<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
</TABLE>
INGRAM MICRO INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
INGRAM MICRO INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] Fee not required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
[IM LOGO]
INGRAM MICRO INC.
1600 East St. Andrew Place
Santa Ana, California 92705
------------------------------
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
To Be Held May 7, 1997
------------------------------
The 1997 Annual Meeting of the Shareowners of Ingram Micro Inc. will be
held at the Company's Santa Ana campus, 1700 East St. Andrew Place, Santa Ana,
California 92705 on Wednesday, May 7, 1997 at 10:00 a.m. for the following
purposes:
1. To elect eight Directors of the Company to serve until the Annual
Meeting of the Shareowners in 1998.
2. To transact such other business as may properly come before the meeting
and any and all adjournments or postponements thereof.
The Board of Directors has fixed the close of business on March 24, 1997
as the record date for the determination of the shareowners entitled to notice
of and to vote at the meeting and at any adjournment or postponement thereof.
Shareowners are invited to attend the meeting. Whether or not you expect
to attend, we urge you to sign, date and promptly return the enclosed proxy
card in the enclosed postage prepaid envelope. If you attend the meeting, you
may vote your shares in person, which will revoke any previously executed
proxy.
If your shares are held of record by a broker, bank or other nominee and
you wish to attend the meeting, you must obtain a letter from the broker, bank
or other nominee confirming your beneficial ownership of the shares and bring
it to the meeting. In order to vote your shares at the meeting, you must
obtain from the record holder a proxy issued in your name.
By Order of the Board of Directors,
/s/ JAMES E. ANDERSON, JR.
-----------------------------------
James E. Anderson, Jr.
Senior Vice President, Secretary
and General Counsel
April 9, 1997
<PAGE> 3
[IM LOGO]
INGRAM MICRO INC.
1600 East St. Andrew Place
Santa Ana, California 92705
------------------------------
PROXY STATEMENT
For Annual Meeting of Shareowners to be held May 7, 1997
------------------------------
INTRODUCTION
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Ingram Micro Inc., a Delaware
corporation (the "Company"), for the 1997 Annual Meeting of the Shareowners of
the Company (the "1997 Annual Meeting") to be held at the Company's Santa Ana
campus, 1700 East St. Andrew Place, Santa Ana, California 92705 on Wednesday,
May 7, 1997 at 10:00 a.m. The Notice of Annual Meeting, this proxy statement
and the accompanying proxy are first being mailed on or about April 9, 1997 to
shareowners of record as of the close of business on March 24, 1997. You can
ensure that your shares are voted at the meeting by signing, dating and
promptly returning the enclosed proxy in the envelope provided. Sending in a
signed proxy will not affect your right to attend the meeting and vote in
person. You may revoke your proxy at any time before it is voted by notifying
the Company's Transfer Agent, First Chicago Trust Company of New York, P.O. Box
2500, Jersey City, New Jersey 07303-2500, in writing, or by executing a
subsequent proxy, which revokes your previously executed proxy. Additionally,
if you attend the meeting, you may vote your shares in person, which will
revoke any previously executed proxy.
VOTING OF PROXIES
Proxies will be voted as specified by the shareowners. Where specific
choices are not indicated, proxies will be voted FOR the election of all
nominees for Director (Proposal 1). Under the Delaware General Corporation Law
(the "DGCL"), the Company's Certificate of Incorporation (the "Charter") and
the Company's Bylaws (the "Bylaws"), shares represented by proxies that reflect
abstentions or "broker non-votes" will be counted as shares that are present
and entitled to vote for purposes of determining the presence of a quorum. The
election of Directors (Proposal 1) requires the affirmative vote of a plurality
of the shares of Common Stock present, in person or by proxy, and entitled to
vote at the 1997 Annual Meeting. Accordingly, abstentions and broker non-votes
have no effect on the plurality of votes for election of Directors.
The Company has two classes of Common Stock outstanding, the Class A
Common Stock, par value $0.01 per share (the "Class A Common Stock"), and the
Class B Common Stock, par value $0.01 per share (the "Class B Common Stock"
and, together with the Class A Common Stock, the "Common Stock"). The shares
of Class A Common Stock and Class B Common Stock are identical in all respects,
except for voting rights and certain conversion rights. Each share of Class A
Common Stock entitles the holder to one vote on each matter submitted to a vote
of the Company's shareowners, including the election of Directors, and each
share of Class B Common Stock entitles the holder to ten votes on each such
matter. The Class B Common Stock is convertible into Class A 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 Class A 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 Class A Common Stock upon the earliest
to occur of (i) the fifth anniversary of the closing of the split-off (the
"Split-Off") of the Company from its former parent, Ingram Industries Inc.
("Ingram Industries"); (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 (as defined below) 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 (as defined below) 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
<PAGE> 4
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 Stock then outstanding. Except as required by applicable law, holders
of the Class A Common Stock and Class B Common Stock vote together as a single
class on all matters submitted to a vote of the shareowners of the Company.
The shares of Common Stock do not have cumulative voting rights.
The Company engaged in an initial public offering (the "IPO") in November
1996, pursuant to which 23,000,000 shares of Class A Common Stock were sold to
the public, and 200,000 shares were sold to the Company's Chairman of the Board
of Directors and Chief Executive Officer, Jerre L. Stead. Including such
shares, as of January 31, 1997 there were outstanding 25,786,779 shares of
Class A Common Stock and 109,068,762 shares of Class B Common Stock.
Concurrently with the IPO, the Split-Off was completed, pursuant to which
the Company ceased to be a subsidiary of Ingram Industries. In connection with
the Split-Off, the Company entered into certain agreements relating to the
provision of certain services. The Company also entered into certain
agreements with certain shareowners of the Company relating to board
representation and registration rights. See "Item 1. Election of Directors"
and "Certain Relationships and Related Transactions."
In the Split-Off, certain existing shareowners 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 common stock so exchanged. As of January 31, 1997, 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") held 156,727 shares of Class A Common Stock
(including 122,405 shares issuable for stock options exercisable within 60 days
of January 31, 1997) in the aggregate and 89,930,768 shares of Class B Common
Stock in the aggregate (amounting to 80.6% of the aggregate voting power of the
Common Stock). Ingram Industries (which is controlled by the Ingram Family
Stockholders) held 246,000 shares of Class A Common Stock as of January 31,
1997 (including 15,000 shares held by Ingram Industries' wholly-owned
subsidiary, Ingram Entertainment Inc., a Tennessee corporation ("Ingram
Entertainment")).
