SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Tech Data Corporation
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<PAGE>
[TECH DATA LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Date: June 20, 2000
Time: 4:30 p.m.
Place: Tech Data Corporation
5350 Tech Data Drive
Clearwater, Florida 33760
(727) 539-7429
Matters to be voted on:
1. Elect one director for a two year term and elect three directors for three
year terms.
2. Approval of the Company's 2000 Equity Incentive Plan.
3. Approval of an amendment to the Non-Employee Directors' 1995 Non-Statutory
Stock Option Plan.
4. Any other matters properly brought before the shareholders at the meeting.
By order of the Board of Directors,
/s/ ARTHUR W. SINGLETON
------------------------
Arthur W. Singleton
Corporate Vice President, Treasurer and Secretary
May 22, 2000
<PAGE>
The accompanying proxy is solicited by the Board of Directors of Tech
Data Corporation (the "Company") for the Annual Meeting of Shareholders to be
held on Tuesday, June 20, 2000 at 4:30 p.m., or any adjournment thereof. Your
vote at the annual meeting is important to us. Please vote your shares and
complete, sign and return the enclosed proxy form. This proxy statement, proxy
and Annual Report of the Company were mailed on or about May 22, 2000.
GENERAL INFORMATION
WHO CAN VOTE?
You can vote your shares if our records show that you owned the shares
on April 28, 2000. Each outstanding share of Preferred Stock and Common Stock is
entitled to one vote. There were 52,961,833 outstanding shares of Common Stock
and 226,500 outstanding shares of Preferred Stock entitled to vote as of April
28, 2000.
HOW DO I VOTE?
You can vote in person or by proxy. Follow the instructions on the proxy
to vote for the matters to be considered at the annual meeting. The proxyholders
named on the proxy will vote your shares as you instruct. If you vote by proxy
and later are able to attend the Annual Meeting in person you may revoke the
proxy and vote at the meeting.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. At any time before the vote on a proposal, you can change your vote
either by giving the Company's Secretary a written notice revoking your proxy or
by signing, dating and returning to us a new proxy. We will honor the proxy with
the latest date.
HOW ARE VOTES COUNTED?
A quorum must be present for the transaction of business. A quorum is
present if the holders of a majority of the outstanding shares of Common Stock
entitled to vote are present in person or represented by proxy.
Abstentions will be counted as present shares for quorum purposes but
will be considered negative votes for voting purposes.
Shares held by nominees for beneficial owners will be counted for quorum
purposes if the nominee has the discretion to vote on at least one of the
matters presented, even if the beneficial owner has not given the nominee voting
instructions (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.
WHAT WILL BE VOTED ON AT THE MEETING?
The business to be voted on at this year's Annual Meeting is to elect
one director to serve for a term of two years and to elect three directors to
serve for terms of three years, all to serve until their successors are duly
qualified and elected. 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. The biographies of all directors, including the nominated
directors, are provided herein.
Also to be voted on is approval of the Company's 2000 Equity Incentive
Plan and an amendment to the Company's Non-Employee Directors' 1995
Non-Statutory Stock Option Plan. These matters are described herein.
WHAT IF OTHER MATTERS COME UP AT THE ANNUAL MEETING?
The matters described in this proxy statement are the only matters we
know will be voted on at the annual meeting. Any other matters properly
presented at the meeting will be voted on by the proxyholders as they see fit.
<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, four of the directors of the Company, Charles E. Adair,
Daniel M. Doyle, David M. Upton 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.
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 April 28, 2000, 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.
<TABLE>
<CAPTION>
NAME OF AMOUNT AND PERCENT OF
BENEFICIAL OWNER(1) NATURE OF BENEFICIAL OWNERSHIP(2) CLASS
- ------------------- --------------------------------- ----------
<S> <C> <C>
Charles E. Adair 23,000 (3) *
Maximilian Ardelt 2,400 (4) *
Nestor Cano 5,000 (5) *
James M. Cracchiolo -- --
Daniel M. Doyle 15,000 (6) *
Jeffery P. Howells 132,942 (7) *
Anthony A. Ibarguen 96,211 (8) *
H. John Lochow 28,000 (9) *
Kathy Misunas 2,000 *
Edward C. Raymund 183,698 (10) *
Steven A. Raymund 3,401,553 (11) 6.3%
David M. Upton 4,420 (12) *
John Y. Williams 14,000 (13) *
All executive officers and directors
as a group (25 persons) 4,319,867 (14) 8.0%
Sanford C. Bernstein & Co., Inc. 7,559,551 (15) 14.3%
767 Fifth Avenue
New York, New York 10153
Mellon Financial Corporation 3,139,373 (16) 5.9%
One Mellon Center
Pittsburgh, PA 15258
</TABLE>
* Beneficial ownership represents less than 1% of the Company's outstanding
shares of Common Stock.
(1) The address for all of the above-listed beneficial owners (except as
otherwise set forth) is: 5350 Tech Data Drive, Clearwater, Florida 33760.
(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
2
<PAGE>
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 9,000 shares that may be acquired upon the exercise of stock
options which are exercisable within 60 days of April 28, 2000.
(4) Includes 2,000 shares that may be acquired upon the exercise of stock
options which are exercisable within 60 days of April 28, 2000. Pursuant to
a Share Purchase Agreement, dated April 14, 1998, between Klockner & Co. AG
("Klockner") and the Company regarding the Company's acquisition of certain
shares in Computer 2000 AG, VIAG AG, the ultimate parent of Klockner,
became entitled to nominate one individual to the Board of Directors of the
Company. VIAG AG nominated Maximilian Ardelt to sit on the Company's Board
of Directors. Klockner is the beneficial owner of 2,195,945 shares of the
Company's common stock and $300,000,000 principal amount of the Company's
5% Convertible Subordinated Debentures, due 2003, which are convertible
into 5,333,100 shares of the Company's common stock. Mr. Ardelt disclaims
beneficial ownership of such securities owned by Klockner.
(5) Includes 5,000 shares that may be acquired upon the exercise of stock
options which are exercisable within 60 days of April 28, 2000.
(6) Includes 15,000 shares that may be acquired upon the exercise of stock
options which are exercisable within 60 days of April 28, 2000.
(7) Includes 118,540 shares that may be acquired upon the exercise of stock
options which are exercisable within 60 days of April 28, 2000. Also
includes 1,482 shares in his Tech Data Corporation 401(k) Savings Plan (the
"401(k) Savings Plan") account.
(8) Includes 96,000 shares that may be acquired upon the exercise of stock
options which are exercisable within 60 days of April 28, 2000. Also
includes 211 shares in his 401(k) Savings Plan account.
(9) Includes 28,000 shares that may be acquired upon the exercise of stock
options which are exercisable within 60 days of April 28, 2000.
(10) Includes 110,450 shares owned by a trust of which he is the trustee;
includes 64,750 shares owned by a partnership of which he is a general
partner; and includes 8,498 shares held in his 401(k) Savings Plan account.
(11) Includes 675,880 shares that may be acquired upon the exercise of stock
options which are exercisable within 60 days of April 28, 2000; includes
2,546,540 shares owned by a partnership which is indirectly owned by Mr.
Raymund; includes 28,500 shares owned by inter vivos trusts of which he is
a trustee; and includes 148,633 shares held in his 401(k) Savings Plan
account.
(12) Includes 4,000 shares that may be acquired upon the exercise of stock
options which are exercisable within 60 days of April 28, 2000.
(13) Includes 9,000 shares that may be acquired upon the exercise of stock
options, which are exercisable within 60 days of April 28, 2000.
(14) Includes 1,301,585 shares that may be acquired upon the exercise of stock
options which are exercisable within 60 days of April 28, 2000. Also
includes 166,783 shares held in the 401(k) Savings Plan accounts of the
Company's executive officers.
(15) Based upon a Schedule 13G/A dated February 8, 2000 filed with the
Securities and Exchange Commission which reported that Sanford C. Bernstein
& Co., Inc. (a registered investment advisor) had sole voting power with
respect to 4,313,027 of these shares and sole dispositive power with
respect to 7,559,551 shares.
(16) Based upon a Schedule 13G dated January 24, 2000 filed with the Securities
and Exchange Commission which reported that Mellon Financial Corporation
(for itself or on behalf of Boston Group Holdings, Inc. and The Boston
Company, Inc.) had sole voting power with respect to 2,380,282 of these
shares and sole dispositive power with respect to 2,821,223 shares.
3
<PAGE>
PROPOSAL NO. 1
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 Amended and Restated 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. One director is to be elected at this Annual Meeting of
Shareholders to hold office for a term of two years expiring at the 2002 Annual
Meeting of Shareholders and three directors are to be elected at this Annual
Meeting of Shareholders to hold office for a term of three years expiring at the
2003 Annual Meeting of Shareholders, all four 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.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NOMINEE AGE AND OTHER INFORMATION SINCE
- ------- --- --------------------- -----
<S> <C> <C> <C>
NOMINEE FOR DIRECTOR - TERM TO EXPIRE 2002
James M. Cracchiolo (1)(2) 42 James M. Cracchiolo has been employed by American 1999
Express Company since 1982 and has served as
President of American Express Travel Related
Services International since 1998. Mr. Cracchiolo
serves as a Director of American Express
International Bank, and a Corporate Officer and
Member of the National Board of Trustees of the
March of Dimes. Mr. Cracchiolo holds a B.S. Degree
in Accounting and a Masters in Business
Administration Degree both from New York University.
NOMINEES FOR DIRECTOR - TERMS TO EXPIRE 2003
Daniel M. Doyle (1)(2) 59 Daniel M. Doyle has been Chairman of the Board and 1994
Chief Executive Officer of BrainBuzz.com, Inc. (a
portal for IT professionals) since May 1999. Mr. Doyle
was the Chief Executive Officer of Danka Business
Systems PLC (an office equipment and service company)
from 1977 to 1998. Mr. Doyle attended John Carroll
University.
Kathy Misunas (1)(2) 49 Kathy Misunas has been the Chief Executive Officer and 2000
President of brandwise LLC (an e-commerce comparison
shopping/purchasing portal) since 1999. Ms. Misunas
was employed by Reed Elsevier PLC (a publishing company)
from 1996 to 1998 serving as Chief Executive Officer of
Reed Travel Group. From 1973 to 1995, Ms. Misunas was
employed by AMR Corporation (a major airline company)
serving as President and Chief Executive Officer of the
SABRE Group (a subsidiary of AMR Corporation) from 1993
to 1995. Ms. Misunas attended Moravian College and
American University.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NOMINEE AGE AND OTHER INFORMATION SINCE
- ------- --- --------------------- -----
<S> <C> <C> <C>
Steven A. Raymund (3) 44 Steven A. Raymund has been employed by the Company 1986
since 1981. He has served as Chief Executive Officer
since January 1986 and as Chairman of the Board since
April 1991. In January 1996, Mr. Raymund became a
Director of Jabil Circuit, Inc. (a provider of
electronic manufacturing services). 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.
DIRECTORS CONTINUING IN OFFICE- TERMS TO EXPIRE 2002
Maximilian Ardelt 60 Maximilian Ardelt has been a member of the Board of 1998
Management of VIAG AG, Munich (a group of companies
engaged in energy, telecommunications and industrial
activities) since 1994, responsible for the
Telecommunications Division and Information Systems.
In addition, Mr. Ardelt is a member of the Management
or Supervisory Boards of the following companies:
Computer 2000 AG, Tech Data Germany AG, Klockner & Co.
AG, Connect Austria GmbH, Orange Communications SA,
Radex-Heraklith Industriebeteiligungs AG, VIAG
Europlattform AG and VIAG Interkom GmbH & Co. Mr. Ardelt
holds a Masters Degree in Engineering from Technical
University Berlin.
