<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
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 that the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
/ X / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MERISEL, INC.
- ----------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- ----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): N/A
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
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 No.:
_________________________________________________________________
(3) Filing Party:
_________________________________________________________________
(4) Date Filed:
_________________________________________________________________
<PAGE>
MERISEL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 18, 1996
TO THE STOCKHOLDERS OF MERISEL, INC.:
The Annual Meeting of Stockholders (the "Annual Meeting") of
Merisel, Inc. (the "Company") will be held on December 18, 1996
at 10:00 a.m. Los Angeles time, at the Company's headquarters
located at 200 Continental Boulevard, El Segundo, California, for
the following purposes as described in the accompanying Proxy
Statement:
1. To elect two Class III directors to the Board of Directors
for terms expiring in 1999 to replace those directors whose terms
expire in 1996.
2. To transact such other business as may properly come before
the Annual Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed November 11, 1996 as the
record date for determination of stockholders entitled to receive
notice of and to vote at the Annual Meeting and any adjournment
thereof, and only record holders of Common Stock at the close of
business on that day will be entitled to vote. A copy of (a) the
Company's 1995 Annual Report to Stockholders, including financial
statements for the fiscal year ended December 31, 1995, and (b)
the Company's Quarterly Report (Form 10-Q) for the quarterly
period ended September 30, 1996, including financial statements
for the nine months ended September 30, 1996, are each enclosed
with this Notice of Annual Meeting but are not to be considered
part of the proxy soliciting material.
All stockholders are cordially invited to attend the Annual
Meeting in person. Whether or not you expect to attend the
Annual Meeting, to ensure your representation at the Annual
Meeting, please mark, sign, date and return the enclosed proxy
card as promptly as possible in the postage-prepaid envelope
enclosed for that purpose. Any stockholder attending the Annual
Meeting may vote in person even if he or she previously returned
a proxy.
By Order of the Board of Directors
/s/ Kelly M. Martin
Kelly M. Martin
Secretary
El Segundo, California
November 14, 1996
<PAGE>
MERISEL, INC.
200 Continental Boulevard
El Segundo, California 90245
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is being sent on or about November 14,
1996, in connection with the solicitation of proxies by the Board
of Directors of Merisel, Inc., a Delaware corporation (the
"Company" or "Merisel"). The proxies are for use at the Annual
Meeting of Stockholders of the Company (the "Annual Meeting"),
which will be held on December 18, 1996, at 10:00 a.m.
Los Angeles time, at the Company's headquarters located at 200
Continental Boulevard, El Segundo, California and at any meetings
held upon adjournment thereof. The record date for the Annual
Meeting is the close of business on November 11, 1996 (the
"Record Date"), and all holders of record of Merisel's common
stock, par value $0.01 per share (the "Common Stock"), on the
Record Date are entitled to notice of the Annual Meeting and to
vote at the Annual Meeting and any meetings held upon adjournment
thereof. The Company's principal executive offices are located at
200 Continental Boulevard, El Segundo, California 90245, and its
telephone number is (310) 615-3080.
A proxy form for use at the Annual Meeting is enclosed.
Whether or not you plan to attend the Annual Meeting in person,
please date, sign and return the enclosed proxy as promptly as
possible in the postage prepaid envelope provided in order to
ensure that your shares will be voted at the Annual Meeting. Any
stockholder who returns a proxy has the power to revoke it at any
time prior to its effective use by filing an instrument revoking
it or a duly executed proxy bearing a later date with the
Secretary of the Company or by attending the Annual Meeting and
voting in person. Unless contrary instructions are given, any
such proxy, if not revoked, will be voted at the Annual Meeting:
(a) for the Board of Directors' slate of nominees; and (b) as
recommended by the Board of Directors with regard to all other
matters in its discretion.
The only voting securities of the Company are the
outstanding shares of Common Stock. At the Record Date, the
Company had 30,078,495 shares of Common Stock outstanding. At the
Record Date, the Company had 1264 stockholders of record. The
holders of record of a majority of the outstanding shares of
Common Stock will constitute a quorum for the transaction of
business at the Annual Meeting. As to all matters, each holder
of Common Stock is entitled to one vote for each share of Common
Stock held. Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum for
the transaction of business. The director nominees who receive
the greatest number of votes at the Annual Meeting will be
elected to the Board of Directors of the Company. Stockholders
are not entitled to cumulate votes. Votes against a candidate
and votes withheld have no legal effect with respect to the
election of directors. In matters other than the election of
directors, abstentions are counted as votes against in
tabulations of the votes cast on proposals presented to
stockholders, whereas broker non-votes are not counted for
purposes of determining whether a proposal has been approved.
<PAGE>
The cost of preparing, assembling, printing and mailing
this Proxy Statement and the accompanying form of proxy, and the
cost of soliciting proxies relating to the Annual Meeting, will
be borne by Merisel. The Company may request banks and brokers
to solicit their customers who beneficially own Common Stock
listed of record in names of nominees, and will reimburse such
banks and brokers for their reasonable out-of-pocket expenses of
such solicitation. The original solicitation of proxies by mail
may be supplemented by telephone, telegram and personal
solicitation by officers, directors and regular employees of the
Company, but no additional compensation will be paid to such
individuals.
The Company was originally incorporated in California in
October 1980, was reincorporated in Delaware in August 1988 and
changed its name from Softsel Computer Products, Inc. to Merisel,
Inc. in August 1990. As used in this Proxy Statement, the
"Company" and "Merisel" refer to Merisel, Inc. for periods after
August 1990. For periods prior to August 1990 but after
August 1988, the "Company" refers to Softsel Computer Products,
Inc., a Delaware corporation, and, for periods prior to
August 1988, the "Company" refers to the predecessor California
corporation. In April 1990, the Company acquired Microamerica,
Inc., a Delaware corporation ("Microamerica"). As used in this
Proxy Statement, "Microamerica" refers to Microamerica, Inc., an
independent entity for periods prior to April 9, 1990. On January
31, 1994, the Company, through its wholly-owned subsidiary,
Merisel FAB, Inc., acquired certain assets of the United States
Franchise and Distribution Division of Vanstar Corporation
(formerly ComputerLand Corporation). On September 27, 1996, the
Company sold substantially all of its European, Latin American
and Mexican businesses.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors presently consists of five members
divided into three classes serving staggered terms, with one
class of directors elected annually. Class I consists of one
director and Classes II and III each consist of two directors.
At the Annual Meeting, the terms of the two present directors
constituting Class III will expire. The term of the director in
Class I extends through 1997, and the term of the directors in
Class II extends through 1998. The table below indicates the
names of the directors in each class and the expiration of the
terms of the directors in each class.
Class I Class II Class III
(terms expiring in (terms expiring (terms expiring
1997) in 1998) in 1996)
- ---------------------------------------------------------------------
Lawrence J. Schoenberg Joseph Abrams David L. House
Dr. Arnold Miller Dwight A. Steffensen
The Board of Directors has nominated the two incumbent
Class III directors named above for election as Class III
directors at the Annual Meeting. Each nominee has consented to
being named in this Proxy Statement as a nominee for election as
director and has agreed to serve as a director if elected. Each
director elected to Class III at the Annual Meeting will be
elected for a three-year term which will expire in 1999.
<PAGE>
If, by reason of death or other unexpected occurrence, any
one or more of such nominees should for any reason become
unavailable for election (although management knows of no reason
to anticipate that this will occur), the persons named in the
accompanying form of proxy may vote for the election of such
substitute nominees as the Board of Directors may propose. The
accompanying form of proxy contains a discretionary grant of
authority with respect to this matter.
