stock with a value of $44,687/$302,084.
</TABLE>

Pension Plan

None of the Named Executive Officers other than Mr. Lacy
participates in the tax-qualified Ingram Retirement Plan and the non-
qualified Ingram Supplemental Executive Retirement Plan (the "Retirement
Plans") sponsored by Ingram Industries. At the time he left the Company,
Mr. Lacy had earned one year of credited service under the Retirement
Plans.

Mr. Lacy's benefit from the Retirement Plans will be in the
form of a deferred annuity. At age 65, his life only annuities would be
$178.70 per month from the Ingram Retirement Plan and $539.70 per month from
the Ingram Supplemental Executive Retirement Plan. It is anticipated that the
Company will establish a qualified plan similar to the Ingram Industries
qualified plan. None of the Named Executive Officers will participate in the
Company's qualified retirement plan.

Employment Agreements

In August 1996, the Company entered into an agreement with Mr.
Stead pursuant to which he agreed to serve as Chief Executive Officer and
Chairman of the Board of the Company. The agreement provides for the grant to
Mr. Stead of options at the initial public offering price exercisable for
3,600,000 shares of Common Stock. Such options will vest over an extended
period, as described below. In lieu of receipt of 200,000 of such options,
Mr. Stead has purchased 200,000 shares of Common Stock directly from the
Company at the initial public offering price. See "--1996 Plan--Options."
Mr. Stead will not receive any salary, bonus, or other cash compensation
during the vesting period of such options; however, the Company has agreed
to compensate Mr. Stead in a mutually agreeable manner in the event that
the initial public offering price exceeds $14.00. The Company has also
agreed to provide Mr. Stead and his spouse with lifetime healthcare
coverage, with a lifetime cap of $2.0 million, as well as certain other
perquisites.

In December 1994, the Company entered into an agreement with
Mr. Rodek pursuant to which he agreed to serve as President and Chief
Operating Officer of the Company and as a member of the Company's Board of
Directors. The agreement provides for a base salary, participation in the
Company's Executive Incentive Bonus Plan, and participation in the Company's
health and benefit programs. Mr. Rodek will receive a severance benefit equal
to his annual base salary if the Company terminates his employment without
cause prior to January 1, 1998. Mr. Rodek currently serves as Worldwide
President and Chief Operating Officer.

In April 1988, the Company entered into an agreement with Mr.
Dutta pursuant to which he agreed to serve as Senior Vice President,
Operations. The agreement provides for a base salary, participation in the
Company's Executive Incentive Bonus Plan, and participation in the Company's
health and benefit programs. Mr. Dutta will receive a severance benefit of
nine months' base salary if he is terminated without cause or 12 months' base
salary if he is involuntarily terminated or has a substantial change in title
or reduction of salary within 12 months of a change in control (as defined in
the agreement). Mr. Dutta currently serves as Executive Vice President and
President, Ingram Micro U.S.

In June 1991, the Company entered into an agreement with Mr.
Winkelhaus pursuant to which he agreed to serve as Senior Vice President,
Ingram Micro Europe. The agreement provides for a base salary, a housing cost
and goods and services differential, participation in the Company's Executive
Incentive Bonus Plan, and participation in the Company's health and benefit
programs. Mr. Winkelhaus currently serves as Executive Vice President and
President, Ingram Micro Europe.

Mr. Lacy resigned as Chairman and Chief Executive Officer of
the Company effective May 31, 1996. Pursuant to an agreement (the "Severance
Agreement"), Mr. Lacy resigned from all positions with the Company, and
resigned from all positions with Ingram Industries and its other subsidiaries,
except that Mr. Lacy will remain a director of Ingram Industries until
December 31, 1997, unless earlier removed in accordance with the bylaws of
Ingram Industries. In addition, Mr. Lacy has agreed to serve as a director of
the Company, if so requested by Ingram Industries, until December 31, 1997.

Pursuant to the Severance Agreement, Mr. Lacy agreed to
cooperate with the Company and Ingram Industries in connection with the
consummation of the Split-Off and the IPO. Mr. Lacy has also agreed not to
use or disclose confidential information relating to the Company.
Furthermore, Mr. Lacy has agreed that until November 30, 1998, he will not
compete with the Company or solicit for hire any person who was or becomes an
employee of the Company between December 1, 1995 and June 1, 1998. Mr. Lacy
has also agreed to similar restrictions with respect to the businesses of
Ingram Industries and its other subsidiaries.

The Company agreed to pay Mr. Lacy one year's salary at the
level in effect as of the date of his resignation, and has paid Mr. Lacy
$272,000, his earned bonus for the first five months of 1996. In addition,
the Severance Agreement provides for the continuation of certain health and
life insurance benefits for a period of 12 months from the date thereof. Mr.
Lacy will also receive certain payments from Ingram Industries.

The shares of Ingram Industries common stock owned by Mr. Lacy
were converted into shares of Class B Common Stock in connection with the
Split-Off. These shares have been placed in an escrow account, although Mr.
Lacy will be permitted to sell such shares, subject to applicable tax and
securities laws, provided that the after-tax proceeds of such sales remain in
the escrow account. If at any time prior to December 1, 1998, Mr. Lacy
breaches the terms and conditions of the Severance Agreement, the Company
shall have the right to be reimbursed for its damages from this escrow
account. Furthermore, Ingram Industries and the Company may suspend any
payments or obligations otherwise owed to Mr. Lacy. If not earlier released
due to the death of Mr. Lacy or a Change of Control (as defined therein),
fifty percent of the escrow account will be released on June 1, 1998 and the
remainder on December 1, 1998.

Key Employee Stock Purchase Plan

As of April 30, 1996, the Board of Directors of the Company
adopted, and Ingram Industries, as the sole stockholder of the Company,
approved, the Key Employee Stock Purchase Plan (the "Stock Purchase Plan").
The Company has reserved 4,000,000 shares of Class B Common Stock to cover
awards under the Stock Purchase Plan.

Employee Offering. In the second quarter of 1996, the Company
offered (the "Employee Offering") 2,775,000 shares of its Class B Common
Stock, of which 2,510,400 shares were purchased, in reliance upon Regulation D
and Regulation S under the Securities Act of 1933, as amended (the "Securities
Act"), for $17,572,800, to certain of its officers. Such shares are subject
to vesting, certain restrictions on transfer, and repurchase by the Company
upon termination of the holder's employment. As of October 31, 1996, 50,000
of such shares have been repurchased by the Company. In order to allow loan
financing from a bank of the shares purchased in the Employee Offering, the
Company entered into repurchase agreements with such bank, pursuant to which
it agreed to repurchase (i) unvested shares at the lower of fair market value
and $7.00 and (ii) vested shares at fair market value, in the event of an
employee's default on his or her loan.

Restricted Stock Grants. The Company also made grants
pursuant to the Stock Purchase Plan of an aggregate of 107,000 restricted
shares of Class B Common Stock to certain officers and employees of the
Company, which shares will vest 25% on April 1, 1998 and each year thereafter
through 2001. Prior to vesting, such shares are subject to forfeiture to the
Company, with no consideration paid to the holder thereof, upon termination of
the holder's employment. As of October 31, 1996, 5,000 of such shares have
been forfeited to the Company.

1996 Plan

As of April 30, 1996, the Board of Directors of the Company
adopted, and Ingram Industries, as the sole stockholder of the Company,
approved, the 1996 Equity Incentive Plan (the "1996 Plan"). The Company has
amended the 1996 Plan, effective as of October 31, 1996, primarily to increase
the number of shares available for grant from 10,000,000 shares to 12,000,000
shares, as well as to change the allowable vesting schedule for options
granted under the 1996 Plan and to permit options to be granted to purchase
shares of Common Stock in addition to Class B Common Stock. Options granted
prior to October 31, 1996 will continue to be governed by the 1996 Plan as in
effect prior to the amendment of the 1996 Plan.

The purpose of the 1996 Plan is to attract and retain key
personnel and to enhance their interest in the Company's continued success.

The 1996 Plan is administered by the Board of Directors of the
Company or a committee appointed thereby (the "Committee"). The Committee has
broad discretion, subject to contractual restrictions affecting the Company,
as to the specific terms and conditions of each award and any rules applicable
thereto, including but not limited to the effect thereon of the death,
retirement, or other termination of employment of the participant.

The 1996 Plan permits the granting of (i) stock options that
qualify as "Incentive Stock Options" under the U.S. Internal Revenue Code of
1986, as amended (the "Code"), (ii) options other than Incentive Stock Options
("Nonqualified Stock Options"), (iii) SARs granted either alone or in tandem
with other awards under the 1996 Plan, (iv) restricted stock and restricted
stock units, (v) performance awards, and (vi) other stock-based awards. The
Company has reserved 12,000,000 shares of Common Equity (which may be either
Common Stock or Class B Common Stock) to cover awards under the 1996 Plan.

The Board of Directors may amend, alter, or terminate the 1996
Plan at any time, provided that stockholder approval generally must be
obtained for any change that would require stockholder approval under Rule
16b-3 under the Exchange Act or any other regulatory or tax requirement that
the Board deems desirable to comply with or obtain relief under and subject to
the requirement that no rights under an outstanding award may be impaired by
such action without the consent of the holder thereof. The Committee may
amend or modify the terms of any outstanding award but only with the consent
of the participant if such amendment would impair his rights. In the event of
certain corporate transactions or events affecting the shares or the structure
of the Company, the Committee may make certain adjustments as set forth in the
1996 Plan.

The 1996 Plan is not subject to any provision of ERISA and is
not qualified under Section 401(a) of the Code.

Options. On June 25, 1996, the Company granted options to
purchase approximately 4,800,000 shares of Class B Common Stock under the 1996
Plan to all full-time employees of the Company who had at such time been
continuously employed by the Company since January 1, 1996, as well as to
certain employees of the Company, at the director level and above, who began
employment with the Company at a later date. The exercise price of these
options is $7.00 per share. These options, which are Incentive Stock Options
to the extent permitted under the terms of the 1996 Plan and the Code, will
vest as follows: (i) for officers of the Company, in four equal annual
installments commencing on April 1, 1998, and (ii) for non-officers, in five
equal annual installments commencing on April 1, 1997, in each case subject to
continued employment with the Company.

Concurrently with the closing of the IPO, the Board of
Directors granted options under the 1996 Plan to purchase approximately
5,200,000 shares of Common Stock to certain executive officers, employees, and
Independent Directors of the Company. The exercise price of these options is
equal to the initial public offering price. Of such options, options to
purchase 3,400,000 shares were granted to Mr. Stead pursuant to the employment
agreement described above. See "--Employment Agreements." Of the total
options granted to Mr. Stead, options to purchase 200,000 shares vested
immediately, and options to purchase an additional 1,600,000 shares will vest
in four equal installments beginning April 1, 1998. The remaining options to
purchase an additional 1,600,000 shares granted to Mr. Stead, as well as the
options to purchase approximately 1,000,000 shares granted to other executive
officers and employees of the Company, will vest over a fixed term, subject to
continued employment with the Company; however, such options will vest earlier
if the Company achieves certain performance criteria. The Company also has
granted to the Independent Directors, concurrently with the IPO, options to
purchase an aggregate of 180,000 shares of Common Stock at the initial public
offering price. See "--Board of Directors --Compensation of Directors." The
Company has also granted options to purchase an aggregate of approximately
635,000 shares of Common Stock to certain officers of the Company, in
connection with the hiring or promotion of such officers. All of such options
have an exercise price equal to the initial public offering price and otherwise
have terms similar to those of the options granted in June 1996.

1996 Employee Stock Purchase Plan

The Company intends to make available to its employees the
opportunity to purchase shares of Common Stock under its 1996 Employee Stock
Purchase Plan (the "ESPP"). The ESPP was adopted by the Board of Directors
and stockholders in October 1996. The ESPP is intended to qualify under
Section 423 of the Code and permits eligible employees of the Company to
purchase Common Stock through payroll deductions, provided that no employee
may accrue the right to purchase more than $25,000 worth of stock under all
employee stock purchase plans of the Company in any calendar year. Up to
1,000,000 shares of Common Stock will be initially available for sale under
the ESPP. The amount of additional shares of Common Stock that will be made
available for sale under the ESPP, if any, has not been determined. The
initial offering period will commence on or about November 1, 1996 and will
end on the last market trading day on or before December 31, 1998, and the
right to purchase shares of Common Stock will accrue in an amount not to
exceed $13,000 per employee during the offering period. The price of Common
Stock offered under the initial offer under the ESPP will be 100% of the lower
of the fair market value of the Common Stock on the first or last day of the
offering period. The price of Common Stock offered under subsequent ESPP
offerings, the duration of which will be determined by the Committee, will be
from 85% to 100% of the lower of the fair market value of the Common Stock on
the first or last day of each offering period, as determined by the Committee.
Employees may end their participation in the ESPP at any time during an
offering period, and they will be paid their payroll deductions accumulated to
date. Participation ends automatically on termination of employment with the
Company.

Rights granted under the ESPP are not transferable by a
participant other than by will, the laws of descent and distribution, or as
otherwise provided under the ESPP.

The Board may amend or terminate the ESPP at any time. The
ESPP will terminate in all events on the last business day in October 2006.

Executive Incentive Bonus Plan

All officers of the Company are eligible to participate in the
Company's Executive Incentive Bonus Plan (the "Bonus Plan"). Pursuant to the
Bonus Plan, officers receive bonus payments based on the Company's meeting or
exceeding budgeted results, as well as individual achievement of previously
agreed upon goals.

Rollover Plan; Incentive Stock Units

In connection with the Split-Off, Ingram Industries options
held by the Company's employees and certain other Ingram Industries options
and SARs were converted to the Options. In addition, holders of approximately
300,000 Ingram Industries ISUs had the option to exchange a portion of their
ISUs for the Options. See "The Plan" and "The Split-Off and the
Reorganization--The Split-Off." Approximately 11,000,000 Options are
outstanding, with exercise prices ranging from $0.66 to $3.32 per share. See
"The Split-Off and the Reorganization--The Split-Off." The majority of these
options will be fully vested by the year 2000 and expire no later than ten
years from the date of grant. These vested options generally become
exercisable, if otherwise vested, upon the earlier of (i) nine months after
the Split-Off or (ii) a public offering of the shares, in each case subject to
the optionee's continued employment with any of the Company, Ingram
Industries, or Ingram Entertainment.

Compensation Committee Interlocks and Insider Participation

The Board of Directors of the Company does not currently
maintain a separate compensation committee. Historically, base compensation
of officers of the Company, and Mr. Lacy's compensation under the Bonus Plan,
has been determined by the Executive Compensation Committee of the Ingram
Industries board of directors, which in 1995 consisted of E. Bronson Ingram,
until his resignation from the Board in May, and Messrs. Lacy and Pfeffer.
Mr. Lacy did not participate in the determination of his compensation.
Compensation under the Bonus Plan for all officers of the Company other than
Mr. Lacy was determined by the entire Board of Directors of the Company.

CERTAIN TRANSACTIONS

Historically, Ingram Industries has provided certain
administrative services to the Company. The Company is allocated a portion of
the costs of these administrative services. This allocation totaled $1.6
million, $2.4 million, $3.5 million, and $3.3 million in 1993, 1994, 1995, and
the first three quarters of 1996, respectively. In connection with the
Split-Off, the Company entered into the Transitional Service Agreements with
Ingram Industries relating to the continued provision of certain
administrative services. The Company believes that the terms of the
Transitional Service Agreements are on a basis as favorable as those that
would be obtained from third parties on an arm's length basis. The
Transitional Service Agreements generally terminate on December 31, 1996,
although payroll services under the Transitional Service Agreements will be
provided through December 31, 1997. After such termination, the Company will
be required to provide such services internally or find a third-party provider
of such services.

Additionally, Ingram Industries has provided a large portion of
the debt financing required by the Company in connection with its expansion.
As of December 31, 1994, December 30, 1995, and September 28, 1996, $449.4
million, $673.8 million, and $479.7 million, respectively, was outstanding to
Ingram Industries. Interest on such debt has been charged based on Ingram
Industries' domestic weighted average cost of funds. See Note 6 of Notes to
Consolidated Financial Statements. In connection with the Split-Off, the
Company assumed Ingram Industries' accounts receivable securitization program
in partial satisfaction of amounts due to Ingram Industries. The Company used
borrowings under the Credit Facility to repay the remaining intercompany
indebtedness to Ingram Industries, which was incurred for general corporate
purposes, primarily working capital needs in connection with the expansion of
the Company's business. The Company also used borrowings under the Credit
Facility to repay outstanding revolving indebtedness related to amounts drawn
by certain of the Company's subsidiaries, as participants in Ingram
Industries' then existing $380 million credit facility, which terminated
concurrently with the closing of the IPO. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."

The Company leases certain office space near Buffalo, New York
from a partnership owned by certain members of the Ingram family. The lease
agreement expires January 31, 2013 and requires annual rental payments of
approximately $1.6 million. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources." The Company currently subleases its facilities in Santa Ana,
California and Harrisburg, Pennsylvania from Ingram Industries pursuant to a
sublease which expires March 1, 2007. The sublease agreement requires annual
rental payments of approximately $2.1 million. In connection with the
Reorganization, the Company intends to acquire ownership of these facilities
for an aggregate amount of approximately $22.6 million. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources." The Company's lease for its
distribution center in Millington, Tennessee is guaranteed by Ingram
Industries. This guarantee provides for the release of Ingram Industries'
guarantee upon satisfaction by the Company of certain financial requirements
specified in the guarantee including consummation of an initial public
offering of at least $300 million. Certain of the Company's other leases are
guaranteed by Ingram Industries. Such guarantees were released in connection
with the Split-Off.

The Company extended a loan during 1995 to one of its senior
executive officers. This loan has been repaid in full. The largest aggregate
amount outstanding at any time during 1995 was $450,000. This loan bore
interest at the intercompany rate of interest paid by the Company to Ingram
Industries.