Jeffery P. Howells 43 Jeffery P. Howells, Executive Vice President and Chief 1998
Financial Officer, joined the Company in October 1991
as Vice President of Finance and assumed the
responsibilities of Chief Financial Officer in March
1992. In March 1993, he was promoted to Senior Vice
President and Chief Financial Officer and was promoted
to Executive Vice President and Chief Financial Officer
in March 1997. From 1979 to 1991 he was employed by
Price Waterhouse. Mr. Howells is a Certified Public
Accountant and holds a B.B.A. Degree in Accounting from
Stetson University.
David M. Upton (1)(2) 40 David M. Upton has been on the faculty of the Harvard 1997
Business School since 1989. He currently teaches
courses in Technology and Operations Management and is
the faculty chair of Harvard's executive course -
Building Competitive Advantage through Operations.
Dr. Upton is a Director of HK Systems, Inc. (an
automated materials handling company). Dr. Upton holds
a Masters Degree in Manufacturing from King's College,
Cambridge University and also holds a Ph.D. in Industrial
Engineering from Purdue University.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NOMINEE AGE AND OTHER INFORMATION SINCE
- ------- --- --------------------- -----
<S> <C> <C> <C>
DIRECTORS CONTINUING IN OFFICE - TERMS TO EXPIRE 2001
Charles E. Adair (1)(2) 52 Charles E. Adair has been a partner of Cordova 1995
Capital II, LLC or Kowaliga Capital, Inc.
(venture capital and fund management companies)
since 1993, where he serves as manager of venture
capital funds. Mr. Adair was associated with
Durr-Fillauer Medical, Inc., a pharmaceutical and
medical products distribution company, where he
served in various capacities, including President
and Chief Operating Officer from 1981 to 1992.
Mr. Adair also serves on the Board of Directors of
Performance Food Group Company (a food distributor)
and numerous privately-held companies associated with
Cordova's venture capital fund investments. Mr. Adair
is a Certified Public Accountant and holds a B.S.
Degree in Accounting from the University of Alabama.
Edward C. Raymund (3) 71 Edward C. Raymund has been employed continuously by 1974
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 (1)(2) 57 John Y. Williams has been a Managing Director of 1998
Grubb & Williams, Ltd. ("GWL"), (an Atlanta-based
merchant banking firm) since 1987 and a Managing
Director of Equity-South Advisors, LLC (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 LAWGIBB Group, Inc. (an engineering
consulting firm) since December 1995. Mr. Williams
holds a B.I. Engr. Degree from Georgia Institute of
Technology and a Masters in Business Administration
Degree from the Harvard Business School.
</TABLE>
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Steven A. Raymund is the son of Edward C. Raymund.
The Board of Directors held four meetings during the fiscal year ended January
31, 2000. The current standing committees of the Board of Directors are the
Audit Committee and the Compensation Committee. The Audit Committee met twice
and the Compensation Committee met once during the fiscal year ended January 31,
2000. 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, 2000. The function of the Audit Committee is to meet periodically
with the Company's independent and internal auditors to review the scope and
results of their audits and to 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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During the fiscal year ended January 31, 2000, 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. 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.
6
<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, 2000, 1999 and 1998 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 $100,000
(collectively, the "Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION(1) AWARDS
---------------------- ------
NAME AND OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(2) OTHER (SHARES) COMPENSATION(3)
------------------ ---- --------- ----------- ----- -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Steven A. Raymund 2000 $800,000 $ 800,000 $5,000 140,000 $33,000
Chairman of the Board 1999 700,000 853,000 5,000 100,000 20,000
of Directors and Chief 1998 650,000 1,137,000 5,000 100,000 5,000
Executive Officer
Anthony A. Ibarguen(4) 2000 559,000 391,000 5,000 98,000 3,000
President and Chief 1999 430,000 315,000 5,000 70,000 3,000
Operating Officer 1998 400,000 564,000 5,000 65,000 32,000
Nestor Cano (5) 2000 285,000 154,000 5,000 70,000 76,000
President of the Americas
Jeffery P. Howells 2000 400,000 200,000 5,000 80,000 3,000
Executive Vice President 1999 325,000 197,000 5,000 50,000 3,000
and Chief Financial Officer 1998 300,000 375,000 5,000 45,000 5,000
H. John Lochow (6) 2000 300,000 150,000 5,000 70,000 2,000
Executive Vice President 1999 255,000 152,000 5,000 70,000 83,000
of IT and Logistics;
Chief Information Officer
</TABLE>
(1) Includes amounts deferred under the Company's retirement savings and
deferred compensation plans. See "Retirement Savings Plan" and "Deferred
Compensation Plan".
(2) Amounts reflected for bonuses are based on performance for the indicated
fiscal year and are typically approved by the Board of Directors in March
following the end of the fiscal year.
(3) All other compensation relates to Company contributions to the ESOP and
retirement savings plan, except Mr. Raymund received relocation
reimbursement of $30,000 in fiscal 2000 and $17,000 in fiscal 1999, Mr.
Ibarguen received relocation reimbursement of $28,000 in fiscal 1998, Mr.
Cano received relocation reimbursement of $74,000 in fiscal 2000, and Mr.
Lochow received relocation reimbursement of $83,000 in fiscal 1999.
(4) Mr. Ibarguen resigned from the Company effective January 31, 2000.
(5) Mr. Cano became an executive officer of the Company on March 29, 1999 as
Executive Vice President of U.S. Sales and Marketing. In January 2000, he
was promoted to President of the Americas. Prior to March 1999, Mr. Cano
was Managing Director of Computer 2000 Spain, a subsidiary of Computer 2000
AG, which was acquired by the Company on July 1, 1998.
(6) Mr. Lochow began his employment with the Company on February 2, 1998. Mr.
Lochow is eligible to receive a special incentive bonus equal to his annual
base salary if he remains employed with the Company as of June 30, 2000.
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides details regarding stock options granted to the
Executive Officers during the fiscal year ended January 31, 2000.
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
OPTIONS OPTIONS
GRANTED GRANTED TO GRANT DATE
IN EMPLOYEES IN EXERCISE EXPIRATION PRESENT
NAME 2000(1) FISCAL YEAR PRICE($/SH) DATE VALUE(2)
- ------------------- ------- ------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Steven A. Raymund 140,000 4.6% $16.50 3/29/09 $1,127,000
Anthony A. Ibarguen 98,000 3.2 16.50 3/29/09 793,000
Nestor Cano 70,000 2.3 16.50 3/29/09 564,000
Jeffery P. Howells 80,000 2.6 16.50 3/29/09 644,000
H. John Lochow 70,000 2.3 16.50 3/29/09 564,000
</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. Approximately 50%
of the options become 40% exercisable two years from the date of grant and
vest an additional 20% on each of the three succeeding anniversaries,
becoming fully exercisable following five years from the date of grant. The
other 50% of the options above were granted with a performance accelerated
vesting ("PAV") feature wherein if the price of the Company's common stock
reached $24.75 (50% appreciation from exercise price) or $33.00 (100%
appreciation from exercise price) during any ten (10) consecutive trading
days, the PAV option would vest 50% and 100%, respectively. If the
aforementioned common stock price levels were not achieved, the PAV option
would vest 50% after one year and 100% after two years. On June 1, 1999,
the Company's common stock price had exceeded $33.00 for ten (10)
consecutive trading days and the PAV options became 100% vested. 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: estimated option term of two to
five years, volatility at 65%, dividend yield at 0.0%, and an annual
interest rate of 5.0% - 5.2%. 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.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT YEAR-END AT YEAR-END
ON EXERCISE VALUE --------------------------- ----------------------------
NAME IN 2000 REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven A. Raymund 4,120 $ 3,000 580,880 280,000 $3,810,000 $875,000
Anthony A. Ibarguen 48,000 1,167,000 36,000 109,000 -- --
Nestor Cano -- -- 35,000 35,000 202,000 202,000
Jeffery P. Howells 6,460 215,000 75,540 138,000 373,000 424,000
H. John Lochow 10,000 275,000 25,000 105,000 145,000 202,000
</TABLE>
8
<PAGE>
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 OPTION TERM
OF COMMON STOCK MARKET PRICE OF EXERCISE PRICE REMAINING AT
UNDERLYING OPTIONS COMMON STOCK AT AT TIME OF NEW EXERCISE DATE OF
NAME DATE REPRICED TIME OF REPRICING REPRICING PRICE REPRICING(1)
- ------------------ -------- ------------------ ----------------- --------- ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Jeffery P. Howells 11/28/95 50,000 $14.63 $20.25 $14.63 8 yrs., 4 months
</TABLE>
(1) The vesting period of these repriced options corresponds to their original
date of grant, March 21, 1994. Accordingly, the first vesting date was
March 21, 1996.
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.
9
<PAGE>
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 and
participation in a 401(k) 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 1999. 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 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. 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 1999
compensation study prepared by a nationally recognized executive compensation
consulting firm. The study included a survey of compensation of many companies
which are in the distribution industry as well as other 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, within the 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 based exclusively upon attaining certain
pre-established earnings per share goals.
10
<PAGE>
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 non-discretionary awards which are tied to the financial
performance of the Company for such year in relation to the Company's operating
budget and discretionary awards which are based on 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 attaining certain pre-established earnings per
share goals. Discretionary awards are based upon qualitative objectives
established at the beginning of each half of the fiscal year. Executive Officers
received 70% - 100% of their total potential bonus based upon the quantitative
corporate performance levels.
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 Stock Option
Committee 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 stock options at no less than fair market value on 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.
In March 1999, the Stock Option Committee approved a one-time
performance-related change to the option vesting schedule for approximately
one-half of the total options granted to all employees, including the Executive
Officers, and the Chief Executive Officer. Specifically, the Stock Option
Committee attached a performance accelerated vesting ("PAV") feature to one-half
of the options granted wherein options granted with the PAV feature would vest
(a) 50% if the Company's common stock price appreciated 50% from the grant price
of $16.50 to $24.75 and maintained that price for ten consecutive trading days,
and (b) 100% if the Company's common stock price appreciated 100% from the grant
price of $16.50 to $33.00 and maintained that price for ten consecutive trading
days. In the event the aforementioned stock price appreciation targets were not
achieved, the option would vest 50% one year from the date of grant and 100% two
years from the date of grant. Following the option grant date, the
11
<PAGE>
options granted with the PAV feature vested 50% on May 19, 1999 and 100% on June
1, 1999 having achieved the required price target at the improved levels for
more than the required ten trading days. The remaining one-half of the total
options granted to all employees, including the Executive Officers, and the
Chief Executive Officer, were granted with five-year vesting with 40% after two
years from the date of grant and 20% on each grant date anniversary thereafter.
All granted options, whether with or without the PAV feature, were provided with
a ten-year outstanding term from the date of grant.
COMPENSATION COMMITTEE
John Y. Williams, Chairman
Charles E. Adair
James M. Cracchiolo
Daniel M. Doyle
Kathy Misunas
David M. Upton
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.
12
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Charles E. Adair, James M. Cracchiolo,
Daniel M. Doyle, Kathy Misunas, David M. Upton 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 $20,000 annual
retainer fee and a $2,000 attendance fee for each Board of Directors 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 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 Director 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.
STOCK OPTION PLANS
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 to enable them to acquire or increase their proprietary
interest in the Company. A total of 10,000,000 shares of Common Stock have been
reserved for issuance pursuant to the 1990 Plan. As of January 31, 2000, there
were 6,011,000 shares underlying unexercised options granted under the 1990 Plan
and 808,000 shares available for grant under such Plan. The 1990 Plan is
administered by the Stock Option Committee of the Board of Directors. All
incentive stock options under the 1990 Plan must be granted at an exercise price
of not less than fair market value on the date of grant. Options granted under
the 1990 Plan typically vest over five years following the date of grant, except
for the March 1999 option grant (see "Compensation Committee Report on Executive
Compensation - Stock Option Awards"). Options granted to an optionee expire
ninety days after termination of employment (which expiration date may be
extended by the Board of Directors), except for termination for cause in which
case options expire immediately. In the event of disability, retirement or death
of an optionee, options become immediately and fully exercisable and expire one
year after the date of such event. No options may be granted under the 1990 Plan
after June 29, 2000.