Shareowners will not be entitled to appraisal rights in connection with
any matter to be voted on at the 1997 Annual Meeting.
2
<PAGE> 5
ITEM 1. ELECTION OF DIRECTORS
At the 1997 Annual Meeting, eight Directors (constituting the entire Board
of Directors) are to be elected to serve for a term to expire at the 1998
Annual Meeting of the Shareowners. The nominees for re-election are Don H.
Davis, Jr., David B. Ingram, John R. Ingram, Martha R. Ingram, Phillip M.
Pfeffer, J. Phillip Samper, Jerre L. Stead, and Joe B. Wyatt. Information
regarding the Board's nominees for Directors is set forth below.
The accompanying proxy will be voted for election of the Board's nominees
unless contrary instructions are given. If any of the Board's nominees is
unable to serve, which is not anticipated, the persons named as proxies intend
to vote, unless the number of nominees is reduced by the Board of Directors,
for such other person or persons as the Board of Directors may designate.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MESSRS. DAVIS,
DAVID B. INGRAM, JOHN R. INGRAM, PFEFFER, SAMPER, STEAD, AND WYATT AND MRS.
INGRAM AS DIRECTORS, WHICH IS DESIGNATED AS PROPOSAL NO. 1 ON THE ENCLOSED
PROXY CARD.
NOMINEES FOR RE-ELECTION TO THE BOARD OF DIRECTORS FOR A ONE-YEAR TERM TO
EXPIRE AT THE 1998 ANNUAL MEETING OF SHAREOWNERS
DON H. DAVIS, JR., age 57, became a Director of the Company in October
1996. Since July 1995, he has served as President and Chief Operating Officer
of Rockwell International Corporation, a diversified high-technology company.
Mr. Davis previously was Executive Vice President and Chief Operating Officer
of Rockwell International Corporation from January 1994 to July 1995,
President, Automation Group of Rockwell International Corporation from June
1993 to January 1994, and President of Rockwell International Corporation's
wholly-owned subsidiary, Allen-Bradley Company, from July 1989 to January 1994.
He also is a member of the Board of Directors of Sybron International
Corporation and Rockwell International Corporation, and Chairman of the Board
for the L.A. Manufacturing Learning Center.
DAVID B. INGRAM, age 34, has been a Director of the Company since May
1996. He is currently Chairman and President of Ingram Entertainment, a
position he has held since March 1996. Mr. Ingram had previously served as
President and Chief Operating Officer of Ingram Entertainment from August 1994,
Vice President, Major Accounts of Ingram Entertainment from November 1993 to
August 1994, Assistant Vice President of Sales from June 1992 to November 1993,
and Director of Sales from July 1991 to June 1992. He is a member of the Video
Software Dealers Association national board.
JOHN R. INGRAM, age 35, has served as a Director of the Company since
December 1994. He has been Co-President of Ingram Industries since January
1996 and was President of Ingram Book Company, a division of Ingram Industries,
from January 1995 to October 1996. Mr. Ingram served as Acting Chief Executive
Officer of the Company from May 1996 to August 1996 and held a variety of
positions at the Company from 1991 through 1994, including Vice President of
Purchasing and Vice President of Management Services at Ingram Micro Europe,
and Director of Purchasing. He is a member of the Board of Directors of
SunTrust Bank, Nashville, and the Nashville Area Chamber of Commerce.
MARTHA R. INGRAM, age 61, became a Director of the Company in May 1996,
serving as Chairman of the Board until August 1996. She has been the Chairman
of the Board of Directors of Ingram Industries since June 1995 and Chief
Executive Officer since April 1996. She previously served as Director of
Public Affairs of Ingram Industries from 1979 to June 1995. Mrs. Ingram serves
on the Board of Trust of Vanderbilt University and Vassar College and on the
Board of Directors of Weyerhaeuser Company, First American Corporation, and
Baxter International.
PHILIP M. PFEFFER, age 52, has served as a Director of the Company since
1986. He has been a Director and President and Chief Operating Officer of
Random House, Inc., a publishing company, since May 1996. Previously,
3
<PAGE> 6
Mr. Pfeffer was Executive Vice President and a Director of Ingram Industries
from December 1981 to March 1996, and Chairman and Chief Executive Officer of
Ingram Distribution Group Inc. from December 1981 to December 1995.
J. PHILLIP SAMPER, age 62, has been a Director of the Company since
October 1996. He currently serves as Chairman, CEO and President of Quadlux,
Inc. Mr. Samper was previously Chairman and Chief Executive Officer of Cray
Research, Inc., a computer products company, from May 1995 to March 1996,
President and Chief Executive of Sun Microsystems Computer Corporation from
January 1994 to March 1995, and Managing Partner of FRN Group, a private
investment consulting firm, from February 1991 until January 1994. He also
serves as a Director of Armstrong World Industries, Inc., the Interpublic Group
of Companies, Sylvan Learning Systems, Inc., and Network Storage Corp.
JERRE L. STEAD, age 54, became Chief Executive Officer and Chairman of the
Board of the Company in August 1996. Mr. Stead served as Chief Executive
Officer and Chairman of the Board at LEGENT Corporation, a software development
company, from January 1995 to August 1995. Prior to that, Mr. Stead was
Executive Vice President, Chairman and CEO of AT&T Corp. Global Information
Solutions (NCR Corporation) from May 1993 to December 1994 and President and
Chief Executive Officer of AT&T Corp. Global Business Communication Systems
from September 1991 to April 1993. He was Chairman, President and Chief
Executive Officer of Square D Co., an electronics manufacturer from September
1988 to August 1991. He is on the Board of Directors of Armstrong World
Industries, TBG Group and TJ International, Inc. Mr. Stead is Chairman of the
Board of the Center of Ethics and Values at Garrett Seminary on the
Northwestern University campus.
JOE B. WYATT, age 61, has been a Director of the Company since October
1996. He currently serves as Chancellor of Vanderbilt University in Nashville,
Tennessee, a position he has held since 1982. Mr. Wyatt is a Director of
Sonat, Inc. and Reynolds Metals Company.
Martha R. Ingram is the mother of David B. Ingram and John R. Ingram.
There are no other family relationships among the Directors or executive
officers of the Company.
