<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by Registrant /X/
File by a Party other than 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 sec 240.14a-11(c) or sec 240.14a-12
TECH DATA CORPORATION
- ------------------------------------------------------------------------
(Name of the Registrant as Specified in Charter)
- -------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 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 the 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 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 date of its filing
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Tech Data Corporation:
The Annual Meeting of Shareholders of Tech Data
Corporation (the "Company") will be held at Tech Data Corporation's
headquarters, 5350 Tech Data Drive, Clearwater, Florida on Tuesday,
June 25, 1996, at 3:30 p.m. for the following purposes:
1. To elect two directors to hold office until the 1999
Annual Meeting of Shareholders and to hold office until their
successors are duly elected and qualified.
2. To consider and act upon a proposal to ratify the
appointment of Price Waterhouse LLP as independent auditors of
the Company for the fiscal year ending January 31, 1997; and
3. To transact any other business as may properly come
before the meeting.
Shareholders of record as of the close of business on May
1, 1996 will be entitled to vote at this meeting or any adjournment
thereof. Information relating to the matters to be considered and
voted on at the Annual Meeting is set forth in the proxy statement
accompanying this Notice.
By Order of the Board of Directors,
/s/ Arthur W. Singleton
------------------------
ARTHUR W. SINGLETON
Vice President, Treasurer and Secretary
May 10, 1996
If you do not expect to attend the meeting in person,
please vote on the matters to be considered at the
meeting by completing the enclosed Proxy and mailing
it promptly in the enclosed envelope.
<PAGE>
TECH DATA CORPORATION
5350 Tech Data Drive
Clearwater, Florida 34620
(813) 539-7429
-----------------------
PROXY STATEMENT
This proxy statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of Tech
Data Corporation (the "Company") for the Annual Meeting of
Shareholders to be held on Tuesday, June 25, 1996, at 3:30 p.m., or
any adjournment thereof.
If the accompanying proxy form is completed, signed and
returned, the shares represented thereby will be voted at the
meeting. The giving of the proxy does not affect the right to vote
in person should the shareholder be able to attend the meeting.
The shareholder may revoke the proxy at any time prior to the
voting thereof.
The annual report of the Company for the fiscal year
ended January 31, 1996 is being mailed with this proxy statement to
shareholders entitled to vote at the meeting. The cost of all
proxy solicitation will be paid by the Company.
SHAREHOLDERS ENTITLED TO VOTE
Shareholders of record as of the close of business on May
1, 1996 are entitled to notice of and to vote at the Annual
Meeting. At that date, there were 38,238,818 shares of Common
Stock outstanding and 226,500 shares of Preferred Stock outstanding
and entitled to vote. Each outstanding share of Preferred Stock
and Common Stock is entitled to one vote on all matters submitted
to a vote of shareholders, except for matters involving mergers,
the sale of all Company assets, amendments to the Company's charter
and exchanges of Company stock for stock of another company which
require approval by a majority of each class of capital stock. In
such matters, the preferred and common shareholders will each vote
as a separate class.
Votes cast by proxy or in person at the Annual Meeting
will be tabulated by the inspector of elections appointed for the
meeting who will also determine whether a quorum is present for the
transaction of business. The Company's By-laws provide that a
quorum is present if the holders of a majority of the issued and
outstanding shares of Common Stock of the Company entitled to vote
at the meeting are present in person or represented by proxy.
Abstentions will be counted as shares that are present and entitled
to vote for purposes of determining whether a quorum is present.
Shares held by nominees for beneficial owners will also be counted
for purposes of determining whether a quorum is present if the
nominee has the discretion to vote on at least one of the matters
presented, even though the nominee may not exercise discretionary
voting power with respect to other matters and even though voting
instructions have not been received from the beneficial owner (a
"broker non-vote"). Because abstentions will be counted as shares
that are present at the meeting, abstentions will be the equivalent
of negative votes. Broker non-votes will be counted as votes for,
not against, matters presented for shareholder consideration.
Under Florida corporate law, if a quorum exists,
directors are elected by a plurality of the votes cast by the
shares entitled to vote in the election.
<PAGE>
PRINCIPAL SHAREHOLDERS
In addition to the ownership of Common Stock indicated
below, Edward C. Raymund, a director of the Company, beneficially
owns 113,260 shares of Preferred Stock (which, with the 113,240
shares owned by Annette L. Raymund, is all of the Preferred Stock
outstanding), each share of which is entitled to one vote. In
connection with the terms of an employment agreement dated as of
January 31, 1991, between Mr. Raymund and the Company (see
"Executive Compensation-Employment Agreements"), providing for Mr.
Raymund's employment from February 1, 1991 through January 31,
2001, Mr. Raymund entered into an irrevocable proxy and escrow
agreement (the "Irrevocable Proxy"). (In connection with an
amendment to the employment agreement dated November 13, 1992,
Annette L. Raymund has also entered into the Irrevocable Proxy.)
Under the terms of the Irrevocable Proxy, three of the directors of
the Company, Donald F. Dunn, Lewis J. Dunn and John Y. Williams (in
their capacity as "outside" directors of the Company), have been
granted full power and authority to vote the aggregate 226,500
shares of Preferred Stock. Each Irrevocable Proxy has a three year
term in accordance with Section 607.0722 of the Florida Business
Corporation Act. For the employment agreement to remain in effect,
successive three year Irrevocable Proxies must be executed through
January 31, 2001.
The following table sets forth certain information
regarding the beneficial ownership of the Company's Common Stock
(information regarding the Company's Preferred Stock is set forth
in the preceding paragraph and under "Executive Compensation-
Employment Agreements") as of May 1, 1996, by (i) each person known
by the Company to own beneficially more than 5% of the shares of
the Company's Common Stock, (ii) each of the Company's directors,
(iii) the Company's Executive Officers (as defined under "Executive
Compensation"), and (iv) such directors and all executive officers
as a group.
