<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
COMDISCO, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Philip A. Hewes
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] 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:
-------------------------------------------------------------------------
Notes:
<PAGE>
LOGO
6111 N. RIVER ROAD
ROSEMONT, ILLINOIS 60018
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 23, 1996
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Comdisco, Inc., a Delaware corporation
("Comdisco"), will be held on Tuesday, January 23, 1996 at 3:00 o'clock p.m.
(C.S.T.), at Comdisco's corporate office, 6111 N. River Road in the first
floor auditorium, Rosemont, Illinois 60018, for the purpose of considering and
acting upon the following:
1. The election of three Class I Directors of Comdisco for a term of three
years;
2. The approval of Comdisco's 1995 Long-Term Stock Ownership Incentive
Plan;
3. The approval of performance goal criterion applicable to Performance
Unit Awards under the 1995 Long-Term Stock Ownership Incentive Plan;
4. The ratification of the appointment by the Board of Directors of KPMG
Peat Marwick LLP as independent auditors of Comdisco for the current
fiscal year; and
5. The transaction of such other business as may properly be brought before
the meeting or any adjournment thereof.
Only stockholders of record at the close of business on December 11, 1995,
are entitled to notice of and to vote at the Annual Meeting of Stockholders.
For at least ten (10) days prior to the Annual Meeting, a list of stockholders
entitled to vote at the Annual Meeting will be open for the examination of any
stockholder, for any purpose germane to the Annual Meeting, during ordinary
business hours at the office of Comdisco.
Stockholders are cordially invited to attend the Annual Meeting. However,
whether or not a stockholder plans to attend, each stockholder is urged to
sign, date and promptly return the enclosed proxy in the accompanying
envelope.
The Annual Report, Proxy Statement and Proxy are enclosed with this notice.
Dated and mailed at New York, New York, December 22, 1995.
By order of the Board of Directors
PHILIP A. HEWES
Secretary
IMPORTANT
Please complete, sign and return the enclosed Proxy immediately. A return
envelope, which requires no postage if mailed in the United States, is
enclosed.
<PAGE>
LOGO
6111 NORTH RIVER ROAD
ROSEMONT, ILLINOIS 60018
PROXY STATEMENT
ANNUAL MEETING AND PROXY SOLICITATION INFORMATION
SOLICITATION OF PROXIES
This Proxy Statement, which is being mailed to stockholders on or about
December , 1995, is furnished in connection with the solicitation by the
Board of Directors of Comdisco, Inc., a Delaware corporation ("Comdisco" or
the "Company"), of proxies for use at its Annual Meeting of Stockholders to be
held on Tuesday, January 23, 1996, at 3:00 o'clock p.m. (C.S.T.) at Comdisco's
corporate office, 6111 N. River Road, Rosemont, Illinois 60018, and at any
adjournment of the Annual Meeting.
At the meeting, stockholders will be asked to elect three Class I Directors,
to approve the Comdisco 1995 Long-Term Stock Ownership Incentive Plan, to
approve performance goals applicable to Performance Unit Awards under said
Plan, and to ratify the appointment of auditors. Because many of our
stockholders are unable to personally attend the Annual Meeting, the Board of
Directors solicits the enclosed proxy so that each stockholder is given an
opportunity to vote. This proxy enables each stockholder to vote on all
matters which are scheduled to come before the meeting. When the proxy card is
returned properly executed, the stockholder's shares will be voted according
to the stockholder's directions. Stockholders are urged to specify their
choices by marking the appropriate boxes on the enclosed proxy card. If no
choice has been specified, the shares will be voted FOR the election of the
Director-nominees listed below, FOR the approval of the Comdisco 1995 Long-
Term Stock Ownership Incentive Plan, FOR the approval of the performance goals
applicable to Performance Unit Awards and FOR the ratification of the
appointment of KPMG Peat Marwick LLP as independent auditors.
The Board of Directors knows of no other business that will be presented at
the meeting. If, however, other matters are properly presented, the persons
named in the enclosed proxy will vote the shares represented thereby in
accordance with their judgment on such matters.
A proxy may be revoked by giving the Secretary of Comdisco written notice of
revocation at any time before the voting of the shares represented by the
proxy. A stockholder who attends the meeting may cancel any proxy by voting at
the meeting.
The cost of soliciting proxies will be borne by Comdisco. In addition to
solicitation by mail, proxies may be solicited by Directors, officers and
employees of Comdisco by personal interview, telephone or telegram. Comdisco
may request brokerage houses and other custodians, nominees and fiduciaries to
forward proxy soliciting material to the beneficial owners of stock held of
record by such persons. Comdisco will reimburse its transfer agent for charges
and expenses in connection with the distribution of proxy material and brokers
or other persons holding stock in their names or in the names of their
nominees for out-of-pocket expenses in forwarding proxy material to the
beneficial owners. In addition, Chemical Mellon Shareholder Services, New
York, New York, has been retained to assist in the solicitation of the proxies
at a fee of $6,000.00, plus out-of-pocket expenses.
1
<PAGE>
QUORUM AND VOTING RIGHTS
The presence, in person or by proxy, of the holders of a majority of the
issued and outstanding shares of Common Stock of the Company ("Common Stock")
entitled to vote (exclusive of shares held by or for the account of the
Company) is necessary to constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes will be counted for purposes of determining
whether a quorum is present. The election of Directors will be decided by a
plurality of the votes represented in person or by proxy at the Annual
Meeting. The affirmative vote of the holders of a majority of the shares of
Common Stock present in person or by proxy at the Annual Meeting is required
for the approval of each of the other matters to be presented. Only holders of
record of Common Stock at the close of business on December 11, 1995 are
entitled to notice of and to vote at the Annual Meeting.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
As of December 11, 1995, the Company had issued and outstanding
shares of Common Stock. Each share of Common Stock entitles the holder to one
vote upon each matter to be voted upon.
PRINCIPAL STOCKHOLDERS
The following table lists all persons known to be the beneficial owner of
more than 5% of Comdisco's outstanding Common Stock as of December 11, 1995.
<TABLE>
<CAPTION>
PERCENT
NUMBER OF OF
NAME AND ADDRESS SHARES CLASS
---------------- --------- -------
<S> <C> <C>
Fidelity Management and Research Corporation........... %
82 Devonshire
Boston, MA 02109
Estate and Trusts of Kenneth N. Pontikes............... 2,343,361* %
6111 N. River Road
Rosemont, IL 60018
Pontikes Trust......................................... 6,257,157 %
6111 N. River Road
Rosemont, IL 60018
Ponchil Limited Partnership............................ 3,272,836 %
6111 N. River Road
Rosemont, IL 60018
</TABLE>
- --------
*For additional information, see footnote (c) in the Section entitled Stock
Ownership of Directors and Management.
2
<PAGE>
STOCK OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table shows certain information about stock ownership of each
Director and nominee for directorship, the Chief Executive Officer and the
next four most highly compensated executive officers, and all Directors and
Executive Officers as a group.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY
OWNED ON % OF
NAME DECEMBER 11, 1995 CLASS
---- ------------------------- -----
<S> <C> <C>
Alan J. Andreini......................... 175,387(a,b) (d)
Robert A. Bardagy........................ 133,214(b) (d)
Edward H. Fiedler, Jr.................... 182,151(a,b) (d)
C. Keith Hartley......................... 46,744(a,b) (d)
Philip A. Hewes.......................... 63,764(a,b) (d)
Rick Kash................................ 54,093(b) (d)
Thomas A. Patrick........................ 53,851(a,b) (d)
Nicholas K. Pontikes..................... 12,133,092(b,c) %
William N. Pontikes...................... 867,394(a,b) %
Jack Slevin.............................. 282,442(a,b) (d)
Basil R. Twist, Jr....................... 44,850(b) (d)
John J. Vosicky.......................... 241,425(a,b) (d)
All Directors and Executive Officers as a
group, including two officers not named
above................................... 14,364,240(a,b,c) %
</TABLE>
- --------
(a) Includes shares held by or for the benefit of the immediate families of
the above individuals and for which they disclaim any beneficial interest,
as follows: Mr. W. Pontikes, 66,864 shares; Mr. Andreini, 637 shares; Mr.
Slevin, 159,993 shares; and Directors and Executive Officers as a group,
230,494 shares.