No arrangement or understanding exists between any nominee
and any other person or persons pursuant to which any nominee was
or is to be selected as a director or nominee. None of the
nominees has any family relationship between them nor with any
director or executive officer of the Company.
Information Regarding Nominees and the Board of Directors;
Director Compensation
The nominees for election as Class III directors and all
current Class I and II directors are listed below, together with
their ages and all Company positions and offices held by them.
Name Age* Position
- ------------------------------------------------------------------------
Dwight A. 53 Chairman of the
Steffensen Board of Directors,
and Chief Executive
Officer
Joseph Abrams 60 Director
David L. House 53 Director
Dr. Arnold Miller 68 Director
Lawrence J. Schoenberg 64 Director
* As of November 1, 1996
The business experience, principal occupations and
employment during the past five years of each of the nominees for
election as Class III directors and each of the Class I and II
directors, together with their periods of service as directors
and executive officers of the Company, as applicable, are set
forth below.
Dwight A. Steffensen was elected as Chief Executive Officer
and Chairman of the Board of the Company in February 1996. Mr.
Steffensen has been a member of the Board of Directors since
August 1990. From January 1985 to March 1992, Mr. Steffensen
served as a Director and Executive Vice President of Bergen
Brunswig Corporation (''Bergen''), a pharmaceuticals distributor.
From April 1992 to October 1995, Mr. Steffensen served as
President and Chief Operating Officer for Bergen. In January
1996, he resigned from Bergen's Board of Directors.
Joseph Abrams was elected a director of the Company
following the acquisition of Microamerica by the Company in April
1990. Mr. Abrams had previously served as a director of
Microamerica from 1983 to April 1990 and also served as
President, Chief Operating Officer and Secretary of AGS
Computers, Inc. (''AGS''), a software development company, which
was a subsidiary of NYNEX Corp., a telecommunications company,
from 1988 until his retirement in 1991. He is also a director of
Spectrum Signal Processing, a hardware and software electronics
company and Phonetel Technologies, a provider of pay telephone
services.
<PAGE>
David L. House was appointed to the Board of Directors in
March 1994 to fill a vacancy. In October 1996, Mr. House was
named Chairman of the Board, President and Chief Executive
Officer of Bay Networks, Inc., a marketer of internet working
products. From 1974 to 1996, he was employed by Intel
Corporation, a manufacturer of microprocessing systems, most
recently as Senior Vice President and General Manager of the
Enterprise Server Group.
Dr. Arnold Miller was elected to the Board of Directors in
August 1989 and was appointed the Governance Director in May
1995. Since its formation in 1987, he has been President of
Technology Strategy Group, a consulting firm organized to assist
businesses and government in the fields of corporate strategy
development, international technology transfer and joint
ventures, as well as business operations support. Prior to
joining Technology Strategy Group, Dr. Miller was employed at
Xerox Corporation, a consumer products and information services
company, for 14 years, where his most recent position was
Corporate Vice President with responsibility for worldwide
electronics operations.
Lawrence J. Schoenberg was elected a director of the Company
following the acquisition of Microamerica in April 1990. Mr.
Schoenberg had previously served as a director of Microamerica
from 1983 to April 1990. From 1967 through 1990, Mr. Schoenberg
served as Chairman of the Board and Chief Executive Officer of
AGS. From January to December 1991, Mr. Schoenberg served as
Chairman and as a member of the executive committee of the Board
of Directors of AGS. Mr. Schoenberg retired from AGS in 1992. He
is also a director of Sungard Data Services, Inc., a computer
services company, Government Technology Services, Inc., a
microcomputer reseller, Penn-America Group, Inc., a casualty
insurance company, and Forecross Inc., a computer software
company.
The Company's Board of Directors met fifteen times during
the fiscal year ended December 31, 1995. Each incumbent director
other than Mr. House attended at least 75% of the aggregate of
(i) the total number of meetings held by the Board of Directors
and (ii) the total number of meetings held by all Committees of
the Board of Directors on which he served that occurred during
this period. Mr. House attended 71% of such aggregate meetings.
During fiscal 1995, each nonemployee director was entitled to
receive an annual retainer of $8,000, $1,000 per Board of
Directors meeting attended, $5,000 annually for acting as the
chairman of a committee of the Board, $2,000 annually for
committee membership, $250 per committee meeting attended and
reimbursement for travel expenses to and from Board of Directors
and committee meetings. Technology Strategy Group, a consulting
firm associated with Dr. Miller, also received $75,000 for
consulting fees in 1995.
Additionally, pursuant to the Company's 1992 Stock Option
Plan for Nonemployee Directors (the "Nonemployee Director Plan"),
immediately following the Company's 1995 Annual Meeting, Messrs.
Abrams, House, Miller, Schoenberg and Steffensen were each
awarded options to purchase 1,000 shares of Common Stock at an
exercise price of $5.875 per share. The Nonemployee Director
Plan provides for the granting of nonqualified stock options to
each member of the Company's Board of Directors who is not
otherwise an employee or officer of the Company or any subsidiary
of the Company (an "Eligible Director"). Currently, four members
of the Board of Directors are Eligible Directors. The Nonemployee
Director Plan provides for the issuance of options to purchase up
to 50,000 shares of Common Stock at an exercise price per share
of not less than the fair market value of the Common Stock on the
date of grant.
The Nonemployee Director Plan provides for initial grants
with respect to options to purchase 1,000 shares of Common Stock
to each Eligible Director immediately following the annual
meeting at which such director is first elected or appointed,
whichever is applicable. Each Eligible Director who has received
an initial option grant will also receive annual automatic option
grants of 1,000 shares immediately following each of the
Company's annual meetings. Each option becomes exercisable when,
and only if, the optionee continues to serve as a director for
<PAGE>
twelve months following the date on which the option was granted.
Options expire ten years and one day from the date of grant,
subject to earlier termination in accordance with the Nonemployee
Director Plan. Any vested and exercisable options may be
exercised in whole or in part by payment in cash of the full
exercise price.
The Board of Directors maintains an Audit Committee, which
is currently comprised of Dr. Miller and Mr. Schoenberg. The
Audit Committee met five times in fiscal 1995. The Audit
Committee was formed to, among other things, consult and meet
with the Company's auditors and its Chief Financial Officer and
other finance and accounting personnel, review potential conflict
of interest situations, where appropriate, and report and make
recommendations to the full Board of Directors regarding such
matters. The Board of Directors has an Organization and
Compensation Committee, which is currently comprised of Messrs.
Abrams, House and Schoenberg. The Organization and Compensation
Committee met five times in fiscal 1995. The Board of Directors
maintains an Option Committee that administers the Company's
stock option plans. The Option Committee met one time in fiscal
1995. The Option Committee is currently comprised of Messrs.
Abrams, House and Schoenberg. In December 1995, the Board of
Directors formed a Nominating Committee to recommend persons for
membership on the Board and to establish criteria and procedures
for the selection of new directors. The Nominating Committee is
currently comprised of Messrs. Schoenberg, Miller and Steffensen.
For further information regarding the nominees for election
as Class III directors and the Class I and II directors,
including stock ownership and related party transactions, see
"Security Ownership of Principal Stockholders, Directors and
Executive Officers" and "Executive Officers, Compensation and
Other Information" below.
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS,
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth as of November 1, 1996 certain
information regarding beneficial ownership of Common Stock by
each stockholder known by the Company to be the beneficial owner
of more than 5% of Common Stock as of such date, each director
and each executive officer of the Company and all directors and
executive officers, as a group. Unless otherwise indicated, the
stockholders have sole voting and investment power with respect
to shares beneficially owned by them, subject to community
property laws, where applicable.