In connection with the Split-Off, agreements relating to board
representation and registration rights with respect to Common Stock held by
the Ingram Family Stockholders (including shares of Common Stock issued upon
conversion of Class B Common Stock) were entered into by the Company and the
Ingram Family Stockholders. See "The Split-Off and the Reorganization."

THE SPLIT-OFF AND THE REORGANIZATION

Immediately prior to the closing of the IPO, Ingram Industries
consummated the Split-Off. The Company, Ingram Industries, and Ingram
Entertainment have also entered into certain agreements to effect the
Reorganization. The following is a summary of certain of the material terms
of the Split-Off.

The Split-Off

Immediately prior to the closing of the IPO, Ingram Industries
consummated an exchange, under an Exchange Agreement (the "Exchange
Agreement"), pursuant to which certain existing stockholders of Ingram
Industries exchanged a specified number of their shares of Ingram Industries
common stock for shares of Class B Common Stock of the Company of equivalent
value to the shares of Ingram Industries so exchanged. The exchange of shares
of Ingram Industries common stock for shares of Class B Common Stock of the
Company, together with those elements of the Reorganization contemplated to
occur prior to the closing of the IPO, are referred to herein as the
"Split-Off." See "Principal Stockholders." Eligible stockholders who
exchanged shares of Ingram Industries common stock eligible to be exchanged
received 107,251,362 shares of Class B Common Stock. The exchange values were
determined by the board of directors of Ingram Industries, which relied in
part on an opinion of a financial advisor to the effect that the Split-Off was
fair to all involved parties. In the Exchange Agreement, the Company
covenants that, during the two-year period following the Split-Off, it will
not (i) liquidate, merge, or consolidate with any other person, or sell,
exchange, distribute, or dispose of any material asset other than in the
ordinary course of business, (ii) with certain limited exceptions, redeem or
reacquire any of its capital stock transferred in the Split-Off, (iii) cease
to conduct the principal active trade or business conducted by it during the
five years immediately preceding the Split-Off, or (iv) otherwise take any
actions inconsistent with the facts and representations set forth in the
private letter ruling from the U.S. Internal Revenue Service (the "IRS")
regarding certain federal income tax consequences of the Reorganization and
the Split-Off, in each case unless it first obtains an opinion from recognized
tax counsel or a ruling from the IRS that such action will not affect the
qualification of the transactions contemplated by the Exchange Agreement for
tax-free treatment. All such covenants were necessary to obtain the private
letter ruling from the IRS. After the Split-Off, Ingram Entertainment
continues to be a wholly-owned subsidiary of Ingram Industries. Although
there can be no assurance, it is contemplated that, pursuant to the Exchange
Agreement, on or after June 20, 1997, certain remaining stockholders of Ingram
Industries will exchange their remaining shares of Ingram Industries common
stock for shares of Ingram Entertainment common stock.

Certain outstanding Ingram Industries options and SARs were
converted to, and certain Ingram Industries ISUs were exchanged for, the
Options. The exchange values for these options, SARs, and ISUs are primarily
based on the exchange value for the underlying common stock. The option, SAR,
and ISU exchange values were determined by the board of directors of Ingram
Industries in accordance with the respective plans under which they were
issued. The total number of Options outstanding are exercisable for
approximately 11,000,000 shares of Common Stock. See "The Plan" and
"Management--Rollover Plan; Incentive Stock Units."

The Company and the Ingram Family Stockholders entered into the
Board Representation Agreement. So long as the Ingram Family Stockholders and
their permitted transferees (as defined in the Board Representation Agreement)
own in excess of 25,000,000 shares of the outstanding Common Equity, the Board
Representation Agreement will provide for the designation of (i) not more than
three directors designated by the Ingram Family Stockholders, (ii) one
director designated by the Chief Executive Officer of the Company, and (iii)
four or five additional Independent Directors (collectively, the "Designated
Nominees").

The Ingram Family Stockholders will be required to vote their
shares of Common Equity for the election of the Designated Nominees. In
addition, certain types of corporate transactions, including transactions
involving the potential sale or merger of the Company; the issuance of
additional equity, warrants, or options; acquisitions involving aggregate
consideration in excess of 10% of the Company's stockholders' equity; any
guarantee of indebtedness of an entity other than a subsidiary of the Company
exceeding 5% of the Company's stockholders' equity; and the incurrence of
indebtedness in a transaction which could reasonably be expected to reduce the
Company's investment rating (i) lower than one grade below the rating in
effect immediately following the IPO or (ii) below investment grade, may not
be entered into without the written approval of at least a majority of the
voting power deemed to be held (for purposes of the Board Representation
Agreement) by certain of the Ingram Family Stockholders, acting in their sole
discretion.

The Board Representation Agreement will terminate on the date
on which the Ingram Family Stockholders and their permitted transferees
collectively cease to beneficially own at least 25,000,000 shares of the
Common Equity of the Company (as such number may be equitably adjusted to
reflect stock splits, stock dividends, recapitalization, and other
transactions in the capital stock of the Company). All decisions for the
Ingram Family Stockholders that are trusts or foundations will be made by the
trustees thereof, who in some cases are members of the Ingram family.

The Ingram Family Stockholders and the other stockholders of
Ingram Industries who received shares of Class B Common Stock in the Split-Off
entered into a registration rights agreement (the "Registration Rights
Agreement") which grants the E. Bronson Ingram QTIP Marital Trust (the "QTIP
Trust") demand registration rights following the closing of the IPO. Such
demand registration rights may be exercised with respect to all or any portion
(subject to certain minimum thresholds) of the shares of Class B Common Stock
owned by the QTIP Trust, one or more of the other Ingram Family Stockholders
and certain of their permitted transferees on up to three occasions during the
84-month period following the closing of the IPO; provided that the Company
shall not be obligated to effect (i) any registration requested by the QTIP
Trust unless the QTIP Trust has furnished the Company with an opinion of
counsel to the effect that such registration and any subsequent sale will not
affect the tax-free nature of the Split-Off or (ii) more than one demand
registration during any 12-month period.

The Registration Rights Agreement also grants one demand
registration right (subject to certain minimum thresholds) to members of the
Ingram family (which may only be exercised during the 84-month period
following the closing of the IPO) and one demand registration right to
certain minority stockholders of the Company if a change of control of the
Company occurs following the closing of the IPO but prior to the second
anniversary of the Split-Off Date. The minority stockholders will not be
entitled to this registration right if they were offered the opportunity to
participate in the change of control transaction.

The Registration Rights Agreement restricts the exercise by any
party thereto of a demand registration right, and provides that the Company
will not grant any registration rights to any other person that are more
favorable than those granted pursuant to the Registration Rights Agreement or
that provide for the exercise of demand registration rights sooner than three
months following a public offering in which such person was entitled to include
its shares, unless the number of shares requested to be included in such
public offering exceeded 125% of the number of shares actually included.

In addition, the Registration Rights Agreement provides that
the parties thereto shall be entitled to unlimited "piggyback" registration
rights in connection with any proposed registration of equity securities by
the Company (with certain specified exceptions) during the 84-month period
following the completion of the IPO. Employees who received shares in the
Employee Offering, and persons who have exercised Options, are bound by the
provisions of the Registration Rights Agreement as if such employees were
parties thereto, and are entitled to the "piggyback" registration rights
provided therein, with respect to the portion of their shares of Class B Common
Stock that is no longer subject to restrictions.

The Registration Rights Agreement contains provisions regarding
reduction of the size of an offering that has been determined by the
underwriters to have exceeded its maximum potential size and contains certain
customary provisions, including those relating to holdback arrangements,
registration procedures, indemnification, contribution and payment of fees and
expenses.

Pursuant to an agreement (the "Thrift Plan Liquidity
Agreement") with the Ingram Thrift Plan (the "Thrift Plan"), which received
10,007,000 shares of Class B Common Stock in the Split-Off, during the 90-day
period following each of (i) the closing of the IPO and (ii) the first
anniversary of the closing of the IPO the Company may elect to file a
registration statement under the Securities Act covering such number of shares
as are required to be sold by the Thrift Plan in order to comply with the
requirements of ERISA or are necessary to fund distributions to Thrift Plan
participants ("Registrable Securities"). If a registration statement covering
the Registrable Securities has not become effective during either such 90-day
period, the Thrift Plan may elect to sell any of such Registrable Securities
to the Company during the 90-day period thereafter at the then-current fair
market value of the Common Stock; provided that the Company's obligation in
any fiscal year to purchase shares not required to fund distributions by the
Thrift Plan will be limited to the lesser of $10,000,000 or 3% of the
Company's stockholders' equity as of the beginning of such fiscal year. In
addition, the Thrift Plan may elect to sell to the Company one time each
calendar month, such number of shares as are necessary to fund distributions
to Thrift Plan participants, except during such periods when the Company has
notified the Thrift Plan of the filing of a registration statement covering
Registrable Securities or when such a registration statement is effective.
The Company will not be obligated to make any repurchase pursuant to the
Thrift Plan Liquidity Agreement if it determines that to do so would adversely
affect the tax-free nature of the Split-Off or if such repurchase would be
prohibited by a credit facility of the Company. Of the 10,007,000 shares of
Class B Common Stock to be received by the Thrift Plan, 9,207,000 shares are
subject to a lock-up agreement in connection with the IPO. See "Shares
Eligible for Future Sale."

The Reorganization

Prior to the Split-Off, the Company was a subsidiary of Ingram
Industries, a company controlled by the Ingram Family Stockholders. Ingram
Industries is engaged in various businesses, including inland marine
transportation; the production and transport of specification commercial sand;
insurance; and the distribution of books, prerecorded video cassettes, laser
discs, video games, and spoken-word audio cassettes. The businesses of the
Company, Ingram Industries, and Ingram Entertainment (each, an "Ingram
Company") and their respective subsidiaries are being reorganized as described
below. In conjunction with the Split-Off, the Company assumed Ingram
Industries' accounts receivable securitization program in partial satisfaction
of amounts due to Ingram Industries. The Company repaid the remaining
intercompany indebtedness with borrowings under the Credit Facility. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

Pursuant to a reorganization agreement (the "Reorganization
Agreement"), each Ingram Company has agreed to retain or assume, at the time
of the Reorganization, certain liabilities and obligations, including the
following: (i) liabilities and obligations incurred by such Ingram Company
(other than certain general corporate level liabilities of Ingram Industries)
with respect to periods ending on or prior to the closing of the Split-Off,
other than liabilities or obligations arising as a result of any intentional
act which is tortious or as a result of any illegal act (each, a "Designated
Action") committed by (x) a corporate officer of Ingram Industries (except for
actions that are believed by such person to be in furtherance of his duties as
an officer or employee of the Company, Ingram Entertainment, or their
respective subsidiaries, or the other subsidiaries or business operating units
of Ingram Industries), (y) any other employee of Ingram Industries whose
responsibilities are not primarily associated with the Company, Ingram
Entertainment, or their respective subsidiaries, or the other subsidiaries or
business operating units of Ingram Industries or (z) an employee (other than
general corporate level employees of Ingram Industries) of any other Ingram
Company; (ii) liabilities and obligations (other than general corporate level
liabilities of Ingram Industries) incurred by any other Ingram Company with
respect to periods ending on or prior to the closing of the Split-Off as a
result of any Designated Action committed by an employee of any such Ingram
Company or certain subsidiaries or business operating units of such Ingram
Company; (iii) in the case of Ingram Industries, certain general corporate
level liabilities and obligations up to an aggregate of $100,000 incurred by
Ingram Industries with respect to certain periods ending on or prior to the
closing of the Split-Off and recorded under Ingram Industries' internal
accounting system as "home office" liabilities, to the extent that such
liabilities and obligations are extraordinary in nature and arise out of the
ordinary course of business and were not accrued on Ingram Industries' year
end 1995 balance sheet; (iv) specified liabilities and obligations related to
certain asset dispositions and the settlement of certain claims; and (v)
liabilities and obligations incurred by such Ingram Company with respect to
periods beginning after the closing of the Split-Off. In addition, certain
contingent assets or liabilities, as well as fees and costs incurred in
connection with the Split-Off, will be shared 23.01% by Ingram Industries,
72.84% by the Company, and 4.15% by Ingram Entertainment. These contingent
liabilities include (i) liabilities and obligations arising as a result of any
Designated Action committed by a corporate officer of Ingram Industries
(except for actions that are believed by such person to be in furtherance of
his duties as an officer or employee of the Company, Ingram Entertainment, or
their respective subsidiaries or other designated affiliates, or the other
subsidiaries or designated affiliates of Ingram Industries), or any other
employee of Ingram Industries whose responsibilities are not primarily
associated with the Company, Ingram Entertainment, or their respective
subsidiaries, or the other subsidiaries or business operating units of Ingram
Industries; (ii) certain general corporate level liabilities and obligations,
if the aggregate of such liabilities and obligations incurred by Ingram
Industries exceeds $100,000, incurred by Ingram Industries with respect to
periods ending on or prior to the closing of the Split-Off and recorded under
Ingram Industries' internal accounting system as "home office" liabilities, to
the extent that such liabilities and obligations are extraordinary and
non-recurring in nature and arise out of the ordinary course of business and
were not accrued on Ingram Industries' 1995 balance sheet; (iii) certain
liabilities and obligations incurred by Ingram Industries in respect of
specified individuals pursuant to certain deferred compensation plans of
Ingram Industries; and (iv) assets, liabilities, and obligations arising in
connection with certain specified asset dispositions. The Company will not be
responsible for any liabilities except to the extent that the Company's share
of such liabilities, fees or costs and certain other amounts (net of any
contingent assets) exceeds, in the aggregate, $20,778,000. The Company
currently believes that any such liabilities, fees, or costs will be largely
offset by other amounts due from Ingram Industries. However, there can be no
assurance that further payments, which could be material, will not be required
in the future.

Pursuant to the Reorganization Agreement, each Ingram Company
agreed to conduct its business, from the date of the Reorganization Agreement
until the closing of the Split-Off, in the ordinary course of business
consistent with past practice. The Reorganization Agreement required the
Company, at or prior to the closing of the Split-Off, to enter into bank
repurchase agreements with respect to securities of the Company received in
connection with the Exchange Agreement in exchange for shares of Ingram
Industries common stock previously held as collateral for certain loans made
to stockholders of Ingram Industries. If securities of Ingram Industries are
exchanged for securities of Ingram Entertainment, as contemplated in "-- The
Split-Off" above, Ingram Entertainment has agreed to enter into similar
agreements with respect to such securities.

Pursuant to the Reorganization Agreement, each Ingram Company
has agreed to indemnify each other Ingram Company from any and all damage,
loss, liability, and expense incurred as a result of any breach by such party
of any covenant or agreement pursuant to the Reorganization Agreement or the
failure by such party to perform its obligations with respect to any liability
retained or assumed by such party pursuant to the Reorganization Agreement.

The Ingram Companies have also entered into an employee
benefits transfer and assumption agreement (the "Employee Benefits
Agreement"). The Employee Benefits Agreement provides for the allocation of
employee benefit assets and liabilities generally on a pro rata basis in
respect of each Ingram Company's current and former employees. Each Ingram
Company will indemnify the other parties with respect to such party's
benefit-related assumed or retained assets and liabilities.

In connection with the Reorganization, the Ingram Companies
entered into a tax sharing and tax services agreement (the "Tax Sharing
Agreement"). Under the Tax Sharing Agreement, the Company agreed that it will
be liable for (i) its allocable share of the consolidated federal income tax
liability and any consolidated state income tax liability for the year that
includes the Split-Off and (ii) generally, 72.84% of any adjustment in excess
of reserves already established by Ingram Industries for federal or state
income tax liabilities of Ingram Industries, Ingram Entertainment, or the
Company (x) relating to tax periods ending on or prior to the Split-Off or (y)
resulting from a failure (other than due to a breach of certain
representations or covenants) of either the Split-Off or the subsequent
exchange of securities of Ingram Industries for securities of Ingram
Entertainment to qualify for tax-free treatment. However, no liability with
respect to the subsequent exchange involving Ingram Entertainment will be
allocated to the Company if such exchange is not completed in accordance with
the provisions of the Exchange Agreement or if the facts and circumstances of
such exchange are materially different from those on which the private letter
ruling received by Ingram Industries (see "The Split-Off and the
Reorganization -- Conditions to the Split-Off") is based, unless a
supplemental private letter ruling reasonably satisfactory to the Company
addressing such differences is obtained prior to such exchange. Subject to
certain consultation rights and certain limited rights on the part of the
Company to consent to a settlement, Ingram Industries will have the right to
control any audit or proceeding relating to the Company for periods ending
prior to the Split-Off. The Company will share in any refunds received in
respect of the carryback of any future tax losses or credits it may suffer or
receive. In addition, Ingram Industries and Ingram Entertainment have each
agreed that, upon the exercise by one of its employees of an option granted in
connection with the Split-Off, it will pay the Company an amount equal to the
tax benefit, if any, received from any compensation deduction in respect of
such exercise. Furthermore, if the Split-Off or the contemplated exchange of
Ingram Entertainment common stock fails to qualify for tax-free treatment as a
result of a breach by one of the Ingram Companies of specified representations
or covenants contained in the Exchange Agreement, any resulting deficiency
will be borne by such breaching Ingram Company.

In addition, until 1999, the Company will provide data
processing services to Ingram Industries and Ingram Entertainment for a fee to
be determined. The Ingram Companies have also entered into the Transitional
Service Agreements relating to the continued provision of certain
administrative services (including cash management, insurance, employee
benefits, and payroll administration). The Transitional Service Agreements
are believed to be on terms as favorable as those that would be obtained from
third parties on an arm's length basis.