Also includes other shares held by or for the benefit of the immediate
families of the above individuals, over which such individuals hold no
voting or dispositive powers and for which they disclaim any beneficial
interest, as follows: Mr. W. Pontikes, 190,745 shares; Mr. Fiedler, 88,515
shares; Mr. Hartley, 157 shares; Mr. Hewes, 1,194 shares; Mr. Patrick,
5,310 shares; Mr. Slevin, 39,126 shares; Mr. Vosicky, 4,342 shares; and
Directors and Executive Officers as a group, 329,389 shares.
(b) Includes shares obtainable upon exercise of stock options which are or
become exercisable prior to February 1, 1996 as follows: Mr. N. Pontikes,
7,815 shares; Mr. W. Pontikes, 10,408 shares; Mr. Andreini, 79,638 shares;
Mr. Bardagy, 55,072 shares; Mr. Fiedler, 12,150 shares; Mr. Hartley,
24,600 shares; Mr. Hewes, 37,255 shares; Mr. Kash, 24,600 shares; Mr.
Patrick, 24,600 shares; Mr. Slevin, 68,109 shares; Mr. Twist, 24,600
shares; Mr. Vosicky, 113,070 shares; and Directors and Executive Officers
as a group, 550,937 shares. The percentages set forth in the above table
give effect to the exercise of these options.
(c) Includes shares over which Nicholas Pontikes exercises sole or shared
voting and dispositive powers but with respect to which he disclaims any
beneficial interest (with the exception of a percentage of the shares
owned by Ponfam Corp. and Ponchil Limited Partnership equal to his
proportionate ownership interest in those entities), which shares are held
of record as follows: Pontikes Trust, 6,257,157 shares; Estate of Kenneth
N. Pontikes (Nicholas Pontikes, Executor), 753,976 shares; Pontikes
Nonexempt Marital Trust, 1,500,000 shares; Pontikes Exempt Marital Trust,
89,385 shares; Ponchil Limited Partnership, 3,272,836 shares; Ponfam
Corp., 96,021 shares; and Pontikes Family Foundation, 118,770 shares.
(d) Percentage of shares beneficially owned does not exceed 1% of the class
outstanding.
3
<PAGE>
BOARD OF DIRECTORS
ELECTION OF DIRECTORS
Pursuant to Comdisco's Certificate of Incorporation, the Board of Directors
is divided into three classes, with each class as equal in number as possible,
and that each year the stockholders elect the members of one of the three
classes to a three year term of office. There are twelve Directors with Class
I having three members, Class II having four members and Class III having five
members.
The term of office of each of the three Class I Directors will expire at the
1996 Annual Meeting of Stockholders. The term of office for each of the Class
I nominees to be elected at the 1996 Annual Meeting will expire at the 1999
Annual Meeting, the term of office for each of the Class II Directors will
expire at the 1997 Annual Meeting, and the term of office of each of the Class
III Directors will expire at the 1998 Annual Meeting, or in each case when
their respective successors have been duly elected and qualified.
PROFILE OF DIRECTORS AND NOMINEES
NOMINEES FOR TERMS EXPIRING IN 1999
(CLASS I DIRECTORS)
EDWARD H. FIEDLER, JR. (Age 63--Director since 1969)
Mr. Fiedler was General Attorney of Comdisco from March, 1983 to September,
1991 and Secretary from January, 1982 to September, 1991. Mr. Fiedler retired
from both positions at Comdisco effective September 30, 1991.
BASIL R. TWIST, JR. (Age 52--Director since 1982)
Mr. Twist has been President of Champion Securities Corporation since
February, 1991. He was a private investor from February, 1986 to February,
1991.
JOHN J. VOSICKY (Age 47--Director since 1986)
Executive Vice President and Chief Financial Officer (a)
Mr. Vosicky has been Executive Vice President, Chief Financial Officer of
Comdisco since July, 1994. He was Senior Vice President and Chief Financial
Officer from November, 1985 to July, 1994.
DIRECTORS CONTINUING IN OFFICE UNTIL 1997
(CLASS II DIRECTORS)
C. KEITH HARTLEY (Age 53--Director since 1978)
Mr. Hartley has been Senior Managing Director of Forum Capital Markets L.P.
since August 1995. From May, 1991 to August, 1995 he was an independent
financial consultant. He was a Managing Director of Peers & Co., Merchant
Bankers from February, 1990 to May, 1991.
RICK KASH (Age 53--Director since 1987)
Mr. Kash has been President and Managing Partner of The Cambridge Group,
management consultants, since 1975. Mr. Kash is also a director of U.S. Auto
Glass.
WILLIAM N. PONTIKES (Age 54--Director since 1977)
Executive Vice President (a)
4
<PAGE>
Mr. Pontikes has been Executive Vice President since October, 1989. Mr.
Pontikes is the uncle of Nicholas K. Pontikes.
JACK SLEVIN (Age 59--Director since 1979)
President and Chief Executive Officer (a)
Mr. Slevin has been President and Chief Executive Officer since July, 1994.
He was Interim Chief Operating Officer from December, 1993 to July, 1994 and
Executive Vice President from April, 1992 to July, 1994. Mr. Slevin was Senior
Vice President and National Sales Manager from July, 1990 to April, 1992 and
was a Senior Vice President from October, 1989 to July, 1990.
DIRECTORS CONTINUING IN OFFICE UNTIL 1998
(CLASS III DIRECTORS)
ALAN J. ANDREINI (Age 49--Director since 1992)
Executive Vice President (a)
Mr. Andreini has been Executive Vice President since July, 1994. He was
Senior Vice President from July, 1986 to July, 1994. Mr. Andreini is also a
director of Hugoton Energy Corporation.
ROBERT A. BARDAGY (Age 56--Director since 1983)
Executive Vice President (a)
Mr. Bardagy has been Executive Vice President since July, 1986.
PHILIP A. HEWES (Age 43--Director since 1992)
Senior Vice President and Secretary (a)
Mr. Hewes has been Senior Vice President since January, 1992, and Secretary
since October, 1991. He was Vice President and General Counsel from July, 1988
to January, 1992, and Assistant Secretary from February, 1978 to October,
1991.
THOMAS H. PATRICK (Age 52--Director since 1971)
Mr. Patrick has been Executive Vice President, member of Office of the
Chairman of Merrill Lynch & Co., Inc. ("Merrill Lynch") since May, 1993. He
has also held the following positions with Merrill Lynch: Executive Vice
President, Equity Markets Group from June, 1992 to May, 1993; Executive Vice
President, Insurance from November, 1990 to June, 1992; and Executive Vice
President and Chief Financial Officer from June, 1989 to November, 1990. Mr.
Patrick is also a director of Baldwin & Lyons, Inc. and AMLI Realty Co.
NICHOLAS K. PONTIKES (Age 31--Director since 1993)
Executive Vice President (a)
Mr. Pontikes has been Executive Vice President of Comdisco since July, 1994
and President of Business Continuity Services Division since September, 1993.
He was Vice President of Comdisco from September, 1993 to July, 1994. He was
Vice President--Business Controls of Business Continuity Services from
January, 1993 to September, 1993. He was Director--International Marketing for
the Comdisco Electronics Group from July, 1992 to January, 1993. From April,
1990 through July, 1992 he was President of Avalon Capital Corporation, an
investment banking firm. Mr. Pontikes is the nephew of William N. Pontikes.
5
<PAGE>
(a) These individuals, along with David J. Keenan and John C. Kenning, are
the current executive officers of Comdisco. Mr. Keenan, age 47, has
been Vice President and Controller since January, 1985. Mr. Kenning,
age 34, has been National Sales Manager and Senior Vice President since
August, 1995. He was Vice President/Marketing from April, 1995 to
August, 1995 and Regional Marketing Manager from October, 1986 to
August, 1995.
INFORMATION REGARDING THE BOARD AND ITS COMMITTEES
During the last fiscal year, the Board of Directors held five meetings. All
incumbent directors, including those standing for re-election, attended at
least 75% of the meetings of the Board and the committees on which they
served. The Board has established Executive, Audit, Stock Option and
Compensation Committees. The Executive Committee, which acts on behalf of the
Board of Directors in connection with the regular conduct of Comdisco's
business, is composed of Messrs. Andreini, Bardagy, N. Pontikes, W. Pontikes,
Slevin and Vosicky. It has been the practice of the Executive Committee to act
by unanimous consent without a meeting. The Audit Committee is composed of
Messrs. Fiedler, Hartley, Kash, Patrick and Twist. The Audit Committee, which
met once during the last fiscal year, has the general responsibility for
establishing and maintaining communications with Comdisco's internal and
independent accountants, reviewing the methods used and audits made by the
auditors in connection with Comdisco's published financial statements and
reviewing with the auditors Comdisco's financial and operating controls. The
Stock Option Committee, which makes recommendations to the Board of Directors
with regard to the granting of stock options and administers stock option
plans, consists of Messrs. Hartley and Kash. The Stock Option Committee also
has the practice of formal actions by consent without a meeting. The
Compensation Committee consists of Messrs. Hartley, Patrick and Kash, all non-
employee directors. The Compensation Committee, which met two times during the
last fiscal year, has the general responsibility for evaluating the
compensation arrangements of officers and directors, including the
compensation arrangements for Comdisco's President and Chief Executive
Officer, Mr. Jack Slevin. The Board has no nominating committee.