13
<PAGE>
The Company adopted the Non-Employee Directors' 1995 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 1990
Plan, 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, 2000, there were 32,000 shares
underlying unexercised options granted under the 1995 Plan and 62,000 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 become
immediately and fully exercisable and terminate after one year in the case of
disability or death of the optionee. No options may be granted under the 1995
Plan after June 20, 2005.
EMPLOYEE STOCK OWNERSHIP PLAN AND RETIREMENT SAVINGS PLAN
In 1984 the Company established an employee stock ownership plan (the "ESOP")
covering substantially all U.S. employees. Contributions, in the form of company
stock, were made to the employees' accounts on an annual basis upon approval by
the Board of Directors. The ESOP provided for distribution of vested percentages
of the Company's common stock to participants upon separation. Such benefit
became fully vested after seven years of qualified service. The Company also
offered its U.S. employees a retirement savings plan pursuant to section 401(k)
of the Internal Revenue Code ("401(k) Plan"). The Company's 401(k) Plan provided
the ability for the Company to match participant deferrals in an amount
determined annually by the Company's Board of Directors, most recently equal to
50% of the first 5% of each participant's deferrals to a maximum contribution
amount of $500.
Effective January 1, 2000, the Company merged the assets of the ESOP and the
401(k) Plan to form the Tech Data Corporation 401(k) Savings Plan (the "401(k)
Savings Plan"). Participant deferrals are matched monthly, in the form of
company stock, in an amount equal to 50% of the first 6% of participant's
deferrals, with no maximum, and participants are fully vested following four
years of qualified service.
At January 31, 2000, 825,000 shares of Tech Data common stock were held by the
Company's 401(k) Savings Plan. Aggregate contributions made by the Company to
these plans were $2,740,000 for fiscal 2000.
EMPLOYEE STOCK PURCHASE PLAN
All U.S. and Canadian 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 employees of the Company and its designated 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 Internal Revenue Code of 1986 (the "Code"), as
amended. A maximum of 1,000,000 shares of Common Stock have been reserved 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 is granted an option which permits him to purchase in excess of
$25,000 of fair market value of Common Stock per calendar year.
14
<PAGE>
DEFERRED COMPENSATION PLAN
In fiscal 1997, the Company established the Tech Data Corporation Deferred
Compensation Plan (the "Deferred Compensation Plan") which provides designated
senior management employees and members of the Board of Directors the
opportunity to make pre-tax deferrals from compensation and to accumulate tax
deferred earnings. The Deferred Compensation Plan is designed to be a supplement
to those employees that are limited by the rules of Tech Data's 401(k) Savings
Plan as to the amounts the employee can save on a tax-deferred basis.
Participants in the Deferred Compensation Plan elected to defer approximately
$2,300,000 of income for the plan year ended December 31, 1999.
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 Standard Industrial Classification ("SIC") Code Index (SIC Code 5045 -
Computer and Computer Peripheral Equipment and Software). This graph assumes
that $100 was invested on January 31, 1995 (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 OMITTED]
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Tech Data Corporation 100 103 192 320 237 168
Nasdaq Stock Market (U.S.) Index 100 140 184 217 339 507
SIC Code Index 100 124 171 172 154 144
</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.
15
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PROPOSAL NO. 2
APPROVE THE ADOPTION OF THE 2000 EQUITY INCENTIVE PLAN
On April 5, 2000, the Board of Directors adopted, subject to approval by the
shareholders of the Company, the 2000 Equity Incentive Plan of Tech Data
Corporation (the "Plan"). In general, the Plan empowers the Company to grant
stock options and to make restricted stock grants, performance grants and
awards, to officers of the Company and other selected employees of the Company
and its subsidiaries allowing such employees to participate in the long-term
growth of the Company.
The Plan is designed to advance the interests of the Company and its
shareholders by strengthening the ability of the Company to attract, retain and
reward highly qualified officers and other selected employees, to motivate
officers and other selected employees to achieve business objectives established
to promote the long-term growth, profitability and success of the Company, and
to encourage ownership of the Common Stock of the Company.
The Plan is also designed to meet the requirements for tax deductibility under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
with respect to certain performance based compensation paid under the Plan.
Under the Code, the Company may not deduct compensation paid to any one of
certain executive officers in excess of $1,000,000 in any one year. Section
162(m) provides exceptions to the limitations on deductibility for
performance-based compensation meeting certain requirements. If the Plan is
approved by the shareholders, based on the Company's interpretation of Section
162(m) and the regulations promulgated thereunder, all stock options, and
performance awards paid in accordance with the Plan, and certain grants of
restricted stock and other stock based grants made under the Plan, will be
deductible as performance-based compensation not subject to or included in the
$1,000,000 limitation on tax deductibility set forth in Section 162(m) of the
Code.
The Plan will be approved upon receiving the affirmative vote of holders of a
majority of the shares present or represented by proxy at the Annual Meeting.
Proxies will be voted in accordance with the specifications marked thereon, and,
if no specification is made, will be voted FOR approval of the Plan.
Abstentions, "withheld" votes and "broker non-votes" will not be counted as
either "for" or "against" this proposal, but will have the same effect as votes
against the proposal.
When approved by the shareholders, the Plan will replace the 1990 Incentive and
Non-Statutory Stock Option Plan (the "1990 Plan"), which expires on June 29,
2000, except that approval of the Plan will not affect grants and awards then
outstanding under the 1990 Plan. In the opinion of the Compensation Committee
and the Board of Directors, it is in the best interests of the Company and its
shareholders to adopt the Plan.
SUMMARY OF THE PLAN
The principal features of the Plan are summarized below. The summary is
qualified in its entirety by reference to the Plan, the complete text of which
is set forth at Exhibit A to this Proxy Statement.
PLAN ADMINISTRATION
The Plan will be administered by a committee (the "Committee") which shall be
composed of not less than three members of the Board of Directors who qualify as
"outside directors" within the meaning of Section 162(m) of the Code and as
"non-employee directors" within the meaning of Rule 16(b)-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Committee will have
the sole authority to, among other things, construe and interpret the Plan, make
rules and regulations relating to the administration of the Plan, select
participants and establish the terms and conditions of the grants and awards not
inconsistent with the terms of the Plan. The initial members of the Committee
will be Charles E. Adair, James M. Cracchiolo, Daniel M. Doyle, Kathy Misunas,
David M. Upton and John Y. Williams.
16
<PAGE>
ELIGIBILITY
Any officer of the Company and any other selected employee of the Company or a
subsidiary selected by the Committee is eligible to receive grants of stock
options, restricted stock grants, performance grants and awards under the Plan.
The selection of recipients (allowing the actual naming of some
non-officer/non-director recipients to management) of, and the nature and size
of, grants and awards will be wholly within the discretion of the Committee.
Except as otherwise may be provided by the Committee, a participant must be an
employee of the Company or a subsidiary continuously from the date a grant is
made through the date of payment or settlement thereof, ordinarily for a period
of not less than six months.
SHARES SUBJECT TO THE PLAN
The maximum number of shares of Common Stock which will be available for
issuance and delivery under the Plan will be 3,000,000, plus any shares that are
forfeited back to the Company and any shares that are tendered to the Company by
a participant as full or partial payment of the exercise price of any stock
option granted under the Plan or in payment of any withholding tax incurred in
connection with the exercise of any stock option or the settlement of any other
award under the Plan. Shares of Common Stock that were subject to grants or
awards settled in cash or grants that expire unexercised or unfulfilled shall be
available for a new grant or issuance pursuant to a new award. The Plan also
limits the number of shares of Common Stock which may be issued in settlement of
the various types of grants and in respect of which the various types of grants
which may be made to any participant during any calendar year.
ADJUSTMENT
The maximum number of shares available for issuance under the Plan are subject
to appropriate adjustments to reflect certain events such as a stock dividend,
stock split, reorganization, recapitalization or business combination. Similar
adjustments shall also be made with respect to (i) the maximum number of shares
which may be subject to any type of grant or award or any outstanding grant or
award, or which may be granted or awarded to any participant during any
specified period, and (ii) the per share exercise price of any outstanding stock
option and the number or value of any units which are the subject of any
outstanding grant or award.
TERM, AMENDMENT AND TERMINATION
The Plan will remain in effect until June 20, 2010, unless sooner terminated by
the Board of Directors. Termination will not affect grants and awards then
outstanding. The Board of Directors may terminate or amend the Plan at any time
without shareholder approval, unless such approval is necessary to comply with
applicable laws, including the Exchange Act or the Code. In any event,
shareholder approval shall be required to, among other things, amend the Plan to
increase the maximum number of shares which may be issued pursuant to the Plan,
reduce the minimum exercise price for stock options or change the Performance
Measures (as defined below).
STOCK OPTIONS
The Plan will permit the Committee to grant stock options to all officers of the
Company and other selected employees of the Company and its subsidiaries. No
participant may receive stock options to purchase more than 300,000 shares of
Common Stock in any fiscal year. The per share exercise price for any stock
option shall not be less than 100% of the fair market value of a share of Common
Stock (defined in the Plan as the last sales price per share of the Common Stock
on The Nasdaq National Market) at the time of grant. The Plan also permits the
Committee to establish the time periods for the exercise of each stock option
and to require a period of employment before the stock option may be exercised.
17
<PAGE>
The Plan authorizes the Committee to grant incentive stock options, as that term
is defined in Code Section 422A, each having a term of up to ten years from the
date of grant. The amount of incentive stock options vesting in a particular
calendar year cannot exceed $100,000 per option recipient, determined using the
fair market value of the shares of Common Stock subject to such option or
options on the date of grant.
The Plan prohibits the repricing of stock options at a lower exercise price,
whether by cancellation or amendment of the original grant.
RESTRICTED STOCK
The Plan authorizes the Committee to grant restricted stock to any officer of
the Company and other selected employees of the Company and its subsidiaries and
to determine the time, amount and terms and conditions of the grant. The maximum
number of shares which may be issued as restricted stock is 200,000. The maximum
number of shares which may be issued to any participant as restricted stock
during any one fiscal year shall be 50,000. The maximum amount any participant
may receive as a restricted stock grant or award in any fiscal year is
$2,500,000. Shares awarded as restricted stock would be issued subject to a
restriction period of no less than three years. During the restriction period,
the recipient is not entitled to delivery of the shares, restrictions are placed
on the transferability of the shares, and the shares would be forfeited if the
recipient terminates employment for reasons other than as approved by the
Committee. The Committee may also require that specified Performance Goals (as
defined below) be attained during the restriction period. Upon expiration of the
restriction period, the appropriate number of shares of Common Stock will be
delivered to the grantee free of all restrictions. During the restriction period
the grantee shall be entitled to vote the shares and to receive dividends paid
thereon.
PERFORMANCE GRANTS AND AWARDS
The Plan will permit the Committee to grant to officers of the Company and other
selected employees of the Company and its subsidiaries the contingent right,
expressed in units (which may be equivalent to a share of Common Stock or other
monetary value), to receive payments of shares of Common Stock, cash or any
combination thereof ("Performance Grants") based upon Company performance over a
specified period ("Performance Period"). At the time of grant, the Committee
shall also establish one or more Company performance criteria (the "Performance
Measure") applicable to the Performance Grant and targets that must be attained
relative to the Performance Measure ("Performance Goals").