Name and Address (1) Common Stock Percent of Shares
Beneficially Owned Owned
- ------------------------------------------------------------------------
Dwight Steffensen (2) 4,000 *
Joseph Abrams(3) 600,560 1.99%
David L. House(4) 2,000 *
Dr. Arnold Miller(3) 6,000 *
Lawrence J. Schoenberg(3) 364,584 1.20%
James E. Illson (4) 0 *
Martin E. Fishman(5) 18,501 *
Timothy N. Jenson(6) 18,200 *
Kelly M. Martin(7) 2,805 *
Archie K. Miller (8) 4,625 *
Susan J. Miller-Smith(4) 116,897 *
Thomas P. Reeves(9) 131,641 *
Kristin M. Rogers(10) 43,948 *
James D. Wittry(4) 0 *
Bruce A. Zeedik 0 *
All Directors and
Executive Officers 1,313,761 4.36%
as a Group (15 Persons)(11)
_______________
* Percentage of Common Stock owned is less than one percent.
(Footnotes on following page)
<PAGE>
(1) The address for all listed persons is c/o Merisel, Inc.,
200 Continental Boulevard, El Segundo, California 90245.
(2) Represents 4,000 shares issuable with respect to stock
options exercisable within 60 days after November 1, 1996.
In addition Mr. Steffensen also has a stock appreciation
right (the "SAR") covering 500,000 hypothetical shares of the
Company's Common Stock. Within 60 days after November 1,
1996, 20.8% of Mr. Steffensen's SAR will have vested. Mr.
Steffensen may not receive any payment under his SAR until
the earlier to occur of (a) the termination of his employment
with the Company for any reason, or (b) February 12, 1997.
Mr. Steffensen has no voting rights with respect to the SAR.
(3) Includes 4,000 shares issuable with respect to stock options
exercisable within 60 days after November 1, 1996.
(4) Represents shares issuable with respect to stock options
exercisable within 60 days after November 1, 1996.
(5) Includes 4,375 shares issuable with respect to stock options
exercisable within 60 days after November 1, 1996.
(6) Includes 15,625 shares issuable with respect to stock
options exercisable within 60 days after November 1, 1996.
(7) Includes 625 shares issuable with respect to stock options
exercisable within 60 days after November 1, 1996.
(8) Includes 4,375 shares issuable with respect to stock options
exercisable within 60 days after November 1, 1996.
(9) Includes 133,821 shares issuable with respect to stock
options exercisable within 60 days after November 1, 1996.
(10) Includes 41,366 shares issuable with respect to stock
options exercisable within 60 days after November 1, 1996.
(11) Includes 218,187 shares issuable with respect to stock
options exercisable within 60 days after November 1, 1996.
<PAGE>
EXECUTIVE OFFICERS, COMPENSATION
AND OTHER INFORMATION
Executive Officers
Set forth in the table below are the names, ages and offices
held by all executive officers of the Company.
Name Age* Position
Dwight A. 53 Chairman of the Board
Steffensen and Chief Executive Officer
James E. Illson 43 Chief Financial Officer,
Senior Vice President
and Assistant Secretary
Martin E.Fisman 38 President, Merisel FAB,
Inc., Vice President
Timothy N. Jenson 37 Vice President,
Treasurer and
Assistant Secretary
Kelly M. Martin 36 Vice President, General
Counsel and Secretary
Archie K. Miller 39 Vice President, Merisel
Americas, Inc.
Susan J. Miller- 44 Senior Vice President
Smith
Thomas P. Reeves 35 Senior Vice President
Kristin M. Rogers 38 Senior Vice President,
Merisel Americas, Inc.
James D. Wittry 43 Senior Vice President,
Merisel Americas, Inc.
Bruce A. Zeedik 55 Vice President and
Controller
______________
* As of November 1, 1996
Executive officers of the Company are elected by and serve
at the discretion of the Board of Directors. Set forth below is
a brief description of the business experience for the previous
five years of all executive officers except those who are also
directors. For information concerning the business experience of
Mr. Steffensen, see "Information Regarding Nominees and the Board
of Directors" above.
Except as described in "Employment and Change-in-Control
Arrangements" below, no arrangement or understanding exists
between any executive officer and any other person or persons
pursuant to which any such officer was or is to be selected as an
officer.
Prior to joining Merisel in August 1996, Mr. James E. Illson
served as Senior Vice President and Chief Financial Officer for
the Southern California-based grocery chain, Bristol Farms. He
joined Bristol Farms in 1995. From 1992 to 1995, Mr. Illson was a
partner with Kidd, Kamm & Co., a private equity investment firm.
Prior to that, Mr. Illson spent more than 13 years with Deloitte
& Touche, most recently as a national partner in Deloitte &
Touche's reorganization advisory services group.
Martin E. Fishman has been with the Company for over
fourteen years in a variety of positions including Managing
Director of the Company's Swiss subsidiary. In 1996, Mr. Fishman
was appointed President of Merisel FAB, Inc., a subsidiary of the
Company.
<PAGE>
Timothy N. Jenson joined the Company in 1993 as Vice
President and Treasurer. From 1989 to 1993, Mr. Jenson served as
Vice President at Citicorp North America, Inc. where he was
responsible for the Company's lending relationship.
Kelly M. Martin joined the Company in 1994 as General
Counsel. In February of 1996, Ms. Martin was promoted to Vice
President. From 1993 to 1994, she served as the Assistant Deputy
Mayor of Economic Development for the City of Los Angeles. For
seven years prior to joining the Mayor's office, Ms. Martin was
employed by the law firm of Riordan & McKinzie, most recently as
a partner in the corporate department.
Archie K. Miller, is a Vice President and General Manager
of the Merisel Open Computing Alliance, a division of Merisel
Americas, Inc. dedicated to the sales and support of Sun
Microsystems and complementary third-party products and services,
a position he has held since 1994. From 1993 to 1994, Mr. Miller
served as Vice President, North American Sales for Performance
Technologies, Inc., a provider of database performance tools for
Oracle. From 1991 to 1993, Mr. Miller was employed by Microcom,
a manufacturer of modem and software products, and most recently
was the Director, Channel Sales.
Susan J. Miller-Smith joined Merisel in 1987 as President of
the Company's Canadian subsidiary and became a Senior Vice
President in charge of Canadian operations in May 1992. She
continued in that capacity until August 1994, when she was named
Senior Vice President_European Operations and became Managing
Director of the Company's operations in Europe.
Thomas P. Reeves joined Merisel in 1987 as director of
International Strategic Planning. From March 1990 to February
1992, Mr. Reeves served as Managing Director of the Company's
United Kingdom subsidiary. From February 1992 until August 1994,
Mr. Reeves served as the Company's Managing Director of
operations in Europe. Mr. Reeves was named Senior Vice President-
European Operations in May 1992. In August 1994, he became Senior
Vice President_Canadian Operations as well as President of the
Company's Canadian subsidiary.
Kristin M. Rogers has been with the Company and
Microamerica since 1980 and in her 16 years with the Company she
has held various positions including Vice President, Quality
Process Improvement. In 1996, Ms. Rogers was promoted to the
office of Senior Vice President of Merisel Americas, Inc.,
Products and Inventory Management.