COMPENSATION OF DIRECTORS
Non-employee Directors are paid a quarterly retainer of $6,000, a Board
meeting fee of $2,000 plus expenses and a Committee meeting fee of $2,000 plus
expenses if the Committee meeting is held on a date other than that scheduled
for a full Board meeting. In October of 1995, each non-employee Director was
granted an option to acquire 2,000 shares of Comdisco Common Stock at a price
equal to the fair market value on the date of grant pursuant to Comdisco's
Non-Employee Directors' Stock Option Plan. No option is exercisable within six
months from the date granted and options must be exercised within ten years
from the date granted.
EMPLOYMENT AGREEMENTS
The Company has entered into an agreement with Robert Bardagy relating to
compensation payments to be made after April 30, 1996. Mr. Bardagy, in
addition to his continuing service as a Director, will be available to consult
with the Company for a minimum 18 month period from April 30, 1996. During
said 18 month period, Mr. Bardagy will receive compensation (payable in bi-
monthly installments) equal to the average of his total compensation paid in
the three previous fiscal years. The Company has also agreed to provide its
customary insurance benefits (other than disability and accidental death
plans) to Mr. Bardagy through his 65th birthday provided that he pays the
regular employee portion of the cost of these benefits. As long as Mr. Bardagy
remains an employee of the Company, he will continue to be eligible to retain
stock options that he previously was granted in accordance with the terms of
the grant agreements and relevant stock option plans. Amounts payable, if any,
under previously awarded senior management incentive plans will be distributed
in accordance with the terms of said plans.
6
<PAGE>
CERTAIN BUSINESS RELATIONSHIPS
Mr. Patrick is Executive Vice President, Office of the Chairman of Merrill
Lynch. In 1995, Merrill Lynch acted as Comdisco's agent in an established
medium term note program and was an underwriter of Comdisco's senior note
program. In addition, Merrill Lynch was a dealer for the sale of Comdisco's
domestic commercial paper.
OTHER TRANSACTIONS
During 1995, Comdisco made personal loans in an aggregate amount of
$704,405,000 to Mr. Slevin. The loans are evidenced by a demand note bearing
interest at the LIBOR rate plus 3/4% and secured by the mortgage of his
personal residence. The largest aggregate amount of indebtedness outstanding
during the 1995 fiscal year was $ . As of December 1, 1995,
$ is currently outstanding.
In fiscal 1995, the Company repurchased its common stock from the following
Directors and Officers under its Stock Repurchase Program. In January 1995 the
Company repurchased 1,100,000 shares of its common stock from the estate of
Kenneth N. Pontikes. Nicholas K. Pontikes, Executive Vice President of the
Company, is the executor of the estate. Based upon a fairness opinion from an
investment banking firm, the shares were purchased at a 5% discount to the
market price on the acquisition date. The aggregate purchase price was
$25,993,000, or $23.63 per share. In April 1995 the Company repurchased
300,000 shares from William N. Pontikes at an aggregate purchase price of
$8,220,000, or $27.40 per share. This transaction was done at a 5% discount to
the market price on the acquisition date. The Company also repurchased 80,134
shares from Robert Bardagy in February 1995. These shares were purchased at
the then closing price of the Company's shares on the New York Stock Exchange
($25.37 per share for an aggregate amount of $2,033,000). In May 1995 the
Company repurchased 29,456 shares from Mr. Bardagy on the same basis ($29.00
per share for an aggregate amount of $854,224).
Basil Twist received $92,502.28 in fiscal 1995 pursuant to the terms of the
Comdisco Financial Services, Inc. Residual Incentive Compensation Plan dated
as of January 19, 1976. Mr. Twist was an employee of the Company at the time
he became a participant under this Plan. Participants under this Plan are
entitled to share in the Company's residual value in certain non-computer
capital equipment financings arranged by the Company. The amount of any future
benefits under this Plan is not presently determinable.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires Comdisco's
officers and directors, and persons who own more than ten percent of a
registered class of Comdisco's equity securities, to file reports of ownership
and changes in ownership with the Securities and Exchange Commission ("SEC")
and the New York Stock Exchange. Officers, directors and greater than ten
percent stockholders are required by SEC regulation to furnish Comdisco with
copies of all Section 16(a) forms they file.
Based solely on the Company's review of the copies of such forms received by
it, or written representations from certain reporting persons that no Forms 5
were required for those persons during fiscal year 1995, all filing
requirements applicable to its officers, directors and greater than ten
percent beneficial owners were complied with except as follows: Mr. Vosicky
did not timely file a monthly report of one transaction, however he did report
that transaction on Form 4 as soon as the omission was discovered.
7
<PAGE>
COMPENSATION AND BENEFITS
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information with respect to
compensation for services in all capacities paid by Comdisco and its
subsidiaries for the past three years, to or on behalf of (i) Jack Slevin,
President and Chief Executive Officer, and (ii) each of the four other most
highly compensated executive officers of Comdisco serving at September 30,
1995.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------- --------------------- -------
SECURITIES LONG-
RESTRICTED UNDERLYING TERM ALL OTHER
NAME AND PRINCIPAL OTHER ANNUAL STOCK OPTIONS INCENTIVE COMPENSATION
POSITION YEAR SALARY BONUS COMPENSATION(1) AWARDS (SHARES) PAYOUTS (1)(2)
------------------ ---- -------- -------- --------------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jack Slevin 1995 $ $ $ 88,653
President and CEO 1994 350,000 450,000 -0- -0- 125,000 -0- 5,643
1993 150,000 650,000 -0- -0- -0-
Alan J. Andreini 1995 141,270 37,318.12(3)
Executive Vice President 1994
1993
Robert A. Bardagy 1995 35,164
Executive Vice President 1994 350,000 509,000 -0- -0- -0- -0- 5,643
1993 200,000 663,500 -0- -0- -0-
Nicholas K. Pontikes 1995 45,538
Executive Vice President 1994 200,000 385,000 -0- -0- 25,000 -0- 5,643
1993 137,500 -0- -0- -0- -0-
John J. Vosicky 1995 35,576
Executive Vice President
and 1994 225,000 276,000 -0- -0- -0- -0- 5,643
Chief Financial Officer 1993 150,000 300,000 -0- -0- -0-
</TABLE>
- --------
(1) In accordance with the revised rules on executive officer and director
compensation disclosure adopted by the Securities and Exchange Commission,
amounts of Other Annual Compensation and All Other Compensation are
excluded for Comdisco's 1993 fiscal year.
(2) Amounts of All Other Compensation are amounts contributed by Comdisco for
fiscal 1995 and 1994 under Comdisco's Profit Sharing and Employee Stock
Ownership Plans for the persons named above.
(3) During fiscal year 1995, Alan Andreini received this amount pursuant to
the terms of the Comdisco Financial Services, Inc. Residual Incentive
Compensation Plan as described in the Other Transactions section above.