Amount and
Name of Nature of Percent of
Beneficial Owner(1) Beneficial Ownership(2) Class
- ------------------- ----------------------- ---------
Charles E. Adair 6,000 (3) *
Peggy K. Caldwell 39,608 (4) *
Daniel M. Doyle 13,000 (5) *
Donald F. Dunn 21,000 (6) *
Lewis J. Dunn 22,700 (7) *
A. Timothy Godwin 126,261 (8) *
Jeffery P. Howells 50,935 (9) *
James T. Pollard 60,088 (10) *
Edward C. Raymund 269,126 (11) *
Steven A. Raymund 3,763,056 (12) 9.7%
John Y. Williams 31,000 (13) *
All executive officers and
directors as a group (19 persons) 5,037,296 (14) 13.0%
FMR Corp. 4,401,400 (15) 11.5%
82 Devonshire Street
Boston, MA 02109
T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202 2,072,800 (16) 5.4%
- ----------
* Beneficial ownership represents less than 1% of the
Company's outstanding shares of Common Stock.
2
<PAGE>
(1) The address for all of the above-listed beneficial
owners (except as otherwise set forth) is: 5350 Tech Data
Drive, Clearwater, Florida 34620.
(2) Under the rules of the Securities and Exchange
Commission, a person is deemed to be a "beneficial owner" of a
security if that person has or shares "voting power", which
includes the power to vote or to direct the voting of such
security, or "investment power", which includes the power to
dispose of or to direct the disposition of such security. A
person is also deemed to be a beneficial owner of any
securities of which that person has the right to acquire
beneficial ownership within sixty (60) days. Under these
rules, more than one person may be deemed to be a beneficial
owner of the same securities and a person may be deemed to be
a beneficial owner of securities as to which he has no
beneficial interest.
(3) Includes 1,000 shares that may be acquired upon the
exercise of stock options which are exercisable within 60 days
of May 1, 1996.
(4) Includes 38,000 shares that may be acquired upon the
exercise of stock options which are exercisable within 60 days
of May 1, 1996. Also includes 838 shares in the Company's
Employee Stock Ownership Plan (the "ESOP").
(5) Includes 3,000 shares that may be acquired upon the
exercise of stock options which are exercisable within 60 days
of May 1, 1996.
(6) Includes 1,000 shares that may be acquired upon the
exercise of stock options which are exercisable within 60 days
of May 1, 1996.
(7) Includes 17,000 shares that may be acquired upon the
exercise of stock options which are exercisable within 60 days
of May 1, 1996.
(8) Includes 106,500 shares that may be acquired upon the
exercise of stock options which are exercisable within 60 days
of May 1, 1996. Also includes 4,761 shares held in his ESOP
account.
(9) Includes 50,000 shares that may be acquired upon the
exercise of stock options exercisable within 60 days of May 1,
1996. Also includes 735 shares held in his ESOP account.
(10) Includes 40,000 shares that may be acquired upon the
exercise of stock options which are exercisable within 60 days
of May 1, 1996. Also includes 88 shares held in his ESOP
account.
(11) Includes 171,000 shares owned by a trust of which he
is the trustee; includes 90,000 shares owned by a partnership
of which he is a general partner; and includes 8,126 shares
held in his ESOP account.
(12) Includes 3,404,670 shares owned by a partnership
which is indirectly owned by Mr. Raymund; includes 38,500
shares owned by inter vivos trusts of which he is a trustee;
and includes 147,886 shares held in his ESOP account.
(13) Includes 21,000 shares that may be acquired upon the
exercise of stock options which are exercisable within 60 days
of May 1, 1996.
(14) Includes 556,700 shares that may be acquired upon the
exercise of stock options which are exercisable within 60 days
of May 1, 1996. Also includes 663,831 shares owned by the
ESOP for which certain officers of the Company serve as
trustees. Such officers are deemed to be beneficial owners of
such shares.
(15) Ownership information of FMR Corp. is based on its
Schedule 13G filed with the Securities and Exchange
Commission, dated February 14, 1996, which reported that FMR
Corp. had sole voting power over 65,900 of these shares.
(16) Ownership information of T. Rowe Price Associates,
Inc. is based on its Schedule 13G filed with the Securities
and Exchange Commission, dated February 14, 1996, which
reported that T. Rowe Price Associates, Inc, had sole voting
power over 18,400 of these shares.
3
<PAGE>
ELECTION OF DIRECTORS
Proxies in the accompanying form will be voted at the
meeting, unless authority to do so is withheld, in favor of the
election as directors of the nominees named below.
Pursuant to the Company's Articles of Incorporation, the
Board of Directors is divided into three classes, terms of which
expire alternately over a three-year period. At each Annual
Meeting of Shareholders, successors to directors whose terms expire
at that meeting shall be elected for three-year terms. Two
directors are to be elected at this Annual Meeting of Shareholders
to hold office for a term of three years expiring at the 1999
Annual Meeting of Shareholders, to hold office until their
successors shall have been elected and qualified. In the event any
nominee is unable to serve, the persons designated as proxies may
cast votes for other persons as substitute nominees. The Board of
Directors has no reason to believe that any of the nominees named
below will be unavailable, or if elected, will decline to serve.
Certain information is given below for the nominees for
directors, and for each director whose term of office will continue
after the Annual Meeting. The statements as to beneficial
ownership of the shares of the Company are in each instance based
upon information furnished by the nominee or director.
Principal Occupation Director
Nominee Age and Other Information Since
- ------- --- --------------------- ---------
NOMINEES FOR DIRECTOR - TERMS TO EXPIRE 1999
Donald F. Dunn(1)(2)(3) 70 Donald F. Dunn has been 1991
a director of Eckerd
Corporation (a retail drug
store chain) since 1986.
Mr. Dunn has also been a
director of Proffitt's, Inc.