Conditions to the Split-Off

The Split-Off was subject to the satisfaction or waiver of
certain conditions including, without limitation, (i) receipt of a private
letter ruling from the IRS satisfactory to Ingram Industries and certain of
the Ingram Family Stockholders as to the tax-free nature of the Split-Off and
a determination by the board of directors of Ingram Industries and each of the
Ingram Family Stockholders that nothing has come to their attention that
causes them to conclude that significant questions exist as to the validity of
the ruling as applied to the Reorganization or the Split-Off; (ii) the absence
of any law, judgment, injunction, order or decree which prohibits consummation
of the Split-Off; (iii) the effectiveness of certain ancillary agreements;
(iv) receipt of required regulatory approvals and third-party consents; (v)
consummation of the scheduled refinancing and assumption of debt; and (vi)
settlement of intercompany receivables and payables. On October 16, 1996,
Ingram Industries received from the IRS a private letter ruling as to the
tax-free nature of the Split-Off. The Exchange Agreement was terminable by
the board of directors of Ingram Industries or the holders of a majority of
the outstanding shares of Ingram Industries common stock at any time prior to
the closing of the Split-Off.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information, as of
September 28, 1996, as adjusted for (i) the Split-Off and (ii) the issuance of
the Common Stock offered in the IPO as if such transactions had occurred on
September 28, 1996, with respect to the beneficial ownership of each class of
the Common Equity by (a) each person known by the Company to own beneficially
more than five percent of the outstanding shares of either class of the Common
Equity; (b) each director; (c) each of the Named Executive Officers; and (d)
all executive officers and directors of the Company as a group. See
"Management," "Certain Transactions," and "The Split-Off and the
Reorganization."
<TABLE>
<CAPTION>
Common
Class B Common Stock Common Stock(1) Equity
------------------------------------ ----------------------------- ----------
Shares Shares Percentage
Beneficially Percentage Beneficially Percentage of Total
Name Owned of Class Owned of Class Voting Power
- ---- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
E. Bronson Ingram QTIP
Marital Trust(2)(3) 69,099,259 62.9% -- -- 61.6%
Ingram Thrift Plan(2) 10,007,000 9.1 -- -- 8.9
David B. Ingram(2)(3) 72,377,210(4)(5) 65.9 8,580(6)(7) * 64.5
Robin Ingram Patton(2)(3) 71,646,916(4)(5) 65.2 --(7) -- 63.9
Orrin H. Ingram(2)(3) 73,157,670(4)(5) 66.6 68,644(6)(7) * 65.2
Roy E. Claverie(2) 10,859,083(4)(8) 9.9 150,000(6)(7) * 9.7
SunTrust Bank, Atlanta(9) 12,115,391 11.0 -- -- 10.8
Jerre L. Stead -- -- 400,000(10) 1.7% *
Jeffrey R. Rodek 285,000 * -- -- *
David R. Dukes 65,000 * 73,277(6) * *
Sanat K. Dutta 85,000 * 37,410(6) * *
John Wm. Winkelhaus, II 85,000 * 42,559(6) * *
Martha R. Ingram(3) 83,740,788(4)(5) 76.3 --(7) -- 74.7
John R. Ingram(3) 71,875,978(4)(5) 65.5 33,633(6)(7) * 64.1
Philip M. Pfeffer 1,972,476(5) 1.8 21,250(6) * 1.8
J. Phillip Samper -- -- -- -- --
Joe B. Wyatt -- -- 193,065(6) * *
Don H. Davis, Jr. -- -- -- -- --
All executive officers and
directors as a group (24
persons)(3)(11) 91,067,943(4)(5) 82.9 1,148,537(6)(7) 4.8 81.2
Linwood A. (Chip) Lacy, Jr. 1,390,062 1.3 110,500(6) * 1.2
</TABLE>

(footnotes on following page)

- ------------
* Less than one percent.

(1) Excludes each stockholder's beneficial ownership of Class B Common
Stock, which may be converted into Class A Common Stock at any time, at
the option of the holder. See "Description of Capital Stock."

(2) The address for the indicated parties is: c/o Ingram Industries Inc.,
One Belle Meade Place, 4400 Harding Road, Nashville, Tennessee 37205.

(3) David B. Ingram, Robin Ingram Patton, Orrin H. Ingram, John R.
Ingram, and Martha R. Ingram are trustees of the QTIP Trust, and
accordingly could each be deemed to be the beneficial owner of the
shares held by the QTIP Trust.

(4) Includes 71,286,290; 71,266,588; 71,286,290; 10,387,004; 71,286,290;
81,702,786; and 83,870,115 shares, for David B. Ingram, Robin Ingram
Patton, Orrin H. Ingram, Roy E. Claverie, John R. Ingram, Martha R.
Ingram, and all executive officers and directors as a group,
respectively, which shares are held by various trusts or foundations of
which these individuals are trustees. Such individuals could each be
deemed to be the beneficial owner of the shares held by such trusts of
which he or she is a trustee.

(5) Excludes for David B. Ingram 5,132,080 shares held by one or more
trusts of which he and/or his children are beneficiaries; for Robin
Ingram Patton 2,932,917 shares held by one or more trusts of which she
is a beneficiary; for Orrin H. Ingram 1,441,856 shares held by one or
more trusts of which he and/or his children are beneficiaries; for John
R. Ingram 2,732,815 shares held by one or more trusts of which he
and/or his children are beneficiaries; for Mr. Lacy 223,097 shares held
by a trust of which his children are beneficiaries; for Mr. Pfeffer
234,348 shares held by his children or one or more trusts of which his
children are beneficiaries; and for Mr. Claverie 244,912 shares held by
his children or one or more trusts of which he and/or his children are
beneficiaries. Each such individual disclaims beneficial ownership as
to such shares.

(6) Represents Options exercisable within 60 days of the date of the table
for shares of Common Stock.

(7) Excludes approximately 250,000 shares of Common Stock purchased by
Ingram Industries in the IPO. As principal stockholders of Ingram
Industries, the indicated stockholders may be deemed to be beneficial
owners of the shares held by Ingram Industries.

(8) Includes 10,007,000 shares held by the Ingram Thrift Plan. Mr.
Claverie may be deemed to be the beneficial owner of such shares,
because he is a trustee of the Ingram Thrift Plan.

(9) The address for SunTrust Bank, Atlanta ("SunTrust") is 25 Park Place,
NE, Atlanta, Georgia 30303. All shares are held by SunTrust as trustee
for certain individuals. SunTrust and certain of its affiliates may be
deemed beneficial owners of such shares; however, SunTrust and such
affiliates disclaim any beneficial interest in such shares.

(10) Includes options to purchase 200,000 shares of Common Stock, which
represent the immediately exercisable portion of the options granted to
Mr. Stead effective upon the closing of the IPO. See "Management--1996
Plan--Options."

(11) Excludes shares beneficially owned by Mr. Lacy, the Company's former
Chief Executive Officer and former Chairman of the Board of Directors.

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of
265,000,000 shares of Class A Common Stock, par value $0.01 per share, of
which 23,200,000 shares were issued and outstanding upon the closing of the
IPO, and 135,000,000 shares of Class B Common Stock, par value $0.01 per
share, of which 109,813,762 shares were issued and outstanding upon the
closing of the Split-Off. In addition, the Company's Certificate of
Incorporation (the "Certificate of Incorporation") authorizes the issuance
by the Company of up to 1,000,000 shares of preferred stock, par value
$0.01 per share (the "Preferred Stock"), on terms determined by the
Company's Board of Directors. Additionally, any shares of Common Stock (a
maximum of 2,867,374 shares) sold in this offering will be outstanding.
The following description is a summary of the capital stock of the Company
and is subject to and qualified in its entirety by reference to the
provisions of the Certificate of Incorporation and the Amended and Restated
Bylaws (the "Bylaws") of the Company, which are included as exhibits to the
Registration Statement of which this Prospectus forms a part.

Common Equity

The shares of Common Stock and Class B Common Stock are
identical in all respects, except for voting rights and certain conversion
rights, as described below.

Voting Rights. Each share of Common Stock entitles the holder
to one vote on each matter submitted to a vote of the Company's stockholders,
including the election of directors, and each share of Class B Common Stock
entitles the holder to ten votes on each such matter. Except as required by
applicable law, holders of the Common Stock and Class B Common Stock vote
together as a single class on all matters submitted to a vote of the
stockholders of the Company. There is no cumulative voting. See "Risk
Factors--Control by Ingram Family Stockholders."

Subject to New York Stock Exchange requirements, for so long as
there are any shares of Class B Common Stock outstanding, any action that may
be taken at a meeting of the stockholders may be taken by written consent in
lieu of a meeting if the Company receives consents signed by stockholders
having the minimum number of votes that would be necessary to approve the
action at a meeting at which all shares entitled to vote on the matter were
present and voted. This could permit certain holders of Class B Common Stock
to take action regarding certain matters without providing other stockholders
the opportunity to voice dissenting views or raise other matters. The right
to take such action by written consent of stockholders will expire at such
time as all outstanding shares of Class B Common Stock cease to be
outstanding.

Dividends, Distributions and Stock Splits. Holders of Common
Stock and Class B Common Stock are entitled to receive dividends at the same
rate if, as, and when such dividends are declared by the Board of Directors out
of assets legally available therefor after payment of dividends required to be
paid on shares of Preferred Stock, if any.

In the case of dividends or distributions payable in Common
Stock or Class B Common Stock, only shares of Common Stock will be distributed
with respect to the Common Stock and only shares of Class B Common Stock will
be distributed with respect to the Class B Common Stock. In the case of
dividends or other distributions consisting of other voting shares of the
Company, the Company will declare and pay such dividends in two separate
classes of such voting securities, identical in all respects, except that the
voting rights of each such security paid to the holders of the Common Stock
shall be one-tenth of the voting rights of each such security paid to the
holders of Class B Common Stock, and such security paid to the holders of
Class B Common Stock shall convert into the security paid to the holders of
the Common Stock upon the same terms and conditions applicable to the Class B
Common Stock. In the case of dividends or other distributions consisting of
securities convertible into, or exchangeable for, voting securities of the
Company, the Company will provide that such convertible or exchangeable
securities and the underlying securities be identical in all respects, except
that the voting rights of each security underlying the convertible or
exchangeable security paid to the holders of the Common Stock shall be
one-tenth of the voting rights of each security underlying the convertible or
exchangeable security paid to the holders of Class B Common Stock, and such
underlying securities paid to the holders of Class B Common Stock shall
convert into the security paid to the holders of the Common Stock upon the
same terms and conditions applicable to the Class B Common Stock.

Neither the Common Stock nor the Class B Common Stock may be
subdivided or combined in any manner unless the other class is subdivided or
combined in the same proportion.

Conversion. The Common Stock has no conversion rights.

The Class B Common Stock is convertible into Common Stock, in
whole or in part, at any time and from time to time at the option of the
holder, on the basis of one share of Common Stock for each share of Class B
Common Stock converted. Each share of Class B Common Stock will also
automatically convert into one share of Common Stock upon the earliest to
occur of (i) the fifth anniversary of the closing of the Split-Off; (ii) the
sale or transfer of such share of Class B Common Stock (a) by a holder that is
a party to the Board Representation Agreement to any person that is not an
affiliate, spouse or descendant of such holder, their estates or trusts for
their benefit or any other party to the Exchange Agreement or (b) by any other
holder, to a holder that is not the spouse or descendant of such holder or
their estates or trusts for the benefit thereof; and (iii) the date on which
the number of shares of Class B Common Stock then outstanding is less than 25%
of the aggregate number of shares of Common Equity then outstanding.

Liquidation. In the event of any dissolution, liquidation, or
winding up of the affairs of the Company, whether voluntary or involuntary,
after payment of the debts and other liabilities of the Company and making
provision for the holders of Preferred Stock, if any, the remaining assets of
the Company will be distributed ratably among the holders of the Common Stock
and the Class B Common Stock, treated as a single class.

Mergers and Other Business Combinations. Upon a merger,
combination, or other similar transaction of the Company in which shares of
Common Equity are exchanged for or changed into other stock or securities, cash
and/or any other property, holders of each class of Common Equity will be
entitled to receive an equal per share amount of stock, securities, cash,
and/or any other property, as the case may be, into which or for which each
share of any other class of Common Equity is exchanged or changed; provided
that in any transaction in which shares of capital stock are distributed, such
shares so exchanged for or changed into may differ as to voting rights and
certain conversion rights to the extent and only to the extent that the voting
rights and certain conversion rights of Common Stock and Class B Common Stock
differ at that time.

Other Provisions. The holders of the Common Stock and Class B
Common Stock are not entitled to preemptive rights. There are no redemption
provisions or sinking fund provisions applicable to the Common Stock or the
Class B Common Stock.

Preferred Stock

The Board of Directors is authorized, subject to any
limitations prescribed by the DGCL, or the rules of any quotation system or
national securities exchange on which stock of the Company may be quoted or
listed, to provide for the issuance of shares of Preferred Stock in one or
more series; to establish from time to time the number of shares to be
included in each such series; to fix the rights, powers, preferences, and
privileges of the shares of each series and any qualifications and
restrictions thereon; and, to the extent permitted by the DGCL, to increase or
decrease the number of shares of such series, without any further vote or
action by the stockholders. Depending upon the terms of the Preferred Stock
established by the Board of Directors, any or all series of Preferred Stock
could have preference over the Common Stock with respect to dividends and
other distributions and upon liquidation of the Company or could have voting
or conversion rights that could adversely affect the holders of the outstanding
Common Stock. The Company has no present plans to issue any shares of
Preferred Stock.

Limitation of Liability; Indemnification

As permitted by the DGCL, the Certificate of Incorporation
provides that directors of the Company shall not be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty
as a director to the fullest extent permitted by the DGCL (which currently
provides that such liability may be so limited, except for liability (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 the law, (iii) under Section
174 of the DGCL, relating to prohibited dividends or distributions or the
repurchase or redemption of stock, or (iv) for any transaction from which the
director derives an improper personal benefit).

Each person who is or was a party to any action by reason of
the fact that such person is or was a director or officer of the Company shall
be indemnified and held harmless by the Company to the fullest extent
permitted by the DGCL. This right to indemnification also includes the right
to have paid by the Company the expenses incurred in connection with any such
proceeding in advance of its final disposition, to the fullest extent
permitted by the DGCL. In addition, the Company may, by action of the Board
of Directors, provide indemnification to such other employees and agents of
the Company to such extent as the Board of Directors determines to be
appropriate under the DGCL.

As a result of this provision, the Company and its stockholders
may be unable to obtain monetary damages from a director for breach of his
duty of care. Although stockholders may continue to seek injunctive or other
equitable relief for an alleged breach of fiduciary duty by a director,
stockholders may not have any effective remedy against the challenged conduct
if equitable remedies are unavailable. The Company also reserves the right
to purchase and maintain directors' and officers' liability insurance.

Other Certificate of Incorporation and Bylaw Provisions

The Bylaws provide that a majority of the total number of
directors shall constitute a quorum for the transaction of business. The
Board of Directors may act by unanimous written consent. The Board
Representation Agreement contains additional provisions relating to corporate
governance. See "The Split-Off and the Reorganization -- The Split-Off."

Annual meetings of stockholders shall be held to elect the
Board of Directors and transact such other business as may be properly brought
before the meeting. Special meetings of stockholders may be called by the
chairman and shall be called by the secretary on the written request of
stockholders having 10% of the voting power of the Company. The stockholders
may act by written consent in lieu of a meeting of stockholders until such
time as all shares of Class B Common Stock cease to be outstanding.

The Certificate of Incorporation may be amended with the
approval of the Board of Directors (by the vote required as described above),
and for so long as any shares of Class B Common Stock remain outstanding, in
addition to any vote required by law, any such amendment also requires the
approval of the holders of a majority of the Company's outstanding voting
power and a majority of the members of the Board of Directors. However, any
amendment to the provisions of the Certificate of Incorporation relating to
the Common Equity also requires the consent of a majority of the outstanding
voting power held by the Ingram Family Stockholders. The Bylaws may be
amended with the approval of three-quarters of the entire Board of Directors
or by the holders of 75% of the Company's voting power present and entitled to
vote at any annual or special meeting of stockholders at which a quorum is
present.

The number of directors which shall constitute the whole Board
of Directors shall be fixed by resolution of the Board of Directors. The
number of directors shall be eight or nine. The size of the initial Board is
fixed at eight members, but may be increased to nine in accordance with the
Board Representation Agreement. The vote of a majority of the entire Board is
required for all actions of the Board. The directors shall be elected at the
annual meeting of the stockholders, except for filling vacancies. Directors
may be removed with the approval of the holders of a majority of the Company's
voting power present and entitled to vote at a meeting of stockholders.
Vacancies and newly created directorships on the Board of Directors resulting
from any increase in the number of directors may be filled by a majority of
the directors then in office, although less than a quorum, a sole remaining
director, or the holders of a majority of the voting power present and
entitled to vote at a meeting of stockholders. So long as the Ingram Family
Stockholders and their permitted transferees own at least 25,000,000 shares of
the Common Equity, the Bylaws will provide for the appointment of the
Designated Nominees.

The presence, in person or by proxy, of the holders of a
majority of the votes entitled to be cast by the stockholders entitled to vote
generally, shall constitute a quorum for stockholder action at any meeting.

Section 203 of the DGCL

The Company is subject to Section 203 of the DGCL which,
subject to certain exceptions, prohibits a Delaware corporation from engaging
in a business combination (as defined therein) with an "interested
stockholder" (defined generally as any person who beneficially owns 15% or
more of the outstanding voting stock of the Company or any person affiliated
with such person) for a period of three years following the date that such
stockholder became an interested stockholder, unless (i) prior to such date
the board of directors of the corporation approved either the business
combination or the transaction that resulted in the stockholder becoming an
interested stockholder; (ii) upon consummation of the transaction that
resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation at the
time the transaction commenced (excluding for purposes of determining the
number of shares outstanding those shares owned (a) by directors who are also
officers of the corporation and (b) by employee stock plans in which employee
participants do not have the right to determine confidentially whether shares
held subject to the plan will be tendered in a tender or exchange offer); or
(iii) on or subsequent to such date the business combination is approved by
the board of directors of the corporation and authorized at a meeting of
stockholders by the affirmative vote of at least 66 2/3% of the outstanding
voting stock of the corporation not owned by the interested stockholder.