8
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to grants of
stock options made to named executive officers during the fiscal year ended
September 30, 1995.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
-------------------------------------------------- -----------------------------
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL
OPTIONS/ OPTIONS/SARS EXERCISE GRANT
SARS GRANTED TO OR BASE DATE
GRANTED EMPLOYEES IN PRICE MARKET EXPIRATION
NAME (#) FISCAL YEAR ($/SH) PRICE DATE 0% 5% 10%
- ---- ---------- ------------ -------- ------ ---------- ---------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jack Slevin 10,245 .7% $20.50 $20.50 10/17/04 $ 0 $ 132,082 $ 334,722
29,700 2.1% $20.00 $20.00 09/30/04 $ 0 $ 364,296 $ 917,987
18,466 1.3% $29.75 $29.75 09/28/05 $ 0 $ 345,372 $ 875,172
30,242 2.1% $29.75 $29.75 09/28/05 $ 0 $ 565,620 $ 1,433,280
Alan J. Andreini 5,415 .4% $20.50 $20.50 10/17/04 $ 0 $ 69,812 $ 176,917
45,000 3.1% $20.00 $20.00 09/30/04 $ 0 $ 551,963 $ 1,390,890
50,000 3.5% $20.00 $20.00 12/12/04 $ 0 $ 628,895 $ 1,593,742
10,613 .7% $29.75 $29.75 09/28/05 $ 0 $ 198,496 $ 502,989
30,242 2.1% $29.75 $29.75 09/28/05 $ 0 $ 565,620 $ 1,433,280
Robert A. Bardagy 10,245 .7% $20.50 $20.50 10/17/04 $ 0 $ 132,082 $ 334,722
9,000 .6% $20.00 $20.00 09/30/04 $ 0 $ 110,393 $ 278,178
15,919 1.1% $29.75 $29.75 09/28/05 $ 0 $ 297,735 $ 754,460
Nicholas K. Pontikes 4,829 .3% $20.50 $20.50 10/17/04 $ 0 $ 62,257 $ 157,772
18,000 1.2% $20.00 $20.00 09/30/04 $ 0 $ 220,785 $ 556,356
10,613 .7% $29.75 $29.75 09/28/05 $ 0 $ 198,496 $ 502,989
12,096 .8% $29.75 $29.75 09/28/05 $ 0 $ 226,233 $ 573,274
John J. Vosicky 5,415 .4% $20.50 $20.50 10/17/04 $ 0 $ 69,812 $ 176,917
13,500 .9% $20.00 $20.00 09/30/04 $ 0 $ 165,589 $ 417,267
10,613 .7% $29.75 $29.75 09/28/04 $ 0 $ 198,496 $ 502,989
6,048 .4% $29.75 $29.75 09/28/04 $ 0 $ 113,117 $ 286,637
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END VALUE
The following table sets forth information with respect to the named
executive officers in the Summary Compensation Table concerning the exercise
of options during the last fiscal year and unexercised options held as of the
end of the fiscal year. The figures used in the table set forth below reflect
totals determined prior to the three-for-two stock split of the Common Stock
of Comdisco announced by the Company's Board of Directors on November 7, 1995.
<TABLE>
<CAPTION>
TOTAL NUMBER OF SHARES TOTAL VALUE OF
NUMBER OF UNDERLYING UNEXERCISED UNEXERCISED, IN-THE-MONEY
SHARES OPTIONS HELD AT OPTIONS HELD AT SEPTEMBER
ACQUIRED SEPTEMBER 30, 1995 30, 1995(1)
ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jack Slevin............. 14,542 $144,521 31,333 218,371 $347,744 $1,964,017
Alan J. Andreini........ 0 0 30,262 168,295 283,078 1,391,757
Robert A. Bardagy....... 0 0 21,750 69,914 207,062 673,254
Nicholas K. Pontikes.... 0 0 3,600 66,938 35,100 566,318
John J. Vosicky......... 6,300 87,444 62,025 69,426 665,244 663,676
</TABLE>
- --------
(1) Based on the closing price of the Common Stock on September 29, 1995,
$29.75.
LONG TERM INCENTIVE PLAN ("LTIP") AWARDS
The following table sets forth information with respect to the named
executive officers concerning the grants of Performance Unit Awards under the
Comdisco, Inc. 1992 Long-Term Stock Ownership Incentive Plan during the fiscal
year ended September 30, 1995. The target performance objective is
9
<PAGE>
that Comdisco's Total Shareholder Return, as hereinafter defined, be ranked at
or above the 60th percentile of the Total Shareholder Return of all companies
in the S&P 500 for the period running from October 3, 1994 through September
30, 1997. The minimum performance objective is a 50th percentile ranking. If
the actual ranking is less than the 50th percentile, then no compensation will
be paid under these awards.
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER
NON-STOCK PRICE-BASED PLANS
---------------------------
(A) (B) (C) (D) (E) (F)
- -------------------------- ------ ------------------ --------- -------- --------
PERFORMANCE OR
NUMBER OTHER PERIOD UNTIL
OF MATURATION OR
NAME UNITS PAYMENT THRESHOLD TARGET MAXIMUM
- ---- ------ ------------------ --------- -------- --------
<S> <C> <C> <C> <C> <C>
Jack Slevin............... 288 September 30, 1997 $144,000 $288,000 $864,000
Alan J. Andreini.......... 166 September 30, 1997 $ 83,000 $166,000 $498,000
Robert A. Bardagy......... 250 September 30, 1997 $125,000 $250,000 $750,000
Nicholas K. Pontikes...... 166 September 30, 1997 $ 83,000 $166,000 $498,000
John J. Vosicky........... 166 September 30, 1997 $ 83,000 $166,000 $498,000
</TABLE>
COMPENSATION COMMITTEE REPORT
ROLE OF THE COMMITTEE
In 1993, the Board of Directors defined the scope of authority that would be
delegated to the non-employee Directors who serve as members of the
Compensation Committee. Overall direction was given to this Committee to
review and approve the Company's compensation policies to ensure that
executive officers are rewarded appropriately for their contributions to
Comdisco's growth and profitability and to ensure that compensation policies
support Comdisco's business objectives, organization structure, culture and
stockholder interests. Specific direction was given to determine the
compensation of the Chief Executive Officer and to review and approve the
compensation of the executive officers of the Company.
COMPENSATION STRATEGY
During fiscal year 1995, the Compensation Committee has continued to
evaluate Comdisco's compensation plans in accordance with the Committee's
previously announced objectives of linking compensation to profit measures and
stockholder value. The senior management team continues to be compensated in
the following manner as originally suggested by outside compensation
consultants in 1994. The CEO and executive officers total compensation is
comprised of the following components: (i) base salary, (ii) annual incentive
(cash and stock options) based on Company pre-tax earnings objectives and
(iii) long term performance units based on Total shareholder return
objectives. Each of the foregoing components was approximately one-third of
the executive's total compensation. Thus over two-thirds of the executive's
compensation is subject to both Company performance and stockholder returns.
TAX CONSIDERATIONS
The Compensation Committee has continued to monitor legislation which was
enacted in 1993 that precludes a publicly held corporation from taking a
deduction for compensation in excess of $1 million paid to its chief executive
officer and its four other highest paid executive officers. Certain qualified
performance based compensation is exempt from this deduction limit. In order
to attempt to meet the deductibility requirements, the Company is seeking
stockholder approval of the 1995 Long-Term Stock Ownership Incentive Plan and
approval of certain performance goals to be established for the award of
Performance Units thereunder. Assuming the receipt of such approvals, it is
expected that most, if not all, compensation paid to the executive officers
will qualify as a tax deductible expense.
10
<PAGE>
Notwithstanding the foregoing, the Compensation Committee believes that the
new tax law requirements may not always be consistent with sound executive
compensation principles. To achieve full tax deductibility, the tax law
requirements do not allow the flexibility or discretion to respond to changing
market conditions, to utilize subjective performance factors or to reward
extraordinary performance of an unforseen type. Therefore, the Compensation
Committee reserves the right to approve nondeductible compensation based upon
the circumstances at the time.
1995 CEO COMPENSATION
Jack Slevin's compensation package for fiscal 1995 reflects the Committee's
strategy of placing a majority of the compensation at risk subject to the
attainment of pre-tax earnings goals and longer-term total stockholder return
goals. The Company has an employment agreement with Mr. Slevin which provided
for a base salary of $433,000 for fiscal 1995. Annual cash incentive
compensation for Mr. Slevin was equal to 1% of Comdisco's 1995 fiscal year
pre-tax earnings between $125 million and $170 million and 2% of pre-tax
earnings in excess of $170 million. The Committee also approved a
discretionary annual cash incentive payment of $ based upon Mr.
Slevin's positive contributions during the last year. The amount of annual
cash incentive payments can be found in the Summary Compensation Table. Mr.
Slevin's employment agreement also provided for an annual stock option award
which was contingent upon the attainment of pre-tax earnings objectives for
fiscal 1995. In accordance with the terms of the award, Mr. Slevin received
88% of the award which equaled 18,466 option shares at $29.75 (the closing
price of Comdisco's Common Stock on September 29, 1995). For the long term
perspective, Mr. Slevin was granted 288 Performance Units under the Comdisco,
Inc. 1992 Long-Term Stock Ownership Incentive Plan. The performance period and
performance objectives are set forth in the Long-Term Incentive Plan ("LTIP")
Awards section above. To further align Mr. Slevin's interests with the
Company's stockholders, the Committee offered Mr. Slevin the right to forego
cash compensation in exchange for stock options. Under this "Cash-to-Option
Alternative" Mr. Slevin elected to forego $99,000 in cash compensation and in
return received a stock option to acquire 29,700 shares at the closing price
of Comdisco's Common Stock on the date such election was made ($29.75).