REQUIREMENTS OF BOARD MEMBERS
The Company and the Ingram Family Stockholders have entered into a Board
Representation Agreement (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 Stock, the Board Representation Agreement provides for the
designation of certain Directors (the "Designated Nominees"): (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, but are not required to,
include Martha R. Ingram, any of her legal descendants, or any of their
respective spouses. Messrs. David B. Ingram and John R. Ingram and Mrs. Ingram
are the Directors designated by the Ingram Family Stockholders; Mr. Stead is
the Director designated by the Chief Executive Officer of the Company; and
Messrs. Davis, Pfeffer, Samper, and Wyatt are Independent Directors. Each of
the parties to the Board Representation Agreement (other than the Company) has
agreed to vote its shares of Common Stock in favor of the Designated Nominees.
The Ingram Family Stockholders' holdings of Common Stock are sufficient to
guarantee the election of the Designated Nominees.
COMMITTEES OF THE BOARD - BOARD MEETINGS
The Company was formed on April 29, 1996. The Company was the surviving
corporation in a merger (the "Merger") with Ingram Micro Holdings Inc., a
California corporation, on October 25, 1996. In 1996, there were six meetings
of the Board of Directors of the Company and its predecessor. In addition,
management conferred frequently with Directors. During 1996, all Directors
attended 75% or more of the aggregate of the total number of meetings of the
Board of Directors and meetings of all committees of the Board on which they
served, except Mr. Davis, who attended 50% (one out of two) of all such
meetings.
4
<PAGE> 7
COMMITTEES. The Board Representation Agreement provides for the formation
of certain committees of the Board of Directors. As provided in the Bylaws and
the Board Representation Agreement, the Company has four committees: an
Executive Committee, a Nominating Committee, an Audit Committee, and a Human
Resources Committee. The Predecessor's Board of Directors did not have any
committees during 1996.
The Executive Committee consists of three Directors, one of whom is a
Director designated by the Ingram Family Stockholders, one of whom is the
Director designated by the Chief Executive Officer of the Company, and one of
whom is an Independent Director. The Executive Committee currently consists of
Messrs. Stead, John R. Ingram, and Samper. The Executive Committee did not meet
in 1996, but acted by written consent on several occasions. 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 does 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 was formed in November 1996 and consists of three
Directors, two of whom are Directors designated by the Ingram Family
Stockholders, and one of whom is the Director designated by the Chief Executive
Officer of the Company. The Nominating Committee currently consists of Messrs.
David B. Ingram and Stead and Mrs. Ingram. The Nominating Committee did not
meet in 1996, but acted by written consent on one occasion. The function of
the Nominating Committee is to designate nominees for election as Directors of
the Company and to elect members of other committees of the Board of Directors.
The Nominating Committee will consider individuals recommended by shareowners.
Any such recommendation must be submitted in writing prior to January 1 of each
year, accompanied by a description of the proposed nominee's qualifications and
other relevant biographical information, and should be addressed to the
Nominating Committee, in care of the Secretary of the Company.
The Audit Committee was formed in November 1996 and consists of at least
three Directors, a majority of whom must be Independent Directors. The Audit
Committee currently consists of Messrs. David B. Ingram, Pfeffer, and Wyatt.
The Audit Committee did not meet in 1996. The functions of the Audit Committee
are 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 Human Resources Committee was formed in November 1996 and consists of
three Directors, one of whom is a Director designated by the Ingram Family
Stockholders and two of whom are Independent Directors. The Human Resources
Committee currently consists of Messrs. Davis and Samper and Mrs. Ingram. The
Human Resources Committee held one meeting in 1996. The functions of the Human
Resources Committee are to review and approve annual salaries, bonuses, and
grants of stock options for all executive officers and key members of the
Company's management staff and to review and approve the terms and conditions
of all compensation plans in which such individuals participate, and any
changes thereto.
HUMAN RESOURCES (COMPENSATION) COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION. Messrs. Davis and Samper and Mrs. Ingram served on the Human
Resources Committee during 1996. No Human Resources Committee interlocks or
insider participation existed in 1996.
5
<PAGE> 8
COMPENSATION OF DIRECTORS
Directors who are not Independent Directors do not receive any additional
compensation for serving on the Board of Directors, but are reimbursed for
expenses incurred in attending meetings of the Board of Directors and
Committees thereof. In addition to such reimbursement, each current
Independent Director has been granted on the date his service began (but not
prior to October 31, 1996), and each new Independent Director will be granted
on the date his or her service begins, options to purchase 45,000 shares of
Class A Common Stock. These options 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 do not receive any other compensation for their
service.
CERTAIN RIGHTS OF THE INGRAM FAMILY STOCKHOLDERS WITH RESPECT TO THE BOARD OF
DIRECTORS
In addition to provisions relating to the designation of Directors
described above, the Board Representation Agreement provides as follows:
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 Stock of the
Company (as such number may be equitably adjusted to reflect stock splits,
stock dividends, recapitalizations, 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.
6
<PAGE> 9
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of January 31,
1997, with respect to the beneficial ownership of each class of the Common
Stock by (a) each Director of the Company; (b) the Company's Chief Executive
Officer, the Company's former Chief Executive Officer and the other four most
highly compensated executive officers of the Company in the most recently
completed fiscal year (collectively, the "Named Executive Officers"); (c) all
executive officers and Directors of the Company as a group; and (d) each person
known by the Company to own beneficially more than five percent of the
outstanding shares of either class of Common Stock.
