<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
KENT ELECTRONICS CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
KENT ELECTRONICS CORPORATION
7433 HARWIN DRIVE
HOUSTON, TEXAS 77036
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 29, 1995
To the Shareholders of
Kent Electronics Corporation:
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of Kent Electronics Corporation (the "Company") will be held at the
offices of the Company, 7433 Harwin Drive, Houston, Texas 77036, at 10:00 a.m.,
Houston time, on Thursday, June 29, 1995, for the following purposes:
1. To elect two persons to serve as directors on the classified Board
of Directors until the 1998 annual meeting and until their successors have
been elected and have qualified.
2. To adopt a Stock Option Plan and Agreement for the Company's
Executive Vice President of Sales -- Distribution as more fully set forth
under "Proposal No. 2."
3. To adopt a Stock Option Plan and Agreement for the Company's
Executive Vice President of Operations -- Distribution as more fully set
forth under "Proposal No. 3."
4. To adopt a Stock Option Plan and Agreement for the Company's Vice
President, Secretary and Treasurer as more fully set forth under "Proposal
No. 4."
5. To ratify the appointment of Grant Thornton LLP as the Company's
independent public accountants for the fiscal year ending March 30, 1996.
6. To transact such other business as may properly come before the
Annual Meeting, or any adjournment or adjournments thereof.
Shareholders of record at the close of business on May 9, 1995 will be
entitled to notice of and to vote at the Annual Meeting, or any adjournment or
adjournments thereof. Shareholders are cordially invited to attend the Annual
Meeting in person. Those who will not attend and who wish their shares voted are
requested to sign, date and mail promptly the enclosed proxy for which a stamped
return envelope is provided.
By Order of the Board of Directors
Stephen J. Chapko, Secretary
Houston, Texas
May 24, 1995
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE URGED
TO SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY. IF YOU ATTEND THE ANNUAL
MEETING, YOU CAN VOTE EITHER IN PERSON OR BY YOUR PROXY.
<PAGE> 3
KENT ELECTRONICS CORPORATION
7433 HARWIN DRIVE
HOUSTON, TEXAS 77036
-------------------------------
PROXY STATEMENT
-------------------------------
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Kent Electronics Corporation, a
Texas corporation (the "Company"), for use at the annual meeting of shareholders
to be held on Thursday, June 29, 1995, at the offices of the Company, 7433
Harwin Drive, Houston, Texas 77036, at 10:00 a.m., Houston time, or at any
adjournment or adjournments thereof (such meeting or adjournment(s) thereof
referred to as the "Annual Meeting"). Copies of the Proxy and Notice and Proxy
Statement are being mailed to shareholders on or about May 24, 1995.
In addition to solicitation by mail, solicitation of proxies may be made by
personal interview, special letter, telephone or telegraph by the officers,
directors and employees of the Company. Brokerage firms will be requested to
forward proxy materials to beneficial owners of shares registered in their names
and will be reimbursed for their expenses. In addition, the company has retained
the services of D.F. King & Co., Inc. to assist in the solicitation of proxies
either in person or by mail, telephone or telegram, at an estimated cost of
$3,500 plus expenses. The cost of solicitation of proxies will be paid by the
Company.
A proxy received by the Board of Directors of the Company may be revoked by
the shareholder giving the proxy at any time before it is exercised. A
shareholder may revoke a proxy by notification in writing to the Company at 7433
Harwin Drive, Houston, Texas 77036, Attention: Secretary. A proxy may also be
revoked by execution of a proxy bearing a later date or by attendance at the
Annual Meeting and voting by ballot. A proxy in the form accompanying this Proxy
Statement, when properly executed and returned, will be voted in accordance with
the instructions contained therein. A proxy received by management which does
not withhold authority to vote or on which no specification has been indicated
will be voted in favor of the proposals set forth in this Proxy Statement and
for the nominees for the Board of Directors of the Company named in Proposal No.
1 of this Proxy Statement. A majority of the outstanding shares will constitute
a quorum at the Annual Meeting. Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. Abstentions are counted in tabulations of the votes cast on
proposals presented to shareholders, whereas broker non-votes are not counted
for purposes of determining whether a proposal has been approved.