1995 EXECUTIVE OFFICER COMPENSATION
During fiscal year 1995, the Company entered into incentive compensation
agreements with certain of its executive officers. The agreements included the
following elements: base salary; annual bonus based on the Company meeting its
pre-tax earnings objectives; Performance Units to be paid if the Company meets
3 year total shareholder return goals; and stock options to be granted if the
company met its annual pre-tax earnings objectives. The executive officers
also participated in the "Cash-to-Option Alternative" under which they had the
right to forego cash compensation in exchange for stock options.
This report has been provided by C. Keith Hartley, Rick Kash, and Thomas H.
Patrick, the members of the Compensation Committee.
PERFORMANCE GRAPH
The following performance graph compares the performance of Comdisco's
Common Stock for the last five fiscal years (October 1, 1990--September 30,
1995) to that of the Standard & Poor's 500 Stock Index and the Standard &
Poor's Midcap 400 Index. The S&P Midcap 400 Index represents a comparison to
companies with similar market capitalization. Comdisco is included in the S&P
Midcap 400 Index. Comdisco's most similar peers are divisions or subsidiaries
of large publicly-held
11
<PAGE>
companies, and therefore, the Company feels that the most appropriate
comparison, at this time, is to publicly-held companies with similar market
capitalizations.
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG COMDISCO, INC., S&P 500 INDEX AND S&P MIDCAP 400
<CAPTION>
Measurement Period COMDISCO, S&P
(Fiscal Year Covered) INC. 500 INDEX S&P MIDCAP 400
- ------------------- ---------- --------- --------------
<S> <C> <C> <C>
Measurement Pt-
9/30/90 $100 $100 $100
FYE 9/30/91 $130 $131 $150
FYE 9/30/92 $114 $146 $169
FYE 9/30/93 $123 $165 $210
FYE 9/30/94 $152 $171 $213
FYE 9/30/95 $221 $222 $268
</TABLE>
(1) Assumes $100 invested on September 30, 1990 in Comdisco Common Stock, S&P
500 Index and S&P Midcap 400 Index. Each of the three measures of
cumulative total return assumes reinvestment of dividends.
(2) The S&P Midcap Index consists of the issuers with market capitalizations
of $200 million to $5 billion.
1995 LONG-TERM STOCK OWNERSHIP INCENTIVE PLAN
The Board of Directors, on September 27, 1995, adopted the 1995 Long-Term
Stock Ownership Incentive Plan (the "Long Term Plan") subject to the approval
by a majority of the Company's stockholders. The Long-Term Plan is similar to
the 1992 Long-Term Stock Ownership Incentive Plan previously approved by a
majority of the Company's stockholders. The Company's management believes that
the Company's future success and profitability will depend to a great extent
on its ability to continue to attract, retain and motivate highly qualified
individuals and that an effective compensation policy for these individuals
includes not only a competitive annual salary, but also long-term incentives
linked to returns to stockholders and Company performance. The Company
believes an important role is played by stock-based incentives in retaining
the services of outstanding personnel and in encouraging such employees to
have greater personal financial investment and stock ownership in the Company.
The following is a summary of the principal provisions of the Long-Term
Plan. Capitalized terms used in this summary which are not defined herein have
the meanings ascribed to them in the Long-Term Plan. A copy of the Long-Term
Plan will be available at the forthcoming Annual Meeting or in advance of the
Annual Meeting to any stockholder to whom this Proxy Statement is furnished
upon request to the Secretary of the Company.
12
<PAGE>
PURPOSE. The primary purposes of the Long-Term Plan are to advance the
Company's interests by encouraging and enabling key employees to acquire a
larger personal financial interest in the Company and to provide a means by
which employees can acquire and maintain ownership of Common Stock.
GENERAL INFORMATION. The Long-Term Plan provides for the granting of stock
options, restricted stock awards, stock appreciation rights, performance units
(payable in cash or stock) and stock bonuses (collectively, "Awards"). Such
Awards, which will expire not more than 15 years after their respective Grant
Dates, may be granted alone or in conjunction with one or more other Awards.
Awards may be granted to any agent, director, employee (including officers)
of the Company or of any of its domestic Subsidiaries, or to any agent,
employee or officer or director of any of the Company's foreign Subsidiaries.
As of December 11, 1995, approximately employees and twelve members of
the Board would be eligible to participate.
On September 29, 1995, the Company granted non-qualified stock options
("Non-Qualified Options") for the purchase of a total of 109,821 shares of the
Company's Common Stock under the Long-Term Plan. Such Awards were in the
following amounts to the executive officers who are named in the Summary
Compensation Table and who hold the positions stated therein:
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
NAME AND POSITION OPTION SHARES
----------------- -------------------------------
<S> <C>
Jack Slevin, President and Chief
Executive Officer....................... (30,242 Non-Qualified Options);
Alan J. Andreini, Executive Vice
President............................... (30,242 Non-Qualified Options);
Robert A. Bardagy, Executive Vice
President............................... (-0- Non-Qualified Options);
Nicholas K. Pontikes, Executive Vice
President............................... (12,096 Non-Qualified Options);
John J. Vosicky, Executive Vice President
and Chief Financial Officer............. (6,048 Non-Qualified Options);
</TABLE>
all current executive officers of the Company (including those
named in the Summary Compensation Table), as a group, 109,821
Non-Qualified Options; current directors who are not executive
officers, as a group, -0- Non-Qualified Options, and employees
who are not executive officers, as a group, 50,800 Non-
Qualified Options.
The recipients of the foregoing Awards may exercise each Non-Qualified
Option for a price of $29.75. Twenty percent (20%) of each grant will vest on
an annual basis over the next five (5) years. The Non-Qualified Options have a
ten (10) year term and will expire on September 28, 2005.
These Awards are subject to the approval of the Long-Term Plan by the
Company's stockholders. The Company will consider the grant of other types of
Awards under the Long-Term Plan in the future.
SCOPE OF THE LONG-TERM PLAN. The Long-Term Plan provides that 2,500,000 shares
of the Company's Common Stock are reserved and may be issued for payment of
Awards. If any Award expires or terminates without having been exercised in
full or is forfeited, the shares of Common Stock associated with such expired
or terminated Award shall become available for other Awards.
The effective date of the Long-Term Plan was September 27, 1995, subject to
approval of the Company's stockholders. On that date, 2,500,000 shares of
Common Stock were available for issuance thereunder and, the closing price for
the Common Stock on the New York Stock Exchange Composite Tape was $29.75.
Common Stock issued under the Long-Term Plan may be either newly issued
shares, shares purchased on the open market, treasury shares or any
combination thereof. In addition, certain benefits under the Long-Term Plan
may be payable in cash.
13
<PAGE>
PLAN ADMINISTRATION. Except for certain duties and responsibilities expressly
reserved by the Board of Directors or delegated to another committee pursuant
to the terms of the Long-Term Plan, the Long-Term Plan will be administered by
a committee that includes not less than two Board members (the "Committee").
Initially the Committee will be composed of Messrs. Hartley and Kash. These
two individuals meet the requirements prescribed by Internal Revenue Code
Section 162(m) for membership on the Committee.
Among other things, the Committee will have exclusive discretion (subject to
the provisions of the Long-Term Plan): to select the persons to whom, and the
times when, Awards are to be granted, as well as the type, size and terms of
such Awards; within certain limits, to modify the terms of or replace any
Award which has been granted; to interpret the Long-Term Plan and prescribe
rules and regulations thereunder; to authorize foreign Subsidiaries to adopt
stock incentive plans providing for the granting of Awards which will be
treated as grants under the Long-Term Plan; and to accelerate the
exercisability of, and to waive the restrictions and conditions applicable to,
Awards and, subject to certain restrictions, to extend the time during which
Awards may be exercised--but not beyond 15 years (ten years for Incentive
Stock Options) after the Grant Date. The determinations of the Committee shall
be conclusive and final. No Committee member will be liable for any action or
determination made in good faith.