<TABLE>
<CAPTION>
Common Stock
Class A Common Stock(1) Class B Common Stock ------------------------
-------------------------- ------------------------------- Percentage Percentage
Shares Shares of Total of Total
Beneficially Percentage Beneficially Percentage Outstanding Voting
Name Owned of Class Owned of Class Shares Power
- ---- ------------ ---------- ------------ --------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Don H. Davis, Jr. . . . . . -- -- -- -- -- --
David B. Ingram(2)(3) . . . 14,435(4)(5) * 72,377,210(6)(7) 66.4% 53.7% 64.8%
John R. Ingram(3)(8) . . . 45,047(4)(5) * 71,875,977(6)(7) 65.9 53.3 64.4
Martha R. Ingram(3)(8) . . --(5) -- 83,740,791(6)(7) 76.8 62.1 75.0
Philip M. Pfeffer(9) . . . 144,679 * 1,972,478(7) 1.8 1.6 1.8
J. Phillip Samper . . . . . -- -- -- -- -- --
Jerre L. Stead . . . . . . 400,000(10) 1.5% -- -- * *
Joe B. Wyatt . . . . . . . 193,065(11) * -- -- * *
Jeffrey R. Rodek . . . . . 42,902(4) * 285,000 * * *
David R. Dukes . . . . . . 119,099(12) * 65,000 * * *
Sanat K. Dutta . . . . . . 86,833(13) * 85,000 * * *
John Wm. Winkelhaus, II . . 85,118(4) * 85,000 * * *
Linwood A. (Chip) Lacy,
Jr.(14) . . . . . . . . 105,180(4) * 1,390,062(7) 1.3 1.1 1.3
All executive officers and
Directors as a group (26
persons)(3)(15). . . . . 1,801,427(5)(16) 6.7 98,301,855(6)(7) 90.1 73.5 88.1
Orrin H. Ingram(3)(8) . . . 97,245(5)(17) * 73,157,670(6)(7) 67.1 54.3 65.5
Robin Ingram Patton(3)(8) . --(5) -- 71,646,916(6)(7) 65.7 53.1 64.2
E. Bronson Ingram QTIP
Marital Trust(3)(8) . . -- -- 69,099,259 63.4 51.2 61.9
SunTrust Bank, Atlanta(18) 43,329 * 11,802,632 10.8 8.8 10.6
Roy E. Claverie(8) . . . . --(5) -- 7,540,794(6)(7)(19) 6.9 5.6 6.8
Ingram Thrift Plan(8) . . . -- -- 6,688,708 6.1 5.0 6.0
FMR Corp.(20) . . . . . . . 2,565,200 9.9 -- -- 1.9 *
AIM Management Group
Inc.(21) . . . . . . . . 1,840,300 7.1 -- -- 1.4 *
Public Employees
Retirement System of
Ohio(22) . . . . . . . . 1,400,000 5.4 -- -- 1.0 *
</TABLE>
(footnotes on following page)
7
<PAGE> 10
- ----------------------------
* Less than one percent.
(1) Excludes each shareowner'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.
(2) The address for David B. Ingram is c/o Ingram Entertainment Inc., Two
Ingram Boulevard, Lavergne, Tennessee 37089.
(3) David B. Ingram, Robin Ingram Patton, Orrin H. Ingram, John R. Ingram,
and Martha R. Ingram are trustees of the E. Bronson Ingram QTIP Marital
Trust (the "QTIP Trust"), and accordingly could each be deemed to be the
beneficial owner of the shares held by the QTIP Trust.
(4) Represents stock options exercisable for shares of Class A Common Stock
within 60 days of the date of the table.
(5) Excludes 246,000 shares of Common Stock purchased by Ingram Industries in
the IPO (including 15,000 shares purchased by Ingram Industries'
subsidiary Ingram Entertainment). As principal shareowners of Ingram
Industries, the indicated shareowners may be deemed to be beneficial
owners of the shares held by Ingram Industries.
(6) Includes 71,286,290; 71,266,588; 71,286,290; 7,068,715; 71,286,290;
81,702,789; and 84,078,771 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.
(7) 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 2,932,919 shares held by one or more trusts of which she is a
beneficiary; for Orrin H. Ingram 1,441,858 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.
(8) The address for each of the indicated parties is c/o Ingram Industries
Inc., One Belle Meade Place, 4400 Harding Road, Nashville, Tennessee
37205.
(9) The address for Mr. Pfeffer is c/o Random House, Inc., 201 East 50th
Street, New York, New York 10022.
(10) Includes options to purchase 200,000 shares of Class A Common Stock.
(11) Includes options to purchase 188,065 shares of Class A Common Stock.
(12) Includes options to purchase 56,118 shares of Class A Common Stock.
(13) Includes options to purchase 42,559 shares of Class A Common Stock.
(14) The address for Mr. Lacy is c/o Micro Warehouse, 535 Connecticut Avenue,
Norwalk, Connecticut 06854.
(15) Excludes shares beneficially owned by Mr. Lacy, the Company's former
Chief Executive Officer and former Chairman of the Board of Directors.
(16) Includes options to purchase 1,264,868 shares of Class A Common Stock.
(17) Includes options to purchase 62,923 shares of Class A Common Stock.
(18) The address for SunTrust Bank, Atlanta ("SunTrust") is 25 Park Place, NE,
Atlanta, Georgia 30303. All shares of Class B Common Stock are held by
SunTrust as trustee for certain individuals. All shares of Class A
Common Stock are held in accounts for customers of SunTrust Banks and its
affiliates. SunTrust and its affiliates have sole voting and dispositive
power with respect to 20,320 of these shares of Class A Common Stock, and
shared voting and dispositive power with respect to 4,100 of such shares.
SunTrust and its affiliates
8
<PAGE> 11
hold the other 18,909 shares of Class A Common Stock in non-discretionary
accounts. SunTrust Banks and each of its affiliates disclaim any
beneficial interest in all shares of Common Stock it holds.
(19) Includes 6,688,708 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.
(20) Based on information provided in a Schedule 13G filed on February 14,
1997 by FMR Corp. The address for FMR Corp. is 82 Devonshire Street,
Boston, Massachusetts 02109.
(21) Based on information provided in a Schedule 13G filed on February 12,
1997 by AIM Management Group Inc. The address for AIM Management Group
Inc. is 11 Greenway Plaza, Suite 1919, Houston, Texas 77046.
(22) The address for the Public Employees Retirement System of Ohio is
277 East Town Street, Columbus, Ohio 43215.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Historically, Ingram Industries provided certain administrative services
to the Company. The Company was allocated a portion of the costs of these
administrative services. This allocation totaled $3.6 million in 1996. In
connection with the Split-Off, the Company entered into certain agreements (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 have been obtained from third parties on an arm's
length basis. The Transitional Service Agreements generally terminated on
December 31, 1996, although payroll services under the Transitional Service
Agreements will be provided through December 31, 1997.
Additionally, Ingram Industries historically provided a large portion of
the debt financing required by the Company in connection with its expansion.
Interest on such debt was charged based on Ingram Industries' domestic weighted
average cost of funds. In connection with the Split-Off, the Company assumed
$160 million of fixed rate medium term certificates and $13.0 million of
outstanding commercial paper under Ingram Industries' accounts receivable
securitization program, in partial satisfaction of the amounts due to Ingram
Industries. Assumption of the securitization program resulted in a $160
million reduction of trade accounts receivable and long-term debt on the
Company's consolidated balance sheet at December 28, 1996. The Company used
proceeds from the IPO to repay the remaining intercompany indebtedness to
Ingram Industries of $366.3 million, 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 its new $1
billion credit facility (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.