(a department store chain) since
since February 1996. From 1977
to August 1988 he was Senior
Vice President and a director of
Allied Stores Corporation. From
May 1987 to August 1988 he was
Chairman and Chief Executive
Officer of Maas Brothers/Jordan
Marsh (a division of Allied
Stores Corporation). Mr. Dunn
holds a B.S. Degree from Babson
Institute.
A. Timothy Godwin 46 A. Timothy Godwin joined the 1991
Company in July 1989 as Senior
Vice President of Finance and
assumed the responsibilities of
Chief Financial Officer in
November 1989. Mr. Godwin was
promoted to President and Chief
Operating Officer in November
1991. In September 1995, Mr.
Godwin was appointed Vice Chairman.
From 1987 to June 1989 Mr. Godwin
was employed by Price Waterhouse
as an audit partner. Mr. Godwin
is a certified public accountant
and holds a B.S. Degree in Accounting
from the University of West Florida.
4
<PAGE>
Principal Occupation Director
Nominee Age and Other Information Since
- ------- --- --------------------- ---------
DIRECTORS CONTINUING IN OFFICE - TERMS TO EXPIRE 1998
Charles E. Adair (2)(3) 48 Charles E. Adair since 1992 1995
has been the President of
Adair & Associates, Inc.
(a private investment and
consulting firm) and since
1993 has been President of
Kowaliga Capital, Inc. (a
venture capital management
firm). Prior thereto, for
nineteen years he was employed
employed by Durr-Fillauer
Medical, Inc., then a
publicly-held distributor of
pharmaceutical products of major
healthcare manufacturers, serving
as President and Chief Operating
Officer from 1981 to 1992.
Mr. Adair also is a director
of Performance Food Group, Inc.
(a food processing and
distributing company) and
Boyd Bros. Transportation, Inc.
(a transportation company).
Mr. Adair, who is a certified
public accountant, attended
Vanderbilt University and holds
a B.S. Degree in Accounting from
the University of Alabama.
Edward C. Raymund(4) 67 Edward C. Raymund has been 1974
employed continuously by the
Company in various management
positions since he founded it
in 1974 and is currently the
Chairman Emeritus. Mr. Raymund
has been a director of PC Service
Source, Inc. (personal computer
parts distribution) since March
1994. Mr. Raymund holds a B.S.
Degree in Finance from the
University of Southern California.
John Y. Williams(2)(3) 53 John Y. Williams has been a 1988
Managing Director of Grubb
& Williams, Ltd. ("GWL"),
(an Atlanta-based merchant
banking firm) since 1987 and
principal of Equity-South
Partners L.P. (a merchant
banking affiliate of GWL)
since January 1995. Prior
thereto, he was an investment
banker for more than 18 years
with several firms.
Mr. Williams has been a
director of Law Companies
Group, Inc. (an engineering
consulting firm) since
December 1995. Mr. Williams
holds a B.I. Engr. Degree from
Georgia Institute of Technology
and an MBA Degree from the
Harvard Business School.
5
<PAGE>
Principal Occupation Director
Nominee Age and Other Information Since
- ------- --- --------------------- ---------
DIRECTORS CONTINUING IN OFFICE - TERMS TO EXPIRE 1997
Lewis J. Dunn(1)(2)(3) 70 Lewis J. Dunn has been a 1986
senior consultant with Price
& Donoghue, P.A. (a public
accounting firm) since
November 1992. From May
1989 to November 1992 he
was a Realtor-Associate.
From September 1985 to
April 1989, Mr. Dunn was
the Chief Executive Officer
and Chairman of the Gulf Bank
of Dunedin, Florida. From 1972
to November 1984 Mr. Dunn was
President and Chief Executive
Officer of Sun Bank/Suncoast.
Mr. Dunn holds a B.S. Degree in
Economics from the University of
Illinois.
Daniel M. Doyle(2)(3) 55 Daniel M. Doyle has been 1994
the Chief Executive Officer
and a director, since
January 1987, of Danka
Business Systems PLC which
owns Danka Industries, Inc.,
(a distributor of automated
office equipment and related
services). Mr. Doyle was
one of the founders of Danka
Industries, Inc. Mr. Doyle
attended John Carroll University.
Steven A. Raymund(4) 40 Steven A. Raymund has 1986
been employed by the
Company since 1981. He
has served as Chief
Executive Officer since
January 1986 and as
Chairman of the Board
since April 1991. In
March 1993, Mr. Raymund
became a director of
Sports & Recreation, Inc.
(a retail sporting goods
chain). In January 1996,
Mr. Raymund became a
director of Jabil Circuit,
Inc. (manufacturer of
circuit boards). He has
a B.S. Degree in Economics
from the University of
Oregon and a Masters Degree
from the Georgetown University
School of Foreign Service.
(1) Donald F. Dunn is not related to Lewis J. Dunn.
(2) Member of the Compensation Committee.
(3) Member of the Audit Committee.
(4) Steven A. Raymund is the son of Edward C. Raymund.
The Board of Directors held four meetings during the
fiscal year ended January 31, 1996. The current standing committees
of the Board of Directors are the Audit Committee and the
Compensation Committee. The Audit Committee and the Compensation
Committee each met twice during the fiscal year ended January 31,
1996. All directors attended at least 75% of the meetings of the
Board of Directors and all Committees on which they served during
the fiscal year ended January 31, 1996. The function of the Audit
Committee is to meet periodically with the Company's independent
auditors to review the scope and results of the audit and to
6
<PAGE>
consider various accounting and auditing matters related to the
Company, including its internal control structure. The Audit
Committee also makes recommendations to the Board of Directors
regarding the independent public accountants to be appointed as the
Company's auditors. The function of the Compensation Committee is
to meet periodically to review and recommend management
compensation plans.