James D. Wittry joined the Company in 1996 as Senior Vice
President, Sales of Merisel Americas, Inc. From 1994 to 1995,
Mr. Wittry was with AST Research, a manufacturer of personal
computers as Senior Vice President. From 1991 to 1994 he was
employed by Ingram Micro, a wholesale distributor of computer
software and hardware. At Ingram Micro, Mr. Wittry held the
office of Senior Vice President, U.S. Sales. Prior to that, Mr.
Wittry spent 10 years with Avnet Computer, where he rose to the
position of National Computer Sales Director.
Bruce A. Zeedik joined the Company in January 1996 as Vice
President and Corporate Controller. From 1994 to 1995, Mr.
Zeedik was the Vice President of finance for JBL Professional, a
distributor of audio speakers and stereo sound equipment. From
1989 to 1994, Mr. Zeedik was the vice president and corporate
controller for Seiko Instruments USA, Inc., a wholly owned
subsidiary of Seiko Watch Company.
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's
executive officers and directors to file reports of ownership and
changes in ownership with the Securities and Exchange Commission
and the Nasdaq National Market, and to furnish the Company with
copies of all Section 16(a) forms they file.
Based on its review of the copies of such forms received by
it and on written representations from such persons that no
Forms 5 were required for those persons, the Company believes
that, during the fiscal year ended December 31, 1995, all filing
requirements applicable to its directors and executive officers
were complied with, except for the following: Form 4s, each
reporting the annual grant of options to non-employee directors,
were filed late by Dr. Miller and Messrs. Abrams, House,
Schoenberg, Steffensen and Wagman and a Form 5 reporting the
grant of options to Ronald A. Rittenmeyer was filed late.
Executive Compensation
<PAGE>
Summary Compensation Table
The following table sets forth the cash and non-cash
compensation for each of the last three fiscal years awarded to
or earned by the Company's former Chief Executive Officer and the
four other most highly compensated executive officers of the
Company, who were serving as executive officers at the end of
1995 fiscal year. For information about the companies current
executive officers see "Employment and Change-in-Control
arrangement" below.
Summary Compensation Table
Long-Term
Annual Compensation All Other
Compensation(1) Awards(3) Compensation
Option (#) ($)(4)
Name and Principal Year Salary Bonus
Position ($)(2) ($)(2)
- ----------------------------------------------------------------------------
Michael D. Pickett, 1995 502,092 -0- 211,741 18,542
Former Chairman of the 1994 501,630 77,438 -0- 17,022
Board of Directors, 1993 490,066 279,688 -0- 18,739
President and Chief
Executive Officer(5)
James L. Brill, 1995 227,700 -0- 80,000 4,436
Former Senior Vice 1994 217,517 19,688 -0- 3,306
President-Finance, Chief 1993 207,503 72,656 -0- 4,122
Financial Officer,
Secretary and Director (5)
Susan J. Miller-Smith, 1995 241,664 -0- 100,000 84,101
Senior Vice 1994 160,854 91,488 -0- 177,308
President-Managing 1993 166,346 95,112 -0- 5,944
Director-Europe (6)
Paul M. Lemerise 1995 248,100 -0- 80,000 3,378
Former Senior Vice 1994 216,029 29,876 -0- 3,522
President_Chief 1993 191,030 40,507 -0- 5,088
Information Officer (5)
Martin D. Wolf 1995 215,000 26,875 75,000 3,444
Former Senior Vice 1994 214,354 17,899 -0- 3,166
President (5) 1993 n/a n/a n/a n/a
__________
(1) While the named executive officers enjoyed certain
perquisites commensurate with their positions with the
Company, such perquisites did not exceed the lesser of $50,000
or ten percent (10%) of such officer's salary and bonus.
(2) Portions of the salary and/or bonus earned by named
executive officers may be deferred pursuant to the Company's
executive deferred compensation plan (the ''Deferred
Compensation Plan''), which was adopted by the Board of
Directors in 1990. Under the Deferred Compensation Plan,
executive officers may elect on an annual basis to defer any
portion of their pre-tax compensation until retirement or
termination of employment. The Company will pay participants
in the Deferred Compensation Plan, upon retirement or
termination of employment, an amount equal to the amount of
deferred compensation plus a guaranteed return at a specified
rate that is no less than a base interest rate. In addition,
upon the death of a participant the Company will pay a death
benefit to a named beneficiary.
<PAGE>
(3) At December 31, 1995, the only long-term compensatory
arrangement the Company had for its executive officers was its
stock option plan, grants under which are listed in the
Summary Compensation Table for completeness of presentation.
(4) For Mr. Pickett, the amount listed for 1995 includes the
Company's contributions on behalf of Mr. Pickett of (a) $3,722
to the Merisel, Inc. 40l(k) Plan (the ''40l(k) Plan''), (b)
$1,320 of premiums paid with respect to the Company's group
term life insurance policy (the ''Term Life Policy''), and (c)
$13,500 to Mr. Pickett's split-dollar life insurance policy.
For Mr. Brill, the amount listed for 1995 includes the
Company's contributions on behalf of Mr. Brill of (a) $3,722
to the 401(k) Plan and (b) $714 to the Term Life Policy. For
Ms. Miller-Smith, the amount listed for 1995 includes (a)
reimbursement of relocation costs of $84,101. For Mr.
Lemerise, the amount listed for 1995 includes the Company's
contributions on behalf of Mr. Lemerise of (a) $1,025 to the
401(k) Plan and (b) $2,353 to the Term Life Policy. For Mr.
Wolf, the amount listed for 1995 includes the Company's
contributions on behalf of Mr. Wolf of (a) $3,000 to the
401(k) Plan and (b) $444 to the Term Life Policy. Itemized
disclosure of amounts of other compensation in 1994 and 1993
is not required.
(5) Mr. Pickett resigned on February 12, 1996, Mr. Brill on
September 3, 1996, Mr. Lemerise on July 31, 1996 and Mr. Wolf
on October 31, 1996.
(6) Ms. Miller-Smith became Senior Vice President_Canadian
Operations in May 1992. She was named Senior Vice
President_European Operations in August 1994.
Options in 1995 Fiscal Year
<PAGE>
The following tables summarize option grants and exercises
during the 1995 fiscal year to or by the executive officers named
in the Summary Compensation Table above and the value of the
options held by such persons at the end of the 1995 fiscal year.
Option Grants in 1995 Fiscal Year
Potential
Realizable Value
at Assumed
Annual Rates
Individual Grants of Stock Price
----------------- Appreciation
for Option Term
($)(1)
Percent ---------------
of Total
Option
Options Granted Per Share
Granted To Employees Exercise Expiration
Name (#) in 1995 Price Date($) 5%($) 10%($)
- -----------------------------------------------------------------------------
Michael D. 24,241 1.4% $ 4.579 03/27/05 69,807 176,905
Pickett 187,500 11.2% $ 6.313 06/09/05 744,356 1,886,344
James L. 25,000 1.5% $ 4.579 03/27/05 71,993 182,444
Brill 55,000 3.3% $ 6.313 06/09/05 218,344 553,327
Susan J. 25,000 1.5% $ 4.579 03/27/05 71,993 182,444
Miller- 75,000 4.5% $ 6.313 06/09/05 297,742 553,327
Smith
Paul M. 25,000 1.5% $ 4.579 03/27/05 71,993 182,444
Lemerise 55,000 3.3% $ 6.313 06/09/05 218,344 553,327
Martin D. 75,000 4.5% $ 4.579 03/27/05 215,978 547,331
Wolf
__________
(1) Potential realizable value is determined by taking the
initial market value per share and applying the stated annual
appreciation rate compounded annually for the remaining term
of the option, subtracting the exercise price at the end of
that period and multiplying that number by the number of
options granted. Actual gains, if any, recognized by a named
executive officer are dependent on the future performance of
the Common Stock and on overall market conditions. There can
be no assurance that the potential realizable values reflected
in this table will be achieved.