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. Until November 1996, the Company subleased its facilities in
Santa Ana, California and Harrisburg, Pennsylvania from Ingram Industries. The
sublease agreement required annual rental payments of approximately $2.1
million. In connection with the Split-Off, the Company acquired ownership of
two of three office buildings within the Santa Ana campus, as well as the
Harrisburg distribution center, for an aggregate amount of approximately $22.6
million. The Company's lease for its distribution center in Millington,
Tennessee was previously guaranteed by Ingram Industries. Certain of the
Company's other leases were also 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 1996 was $450,000. This loan bore interest at
the intercompany rate of interest paid by the Company to Ingram Industries.
9
<PAGE> 12
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 Class A Common Stock issued
upon conversion of Class B Common Stock) were entered into by the Company and
the Ingram Family Stockholders.
In connection with the exchange of shares of Ingram Industries common
stock for shares of Class B Common Stock of the Company (as described above),
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 an exchange
agreement (the "Exchange Agreement"), the Company covenanted 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 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. Although there can be no assurance, it
is contemplated that, pursuant to the Exchange Agreement, on or after June 20,
1997, certain remaining shareowners of Ingram Industries will exchange their
remaining shares of Ingram Industries common stock for all of the shares of
Ingram Entertainment common stock.
Certain outstanding Ingram Industries options and stock appreciation
rights ("SARs") were converted to, and certain Ingram Industries incentive
stock units ("ISUs") were exchanged for, options exercisable for shares of
Class A Common Stock of the Company (the "Rollover Stock Options"). The
exchange values for these options, SARs, and ISUs were based primarily on the
exchange value for the underlying common stock, and were determined by the
board of directors of Ingram Industries in accordance with the respective plans
under which they were issued. A total of approximately 10,989,000 Rollover
Stock Options were issued in connection with the Split-Off. In connection with
such conversion and exchange, the Company agreed to register at various times
following the IPO, shares of Class A Common Stock issuable upon the exercise of
Rollover Stock Options.
The Ingram Family Stockholders and the other shareowners 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 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 shareowners
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. The
minority shareowners 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
10
<PAGE> 13
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 of Class B Common Stock in
the Company's July 1996 employee offering 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.
As provided in an agreement (the "Thrift Plan Liquidity Agreement") with
the Ingram Thrift Plan, which received 10,007,000 shares of Class B Common
Stock in the Split-Off, the Company filed with the Securities and Exchange
Commission a registration statement on Form S-1, pursuant to which the Ingram
Thrift Plan sold 770,000 of such shares of Class B Common Stock in December
1996. All of such shares were automatically converted into shares of Class A
Common Stock in connection with the sale thereof. In January 1997, pursuant to
an employee benefits transfer and assumption agreement (the "Employee Benefits
Agreement"), the Ingram Thrift Plan transferred an aggregate of 2,548,292
shares of Class B Common Stock to the Ingram Micro Thrift Plan and the Ingram
Entertainment Thrift Plan. The Employee Benefits Agreement provides for the
allocation of employee benefit assets and liabilities generally on a pro rata
basis in respect of the current and former employees of each of the Company,
Ingram Industries, and Ingram Entertainment (each, an "Ingram Company"). Each
Ingram Company has indemnified the other parties with respect to such party's
benefit-related assumed or retained assets and liabilities.
Pursuant to a reorganization agreement (the "Reorganization Agreement"),
each Ingram Company agreed to retain or assume, at the time of the Split-Off,
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.
The Reorganization Agreement also provides that 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
11
<PAGE> 14
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.
In addition, 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 shareowners of Ingram
Industries. If securities of Ingram Industries are exchanged for securities of
Ingram Entertainment, as contemplated to occur in June 1997, 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.
In connection with the Split-Off, 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 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
12
<PAGE> 15
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 based on the allocated
costs of such services. The Company received fees of $253,500 in 1996
(beginning in November 1996), and is expected to receive approximately
$1,782,400 in 1997.
13
<PAGE> 16
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides information relating to compensation for
the two most recently completed fiscal years for the Named Executive Officers.
Excluding Mr. Stead, prior to the Split-Off, a portion of this compensation was
paid by Ingram Industries and was included as a factor in the determination of
intercompany charges paid by the Company to Ingram Industries.
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
-------------
Annual Compensation Securities All Other
------------------------------------ Underlying Compensation
Name and Principal Position(s) Year(1) Salary($)(2) Bonus($)(3) Options/SARs(#) ($)(4)
- ------------------------------ ------- ------------ ----------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Jerre L. Stead(5) 1996 -- -- 3,400,000 --
Chief Executive Officer and Chairman
of the Board of Directors
Jeffrey R. Rodek 1996 $434,458 $375,239 350,000(6) $ 12,493
Worldwide President and 1995 392,820 267,089 240,258(7) 163,649
Chief Operating Officer
David R. Dukes 1996 317,081 266,272 185,000(6) 16,499
Vice Chairman of the Company 1995 260,130 205,611 -- 10,607
and Chief Executive Officer
of Ingram Alliance
Sanat K. Dutta 1996 268,435 241,475 165,000(6) 12,850
Executive Vice President and President, 1995 263,500 213,593 -- 12,365
Ingram Micro U.S.
John Wm. Winkelhaus, II 1996 336,411 87,136 115,000(6) 128,865
Executive Vice President and President, 1995 250,000 130,441 -- 124,287
Ingram Micro Europe
Linwood A. (Chip) Lacy, Jr.(8) 1996 577,498 686,057 --(6) 487,452
Former Chief Executive Officer and 1995 558,000 414,057 -- 28,617
Former Chairman of the Board of Directors
</TABLE>
- -----------------
(1) Under rules promulgated by the Securities and Exchange Commission (the
"Commission"), only information with respect to the two most recently
completed fiscal years 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) In respect of each of 1995 and 1996, the bonuses were paid in February or
March of the following years.
(4) Includes the following amounts for 1996: Mr. Rodek (group term life
insurance, $1,632; employer thrift plan contributions, $10,861); Mr.
Dukes (group term life insurance, $4,608; employer thrift plan
contributions, $11,891); Mr. Dutta (group term life insurance, $2,784;
employer thrift plan contributions, $10,066); Mr. Winkelhaus (group term
life insurance, $1,267; employer thrift plan contributions, $6,136;
expatriate compensatory payments, $121,462); Mr. Lacy (group term life
insurance, $4,608; employer thrift plan contributions, $9,063; relocation,
$145,448; termination payments, $328,333).
(5) Mr. Stead became the Company's Chief Executive Officer and Chairman of the
Board of Directors on August 27, 1996.