During the fiscal year ended January 31, 1996, the
executive officers and directors of the Company filed with the
Securities and Exchange Commission (the "SEC") on a timely basis
all required reports relating to transactions involving equity
securities of the Company beneficially owned by them except that
Lewis J. Dunn filed one late report covering a gift of shares to a
charitable organization. The Company has relied on the written
representation of its executive officers and directors and copies
of the reports they have filed with the SEC in providing this
information.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table presents certain summary information
concerning compensation paid or accrued by the Company for services
rendered in all capacities during the fiscal years ended January
31, 1996, 1995 and 1994 for (i) the Chief Executive Officer of the
Company and (ii) each of the four other most highly compensated
executive officers of the Company (determined as of the end of the
last fiscal year) whose total annual salary and bonus exceeded
$100,000 (collectively, the "Executive Officers").
<TABLE>
<CAPTION>
Summary Compensation Table
Long-term
Compensation
Annual Compensation Awards
-------------------- -------------
Name and And All Options All Other
Principal Position Year Salary Bonus Compensation (Shares) Compensation
- ------------------ ---- -------- -------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Steven A. Raymund 1996 $400,000 $400,000 $5,000 100,000 $5,000
Chairman of the Board 1995 400,000 222,000 5,000 200,000 5,000
of Directors and Chief 1994 375,000 425,000 5,000 150,000 7,575
Executive Officer
A. Timothy Godwin 1996 250,000 150,000 5,000 150,000 5,000
Vice Chairman, 1995 250,000 85,000 5,000 100,000 (1) 5,000
President and Chief 1994 225,000 146,000 5,000 100,000 7,575
Operating Officer
Peggy K. Caldwell 1996 185,000 83,000 5,000 85,000 5,000
Senior Vice President 1995 175,000 70,000 5,000 50,000 (1) 5,000
of Sales and Marketing 1994 170,000 80,000 5,000 50,000 7,575
Jeffery P. Howells 1996 185,000 83,000 5,000 85,000 5,000
Senior Vice President 1995 170,000 47,000 5,000 50,000 (1) 5,000
of Finance and 1994 145,000 44,000 5,000 50,000 5,787
Chief Financial
Officer
James T. Pollard 1996 185,000 83,000 5,000 85,000 5,000
Senior Vice President 1995 170,000 47,000 5,000 50,000 (1) 1,525
of Logistics and Chief 1994 42,000 17,000 5,000 50,000 -
Information Officer
</TABLE>
(1) All fiscal year 1995 stock options were canceled and
reissued in fiscal year 1996 and are included in the total of fiscal
year 1996 stock option grants.
8
<PAGE>
Option Grants in Last Fiscal Year
The following table provides details regarding stock
options granted to the Executive Officers during the fiscal year
ended January 31, 1996.
<TABLE>
<CAPTION>
Number of % of Total
Options Options
Granted Granted to Grant Date
in Employees in Exercise Expiration Present
Name 1996(1) Fiscal Year Price($/Sh) Date Value(2)
- --------- --------- ------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Steven A. Raymund 100,000 5.9% $10.63 4/04/05 $685,000
A. Timothy Godwin 50,000 3.0 10.63 4/04/05 342,000
100,000 (3) 5.9 14.63 3/21/04 930,000
Peggy K. Caldwell 35,000 2.1 10.63 4/04/05 240,000
50,000 (3) 3.0 14.63 3/21/04 465,000
Jeffery P. Howells 35,000 2.1 10.63 4/04/05 240,000
50,000 (3) 3.0 14.63 3/21/04 465,000
James T. Pollard 35,000 2.1 10.63 4/04/05 240,000
50,000 (3) 3.0 14.63 3/21/04 465,000
- ----------
</TABLE>
(1) All options were granted at an exercise price equal to
the fair market value of the Company's Common Stock on the date
of grant. Options are exercisable after two (2) years of
continued employment after the date of grant. Options are
exercisable only to the extent of forty percent (40%) of the
total number of shares subject to option after the expiration of
two (2) years following the date of grant; only to the extent of
sixty percent (60%) of the total number of optioned shares after
the expiration of three (3) years following the date of grant;
only to the extent of eighty percent (80%) of the total number
of shares subject to option after the expiration of four (4)
years following the date of grant; and in full only after the
expiration of five (5) years following the date of grant. For
more information regarding the Company's stock option plans, see
"Stock Option Plans".
(2) In accordance with Securities and Exchange Commission
rules, the Black-Scholes option pricing model was chosen to estimate
the grant date present value of the options set forth in this table.
The Company's use of the model should not be construed as an
endorsement of its accuracy at valuing options. All stock option
valuation models, including the Black-Scholes model, require a
prediction about the future movement of the stock price. The
following assumptions were made for purposes of calculating the Grant
Date Present Value: (i) for the $10.63 option, an option term of ten
years, volatility at .3936, dividend yield at 0.0%, and an interest
rate of 7.2% annually, (ii) for the $14.63 option, an option term of
8.3 years, volatility at .5022, dividend yield at 0.0%, and an
interest rate of 5.74%. The Company does not believe that the Black-
Scholes model, or any other model can accurately determine the value
of an employee stock option. Accordingly, there is no assurance that
the value, if any, realized by an executive, will be at or near the
value estimated by the Black-Scholes model. Future compensation
resulting from option grants is based solely on the performance of
the Company's stock price.
(3) Represents stock options originally granted in fiscal
year 1995 which were canceled and reissued in fiscal year 1996. See
the "Ten-Year Option/SAR Repricings" table on page 10.
9
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
Shares Value of Unexercised
Acquired Number of Unexercised In-the-Money Options
on Exercise Value Options at Year-End at Year-End
Name in 1996 Realized Exercisable Unexercisable Exercisable Unexercisable
- -------- --------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven A. Raymund - - 60,000 390,000 $ 99,750 $449,625
A. Timothy Godwin - - 98,000 242,000 367,750 366,000
Peggy K. Caldwell - - 44,000 131,000 157,000 230,500
Jeffery P. Howells - - 32,000 127,000 106,875 209,875
James T. Pollard - - 20,000 115,000 7,500 116,250
</TABLE>
Ten-Year Option/SAR Repricings
The following table provides information on all option repricings for
the Executive Officers during the last ten fiscal years.