The Performance Measure may be based on any of the following criteria, alone or
in combination, as the Committee deems appropriate: (i) Cumulative Net Income
Per Diluted Share; (ii) Cumulative Net Income; (iii) return on sales; (iv) total
shareholder return; (v) return on assets; (vi) economic value added; (vii) cash
flow; (viii) return on equity; (ix) cumulative operating income (which shall
equal consolidated sales minus cost of goods sold and selling, administrative
and general expense during the performance period) and (x) achievement of
explicit strategic objectives or milestones. Cumulative Net Income and
Cumulative Net Income Per Diluted Share are determined based on Net Income for
the applicable year or years as reported in the audited Consolidated Statement
of Income of the Company and subsidiaries, adjusted to exclude (i) extraordinary
items; (ii) gains or losses on the disposition of discontinued operations; (iii)
the cumulative effect of changes in accounting principles, and (iv) any
applicable adjustments for calculating net income per diluted share in
accordance with generally accepted accounting principles.
18
<PAGE>
Performance Goals may include a minimum, maximum and target level of
performance, with the size of Performance Award based on the level attained.
Performance Goals and the Performance Measure in respect of any grant shall not
be changed when so provided in the grant agreement. The Committee may eliminate
or decrease (but not increase) the amount of any Performance Award otherwise
payable to a participant. Performance Grants may be paid in cash, shares of
Common Stock or any combination thereof.
The maximum number of shares of Common Stock which may be issued pursuant to
Performance Grants is 200,000. The maximum number of shares of Common Stock
which may be the subject of Performance Grants made to any Participant in
respect of any Performance Period or during any fiscal year shall be 50,000. The
maximum amount any Participant may receive pursuant to Performance Grants during
any fiscal year shall not exceed $2,500,000, determined using the fair market
value of the Common Stock (multiplied by the aggregate number of units of the
Performance Grant awarded) on the last day of the Performance Period or on the
date of the payment thereof, whichever is higher. It is presently anticipated
that the Committee will make Performance Grants for three year Performance
Periods using Cumulative Net Income Per Diluted Share as the Performance
Measure.
TRANSFERABILITY
Awards under the Plan will not be transferable other than by will or the laws of
descent and distribution; except that the Committee may permit the transfer of
(i) specific non-qualified stock option grants by gift to the employee's spouse,
children and grandchildren, or to a trust for the benefit of any one or more of
them, or (ii) any grant or award pursuant to a qualified domestic relations
order.
DEFERRALS
The Committee may at any time require that the payment or settlement of any
grant or award under the Plan be deferred for such period or periods and on such
terms and conditions as the Committee shall determine. The Committee may also
permit participants to defer the receipt of the payment of any award on such
terms and conditions as the Committee shall deem appropriate. Such deferrals may
be in the form of Common Stock equivalents and earn dividend equivalents.
Amounts deferred in cash may earn interest at a rate or rates determined by the
Committee.
CHANGE IN CONTROL
In the event of a change in control of the Company, except as the Board of
Directors comprised of a majority of continuing directors may expressly provide
otherwise, and notwithstanding any other provision of the Plan: (i) all stock
options then outstanding under the Plan become fully exercisable (ii) all terms
and conditions of all restricted stock grants then outstanding are deemed
satisfied, and (iii) all Performance Grants and Awards shall be deemed to have
been fully earned. A change in control occurs if: (i) any person becomes a
beneficial owner of 50 percent or more of the Common Stock outstanding; (ii) the
Company's shareholders approve a combination with another company under certain
circumstances; (iii) the Company approves a plan of complete liquidation of the
Company or an agreement to dispose of substantially all of its assets; or (iv)
the continuing directors no longer constitute a majority of the Board of
Directors. The payment of awards in the event of a change in control may have
the incidental effect of increasing the net cost of that change, and,
theoretically, could render a change in control more difficult or discourage it.
FEDERAL INCOME TAX CONSEQUENCES
Based on current provisions of the Code, and the existing regulations
thereunder, the anticipated U.S. Federal income tax consequences in respect of
the several types of grants and awards under the Plan are as described below.
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GRANT OF STOCK OPTIONS
An optionee will not recognize any taxable income at the time a stock option is
granted and the Company will not be entitled to a Federal income tax deduction
at that time.
INCENTIVE STOCK OPTIONS
No ordinary income will be recognized by the holder of an incentive stock option
at the time of exercise. The excess of the fair market value of the shares of
Common Stock at the time of exercise over the aggregate option exercise price
will be an adjustment to alternative minimum taxable income for purposes of the
Federal "alternative minimum tax" at the date of exercise. If the optionee holds
the shares of Common Stock purchased for the greater of two years after the date
the option was granted or one year after the acquisition of such shares, the
difference between the aggregate option price and the amount realized upon
disposition of the shares will constitute a long term capital gain or loss, as
the case may be, and the Company will not be entitled to a Federal Income tax
deduction. If the shares of Common Stock are disposed of in a sale, exchange or
other "disqualifying disposition" within two years after the date of grant or
within one year after date of exercise, the optionee will realize taxable
ordinary income in an amount equal to the lesser of (i) the excess of the fair
market value of the shares of Common Stock purchased at the time of exercise
over the aggregate option exercise price or (ii) the excess of the amount
realized upon disposition of such shares over the option exercise price, and the
Company will usually be entitled to a Federal income tax deduction equal to such
amount.
NON-QUALIFIED STOCK OPTIONS
Taxable ordinary income will be recognized by the holder of a non-qualified
stock option at the time of exercise in an amount equal to the excess of the
fair market value of the shares of Common Stock purchased at the time of such
exercise over the aggregate option exercise price. The Company will usually be
entitled to a corresponding Federal income tax deduction. The optionee will
generally recognize a taxable capital gain or loss based upon the difference
between the per share fair market value at the time of exercise and the per
share selling price at the time of a subsequent sale of the shares.
RESTRICTED STOCK
Unless a participant makes the election described below, a participant receiving
a grant will not recognize income and the Company will not be allowed a
deduction at the time such shares of restricted stock are granted. While the
restrictions on the shares are in effect, a participant will recognize
compensation income equal to the amount of the dividends received and the
Company will be allowed a deduction in a like amount. When the restrictions on
the shares of Common Stock are removed or lapse, the excess of fair market value
of such shares on the date the restrictions are removed or lapse over the amount
paid, if any, by the participant for such shares will be ordinary income to the
participant and will be allowed as a deduction for Federal income tax purposes
to the Company. Upon disposition of the shares of Common Stock, the gain or loss
recognized by the participant will be treated as capital gain or loss, and the
capital gain or loss will be short term or long term depending upon the period
of time the shares are held by the participant following the removal or lapse of
the restrictions. However, by filing a Section 83(b) election with the Internal
Revenue Service within 30 days after the date of grant, a participant's ordinary
income and commencement of holding period and the Company's deduction will be
determined as of the date of grant. In such a case, the amount of ordinary
income recognized by such a participant and deductible by the Company will be
equal to the excess of the fair market value of the shares as of the date of
grant over the amount paid by the participant for the shares of Common Stock. If
such election is made and a participant thereafter forfeits such Shares of
Common Stock, no refund or deduction will be allowed for the amount previously
included in such participant's income.
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PERFORMANCE GRANTS
A participant receiving any Performance Grant will not recognize income, and the
Company will not be allowed a deduction, at the time such grant is made. When a
participant receives payment in cash or shares of Common Stock, the amount of
cash and the fair market value of the shares of Common Stock received will be
ordinary income to the participant and will be allowed as a deduction for
Federal income tax purposes to the Company.
SPECIAL RULES
To the extent an optionee pays all or part of the option price of a
non-qualified stock option by tendering shares of Common Stock owned by the
optionee, the tax consequences described above apply except that the number of
shares of Common Stock received upon such exercise which is equal to the number
of shares surrendered in payment of the option exercise price shall have the
same basis and tax holding period as the shares of Common Stock surrendered. If
the shares of Common Stock surrendered had previously been acquired upon the
exercise of an incentive stock option, the surrender of such shares may be a
disqualifying disposition of such shares. The additional shares of Common Stock
received upon such exercise have a tax basis equal to the amount of ordinary
income recognized on such exercise and a holding period which commences on the
date of exercise. If an optionee exercises an incentive stock option by
tendering shares previously acquired on the exercise of an incentive stock
option, a disqualifying disposition may occur and the optionee may recognize
income and be subject to other basis allocation and holding period requirements.
WITHHOLDING TAXES
There are no withholding taxes payable in connection with the grant of any stock
option or the exercise of an incentive stock option. However, withholding taxes
must be paid at the time of exercise of any non-qualified stock option.
Withholding taxes must also be paid in respect of any restricted stock when the
restrictions thereon lapse. In respect of all other awards, withholding taxes
must be paid whenever income to the Plan participant is recognized for tax
purposes.
SECTION 162(m) LIMIT
The Company believes that compensation paid under the Plan from time to time to
certain executive officers attributable to stock options, Performance Grants,
and certain forms of restricted stock grants and awards, will be treated as
qualified performance based compensation and, therefore, will be deductible by
the Company and not subject to the $1,000,000 deduction limitation of Section
162(m) of the Code.
OTHER INFORMATION
No benefits or amounts have been granted, awarded or received under the Plan,
nor are any such benefits or amounts now determinable. For comparison purposes,
reference is made to the Option Grants in Last Fiscal Year table on page 11 for
stock options granted during fiscal 2000, which options were granted under the
1990 Plan and were in respect of annual grants (the total stock options granted
in fiscal 2000 to all officers and all other grantees totaled 867,000 and
2,173,700, respectively).
The closing price of the Common Stock reported on The Nasdaq National Market on
May 16, 2000 was $42.50 per share.
For additional information regarding the Plan, please refer to the complete text
of the Plan set forth at Exhibit A to this Proxy Statement. If the Plan is not
approved by shareholders, the Company will consider other alternatives available
with respect to performance based compensation.
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The following resolution will be presented by your Board of Directors at the
Annual Meeting:
"RESOLVED, that the adoption of the 2000 Equity Incentive Plan of Tech Data
Corporation, the complete text of which is set forth at Exhibit A to the Proxy
Statement of the Company for the Annual Meeting of Shareholders on June 20,
2000, be, and the same hereby is, approved."
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
APPROVAL OF THE PLAN
The Plan will be approved upon receiving the affirmative vote of holders of a
majority of the shares present or represented by proxy at the Annual Meeting.
Proxies will be voted in accordance with the specifications marked thereon, and,
if no specification is made, will be voted FOR approval of the Plan.
Abstentions, "withheld" votes and "broker non-votes" will not be counted as
either "for" or "against" this proposal, but will have the same effect as votes
against the proposal.
PROPOSAL NO. 3
APPROVAL OF THE PROPOSED AMENDMENT TO THE TECH DATA CORPORATION
NON-EMPLOYEE DIRECTORS' 1995 NON-STATUTORY STOCK OPTION PLAN
GENERAL
On April 5, 2000, the Board of Directors approved, subject to approval by the
shareholders of the Company, an amendment to the Tech Data Corporation
Non-Employee Directors' 1995 Non-Statutory Stock Option Plan (the "Directors'
Stock Option Plan") to increase the number of Annual Director Grants (as defined
below) from 1,000 shares of Common Stock to 2,500 shares. The text of the
proposed amendment to the Stock Option Plan is set forth in Exhibit B to this
Proxy Statement.
The proposed amendment to the Directors' Stock Option Plan will be approved upon
receiving the affirmative vote of holders of a majority of the shares present or
represented by proxy at the meeting. Proxies will be voted in accordance with
the specifications marked thereon, and, if no specification is made, will be
voted FOR approval of the proposed amendment to the Directors' Stock Option
Plan. Abstentions, "withheld" votes and "broker non-votes" will not be counted
as either "for" or "against" this proposal, but will have the same effect as
votes against the proposal.