14
<PAGE> 17
(6) Does not include the exchange or conversion of outstanding Ingram
Industries securities held by Messrs. Rodek, Dukes, Dutta, Winkelhaus and
Lacy, into Rollover Stock Options in connection with the Split-Off, as
follows: 274,582, 273,896, 258,107, 244,378, and 419,190 shares,
respectively.
(7) Represents options granted in 1995 exercisable for 175,000 shares of
Ingram Industries common stock, which were converted into options
exercisable for 240,258 shares of Common Stock in connection with the
Split-Off.
(8) Mr. Lacy was an employee of Ingram Industries at all times during 1995 and
through May 31, 1996, at which time he resigned from both the Company and
Ingram Industries. All amounts shown for Mr. Lacy were paid by Ingram
Industries, and a portion of such amounts is reflected in the Company's
consolidated statement of income under charges allocated from Ingram
Industries.
STOCK OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information relating to stock options granted
to the Named Executive Officers for the year ended December 28, 1996.
<TABLE>
<CAPTION>
Individual Grants(1)
---------------------------------------------------
% of Total
Number of Options/SARs
Securities Granted to Exercise Alternative to
Underlying Employees of or Base Grant Date
Options/SARs the Company in Price Expiration Present
Name Granted Fiscal Year ($/sh) Date Value($)(5)
- ---- ------------ -------------- -------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Jerre L. Stead . . . . . . 200,000(2) 2.1% $18.00 10/31/04 $ 1,275,609
1,600,000(3) 16.4 18.00 10/31/04 10,037,594
1,600,000(4) 16.4 18.00 10/31/06 8,706,314
-----------------------------------------------------------------
Jeffrey R. Rodek . . . . . 150,000(3) 1.5 7.00 3/31/04 177,637
200,000(4) 2.1 18.00 10/31/06 1,088,289
-----------------------------------------------------------------
David R. Dukes . . . . . . 35,000(3) 0.4 7.00 3/31/04 45,847
70,000(3) 0.7 18.00 10/31/04 444,585
80,000(4) 0.8 18.00 10/31/06 435,316
-----------------------------------------------------------------
Sanat K. Dutta . . . . . . 40,000(3) 0.4 7.00 3/31/04 49,956
25,000(3) 0.3 18.00 10/31/04 159,973
100,000(4) 1.0 18.00 10/31/06 544,145
-----------------------------------------------------------------
John Wm. Winkelhaus, II . . 40,000(3) 0.4 7.00 3/31/04 52,397
75,000(4) 0.8 18.00 10/31/06 408,108
-----------------------------------------------------------------
Linwood A. (Chip) Lacy, Jr. -- 0.0 -- -- --
-----------------------------------------------------------------
</TABLE>
- -----------------
(1) Does not include the exchange or conversion of outstanding Ingram
Industries securities into Rollover Stock Options in connection with the
Split-Off.
(2) Such options were immediately exercisable on the date of grant.
(3) Such options become exercisable in four equal annual installments,
beginning April 1, 1998.
(4) Such options become exercisable over a fixed term, subject to continued
employment with the Company; however, such options will vest earlier if
the Company achieves certain performance criteria.
(5) The grant date present values shown in the table were determined pursuant
to the Black-Scholes option valuation model, using the following
assumptions: stock price volatility of 0% and 39.4% for the $7.00 options
and $18.00 options, respectively; expected lives of 3 years for the $7.00
options, 3.2 years for the $18.00 options which vest over 4 years, and 2.5
years for the $18.00 options which vest over a fixed term but are subject
to earlier vesting if the Company achieves certain performance criteria;
dividend yield of 0%; and risk free interest rate of 5.9%.
15
<PAGE> 18
STOCK OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table provides information relating to any stock options and
ISUs exercised by the Named Executive Officers during the year ended December
28, 1996, as well as the number and value of securities underlying unexercised
stock options held by the Named Executive Officers as of December 28, 1996.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Shares Unexercised In-the-Money
Acquired Options/SARs Options/SARs
on at Year End at Year End
Exercise Value ----------------- ----------------------
During Realized Exercisable/ Exercisable/
Name 1996(1) ($)(2) Unexercisable Unexercisable
- ---- -------- ---------- ----------------- ----------------------
<S> <C> <C> <C> <C>
Jerre L. Stead . . . . . . . . . . -- -- 200,000/3,200,000 $1,100,000/$17,600,000
Jeffrey R. Rodek . . . . . . . . . -- -- 0/624,582 0/9,245,118
David R. Dukes . . . . . . . . . . -- -- 73,277/385,619 1,611,679/5,842,797
Sanat K. Dutta . . . . . . . . . . -- -- 37,410/385,694 810,016/6,120,591
John Wm. Winkelhaus, II . . . . . . -- -- 42,559/316,819 918,300/5,459,084
Linwood A. (Chip) Lacy, Jr. . . . . 100,500 $2,921,148 10,000/308,690 220,900/6,795,268
</TABLE>
- ---------------
(1) Excludes Ingram Industries ISUs held by Mr. Lacy that matured in 1996 and
were settled in cash.
(2) Includes $612,353 paid to Mr. Lacy in connection with the settlement of
ISUs.
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. In connection with the Split-Off, the
Company established a qualified plan similar to the Ingram Industries qualified
plan. None of the Named Executive Officers participates in or 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
above. In lieu of receipt of 200,000 of such options, Mr. Stead purchased
200,000 shares of Common Stock directly from the Company at the initial public
offering price. Mr. Stead will not receive any salary, bonus, or other cash
compensation during the vesting period of such options; however, the Company's
agreement with Mr. Stead provides for the Company to compensate Mr. Stead in a
mutually agreeable manner in the event (which occurred) that the initial public
offering price exceeded $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.
16
<PAGE> 19
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.
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.
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<PAGE> 20
HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Human Resources Committee of the Board of Directors is responsible for
administering the executive compensation plans and programs of the Company and
for making recommendations to the Board of Directors regarding the compensation
of and benefits provided to the Chief Executive Officer and the other executive
officers. The names of the Human Resources Committee members are set forth
below this report.
COMPENSATION PHILOSOPHY
The 1996 compensation program described in this Proxy Statement was
established by the Compensation Committee of the Ingram Industries Board of
Directors ("the Committee") while the Company was a controlled subsidiary of
Ingram Industries Inc. The Committee was comprised entirely of Directors who
were senior members of Ingram Industries' management and met as needed.
The Company's compensation program was designed to create and sustain high
performance, to attract and retain the people necessary to sustain the growth
of the business, and to provide incentives to associates to act as shareowners
of the business and to become personally accountable for their own individual
actions and the Company's overall business success. The program was designed
to be highly sensitive to performance and reward both short and long term
performance.