Transfer Agent

The transfer agent and registrar for the Common Stock is First
Chicago Trust Company of New York.

SHARES ELIGIBLE FOR FUTURE SALE

Upon the closing of the IPO, the Company had outstanding an
aggregate of 23,200,000 shares of Common Stock and 109,813,762 shares of Class
B Common Stock. Additionally, any shares of Common Stock sold in this
offering will be outstanding (a maximum of 2,867,374 shares). Of the total
outstanding shares of Common Equity, only the shares of Common Stock sold in
the IPO and in this offering will be freely tradable without restriction or
further registration under the Securities Act, unless purchased by
"affiliates" of the Company, as that term is defined in Rule 144 under the
Securities Act (which sales would be subject to certain volume limitations and
other restrictions described below).

The remaining shares of Common Equity held by existing
stockholders upon completion of the IPO are "restricted securities" as that
term is defined in Rule 144 under the Securities Act. In general, under Rule
144 as currently in effect, a person (or persons whose shares are aggregated),
including an affiliate, who has beneficially owned shares for at least two
years (including, if the shares are transferred, the holding period of any
prior owner except an affiliate) is entitled to sell in "broker's
transactions" or to market makers, within any three-month period commencing 90
days after the date of the IPO, a number of shares that does not exceed the
greater of (i) 1% of the then outstanding shares of such class of the Common
Equity (approximately 1,098,138 shares immediately after the IPO) or (ii)
generally, the average weekly trading volume in such class of the Common Stock
during the four calendar weeks preceding the filing of a Form 144 with respect
to such sale, and subject to certain other limitations and restrictions. In
addition, a person who is not deemed to have been an affiliate of the Company
at any time during the three months preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least three years, would be
entitled to sell such shares under Rule 144(k) without regard to the volume
and other requirements described above. Shares of Common Equity that would
otherwise be deemed "restricted securities" could be sold at any time through
an effective registration statement relating to such shares of Common Equity.

Of the 109,813,762 shares of Class B Common Stock outstanding
as of the closing of the IPO, 2,562,400 shares were acquired in July 1996
pursuant to the Employee Offering and the concurrent grant of restricted stock
awards, and 107,251,362 shares were acquired pursuant to the Split-Off. Under
current law, absent registration or an exemption from registration other than
Rule 144, (a) no shares of Class B Common Stock will be eligible for sale as
of October 31, 1996; (b) 107,251,362 shares of Class B Common Stock will be
eligible for sale two years from the effective date of the Split-Off, and (c)
the 2,562,400 shares of Class B Common Stock sold in the Employee Offering in
July 1996 (or granted concurrently therewith) and not repurchased or forfeited
will be eligible for sale upon the later of (i) July 1998 and (ii) for those
shares pledged to secure purchase money loans for such shares, two years after
the release of such pledge. In addition, the 2,562,400 shares of Class B
Common Stock issued in July 1996 are subject to contractual vesting
restrictions, which restrictions begin to lapse in April 1998.

Pursuant to the Registration Rights Agreement, the QTIP Trust,
which after the Split-Off holds 69,099,259 shares of Class B Common Stock,
has certain demand registration rights with respect to all or any portion
(subject to certain minimum thresholds) of the shares of Class B Common Stock
owned by the QTIP Trust, one or more of the other Ingram Family Stockholders
and certain of their permitted transferees on up to three occasions during the
84-month period following the closing of the IPO; provided that the Company
shall not be obligated to effect (i) any registration requested by the QTIP
Trust unless the QTIP Trust has furnished the Company with an opinion of
counsel to the effect that such registration and any subsequent sale will not
affect the tax-free nature of the Split-Off or (ii) more than one demand
registration during any 12-month period. The Registration Rights Agreement
also grants one demand registration right (subject to certain minimum
thresholds) to members of the Ingram family holding, at the time of the
Split-Off, approximately 18,210,000 shares of Class B Common Stock (which may
only be exercised within the 84-month period following the closing of the
IPO). All holders of such demand registration rights are subject to the
lock-up agreements described below, and therefore are restricted from selling
any shares during the 180-day period following October 31, 1996. In addition,
the Registration Rights Agreement grants one demand registration right to
certain minority stockholders of the Company, if a change of control of the
Company occurs following the closing of the IPO but prior to the second
anniversary of the Split-Off Date. The minority stockholders will not be
entitled to this registration right if they were offered the opportunity to
participate in the change of control transaction.

In addition, the Registration Rights Agreement provides that
the recipients of Class B Common Stock received in the Split-Off will be
entitled to unlimited "piggyback" registration rights in connection with any
proposed registration of equity securities by the Company (with certain
specified exceptions) during the 84-month period following the closing of the
IPO. Employees who received shares in the Employee Offering, holders of
restricted stock granted at the time of the Employee Offering, and persons who
have exercised Rollover Stock Options are bound by the provisions of the
Registration Rights Agreement as if such employees were parties thereto, and
are entitled to the "piggyback" registration rights provided therein, with
respect to the portion of their shares of Common Equity that is no longer
subject to restrictions.

Pursuant to the Thrift Plan Liquidity Agreement, the Thrift
Plan has certain rights to require the Company to purchase such shares of
Class B Common Stock as are required to be sold by the Thrift Plan in order to
comply with the requirements of ERISA or are necessary to fund distributions
to Thrift Plan participants, if the Company does not arrange for the
registration of such shares. Of the 10,007,000 shares of Class B Common Stock
held by the Thrift Plan, 9,207,000 shares will be subject to the lock-up
agreements described below.

In addition to the registration statement of which this
Prospectus forms a part, the Company expects to file a registration statement
on Form S-8 relating to Options held by employees of the Company. See "The
Plan--Exercise of Options." The Company also intends to file a registration
statement on Form S-8 relating to options granted under the 1996 Plan. Shares
registered under such registration statements will, subject to Rule 144 volume
limitations applicable to affiliates, be available for sale in the open
market, unless such shares are subject to vesting restrictions with the
Company or the lock-up agreements described below. Immediately following the
closing of the IPO there were outstanding options (including the Options)
exercisable for approximately 21,000,000 shares of Common Equity. Of such
options, approximately 2,600,000 Options and 200,000 options granted to Mr.
Stead were exercisable immediately after the closing of the IPO for shares of
Common Stock, although shares issuable upon exercise of approximately
1,000,000 of such options will be subject to the lock-up agreements described
below. In addition, approximately 1,350,000 Options will become exercisable
on or prior to May 1, 1997, although the shares issuable upon exercise of
approximately 600,000 of such Options will be subject to the lock-up
agreements described below. In addition, on April 1, 1997, options granted to
non-officers of the Company pursuant to the 1996 Plan will become exercisable
for approximately 700,000 shares of Class B Common Stock, none of which will
be subject to the lock-up agreements described below. See "The Plan,"
"Management--1996 Plan," and "--Rollover Plan; Incentive Stock Units."

The Company and its directors and executive officers, and
certain stockholders of the Company, have agreed, subject to certain
exceptions, not to offer, sell, contract to sell or otherwise dispose of any
Common Stock for a period of 180 days after the date of the Prospectus
relating to the IPO without the prior written consent of Morgan Stanley & Co.
Incorporated. Morgan Stanley & Co. Incorporated has informed the Company
that it has no present intention to consent to any such transactions. Of the
107,251,362 shares of Class B Common Stock received in the Split-Off, all but
3,855,892 shares are subject to such lock-up agreements. Each holder of
shares received in the Split-Off, in order to obtain the private letter ruling
from the IRS, has represented in the Exchange Agreement that there is no plan
or intention by such holder to sell, exchange, transfer by gift or otherwise
dispose of any of such holder's Class B Common Stock subsequent to the
Split-Off. As described above, all such shares are subject to restrictions on
resale under Rule 144, including a two-year holding period. However, 800,000
of such 3,855,892 shares are held by the Thrift Plan, which has the
registration rights described above, and therefore such shares may be
registered and be eligible for immediate resale under certain limited
circumstances. In addition, certain minority stockholders may have demand
registration rights under the Registration Rights Agreement upon a change of
control, as described above.

Prior to the IPO, there has not been any public market for
either class of the Common Equity. No prediction can be made as to the
effect, if any, that market sales of shares or the availability of shares for
sale will have on the market price prevailing from time to time. Sales of
substantial additional amounts of Common Equity in the public market, or the
perception that such sales could occur, could adversely affect the prevailing
market price of the Common Stock.

LEGAL MATTERS

Certain legal matters with respect to the Common Stock offered
in this offering will be passed upon for the Company by Davis Polk & Wardwell,
New York, New York.

EXPERTS

The consolidated financial statements as of December 31, 1994
and December 30, 1995 and for each of the three fiscal years in the period
ended December 30, 1995 included in this Prospectus have been so included in
reliance on the report of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.

ADDITIONAL INFORMATION

This prospectus applies only to Options and is available from
David Finley, Ingram Micro Inc., 1600 East St. Andrew Place, Santa Ana,
California 92705 (telephone number: (714) 566-1000) and from Michael Head,
Ingram Industries, Inc., 4400 Harding Road, Nashville, Tennessee 37205
(telephone number: (615) 298-8200).

Prior to the IPO, the Company has not been subject to the
reporting requirements of the Exchange Act. The Company has filed with the
Commission a registration statement on Form S-1 (together with any amendments
thereto, the "Registration Statement") under the Securities Act, with respect
to the shares of Common Stock being offered in the IPO. This Prospectus does
not contain all of the information set forth in the Registration Statement and
the exhibits and schedules thereto, certain items of which are omitted as
permitted by the Rules and Regulations of the Commission. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to herein are not necessarily complete, and in each instance
in which a copy of such contract or other document has been filed as an
exhibit to the Registration Statement, reference is made to such copy and each
such statement is qualified in all respects by such reference.

As a result of the IPO, the Company is subject to the
informational requirements of the Exchange Act, and, in accordance therewith,
will file reports and other information with the Commission. A copy of the
Registration Statement, the exhibits and schedules forming a part thereof and
the reports and other information filed by the Company in accordance with the
Exchange Act may be inspected without charge at the offices of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549 and at certain regional
offices of the Commission located at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center,
13th Floor, New York, New York 10048. Copies of such material may also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of the fees prescribed by
the Commission. Such material may also be accessed electronically by means of
the Commission's home page on the Internet at http://www.sec.gov.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants..................................................... F-2
Consolidated Balance Sheet as of December 31, 1994, December 30, 1995 and September
28, 1996 (unaudited)................................................................ F-3
Consolidated Statement of Income for the years ended January 1, 1994, December 31,
1994 and December 30, 1995 and the thirty-nine weeks ended September 30, 1995 and
September 28,
1996 (unaudited).................................................................... F-4
Consolidated Statement of Stockholder's Equity for the years ended January 1, 1994,
December 31, 1994 and December 30, 1995 and the thirty-nine weeks ended September
28, 1996 (unaudited)................................................................ F-5
Consolidated Statement of Cash Flows for the years ended January 1, 1994, December 31,
1994 and December 30, 1995 and the thirty-nine weeks ended September 30, 1995 and
September 28, 1996 (unaudited)...................................................... F-6
Notes to Consolidated Financial Statements............................................ F-7
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholder of Ingram Micro Inc.

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of stockholder's equity and of cash flows
present fairly, in all material respects, the financial position of Ingram Micro
Inc. (a wholly-owned subsidiary of Ingram Industries Inc.) and its subsidiaries
at December 31, 1994 and December 30, 1995, and the results of their operations
and their cash flows for each of the three years in the period ended December
30, 1995, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

PRICE WATERHOUSE LLP

Nashville, Tennessee
February 29, 1996, except
Note 12 as to which the date is September 9, 1996
and Note 2 as to which the date is October 29, 1996

F-2

<PAGE>
INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL PERIOD END
------------------------- SEPTEMBER 28,
1994 1995 1996
---------- ---------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash............................................. $ 58,369 $ 56,916 $ 43,196
Trade accounts receivable (less allowances of
$25,668 in 1994, $30,791 in 1995 and $38,069 in
1996).......................................... 745,910 1,071,275 1,127,937
Inventories...................................... 995,880 1,582,922 1,382,122
Other current assets............................. 68,717 88,503 115,243
---------- ---------- ----------
Total current assets........................ 1,868,876 2,799,616 2,668,498
Property and equipment, net......................... 58,285 89,126 127,984
Goodwill, net....................................... 33,481 29,871 27,785
Other............................................... 13,647 22,285 19,445
---------- ---------- ----------
Total assets................................ $1,974,289 $2,940,898 $ 2,843,712
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable................................. $1,100,598 $1,652,073 $ 1,670,358
Accrued expenses................................. 94,505 121,572 153,598
Current maturities of long-term debt............. 10,724 6,332 16,458
---------- ---------- ----------
Total current liabilities................... 1,205,827 1,779,977 1,840,414
Long-term debt................................... 92,204 170,424 128,855
Due to Ingram Industries......................... 449,355 673,792 479,703
Other............................................ 3,434 5,697 8,572
---------- ---------- ----------
Total liabilities........................... 1,750,820 2,629,890 2,457,544
Minority interest................................... 2,125 213 2,956
Commitments and contingencies (Note 8)
Redeemable Class B Common Stock..................... -- -- 17,223
Stockholder's equity:
Preferred Stock, $0.01 par value, 1,000,000
shares authorized; no shares issued and
outstanding.................................... -- -- --
Class A Common Stock, $0.01 par value,
265,000,000 shares authorized; no shares issued
and outstanding................................ -- -- --
Class B Common Stock, $0.01 par value,
135,000,000 shares authorized; 109,813,762
shares issued and outstanding (including
2,460,400 redeemable shares)................... 1,073 1,073 1,074
Additional paid in capital....................... 22,427 22,427 23,140
Retained earnings................................ 197,815 282,122 339,689
Cumulative translation adjustment................ 29 5,173 2,680
Unearned compensation............................ -- -- (594)
---------- ---------- ----------
Total stockholder's equity.................. 221,344 310,795 365,989
---------- ---------- ----------
Total liabilities and stockholder's
equity.................................... $1,974,289 $2,940,898 $ 2,843,712
========== ========== ==========
</TABLE>
See accompanying notes to these consolidated financial statements.

F-3

<PAGE>
INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

CONSOLIDATED STATEMENT OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS ENDED
FISCAL YEAR ---------------------------------
---------------------------------------- SEPTEMBER 30, SEPTEMBER 28,
1993 1994 1995 1995 1996
---------- ---------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Net sales................. $4,044,169 $5,830,199 $8,616,867 $6,070,722 $8,474,710
Cost of sales............. 3,714,527 5,391,224 8,011,181 5,648,210 7,900,223
---------- ---------- ---------- -------------- --------------
Gross profit.............. 329,642 438,975 605,686 422,512 574,487
Expenses:
Selling, general and
administrative....... 225,047 296,330 415,344 296,079 386,492
Charges allocated from
Ingram Industries.... 1,567 2,355 3,461 2,561 3,259
Non-cash compensation
charge............... 8,859
---------- ---------- ---------- -------------- --------------
226,614 298,685 418,805 298,640 398,610
---------- ---------- ---------- -------------- --------------
Income from operations.... 103,028 140,290 186,881 123,872 175,877
Other (income) expense:
Interest income......... (407) (937) (3,479) (3,049) (1,188)
Interest expense........ 5,003 8,744 13,451 8,918 10,608
Interest expense charged
by Ingram
Industries........... 16,089 24,189 32,606 22,977 30,912
Net foreign currency
exchange loss........ 111 6,873 7,751 6,572 447
Other................... (623) 716 1,936 405 1,689
---------- ---------- ---------- -------------- --------------
20,173 39,585 52,265 35,823 42,468
---------- ---------- ---------- -------------- --------------
Income before income taxes
and minority interest... 82,855 100,705 134,616 88,049 133,409
Provision for income
taxes................... 31,660 39,604 53,143 34,755 55,459
---------- ---------- ---------- -------------- --------------
Income before minority
interest................ 51,195 61,101 81,473 53,294 77,950
Minority interest......... 840 (2,243) (2,834) (2,986) 383
---------- ---------- ---------- -------------- --------------
Net income................ $ 50,355 $ 63,344 $ 84,307 $ 56,280 $ 77,567
========= ========= ========= ========== ==========
Earnings per share........ $ 0.41 $ 0.52 $ 0.69 $ 0.46 $ 0.64
========= ========= ========= ========== ==========
</TABLE>
See accompanying notes to these consolidated financial statements.

F-4
<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON STOCK COMMON STOCK ADDITIONAL CUMULATIVE
------------------- -------------------- PAID IN RETAINED TRANSLATION UNEARNED
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS ADJUSTMENT COMPENSATION TOTAL
---------- ------ ----------- ------ ---------- -------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JANUARY 2, 1993...... 107,251,362 $1,073 $ 22,427 $84,116 $ 1,802 $109,418
Translation
adjustment......... (4,314) (4,314)
Net income........... 50,355 50,355
---------- ------ ----------- ------ ------- -------- ------ --------
JANUARY 1, 1994...... 107,251,362 1,073 22,427 134,471 (2,512) 155,459
Translation
adjustment......... 2,541 2,541
Net income........... 63,344 63,344
---------- ------ ----------- ------ ------- -------- ------ --------
DECEMBER 31, 1994.... 107,251,362 1,073 22,427 197,815 29 221,344
Translation
adjustment......... 5,144 5,144
Net income........... 84,307 84,307
---------- ------ ----------- ------ ------- -------- ------ --------
DECEMBER 30, 1995.... 107,251,362 1,073 22,427 282,122 5,173 310,795
Distribution to
Ingram Industries
(unaudited)........ (20,000 ) (20,000)
Grant of restricted
Class B Common
Stock
(unaudited)........ 102,000 1 713 (714)
Amortization of
unearned
compensation
(unaudited)........ 120 120
Translation
adjustment
(unaudited)........ (2,493) (2,493)
Net income
(unaudited)........ 77,567 77,567
---------- ------ ----------- ------ ------- -------- ------ --------
SEPTEMBER 28, 1996
(UNAUDITED)........ 107,353,362 $1,074 $ 23,140 $339,689 $ 2,680 $ (594) $365,989
========== ====== =========== ====== ======= ======== ====== ========
</TABLE>

See accompanying notes to these consolidated financial statements.