AWARDS:
RESTRICTED STOCK. Shares of Common Stock may be awarded to eligible
individuals by the Committee as Restricted Stock. Restricted Stock consists of
shares of the Common Stock of the Company, which at the time of grant are
issued for the benefit of the grantee to whom the grant is made and who may or
may not be required to pay consideration therefor. Such grantee has all the
rights of the stockholder in relation to the Restricted Stock (including the
right to receive dividends), except that during the designated Restricted
Period, the grantee is not entitled to delivery of a stock certificate and
such Restricted Stock cannot be transferred or encumbered. At the end of the
applicable Restricted Period, the grantee receives shares of freely
transferable Common Stock equal in number to the number of shares of
Restricted Stock granted. At the Committee's option, restricted stock may be
made subject to forfeiture upon termination of employment if the Company or
the grantee fails to meet specified performance goals (if any) or upon failure
to satisfy such other restrictions as the Committee may specify (if any).
Generally, Restricted Stock will not become non-forfeitable before the first
anniversary of its Grant Date. Restricted Stock may be granted for, and
outstanding during, a performance period established in relation to such
Restricted Stock of no less than one nor more than 10 consecutive fiscal
years. The number of shares of Restricted Stock actually payable at the end of
the applicable performance period will depend on the extent to which
performance objectives have been met. The Committee may also establish a
Restricted Period applicable to Restricted Stock, which would begin at the end
of the performance period. The Long-Term Plan allows the Committee to
determine that Restricted Stock will remain in the physical custody of the
Secretary of the Company, as escrow holder, until such shares become
nonforfeitable and until the end of any Restricted Period.
The Committee may specify the price, if any, to be paid by the grantee for
Restricted Stock. Such amount shall be paid in cash or the Committee may allow
the grantee to defer payment, on such terms as it may determine, or may cause
the Company to guarantee all or a portion of a loan to the grantee in an
amount equal to the purchase price of the Restricted Stock. If a share of
Restricted Stock is forfeited and if the grantee paid an amount for such share
or acquired such share by Option exercise, upon forfeiture the Company shall
pay the grantee the lesser of: (a) the amount paid or the Option Price, as the
case may be, or (b) the Fair Market Value of a share of Common Stock on the
date of forfeiture.
14
<PAGE>
If a grantee's employment is terminated by death or permanent disability,
any Restricted Stock held by the grantee will become non-forfeitable. If a
grantee's employment is terminated for any other reason, the grantee's
Restricted Stock, to the extent forfeitable on that date, will be forfeited.
PERFORMANCE UNITS. Before the grant of any Performance Unit, the Committee
will establish performance objectives and designate a period (the "Performance
Period") of not less than one year nor more than ten years for the measurement
of the attainment of such goals. The value of a Performance Unit ("Unit
Value") will be established by the Committee and may be a fixed dollar amount,
fixed number of shares of Common Stock, or an amount which varies from time to
time in relation to the Fair Market Value of a share of Common Stock plus, at
the Committee's option, dividends on Common Stock. The benefit realized by the
grantee upon exercise of a Performance Unit will be the Unit Value multiplied
by the Performance Percentage established by the Committee for each level of
attainment of the established performance goals during the Performance Period.
The number of shares actually payable under a Performance Unit at the end of
the applicable Performance Period will depend on the extent to which
performance objectives have been met. Performance objectives may be based on
earnings per share, net income, return on stockholders' equity, and/or any
other measure of performance which the Committee deems appropriate. The
Committee may also establish a Restricted Period applicable to shares to be
issued under a Performance Unit. In the event of changes in economic,
competitive or regulatory conditions, or in accounting principles, or if
acquisitions, dispositions or other extraordinary events so warrant, the
Committee may, in its discretion, modify performance objectives (or adjust the
way in which they are measured) or shorten any Performance Period or
Restricted Period.
Performance Units may be granted alone or in conjunction with other Awards.
If awarded in conjunction with another Award, the number of Performance Units
will be reduced to the extent that the related Award is exercised by, paid to
or otherwise received by the grantee.
If a grantee is promoted, demoted or transferred during a Performance
Period, the Committee may, in its discretion, modify or eliminate the
applicable performance goals of the Performance Period or make a cash payment
to the grantee, calculated as described in the Long-Term Plan.
Generally, a Performance Unit becomes exercisable on the later of the first
anniversary of its Grant Date or the first day after the end of the applicable
Performance Period and, if not issued in conjunction with another Award, is
deemed exercised on the date it first become exercisable. A Performance Unit
related to another Award may be exercised by giving notice to the Company and,
unless otherwise provided in the applicable Award agreement, the related Award
will be cancelled.
If a grantee's employment is terminated for cause, any unexercised
Performance Units will terminate. If a grantee's employment is terminated by
death or permanent disability, any unexercised Performance Units (to the
extent exercisable on the date of death or disability) may be exercised, in
whole or in part, within five months after such death or disability. If a
grantee terminates employment for any other reason, any unexercised
Performance Units shall become non-forfeitable and may be exercised to the
extent determined by the Committee in its sole discretion.
STOCK OPTIONS. The Long-Term Plan provides both for Incentive Stock Options
("ISOs") specifically tailored to the provisions of the Internal Revenue Code
of 1986 (the "Code") and for Options not qualifying as ISOs ("Non-Qualified
Options"), each of which may (but need not) be granted in conjunction with
other Awards.
Pursuant to the Long-Term Plan, the Committee will determine the exercise
price to be paid by a grantee (the "Option Price") for each share issued in
connection with an ISO or a Non-Qualified Option (collectively referred to as
"Options"). The Option Price cannot be less than 100% of the Fair Market Value
of the Common Stock on the Grant Date. Payment of the Option Price may be made
in cash,
15
<PAGE>
through the exchange of Common Stock held by the grantee for at least six
months, through a broker-assisted exercise or, with the approval of the
Committee, through the exchange of Restricted Stock held by the grantee for at
least six months. The Committee may allow a grantee to defer payment of the
exercise price, on terms the Committee may determine, or may cause the Company
to guarantee all or a portion of a loan to the grantee in an amount equal to
the Option Price.
The Committee will determine when an Option may be exercised, which will be
no more than 15 years after the Grant Date (ten years in the case of ISOs),
and the manner in which each Option will become exercisable. Generally,
Options are not exercisable less than one year after their respective Grant
Dates. The Committee may, in its discretion, direct that shares issued upon
exercise of Options will be restricted and non-transferable.
If a grantee dies or become permanently disabled, any unexercised Options
(to the extent exercisable on the date of death or disability) may be
exercised, in whole or in part, within five months after such death or
disability. At retirement on or after age 60, a grantee may, not later than
the thirtieth day following retirement, exercise any unexercised Options which
are exercisable at the time of retirement. If a grantee's employment is
terminated for cause, any unexercised Options shall terminate. In any other
circumstance, a grantee's unexercised Options (to the extent exercisable on
date of grantee's termination of employment) may be exercised, in whole or in
part, not later than the thirtieth day following such termination.
STOCK APPRECIATION RIGHTS. A stock appreciation right ("SAR") may be granted
alone or in conjunction with another Award granted on or before the Grant Date
of the corresponding SAR. A SAR is exercisable only on or after the first
anniversary of its Grant Date and otherwise on conditions established by the
Committee. A SAR related to another Award generally terminates upon the
expiration, termination, forfeiture or exercise of the related Award (or, in
the case of a related Restricted Stock Award, when such Award becomes non-
forfeitable), and is exercisable only to the extent that such other Award is
exercisable and on such other conditions as may be established by the
Committee.
Upon exercise of a SAR, the grantee must surrender the SAR and any related
Award (which will thereupon be terminated) and will receive in exchange cash
or, in the discretion of the Committee, Common Stock equal in value to the
excess of the Fair Market Value of a share of Common Stock on the date the SAR
is exercised over the Fair Market Value of Common Stock on the date the SAR is
exercised over the Fair Market Value of a share of Common Stock on the date
the SAR was granted or, if the SAR is related to an Option, the Option Price.
At the time of grant, the Committee may place a limitation on the amount
payable upon exercise of a SAR.
If a grantee's employment is terminated for cause, any unexercised SARs will
terminate. If a grantee dies or becomes permanently disabled, any unexercised
SARs (to the extent exercisable on the date of death or disability) may be
exercised within five months after such death or disability. At retirement on
or after age 60, a grantee may, not later than the thirtieth day following
retirement, exercise any unexercised SARs that are not related to Restricted
Stock or Performance Units and that are exercisable at the time of retirement.
Upon termination of employment in any other circumstance, a grantee may
exercise any unexercised SARs (other than SARs related to restricted stock or
a performance unit) not later than the thirtieth day following termination of
employment. In each case, SARs cannot be exercised more than 15 years after
their respective Grant Dates (ten years in the case of SARs associated with
ISOs). SARs related to Restricted Stock are forfeited upon termination (other
than for death or disability) to the extent that the related-to Performance
Units become non-forfeitable and exercisable upon termination (other than upon
death or disability) to the extent determined by the Committee.