At the date of this Proxy Statement, management of the Company does not
know of any business to be presented at the Annual Meeting other than those
matters which are set forth in the Notice accompanying this Proxy Statement. If
any other business should properly come before the Annual Meeting, it is
intended that the shares represented by proxies will be voted with respect to
such business in accordance with the judgment of the persons named in the proxy.
COMMON STOCK OUTSTANDING AND PRINCIPAL HOLDERS THEREOF
The Board of Directors has fixed the close of business on May 9, 1995, as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting. At that date there were outstanding 9,804,743
shares of common stock, without par value, of the Company ("Common Stock") and
the holders thereof will be entitled to one vote for each share of Common Stock
held of record by them on that date for each proposition to be presented at the
Annual Meeting.
The following table sets forth information with respect to the shares of
Common Stock (the only outstanding class of voting securities of the Company)
owned of record and beneficially as of May 9, 1995, unless otherwise specified,
by (i) all persons who own of record or are known by the Company to own
1
<PAGE> 4
beneficially more than 5% of the outstanding shares of such class of stock, (ii)
each director and named executive officer, and (iii) all directors and executive
officers of the Company as a group:
<TABLE>
<CAPTION>
SHARES OWNED TOTAL STOCK-BASED
BENEFICIALLY(1) HOLDINGS(2)
----------------------- -------------------------
NAME AND ADDRESS NUMBER PERCENT NUMBER PERCENT
---------------- ------- ------- --------- -------
<S> <C> <C> <C> <C>
Morrie K. Abramson....................... 103,575(3) 1.1% 378,075(4) 3.7%
James F. Corporron....................... 16,816 * 159,316(5) 1.6
Randy J. Corporron....................... 40,000(6) * 135,000(7) 1.4
Rodney J. Corporron...................... 24,000(8) * 99,000(9) 1.1
Mark A. Zerbe............................ 32,750(10) * 65,250(11) *
Max S. Levit............................. 0 * 0 *
David Siegel............................. 12,375(12) * 12,375(12) *
Richard C. Webb.......................... 13,875(13) * 13,875(13) *
Alvin L. Zimmerman....................... 15,375(13) * 15,375(13) *
All executive officers and directors as
a group (16 persons.................... 354,316(14) 3.5 1,030,066(15) 9.7
RCM Capital Management................... 970,500(16) 9.9 970,500(16) 9.9
RCM Limited L.P.
RCM General Corporation
Four Embarcadero Center
Suite 3000
San Francisco, California 94111
FMR Corp................................. 599,950 6.1 599,950 6.1
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
---------------
(1) The persons listed have the sole power to vote and dispose of shares
beneficially owned by them except as otherwise indicated.
(2) The amounts in this column include the equity securities shown in the
"Shares Owned Beneficially" column and options that are not currently
exercisable.
(3) Includes 28,500 shares that may be acquired upon the exercise of
outstanding options and excludes 18,000 shares held in trust for Mr.
Abramson's children and grandchildren, as to which shares Mr. Abramson
disclaims beneficial ownership.
(4) Includes 256,500 shares subject to options that are not currently
exercisable and 18,000 shares held in trust for Mr. Abramson's children and
grandchildren, as to which shares Mr. Abramson disclaims beneficial
ownership.
(5) Includes 142,500 shares subject to options that are not currently
exercisable.
(6) Includes 36,550 shares that may be acquired upon the exercise of
outstanding options.
(7) Includes 95,000 shares subject to options that are not currently
exercisable.
(8) Includes 22,500 shares that may be acquired upon the exercise of
outstanding options.
(9) Includes 75,000 shares subject to options that are not currently
exercisable.
(10) Includes 20,000 shares that may be acquired upon the exercise of
outstanding options.
(11) Includes 32,500 shares subject to options that are not currently
exercisable.
(12) Includes 4,875 shares that may be acquired upon the exercise of outstanding
options, and 3,750 shares that are owned of record by Mr. Siegel's wife.
(Notes continued on following page)
2
<PAGE> 5
(13) Includes 6,375 shares that may be acquired upon the exercise of outstanding
options.
(14) Includes 182,675 shares that may be acquired upon the exercise of
outstanding options.
(15) Includes 651,750 shares subject to options that are not currently
exercisable.
(16) RCM Capital Management ("RCM") is a registered investment adviser. In its
capacity as investment advisor, RCM may have discretionary authority to
dispose of or to vote securities that are under its management, and as a
result may be deemed to have beneficial ownership of such securities.