F-5

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
THIRTY-NINE WEEKS ENDED
FISCAL YEAR -------------------------------
------------------------------ SEPTEMBER 30, SEPTEMBER 28,
1993 1994 1995 1995 1996
-------- -------- -------- -------------- --------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH PROVIDED (USED) BY OPERATING
ACTIVITIES:
Net income........................... $ 50,355 $ 63,344 $ 84,307 $ 56,280 $ 77,567
Adjustments to reconcile net income
to cash provided by operating
activities:
Depreciation and amortization..... 12,918 18,675 25,394 17,829 25,253
Deferred income taxes............. (5,719) (4,668) (8,632) (8,475) (3,144)
Minority interest................. 840 (2,243) (2,834) (2,986) 383
Non-cash compensation charge...... 8,859
Changes in operating assets and
liabilities, net of effects of
acquisitions:
Trade accounts receivable......... (161,097) (232,268) (320,177) (151,854) (63,799)
Inventories....................... (143,738) (345,511) (580,116) (481,072) 194,288
Other current assets.............. (2,881) (12,846) (15,877) (20,929) (16,280)
Accounts payable.................. 184,787 411,012 543,822 612,038 25,890
Accrued expenses.................. 22,830 17,452 22,828 11,651 24,235
-------- -------- -------- -------------- --------------
Cash provided (used) by operating
activities...................... (41,705) (87,053) (251,285) 32,482 273,252
CASH PROVIDED (USED) BY INVESTING
ACTIVITIES:
Purchase of property and equipment... (21,311) (31,286) (52,985) (37,219) (62,503)
Acquisitions, net of cash acquired... (21,447) (15,088)
Other................................ 2,062 3,765 4,188 1,124 (2,034)
-------- -------- -------- -------------- --------------
Cash used by investing
activities...................... (40,696) (42,609) (48,797) (36,095) (64,537)
CASH PROVIDED (USED) BY FINANCING
ACTIVITIES:
Proceeds from sale of Class B Common
Stock............................. 17,223
Increase (decrease) in borrowings
from Ingram Industries............ 83,635 103,580 224,437 (36,196) (194,090)
Proceeds (repayment) of debt......... 1,410 (4,930) (838) 97 2,481
Net borrowings under revolving credit
facility.......................... 16,388 44,636 74,666 19,039 (29,612)
Distribution to Ingram Industries.... (20,000)
Minority interest investment......... 2,400
-------- -------- -------- -------------- --------------
Cash provided (used) by financing
activities...................... 101,433 143,286 298,265 (17,060) (221,598)
Effect of exchange rate changes on
cash................................. 84 354 364 399 (837)
-------- -------- -------- -------------- --------------
Increase (decrease) in cash............ 19,116 13,978 (1,453) (20,274) (13,720)
Cash, beginning of year................ 25,275 44,391 58,369 58,369 56,916
-------- -------- -------- -------------- --------------
Cash, end of period or year............ $ 44,391 $ 58,369 $ 56,916 $ 38,095 $ 43,196
======== ======== ======== ========== ==========
Supplementary disclosure of cash flow
information:
CASH PAYMENTS DURING THE PERIOD:
Interest............................. $ 20,738 $ 32,528 $ 45,164 $ 31,066 $ 41,814
Income taxes......................... 34,906 47,152 54,506 38,843 60,090
Cash payments include payments made to Ingram Industries for interest and U.S. income taxes
</TABLE>

See accompanying notes to these consolidated financial statements.

F-6

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 1 -- ORGANIZATION AND BASIS OF PRESENTATION

Ingram Micro Inc. (the "Company" or "Ingram Micro"), formerly Ingram Micro
Holdings Inc. (refer to Note 12), is primarily engaged in wholesale distribution
and marketing of microcomputer hardware and software products. The Company
conducts the majority of its operations in North America and Europe. The Company
is a wholly-owned subsidiary of Ingram Industries Inc. ("Ingram Industries"). In
September 1995, Ingram Industries announced its intention to reorganize into
three separate companies in a tax-free reorganization. As part of the
reorganization (the "Reorganization"), Ingram Industries will split-off the
Company. The plan of reorganization is subject to, among other things, receipt
of a satisfactory tax ruling from the Internal Revenue Service. The plan
contemplates that certain of the Ingram Industries stockholders will exchange
(the "Exchange") all or some of their shares of Ingram Industries for the
outstanding shares of the Company held by Ingram Industries. The Exchange and
those elements of the Reorganization contemplated to occur prior to the closing
of the Company's initial public offering are referred to herein as the
"Split-Off."

The accompanying consolidated financial statements have been prepared as if
the Company had operated as an independent stand alone entity for all periods
presented except the Company generally has not had significant borrowings in
North America other than amounts due Ingram Industries. Refer to Notes 6 and 10
regarding related party transactions.

NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES

The Company's significant accounting policies which conform to generally
accepted accounting principles applied on a consistent basis between years, are
described below:

Basis of Consolidation

The consolidated financial statements include the accounts of the Company,
its wholly-owned and majority-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation.

Fiscal Year

The fiscal year of the Company is a 52 or 53 week period ending on the
Saturday nearest to December 31. All references herein to "1993," "1994" and
"1995" represent the 52 week fiscal years ended January 1, 1994, December 31,
1994 and December 30, 1995, respectively.

Accounting Estimates

Preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements, disclosure of contingent liabilities at financial
statement date and reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

Cash

Outstanding checks of $119,627 in 1994 and $72,868 in 1995 are included in
accounts payable.

F-7

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Revenue Recognition

Revenue is recognized at the time of product shipment. The Company, under
specified conditions, permits its customers to return or exchange products. The
provision for estimated sales returns is recorded concurrently with the
recognition of revenue.

Vendor Programs

Funds received from vendors for price protection, product rebates,
marketing or training programs are recorded net of direct costs as adjustments
to product costs, reduction of selling, general and administrative expenses or
revenue according to the nature of the program.

The Company does not provide warranty coverage of its product sales.
However, to maintain customer relations, the Company facilitates domestic vendor
warranty policies by accepting for exchange, with the Company's prior approval,
most defective products within 90 days of invoicing. Defective products received
by the Company are subsequently returned to the vendor for credit or
replacement.

The Company generated approximately 17% of its sales in fiscal 1993, 18% in
1994 and 23% in 1995 from products purchased from two vendors.

Inventories

Inventories are stated at the lower of average cost or market.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the
straight-line method over the following estimated useful lives. Leasehold
improvements are amortized over the shorter of the lease term or the estimated
useful life:

<TABLE>
<S> <C>
Leasehold improvements....................................... 3-12 years
Distribution equipment....................................... 5-7 years
Computer equipment........................................... 2-5 years
</TABLE>

Maintenance, repairs and minor renewals are charged to expense as incurred.
Additions, major renewals and betterments to property and equipment are
capitalized. Realization of carrying value is assessed periodically.

Goodwill

Goodwill is amortized on a straight-line basis over periods ranging from
five to twenty years. Accumulated amortization was $9,846 at December 31, 1994
and $13,576 at December 30, 1995. The Company evaluates the recoverability of
goodwill and reviews the amortization periods on an annual basis. Recoverability
is measured on the basis of anticipated undiscounted cash flows from operations.
At December 31, 1994 and December 30, 1995, no impairment was indicated.

Income Taxes

The temporary differences between the financial reporting basis and the
income tax basis of the Company's assets and liabilities are provided in
accordance with Statement of Financial Accounting Standards No. 109.

F-8

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Foreign Currency Translation

Financial statements of foreign subsidiaries are translated into U.S.
dollars using the exchange rate at each balance sheet date for assets and
liabilities and a weighted average exchange rate for each period for results of
foreign operations. Translation adjustments are recorded as a separate component
of stockholder's equity when the local currency is the functional currency.
Translation adjustments are recorded in income when the U.S. dollar is the
functional currency. The U.S. dollar is the functional currency for the
Company's subsidiaries in Mexico and Singapore.

Financial Instruments

The carrying amounts of cash, accounts receivable, accounts payable and
other accrued expenses approximate fair value because of the short maturity of
these items.

The carrying amounts of intercompany payables and debt issued pursuant to
bank credit agreements approximate fair value because interest rates on these
instruments approximate current market interest rates.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of trade accounts receivable
and derivative financial instruments. Credit risk with respect to trade accounts
receivable is limited due to the large number of customers and their dispersion
across geographic areas. The Company sells its products primarily in the United
States, Europe, Canada and Mexico. The Company performs ongoing credit
evaluations of its customers' financial condition, utilizes flooring
arrangements with third party financing companies, obtains credit insurance in
certain locations and requires collateral in certain circumstances. The Company
maintains an allowance for potential credit losses.

Derivative Financial Instruments

The Company operates internationally with distribution facilities in
various locations around the world. The Company uses derivative financial
instruments to reduce its exposure to fluctuations in interest rates and foreign
exchange rates by creating offsetting positions through the use of derivative
financial instruments. The market risk related to the foreign exchange
agreements is offset by changes in the valuation of the underlying items being
hedged. The majority of the Company's derivative financial instruments have
terms of 90 days or less. The Company currently does not use derivative
financial instruments for trading or speculative purposes, nor is the Company a
party to leveraged derivatives.

Derivative financial instruments are accounted for on an accrual basis.
Income and expense are recorded in the same category as that arising from the
related asset or liability being hedged. Gains and losses resulting from
effective hedges of existing assets, liabilities or firm commitments are
deferred and recognized when the offsetting gain and losses are recognized on
the related hedged items. Written foreign currency options are used to mitigate
currency risk in conjunction with purchased options. Gains or losses on written
foreign currency options are adjusted to market value at the end of each
accounting period and have not been material to date.

The notional amount of forward exchange contracts and options is the amount
of foreign currency bought or sold at maturity. The notional amount of currency
interest rate swaps is the underlying principal and currency amounts used in
determining the interest payments exchanged over the life of the swap. Notional
amounts are indicative of the extent of the Company's involvement in the various
types and uses of derivative financial instruments and are not a measure of the
Company's exposure to credit or market risks through its

F-9

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

use of derivatives. The estimated fair value of derivative financial instruments
represents the amount required to enter into like off-setting contracts with
similar remaining maturities based on quoted market prices.

Credit exposure is limited to the amounts, if any, by which the
counterparties' obligations under the contracts exceed the obligations of the
Company to the counterparties. Potential credit losses are minimized through
careful evaluation of counterparty credit standing, selection of counterparties
from a limited group of high quality institutions and other contract provisions.

Derivative financial instruments comprise the following:

<TABLE>
<CAPTION>
1994 1995
----------------------- -----------------------
NOTIONAL ESTIMATED NOTIONAL ESTIMATED
AMOUNTS FAIR VALUE AMOUNTS FAIR VALUE
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Foreign exchange forward contracts....... $ 44,586 $ (384) $109,218 $ (1,971)
Purchased foreign currency options....... 55,979 699 75,928 485
Written foreign currency options ........ 77,298 (25) 121,183 (615)
Currency interest rate swaps............. 9,823 (543) 25,655 (1,056)
</TABLE>

Employee Benefits

The Company participates in Ingram Industries' defined contribution plan
covering substantially all U.S. employees. The plan permits eligible employees
to make contributions up to certain limits and receive employer matching at
stipulated percentages. The Company's contributions charged to expense were $716
in fiscal 1993, $764 in 1994 and $1,399 in 1995.

As a result of the Split-Off described in Note 1, the Company will
establish its own employee benefit plans.

Earnings Per Share

Historical earnings per share data reflects the Company's capital structure
as a result of the formation of the Delaware corporation in preparation for the
Split-Off described in Notes 1 and 12. Earnings per share is determined based on
the number of shares the Company is expected to have after the Split-Off
(107,251,362) in addition to all dilutive common stock and common stock
equivalent shares issued within 12 months of the public offering. Pursuant to
the Securities and Exchange Commission Staff Accounting Bulletins and Staff
policy, such shares are treated as if they were outstanding for all periods
presented using the treasury stock method (14,155,229). The number of common
shares used to compute the earnings per share amounts for each of the three
fiscal years in the period ended December 30, 1995 and the thirty-nine weeks
ended September 30, 1995 and September 28, 1996 was 121,406,591, 121,406,591,
and 121,687,287, respectively.

Supplementary Earnings Per Share

Supplementary per share data (unaudited) is presented to give effect to the
repayment of certain indebtedness assumed by the Company in satisfaction of
amounts due to Ingram Industries. Net income is adjusted by $16,094 and $11,214
for 1995 and the thirty-nine weeks ended September 28, 1996, respectively, to
reflect the reduction in interest expense (net of tax) related to the
indebtedness assumed by the Company.

The weighted average shares outstanding used to calculate supplementary pro
forma earnings per share are based on weighted average shares outstanding at
December 30, 1995 and September 28, 1996, respectively, as adjusted for
20,200,000 shares of Class A Common Stock being sold in the Company's initial
public offering to repay certain indebtedness of the Company.

F-10

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Unaudited supplementary pro forma earnings per share for the fiscal periods
ended December 30, 1995 and September 28, 1996 is $0.70 and $0.62, respectively.

Interim Financial Information

The accompanying interim financial statements have been prepared without
audit, and certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted, although the Company believes that
the disclosures herein are adequate to make information presented not
misleading. These statements should be read in conjunction with the Company's
financial statements for the year ended December 30, 1995. The results of
operations for the thirty-nine week period is not necessarily indicative of
results for the full year.

In the opinion of management, the accompanying interim financial statements
contain all adjustments of a normal and recurring nature necessary for a fair
presentation of the Company's financial position as of September 28, 1996, its
results of operations for the thirty-nine weeks ended September 30, 1995 and
September 28, 1996, and its cash flows for the thirty-nine weeks ended September
30, 1995 and September 28, 1996.

NOTE 3 -- ACQUISITIONS

The Company acquired 70% of the stock of Distribuidora de Computo, S.A. de
C.V. ("Dicom"), in January 1993, for $9,327 cash and amounts payable to the
sellers of $2,475. Dicom is located in Mexico and is engaged in wholesale
distribution. The assets acquired were $32,383 and liabilities assumed were
$21,468.

The Company also acquired four separate wholesale distributors in Germany,
the United Kingdom, Belgium and the Netherlands in 1993. The combined
consideration for the assets or common stock purchased was $12,120 cash and
$2,364 of notes payable to sellers. The acquired companies had assets of $10,810
and liabilities of $80.

In April and August 1994, the Company acquired two separate wholesale
distributors (Keylan S.A. and Datateam Sverige AB) with operations in Spain,
Sweden, Denmark and Norway. The combined consideration paid was $15,088 cash and
$5,279 of notes payable to the sellers. The acquired companies had assets of
$48,748 and liabilities of $35,034.

The acquisitions described above have been accounted for using the purchase
method of accounting. The purchase price has been allocated to the assets
purchased and liabilities assumed based on fair values at the date of
acquisition. The excess of the purchase price over fair value of net assets
acquired in 1993 was $7,916 and in 1994 was $6,653 and was recorded as goodwill.

The operating results of these acquired businesses have been included in
the consolidated statement of income from the date of acquisition. Pro forma
results of operations have not been presented because the effects of these
acquisitions were not significant.

NOTE 4 -- ACCOUNTS RECEIVABLE

Effective February 1993, the Company entered into an arrangement with
Ingram Industries whereby the Company sells all of its domestic trade accounts
receivable to Ingram Industries on an ongoing basis ($665,325 at December 30,
1995). Ingram Industries transfers certain trade accounts receivable from the
Company and other Ingram Industries affiliates to a trust which sells
certificates representing undivided interests in the total pool of trade
receivables without recourse. Ingram Industries' arrangement with the trust
extends to December 31, 1997 and renews biannually under an evergreen provision
up to a maximum term of

F-11

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

twenty years. At December 31, 1994 and December 30, 1995, the accounts
receivable and due to Ingram Industries amounts in the Company's consolidated
balance sheet have not been reduced to reflect the sale of such receivables. As
a result of the Split-Off described in Note 1, it is anticipated that Ingram
Industries' accounts receivable securitization agreement will be assumed by the
Company.

NOTE 5 -- PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
FISCAL PERIOD END
--------------------- SEPTEMBER 28,
1994 1995 1996
-------- -------- --------------
(UNAUDITED)
<S> <C> <C> <C>
Land............................................. $ 2,274 $ 2,359 $ 11,431
Leasehold improvements........................... 17,448 26,381 47,588
Distribution equipment........................... 39,814 62,462 76,173
Computer equipment............................... 40,579 59,161 76,922
------- ------- -------
100,115 150,363 212,114
Accumulated depreciation......................... (41,830) (61,237) (84,130)
------- ------- -------
$ 58,285 $ 89,126 $127,984
======= ======= =======
</TABLE>

Depreciation expense was $10,927 in fiscal 1993, $15,756 in 1994 and
$21,785 in 1995.