<PAGE>
Option/SAR Repricings
Number of Length of
Securities Market Price Exercise Original
Underlying of Stock at Price New Option Term
options/SARS Time of at Time of Exercise Remaining at
Name Date Repriced Repricing or Repricing Price Date of
or Amended Amendment or Amendment Repricing or
(#) ($) ($) ($) Amendment
- -----------------------------------------------------------------------------
Martin 03/27/95 75,000 $4.579 $15.625 $4.579 9 years
D. Wolf
(1) Mr. Wolf resigned from the Company on October 31, 1996.
At the time of his resignation, the price of the Company's
Common Stock was $2.0313. Mr. Wolf's options will expire on
January 31, 1997.
<PAGE>
Aggregated Option Exercises in 1995 Fiscal Year
and Value of Options at Fiscal 1995 Year End
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Fiscal Fiscal Year
Year End (#) End ($)(1)
Shares Value
Name Acquired Realized Exercisable Unexercisable Exercisable Unexercisble
on ($)
Exercise
(#)
- ----------------------------------------------------------------------------
Michael D. -0- -0- 537,371 309,241 365,198 -0-
Pickett
James L. -0- -0- 162,138 93,750 166,221 -0-
Brill
Susan J. -0- -0- 83,647 95,000 32,515 -0-
Miller-Smith
Paul M. -0- -0- 47,500 87,500 -0- -0-
Lemerise
Martin D. -0- -0- 18,750 56,250 -0- -0-
Wolf
- ----------
(1) Value is determined by subtracting the exercise price of
each option held by the named executive officer from $4.375,
the fair market value of the Common Stock as of December 31,
1995, and multiplying the resulting number by the number of
underlying shares of Common Stock.
Employment and Change-in-Control Arrangements
Effective February 12, 1996, the Company entered into a one-
year employment agreement with Mr. Steffensen, pursuant to which
he is to serve as Chairman of the Board of Directors and Chief
Executive Officer with an annual salary of $505,000 and a
quarterly bonus based on the Company's financial performance up
to a maximum of $126,250 per quarter (a minimum bonus of $37,875
is guaranteed for the first quarter of 1996). The agreement also
entitles Mr. Steffensen to 500,000 stock appreciation rights
(''SAR Shares'') vesting on a deferred basis (except in the event
of certain extraordinary transactions, as specified) and subject
to the receipt by the Company of certain gross proceeds from
specified extraordinary transactions. The SAR Shares have an
exercise price of $2.8175 per share. Mr. Steffensen is also
eligible to receive a lump-sum bonus of $990,000 in connection
with the sale of the Company (as defined) and of $200,000 in the
event of a sale of the Company's European operations (as defined)
(together, the ''Extraordinary Transactions''), as well as
certain other benefits, including specified fees for legal and
accounting services and the payment of business and automobile
expenses. If the employment agreement is terminated by the
Company other than for cause (as defined), Mr. Steffensen will be
entitled to receive the remainder of his base salary and may
remain eligible to receive bonuses in connection with
Extraordinary Transactions. On October 4, 1996, the Company
consummated the sale of its European operations, and Mr.
Steffensen received his $200,000 bonus.
<PAGE>
Effective September 1995, the Company entered into an
employment agreement with Ronald Rittenmeyer, pursuant to which
he was named President and Chief Operating Officer with an annual
salary of $355,000 and an annual performance bonus of at least
$200,000 per year (payable quarterly). For 1996, Mr.
Rittenmeyer's bonus was guaranteed to him. Mr. Rittenmeyer was
also entitled to certain other benefits, including 300,000 SAR
Shares (vesting and payable as specified in the agreement),
specified fees for legal and accounting services and the payment
of business and automobile expenses and certain housing and
travel expenses. The agreement provided for certain severance
benefits to be paid to Mr. Rittenmeyer upon a change of control
or termination without cause. The agreement also provided that
upon Mr. Rittenmeyer's voluntary resignation, he would be
entitled to severance payments of at least three months' salary
and bonus, in accordance with formulae dependent upon the timing
of such resignation. On October 1, 1996, Mr. Rittenmeyer
voluntarily resigned. Pursuant to his agreement, he received a
lump sum payment equal to 12 months compensation (salary and
bonus) of $555,000. Mr. Rittenmeyer also served as a member of
the Board of Directors from February, 1996 to October, 1996.
In addition, both Mr. Steffensen and Mr. Rittenmeyer are
subject to specified obligations of non-competition, non-
solicitation and confidentiality obligations and Mr. Steffensen
is entitled to receive a lump sum payment of $1,010,000, in
consideration for such obligations in the event of the sale of
the Company or certain other termination events (as defined).
In April 1992, the Company and Mr. Pickett entered into a five-
year employment agreement. Pursuant to the terms of that
agreement, Mr. Pickett was to serve as the Chairman of the Board
of Directors, President and Chief Executive Officer of Merisel
with an annual salary (subject to discretionary increases
approved by the Board of Directors) of $502,092 (as of February
12, 1996) and, if predetermined objectives were achieved, an
annual performance bonus of at least $295,000 under any
management bonus plan adopted by the Board of Directors as well
as certain other benefits. Effective February 12, 1996, the Board
of Directors terminated the above described employment agreement
and determined to pay Mr. Pickett the resulting benefits,
including a cash payment of $750,000. The Company concurrently
entered into a new employment agreement with Mr. Pickett, which
provided for his continued employment through June 14, 1996 to
provide information and otherwise facilitate a smooth transition
between Mr. Pickett and Mr. Steffensen. The new agreement
entitles Mr. Pickett to $31,350 per month through such period as
well as certain other benefits, including payment of specified
fees for legal and outplacement services. The agreement subjects
Mr. Pickett to specified obligations of non-competition, non-
solicitation and confidentiality, in consideration for which Mr.
Pickett is entitled to $500,000 (paid out periodically over 12
months or immediately upon a change in control).
In January 1995, the Company entered into an Early Retirement
Agreement with John Connors, formerly the Senior Vice
President-U.S. Operations. Mr. Connors resigned as Senior Vice
President, but continued to remain employed by the Company on a
part-time basis until February 1996. Under his agreement, Mr.
Connors received cash compensation of $500,000 plus certain
benefits. In exchange, Mr. Connors agreed not to compete with
Merisel or to hire any of Merisel's employees for the term of the
agreement.
In September and October 1995, the Company entered into
retention agreements (the ''Retention Agreements'') and
employment agreements (the ''Employment Agreements'') with
Messrs. Brill, Lemerise, Thompson, Reeves and Wolf effective
through August 1998. The Retention Agreements provide that if the
Company terminates the executive's employment without cause or
the executive resigns with good reason (each as defined in the
Retention Agreements and together, ''Covered Terminations'')
following a change of control, the Company will pay the
executive's base salary for 180 days over the course of such
period, as well as a lump-sum payment of one-half of the
executive's average annual performance bonus. The Employment
Agreements provide for the continued payment of annual base
salaries, average bonuses and COBRA payments for Covered
<PAGE>
Terminations following the termination of Mr. Pickett as Chief
Executive Officer. In July, September and October 1996, Messrs.
Lemerise, Thompson and Wolf, respectively, resigned for good
reason (as defined) and the Company is paying the resulting
benefits under the applicable Employment Agreements.