However, RCM does not have any economic interest in such securities;
clients are the actual owners of the securities listed above and have the
sole right to receive and the power to direct the receipt of dividends from
or proceeds from the sale of such securities. RCM Limited L.P. is the
general partner of RCM, and RCM General Corporation is the general partner
of RCM Limited L.P. RCM General Corporation and RCM Limited L.P. may be
deemed to have beneficial ownership of shares as to which RCM is deemed to
have beneficial ownership. RCM had sole dispositive power with respect to
952,550 of the shares set forth above, shared dispositive power with
respect to 18,000 of such shares, sole voting power with respect to 879,550
of such shares and no voting power with respect to 91,000 of such shares.
* Less than 1%.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
GENERAL
Two directors are to be elected at the Annual Meeting. The Company
recommends voting for the election of each of the nominees for director listed
below. The persons named as proxy holders in the accompanying proxy intend to
vote each properly signed and submitted proxy for the election as a director of
each of the persons named as a nominee below under "Nominees for Director"
unless authority to vote in the election of directors is withheld on such proxy.
If, for any reason, at the time of the election one or both of such nominees
should be unable to serve, the proxy will be voted for a substitute nominee or
nominees selected by the Board of Directors. Directors are elected by a
plurality of votes cast at the Annual Meeting. Pursuant to the Company's Bylaws,
any nomination of other persons to be elected as directors at the Annual Meeting
must be received by the Secretary of the Company not later than the close of
business on the tenth day following the date on which notice of the Annual
Meeting is first given.
Unless otherwise specified, all properly executed proxies received by the
Company will be voted for the election of Messrs. Max S. Levit and Richard C.
Webb to hold office until the 1998 annual meeting of shareholders and until each
of their respective successors is elected and qualified.
THE COMPANY RECOMMENDS VOTING "FOR" THE NOMINEES.
NOMINEES FOR DIRECTOR
The following table sets forth the name and age of each nominee listed in
the enclosed form of proxy for director to hold office until the 1998 annual
meeting of shareholders, his principal position with the Company and the year he
became a director of the Company.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE POSITION
---- --- -------- ---------
<S> <C> <C> <C>
Max S. Levit............................... 60 1995 Director
Richard C. Webb............................ 61 1986 Director
</TABLE>
Mr. Levit, President of Grocers Supply Company, Inc. since January 1992,
has served as a director of the Company since April 1995. Mr. Levit also serves
on the Board of M.D. Anderson Hospital and The University of Texas -- Houston
Health Science Center.
Mr. Webb, a founder of Harris Webb & Garrison, a Houston-based investment
banking and brokerage firm, has served as a director of the Company since June
1986. He has been involved in the investment banking business since 1960, and
was a founder of Lovett Underwood Neuhaus & Webb, Inc., a subsidiary of Kemper
Securities.
3
<PAGE> 6
OTHER DIRECTORS
The following table sets forth the name and age of each director of the
Company not up for election this year, his principal position with the Company,
the year he became a director of the Company and the year that his term as a
director expires.
<TABLE>
<CAPTION>
TERM DIRECTOR
NAME AGE EXPIRES SINCE POSITION
-------------------------- --- ------- -------- -----------------------------------------
<S> <C> <C> <C> <C>
Morrie K. Abramson........ 60 1996 1973 Chairman of the Board, Chief Executive
Officer and President
David Siegel.............. 69 1997 1990 Director
Alvin L. Zimmerman........ 51 1996 1986 Director
</TABLE>
Mr. Abramson, a co-founder of the Company, has served as Chief Executive
Officer and a director since 1973 and Chairman of the Board since 1977. He has
been in the electronics distribution business since 1956. Mr. Abramson has also
been Chairman of the Board of K*TEC Electronics Corporation ("K*TEC"), the
Company's wholly-owned manufacturing subsidiary, since its incorporation in
1983.
Mr. Siegel has served as a director of the Company since September 1990,
and has been in the electronics distribution business since 1954. Mr. Siegel is
Vice President, director and the founder of Great American Electronics, a
distribution company serving industrial distributors. He is also a director of
Nu Horizons Electronics, Micronetics and Surge Components.