NOTE 6 -- LONG-TERM DEBT AND DUE TO INGRAM INDUSTRIES

Ingram Industries manages most treasury activities, including the
arrangement of short-term and long-term financing on a centralized, consolidated
basis. Using a centralized cash management system, the Company's domestic cash
receipts are remitted to Ingram Industries and domestic cash disbursements are
funded by Ingram Industries on a daily basis. The Company's historical financial
statements reflect funding provided by Ingram Industries to the Company, and net
cash used by the Company, as amounts due to Ingram Industries. At December 31,
1994 and December 30, 1995, amounts due to Ingram Industries are classified as
long-term due to the terms of the underlying debt at Ingram Industries.

Ingram Industries charges the Company interest expense on the outstanding
intercompany balance based on Ingram Industries' domestic weighted average cost
of funds. The average rate was 6.93% in fiscal 1993, 6.99% in 1994 and 7.38% in
1995.

The Company and other Ingram Industries affiliates participate in Ingram
Industries' unsecured revolving credit agreement with a syndicate of banks.
Under this agreement, Ingram Industries and its affiliates may borrow in various
currencies up to $380,000 at various money market and bid rates. The weighted
average borrowing rate was 6.84% at December 31, 1994 and 7.00% at December 30,
1995. The agreement extends to December 31, 1999, and is renewable for an
additional two year period during the year prior to expiration. The agreement is
guaranteed by certain subsidiaries of the Company and other Ingram Industries
affiliates. At December 30, 1995, outstanding aggregate borrowings were
$229,716, of which $167,176 is specifically related to amounts drawn by the
Company's subsidiaries.

The Company's subsidiaries outside the United States have lines of credit
and short-term overdraft facilities aggregating $93,527 various banks worldwide.
Most of these arrangements are reviewed periodically for renewal. At December
30, 1995, the Company had $5,782 outstanding under these facilities.

F-12

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

In addition to the guarantee described above, the Company has guaranteed
certain other borrowings of Ingram Industries totaling $328,572. Included within
this amount are (i) amounts outstanding on an unsecured temporary revolving
credit facility that provides for borrowings up to $200,000 at specified
variable rates and expires on the earlier of December 31, 1996 or five days
after the successful completion of an initial public offering and (ii) $192,900
of fixed maturity, privately placed debt with maturities from November 1, 1996
to November 1, 2002. As a result of the Split-Off described in Notes 1 and 12,
it is anticipated that certain of the debt facilities guaranteed will be assumed
by the Company in satisfaction of the amounts payable to Ingram Industries.

Under the most restrictive provisions of the loan agreements, Ingram
Industries is required to maintain certain levels of stockholders' equity, a
certain current ratio and a certain debt to capital ratio and is subject to
certain dividend restrictions. During 1994 and 1995, Ingram Industries was in
compliance with the provisions of these agreements.

Long-term debt consists of the following:

<TABLE>
<CAPTION>
FISCAL PERIOD END
--------------------- SEPTEMBER 28,
1994 1995 1996
-------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Revolving credit facility........................ $ 61,913 $141,521 $ 100,195
Overdraft facilities............................. 10,724 5,782 13,184
Other............................................ 30,291 29,453 31,934
-------- -------- --------
102,928 176,756 145,313
Less current maturities of long-term debt........ (10,724) (6,332) (16,458)
-------- -------- --------
$ 92,204 $170,424 $ 128,855
======== ======== ========
</TABLE>

Annual maturities of long-term debt as of December 30, 1995 are as follows:

<TABLE>
<S> <C>
1996.............................................................. $ 6,332
1997.............................................................. 10,187
1998.............................................................. 388
1999.............................................................. 157,743
2000 and thereafter............................................... 2,106
--------
$176,756
========
</TABLE>

NOTE 7 -- INCOME TAXES

The components of income before taxes and minority interest consist of the
following:

<TABLE>
<CAPTION>
FISCAL YEAR
---------------------------------
1993 1994 1995
------- -------- --------
<S> <C> <C> <C>
United States....................................... $85,044 $ 99,701 $124,277
Foreign............................................. (2,189) 1,004 10,339
------- -------- --------
Total..................................... $82,855 $100,705 $134,616
======= ======== ========
</TABLE>

F-13

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
FISCAL YEAR
-------------------------------
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Current:
Federal............................................. $30,268 $35,989 $44,615
State............................................... 4,721 4,060 9,544
Foreign............................................. 2,390 4,223 7,616
------- ------- -------
37,379 44,272 61,775
Deferred:
Federal............................................. (1,929) (2,472) (4,082)
State............................................... (198) 136 (949)
Foreign............................................. (3,592) (2,332) (3,601)
------- ------- -------
(5,719) (4,668) (8,632)
------- ------- -------
Total income tax provision............................ $31,660 $39,604 $53,143
======= ======= =======
</TABLE>

Deferred income taxes reflect the tax effect of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
FISCAL PERIOD END
-------------------------------
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Deferred tax assets:
Tax in excess of book basis of foreign operations... $ 9,837 $13,816 $19,511
Accruals not currently deductible................... 7,840 9,275 12,734
Inventories......................................... 2,724 3,538 5,876
Other............................................... 293 263 492
------- ------- -------
Total....................................... $20,694 $26,892 $38,613
======= ======= =======
Deferred tax liabilities:
Depreciation........................................ $ 1,324 $ 958 $ 1,564
======= ======= =======
</TABLE>

Current deferred tax assets of $15,130 and $19,307 are included in other
current assets at December 31, 1994 and December 30, 1995, respectively.
Non-current deferred tax assets of $11,762 and $19,306 are included in other
assets at December 31, 1994 and December 30, 1995, respectively.

Reconciliation of the statutory U.S. federal income tax rate to the
Company's effective rate is as follows:

<TABLE>
<CAPTION>
FISCAL YEAR
----------------------
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
U.S. statutory rate............................................ 35.0% 35.0% 35.0%
State income taxes, net of federal income tax benefit.......... 3.3 2.8 3.9
Other.......................................................... (.1) 1.5 .6
---- ---- ----
Effective tax rate............................................. 38.2% 39.3% 39.5%
===== ===== =====
</TABLE>

F-14

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The Company is included in the consolidated federal income tax return filed
by Ingram Industries. Taxes related to the Company are determined on a separate
entity basis and taxes payable are remitted to Ingram Industries every two
months. Taxes payable to Ingram Industries of $4,089 at December 31, 1994 and
$14,303 at December 30, 1995 are included in accrued expenses in the
consolidated balance sheet.

At December 30, 1995, the Company had foreign net operating tax loss
carryforwards of $49,264 of which approximately one third have no expiration
date.

The Company does not provide for U.S. federal income taxes on undistributed
earnings of foreign subsidiaries as such earnings are intended to be permanently
reinvested in those operations.

NOTE 8 -- COMMITMENTS AND CONTINGENCIES

There are various claims, lawsuits and pending actions against the Company
incident to the Company's operations. It is the opinion of management that the
ultimate resolution of these matters will not have a material effect on the
Company's financial position or results of operations.

The Company has arrangements with certain finance companies which provide
accounts receivable and inventory financing facilities for its customers. The
Company assesses the financial stability of the finance companies and payment
terms are within 3 to 30 days of product shipment. In conjunction with certain
of these arrangements, the Company has inventory repurchase agreements with the
finance companies that would require it to repurchase certain inventory which
might be repossessed from the customers by the finance companies. Such
repurchases have been insignificant to date.

The Company leases the majority of its facilities and certain equipment
under noncancelable operating leases. Renewal and purchase options at fair
values exist for a substantial portion of the leases. Rental expense for the
years ended January 1, 1994, December 31, 1994 and December 30, 1995 was
$11,939, $16,574 and $28,367, respectively. Future minimum rental commitments on
operating leases that have remaining noncancelable lease terms in excess of one
year as of December 30, 1995 are as follows:

<TABLE>
<S> <C>
1996............................................................... $21,507
1997............................................................... 18,614
1998............................................................... 16,693
1999............................................................... 14,912
2000............................................................... 9,912
Later years........................................................ 54,104
</TABLE>

F-15

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

NOTE 9 -- SEGMENT INFORMATION

The Company operates predominantly in a single industry segment as a
wholesale distributor of microcomputer hardware and software. Geographic areas
in which the Company operates include the United States (United States and the
majority of the Company's exports), Europe (Belgium, Denmark, France, Germany,
Italy, the Netherlands, Norway, Spain, Sweden and the United Kingdom) and Other
(Canada, Mexico and Singapore). Transfers between geographic areas primarily
represent intercompany sales and are accounted for based on established sales
prices between the related companies. Net sales, income (loss) from operations
and identifiable assets by geographic area are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR
------------------------------------
1993 1994 1995
---------- ---------- ----------
<S> <C> <C> <C>
NET SALES:
United States:
Sales to unaffiliated customers............... $3,118,316 $4,122,338 $5,969,749
Transfers between geographic areas............ 60,358 76,696 86,961
Europe........................................... 485,126 1,078,250 1,849,129
Other............................................ 440,727 629,611 797,989
Eliminations..................................... (60,358) (76,696) (86,961)
---------- ---------- ----------
Total.................................... $4,044,169 $5,830,199 $8,616,867
========== ========== ==========
INCOME (LOSS) FROM OPERATIONS:
United States.................................... $ 98,669 $ 123,796 $ 156,749
Europe........................................... (3,246) 8,079 19,576
Other............................................ 7,605 8,415 10,556
---------- ---------- ----------
Total.................................... $ 103,028 $ 140,290 $ 186,881
========== ========== ==========
IDENTIFIABLE ASSETS:
United States.................................... $ 945,699 $1,381,798 $1,996,642
Europe........................................... 190,892 393,346 669,309
Other............................................ 159,772 199,145 274,947
---------- ---------- ----------
Total.................................... $1,296,363 $1,974,289 $2,940,898
========== ========== ==========
</TABLE>

No single customer accounts for 10% or more of the Company's net sales.

NOTE 10 -- TRANSACTIONS WITH RELATED PARTIES

Ingram Industries provides certain corporate, general and administrative
services to the Company in addition to treasury activities described in Note 6
(including, but not limited to, legal, tax, employee benefits and electronic
data processing services). Charges for these services are based upon utilization
and at amounts which management believes are less than the amounts which the
Company would incur as a stand-alone entity. Such amounts are reflected as
charges allocated from Ingram Industries on the consolidated statement of
income.

Ingram Industries also provides guarantees to certain of the Company's
vendors and for certain of the Company's leases; no charges from Ingram
Industries have been reflected in the Company's financial statements for such
guarantees.

F-16

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The Company leases warehouse and office space from certain stockholders of
Ingram Industries. Total rental payments were $729 in fiscal 1993, $784 in 1994
and $1,645 in 1995.

Other transactions with Ingram Industries affiliates includes sales of
$1,664 in fiscal 1993, $3,056 in 1994 and $5,281 in 1995.

NOTE 11 -- STOCK OPTIONS AND INCENTIVE PLANS

Certain of the Company's employees participate in Ingram Industries'
qualified and non-qualified stock option and SAR plans. Ingram Industries' plans
provide for the grant of options and SARs at fair value. In conjunction with the
Split-Off, Ingram Industries options held by the Company's employees and certain
other Ingram Industries options and SARs will be converted to Ingram Micro
options ("Rollover Stock Options") to purchase Class A Common Stock. Upon
conversion, approximately 11,000,000 Rollover Stock Options will be outstanding.
The Rollover Stock Options have exercise prices ranging from $0.66 to $3.32 per
share, the majority will be fully vested by the year 2000 and no such options
expire later than 10 years from the date of grant. The Company recorded a
non-cash compensation charge of approximately $8,859 or $5,404 net of tax, in
the first three quarters of 1996 related to the vested portion of certain
Rollover Stock Options. This charge was based on the difference between the
estimated fair value of such options in the first quarter of 1996 and the
exercise price of such options.

The Company will adopt Statement of Financial Accounting Standards No. 123,
"Accounting for Stock Based Compensation" ("FAS 123") in 1996. As permitted by
FAS 123, the Company will continue to measure compensation cost in accordance
with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees." Therefore, the adoption of FAS 123 will have no impact on the
Company's financial condition or results of operations.

The Company has two Incentive Stock Unit ("ISU") plans available to grant
up to 1,575,000 ISUs to certain key employees. Subject to continued employment,
these stock appreciation awards vest over five years and actual cash payout is
based on the increase in book value from date of award grant. Outstanding ISUs
at January 1, 1994, December 31, 1994 and December 30, 1995 were 748,200,
221,000 and 25,100, respectively. The amounts charged to expense related to
these incentive stock unit plans totaled $3,354 in fiscal 1993, $2,163 in 1994
and $695 in 1995. There were no grants made under the ISU plans in 1995.

The Company will establish its separate stock option and incentive plans in
conjunction with the Split-Off. Refer to Note 12.

NOTE 12 -- SUBSEQUENT EVENTS

Formation of Ingram Micro Inc.

On April 29, 1996, a Delaware corporation, Ingram Micro Inc., was formed to
hold all of the outstanding stock of Ingram Micro Holdings Inc. ("Holdings"). It
is the Company's plan to merge with and into such Delaware corporation prior to
the effective date of a registration statement on Form S-1 filed with the
Securities and Exchange Commission. The proposed merger will not impact the
Company's financial statements, as the Company's historical financial statements
reflect the capital structure described herein.

Ingram Micro Inc., a Delaware corporation, has two classes of common stock,
consisting of 265,000,000 shares of $0.01 par value Class A Common Stock and
135,000,000 shares of $0.01 par value Class B Common Stock, and 1,000,000 shares
of $0.01 par value Preferred Stock. Class A stockholders are entitled to one
vote on each matter to be voted on by the stockholders whereas the Class B
stockholders are entitled to ten votes on each matter to be voted on by the
stockholders. The two classes of stock have similar

F-17

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

rights in all other respects. Each share of Class B Common Stock may at any time
be converted to a share of Class A Common Stock; however, conversion will occur
automatically on the earliest to occur of (i) the fifth anniversary of the
consummation of the Split-Off pursuant to the Exchange Agreement; (ii) the sale
of such share of Class B Common Stock to any person not provided for under the
provisions of the Board Representation Agreement; or (iii) the date on which the
number of shares of Class B Common Stock then outstanding represents less than
25% of the aggregate number of shares of Class A Common Stock and Class B Common
Stock then outstanding. The capital structure resulting from the formation of
the Delaware corporation was finalized on September 9, 1996 and the Company has
107,251,362 shares of Class B Common Stock outstanding.

Key Employee Stock Purchase Plan

As of April 30, 1996, the Company adopted the Key Employee Stock Purchase
Plan (the "Plan") which provides for the issuance of up to 4,000,000 shares of
Class B Common Stock to certain employees. In June 1996, the Company offered
2,775,000 shares of its Class B Common Stock to certain employees pursuant to
the Plan, and subsequently sold 2,510,400 shares with proceeds of approximately
$17,573. The shares sold thereby are subject to vesting and certain restrictions
on transfer, may be redeemable prior to vesting and are subject to repurchase by
the Company upon termination of employment. The Company has repurchased 50,000
of such shares. In addition, the Company granted, pursuant to this Plan, 107,000
restricted shares of Class B Common Stock to certain officers and employees of
the Company. These shares are subject to vesting. Prior to vesting, these
restricted grant shares are subject to forfeiture to the Company without
consideration, upon termination of employment. 5,000 of such shares have been
forfeited to the Company.

1996 Equity Incentive Plan

As of April 30, 1996, the Company adopted the 1996 Equity Incentive Plan
and Ingram Industries approved the grant of options under this plan. In June
1996, the Company issued options at $7.00 per share to purchase an aggregate of
approximately 4,800,000 shares of Class B Common Stock under its Equity
Incentive Plan to all eligible employees of the Company. These options vest and
generally become exercisable over five years from the issue date and expire
eight years after the issue date.

Split-Off, Reorganization and Exchange

The Company plans to engage in a Split-Off, consisting of a Reorganization
and an Exchange, from Ingram Industries and Ingram Entertainment. Pursuant to
the Reorganization Agreement it is contemplated that the Company will retain all
of the assets and liabilities associated with the Company's business and will
indemnify Ingram Industries and Ingram Entertainment for all liabilities related
to the Company's business and operations or otherwise assigned to the Company.
In addition, the Reorganization Agreement provides for the sharing by the
Company of approximately 73% of certain contingent assets and liabilities not
allocated to one of the parties. The Company will assume a portion of Ingram
Industries' debt in return for the extinguishment of intercompany indebtedness.
The debt to be assumed by the Company includes an accounts receivable
securitization program which will be transferred to the Company subsequent to
the Split-Off. The Company will also enter into a $1 billion Credit Facility.

In connection with the Reorganization Agreement, the Company is expected to
enter into an employee benefits transfer and assumption agreement with Ingram
Industries and Ingram Entertainment which will provide for the allocation of
employee benefit assets and liabilities on a pro rata basis to each of the
parties of the Split-Off. It is also contemplated that the Company will enter
into a Tax Sharing Agreement. This Agreement will hold the Company liable for
its allocable share of the consolidated federal and state income

F-18

<PAGE>

INGRAM MICRO INC.
(A WHOLLY-OWNED SUBSIDIARY OF INGRAM INDUSTRIES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

tax liability for the year that includes the Split-Off and approximately 73% of
any adjustment in excess of reserves already established by Ingram Industries
for past federal or state tax liabilities of the Company, Ingram Industries or
Ingram Entertainment. In addition, the Company will share in any refunds
received. The Company will also enter into Transitional Service Agreements
related to certain administration services including data processing.

In conjunction with the Reorganization, the Company will consummate an
exchange pursuant to which certain existing stockholders of Ingram Industries
may exchange all or a portion of their shares of Ingram Industries common stock
for shares of Class B Common Stock of the Company of equivalent value. If all
stockholders were to exchange all eligible shares, they would receive
107,251,362 shares of Class B Common Stock. Pursuant to a Transfer Restrictions
Agreement, the shares of Class B Common Stock received by employees of the
Company, Ingram Industries or Ingram Entertainment in the Exchange are expected
to be subject to repurchase by the Company upon termination of employment. The
repurchase feature lapses upon consummation of an initial public offering.
Although there can be no assurance, it is also contemplated that, on or after
June 20, 1997, certain remaining stockholders of Ingram Industries will exchange
their remaining shares of Ingram Industries common stock for shares of Ingram
Entertainment common stock.