On August 27, 1996, the Company entered into a separation
agreement (the "Separation Agreement") with James L. Brill,
pursuant to which Mr. Brill's separation from the Company
constituted a qualifying termination (as defined). In connection
with his termination, Mr. Brill received (I) an amount equal to
his annual base salary in two lump sum payments of $113,850, each
on September 3, 1996 and on October 4, 1996, (ii) a lump sum
payment of $26,908.00, which was equal to the average of the
annual performance bonus received by Mr. Brill over the prior
three year period, (iii) reimbursement for legal and accounting
fees up to $5,000 and (iv) reimbursement for outplacement
services for a period of one year up to $15,000. The Company
also permitted Mr. Brill to retain as his property the car phone,
lap top computer and home fax machine previously provided to him
for his use. In order to obtain Mr. Brill's services in
connection with the sale of the Company's European businesses,
the Company retained Mr. Brill as consultant through September
30, 1996 at the rate of $2,000 per day. The Company intends to
continue to retain Mr. Brill as a consultant at the rate of
$10,000 per week until completion of the closing audit in
connection with the sale of such European businesses is
completed. In return, Mr. Brill is subject to specified
obligation of non-competition, non-solicitation and
confidentiality.
In November 1996, the Company entered into an amended and
restated employment agreement with Ms. Miller-Smith which
provides for the lump-sum payment of Ms. Miller-Smith's annual
base salary, average bonus and specified relocation expenses upon
the cessation of her employment due to a termination without
cause (as defined), or her resignation with good reason (as
defined) following specified change of control transactions,
including changes of control affecting the Company's European
operations, which change has occurred. Ms. Miller-Smith's
current base annual salary is $250,000 and her annual bonus is
$125,000.
Merisel Americas, Inc. has entered into a letter agreement,
as amended, with Kristin M. Rogers, a Senior Vice President of
Product and Inventory Management, pursuant to which if the
Company terminates Ms. Rogers' employment without cause (as
defined), whether before or after a change of control, then the
Company will pay Ms. Rogers an amount equal to her annual base
salary plus the average of the annual bonus received by her over
the prior three year period (excluding bonus amounts guaranteed
but not otherwise earned by performance), as well as continued
COBRA payments for a one year period. In addition upon such
termination, the vesting of stock options granted to Ms. Rogers
will accelerate. Ms. Rogers' annual salary is currently $190,000
and she is eligible for an annual bonus of up to $95,000, one
quarter of which is to be earned and paid quarterly based on
achievement of financial and performance objectives. Ms. Rogers'
quarterly bonus has been guaranteed to her for fiscal 1996.
Provided that Ms. Rogers is still employed by the Company on
April 14, 1997, she will receive a bonus equal to the taxes she
will incur with respect to the $50,000 loan owed to the Company
by Ms. Rogers that was forgiven in 1996.
The Company has entered into a letter agreement, as amended,
with Timothy N. Jenson, the Vice President, Treasurer and
Assistant Secretary, pursuant to which, if the Company
terminates Mr. Jenson without cause (as defined), whether before
or after a change of control, then the Company will pay Mr.
Jenson an amount equal to his annual base salary plus the average
of the annual bonus received by him over the prior three year
period (excluding bonus amounts guaranteed but not otherwise
earned by performance), as well as continued COBRA payments for a
one year period. In addition upon such termination, the vesting
of stock options granted to Mr. Jenson will accelerate. Mr.
Jenson's annual salary is currently $175,000 and he is eligible
for an annual bonus of up to $43,750, one quarter of which is to
be earned and paid quarterly based on achievement of financial
and performance objectives. Mr. Jenson's quarterly bonus has been
guaranteed to him for fiscal 1996. Provided that Mr. Jenson is
still employed by the Company on January 1, 1997, he will receive
an additional bonus of $25,000.
<PAGE>
In August, 1996 the Company entered into an employment
agreement with James E. Illson pursuant to which he will serve as
the Company's Chief Financial Officer and Senior Vice President
for a three year period with an annual salary of $225,000 and an
annual bonus of up to $125,000, one quarter of which is to be
earned and paid quarterly based on achievement of financial and
performance objectives. One eighth of Mr. Illson's annual bonus
has been guaranteed to him for each of the third and fourth
fiscal quarters of 1996. Mr. Illson's agreement also provides for
him to receive a bonus of $125,000 upon the successful
restructuring (as defined) of the Company's outstanding
indebtedness. Mr. Illson also receives term life insurance
coverage, $1 million face value, up to a maximum premium of $2000
per year. Under his employment agreement, if the Company
terminates Mr. Illson without cause (as defined) then the Company
will pay Mr. Illson in a lump sum an amount equal to his annual
base salary plus the average of the annual bonus received by him
over the prior three year period (excluding bonus amounts
guaranteed but not otherwise earned by performance), as well as
continued COBRA payments for a one year period. If Mr. Illson is
terminated without cause within one year following a change of
control then the Company will pay Mr. Illson in a lump sum an
amount equal to one and one half times his annual base salary
plus one and one half times the average of the annual bonus
received by him over the prior three year period (excluding bonus
amounts guaranteed but not otherwise earned by performance), as
well as continued COBRA payments for an eighteen month period.
In connection with his employment agreement, Mr. Illson also
received a grant of stock options to purchase 75,000 shares of
the Company's stock at $2.62 per share, the closing price of the
Company's Common Stock on the date such grant was made. The
vesting of such options will accelerate upon a termination
without cause following a change of control.
In September, 1996 the Company entered into an employment
agreement with James D. Wittry pursuant to which he will serve as
Senior Vice President - Sales of Merisel Americas, Inc. for a
three year period with an annual salary of $225,000 and an annual
bonus of up to $112,500, one quarter of which is to be earned and
paid quarterly based on achievement of financial and performance
objectives. All of Mr. Wittry's quarterly bonus has been
guaranteed to him for each of the third and fourth fiscal
quarters of 1996 and for the first fiscal quarter of 1997 and one
half of Mr. Wittry's quarterly bonus has been guaranteed to him
for the second, third and fourth fiscal quarters of 1997. Under
his employment agreement, if the Company terminates Mr. Wittry
without cause (as defined) at any time prior to February 29,
1996, then the Company will pay Mr. Wittry in a lump sum an
amount equal to one fourth of his annual base salary plus one
fourth of the average annual bonus received by him to date, as
well as continued COBRA payments for a three month period. If
the Company terminates Mr. Wittry without cause at any time after
February 29, 1996, then the Company will pay Mr. Wittry in a lump
sum an amount equal to one half of his annual base salary plus
one half of the average annual bonus received by him over the
prior three year period (excluding bonus amounts guaranteed but
not otherwise earned by performance for any quarter after the
first fiscal quarter of 1997), as well as continued COBRA
payments for a six month period. If Mr. Wittry is terminated
without cause within one year following a change in control then
the Company will pay Mr. Wittry in a lump sum an additional
severance amount equal to one half of his annual base salary plus
one half times the average of the annual bonus received by him
over the prior three year period (excluding bonus amounts
guaranteed but not otherwise earned by performance for any
quarter after the first fiscal quarter of 1997), as well as
continued COBRA payments for an additional three month period.
In connection with his employment agreement, Mr. Wittry also
received a grant of stock options to purchase 75,000 shares of
the Company's stock at $2.50 per share, the closing price of the
Company's Common Stock on the date such grant was made. The
vesting of such options will accelerate upon a termination
without cause following a change of control.