In establishing compensation levels for 1996, the Committee considered the
results of the Radford Total Management Survey of top management in high tech
industries and other national surveys of top management positions for companies
with whom the Company competes for executive talent. The Company's competitors
for executive talent are not necessarily the same companies that would be
included in an industry index established to compare shareowner returns because
the Company requires skills and perspectives from a broader range of
backgrounds. Thus, the comparable companies for purposes of executive
compensation are not the same as the industry group index used in the
performance comparison graph included in this Proxy Statement.
The target executive compensation levels described herein for each of the
Company's five most highly compensated officers named in the Summary
Compensation Table in this Proxy Statement ("named officers") do not exceed the
annual limit for deductibility under Section 162(m) of the Internal Revenue
Code of 1986, as amended ("Section 162(m)"). Subject to the needs of the
Company, the Company's policy is to attempt to meet the requirements for
deductibility under Section 162(m).
The Committee developed the following guidelines which were the basis for
the 1996 program:
o target levels at the mean of the select sample of companies
o pay compensation based on results compared to stretch targets
o reflect a bias towards variable pay
o support value creation for the Company's shareowners
The 1996 compensation program consisted of three components: (1) base
salary, (2) annual bonus and (3) long term incentives, e.g., stock options and
restricted stock.
1. Base Salary: Base salaries for executive officers are determined
based on the Committee's assessment of the individual's experience
level, the scope and complexity of the position held and the
Company's knowledge of salaries being paid for similar positions
in the marketplace. Annual salary adjustments are determined by
the Company's performance and the individual's contribution to
that performance. For
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<PAGE> 21
those executive officers responsible for particular business units, the
financial and non-financial results (e.g., recognition within respective
industries) of their business units are also considered.
2. Annual Incentive Plan: The annual bonus paid in 1996 for named officers
other than the Chairman and Chief Executive Officer relates to 1995
performance and was based 60% on the Company's performance related to
preset financial performance targets and 40% on individual performance
against preset goals. No bonus is payable unless the Company achieves a
minimum preset financial target.
3. Long Term Incentives: To ensure a direct connection between shareowner
and executive officer interests, the long term component uses share
price as a key measure of value delivered by the executive officer.
Until last year, long term incentive grants were issued under various
Ingram Industries programs based on the book value of Ingram Industries
stock. At the time of the Split-Off, these awards were converted to
options to purchase shares of the Company's Class A Common Stock. In
addition, the Company adopted its own stock option plan and an executive
stock purchase plan last year. Pursuant to these plans, additional
stock options were awarded last year and members of senior management
were given the opportunity to purchase shares of the Company's Class B
Common Stock on a restricted basis prior to the IPO. Certain
individuals also were awarded restricted share grants. The restrictions
on these shares will lapse at various times through 2000 for the
purchased shares and 2001 for the share grants.
CEO COMPENSATION
Jerre Stead, the Company's Chairman and Chief Executive Officer, receives
no salary or annual bonus. At the time of the IPO, Mr. Stead received a
one-time grant of options to purchase 3,400,000 shares of the Company's Class A
Common Stock at the initial public offering price, $18 per share. The number
of options was determined at the time of Mr. Stead's employment with the
Company based on a comparison with other firms with which the Company believed
it was competing for top executive talent.
Of the options awarded to Mr. Stead, 200,000 were vested immediately and
1,600,000 will vest in four equal installments on April 1 of each of the years
1998 through 2001. The remaining 1,600,000 options will vest 100% on November
1, 2005 or sooner should shareowner value reach the preset performance
objectives described below. One-half of these options may vest any time after
April 1, 1998 upon satisfaction of either of the following conditions:
o the completion of any 90 calendar day period in which the
beginning, ending and average reported closing price of the
Company's Class A Common Stock on the New York Stock Exchange is at
least $35.00 per share.
o (i) the earnings per share as publicly reported by the Company
meets or exceeds $2.00 for any consecutive six quarter period,
beginning with the six quarter period ending in March 1998 and (ii)
the most recent two quarters' earnings per share total at least
$0.75; provided that, for any consecutive six quarter period ending
in fiscal year 1999, or thereafter, the Human Resources Committee
of the Board of Directors may establish, from time to time,
different minimum cumulative earnings per share amounts using
substantially the same criteria as used in establishing the initial
cumulative amounts.
The remaining one-half of the options will vest and become exercisable
upon satisfaction of either of the following conditions:
o the completion of any 90 calendar day period in which the
beginning, ending and average reported closing price of the
Company's Class A Common Stock on the New York Stock Exchange is at
least $45.00 per share.
o (i) the earnings per share as publicly reported by the Company
meets or exceeds $2.75 for any consecutive six quarter period,
beginning with the six quarter period ending in March 1998 and (ii)
the most recent two
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<PAGE> 22
quarters' earnings per share total at least $1.00; provided that, for
any consecutive six quarter period ending in fiscal year 2000, or
thereafter, the Human Resources Committee of the Board of Directors may
establish, from time to time, different minimum cumulative earnings per
share amounts using substantially the same criteria as used in
establishing the initial cumulative amounts.
The first day of measuring the consecutive 90-day periods will be
January 1, 1998.
The Human Resources Committee of the Board of Directors may, at its
discretion, revise the terms and conditions of these stock options to the
extent permitted by the Company's Amended and Restated 1996 Equity Incentive
Plan.
Beginning on November 1, 1996, the date of the Company's initial
public offering, the undersigned non-employee Directors began serving as
members of the Human Resources Committee of the Company's Board of Directors.
The compensation philosophy expressed above, which supports the information
reported in this Proxy Statement, was developed by the Compensation Committee
of the Ingram Industries Board of Directors prior to the Company's initial
public offering. The Human Resources Committee is in the process of developing
principles and formulating an on-going compensation program that supports the
Company's business and strategies.
J. Phillip Samper, Chairman
Martha R. Ingram
Don H. Davis, Jr.
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<PAGE> 23
STOCK PRICE PERFORMANCE GRAPH
The Stock Price Performance Graph below, which assumes a $100 investment on
November 1, 1996 and reinvestment of any dividends, compares cumulative total
shareowner return (assuming reinvestment of dividends) of the Company, the New
York Stock Exchange, Inc. ("NYSE") Composite Index and the Standard Industrial
Classification ("SIC") Code Index (SIC Code 5045--Computer and Computer
Peripheral Equipment and Software) for the period beginning November 1, 1996,
the date on which trading of the Company's Class A Common Stock commenced,
through December 28, 1996. The closing price of the Company's Class A Common
Stock was $23.50 on December 28, 1996 and $21.25 on March 24, 1997. The stock
price performance of the Company's Class A Common Stock depicted in the graph
below represents past performance only and is not indicative of future
performance.