F-19

<PAGE>

INGRAM MICRO INC.

Rollover Stock Option Plan

SECTION 1. Purpose. The purpose of the Ingram Micro Inc.
Rollover Stock Option Plan is to provide for the granting of options to
purchase shares of Micro's common stock upon the conversion and cancellation
of certain options to purchase shares of, and ISUs and SARs relating to,
common stock of Industries as provided in the Conversion Agreement in
connection with the split-off pursuant to the Exchange Agreement.

SECTION 2. Definitions. As used in the Plan, the following
terms shall have the meanings set forth below:

"Board" means the Board of Directors of Micro.

"Cause" means commission of acts of dishonesty, disloyalty or
acts substantially detrimental to the welfare of Micro, Industries or
Entertainment or any of their respective Subsidiaries, as determined by the
respective Boards of Directors, or designated committees thereof.

"Code" means the Internal Revenue Code of 1986, as amended from
time to time.

"Committee" means a committee of the Board designated by the
Board to administer the Plan and composed of not less than the minimum number
of persons from time to time required by Rule 16b-3, each of whom, to the
extent necessary to comply with Rule 16b-3 only, is a "non-employee director"
within the meaning of Rule 16b-3. Until otherwise determined by the Board,
the Compensation Committee designated by the Board shall be the Committee
under the Plan. If the Board has not designated a committee to administer the
Plan, the term "Committee" shall mean the Board.

"Conversion Agreement" means the Stock Option, SAR and ISU
Conversion and Exchange Agreement, dated as of the date of the Closing among
the Ingram Companies and the other Persons set forth on the signature pages
thereof.

"Employee" means an employee of Micro, Industries or
Entertainment or any of their respective Subsidiaries.

"Employer" means a Participant's employer on the date that an
Option is granted hereunder to such Participant or any of such Employer's
respective parent or subsidiary corporations.

"Entertainment" means Ingram Entertainment Inc.

"Exchange Act" means the Securities Exchange Act of 1934, as
amended.

"Exchange Agreement" means the Exchange Agreement dated as of
September 4, 1996, as amended and restated as of October 17, 1996, among the
Ingram Companies and the other Persons set forth on the signature pages
thereof.

"Executive Officer" means, at any time, an individual who is an
executive officer of Micro within the meaning of Exchange Act Rule 3b-7 or who
is an officer of Micro within the meaning of Exchange Act Rule 16a-1(f).

"Fair Market Value" means with respect to the Shares, as of any
given date or dates, the reported closing price of a share of such class of
common stock on such exchange or market as is the principal trading market for
such class of common stock. If such class of common stock is not traded on
an exchange or principal trading market on such date, the fair market value of
a Share shall be determined by the Committee in good faith taking into account
as appropriate recent sales of the Shares, recent valuations of the Shares,
the lack of liquidity of the Shares, the fact that the Shares may represent a
minority interest and such other factors as the Committee shall in its
discretion deem relevant or appropriate.

"First Closing" shall have the meaning ascribed thereto in the
Exchange Agreement.

"Incentive Stock Option" means a right to purchase Shares from
Micro that is granted under Section 6 of the Plan and that is intended to meet
the requirements of Section 422 of the Code or any successor provision thereto.

"Industries" means Ingram Industries Inc.

"Ingram Company" means each of Micro, Industries and
Entertainment and their respective Subsidiaries.

"Ingram Family" means Martha Ingram, her descendants (including
any adopted Persons and their descendants) and their respective spouses.

"ISU" shall have the meaning ascribed thereto in the Conversion
Agreement.

"Micro" means Ingram Micro Inc.

"Non-Qualified Stock Option" means a right to purchase Shares
from Micro that is granted under Section 6 of the Plan and that is not
intended to be an Incentive Stock Option.

"Option" means an Incentive Stock Option or a Non-Qualified
Stock Option.

"Option Agreement" means the written agreement evidencing an
Option in substantially the form attached hereto as Annex 1.

"Participant" means any Employee set forth in Schedule 1 to the
Conversion Agreement holding Options, ISUs or SARs outstanding as of the First
Closing under any Industries Equity-Based Plan (as defined in the Conversion
Agreement) and to the extent applicable, any heirs or legal representatives
thereof.

"Person" means any individual, corporation, limited liability
company, partnership, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.

"Plan" means this Rollover Stock Option Plan.

"Public Offering" means an underwritten registered public
offering of Shares of any class of common stock of Micro.

"Purchase Agreement" means an agreement substantially in the
form attached hereto as Annex 2 or Annex 3, as the case may be, to be executed
by Micro and a Participant as a condition to the exercise, prior to a Public
Offering, by such Participant of any Option granted hereunder.

"Rule 16b-3" means Rule 16b-3 as promulgated and interpreted by
the SEC under the Exchange Act, or any successor rule or regulation thereto as
in effect from time to time.

"SAR" shall have the meaning ascribed thereto in the Conversion
Agreement.

"SEC" means the Securities and Exchange Commission or any
successor thereto.

"Shares" means shares of the Class A Common Stock, $.01 par
value per share, of Micro, or such other securities of Micro as may be
designated by the Committee from time to time pursuant to the provisions of
the Plan.

"Subsidiary" means, with respect to Industries, Entertainment
or Micro, any entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are directly or indirectly owned by such
Person at any time after the First Closing.

SECTION 3. Administration.

(a) Authority of Committee. The Plan shall be administered by
the Committee. Subject to the terms of the Plan and applicable law, and in
addition to other express powers and authorizations conferred on the Committee
by the Plan, the Committee shall have full power and authority to: (i)
determine whether, to what extent, and under what circumstances Options may be
settled or exercised in cash, Shares, other securities or other property, or
suspended and the method or methods by which Options may be settled, exercised
or suspended; (ii) determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other property and other amounts
payable with respect to an Option shall be deferred either automatically or at
the election of the holder thereof or of the Committee; (iii) interpret and
administer the Plan and any instrument or agreement relating to, or Option
made under, the Plan; (iv) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan; and (v) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan. The Committee shall treat each Participant
equally under this Section 3(a) and without regard to whether any such
Participant is employed by Micro, Entertainment or Industries or any of their
respective parent or subsidiary corporations, as the case may be.

(b) Committee Discretion Binding. Unless otherwise expressly
provided in the Plan, all designations, determinations, interpretations and
other decisions under or with respect to the Plan or any Option shall be within
the sole discretion of the Committee, may be made at any time and shall be
final, conclusive and binding upon all Persons, including any Ingram Company,
any Participant, any holder or beneficiary of any Option, any stockholder and
any Employee.

SECTION 4. Shares Available for Options.

(a) Shares Available. Subject to adjustment as provided in
Section 4(b), the number of Shares with respect to which Options may be
granted under the Plan shall be 12,000,000.

(b) Adjustments. In the event that the Committee determines
that any dividend or other distribution (whether in the form of cash, Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, split-off,
spin-off, combination, repurchase or exchange of Shares or other securities of
Micro or other similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be appropriate in order
to preserve the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number of Shares of Micro (or number
and kind of other securities or property) with respect to which Options may
thereafter be granted, (ii) the number of Shares or other securities of Micro
(or number and kind of other securities or property) subject to outstanding
Options, and (iii) the exercise price with respect to any Option, or, if
deemed appropriate, make provision for a cash payment to the holder of an
outstanding Option; provided, in each case, that except to the extent deemed
desirable by the Committee (A) with respect to Options that are intended to
qualify as Incentive Stock Options, no such adjustment shall be authorized to
the extent that such adjustment would cause the Plan to violate Section
422(b)(1) of the Code and (B) with respect to any Option, no such adjustment
shall be authorized to the extent that such authority would be inconsistent
with the Plan's meeting the requirements of Section 162(m) of the Code.

(c) Sources of Shares Deliverable Under Options. Any Shares
delivered pursuant to an Option may consist, in whole or in part, of
authorized and unissued Shares or of treasury Shares.

SECTION 5. Eligibility. Participation in the Plan is limited
to those Employees who qualify as Participants as of the First Closing.

SECTION 6. Stock Options.

(a) Grant. The Employees to whom Options shall be granted, the
number of Shares to be covered by each Option, the option price therefor, the
type of Option and the conditions and limitations applicable to the exercise
of the Option shall be determined in accordance with the Conversion Agreement,
including Schedule 1 thereto. Options will be Incentive Stock Options,
Non-Qualified Stock Options or both, as provided in the Conversion Agreement.
In the case of Incentive Stock Options, the terms and conditions of such
grants shall be subject to and comply with such rules as may be prescribed by
Section 422 of the Code.

(b) Exercise Price. The Committee shall establish the exercise
price as provided in Schedule 1 to the Conversion Agreement.

(c) Exercise. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Committee may, subject to the
Conversion Agreement, specify in the applicable Option Agreement or
thereafter. The Committee may impose such conditions with respect to the
exercise of Options, including without limitation, any relating to the
application of federal or state securities laws, as it may deem necessary or
advisable.

(d) Payment. No Shares shall be delivered pursuant to any
exercise of an Option until payment in full of the option price therefor is
received by Micro. Such payment may be made in cash, or its equivalent, or,
if and to the extent permitted by the Committee, by exchanging Shares owned by
the optionee (which are not the subject of any pledge or other security
interest), or by a combination of the foregoing, provided that the combined
value of all cash and cash equivalents and the Fair Market Value of any such
Shares so tendered to Micro as of the date of such tender is at least equal to
such option price.

SECTION 7. Termination or Suspension of Employment. The
following provisions shall apply in the event of the Participant's
termination of employment unless the Committee shall have provided
otherwise, either at the time of the grant of the Option or thereafter.

(a) Nonqualified Stock Options.

(i) Termination of Employment. Except as the Committee may at any time
otherwise provide or as required to comply with applicable law, if the
Participant's employment with the Participant's Employer or any of its
Subsidiaries is terminated for any reason other than death, permanent and
total disability, retirement or Cause, the Participant's right to exercise any
Nonqualified Stock Option shall terminate, and such Option shall expire, on
the earlier of (A) the 60th day following such termination of employment or
(B) the date such Option would have expired had it not been for the
termination of employment. The Participant shall have the right to exercise
such Option prior to such expiration to the extent it was exercisable at
the date of such termination of employment and has not subsequently been
exercised.

(ii) Death, Disability or Retirement. Except as the Committee may
at any time otherwise provide or as required to comply with applicable law,
if the Participant's employment with the Participant's Employer or any of
its Subsidiaries is terminated by reason of death, permanent and total
disability, or retirement, the Participant or his successor (if employment
is terminated by death) shall have the right to exercise any Nonqualified
Stock Option during the one-year period following such termination of
employment, to the extent it was exercisable and outstanding at the date of
such termination of employment, but in no event shall such option be
exercisable later than the date the Option would have expired had it not
been for the termination of such employment. The meaning of the terms
"permanent and total disability" and "retirement" shall be determined by
the Committee.

(iii) Cause. On the date the Participant's employment with the
Participant's Employer or any of its Subsidiaries is terminated for Cause, the
Participant's right to exercise any Nonqualified Stock Option shall terminate
and such Option shall expire.

(iv) Acceleration and Extension of Exercisability. Notwithstanding the
foregoing, the Committee may, in its discretion, provide at any time (A) that
an Option granted to a Participant may terminate at a date later than that set
forth above, provided such date shall not be beyond the date the Option would
have expired had it not been for the termination of the Participant's
employment and (B) that an Option may become immediately exercisable when it
finds that such acceleration would be in the best interests of Micro.

(b) Incentive Stock Options. Except as otherwise determined by
the Committee at the time of grant or otherwise or as required to comply with
applicable law, if the Participant's employment with the Participant's
Employer or any of its Subsidiaries is terminated for any reason other than
for Cause, the Participant shall have the right to exercise any Incentive
Stock Option during the 60 days after such termination of employment to the
extent it was exercisable at the date of such termination, but in no event
later than the date the Option would have expired had it not been for the
termination of such employment. If the Participant does not exercise such
Option to the full extent permitted by the preceding sentence, the remaining
exercisable portion of such Option automatically will be deemed a Nonqualified
Stock Option, and such Option will be exercisable during the period set forth
in Section 7(a) of the Plan, provided that in the event that employment is
terminated because of death or the Participant dies in such 60-day period the
Option will continue to be an Incentive Stock Option to the extent provided by
Section 421 or Section 422 of the Code, or any successor provision, and any
regulations promulgated thereunder. On the date the Participant's employment
with his Employer or any of its Subsidiaries is terminated for Cause, the
Participant's right to exercise any Incentive Stock Option shall terminate and
such Option shall expire.

(c) Any time spent by a Participant in the status of "leave
without pay" shall be disregarded for purposes of determining the extent to
which any Option or portion thereof has vested or otherwise become exercisable
or nonforfeitable.

SECTION 8. Amendment and Termination.

(a) Amendments to the Plan. Subject to the provisions of the
Conversion Agreement, the Board may amend, alter, suspend, discontinue, or
terminate the Plan or any portion thereof at any time; provided that no such
amendment, alteration, suspension, discontinuation or termination shall be
made without stockholder approval if such approval is necessary to comply with
any tax or regulatory requirement, including for these purposes any approval
requirement which is a prerequisite for exemptive relief from Section 16(b) of
the Exchange Act, for which or with which the Board deems it necessary or
desirable to qualify or comply. Notwithstanding anything to the contrary
herein, the Committee may amend the Plan in such manner as may be necessary so
as to have the Plan conform with local rules and regulations in any
jurisdiction outside the United States.

(b) Amendments to Options. Subject to the provisions of the
Conversion Agreement, the Committee may waive any conditions or rights under,
amend any terms of, or alter or suspend any Option theretofore granted,
prospectively or retroactively; provided that any such waiver, amendment,
alteration or suspension that would adversely affect the rights of any
Participant or any holder or beneficiary of any Option theretofore granted
shall not to that extent be effective without the consent of the affected
Participant, holder or beneficiary.

(c) Cancellation. Any provision of this Plan or any Option
Agreement to the contrary notwithstanding, the Committee may cause any Option
granted hereunder to be cancelled in consideration of a cash payment or
alternative Option made to the holder of such cancelled Option equal in value
to the Fair Market Value of such cancelled Option on the date of cancellation.

SECTION 9. General Provisions.

(a) Nontransferability. No Option shall be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered
by a Participant, except by will or the laws of descent and distribution
provided, however, that an Option other than an Incentive Stock Option may
be transferable, to the extent set forth in the applicable Option
Agreement, (i) if such Option Agreement provisions do not disqualify such
Option for exemption under Rule 16b-3 or (ii) if such Option is not
intended to qualify for exemption under such rule.

(b) No Rights to Options. Except as provided in the Conversion
Agreement or herein, no Employee, Participant or other Person shall have any
claim to be granted any Option, and there is no obligation for uniformity of
treatment of Employees, Participants, or holders or beneficiaries of Options.
The terms and conditions of Options need not be the same with respect to each
recipient.

(c) Share Certificates. All certificates for Shares or other
securities of Micro or any Subsidiary delivered under the Plan pursuant to any
Option or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan or
the rules, regulations and other requirements of the Securities and
Exchange Commission or any stock exchange upon which such Shares or other
securities are then listed and any applicable laws or rules or regulations,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.

(d) Withholding. A Participant may be required to pay to the
Participant's Employer and such Employer shall have the right and is hereby
authorized to withhold from any payment due or transfer made under any Option
or under the Plan or from any compensation or other amount owing to a
Participant the amount (in cash, Shares, other securities or other property)
of any applicable withholding taxes in respect of an Option, its exercise, or
any payment or transfer under an Option or under the Plan and to take such
other action as may be necessary in the opinion of the Employer to satisfy all
obligations for the payment of such taxes.

(e) Option Agreements. Each Option hereunder shall be
evidenced by an Option Agreement which shall be delivered to the
Participant and shall specify the terms and conditions of the Option and
any rules applicable thereto.

(f) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent Micro or any of its Subsidiaries from
adopting or continuing in effect other compensation arrangements, which may,
but need not, provide for the grant of options, restricted stock and Shares
(subject to stockholder approval if such approval is required), and such
arrangements may be either generally applicable or applicable only in specific
cases.

(g) No Right to Employment. The grant of an Option shall not be
construed as giving a Participant the right to be retained in the employ of
the Participant's Employer or any other Ingram Company. Further, the
Participant's Employer may at any time dismiss a Participant from employment,
free from any liability or any claim under the Plan or otherwise, unless
otherwise expressly provided in the Plan or in any Option Agreement.

(h) Rights as a Stockholder. Subject to the provisions of the
applicable Option, no Participant or holder or beneficiary of any Option shall
have any rights as a stockholder with respect to any Shares to be distributed
under the Plan until he or she has become the holder of such Shares.

(i) Governing Law. The validity, construction, and effect of
the Plan and any rules and regulations relating to the Plan and any Option
Agreement shall be determined in accordance with the laws of the State of
Delaware.

(j) Severability. If any provision of the Plan or any
Option is or becomes or is deemed to be invalid, illegal, or unenforceable
in any jurisdiction or as to any Person or Option, or would disqualify the
Plan or any Option under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to the applicable
laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan
or the Option, such provision shall be stricken as to such jurisdiction,
Person or Option and the remainder of the Plan and any such Option shall
remain in full force and effect.

(k) Other Laws. The Committee may refuse to issue or transfer
any Shares or other consideration under an Option if, acting in its sole
discretion, it determines that the issuance or transfer of such Shares or such
other consideration might violate any applicable law or regulation or entitle
Micro to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to Micro by a Participant in connection therewith shall be
promptly refunded to the relevant Participant, holder or beneficiary. Without
limiting the generality of the foregoing, no Option granted hereunder shall be
construed as an offer to sell securities of Micro, and no such offer shall be
outstanding, unless and until the Committee in its sole discretion has
determined that any such offer, if made, would be in compliance with all
applicable requirements of the U.S. federal securities laws and any other laws
to which such offer, if made, would be subject.