SUMMARY DESCRIPTION OF THE DIRECTORS' STOCK OPTION PLAN
The maximum number of shares of the Company's Common Stock that may be issued or
transferred to grantees under the Directors' Stock Option Plan is 100,000
shares. If there is a stock dividend, recapitalization resulting in a stock
split-up, combination or exchange of shares of Common Stock, appropriate
adjustments would be made in the number of shares that could be issued or
transferred in the future and in the number of shares and price under all
outstanding grants made before the event. Future options may also cover such
shares as may cease to be under option by reason of total or partial expiration,
termination or voluntary surrender of an option.
Participation in the Directors' Stock Option Plan is limited to persons who are
members of the Board and who are not full time employees of the Company (the
"Participants"). As of the date of this Proxy Statement, there are seven
non-employee directors of the Company.
The Directors' Stock Option Plan provides for two types of option grants: New
Director Grants (which provide a one-time grant to each new non-employee
director on the date of appointment to the Board) and Annual Director Grants
(which provide yearly grants to each existing non-employee director, who has
served on the Board for at least six (6) months). 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 will receive a New Director Grant
consisting of an option to purchase 5,000 shares of Common Stock at an
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exercise price per share equal to the fair market value of a share of Common
Stock at the date of grant. Pursuant to the terms of the Directors' Stock Option
Plan, 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 option to purchase 2,500
shares (up from 1,000 shares) of Common Stock at an exercise price per share
equal to the fair market value of a share of Common Stock at the date of each
annual shareholders meeting, provided that the director has served on the Board
for at least six (6) months.
Pursuant to the terms of the Directors' Stock Option Plan, New Director Grants
vest in 20% increments annually and become fully vested on the fifth anniversary
of the date of grant. Annual Director Grants vest and become exercisable one
year from the date of grant. All options shall expire on the tenth anniversary
of the date of grant.
Unless otherwise provided in any option, each outstanding option shall become
immediately fully exercisable in the event of (i) a change of control of the
Company, (ii) a merger, consolidation, reorganization, liquidation or
dissolution in which the Company does not survive, or (iii) the sale, lease,
exchange or other disposition of all or substantially all the property and
assets of the Company.
TERMINATION
Pursuant to the terms of the Directors' Stock Option Plan, options granted shall
terminate on the earlier to occur of (i) the date of removal of a Participant
from the Board; (ii) the date of the expiration of the term thereof (the
"Expiration Date"); or (iii) the termination of the Participant as a member of
the Board by reason of voluntary resignation or the expiration of the
Participant's elected or appointed term, in which case the Participant shall
have the right, within three (3) months after the date on which the Participant
shall have ceased to be a member of the Board, except for removal of the
Participant from the Board, to exercise the unexercised portion of the options
granted to the extent, if any, that such options were exercisable by the
Participant on the date of such termination.
In the event of the death of a Participant while a member of the Board or within
three (3) months after the termination of a Participant as a member of the
Board, except for removal of a Participant from the Board, such option shall
become immediately fully exercisable and shall terminate on the earlier of the
Expiration Date thereof or one year following the date of such death. After the
death of a Participant, his executors, administrators or any person or persons
to whom his option may be transferred by will or by laws of descent and
distribution, shall have the right, at any time during such period, to exercise
the option.
If a Participant's service on the Board terminates because of a disability (as
defined in the Directors' Stock Option Plan), the Participant's options shall
become immediately fully exercisable and shall terminate on the earlier of the
Expiration Date thereof or one year following the termination of service on the
Board.
ADMINISTRATION
The Plan is considered a "formula plan" as contemplated by Rule 16b-3,
promulgated under the Exchange Act. Grants of options to non-employee directors
under the Plan and the amount, nature and timing of the grants are automatically
determined as described above and are not subject to the determination of the
Board or any option committee appointed by the Board. The Board may appoint an
option committee to interpret the Directors' Stock Option Plan, and such
Committee may adopt rules, regulations and procedures to administer the
Directors' Stock Option Plan.
TERMINATION AND AMENDMENT OF THE DIRECTORS' STOCK OPTION PLAN
The Directors' Stock Option Plan became effective on June 20, 1995, the date of
initial approval of the Company's shareholders. This Plan will terminate on the
tenth anniversary of its effective date unless terminated earlier by the Board
or unless extended by the Board. The Board could amend the Directors'
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Stock Option Plan as it deems advisable, but unless the shareholders approve, no
amendment could increase the maximum number of shares of Common Stock subject to
the Directors' Stock Option Plan, materially modify the requirements for
eligibility in the Directors' Stock Option Plan, or materially increase the
benefits accruing to Participants.
FEDERAL INCOME TAX CONSEQUENCES
Options granted under the Directors' Stock Option Plan are intended to be
"nonqualified stock options", and are not intended to meet the requirements of
Section 422 of the Code. A Participant would not recognize income for federal
income tax purposes upon the grant of a nonqualified option under the Directors'
Stock Option Plan. The Company will not be entitled to any tax deduction at that
time. Upon exercise, a Participant will recognize compensation taxable as
ordinary income in an amount equal to the excess of the fair market value on the
date of exercise of the shares of Common Stock purchased over their aggregate
exercise price. The Company will be entitled to a tax deduction in an amount
equal to the compensation recognized by the Participant. Upon the disposition by
a Participant of shares of Common Stock previously acquired by means of an
exercise of an option granted under the Directors' Stock Option Plan, the
difference between the amount realized upon the disposition and the fair market
value of the shares on the date of exercise will be treated either as short-term
or long-term capital gain to the Participant, depending upon the length of time
the shares have been held by a Participant after the date of exercise.
OTHER INFORMATION
Since the inception of the Directors' Stock Option Plan, New Director Grants and
Annual Director Grants representing an aggregate of 38,000 shares of Common
Stock have been granted to eight non-employee Directors, for which options have
been exercised for 6,000 shares and options for 62,000 shares are available for
future grant. If this amendment to the Directors' Stock Option Plan is approved
by the shareholders at the meeting, non-employee Directors, Charles E. Adair,
Maximilian Ardelt, James M. Cracchiolo, Daniel M. Doyle, David M. Upton and John
Y. Williams will each receive an Annual Director Grant consisting of an option
to purchase 2,500 shares of Common Stock at an exercise price per share equal to
the fair market value of a share of Common Stock on the date of such meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
APPROVAL OF THE AMENDMENT TO THE DIRECTORS' STOCK OPTION PLAN
The resolution to approve the amendment to the Directors' Stock Option Plan will
be adopted only if it received the affirmative vote of at least a majority of
the shares of Common Stock present or represented by proxy at the Annual
Meeting. Proxies will be voted in accordance with the specifications marked
thereon, and, if no specification is made, will be voted FOR approval of the
amendment. Abstentions, "withheld" votes and "broker non-votes" will not be
counted as either "for" or "against" this proposal, but will have the same
effect as votes against the proposal.
SHAREHOLDER PROPOSALS
Proposals which shareholders intend to present at the 2001 Annual Meeting of
Shareholders must be received by the Company no later than January 9, 2001 to be
eligible for inclusion in the proxy material for that meeting.
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INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP served as the Company's independent
certified public accountants for fiscal 2000. This firm has advised the Company
that it has no direct or indirect financial interest in the Company.
Representatives of this firm are expected to be present at the 2000 Annual
Meeting, with the opportunity to make a statement should they desire to do so,
and will be available to respond to appropriate questions from shareholders.
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
Corporate Vice President, Treasurer and Secretary
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EXHIBIT A
2000 EQUITY INCENTIVE PLAN
OF
TECH DATA CORPORATION
1. PURPOSE.
The purposes of the 2000 Equity Incentive Plan (the "Plan") of Tech
Data Corporation (the "Company") are to advance the interests of the Company and
its shareholders by strengthening the ability of the Company to attract, retain
and reward highly qualified officers and other employees, to motivate officers
and other selected employees to achieve business objectives established to
promote the long-term growth, profitability and success of the Company, and to
encourage ownership of the Common Stock of the Company by participating officers
and other selected employees allowing such employees to participate in the
long-term growth of the Company. The Plan authorizes performance-based stock and
cash incentive compensation in the form of stock options, restricted stock,
performance grants and awards.
2. DEFINITIONS.
For the purposes of the Plan, the following terms shall have the
following meanings:
(a) "ADJUSTED NET INCOME" means, with respect to any fiscal year of the
Company, the amount reported as "Net Income" in the audited Consolidated
Statement of Income of the Company and Subsidiaries for such year (as set forth
in the Company's Annual Report to Shareholders for such year), adjusted to
exclude any of the following items: (i) extraordinary items (as described in
Accounting Principles Board Opinion No. 30); (ii) gains or losses on the
disposition of discontinued operations; (iii) the cumulative effects of changes
in accounting principles; and (iv) any applicable adjustments for calculating
net income per diluted share in accordance with generally accepted accounting
principles.
(b) "ANNUAL NET INCOME PER DILUTED SHARE" means, with respect to the
fiscal year of the Company in respect of which a determination thereof is being
or to be made, the Adjusted Net Income for such year divided by the applicable
weighted average number of diluted shares of Common Stock outstanding during
such year.
(c) "AWARD" means any payment or settlement in respect of a grant made
pursuant to the Plan, whether in the form of shares of Common Stock or in cash,
or in any combination thereof.
(d) "BOARD OF DIRECTORS" means the Board of Directors of the Company.
(e) "CODE" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, or any successor statute thereto, together with the
published rulings, regulations and interpretations duly promulgated thereunder.
(f) "COMMITTEE" means the Stock Option Committee of the Board of
Directors established and constituted as provided in Section 5 of the Plan.
(g) "COMMON STOCK" means the common stock, par value of $.0015, of the
Company, or any security issued by the Company in substitution or exchange
therefor or in lieu thereof.
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(h) "COMMON STOCK EQUIVALENT" means a Unit (or fraction thereof, if
authorized by the Committee) substantially equivalent to a hypothetical share of
Common Stock, credited to a Participant and having a value at any time equal to
the Fair Market Value of a share of Common Stock (or such fraction thereof) at
such time.
(i) "COMPANY" means Tech Data Corporation, a Florida corporation, or
any successor corporation.
(j) "COVERED EMPLOYEE" means any person who is a "covered employee"
within the meaning of Section 162(m) of the Code.
(k) "CUMULATIVE NET INCOME" means, in respect of any Performance
Period, the aggregate cumulative amount of the Adjusted Net Income for the
fiscal years of the Company during such Performance Period.
(l) "CUMULATIVE NET INCOME PER DILUTED SHARE" means, in respect of any
Performance Period, the aggregate cumulative amount of the Annual Net Income Per
Diluted Share for the fiscal years of the Company during such Performance
Period.
(m) "DIVIDEND EQUIVALENT" means, in respect of a Common Stock
Equivalent and with respect to each dividend payment date for the Common Stock,
an amount equal to the cash dividend on one share of Common Stock payable on
such dividend payment date.
(n) "EMPLOYEE" means any individual, including any officer of the
Company, who is on the active payroll of the Company or a Subsidiary at the
relevant time.
(o) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended and in effect from time to time, including all rules and regulations
promulgated thereunder.
(p) "EXECUTIVE OFFICER" means, at any time, an individual who is an
executive officer of the Company within the meaning of Exchange Act Rule 3b-7 or
who is an officer of the Company within the meaning of Exchange Act Rule
16a-1(f).
(q) "FAIR MARKET VALUE" means, in respect of any date on or as of which
a determination thereof is being or to be made, the last sales price per share
of the Common Stock reported on such date on The Nasdaq National Market or on
any other national securities exchange registered under the Exchange Act upon
which the Common Stock is then listed on such date, or, if the Common Stock was
not traded on such date, on the next preceding day on which sales of shares of
the Common Stock were reported on The Nasdaq National Market or on any other
national securities exchange registered under the Exchange Act upon which the
Common Stock is then listed.