<TABLE>
<CAPTION> Length of Original
Number of Shares Market Price of Option Term
of Common Stock Common Stock Exercise Price Remaining at
Underlying Options at at Time of New Exercise Date of
Name Date Repriced Time of Repricing Repricing Price Repricing(1)
- ------ ---- ----------------- --------------- ---------- ------------ ------------
<S> <S> <C> <C> <C> <C> <C>
A. Timothy Godwin 11/28/95 100,000 $14.63 $20.25 $14.63 8 yrs., 4 months
Peggy K. Caldwell 11/28/95 50,000 14.63 20.25 14.63 8 yrs., 4 months
Jeffery P. Howells 11/28/95 50,000 14.63 20.25 14.63 8 yrs., 4 months
James T. Pollard 11/28/95 50,000 14.63 20.25 14.63 8 yrs., 4 months
</TABLE>
(1) See footnote 1 to the table above entitled "Option Grants in
Last Fiscal Year." The exercise of these repriced options will correspond
to their original date of grant, March 21, 1994. Accordingly, the first
vesting date will be March 21, 1996.
10
<PAGE>
Compensation Committee Report on Executive Compensation
Introduction
The Compensation Committee of the Board of Directors
composed entirely of independent, non-employee directors,
recommends to the Board the compensation of Executive Officers.
The Company is required to provide herein certain information
concerning compensation provided to the Company's Chairman and
Chief Executive Officer and the four other most highly compensated
Executive Officers. The disclosure requirements for the Executive
Officers include the use of tables and a report of the Committee
responsible for compensation decisions for the named Executive
Officers, explaining the rationale and considerations that led to
those compensation decisions. Therefore, the Compensation
Committee of the Board of Directors has prepared the following
report for inclusion in this Proxy Statement.
Compensation Committee Role
The Compensation Committee of the Board of Directors is
responsible for making recommendations to the Board of Directors
concerning the salaries of Executive Officers. The Committee's
responsibilities include the review of salaries, benefits and other
compensation of senior officers and making recommendations to the
full Board of Directors with respect to these matters.
Compensation Philosophy
The compensation philosophy for Executive Officers
generally conforms to the compensation philosophy of the Company
for all employees. The Company's compensation is designed to:
o provide compensation comparable to that offered by
companies with similar businesses, allowing the Company to
successfully attract and retain the employees necessary to its
long-term success;
o provide compensation which relates to the performance of
the individual and differentiates based upon individual
performance;
o provide incentive compensation that varies directly with
both Company performance and individual contribution to that
performance; and
o provide an appropriate linkage between compensation and
the creation of shareholder value through awards tied to the
Company's performance and through facilitating employee stock
ownership.
Executive Officers' Compensation Program
The Company's Executive Officers' compensation program is
comprised of base salary, annual cash performance bonus plan
compensation and long-term incentive compensation in the form of
stock options. In addition, the Company's Executive Officers
receive various other benefits, including medical benefits,
participation in an employee stock ownership plan and a retirement
savings plan, all of which are generally available to other U.S.
employees of the Company.
Base Salary
The Compensation Committee reviewed the salaries of the
Executive Officers of the Company in March 1995. The Committee
made salary decisions about the Executive Officers based upon a
variety of considerations in conformance with the compensation
philosophy stated above. First, salaries are competitively set
relative to companies in the distribution industry and other
comparable companies. Second, the Committee considered the
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performance of the individual Executive Officer with respect to the
areas under his or her responsibility, including an assessment of
the value of each to the Company. Third, internal equity among
employees was factored into the decision. Finally, the
Compensation Committee considered the Company's financial
performance and its ability to absorb any increases in salaries.
Other comparable companies included distributors of
computers, electronics, pharmaceuticals, food and office supplies
with similar or larger annual revenues. The Committee believes
that the dynamics of such kinds of companies in the distribution
industry are similar to the Company.
The Committee believes that it sets Company base salaries
within the range of salaries paid by the majority of the peer
corporations which are in the distribution industry and included in
the "Stock Price Performance Graph" on page 20. In developing base
salary ranges, in addition to the peer corporations, the Committee
also considered each Executive Officer's experience level and scope
of responsibility as well as considering a March 1995 compensation
study prepared by the Company's human resources department. The
study included a survey of compensation certain peer
companies which are in the distribution industry and included in
the "Stock Price Performance Graph" on page 20 as well as other
regional and market data. In conducting its salary deliberations,
the Committee did not strictly tie senior executive base pay to a
defined competitive standard. Rather, the Committee elected to
maintain flexibility in its decision making capacity so as to
permit salary recommendations that best reflect the individual
contributions made by the Company's top executives.
Base salaries for Executive Officers are determined with
references to a position rate for each officer. These position
rates are determined annually by evaluating the responsibilities of
the position and comparing it with other executive officer
positions in the market place. It is often difficult to compare
the duties and responsibilities of Company Executive Officers to
those included in the peer group or in competitive positions
because comparable job titles are not necessarily comparable to
duties and responsibilities. However, the Committee generally
sought to establish base salaries within the range of the peer
group companies and the companies surveyed by its human resources
department and based upon the nature of the Executive Officer
position.
Based upon his strategic direction and the Company's
continuing sustained growth and increasing market share, the
Committee set the base salary of its Chief Executive Officer,
Steven A. Raymund, at the average range referred to above.
The Compensation Committee established targets for the
annual base salary and the cash bonus awards for Mr. Raymund based
upon his responsibilities compared to the breadth and scope of the
responsibilities of other chief executive officers of companies in
the distribution industry. The Committee then splits such targeted
annual earnings evenly between base salary and cash bonus awards.