<PAGE>
On November 6, 1996, the Organization and Compensation
Committee of the Board of Directors approved the terms of an
employment agreement with Martin Fishman, an executive officer of
the Company and the President of Merisel FAB, Inc. The terms so
approved include an annual salary of $175,000 and an annual bonus
of up to $40,000. In addition Mr. Fishman will receive a bonus
of $50,000 upon the successful completion of a sale of Merisel
FAB, Inc. Mr. Fishman will also receive a payment equal to his
annual base salary if his employment is terminated following the
sale of Merisel FAB, Inc. The terms of Mr. Fishman's agreement
are subject to the negotiation and execution of a definitive
agreement.
The Company has also entered into agreements with each of
Kelly M. Martin, Archie K. Miller and Bruce A. Zeedik, pursuant
to which they will receive certain payments if the Company
terminates such executive's employment without cause or the
executive resigns with good reason (each as defined). Such
payments vary from 3 months base salary and bonus and COBRA
coverage to 9 months base salary, bonus and COBRA coverage and
also may include acceleration of option vesting.
Under all of the foregoing agreements, the executives party to
such agreements are subject to specified obligations of non-
competition, non-solicitation and confidentiality during the
benefit periods or the terms of the agreements, as applicable.
Certain Relationships and Related Transactions
Merisel has entered into Indemnity Agreements with each of its
directors and executive officers, which agreements require
Merisel, among other things, to indemnify them against certain
liabilities that may arise by reason of their status or service
as directors, officers, employees or agents of Merisel (other
than liabilities arising from conduct in bad faith or which is
knowingly fraudulent or deliberately dishonest), and, under
certain circumstances, to advance their expenses incurred as a
result of proceedings brought against them.
Organization and Compensation Committee Report on 1995 Executive
Compensation
At the end of fiscal 1995, the Organization and Compensation
Committee (the ''Committee'') of the Merisel Board of Directors
was comprised of Messrs. Abrams, House and Miller. Dwight A.
Steffensen and David S. Wagman also served on the Committee in
1995. The Committee establishes policies relating to the
compensation of Company executive officers and other key
employees. The administration of the Company's employee stock
option plans is the responsibility of the Company's Option
Committee, which is currently comprised of Messrs. Abrams, House
and Schoenberg. All decisions of the Committee relating to
compensation of the Company's executive officers are ratified by
the entire Board of Directors. Decisions relating to the grant of
stock options to executive officers, are made solely by the
Option Committee so that grants of such options satisfy Rule 16b-
3 of the Securities Exchange Act of 1934. In the 1995 fiscal
year, the Company's Board of Directors ratified all of the
Committee's recommendations regarding executive compensation, as
submitted. Additionally, each member of the Board of Directors
who is also an executive officer does not participate when the
Board of Directors reviews his compensation.
As required by rules designed to enhance the disclosure of
Merisel's executive compensation policies and practices, the
following is the Committee's report submitted to the Board of
Directors addressing the compensation of the Company's executive
officers for the 1995 fiscal year.
<PAGE>
Compensation Policy.
Merisel's executive compensation policy is designed to
establish an appropriate relationship between executive pay and
the Company's annual performance, its long-term objectives and
its ability to attract and retain qualified executive officers.
The Committee attempts to achieve these goals by integrating
competitive annual base salaries with (a) bonuses based on
corporate performance and on the achievement of internal
strategic objectives and (b) executive stock options through the
Company's stock option plans. The Committee believes that cash
compensation in the form of salary and bonus provides Company
executives with short-term rewards for success in operations, and
that long-term compensation through the award of stock options
encourages growth in management stock ownership, which in turn
leads to the expansion of management's stake in the long-term
performance and success of the Company
Base Salary. Due to the Company's financial performance in
fiscal 1994, the base salary level of executive officers in
fiscal 1995 was generally not increased. Only Susan Miller-
Smith's, Thomas Reeves' and Verilyn Smith's 1995 base salaries
were changed as a result of the new positions held within the
Company by each of these executives. In addition, a portion of
Mr. Lemerise's target bonus amount was added to his base salary
and the value of car allowances previously provided to certain
executive officers was added to such officers' base salaries.
Base salaries in 1995 were paid either directly to the Company's
executive officers in cash or, at the option of the executive,
deferred as part of the Deferred Compensation Plan or the 401(k)
Plan.
Bonuses. The Merisel Management Incentive Program (the
''Incentive Program'') is intended to encourage and reward the
achievement of certain short-term corporate objectives.
Participants in the Incentive Program are assigned target bonus
amounts ranging from 12.5% to 60% of the base salaries paid to
such persons. Actual bonuses could then range from 0% to 150% of
the target amounts, depending on the level of achievement of
various performance objectives, including the satisfaction of net
income milestones, the achievement of cost center budgets, the
completion of priority tasks or a combination of these
objectives. Bonuses are paid quarterly, based upon whether the
executive meets quarterly objectives. In 1995, only Mr. Wolf met
any of his quarterly objectives. Mr. Rittenmeyer, who was hired
on September 29, 1995, was guaranteed his bonus for the last
quarter of fiscal 1995.
Stock Options. The Company has adopted a long-term incentive
compensation strategy to provide incentives and reward
management's contribution to the achievement of long-term Company
performance, as measured by the market value of the Common Stock.
Under this long-term strategy, the Option Committee awarded stock
options in 1995 to executive officers under the Company's
existing employee stock option plan who were deemed to be able to
cause a measurable impact on the Company's earnings per share
over an extended period. The options granted to executive
officers in 1995 vest over a five-year period. In 1995, due to
the volatility of the Company's stock price, the Committee
determined to change the timing of stock option grants on a going
forward basis and to phase in annual stock option grants, rather
than granting options every three years. The Committee believes
this changed strategy provides more meaningful incentives for
senior management to remain with the Company and improve its long-
term performance.
Retention Program. In August 1995, the Committee authorized the
Company to enter into certain retention and employment agreements
with all of its executive officers, other than Mr. Pickett. The
agreements provide for severance payments if the executive
officer is terminated without cause (as defined). The amount of
the payment varies, depending on whether the termination occurs
after certain events, which events include a change in the chief
executive officer or a change of control. The Committee believes
that such agreements enable the Company to retain those executive
officers who are critical to the success of the Company.
<PAGE>
Compensation of Former Chief Executive Officer.
The annual salary earned by Michael Pickett, the Company's
Chief Executive Officer for 1995, was $502,092, an amount that
did not increase materially from his base salary in fiscal 1994.
Mr. Pickett's base salary was determined pursuant to the terms of
his employment agreement with the Company. Under his employment
agreement, he participated in the Company's Management Incentive
Bonus Plan as adopted from time to time by the Committee. In
1994, based on (a) improvements in the Company's performance and
profitability in fiscal 1993 and (b) an increase in Mr. Pickett's
responsibilities, as a result of a significant increase in both
the Company's size and sales volume, the Committee determined
that an increase in Mr. Pickett's base salary would have been
appropriate. However, with the agreement of Mr. Pickett, the
Committee agreed to increase the long-term compensation component
of his compensation by increasing the amount of stock options
that he would otherwise ordinarily receive under the Company's
long-term incentive strategy, described above, in 1995.
Accordingly, in fiscal 1995, Mr. Pickett was granted options to
purchase 24,241 and 187,500 shares of the Company's common stock
at an exercise price of $4.579 and $6.3125, respectively. The
potential target bonus payable to Mr. Pickett in 1995, upon
achievement of predetermined objectives set forth in the
Incentive Program, was not raised from the 1994 level of
$309,752. Mr. Pickett's bonus depended entirely on the Company
achieving certain net income objectives each quarter. Pursuant to
the Incentive Program, Mr. Pickett did not earn a bonus in any
quarter of the 1995 fiscal year. On February 12, 1996, the Board
of Directors voted to terminate Mr. Pickett's employment
agreement and to pay him the resulting benefits, including a cash
payment of $750,000. Mr. Pickett also received certain other
benefits, including reimbursement for outplacement services and
legal and accounting fees. Mr. Pickett also agreed not to compete
with the Company for a period of 12 months, for which agreement
he will receive an aggregate of $500,000, paid out periodically
over such 12 months or immediately upon a change of control.