(r) "INCENTIVE STOCK OPTION" means any option to purchase shares of
Common Stock granted pursuant to the provisions of Section 6 of the Plan that is
intended to be and is specifically designated as an "incentive stock option"
within the meaning of Section 422A of the Code.
(s) "NON-QUALIFIED STOCK OPTION" means any option to purchase shares of
Common Stock granted pursuant to the provisions of Section 6 of the Plan that is
not an Incentive Stock Option.
(t) "PARTICIPANT" means any Employee of the Company or a Subsidiary who
receives a grant or Award under the Plan.
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(u) "PERFORMANCE GRANT" means a grant made pursuant to Section 8 of the
Plan, the Award of which is contingent on the achievement of specific
Performance Goals during a Performance Period, determined using a specific
Performance Measure, all as specified in the grant agreement relating thereto.
(v) "PERFORMANCE GOALS" mean, with respect to any applicable grant made
pursuant to the Plan, the one or more targets, goals or levels of attainment
required to be achieved in terms of the specified Performance Measure during the
specified Performance Period, all as set forth in the related grant agreement.
(w) "PERFORMANCE MEASURE" means, with respect to any applicable grant
made pursuant to the Plan, one or more of the criteria identified at Section
8(c) of the Plan selected by the Committee for the purpose of establishing, and
measuring attainment of, Performance Goals for a Performance Period in respect
of such grant, as provided in the related grant agreement.
(x) "PERFORMANCE PERIOD" means, with respect to any applicable grant
made pursuant to the Plan, the one or more periods of time, which may be of
varying and overlapping durations, as the Committee may select during which the
attainment of one or more Performance Goals will be measured to determine
whether, and the extent to which, a Participant is entitled to receive payment
of an Award pursuant to such grant, as provided in the related grant agreement.
(y) "PLAN" means this 2000 Equity Incentive Plan of the Company, as set
forth herein and as hereafter amended from time to time in accordance with the
terms hereof.
(z) "RESTRICTED STOCK" means shares of Common Stock issued pursuant to
a Restricted Stock Grant under Section 7 of the Plan so long as such shares
remain subject to the restrictions and conditions specified in the grant
agreement pursuant to which such Restricted Stock Grant is made.
(aa) "RESTRICTED STOCK GRANT" means a grant made pursuant to the
provisions of Section 7 of the Plan.
(bb) "STOCK OPTION" means and includes any Non-Qualified Stock Option
and any Incentive Stock Option granted pursuant to Section 6 of the Plan.
(cc) "SUBSIDIARY" means any corporation or entity in which the Company
directly or indirectly owns or controls 50% or more of the equity securities
issued by such corporation or entity having the power to vote for the election
of directors.
(dd) "UNIT" means a bookkeeping entry used by the Company to record and
account for the grant, settlement or, if applicable, deferral of an Award until
such time as such Award is paid, canceled, forfeited or terminated, as the case
may be, which, except as otherwise specified by the Committee, shall be equal to
one Common Stock Equivalent.
3. EFFECTIVE DATE; TERM.
(a) EFFECTIVE DATE. The Plan shall be effective on June 20, 2000, upon
approval by the shareholders of the Company at the 2000 annual meeting of
shareholders or any adjournments thereof.
(b) TERM. The Plan shall remain in effect until June 20, 2010, unless
sooner terminated by the Board of Directors. Termination of the Plan shall not
affect grants and Awards then outstanding.
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4. SHARES OF COMMON STOCK SUBJECT TO PLAN.
(a) MAXIMUM NUMBER OF SHARES AVAILABLE FOR ISSUANCE UNDER THE PLAN. The
maximum aggregate number of shares of Common Stock which may be issued pursuant
to the Plan, subject to adjustment as provided in Section 4(b) of the Plan,
shall be three million shares (3,000,000), plus (i) any shares of Common Stock
issued under the Plan that are forfeited back to the Company or are canceled,
and (ii) any shares of Common Stock that are tendered, whether by physical
delivery or by attestation, to the Company by a Participant as full or partial
payment of the exercise price of any Stock Option granted pursuant to the Plan,
in connection with the payment or settlement of any other grant or Award made
pursuant to the Plan, or in payment of any applicable withholding for federal,
state, city, local or foreign income, payroll or other taxes incurred in
connection with the exercise of any Stock Option granted under the Plan or the
receipt or settlement of any other grant or Award under the Plan. The shares of
Common Stock which may be issued under the Plan may be authorized and unissued
shares or issued shares which have been reacquired by the Company. No fractional
share of the Common Stock shall be issued under the Plan. Awards of fractional
shares of the Common Stock, if any, shall be settled in cash.
(b) ADJUSTMENTS UPON CHANGES IN CAPITAL STRUCTURE. In the event of any
change in the capital structure, capitalization or Common Stock of the Company
such as a stock dividend, stock split, recapitalization, merger, consolidation,
split-up, combination or exchange of shares or other form of reorganization, or
any other change affecting the Common Stock, such proportionate adjustments, if
any, as the Board of Directors in its discretion may deem appropriate to reflect
such change shall be made with respect to: (i) the maximum number of shares of
Common Stock which may be (1) issued pursuant to the Plan, (2) the subject of
any type of grant or Award under the Plan, and (3) granted, Awarded or issued to
any Participant pursuant to any provision of the Plan; (ii) the number of shares
of Common Stock subject to any outstanding or other grant or Award made to any
Participant under the Plan; (iii) the per share exercise price in respect of any
outstanding Stock Options; (iv) the number of shares of Common Stock and the
number of Units or the value of such Units, as the case may be, which are the
subject of other grants and Awards then outstanding under the Plan; and (v) any
other term or condition of any grant affected by any such change; provided
however that no such adjustment shall be authorized to the extent that such
authority would cause the Plan to violate Section 422(b)(1) of the Code, as from
time to time amended, and with respect to any Award no such adjustment shall be
authorized to the extent that such authority would be inconsistent with the
Plan's meeting the requirements of Section 162(m) of the Code, as from time to
time amended.
5. ADMINISTRATION.
(a) THE COMMITTEE. The Plan shall be administered by the Committee to
be appointed from time to time by the Board of Directors and comprised of not
less than three of the then members of the Board of Directors who qualify as
"non-employee directors" within the meaning of Rule 16(b)-3 promulgated under
the Exchange Act and as "outside directors" within the meaning of Section 162(m)
of the Code. Members of the Committee shall serve at the pleasure of the Board
of Directors. The Board of Directors may from time to time remove members from,
or add members to, the Committee. A majority of the members of the Committee
shall constitute a quorum for the transaction of business and the acts of a
majority of the members present at any meeting at which a quorum is present
shall be the acts of the Committee. Any one or more members of the Committee may
participate in a meeting by conference telephone or similar means where all
persons participating in the meeting can hear and speak to each other, which
participation shall constitute presence in person at such meeting. Action
approved in writing by a majority of the members of the Committee then serving
shall be fully as effective as if the action had been taken by unanimous vote at
a meeting duly called and held. The Company shall make grants and effect Awards
under the Plan in accordance with the terms and conditions specified by the
Committee, which terms and conditions shall be set forth in grant agreements
and/or other instruments in such forms as the Committee shall approve.
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(b) COMMITTEE POWERS. The Committee shall have full power and authority
to operate and administer the Plan in accordance with its terms. The powers of
the Committee include, but are not limited to, the power to: (i) select
Participants from among the Employees of the Company and Subsidiaries including
establishing guidelines, criteria and overall numbers of and limits of grants
and Awards; (ii) establish the types of, and the terms and conditions of, all
grants and Awards made under the Plan, subject to any applicable limitations set
forth in, and consistent with the express terms of, the Plan; (iii) make grants,
conditionally or unconditionally, and pay or otherwise effect Awards subject to,
and consistent with, the express provisions of the Plan; (iv) establish
Performance Goals, Performance Measures and Performance Periods, subject to, and
consistent with, the express provisions of the Plan; (v) reduce the amount of
any grant or Award; (vi) prescribe the form or forms of grant agreements and
other instruments evidencing grants and Awards under the Plan; (vii) pay and to
defer payment of Awards on such terms and conditions, not inconsistent with the
express terms of the Plan, as the Committee shall determine; (viii) direct the
Company to make conversions, accruals and payments pursuant to the Plan; (ix)
construe and interpret the Plan and make any determination of fact incident to
the operation of the Plan; (x) promulgate, amend and rescind rules and
regulations relating to the implementation, operation and administration of the
Plan; (xi) adopt such modifications, procedures and subplans as may be necessary
or appropriate to comply with the laws of other countries with respect to
Participants or prospective Participants employed in such other countries; (xii)
in its sole discretion to accelerate the date on which any option may be
exercised and may accelerate the vesting of any shares of Common Stock subject
to any option or previously acquired shares by the exercise of any option;
(xiii) the power to delegate responsibility for Plan operation, management and
administration on such terms consistent with the Plan, as the Committee may
establish; (xiv) delegate to other persons the responsibility for performing
administrative or ministerial acts in furtherance of the Plan; (xv) engage the
services of persons and firms, including banks, consultants, insurance companies
and broker-dealers in furtherance of the Plan's activities; and (xvi) make all
other determinations and take all other actions as the Committee may deem
necessary or advisable for the administration and operation of the Plan. The
Committee may, in its sole discretion, delegate to one or more Executive
Officers the power to select Participants from among the Employees of the
Company and Subsidiaries provided that at the time of such grant no recipient of
such grants shall be an Executive Officer.
(c) COMMITTEE'S DECISIONS FINAL. Any determination, decision or action
of the Committee in connection with the construction, interpretation,
administration or application of the Plan, and of any grant agreement, shall be
final, conclusive and binding upon all Participants, and all persons claiming
through Participants, affected thereby.
(d) ADMINISTRATIVE ACCOUNTS. For the purpose of accounting for Awards
deferred as to payment, the Company shall establish bookkeeping accounts
expressed in Units bearing the name of each Participant receiving such Awards.
Each account shall be unfunded, unless otherwise determined by the Committee in
accordance with Section 13(d) of the Plan.
(e) CERTIFICATIONS. In respect of each grant under the Plan to a
Covered Employee which the Committee intends to be "performance based
compensation" under Section 162(m) of the Code, the provisions of the Plan and
the related grant agreement shall be construed to confirm such intent, and to
conform to the requirements of Section 162(m) of the Code, and the Committee
shall certify in writing (which writing may include approved minutes of a
meeting of the Committee) that the applicable Performance Goal(s), determined
using the Performance Measure specified in the related grant agreement, was
attained during the relevant Performance Period at a level that equaled or
exceeded the level required for the payment of such Award in the amount proposed
to be paid and that such Award does not exceed any applicable Plan limitation.
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6. STOCK OPTIONS.
(a) IN GENERAL. Options to purchase shares of Common Stock may be
granted under the Plan and may be Incentive Stock Options or Non-Qualified Stock
Options. All Stock Options shall be subject to the terms and conditions of this
Section 6 and shall contain such additional terms and conditions, not
inconsistent with the express provisions of the Plan, as the Committee or
designated Executive Officers shall determine in accordance with personnel
policies developed by the Company. Stock Options may be granted in addition to,
or in tandem with or independent of or other grants and Awards under the Plan.