Mr. Zimmerman has served as a director of the Company since June 1986. As a
judge he presided over the 309th Family District Court and the 269th Civil
District Court of Harris County, Texas from 1980 to 1984. Since 1984, he has
been a shareholder, officer and director in the law firm of Zimmerman, Flaum,
Axelrad, Meyer & Wise, P.C. and its predecessor firms.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the Company's last fiscal year, the Board of Directors held six
meetings. Each director attended all the meetings of the Board of Directors and
all the meetings of the committees on which they serve.
The Audit Committee, which was composed of Messrs. Siegel, Webb and
Zimmerman, met on two occasions during the last fiscal year. The Audit Committee
reviews with the Company's independent auditors the plan, scope and results of
the annual audit and the procedures for and results of internal controls.
The Compensation Committee, which was composed of Messrs. Siegel, Webb and
Zimmerman, met on four occasions during the last fiscal year. The Compensation
Committee is authorized to determine the compensation of Mr. Abramson. In
addition, it is authorized to make recommendations to the Board of Directors
regarding the compensation of other officers and administers the Company's stock
option plans. Upon his election to the Board of Directors in April 1995, Mr.
Levit was appointed as a member of the Audit Committee and the Compensation
Committee.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive $1,000 per meeting
for attendance at the meetings of the Board of Directors and $500 per meeting
for attendance at meetings of each committee on which such director serves (in
the case of committee meetings not held before or after Board meetings). In
addition to the above fees, directors who are not employees of the Company
receive an annual retainer in the amount of $15,000 and committee chairmen
receive $2,000 annually, with total compensation not to exceed $25,000 annually.
4
<PAGE> 7
EXECUTIVE OFFICERS
The following table sets forth the names, ages and positions of the persons
who are not directors and who are executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
--------------------------------- --- ---------------------------------------
<S> <C> <C>
Barbara Alberto.................. 48 Vice President
Keith K. Ayers................... 56 Vice President
Stephen J. Chapko................ 41 Vice President, Treasurer and Secretary
Randy J. Corporron............... 38 Executive Vice President
Rodney J. Corporron.............. 38 Vice President
Duane Davis...................... 60 Vice President
Cathy L. Felts................... 43 Vice President
William H. Fountain.............. 38 Vice President
Larry D. Olson................... 38 Executive Vice President
Mark A. Zerbe.................... 34 Executive Vice President
</TABLE>
Ms. Alberto joined the Company's credit department in 1978. In August 1987,
she was appointed Vice President and she oversees credit administration.
Mr. Ayers joined the Company in 1976 as a purchasing agent. Since then, he
has served in various capacities, including manager of the management
information systems. Mr. Ayers currently serves as Vice President and has
responsibilities for training, special projects and administrative matters.
Mr. Chapko has been Vice President and Treasurer since July 1989 and
Secretary since June 1993. He joined the Company as Assistant Treasurer in April
1987.
Mr. Randy Corporron has been Executive Vice President of Manufacturing
Services since January 1994, and was previously Vice President of the Company
since August 1987. Since July 1989, he has served as President of K*TEC. He
joined the Company in 1982 as General Manager of K*TEC.
Mr. Rodney Corporron directs and coordinates the multi-plant manufacturing
operations and was appointed Vice President of the Company and General Manager
of K*TEC in July 1989. Prior to such time, he served the Company in a number of
capacities since 1974.
Mr. Davis became a Vice President of the Company in June 1993. He joined
the Company in 1988 as the director of management information systems.
Ms. Felts became a Vice President of the Company in June 1993. She joined
the Company in 1986 as a purchasing manager for K*TEC.
Mr. Fountain has been Vice President since August 1987 and is responsible
for product management in the distribution operations. He joined the Company in
1980 as a purchasing agent.
Mr. Olson became Executive Vice President of Sales -- Distribution in
January 1994, and was previously Vice President since January 1992 after the
Company's acquisition of Shelley-Ragon, Inc. Since February 1991, he had been
President of Shelley-Ragon, Inc. Prior to that time he held various positions
with Shelley-Ragon since joining in June 1979.
Mr. Zerbe joined the Company as a sales representative in 1985. In May
1988, he was appointed Vice President of the Company and in January 1994 he
became Executive Vice President of Operations -- Distribution.
Other than as set forth below under the heading "Executive Agreements," the
executive officers serve at the pleasure of the Board of Directors.