16
<PAGE>
STOCK BONUSES. The Committee is authorized, in its discretion, to grant shares
of Common Stock (or other Awards payable in, or valued by reference to, shares
of Common Stock) as stock bonuses or incentives to eligible employees, which
will not include executive officers.
AMENDMENT AND TERMINATION. The Long-Term Plan will terminate on the tenth
anniversary of its effective date. The Board of Directors may before that time
terminate the Long-Term Plan and may amend or modify the Long-Term Plan
without stockholder approval, except as may be advisable for purposes of
compliance with federal securities laws or listing requirements of a national
securities exchange or to permit continued grant of ISOs under the Code.
Termination of the Long-Term Plan will not affect any Awards then outstanding.
ESTIMATE OF BENEFITS. It is impossible to determine the amount of Awards that
will be received by any of the grantees since the grant of Awards is within
the discretion of the Committee. Information regarding Awards to the Company's
Chief Executive Officer and the other four most highly compensated Executive
Officers is provided on page under the section entitled "Option Grants in
Last Fiscal Year". In fiscal year 1995, 102,821 options were granted to
Executive Officers as a group under the Long-Term Plan. No Awards were made
under the Long-Term Plan to Directors who are not Executive Officers or to any
employees that are not Executive Officers.
OTHER TERMS AND CONDITIONS. For purposes of the Long-Term Plan, the "Fair
Market Value" of Common Stock is the closing price of the Common Stock as
reported on the New York Stock Exchange Composite Tape.
In order to comply with Code Section 162(m), the Long-Term Plan provides
that the maximum Award payable to any participant during any one-year period
will be 200,000 shares of Common Stock, subject to adjustments for stock
splits and other events described in the Long-Term Plan.
Awards granted under the Long-Term Plan will be evidenced by agreements
consistent with the Plan in such form as the Committee may prescribe. Neither
the Long-Term Plan nor such Award Agreements confer any right to continued
employment upon any grantee.
Awards (other than shares of Restricted Stock) are generally non-
transferable other than by will or the laws of descent and distribution and
may be exercised, during a grantee's lifetime, only by the grantee. The
Committee may grant transferable Awards under limited circumstances for estate
planning purposes. Restricted Stock is non-transferable until it becomes non-
forfeitable.
Adjustments in the amount of Awards issuable under the Long-Term Plan and in
any Awards outstanding may be made in order to preserve the benefits or
potential benefits intended to be made available to participants, in the event
of merger, consolidation, reorganization, the sale of all or substantially all
the assets of the Company, recapitalization, reclassification, stock splits,
stock dividends or similar events.
The holder of an Award will have no rights as a stockholder with respect to
any shares of Common Stock covered by such Award until the date such stock is
delivered to such holder. Subject to any restrictions contained in the Award,
the privileges of stock ownership will exist with respect to Restricted Stock
or shares issued pursuant to a Performance Unit but subject to a Restricted
Period, even if such stock is being held in custody by the Company.
The Company may make such provisions as it deems appropriate to withhold any
taxes due in connection with any Award and may require the grantee to satisfy
any relevant tax requirements before authorizing any issuance of shares to a
grantee. Grantees may elect, subject to Committee approval, to have shares of
Common Stock otherwise issuable to them withheld to satisfy federal, state and
local withholding tax liability with respect to the exercise of Awards in the
year such exercise becomes taxable.
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The Long-Term Plan provides that no Option, SAR or Performance Unit granted
to an employee subject to Section 16 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") may be exercised before six months after the
Grant Date unless the employee dies or becomes incompetent before the
expiration of the six-month period.
In the event of a Change in Control (as defined below), (i) all Options and
SARs will become fully exercisable and vested, (ii) all restrictions with
respect to Restricted Stock will lapse and such shares will be fully vested
and nonforfeitable, and (iii) with respect to Performance Unit Awards, all
outstanding Performance Periods will be deemed completed, the maximum level of
performance will be deemed to have been attained, all applicable Restricted
Periods will lapse and a pro rata portion of each outstanding Award will
become payable in cash.
A Change in Control is deemed to have occurred if (i) any person becomes the
beneficial owner of 50% or more of either the then outstanding shares of Stock
or the combined voting power of the Company's then outstanding voting
securities; (ii) a change in the composition of the Board such that the
individuals who constituted the Board as of September 30, 1995 cease to
constitute a majority thereof; (iii) the stockholders approve a merger or
consolidation with any other corporation, subject to certain exceptions; or
(iv) the stockholders approve a plan of liquidation of the Company or an
agreement for the sale of substantially all its assets.
FEDERAL INCOME TAX CONSEQUENCES OF OPTIONS. The following is a brief
description of the principal United States federal income tax consequences
related to Options granted under the Long-Term Plan.
NON-QUALIFIED OPTIONS. In general: (a) a grantee will not be subject to tax at
the time a Non-Qualified Option is granted; (b) an amount equal to the
difference between the Option Price and the Fair Market Value of the shares
acquired on the date of exercise will be included in the grantee's ordinary
income in the taxable year in which the Non-Qualified Option is exercised; (c)
the Company will be entitled to deduct such amount in the taxable year in
which such grantee includes such amount in income; and (d) upon disposition of
shares acquired upon exercise, appreciation or depreciation after the date of
exercise will be treated as either capital gain or capital loss.
Where an Option provides for issuance of stock subject to restriction on
transfer, the grantee receiving such Restricted Stock upon exercise will not
recognize income for tax purposes until the restriction lapses. In these
situations, the grantee will have taxable income upon the lapse of the
restriction equal to the amount by which the Fair Market Value of the shares
at the time the restriction lapses exceeds the Option Price. Proceeds from the
sale of stock sold after the restricted period will be taxable as a capital
gain or capital loss, depending upon the amount by which the sale price
exceeds or is less than the Fair Market Value of the stock at the end of the
Restricted Period.
Alternatively, a grantee who receives stock subject to restrictions on
transfer can elect to recognize income immediately upon exercise of the
Option, in which case taxable income is generally determined at the time of
Option exercise and the time of the sale of the stock as explained in the
first paragraph of this section. However, if a grantee who has elected to
recognize income immediately upon exercise of Options for Restricted Stock
subsequently sells the stock to the Company as required by the terms of the
restriction, any loss on the sale will be limited to the amount (if any) by
which the Option Price exceeds the amount paid by the Company on such sale.
Generally, the Company will be entitled to a tax deduction in the amount of
the ordinary income realized by the employee in the year the Option is
exercised or the restriction lapses, whichever is applicable.
If the grantee pays the Option Price, in whole or in part, with previously
acquired shares, the exchange will not affect the tax treatment of the
exercise. Upon such exchange, no gain or loss is recognized upon delivery of
the previously acquired shares to the Company, and the shares received by the
grantee equal in number to the previously acquired shares exchanged therefor
will have the
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same basis and holding period for capital gain purposes as the previously
acquired shares. Shares received by the grantee in excess of the number of
previously acquired shares will have a basis equal to the Fair Market Value of
such additional shares as of the date ordinary income equal to such Fair
Market Value is realized and a holding period which commences as of such date.
INCENTIVE STOCK OPTIONS. In general, a grantee will not be subject to tax at
the time an ISO is granted or exercised. However, the excess of the Fair
Market Value of the shares received upon exercise of the ISO over the Option
Price is potentially subject to the alternative minimum tax. Upon disposition
of the shares acquired upon exercise of an ISO, capital gain or capital loss
will be recognized in an amount equal to the difference between the sale price
and the Option Price, provided that the grantee has not disposed of the shares
within two years of the date of grant or within one year from the date of
exercise and further provided that the grantee has been employed by the
Company at all times from the Grant Date until the date of exercise (one year
in the case of permanent disability). If the grantee disposes of the shares
without satisfying both the holding period and employment requirements (a
"Disqualifying Disposition"), the grantee will recognize ordinary income at
the time of such Disqualifying Disposition to the extent of the difference
between the Option Price and the lesser of the Fair Market Value of the shares
on the date the ISO is exercised or the amount realized on such Disqualifying
Disposition. Any remaining gain or loss is treated as a capital gain or
capital loss.