(b) ELIGIBILITY AND LIMITATIONS. Any officer of the Company and any
other Employee of the Company or a Subsidiary may be granted Stock Options. The
Committee shall determine, in its discretion, the Employees to whom Stock
Options will be granted, the timing of such grants, and the number of shares of
Common Stock subject to each Stock Option granted; provided (i) the maximum
number of shares of Common Stock in respect of which Stock Options may be
granted to any Employee during any fiscal year shall be three-hundred thousand
shares (300,000), and (ii) in respect of Incentive Stock Options, the aggregate
Fair Market Value (determined as of the date the Incentive Stock Option is
granted) of the shares of Common Stock with respect to which an Incentive Stock
Option becomes exercisable for the first time by a Participant during any
calendar year shall not exceed $100,000, or such other limit as may be required
by the Code, except that, if authorized by the Committee and provided for in the
related grant agreement, any portion of any Incentive Stock Option that cannot
be exercised as such because of this limitation may be converted into and
exercised as a Non-Qualified Stock Option. In no event shall any Stock Option be
granted to a Participant in exchange for the Participant's agreement to the
cancellation of one or more Stock Options, then held by such Participant, if the
exercise price of the new grant is lower than the exercise price of the grant to
be cancelled and in no event shall any Stock Option be amended to reduce the
option price, except as contemplated by Section 4(b) of the Plan.
(c) OPTION EXERCISE PRICE. The per share exercise price of each Stock
Option granted under the Plan shall be determined by the Committee prior to or
at the time of grant, but in no event shall the per share exercise price of any
Stock Option be less than 100% of the Fair Market Value of the Common Stock on
the date of the grant of such Stock Option.
(d) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee; except that in no event shall the term of any Incentive Stock Option
exceed ten years after the date such Incentive Stock Option is granted.
(e) EXERCISABILITY. A Stock Option shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at the date of grant; provided, however, that no Stock Option shall be
exercisable during the first six months after the date such Stock Option is
granted. No Stock Option may be exercised unless the holder thereof is at the
time of such exercise an Employee and has been continuously an Employee since
the date such Stock Option was granted, except that the Committee or designated
Executive Officers may permit the exercise of any Stock Option for any period
following the Participant's termination of employment not in excess of the
original term of the Stock Option on such terms and conditions as it shall deem
appropriate and specified in the related grant agreement.
(f) METHOD OF EXERCISE. A Stock Option may be exercised, in whole or in
part, by giving written notice of exercise to the Company specifying the number
of shares of Common Stock to be purchased. Such notice shall be accompanied by
payment in full of the purchase price, plus any required withholding taxes, in
cash or, if permitted by the terms of the related grant agreement or otherwise
approved in advance by the Committee, in shares of Common Stock already owned by
the Participant valued at the Fair Market Value of the Common Stock on the date
of exercise and delivered either by physical or constructive (attestation)
delivery. The Committee may also permit Participants, either on a selective or
aggregate basis, to simultaneously exercise Stock Options and sell the shares of
Common Stock thereby acquired pursuant to a brokerage or similar arrangement
approved in advance by the Committee and to use the proceeds from such sale to
pay the exercise price and withholding taxes.
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7. RESTRICTED STOCK GRANTS AND AWARDS.
(a) IN GENERAL. A Restricted Stock Grant is the issuance of shares of
Common Stock in the name of an Employee, which issuance is subject to such terms
and conditions as the Committee shall deem appropriate, including, without
limitation, restrictions on the sale, assignment, transfer or other disposition
of such shares and the requirement that the Employee forfeit such shares back to
the Company (i) upon termination of employment for specified reasons within a
specified period of time, or (ii) if any specified Performance Goals are not
achieved during a specified Performance Period, or (iii) if such other
conditions as the Committee may specify are not satisfied.
(b) ELIGIBILITY AND LIMITATIONS. Any officer of the Company and any
other key Employee of the Company or a Subsidiary selected by the Committee may
receive a Restricted Stock Grant. The Committee, in its sole discretion, shall
determine whether a Restricted Stock Grant shall be made, the Employee to
receive the Restricted Stock Grant, and the conditions and restrictions imposed
on the Restricted Stock Grant. The maximum number of shares of Common Stock
which may be issued as Restricted Stock under the Plan shall be two hundred
thousand shares (200,000). The maximum number of shares of Common Stock which
may be issued to any Employee as Restricted Stock during any fiscal year shall
not exceed fifty thousand shares (50,000). The maximum amount any Employee may
receive as a Restricted Stock Grant in any fiscal year shall not exceed two and
one-half million dollars ($2,500,000), determined using the Fair Market Value of
such Restricted Stock Grant as at the date of the grant thereof.
(c) RESTRICTION PERIOD. Restricted Stock Grants shall provide that in
order for a Participant to receive shares of Common Stock free of restrictions,
the Participant must remain in the employment of the Company or its
Subsidiaries, subject to such exceptions as the Committee shall deem appropriate
and specify in the related grant agreement, for a period of not less than three
years commencing on the date of the grant and ending on such later date or dates
as the Committee may designate at the time of the grant (the "Restriction
Period"). The Committee, in its sole discretion, may provide for the lapse of
restrictions in installments during the Restriction Period. The Committee may
also establish one or more Performance Goals that are required to be achieved
during one or more Performance Periods within the Restriction Period as a
condition to the lapse of the restrictions.
(d) RESTRICTIONS. The following restrictions and conditions shall apply
to each Restricted Stock Grant during the Restriction Period: (i) the
Participant shall not be entitled to delivery of the shares of the Common Stock;
(ii) the Participant may not sell, assign, transfer, pledge, hypothecate,
encumber or otherwise dispose of or realize on the shares of Common Stock
subject to the Restricted Stock Grant; and (iii) the shares of the Common Stock
issued as Restricted Stock shall be forfeited to the Company if the Participant
for any reason ceases to be an Employee prior to the end of the Restriction
Period, except due to circumstances specified in the related grant agreement or
otherwise approved by the Committee. The Committee may, in its sole discretion,
include such other restrictions and conditions as it may deem appropriate.
(e) PAYMENT. Upon expiration of the Restriction Period and if all
conditions have been satisfied and any applicable Performance Goals attained,
the shares of the Restricted Stock will be made available to the Participant,
subject to satisfaction of applicable withholding tax requirements, free of all
restrictions; provided, that the Committee may, in its discretion, require (i)
the further deferral of any Restricted Stock Grant beyond the initially
specified Restriction Period, (ii) that the Restricted Stock be retained by the
Company, and (iii) that the Participant receive a cash payment in lieu of
unrestricted shares of Common Stock.
(f) RIGHTS AS A SHAREHOLDER. A Participant shall have, with respect to
shares of Restricted Stock, all of the rights of a shareholder of the Company,
including the right to vote the shares and receive any cash dividends paid
thereon. Stock dividends distributed with respect to shares of Restricted Stock
shall be treated as additional shares under the Restricted Stock Grant and shall
be subject to the restrictions and other terms and conditions set forth therein.
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8. PERFORMANCE GRANTS AND AWARDS.
(a) ELIGIBILITY AND TERMS. The Committee may grant to officers of the
Company and other key Employees of the Company and its Subsidiaries the
prospective contingent right, expressed in Units, to receive payments of shares
of Common Stock, cash or any combination thereof, with each Unit equivalent in
value to one share of Common Stock, or equivalent to such other value or
monetary amount as may be designated or established by the Committee
("Performance Grants"), based upon Company performance over a specified
Performance Period. The Committee shall, in its sole discretion, determine the
officers of the Company and other key Employees eligible to receive Performance
Grants. At the time each Performance Grant is made, the Committee shall
establish the Performance Period, the Performance Measure and the targets to be
attained relative to such Performance Measure (the "Performance Goals") in
respect of such Performance Grant. The number of shares of Common Stock and/or
the amount of cash earned and payable in settlement of a Performance Grant shall
be determined at the end of the Performance Period (a "Performance Award").
(b) LIMITATIONS ON GRANTS AND AWARDS. The maximum number of shares of
Common Stock which may be issued pursuant to Performance Grants shall be
two-hundred thousand shares (200,000). The maximum number of shares which may be
the subject of Performance Grants made to any Participant in respect of any
Performance Period or during any fiscal year shall be fifty-thousand shares
(50,000). The maximum amount any Participant may receive during any fiscal year
as Performance Awards pursuant to Performance Grants shall not exceed two and
one-half million dollars ($2,500,000), determined using the Fair Market Value of
such Performance Awards as at the last day of the applicable Performance Period
or Periods or as at date or dates of the payment thereof, whichever is higher.
(c) PERFORMANCE GOALS, PERFORMANCE MEASURES AND PERFORMANCE PERIODS.
Each Performance Grant shall provide that, in order for a Participant to receive
an Award of all or a portion of the Units subject to such Performance Grant, the
Company must achieve certain Performance Goals over a designated Performance
Period having a minimum duration of one year, with attainment of the Performance
Goals determined using a specific Performance Measure. The Performance Goals and
Performance Period shall be established by the Committee in its sole discretion.
The Committee shall establish a Performance Measure for each Performance Period
for determining the portion of the Performance Grant which will be earned or
forfeited based on the extent to which the Performance Goals are achieved or
exceeded. In setting Performance Goals, the Committee may use a Performance
Measure based on any one, or on any combination, of the following Company
performance factors as the Committee deems appropriate: (i) Cumulative Net
Income Per Diluted Share; (ii) Cumulative Net Income; (iii) return on sales;
(iv) total shareholder return; (v) return on assets; (vi) economic value added;
(vii) cash flow; (viii) return on equity; (ix) cumulative operating income
(which shall equal consolidated sales minus cost of goods sold and selling,
administrative and general expense) and (x) achievement of explicit strategic
objectives or milestones. Performance Goals may include minimum, maximum and
target levels of performance, with the size of Performance Award based on the
level attained. Once established by the Committee and specified in the grant
agreement, and if and to the extent provided in or required by the grant
agreement, the Performance Goals and the Performance Measure in respect of any
Performance Grant (or any Restricted Stock Grant or Stock-Based Grant that
requires the attainment of Performance Goals as a condition to the Award) shall
not be changed. The Committee may, in its discretion, eliminate or reduce (but
not increase) the amount of any Performance Award (or Restricted Stock or
Stock-Based Award) that otherwise would be payable to a Participant upon
attainment of the Performance Goal(s).
(d) FORM OF GRANTS. Performance Grants may be made on such terms and
conditions not inconsistent with the Plan, and in such form or forms, as the
Committee may from time to time approve. Performance Grants may be made alone,
in addition to in tandem with, or independent of other grants and Awards under
the Plan. Subject to the terms of the Plan, the Committee shall, in its
discretion, determine the number of Units subject to each Performance Grant made
to a Participant and the Committee may impose different terms and conditions on
any particular Performance Grant made to any Participant. The Performance Goals,
the Performance Period or Periods, and the Performance Measure applicable to a
Performance Grant shall be set forth in the relevant grant agreement.
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(e) PAYMENT OF AWARDS. Each Participant shall be entitled to receive
payment in an amount equal to the aggregate Fair Market Value (if the Unit is
equivalent to a share of Common Stock), or such other value as the Committee
shall specify, of the Units earned in respect of such Performance Award. Payment
in settlement of a Performance Award may be made in shares of Common Stock, in
cash, or in any combination of Common Stock and cash, and at such time or times,
as the Committee, in its discretion, shall determine.
9. DEFERRALS.
The Committee may, whether at the time of grant or at anytime
thereafter prior to payment or settlement, require a Participant to defer, or
permit (subject to such conditions as the Committee may from time to time
establish) a Participant to elect to defer, receipt of all or any portion of any
payment of cash or shares of Common Stock that would otherwise be due to such
Participant in payment or settlement of any Award under the Plan. If any such
deferral is required by the Committee (or is elected by the Participant with the
permission of the Committee), the Committee shall establish rules and procedures
for such payment deferrals. The Committee may provide for the payment or
crediting of interest, at such rate or rates as it shall in its discretion deem
appropriate, on such deferred amounts credited in cash and the payment or
crediting of dividend equivalents in respect of deferred amounts credited in
Common Stock Equivalents. Deferred amounts may be paid in a lump sum or in
installments in the manner and to the extent permitted, and in accordance with
rules and procedures established, by the Committee.