5
<PAGE> 8
COMPENSATION COMMITTEE REPORT1
The Compensation Committee of the Board of Directors (the "Committee") is
composed entirely of outside directors and is responsible for developing and
making recommendations to the Board with respect to the Company's executive
compensation policies. This Committee Report sets forth the components of the
Company's executive officer compensation and describes the basis on which the
fiscal 1995 compensation determinations were made by the Committee with respect
to the executive officers of the Company.
In designing its executive compensation programs, the Company follows its
belief that executive compensation should reflect the value created for
stockholders while supporting the Company's strategic goals. The following
objectives have been adopted by the Committee:
1. Executive compensation should be meaningfully related to the value
created for stockholders.
2. Executive compensation programs should support the short-term and
long-term strategic goals and objectives of the Company.
3. Executive compensation programs should reflect and promote the Company's
value and reward individuals for outstanding contributions to the
Company's success.
4. Short-term and long-term executive compensation play a critical role in
attracting and retaining well qualified executives.
The Committee currently implements a compensation program based on three
components: a base salary, a related bonus program tied to Company performance,
and a stock option program. The Committee regularly reviews the various
components of the Company's executive compensation to ensure that they are
consistent with the Company's objectives.
Base Salary -- The Committee, in determining the appropriate base salaries
of its executive officers, generally considers the level of executive
compensation in similar companies in the industry. In addition, the Committee
takes into account (i) the performance of the Company and the roles of the
individual executive officers with respect to such performance, and (ii) the
particular executive officer's specific responsibilities and the performance of
such executive officer in those areas of responsibility. From time to time
surveys are undertaken to provide competitive information to the Committee. In
this regard the Committee has conferred with third party compensation and
employee benefit consultants and has reviewed published information which
members of the Committee have obtained.
Annual Incentives -- The bonus program provides direct financial incentives
in the form of an annual cash bonus to executive officers to achieve and exceed
the Company's annual goals. The Company maintains for Mr. Abramson an incentive
cash bonus plan (the "Bonus Plan"). Bonuses pursuant to such Bonus Plan are
determined by the Compensation Committee, based upon the Company's achievement
of certain budgeted goals. Ninety percent of such bonus is based on the
Company's pre-tax earnings, 5% is based on the Company's growth of earnings per
share, and 5% is based on the Company's stock performance.
The Company has developed a bonus program for Messrs. Randy and Rodney
Corporron pursuant to which they receive cash bonuses resulting from the
achievement of certain targeted goals for the operating profit in the
manufacturing operations of the Company.
Long-Term Incentives -- The Company maintains the Amended and Restated 1987
Stock Option Plan, a Chief Executive Officer Stock Option Plan and Agreement, a
Chief Operating Officer Stock Option Plan and Agreement, a K*TEC President Stock
Option Plan and Agreement and a K*TEC General Manager Stock Option Plan and
Agreement. These stock option plans align executive officer compensation and
shareholder
---------------
1 Notwithstanding filings by the Company with the Securities and Exchange
Commission ("SEC") that have incorporated or may incorporate by reference
other SEC filings (including this proxy statement) in their entirety, this
Compensation Committee Report shall not be incorporated by reference into such
filings and shall not be deemed to be "filed" with the SEC except as
specifically provided otherwise or to the extent required by Item 402 of
Regulation S-K.
6
<PAGE> 9
return, and enable executive officers to develop and maintain a significant,
long-term stock ownership position in the Company's Common Stock. For executive
officers receiving grants of stock options under the Company's Amended and
Restated 1987 Stock Option Plan, no stock options can have a term of greater
than ten years or an exercise price of less than 85% of the fair market value of
the Common Stock on the date of grant.
Consistent with the Company's compensation program outlined above,
compensation for each of the named executive officers, as well as other senior
executives, consists of a base salary, bonus and stock options. The base
salaries for the named executive officers for fiscal 1995 were believed to be at
levels below competitive amounts paid to executives with comparable
qualifications, experience and responsibilities of other companies engaged in
the same or similar business as the Company. Cash bonuses have been accrued for
payment to Mr. Abramson pursuant to the Bonus Plan and to all other named
executive officers of the Company as a result of the the Company achieving its
budgeted goals concerning pre-tax earnings, growth of earnings per share and
stock performance of the Company, and the guidance and performance of such
officers in assisting the Company to achieve those goals during fiscal 1995.