The cash bonus awards are further split into a quantitative portion
(80%), based primarily upon earnings per share and return on
current assets and a qualitative portion (20%), based upon the same
qualitative objectives established for other Executive Officers and
set forth below under the caption "Cash Bonus Awards".
Cash Bonus Awards
Each Executive Officer, including the Chief Executive
Officer, is eligible to receive an annual cash bonus award. These
cash bonuses generally are paid pursuant to an incentive
compensation plan established at the beginning of a fiscal year in
connection with the Company's preparation of its annual operating
budget for such year. Under the incentive compensation plan, an
Executive Officer's potential bonus for a given year is established
at a fixed dollar amount and consists of discretionary and non-
discretionary awards which are tied primarily to the financial
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performance of the Company for such year in relation to the
Company's operating budget, as well as any particular
accomplishments achieved by the executive during such year in his
or her area of responsibility. In formulating recommendations to
the Board with respect to cash bonus awards, the Compensation
Committee members evaluate the Executive Officer's responsibilities
and role in the Company and such other factors as they deem
relevant to motivate such executive to achieve strategic budgeted
performance levels.
Non-discretionary awards are based on the financial
performance of the Company, currently based primarily upon earnings
per share (65%) and return on current assets (35%). Executive
Officers, other than the Chief Executive Officer and the Chief
Operating Officer, received 70% of their non-discretionary
potential bonus based upon the quantitative corporate performance
levels.
Discretionary awards are based upon qualitative
objectives established at the beginning of the fiscal year and
include restoration of customer service levels subsequent to the
December, 1994 systems conversion, human resource management,
systems and operational enhancements, and other mutually agreed
upon goals of the executive officers. There are no guaranteed
discretionary bonus awards.
Discretionary and non-discretionary awards are limited to
individual and corporate goals established at the beginning of each
fiscal year. As such performance goals are met or exceeded,
executives are rewarded commensurately. If performance goals are
not met, there are no awards to executives.
Stock Option Awards
The Company maintains stock option plans which are
designed to align Executive Officers' and shareholders' interests
in the enhancement of shareholder value. The long-term component
of the Company's incentive compensation program consists of the
grant of non-transferable stock options. The stock options are
designed to create a mutuality of interest with shareholders by
motivating the Chief Executive Officer and the other Executive
Officers and key employees to manage the Company's business so that
the shareholders' investment will grow in value over time. Stock
options are granted under these plans by the outside directors of
the Board. Executive Officers are eligible to receive options
under these plans. The Compensation Committee strongly believes
that the interests of shareholders and executives become more
closely aligned when such executives are provided an opportunity to
acquire a proprietary interest in the Company through ownership of
the Company's Common Stock. Accordingly, key employees of the
Company, including Executive Officers, as part of their overall
compensation package, are eligible for participation in the
Company's Stock Option Plans, whereby they are granted at no less
than fair market value on the date of grant, and are exercisable in
annual installments beginning two years after the date of grant.
Because no benefit is received unless the Company's stock price
performs favorably, awards under the Stock Option Plans are
intended to provide incentives for Executive Officers to enhance
long-term Company performance, as reflected in stock price
appreciation, thereby increasing shareholder value.
In general, stock option awards are granted on an annual
basis if warranted by the Company's growth and profitability. The
Compensation Committee, which also serves as the Stock Option
Committee, evaluates the Company's overall financial performance
for the year, the desirability of long-term service from an
Executive Officer and the number of options issued to other
executive officers in the Company with the same, more or less
responsibility than the Executive Officer at issue. To encourage
long-term performance, options vest over a five-year period and
remain outstanding for ten years.
The Compensation Committee believes that stock option
awards are the incentive for continued growth and performance. The
amount of the grants are principally based on overall consolidated
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results of the Company, achievement of Company objectives,
individual performance, including managerial effectiveness,
initiative and team work, and are in such amounts that reflect what
the Committee believes are necessary to attract, retain and
motivate senior management and other key employees. The Stock
Option Plans are the Company's only long-term deferred compensation
plans as compared to other companies which have other deferred
compensation plans in addition to stock option plans.
Option Repricings
On November 28, 1995, the Board of Directors canceled
options originally granted on March 21, 1994 to the Executive
Officers and key employees under the Company's 1990 Stock Option
Plan. An equal number of options were received on the same date.
(Options granted to the Chief Executive Officer were not repriced
and remain at the original exercise price of $20.25 per share.)
The Board determined that the stock options granted in March 1994
did not provide adequate incentive to retain Executive Officers and
key employees and that repricing of the shares of Common Stock
underlying the options would be in the long term best interest of
the Company and its shareholders.
COMPENSATION COMMITTEE
Donald F. Dunn, Chairman
Charles E. Adair
Daniel M. Doyle
Lewis J. Dunn
John Y. Williams
May 10, 1996
The report of the Compensation Committee shall not be
deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing
under the Securities Act of 1933 or under the Securities Exchange
Act of 1934 (together, the "Acts"), except to the extent that the
Company specifically incorporates this information by reference,
and shall not otherwise be deemed filed under such Acts.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Charles E. Adair,
Daniel M. Doyle, Donald F. Dunn, Lewis J. Dunn and John Y.
Williams. None of the Committee members are Executive Officers of
the Company.
Directors' Compensation
Directors who are not employees of the Company received a
$10,000 annual retainer fee ($15,000 effective for fiscal year
1997) and a $1,500 attendance fee for each meeting plus
reimbursement for out-of-pocket expenses. Members of the Audit and
Compensation Committees receive a $1,000 attendance fee when
meetings of such Committees are not held on the same day as a Board
of Directors meeting.