10. NON-TRANSFERABILITY OF GRANTS AND AWARDS.
No grant or Award under the Plan, and no right or interest therein,
shall be (i) assignable, alienable or transferable by a Participant, except by
will or the laws of descent and distribution, or (ii) subject to any obligation,
or the lien or claims of any creditor, of any Participant, or (iii) subject to
any lien, encumbrance or claim of any party made in respect of or through any
Participant, however arising. During the lifetime of a Participant, Stock
Options are exercisable only by, and shares of Common Stock issued upon the
exercise of Stock Options and or in settlement of other Awards will be issued
only to, and other payments in settlement of any Award will be payable only to,
the Participant or his or her legal representative. The Committee may, in its
sole discretion, authorize written designations of beneficiaries and authorize
Participants to designate beneficiaries with the authority to exercise Stock
Options and granted to a Participant in the event of his or her death.
Notwithstanding the foregoing, the Committee may, in its sole discretion and on
and subject to such terms and conditions as it shall deem appropriate, which
terms and conditions shall be set forth in the related grant agreement: (i)
authorize a Participant to transfer all or a portion of any Non-Qualified Stock
Option granted to such Participant; provided, that in no event shall any
transfer be made to any person or persons other than such Participant's spouse,
children or grandchildren, or a trust for the exclusive benefit of one or more
such persons, which transfer must be made as a gift and without any
consideration; and (ii) provide for the transferability of a particular grant or
Award pursuant to a qualified domestic relations order. All other transfers and
any retransfer by any permitted transferee are prohibited and any such purported
transfer shall be null and void. Each Stock Option which becomes the subject of
permitted transfer (and the Participant to whom it was granted by the Company)
shall continue to be subject to the same terms and conditions as were in effect
immediately prior to such permitted transfer. The Participant shall remain
responsible to the Company for the payment of all withholding taxes incurred as
a result of any exercise of such Stock Option. In no event shall any permitted
transfer of a Stock Option create any right in any party in respect of any Stock
Option or other grant or Award, other than the rights of the qualified
transferee in respect of such Stock Option specified in the related grant
agreement.
11. CHANGE IN CONTROL.
(a) EFFECT ON GRANTS. In the event of a Change in Control (as defined
below) of the Company, except as the Board of Directors comprised of a majority
of Continuing Directors may expressly provide otherwise, and notwithstanding any
other provision of the Plan to the contrary: (i) all
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Stock Options then outstanding shall become fully exercisable as of the date of
the Change in Control, whether or not then exercisable; (ii) all restrictions
and conditions in respect of all Restricted Stock Grants then outstanding shall
be deemed satisfied as of the date of the Change in Control; and (iii) all
Performance Grants and Awards shall be deemed to have been fully earned, at the
maximum amount of the award opportunity specified in the grant agreement, as of
the date of the Change in Control.
(b) CHANGE IN CONTROL DEFINED. A "Change in Control" of the Company
shall occur when: (i) any Acquiring Person (other than the Company, any
Subsidiary, any employee benefit plan of the Company or of any Subsidiary, or
any person or entity organized, appointed or established by the Company or a
Subsidiary for or pursuant to the terms of any such plans), alone, or together
with its Affiliates and Associates, shall become the beneficial owner of fifty
percent (50%) or more of the shares of Common Stock then outstanding and
provided that the Continuing Directors of the combined companies specifically
determine that it is a "change in control" of the Company; or (ii) the
shareholders of the Company approve a definitive agreement for a merger or
consolidation involving the Company which would result in the Common Stock
outstanding immediately prior to such merger or consolidation continuing to
represent (whether by remaining outstanding or by being converted into voting
securities of the surviving entity) less than fifty percent of the combined
voting power of the Company and such other entity outstanding immediately after
such merger or consolidation; or (iii) the shareholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
other disposition of all or substantially all of the assets of the Company; or
(iv) the Continuing Directors no longer constitute a majority of the Board of
Directors. "Acquiring Person" means any person (any individual, firm,
corporation or other entity) who or which, together with all its Affiliates and
Associates, shall be the beneficial owner of a substantial block of Common
Stock. "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 under the Exchange Act. "Continuing Director" means
any individual who is a member of the Board of Directors, while such individual
is a member of the Board of Directors, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative or nominee of
an Acquiring Person or of any such Affiliate or Associate, and was a member of
the Board of Directors prior to the occurrence of a Change in Control, and any
successor of a Continuing Director, while such successor is a member of the
Board of Directors, who is not an Acquiring Person, or an Affiliate or Associate
of an Acquiring Person, or representative or nominee of an Acquiring Person or
of any such Affiliate or Associate, and is recommended or elected to succeed the
Continuing Director by a majority of the Continuing Directors.
12. AMENDMENT AND TERMINATION.
The Board of Directors may at any time terminate the Plan, except with
respect to grants then outstanding. The Board of Directors may amend the Plan at
any time and from time to time in such respects as the Board of Directors may
deem necessary or appropriate without approval of the shareholders, unless such
approval is necessary in order to comply with applicable laws, including the
Exchange Act and the Code. In no event may the Board of Directors amend the Plan
without the approval of the shareholders to (i) increase the maximum number of
shares of Common Stock which may be issued pursuant to the Plan, (ii) increase
any limitation set forth in the Plan on the number of shares of Common Stock
which may be issued, or the aggregate value of Awards which may be made, in
respect of any type of grant to all Participants during the term of the Plan or
to any Participant during any specified period, (iii) reduce the minimum
exercise price for Stock Options, or (iv) change the Performance Measure
criteria identified at Section 9(c) of the Plan.
13. MISCELLANEOUS.
(a) WITHHOLDING TAXES. All Awards under the Plan will be made subject
to any applicable withholding for taxes of any kind. The Company shall have the
right to deduct from any amount payable under the Plan, including delivery of
shares of Common Stock to be made under the Plan, all federal, state, city,
local or foreign taxes of any kind required by law to be withheld with respect
to such payment and to take such other actions as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes.
If shares of Common Stock are used to satisfy withholding taxes, such shares
shall be valued based on the Fair Market Value thereof on the date when the
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withholding for taxes is required to be made. The Company shall have the right
to require a Participant to pay cash to satisfy withholding taxes as a condition
to the payment of any amount (whether in cash or shares of Common Stock) under
the Plan.
(b) NO RIGHT TO EMPLOYMENT. Neither the adoption of the Plan nor the
making of any grant or Award shall confer upon any Employee any right to
continued employment with the Company or any Subsidiary, nor shall it interfere
in any way with the right of the Company or any Subsidiary to terminate the
employment of any Employee at any time, with or without cause.
(c) UNFUNDED PLAN. The Plan shall be unfunded and the Company shall not
be required to segregate any assets that may at any time be represented by
Awards under the Plan. Any liability of the Company to any person with respect
to any Award under the Plan shall be based solely upon any contractual
obligations that may be effected pursuant to the Plan. No such obligation of the
Company shall be deemed to be secured by any pledge of, or other encumbrance on,
any property of the Company.
(d) PAYMENTS TO TRUST. The Committee is authorized to cause to be
established a trust agreement or several trust agreements whereunder the
Committee may make payments of amounts due or to become due to Participants in
the Plan.
(e) OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Payments and other
benefits received by a Participant under an Award made pursuant to the Plan
shall not be deemed a part of a Participant's regular, recurring compensation
for purposes of any termination indemnity or severance pay law of any country
and shall not be included in, nor have any effect on, the determination of
benefits under any pension or other employee benefit plan or similar arrangement
provided by the Company or any Subsidiary, unless (i) expressly so provided by
such other plan or arrangement or (ii) the Committee expressly determines that
an Award or a portion thereof should be included as recurring compensation.
Nothing contained in the Plan shall prohibit the Company or any Subsidiary from
establishing other special awards, incentive compensation plans, compensation
programs and other similar arrangements providing for the payment of
performance, incentive or other compensation to Employees. Payments and benefits
provided to any Employee under any other plan, including, without limitation,
any stock option, stock award, restricted stock, deferred compensation, savings,
retirement or other benefit plan or arrangement, shall be governed solely by the
terms of such other plan.
(f) SECURITIES LAW RESTRICTIONS. In no event shall the Company be
obligated to issue or deliver any shares of Common Stock if such issuance or
delivery shall constitute a violation of any provisions of any law or regulation
of any governmental authority or securities exchange. No shares of Common Stock
shall be issued under the Plan unless counsel for the Company shall be satisfied
that such issuance will be in compliance with all applicable Federal and state
securities laws and regulations and all requirements of any securities exchange
on which the Common Stock is listed.
(g) GRANT AGREEMENTS. Each Participant receiving a grant under the Plan
shall enter into a grant agreement with the Company in a form specified by the
Committee agreeing to the terms and conditions of the grant and such related
matters as the Committee shall, in its sole discretion, determine.
(h) SEVERABILITY. In the event any provision of the Plan shall be held
to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the remaining provisions of the Plan.
(i) TRANSITION - 1990 PLAN. The Plan replaces and supersedes the 1990
Incentive and Non-Statutory Stock Option Plan (the "1990 Plan") and the 1990
Plan shall automatically terminate when the Plan becomes effective, except that
such termination shall not affect any grants or awards then outstanding under
the 1990 Plan.
(j) GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the laws of the State of Florida.
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EXHIBIT B
Proposed Amendment to the Company's Non-Employee Directors' 1995 Non-Statutory
Stock Option Plan (the "1995 Plan").
RESOLVED, that Section 4.2 of the 1995 Plan is deleted in its entirety and the
following shall be inserted in lieu thereof:
"4.2 ANNUAL GRANT OF OPTIONS. On the date of the annual stockholders meeting of
the Company, each eligible Optionee shall be granted an option to purchase at
the "fair market value" from the Company an aggregate of 2,500 shares of Common
Stock. The option shall vest and become exercisable one year from the date of
the grant."
B-1
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PROXY
TECH DATA CORPORATION
P.O. BOX 6260
CLEARWATER, FLORIDA 33758
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints Arthur W. Singleton as Proxy, with the power to appoint his
substitute, and hereby authorizes him to represent and to vote as designated on
the reverse hereof, all the shares of Common Stock of Tech Data Corporation held
of record by the undersigned on April 28, 2000, at the Annual Meeting of
Shareholders to be held on June 20,2000, or any adjournment thereof.
THIS PROXY, WHEN EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. ANY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED IN
FAVOR OF THE NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3.
(Continued on reverse side)
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1. TO ELECT FOUR DIRECTORS to hold office until
the dates specified in the enclosed proxy statement, FOR AGAINST ABSTAIN
all to hold office until their successors are duly 2. APPROVAL OF the Company's 2000 Equity [ ] [ ] [ ]
elected and qualified.
3. APPROVAL OF an amendment to the Non- [ ] [ ] [ ]
FOR WITHHELD Employee Directors' 1995 Non-Statutory
nominees nominees Stock Option Plan.
listed below listed below
[ ] [ ] 4. In his discretion, the Proxy is authorized to vote upon such
other business as may properly come before the meeting.
Nominees: James M. Cracchiolo, Daniel M. Doyle, Kathy Misunas
and Steven Raymund FOR the four nominees listed above EXCEPT
for the following:
____________________________________________________
When shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such. If a
corporation, please sign by President or other authorized
officer. If a partnership, please sign in partnership name
by authorized person.
___________________________________________________________
Signature
___________________________________________________________
Signature if held jointly
Date_________________________________________________, 2000
Number of Shares___________________________________________
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PLEASE HARK, SIGN DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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[LOGO]
YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND SIGN THE ABOVE
PROXY CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOP.