After a review of the manner in which senior executives of similar
companies in the industry are incentivized on a long-term basis, the Committee
has determined that three new stock option plans and agreements (collectively,
the "Executive Officer Plans") should be approved and adopted, one each for the
Executive Vice President of Sales -- Distribution (37,500 shares), Executive
Vice President of Operations -- Distribution (37,500 shares), and Vice
President, Secretary and Treasurer (18,750 shares). Each of the Executive
Officer Plans provides for vesting of stock options annually at 10%, 20%, 30%,
and 40% beginning May 1, 1999. Each of the Executive Officer Plans provides for
a term of 15 years and an exercise price of $14.50, which equals one-half the
closing price per share of Common Stock on May 8, 1995, the date of grant, and
are being submitted to the shareholders of the Company for approval at the
Annual Meeting.
In addition to the long-term incentive components, the Committee believes
that the cash compensation of the chief executive officer ("CEO") should be
impacted by Company performance. Mr. Abramson, who has served as CEO of the
Company since 1973, received a base salary in fiscal 1995 of $372,879, which the
Committee believes to be below the average of the base salary for chief
executive officers of other companies engaged in the same or similar business as
the Company with comparable qualifications, experience and responsibilities.
After due consideration of Mr. Abramson's performance and the achievement by the
Company of certain budgeted goals regarding pre-tax earnings, growth in earnings
per share, and stock performance, based on the Bonus Plan, Mr. Abramson received
a bonus of $674,700 in fiscal 1995, resulting in 64.4% of Mr. Abramson's cash
compensation in fiscal 1995 resulting from annual incentives.
The Committee desires its compensation policy to be cost and tax effective.
In light of federal tax law changes under the Revenue Reconciliation Act of
1993, the Committee is reviewing all compensation components to ensure the
Company is maximizing corporate tax deductions, when feasible and consistent
with its prior commitments to the Company's executive officers.
Compensation Committee: Max S. Levit, David Siegel, Richard C. Webb, and
Alvin L. Zimmerman.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee of the Board of Directors of the
Company was, during fiscal 1995, an officer or employee of the Company or any of
its subsidiaries, or was formerly an officer of the Company or any of its
subsidiaries or had any relationships requiring disclosure by the Company under
Item 404 of Regulation S-K.
During fiscal 1995, no executive officer of the Company served as (i) a
member of the compensation committee (or other board committee performing
equivalent functions) of another entity, one of whose executive officers served
on the Compensation Committee of the Board of Directors, (ii) a director of
another entity, one of whose executive officers served on the Compensation
Committee of the Board of Directors, or (iii) a member of the compensation
committee (or other board committee performing equivalent functions) of another
entity, one of whose executive officers served as a director of the Company.
7
<PAGE> 10
COMPENSATION TABLES
The following table sets forth compensation information for the chief
executive officer and the four most highly compensated executive officers of the
Company during the Company's fiscal years 1995, 1994 and 1993, for services
rendered during such years to the Company or any of its subsidiaries.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ------------
COMPENSATION OTHER SECURITIES ALL
NAME AND FISCAL ------------------ ANNUAL UNDERLYING OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION(2)
---------------------------- ---- ------- ------- --------------- ---------- ---------------
($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
Morrie K. Abramson.......... 1995 372,879 674,700 14,891 0 21,945
Chairman of the Board and 1994 366,484 420,000 6,880 0 7,075
Chief Executive Officer 1993 354,582 225,000 8,238 0 8,443
Randy J. Corporron.......... 1995 151,159 628,500 7,440 0 14,080
Executive Vice President 1994 144,375 358,925 7,505 105,000 7,075
1993 136,857 301,250 7,155 0 6,866
James F. Corporron(3)....... 1995 223,296 449,800 8,366 0 22,662
President, Chief Operating 1994 219,108 280,000 3,930 0 7,805
Officer and Director 1993 212,606 150,000 5,462 142,500 7,804
Rodney J. Corporron......... 1995 120,913 525,800 7,638 0 12,395
Vice President 1994 119,231 300,325 7,163 75,000 7,075
1993 110,584 253,000 7,306 0 6,866
Mark A. Zerbe............... 1995 162,263 36,000 3,331 0 7,823
Executive Vice President 1994 137,573 15,000 670 52,500 4,282
1993 128,451 10,000 0 0 4,077
</TABLE>
---------------
(1) Includes the amount of auto allowance paid by the Company and the amount of
reimbursement by the Company for medical and dental expenses of the officers
and their dependents.