Pursuant to the terms of the Directors' Stock Option
Plan, each non-employee director who for the first time is
appointed a director of the Company receives a New Director Grant
of an option to purchase 5,000 shares of Common Stock of the
Company at an exercise price per share equal to the fair market
value of the shares of Common Stock at the date of grant. Each
non-employee director who is re-elected or otherwise continues to
serve on the Board will receive on the date of each annual
shareholders meeting an Annual Director Grant consisting of an
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option to purchase 1,000 shares of Common Stock of the Company at
an exercise price per share equal to the fair market value of the
shares of Common Stock at the date of each annual shareholders
meeting, provided the director has served on the Board for at least
six months. New Directors Grants vest 20% per year over five years
from the date of grant and Annual Director Grants vest after one
year from the date of grant.
Employment Agreements
Effective as of January 31, 1991, the Company entered
into a ten-year employment agreement with Edward C. Raymund.
During the employment period which began on February 1, 1994 and
ends on January 31, 2001, Mr. Raymund receives an annual salary of
$176,400 provided that the Irrevocable Proxy is renewed. See
"Principal Shareholders." Pursuant to a settlement agreement
between Mr. Raymund and his former wife, Annette L. Raymund, Mrs.
Raymund shares fifty percent of Mr. Raymund's salary in accordance
with an amendment to the employment agreement dated November 13,
1992. The employment agreement, as amended, also provides for the
continuation of fifty percent of Mr. Raymund's salary to Annette L.
Raymund and fifty percent to his designated beneficiary in the
event of his death prior to January 31, 2001, provided that the
Irrevocable Proxy is renewed. The employment agreement further
provides that the Company shall continue to cause Mr. Raymund to be
a nominee and support such nomination for election as a member of
the Board of Directors so long as he owns of record or beneficially
250,000 or more shares of Common Stock of the Company.
Effective December 5, 1995, the Company entered into an
Employment Agreement with A. Timothy Godwin pursuant to which Mr.
Godwin assumed the position of Vice Chairman of the Company. See
"Principal Shareholders." Under the Agreement either the Company
or Mr. Godwin can initiate a "Transition Period," which will run
for a mutually agreed upon time of not less than thirty (30) days
nor more than ninety (90) days, during which time he will continue
to receive compensation, including salary (plus pro-rata bonus) and
fringe benefits. Upon the conclusion of the Transition Period, Mr.
Godwin will commence a four (4) year "Notice Period" as an employee
with full medical benefits, ESOP vesting, 401(k) participation and
associated general employee benefits. He will be paid an aggregate
salary totaling $500,000 over that four year period. Should Mr.
Godwin become a full-time or part-time employee of another entity,
the four (4) year schedule will accelerate and Mr. Godwin will
receive payment in full of all unpaid sums within thirty (30) days
of the date he formally terminates his employment with the Company.
Pursuant to the Employment Agreement, Mr. Godwin's stock
options will continue to vest at the established rates for a period
of two (2) years from the end of the Transition Period. At the
conclusion of the two-year period all unvested options will vest
forward at the established exercise price and must be exercised
within one (1) year. Vested stock options not exercised within the
one (1) year period will expire. Should Mr. Godwin become a full-
time or part-time employee of a competitor of the Company during
the two-year period from the end of the Transition Period, he will
then have one (1) year from the date of such employment to exercise
options which have vested by that date.
Stock Option Plans
The Company adopted its 1985 Incentive Stock Option Plan
(the "1985 Plan") in order to grant options to its employees to
give them a greater interest in the success of the Company and an
added incentive to continue in its employment. A total of
1,050,000 shares of Common Stock were reserved for issuance
pursuant to the 1985 Plan. As of January 31, 1996, there were
4,260 shares underlying unexercised options granted under the 1985
Plan. No options may be granted under the 1985 Plan after July 31,
1995. The 1985 Plan is administered by the Compensation Committee
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of the Board of Directors. All options under the 1985 Plan must be
granted at an exercise price of not less than fair market value on
the date of grant. Options become exercisable two years from the
date of grant. Options granted to an optionee terminate ninety
days after termination of employment except for termination for
cause. Options also terminate in ninety days in the case of
disability or retirement and one year thereafter in the case of
death of the optionee.
The Company adopted the 1990 Incentive and Non-Statutory
Stock Option Plan (the "1990 Plan") in June 1990 in order to grant
options to its officers and employees and for certain other
individuals providing services to or acting as directors of the
Company, and like the 1985 Plan, to enable them to acquire or
increase their proprietary interest in the Company. A total of
5,000,000 shares of Common Stock have been reserved for issuance
pursuant to the 1990 Plan. As of January 31, 1996, there were
3,072,850 shares underlying unexercised options granted under the
1990 Plan and 1,689,082 shares available for grant under such
Plan. The 1990 Plan is administered by the Compensation Committee
of the Board of Directors. All options under the 1990 Plan must be
granted at an exercise price of not less than fair market value on
the date of grant. Option granted under the 1990 Plan vest over
five years following the date of grant. Options granted to an
optionee terminate ninety days after termination of employment
except for termination for cause. Options also terminate in ninety
days in the case of disability or retirement and one year
thereafter in the case of death of the optionee. No options may be
granted under the 1990 Plan after June 21, 2000.
The Company adopted the 1995 Non-Employee Directors Non-
Statutory Stock Option Plan (the "1995 Plan") in June 1995 in order
to grant options to its non-employee directors for acting as
directors of the Company, and like the 1985 and 1990 Plans, to
enable them to acquire or increase their proprietary interest in
the Company. A total of 100,000 shares of Common Stock were
reserved for issuance pursuant to the 1995 Plan. As of January 31,
1996, there were 4,000 shares underlying unexercised options
granted under the 1995 Plan and 96,000 shares available for grant
under such Plan. The 1995 Plan is considered a "formula plan."
Grants under such Plan and the amount, nature and timing of the
grants are automatically determined and are not subject to the
determination of the Board or any option committee. All options
under the 1995 Plan must be granted at an exercise price of not
less than fair market value on the date of grant. See "Directors
Compensation." Options granted to an optionee terminate ninety
days after the optionee ceases to be a member of the Board.