(l) No Trust or Fund Created. Neither the Plan nor any Option
shall create or be construed to create a trust or separate fund of any kind or
a fiduciary relationship between Micro or any of its Subsidiaries and a
Participant or any other Person. To the extent that any Person acquires a
right to receive payments from Micro or any of its Subsidiaries pursuant to an
Option, such right shall be no greater than the right of any unsecured general
creditor of Micro or any of its Subsidiaries.

(m) No Fractional Shares. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Option, and the Committee shall
determine whether cash or other securities or other property shall be paid or
transferred in lieu of any fractional Shares or whether such fractional Shares
or any rights thereto shall be cancelled, terminated, or otherwise eliminated.

(n) Execution of Purchase Agreement; Disposition of Shares.
Prior to a Public Offering, no Shares shall be issued pursuant to the exercise
of an Option unless and until a Purchase Agreement shall be executed by Micro
and the Participant. Each certificate representing Shares so acquired shall
bear an appropriate legend setting forth the restrictions on transfer of such
Shares as provided by such Purchase Agreement.

(o) Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the
construction or interpretation of the Plan or any provision thereof.

SECTION 10. Term of the Plan.

(a) Effective Date. The Plan shall be effective as of August
20, 1996, subject to approval by the stockholders of Micro.

(b) Expiration Date. Subject to earlier termination by Micro,
the Plan shall expire 90 days after the First Closing. Unless otherwise
expressly provided in the Plan or in an applicable Option Agreement, any
Option granted hereunder may, and the authority of the Board or the Committee
to amend, alter, adjust or suspend any such Option or to waive any conditions
or rights under any such Option shall, continue after the authority for grant
of new Options hereunder has been exhausted or terminated.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.Other Expenses of Issuance and Distribution.

An itemized statement of the estimated amount of the expenses,
other than underwriting discounts and commissions, incurred and to be incurred
in connection with the issuance and distribution of the securities registered
pursuant to this Registration Statement is as follows:

Securities and Exchange Commission registration fee.... $1,423
NYSE listing fee....................................... 10,036
Printing and engraving expenses........................ 5,000
Accounting fees and expenses........................... 10,000
Legal fees and expenses................................ 25,000
Transfer Agent fees and expenses....................... 5,000
Miscellaneous.......................................... 3,541
-------
Total................................................. $60,000
=======

Item 14.Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law (the
"DGCL") provides, in effect, that any person made a party to any action by
reason of the fact that he is or was a director, officer, employee or agent of
the Company may and, in certain cases, must be indemnified by the Company
against, in the case of a non-derivative action, judgments, fines, amounts
paid in settlement and reasonable expenses (including attorneys' fees)
incurred by him as a result of such action, and in the case of a derivative
action, against expenses (including attorneys' fees), if in either type of
action he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Company. This indemnification does
not apply, in a derivative action, to matters as to which it is adjudged that
the director, officer, employee or agent is liable to the Company, unless upon
court order it is determined that, despite such adjudication of liability, but
in view of all the circumstances of the case, he is fairly and reasonably
entitled to indemnity for expenses, and, in a non-derivative action, to any
criminal proceeding in which such person had reasonable cause to believe his
conduct was unlawful.

Section 102 of the DGCL allows the Company to eliminate or
limit the personal liability of a director to the Company or to any of its
stockholders for monetary damage for a breach of fiduciary duty as a director,
except in the case where the director (i) breaches such person's duty of
loyalty to the Company or its stockholders, (ii) fails to act in good faith,
engages in intentional misconduct or knowingly violates a law, (iii)
authorizes the payment of a dividend or approves a stock purchase or
redemption in violation of Section 174 of the DGCL or (iv) obtains an improper
personal benefit. Article Tenth of the Company's Certificate of Incorporation
includes a provision which eliminates directors' personal liability to the
fullest extent permitted under the Delaware General Corporation Law.

Article Tenth of the Company's Certificate of Incorporation
provides that the Company shall indemnify any person (and the heirs, executors
or administrators of such person) who was or is a party or is threatened to be
made a party to, or is involved in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director or
officer of the Company or is or was serving at the request of the Company as a
director or officer of another corporation, partnership, joint venture, trust
or other enterprise, to the fullest extent permitted by Delaware Law. Each
such indemnified party shall have the right to be paid by the Company for any
expenses incurred in connection with any such proceeding in advance of its
final disposition to the fullest extent authorized by Delaware Law. Article
Tenth of the Company's Certificate of Incorporation also provides that the
Company may, by action of its Board of Directors, provide indemnification to
such of the employees and agents of the Company to such extent and to such
effect as the Board of Directors shall determine to be appropriate and
authorized by Delaware Law.

As permitted by Delaware Law and the Company's Certificate of
Incorporation, the Company maintains insurance covering its directors and
officers against certain liabilities incurred by them in their capacities as
such, including among other things, certain liabilities under the Securities
Act of 1933, as amended.

Item 15.Recent Sales of Unregistered Securities

In the second quarter of 1996, the Company offered 2,775,000
shares of its Class B Common Stock to certain of its employees, of which
2,510,400 shares were purchased for $17.6 million. The shares were issued
without registration under the Securities Act in reliance upon the exemptions
from registration afforded by Section 4(2) of the Securities Act, and
Regulation D and Regulation S promulgated under the Securities Act. All such
shares were issued pursuant to the Company's Key Employee Stock Purchase Plan
and are subject to certain restrictions.

Reference is made to "Management--Rollover Plan; Incentive
Stock Units" and "The Split-Off and the Reorganization--The Split-Off"
regarding shares, and options exercisable for shares, of the Company's Common
Equity, issued in connection with the Split-Off, the purchasers thereof
and the consideration therefor. Such issuances will occur without registration
under the Securities Act in reliance upon the exemptions from registration
afforded by Section 4(2) of the Securities Act and Regulation D promulgated
under the Securities Act.

Item 16.Exhibits and Financial Statement Schedules.

(a) List of Exhibits.

3.01 -- Form of Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.01 to the Company's
Registration Statement on Form S-1 (File No. 333-08453) (the
"IPO S-1"))
3.02 -- Form of Bylaws of the Registrant (incorporated by reference to
Exhibit 3.02 to the IPO S-1)
3.03 -- Form of Amended and Restated Bylaws of the Registrant
(incorporated by reference to Exhibit 3.03 to the IPO S-1)
4.01 -- Specimen Certificate for the Class A Common Stock, par value $0.01
per share, of the Registrant (incorporated by reference to
Exhibit 4.01 to the IPO S-1)

5.01 -- Opinion of Davis Polk & Wardwell*

10.01 -- Ingram Micro Inc. Executive Incentive Bonus Plan (incorporated by
reference to Exhibit 10.01 to the IPO S-1)
10.02 -- Ingram Micro Inc. Management Incentive Bonus Plan (incorporated by
reference to Exhibit 10.02 to the IPO S-1)
10.03 -- Ingram Micro Inc. General Employee Incentive Bonus Plan
(incorporated by reference to Exhibit 10.03 to the IPO S-1)
10.04 -- Agreement dated as of December 21, 1994 between the Company and
Jeffrey R. Rodek (incorporated by reference to Exhibit 10.04 to
the IPO S-1)
10.05 -- Agreement dated as of April 25, 1988 between the Company and Sanat
K. Dutta (incorporated by reference to Exhibit 10.05 to the IPO
S-1)
10.06 -- Agreement dated as of June 21, 1991 between the Company and John
Wm. Winkelhaus, II (incorporated by reference to Exhibit 10.06
to the IPO S-1)
10.07 -- Ingram Micro Inc. Rollover Stock Option Plan (incorporated by
reference to Exhibit 10.07 to the IPO S-1)
10.08 -- Ingram Micro Inc. Key Employee Stock Purchase Plan (incorporated
by reference to Exhibit 10.08 to the IPO S-1)
10.09 -- Ingram Micro Inc. 1996 Equity Incentive Plan (incorporated by
reference to Exhibit 10.09 to the IPO S-1)
10.10 -- Ingram Micro Inc. Amended and Restated 1996 Equity Incentive Plan
(incorporated by reference to Exhibit 10.10 to the IPO S-1)
10.11 -- Severance Agreement dated as of June 1, 1996 among the Company,
Ingram Industries, Linwood A. Lacy, Jr., and NationsBank, N.A.,
as trustee of the Linwood A. Lacy, Jr. 1996 Irrevocable Trust
dated February 1996 (incorporated by reference to Exhibit 10.11
to the IPO S-1)
10.12 -- Form of Credit Agreement dated as of October , 1996 among the
Company and Ingram European Coordination Center N.V., Ingram
Micro Singapore Pte Ltd., and Ingram Micro Inc., as Borrowers and
Guarantors, certain financial institutions, as the Lenders,
NationsBank of Texas, N.A., as Administrative Agent for the
Lenders and The Bank of Nova Scotia as Documentation Agent for
the Lenders (incorporated by reference to Exhibit 10.12 to the
IPO S-1)
10.13 -- Form of Amended and Restated Reorganization Agreement dated as of
October 17, 1996 among the Company, Ingram Industries, and Ingram
Entertainment (incorporated by reference to Exhibit 10.13 to the
IPO S-1)
10.14 -- Form of Registration Rights Agreement to be dated as of the closing
date of the Split-Off among the Company and the persons listed on
the signature pages thereof (incorporated by reference to Exhibit
10.14 to the IPO S-1)
10.15 -- Form of Board Representation Agreement to be dated as of the
closing date of the Split-Off (incorporated by reference to
Exhibit 10.15 to the IPO S-1)
10.16 -- Form of Thrift Plan Liquidity Agreement to be dated as of the
closing date of the Split-Off among the Company and the Ingram
Thrift Plan (incorporated by reference to Exhibit 10.16 to the
IPO S-1)
10.17 -- Form of Tax Sharing and Tax Services Agreement to be dated as of
the closing date of the Split-Off among the Company, Ingram
Industries, and Ingram Entertainment (incorporated by reference
to Exhibit 10.17 to the IPO S-1)
10.18 -- Form of Master Services Agreement to be dated as of the closing
date of the Split-Off among the Company, Ingram Industries, and
Ingram Entertainment (incorporated by reference to Exhibit 10.18
to the IPO S-1)
10.19 -- Form of Employee Benefits Transfer and Assumption Agreement to be
dated as of the closing date of the Split-Off among the Company,
Ingram Industries, and Ingram Entertainment (incorporated by
reference to Exhibit 10.19 to the IPO S-1)
10.20 -- Form of Data Center Services Agreement to be dated as of the
closing date of the Split-Off among the Company, Ingram Book
Company, and Ingram Entertainment Inc. (incorporated by
reference to Exhibit 10.20 to the IPO S-1)
10.21 -- Form of Amended and Restated Exchange Agreement to be dated as of
the closing date of the Split-Off among the Company, Ingram
Industries, Ingram Entertainment and the other parties thereto
(incorporated by reference to Exhibit 10.21 to the IPO S-1)
10.22 -- Agreement dated as of August 26, 1996 between the Company and Jerre
L. Stead (incorporated by reference to Exhibit 10.22 to the IPO
S-1)
10.23 -- Definitions for Ingram Funding Master Trust Agreements
(incorporated by reference to Exhibit 10.23 to the IPO S-1)
10.24 -- Asset Purchase and Sale Agreement dated as of February 10, 1993
between Ingram Industries and Ingram Funding (incorporated by
reference to Exhibit 10.24 to the IPO S-1)
10.25 -- Pooling and Servicing Agreement dated as of February 10, 1993 among
Ingram Funding, Ingram Industries and Chemical Bank (incorporated
by reference to Exhibit 10.25 to the IPO S-1)
10.26 -- Amendment No. 1 to the Pooling and Servicing Agreement dated as of
Febraury 12, 1993, the Asset Purchase and Sale Agreement dated as
of February 12, 1993, and the Liquidity Agreement dated as of
February 12, 1993 (incorporated by reference to Exhibit 10.26 to
the IPO S-1)
10.27 -- Certificate Purchase Agreement dated as of July 23, 1993
(incorporated by reference to Exhibit 10.27 to the IPO S-1)
10.28 -- Schedule of Certificate Purchase Agreements (incorporated by
reference to Exhibit 10.28 to the IPO S-1)
10.29 -- Series 1993-1 Supplement to Ingram Funding Master Trust Pooling and
Servicing Agreement dated as of July 23, 1993 (incorporated by
reference to Exhibit 10.29 to the IPO S-1)
10.30 -- Schedule of Supplements to Ingram Funding Master Trust Pooling and
Servicing Agreement dated as of July 23, 1993 (incorporated by
reference to Exhibit 10.30 to the IPO S-1)
10.31 -- Letter of Credit Reimbursement Agreement dated as of February 10,
1993 (incorporated by reference to Exhibit 10.31 to the IPO S-1)
10.32 -- Liquidity Agreement dated as of February 10, 1993 (incorporated by
reference to Exhibit 10.32 to the IPO S-1)
10.33 -- Amendment No. 2 to the Pooling and Servicing Agreement dated as of
February 12, 1993, the Asset Purchase and Sale Agreement dated as
of February 12, 1993, and the Liquidity Agreement dated as of
February 12, 1993 (incorporated by reference to Exhibit 10.33 to
the IPO S-1)
10.34 -- Agreement dated as of October 10, 1996 between the Company and
Michael J. Grainger (incorporated by reference to Exhibit 10.34
to the IPO S-1)

10.35 -- Form of Repurchase Agreement (incorporated by reference to Exhibit
10.35 to the IPO S-1)
21.01 -- Subsidiaries of the Registrant (incorporated by reference to
Exhibit 21.01 to the IPO S-1)
23.01 -- Consent of Price Waterhouse LLP
23.02 -- Consent of Davis Polk & Wardwell (included in their opinion filed
as Exhibit 5.01)*
24.01 -- Powers of Attorney of certain officers and directors of the
Registrant*
27.01 -- Financial Data Schedule (EDGAR version only) (incorporated by
reference to Exhibit 27.01 to the IPO S-1)

- ------------------
* Previously filed

(b) Financial Statement Schedules

See Schedule II on page S-1. All other schedules for which
provision is made in the applicable accounting regulations of the Securities
and Exchange Commission are not required under the related instructions or are
inapplicable or the information is contained in the Consolidated Financial
Statements and related notes and therefore have been omitted.

Item 17.Undertakings.

The undersigned registrant hereby undertakes that:

(1) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Securities and
Exchange 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 Company of expenses incurred or paid by a director,
officer or controlling person of the Company 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
Company 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 of 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.

(2) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of this registration statement as of the time it was declared
effective.

(3) For the purpose of determining any liability under the Securities
Act of 1933, 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.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933,
Ingram Micro Inc. has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Santa
Ana, State of California, on this 12th day of November, 1996.

Ingram Micro Inc.

By: /s/ James E. Anderson, Jr.
----------------------------
Name: James E. Anderson, Jr.
Title: Senior Vice President,
Secretary and
General Counsel

Pursuant to the requirements of the Securities Act of 1933, this Amendment No.
1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

*
_____________________________ Chief Executive Officer November 12, 1996
Jerre L. Stead (Principal Executive
Officer); Chairman of
the Board

*
_____________________________ Executive Vice President November 12, 1996
Michael J. Grainger and Worldwide Chief
Financial Officer
(Principal Financial
Officer and Principal
Accounting Officer)

*
_____________________________ Director November 12, 1996
Martha R. Ingram

*
_____________________________ Director November 12, 1996
John R. Ingram

*
_____________________________ Director November 12, 1996
David B. Ingram

*
_____________________________ Director November 12, 1996
Philip M. Pfeffer

* Director November 12, 1996
- -----------------------------
Don H. Davis, Jr.

* Director November 12, 1996
- -----------------------------
J. Phillip Samper

* Director November 12, 1996
- -----------------------------
Joe B. Wyatt

* Pursuant to Power of Attorney
previously filed with the
Commission

/s/ James E. Anderson, Jr.
- -------------------------- Attorney-in-Fact November 12, 1996
James E. Anderson, Jr.

INGRAM MICRO INC.

SCHEDULE II --VALUATION AND QUALIFYING ACCOUNTS
(in thousands)

<TABLE>
<CAPTION>
Balance at Charged to Balance
beginning costs and at end of
Description of year expenses Other(*) Deductions year
----------- ---------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>

Allowance for doubtful accounts
receivable and sales returns:
1995................................ $25,668 $24,168 $ 673 $(19,718) $30,791
1994................................ 18,594 20,931 (4) (13,853) 25,668
1993................................ 12,928 17,492 2,343 (14,169) 18,594

Inventory Obsolescence:
1995................................ $10,706 $13,199 $ 207 $(11,867) $12,245
1994................................ 9,431 9,410 257 (8,392) 10,706
1993................................ 6,076 6,587 121 (3,353) 9,431

<FN>
__________
* Other includes recoveries, acquisitions and the effect of fluctuations in
foreign currency.
</TABLE>

Exhibit 23.01

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Prospectus constituting part of this
Registration Statement on Form S-1 (333-12785) of our report dated February
29, 1996, except as to Note 12 which is dated as of September 9, 1996 and Note
2 which is dated as of October 29, 1996, relating to the financial statements
of Ingram Micro Inc., which appears in such Prospectus. We also consent to
the application of such report to the Financial Statement Schedules for the
three years ended December 30, 1995 listed under Item 16(b) of this
Registration Statement when such schedules are read in conjunction with the
financial statements referred to in our report. The audits referred to in
such report also included these schedules. We also consent to the reference
to us under the heading "Experts" in such Prospectus.

Price Waterhouse LLP

Nashville, Tennessee
November 1, 1996