(2) Includes Company matching contributions of $4,500 for each named executive
officer pursuant to the Company's Tax-Deferred Savings and Retirement Plan
and Trust, and Company matching contributions of $17,445, $9,580, $18,162,
$7,895, and $3,323, respectively, pursuant to the Company's Deferred
Compensation Plan adopted in fiscal 1995.
(3) Mr. James F. Corporron resigned as President and Chief Operating Officer of
the Company on March 31, 1995.
There were no grants of stock options to the named executive officers in
the last fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE MONEY OPTIONS
ACQUIRED ON VALUE AT FISCAL YEAR END AT FISCAL YEAR END
NAME EXERCISE REALIZED (EXERCISABLE/UNEXERCISABLE) (EXERCISABLE/UNEXERCISABLE)
----------------------------- ----------- -------- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
Morrie K. Abramson........... 0 0 0/285,000 0/$6,270,000
Randy J. Corporron........... 0 0 36,550/95,000 $602,437/$1,879,750
James F. Corporron........... 0 0 0/142,500 0/$3,217,650
Rodney J. Corporron.......... 5,100 $ 76,500 22,500/75,000 $423,675/$1,674,750
Mark A. Zerbe................ 0 0 17,500/36,000 $192,700/$385,400
</TABLE>
8
<PAGE> 11
PERFORMANCE GRAPH
The following performance graph provided by Media General Financial
Services compares the performance of the Company's Common Stock to the New York
Stock Exchange Market Index and a Peer Group Index (as defined below) for the
Company's last five fiscal years. The Peer Group Index is made up of the
companies whose common stock has traded publicly for the last five years and
whose primary four-digit SIC Code is the same as the Company's.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN*
AMONG KENT ELECTRONICS CORPORATION, NYSE MARKET INDEX AND
PEER GROUP INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD KENT PEER GROUP NYSE MARKET
(FISCAL YEAR COVERED) ELECTRONICS INDEX(1) INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 216.66 104.09 113.21
1992 242.42 138.66 124.56
1993 325.75 173.68 142.95
1994 324.24 174.08 148.83
1995 536.09 193.66 165.08
</TABLE>
* Assumes $100 invested on April 1, 1990 in Kent Common Stock or Index and that
dividends are reinvested. Fiscal Year Ending April 1, 1995.
---------------
(1) Includes the following companies:
Airport Systems International, All American Semiconductor, Anthem
Electronics, Applied Digital Access, Arrow Electronics, Audiovox, Avnet,
Bell Industries, Bell Microproducts, Cidco, Inc., Communications World
International, Electrocon International, Evans Environmental, Farmstead
Telephone Group, Gentner Electronics, Internet Communications, Jaco
Electronics, Kent Electronics Corporation, Marshall Industries, Milgray
Electronics, Norstan, Nu-Horizons Electronics, PC Services Source, Pioneer
Standard Electronics, Premier Industrial, Rada Electronics, Reptron
Electronics, Richardson Electronics, Richey Electronics, Sterling
Electronics, Tessco Technologies, Western MicroTechnology, Wholesale
Cellular USA, Wyle Electronics and Zing Technologies.
EXECUTIVE AGREEMENTS
In May 1987, the Company entered into an executive agreement (which was
approved by holders of shares representing more than two-thirds of the then
outstanding voting shares) with each of Messrs. Abramson and James Corporron.
Pursuant to the executive agreements, as amended, following a "change in
control" the Company will continue the employment of such persons in positions
similar to and at salary and benefit levels no lower than such persons enjoyed
immediately prior to the change in control. A "change in control" is defined as
any event that is required to be reported by the Company as such pursuant to
Item 6(e) of Schedule 14A under the Securities Exchange Act of 1934, as amended,
and in any event will be
9
<PAGE> 12
deemed to have taken place when (i) any person or entity who was not, as of the
date of the executive agreements, the beneficial owner, directly or indirectly,
of 25% or more of the voting power of the Company becomes such a beneficial
owner or (ii) a change in control has occurred as defined in the Chief Executive
Stock Option Plan and Agreement, as amended, and the President and Chief
Operating Officer Stock Option Plan and Agreement, as amended.