Options also terminate in ninety days in the case of disability or
retirement and one year thereafter in the case of death of the
optionee. No options may be granted under the 1995 Plan after June
20, 2005.
Employee Stock Ownership Plan
All U.S. employees of the Company are eligible to
participate in its ESOP. Employees automatically become
participants in the ESOP after one year of qualified service. Each
year the Company may contribute an amount to the plan that it
determines in its sole discretion. The Board of Directors approved
a contribution of $1,325,000 for the fiscal year ended January 31,
1996. Contributions to the ESOP may be made either in Common Stock
of the Company or in cash. Each employee who is a participant in
the ESOP on the last day of the plan year is entitled to share in
the Company's contributions for that year, as are employees (or
their beneficiaries) who are not participants on the last day of
the year because of retirement, disability or death during the
year. Each employee shares in the Company's contribution to the
ESOP in the same percentage that his salary bears to the total
amount of salaries paid during the year to all participants
entitled to share in the Company's contribution. The amount in
each participant's account vests fully after seven years.
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<PAGE>
Employee Stock Purchase Plan
All U.S. employees of the Company are entitled to
participate in the Company's 1995 Employee Stock Purchase Plan (the
"Stock Purchase Plan"), approved by shareholders in June 1995. The
Stock Purchase Plan provides incentives to present and future
employees of the Company and its subsidiaries to share in the
growth of the Company by acquiring or increasing their proprietary
interest in the Company. The Stock Purchase Plan is an "employee
stock purchase plan" under Section 423 of the Code. A maximum of
1,000,000 shares of Common Stock are available for issuance under
the Stock Purchase Plan. The Stock Purchase Plan has an indefinite
term.
The price per share to be paid by participants under the
Stock Purchase Plan is not less than 85% of the fair market value
of the Common Stock on the exercise date. The exercise price is
payable through payroll deductions from the participant's
compensation and lump-sum contributions by the participant. No
participant will be granted an option which permits him to purchase
in excess of $25,000 of fair market value of Common Stock per
calendar year.
Retirement Savings Plan
The Company's retirement savings plan (the "Savings
Plan") combines a salary deferral arrangement with matching Company
contributions. The Company's U.S. employees are eligible to
participate in the Savings Plan once they have completed a year of
service.
The Savings Plan permits a qualified employee to defer a
portion of his compensation in accordance with the provisions of
Section 401(k) of the Internal Revenue Code of 1986, as amended.
The Company may match amounts deferred in the Savings Plan and, in
its discretion, make additional retirement contributions to the
Savings Plan from Company profits. The maximum deferred amount of
total compensation permitted under the Savings Plan for an employee
during the plan year ended December 31, 1995 was $9,240. The Board
of Directors approved matching Company contributions to the Savings
Plan for the fiscal year ended January 31, 1996 of $.50 per dollar
of the first 5% of salary deferred by an employee up to the first
$1,000 deferred. The Company's matching contribution for fiscal
year 1996 amounted to $354,000. The amount deferred by an employee
in his account and the amount in his matching account are fully
vested at all times. Any retirement contributions made by the
Company become fully vested after seven years.
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STOCK PRICE PERFORMANCE GRAPH
The following graph presents a comparison of the
cumulative total shareholder return on the Company's Common Stock
with the NASDAQ Stock Market (U.S.) Index and the average
performance of a group consisting of the Company's peer
corporations on a line-of-business basis. The companies making up
the peer corporations group are AmeriQuest Technologies, Inc., Arrow
Electronics, Inc., Avnet, Inc., Marshall Industries, Merisel, Inc.,
Southern Electronics Corporation, United Stationers, Inc. and Western
Micro Technology. Robec, Inc., which was included in last year's peer
corporation group, was replaced by AmeriQuest Technologies, Inc., which
merged with Robec, Inc. in 1995. This graph assumes that $100 was
invested on January 31, 1991 (or such later date the applicable
company registered its common stock under Section 12 of the
Securities Exchange Act of 1934) in the Company's Common Stock and
in the other indices, and that all dividends were reinvested and
are weighted on a market capitalization basis at the time of each
reported data point. The stock price performance shown below is
not necessarily indicative of future price performance.
[Graph]
<TABLE>
<CAPTION>
Nasdaq Stock Microcomputer
Measurement Period Tech Data Market (U.S.) Distribution
(Fiscal Year Covered) Corporation Index Index
-------------------- ----------- -------------- -------------
<S> <C> <C> <C>
1991 100 100 100
1992 351 153 136
1993 523 173 185
1994 702 199 231
1995 493 190 188
1996 507 268 255
</TABLE>
The stock price performance graph shall not be deemed
incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the Acts,
except to the extent that the Company specifically incorporates
this information by reference, and shall not otherwise be deemed
filed under the Acts.
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INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Price Waterhouse LLP has served as
independent accountants of the Company since the fiscal year ended
January 31, 1986.
A representative of Price Waterhouse LLP will be present
at the annual meeting of shareholders. Such representative will be
available to respond to appropriate questions and may make a
statement if he so desires.
The Board of Directors recommends a vote "FOR"
ratification of the appointment of Price Waterhouse LLP as the
Company's auditors for the fiscal year ending January 31, 1997.
SHAREHOLDER PROPOSALS
Proposals which shareholders intend to present at the
1997 Annual Meeting of Shareholders must be received by the Company
no later than January 10, 1997 to be eligible for inclusion in the
proxy material for that meeting.
OTHER MATTERS
Management knows of no matter to be brought before the
meeting which is not referred to in the Notice of Meeting. If any
other matters properly come before the meeting, it is intended that
the shares represented by proxy will be voted with respect thereto
in accordance with the judgment of the persons voting them.
By Order of the Board of Directors,
/s/ Arthur W. Singleton
------------------------
Arthur W. Singleton,
Vice President, Treasurer and Secretary
19