If the grantee pays the Option Price, in whole or in part, with previously
acquired shares, the exchange will not affect the tax treatment of the
exercise. Upon such exchange, and except for Disqualifying Dispositions, no
gain or loss is recognized upon the delivery of the previously acquired shares
to the Company, and the shares received by the grantee equal in number to the
previously acquired shares exchanged therefor will have the same basis and
holding period for capital gain or capital loss purposes as the previously
acquired shares. Shares received by the grantee in excess of the number of
previously acquired shares will have a basis of zero and a holding period
which commences as of the date the shares are issued to the grantee upon
exercise of the ISO. If such an exercise is effected using shares previously
acquired through the exercise of an ISO, the exchange of the previously
acquired shares will be considered a disposition of such shares for the
purpose of determining whether a Disqualifying Disposition has occurred. The
Company is not entitled to a tax deduction upon either the exercise of an ISO
or upon disposition of the shares acquired pursuant to such exercise, except
to the extent that the grantee recognized ordinary income in a Disqualifying
Disposition.
SECTION 162(M). Subject to certain exceptions, Section 162(m) of the Code
places a $1 million annual limit on a company's tax deduction for compensation
paid to a "covered employee". A "covered employee" is defined as the company's
chief executive officer and the other four highest paid officers named in its
proxy statement. Compensation in excess of $1 million will, however, continue
to be tax deductible by the company if such compensation satisfies the
applicable requirements for the "performance-based compensation" exception
("Performance Exception").
The Long-Term Plan incorporates the requirements for the Performance
Exception that are applicable to its stock option and stock appreciation right
features and, where appropriate, it is expected that the Committee will
administer the Long-Term Plan in order to satisfy any other requirements for
the Performance Exception. It is anticipated that the Company will be able to
maximize the tax deductibility of the compensation attributable to Non-
Qualified Options. Compensation received by a covered employee which is
attributable to the other Award features contained in the Long-Term Plan may
qualify for the Performance Exception as long as additional requirements are
satisfied, including the proper establishment of performance goals,
shareholder approval of these goals and certification by the Committee that
the goals have been attained. However, Awards may be made under the Long-Term
Plan that do not satisfy the Performance Exception criteria, and therefore
there can be no assurance that all Awards will be fully deductible by the
Company.
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PERFORMANCE GOAL APPLICABLE TO PERFORMANCE UNIT GRANTS
The Company is seeking stockholder approval of the initial performance goal
criterion that the Committee of the 1995 Long-Term Stock Ownership Plan
intends to use in connection with future grants of Performance Units under the
Long-Term Plan. This approval is being sought in an attempt to have the
Performance Unit Awards meet the requirements of "qualified performance based
compensation" under Section 162(m) of the Code.
Performance Units, as described in the previous section, may be granted to
any employee (including officers), Director or agent of the Company or any of
its domestic Subsidiaries.
The performance goal will be met for a given Performance Period if the
Company's "Total Shareholder Return" (as defined below) is ranked at or above
the 50th percentile of the Total Shareholder Return of all companies in the
S&P 500. Total Shareholder Return is defined as the sum of the stock price
appreciation plus dividends (reinvested) through the Performance Period.
The cash compensation to be paid to each grantee in the event that the
performance goal is attained will be determined by multiplying the Performance
Percentage (based on the applicable Total Shareholder Return ranking) times
the Target Unit Value of $500 times the number of Performance Units granted.
PROPOSAL 1--ELECTION OF DIRECTORS
Three directors are to be elected at the meeting for three year terms ending
at the 1999 Annual Meeting. Edward H. Fiedler, Jr., Basil R. Twist, Jr., and
John J. Vosicky, all of whom are presently directors of the Company and have
been nominated by the Board of Directors for election at this Annual Meeting.
The accompanying proxy will be voted for the Board of Directors' nominees,
except where the authority to so vote is withheld.
The nominees for Director will be elected if they receive the affirmative
vote of a plurality of all votes entitled to be cast at the Annual Meeting.
The Board of Directors has no reason to believe that any nominee will be
unable to serve if elected. If any nominee becomes unavailable for election,
those shares voted for such nominee will be voted for the election of a
substitute nominee selected by the persons named in the enclosed proxy.
The Board of Directors favors a vote "FOR" each of the nominees.
PROPOSAL 2--APPROVAL OF 1995 LONG-TERM
STOCK OWNERSHIP INCENTIVE PLAN
As stated above, the Company is seeking stockholder approval of the 1995
Long-Term Stock Ownership Incentive Plan which was previously approved by the
Board of Directors.
The Plan will be approved if it receives the affirmative vote of a majority
of all votes entitled to be cast at the Annual Meeting.
The Board of Directors believes that the adoption of the Long-Term Plan is
advisable both to increase the share authorization for stock-based plans and
to provide the Company with greater flexibility with respect to employee
incentives. The Board of Directors favors a vote "FOR" the approval of the
Long-Term Plan.
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PROPOSAL 3--APPROVAL OF PERFORMANCE GOAL CRITERION
The Company is seeking stockholder approval of the performance goal
criterion, as described above, in order to attempt to meet certain Internal
Revenue Code requirements for tax deductions by the Company.
The performance goal criterion will be approved if it receives the
affirmative vote of a majority of all votes entitled to be cast at the Annual
Meeting.
The Board of Directors believes that the approval of the performance goals
is in the best interests of the Company's stockholders and favors a vote "FOR"
the approval of this proposal.
PROPOSAL 4--APPOINTMENT OF AUDITORS
The Board of Directors has approved the appointment of KPMG Peat Marwick
LLP, independent certified public accountants, as auditors, to audit the
financial statements of Comdisco for the current fiscal year and to perform
other accounting services, as appropriate. KPMG Peat Marwick LLP has audited
the financial statements of Comdisco since 1971. The ratification of the
appointment of KPMG Peat Marwick LLP is being submitted to the stockholders at
the Annual Meeting of Stockholders. The Board of Directors favors a vote "FOR"
the appointment of KPMG Peat Marwick LLP. If such appointment is not ratified,
the Board of Directors will consider the appointment of other auditors.
Comdisco has been advised by KPMG Peat Marwick LLP that representatives of
the firm will be present at the Annual Meeting of Stockholders. Such
representatives will have the opportunity to respond to appropriate questions
and make a statement if they desire to do so.
1996 STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the next Annual Meeting of
Stockholders must be received by Comdisco, in writing, no later than August
23, 1996, in order to be considered for inclusion in the Proxy Statement and
Proxy form for the Comdisco 1997 Annual Meeting of Stockholders. Any proposal
should be sent to the attention of the Secretary of Comdisco at 6111 N. River
Road, Rosemont, Illinois 60018.
The foregoing Notice, Proxy Statement and Proxy are sent by order of the
Board of Directors.
Philip A. Hewes
Secretary
December 22, 1995
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PROXY
[COMDISCO LOGO]
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS IN CONNECTION WITH THE
ANNUAL MEETING OF STOCKHOLDERS
3:00 P.M. (C.S.T.)
JANUARY 23, 1996
PLACE: Comdisco, Inc., at its offices,
1st Floor, 6111 N. River Road
Rosemont, Illinois 60018
PROXY: JACK SLEVIN and PHILIP A. HEWES and each of them, are hereby appointed
by the undersigned as attorneys and proxies with full power of substitution,
to vote all the shares of Common Stock held of record by the undersigned on
December 11, 1995 at the Annual Meeting of Stockholders of Comdisco, Inc. or
at any adjournment(s) of the meeting, on each of the items on the reverse side
and in accordance with the directions given therein.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE PLEASE SIGN ON THE REVERSE SIDE
AND RETURN PROMPTLY
- ------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTIONS ARE GIVEN WITH RESPECT TO ANY OF
SUCH ITEMS, THEN THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR ITEMS
1, 2 AND 3.
1. ELECTION OF THREE CLASS I DIRECTORS
NOMINEES: Edward H. Fiedler, Jr., Basil R. Twist, Jr. and John J. Vosicky
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
----------------------------------------------------------------------------
FOR all nominees listed to the right (except as marked to the contrary)
[_]
WITHHOLD AUTHORITY to vote for all nominees listed to the right
[_]
2. The approval of Comdisco's 1995 Long-Term Stock Ownership Incentive Plan.
FOR [_] AGAINST [_] ABSTAIN [_]
3. The approval of performance goal criterion applicable to Performance Unit
Awards under the 1995 Long-Term Stock Ownership Incentive Plan.
FOR [_] AGAINST [_] ABSTAIN [_]
4. Ratify the appointment of KPMG Peat Marwick LLP, as independent auditors.
FOR [_] AGAINST [_] ABSTAIN [_]
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournment(s)
there-of.
Please sign exactly as name appears at
left. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by President
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
Dated: __________________________, 1995
--------------------------------------
(Signature)
--------------------------------------
(Signature, if held jointly)
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