[GRAPH]
11/01/96 12/28/96
-------- --------
Ingram Micro Inc. . . . . . . . . . . . . . . . . $100.00 $114.63
SIC Code Index . . . . . . . . . . . . . . . . . 100.00 98.57
NYSE Composite Index . . . . . . . . . . . . . . 100.00 105.25
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<PAGE> 24
INDEPENDENT ACCOUNTANTS
The firm of Price Waterhouse LLP served as the Company's independent
accountants for fiscal 1996. This firm has advised the Company that it has no
direct or indirect financial interest in the Company. Representatives of this
firm are expected to be present at the 1997 Annual Meeting, with the
opportunity to make a statement, should they desire to do so, and will be
available to respond to appropriate questions from shareowners. The Audit
Committee will select the Company's independent accountants for 1997.
OUTSTANDING VOTING SECURITIES
On March 24, 1997, the record date for the 1997 Annual Meeting, there were
outstanding and entitled to vote 25,786,779 shares of Class A Common Stock of
the Company, entitled to one vote per share, and 109,068,762 shares of Class B
Common Stock, entitled to ten votes per share.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), requires the Company's executive officers and Directors, and beneficial
owners of more than 10% of the Class A Common Stock of the Company, to file
initial reports of ownership and reports of changes in ownership with the SEC
and the NYSE. Executive officers and Directors are required by SEC regulations
to furnish the Company with copies of all Section 16(a) forms they file. Based
solely on a review of the copies of such forms furnished to the Company and
written representations from the Company's executive officers and Directors,
the Company noted that no individual who, at any time during 1996, was a
Director, officer or beneficial owner of more than 10% of the Class A Common
Stock of the Company failed to file the reports required by Section 16(a) of
the 1934 Act on a timely basis, except that (i) due to a clerical error, one
holding of shares by Philip M. Pfeffer amounting to 63,972 shares of Class B
Common Stock was inadvertently omitted from his Form 3 filed on October 31,
1996 and (ii) a Form 4 filed by Roy E. Claverie relating to the exercise by Mr.
Claverie of options omitted Mr. Claverie's sale of the shares issued upon
exercise of the options. Amended forms were filed in each case promptly after
discovery of these errors.
SOLICITATION OF PROXIES
The cost of soliciting proxies for the 1997 Annual Meeting will be borne by
the Company. In addition to solicitation by mail, solicitations may also be
made by personal interview, telegram, fax and telephone. Although the Company
does not currently intend to do so, the Company may engage one or more agents
to assist in soliciting proxies. Arrangements will be made with brokerage
houses and other custodians, nominees and fiduciaries to send proxies and proxy
material to their principals, and the Company will reimburse them for expenses
in so doing. Consistent with the Company's confidential voting procedure,
Directors, officers and other regular employees of the Company, as yet
undesignated, may also request the return of proxies by telephone or telegram,
or in person.
ANNUAL REPORT
The Annual Report of the Company for the year ended December 28, 1996,
including financial statements audited by Price Waterhouse LLP, independent
auditors, and their report thereon dated February 18, 1997, is being mailed to
all shareowners with this proxy statement. IN ADDITION, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 28, 1996, AS
FILED WITH THE SEC, WILL BE SENT TO ANY STOCKHOLDER WITHOUT CHARGE, UPON
WRITTEN REQUEST TO INGRAM MICRO INC., 1600 EAST ST. ANDREW PLACE, SANTA ANA,
CALIFORNIA 92705, ATTENTION: SENIOR DIRECTOR, INVESTOR RELATIONS.
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<PAGE> 25
SHAREOWNER PROPOSALS
Shareowner proposals intended to be considered for inclusion in the proxy
statement for presentation at the 1998 Annual Meeting must be received by the
Company at its principal executive offices by December 10, 1997, unless the
date of the 1998 Annual Meeting is more than 30 days prior to or subsequent to
May 7, 1998, in which case proposals must be received a reasonable time before
the mailing of the proxy statement relating to the 1998 Annual Meeting.
OTHER MATTERS
The Board of Directors does not know of any matter other than that described
in this proxy statement that will be presented for action at the meeting. If
other matters properly come before the meeting, the persons named as proxies
intend to vote the shares they represent in accordance with their judgment.
By Order of the Board of Directors,
/s/ JAMES E. ANDERSON, JR.
-----------------------------------
James E. Anderson, Jr.
Senior Vice President, Secretary
and General Counsel
April 9, 1997
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<PAGE> 26
INGRAM MICRO INC.
The undersigned, a shareowner of Ingram Micro Inc. (the "Company"),
hereby appoints James E. Anderson, Jr. and Michael J. Grainger, and each of them
individually as Proxies to represent and vote all of the Company's Class A
Common Stock or Class B Common Stock held of record by the undersigned, each
with full power of substitution, at the Annual Meeting of the Shareowners of
the Company, to be held at the Company's Santa Ana campus, 1700 East St.
Andrews Place, Santa Ana, California 92705 on Wednesday, May 7, 1997 at 10:00
a.m., local time, and at any adjournment or postponement thereof, as follows:
1. To reelect Don H. Davis, Jr., David B. Ingram, John R. Ingram,
Martha R. Ingram, Philip M. Pfeffer, J. Phillip Samper, Jerre L. Stead, and Joe
B. Wyatt as Directors of the Company for a term of one year.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(Instruction: to withhold authority to vote for any individual nominee,
strike out his or her name.)
2. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting or any adjournment or
postponement thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ABOVE. IF A CHOICE IS NOT
INDICATED WITH RESPECT TO ITEM (1) ABOVE, THIS PROXY WILL BE VOTED "FOR" SAID
PROPOSAL. THIS PROXY IS REVOCABLE AT ANY TIME BEFORE IT IS EXERCISED.
The undersigned hereby acknowledges receipt of a copy of the Notice of
Annual Meeting and accompanying Proxy Statement dated April 9, 1997.
Joint owners must each sign.
Please sign exactly as your
name(s) appear(s) on the Stock
Certificate. When signing as an
attorney, trustee, executor,
administrator or guardian,
please give your full title. If
signer is a corporation, please
sign the full corporation name
and full title of signing
officer.
Dated: , 1997
-----------------
------------------------------
------------------------------
Signature of Shareowner(s)