Corporate Tax Deduction on Compensation.
To the extent readily determinable and as one of the factors in
its consideration of compensation matters, the Committee
considers the anticipated tax treatment to the Company and to the
executives of various compensation. Some types of compensation
and their deductibility depend upon the timing of an executive's
vesting or exercise of previously granted rights. Further,
interpretations of and changes in the tax laws also affect the
deductibility of compensation. To the extent reasonably
practicable and to the extent it is within the Committee's
control, the Committee intends to limit executive compensation in
ordinary circumstances to that deductible under Section 162(m) of
the Internal Revenue Code of 1986. In doing so, the Committee may
utilize alternatives (such as deferring compensation) for
qualifying executive compensation for deductibility and may rely
on grandfathering provisions with respect to existing contractual
commitments.
The Committee believes that a direct relationship between
executive compensation and Merisel's performance, as measured by
growth in income and earnings, ultimately results in increased
value to the Company's stockholders. The Committee believes that
management compensation levels during the Company's 1995 fiscal
year appropriately reflect the application of the Committee's
compensation policy.
ORGANIZATION AND COMPENSATION
COMMITTEE
Joseph Abrams
David House
Dr. Arnold Miller
Stock Price Performance Graph
(a) The following graph compares the total cumulative
stockholder return on the Common Stock from December 31, 1990 to
December 31, 1995 to that of the Standard & Poor's MidCap Index,
an index that includes 400 companies with a total capitalization
of $578.6 billion as of December 31, 1995, and (b) a combination,
assuming investment on a weighted average basis, of the Standard
& Poor's Computer Systems Index and the Standard & Poor's
Computer Software & Services Index over the same period. The
graph assumes that the value of an investment in Common Stock and
in each such index was $100 on December 31, 1990, and that all
dividends have been reinvested.
<PAGE>
RELATIONSHIP WITH
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has appointed Deloitte & Touche, certified public
accountants, to continue as the Company's auditors and to audit
the books of account and other records of the Company for the
fiscal year ending December 31, 1996. Deloitte & Touche,
previously Deloitte Haskins & Sells, has audited the Company's
financial statements since 1981. A representative of that firm
is expected to be present at the Annual Meeting with the
opportunity to make a statement if such representative desires to
do so and is expected to be available to respond to appropriate
questions. The Company has been advised that neither such firm,
nor any of its partners or associates, has any direct or indirect
financial interest in or any connection with the Company other
than as accountants and auditors.
OTHER MATTERS
The Board of Directors does not know of any other matters to
be presented at the Annual Meeting, but if other matters do
properly come before the Annual Meeting, it is intended that the
persons named in the Proxy will vote on them in accordance with
their best judgment.
STOCKHOLDERS' PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of stockholders which are intended to be presented
at the 1997 Annual Meeting of Stockholders (the "1997 Annual
Meeting") must be received by the Company within a reasonable
time before the date of the Company's Proxy Statement relating to
the 1997 Annual Meeting, in order to be included in such Proxy
Statement.
<PAGE>
ANNUAL REPORTS
A copy of the 1995 Annual Report to Stockholders (the "Annual
Report") is being mailed to each stockholder of record together
with this Proxy Statement. In April 1996, the Company filed with
the Securities and Exchange Commission its Annual Report on
Form 10-K (the "Form 10-K") for the fiscal year ended
December 31, 1995. The Form 10-K contains detailed information
concerning the Company and its operations, supplementary
financial information and certain schedules which are not
included in the Annual Report. A COPY OF THE FORM 10-K WILL BE
FURNISHED TO STOCKHOLDERS WITHOUT CHARGE UPON REQUEST IN WRITING
TO: Susan T. Stillings, Director, Investor Relations, Merisel,
Inc., 200 Continental Boulevard, El Segundo, California 90245.
The Annual Report and Form 10-K are not part of the Company's
soliciting material.
By Order of the Board of Directors
/s/ Kelly M. Martin
Kelly M. Martin
Secretary
El Segundo, California
November 14, 1996
APENDIX
PROXY FORM
MERISEL, INC.
200 Continental Boulevard
El Segundo, California
This Proxy is Solicited on Behalf of the Board of Directors of
MERISEL, INC.
The undersigned stockholder of Merisel, Inc., a Delaware
corporation, acting under the Delaware General Corporation Law,
hereby constitutes and appoints James E. Illson and Kelly M.
Martin, and each of them, the attorneys and proxies of the
undersigned, each with the power of substitution, to attend and
act for the undersigned at the Annual Meeting of Stockholders of
said corporation to be held on December 18, 1996 at 10:00 a.m. at
200 Continental Boulevard, El Segundo, California, and at any
adjournments thereof, and be entitled to vote, as follows:
The Board of Directors recommends a vote FOR all nominees listed
in Proposal No. 1.
PROPOSAL NO. 1: To elect two Class II directors to the Board of
Directors for terms expiring in 1998.
/X/ FOR ALL NOMINEES LISTED BELOW / / WITHHOLD AUTHORITY TO VOTE
(EXCEPT AS INDICATED BELOW) FOR ALL NOMINEES LISTED BELOW
David L. House Dwight A. Steffensen
Instructions: To withhold authority to vote for any individual
nominee write in that nominee's name in the space provided:
- ------------------------------------------------------------------------
Said attorneys and proxies, and each of them, shall have the
powers which the undersigned would have if acting in person. The
undersigned hereby revokes any other proxy to vote at such
Meeting and hereby ratifies and confirms all that said attorneys
and proxies, and each of them, may lawfully do by virtue hereof.
Said proxies, without hereby limiting their general authority,
are specifically authorized to vote in accordance with their best
judgment with respect to matters incident to the conduct of the
Meeting; matters presented at the Meeting but which are not known
to the Board of Directors at the time of the solicitation of this
Proxy; and with respect to the election of any person as a
director if a bona fide nominee for that office is named in the
Proxy Statement and such nominee is unable to serve or for good
cause will not serve.
- -----------------------------------------------------------------
A majority of the above-named proxies present at said
Meeting, either in person or by substitute (or if only thereof
shall be present and acting, then that one), shall have and
exercise all powers of said proxies hereunder. This proxy will
be voted in accordance with the choices specified by the
undersigned on the other side of this proxy. IF NO INSTRUCTIONS
TO THE CONTRARY ARE INDICATED HEREON, THIS PROXY WILL BE TREATED
AS A GRANT OF AUTHORITY TO VOTE FOR THE ELECTION OF THE NOMINEES
LISTED IN PROPOSAL NO. 1.
The undersigned acknowledges receipt of a copy of the Notice
of Annual Meeting and Proxy Statement relating to the Meeting and
a copy of the Company's Annual Report to Stockholders.
-------------------------------
Signature of Stockholder
Dated:-------------------, 1996
-------------------------------
Signature of Stockholder
Dated:-------------------, 1996
Important: In signing this proxy, please sign your
names on the signature lines in the same way as it is stenciled
on this proxy. When signing as an attorney,
executor, administrator, trustee or guardian,
please give your full title as such. EACH
JOINT TENANT SHOULD SIGN.