Following a change in control, the Company has agreed to continue to employ
each such executive, except in certain instances relating to the disability or
death of the executive, until the earlier of (i) such executive's reaching age
65 or (ii) three years after the "termination" of such executive (the "Period of
Employment"). "Termination" is defined generally as (i) the termination of
employment other than for "cause" (as defined in the agreements); (ii) a
significant adverse change in such executive's position, responsibilities or
compensation, (iii) a breach of the agreements by the Company or (iv) the
liquidation, dissolution, merger or sale of the Company or its assets. An
executive terminated during the Period of Employment is entitled under his
agreement to receive at termination his full compensation for the remainder of
the Period of Employment, subject to certain duties to mitigate such payment
obligations, and subject to his not engaging in competition (as defined in the
agreements) with the Company.
In January 1993, the Company entered into an Executive Health Care Benefits
and Consulting Agreement with each of Messrs. Abramson and James Corporron
pursuant to which the executive officer may provide consulting services to the
Company after retirement and the executive officers will be covered under the
Company's health care plan. Under such agreements, the executive officers will
pay all required premiums and other costs for Medicare coverage. Under the
Company's health care plan, the Company will provide medical, dental and
prescription drug benefits for the executive officer and his spouse for those
items and expenses which are eligible to be covered under the health care plan
to the extent not covered by Medicare.
In March 1993, the Company entered into an agreement with each of Messrs.
Abramson and James Corporron pursuant to which the Company, upon a change in
control of the Company, will make a cash payment to the executive officer in an
amount sufficient to pay all excise taxes imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), so as to place such
executive officer in the same after-tax position had there been no such taxes.
CERTAIN TRANSACTIONS
Mr. Zimmerman, a director of the Company, is a shareholder, officer and
director of the law firm of Zimmerman, Flaum, Axelrad, Meyer & Wise, P.C., a
firm retained by the Company.
PROPOSAL NO. 2 -- ADOPTION OF STOCK OPTION PLAN AND AGREEMENT
FOR THE COMPANY'S EXECUTIVE VICE PRESIDENT OF SALES -- DISTRIBUTION
The Company's Compensation Committee has determined it is in the best
interest of the Company to provide Mr. Larry D. Olson with compensation in the
form of additional equity interests in the Company. In view of the foregoing,
the Compensation Committee adopted, subject to shareholder approval, the stock
option plan and agreement for the Company's Executive Vice President of
Sales -- Distribution (the "EVP Sales-Distribution Plan"), a form of which is
attached to this Proxy Statement as Appendix A. A specific discussion of the EVP
Sales-Distribution Plan follows and a more general discussion of the EVP Sales-
Distribution Plan, along with the other Executive Officer Plans subject to
shareholder approval, is set forth below.
The EVP Sales-Distribition Plan for Mr. Olson provides for the granting of
options to purchase an aggregate of up to 37,500 shares of Common Stock. The
options become exercisable as to 3,750 shares on May 1, 1999, 7,500 shares on
May 1, 2000, 11,250 shares on May 1, 2001, and the remaining 15,000 shares on
May 1, 2002. All options expire, if not exercised, on May 1, 2010. The options
are exercisable at a purchase price of $14.50, which equals one-half the closing
price per share of the Common Stock on May 8, 1995, the date the stock option
was granted, resulting in a dollar value benefit of $543,750. The affirmative
vote of the holders of at least a majority of the outstanding shares of Common
Stock present and entitled to vote at the
10
<PAGE> 13
Annual Meeting is required to approve the adoption of the EVP Sales-Distribution
Plan. Unless otherwise specified, all properly executed proxies received by the
Company will be voted in favor of the EVP Sales-Distribution Plan.
The Company recommends voting "For" Proposal No. 2.
PROPOSAL NO. 3 -- ADOPTION OF STOCK OPTION PLAN AND AGREEMENT
FOR THE COMPANY'S EXECUTIVE VICE PRESIDENT OF OPERATIONS -- DISTRIBUTION
The Company's Compensation Committee has determined it is in the best
interest of the Company to provide Mr. Mark A. Zerbe with compensation in the
form of additional equity interests in the Company. In view of the foregoing,
the Compensation Committee adopted, subject to shareholder approval, the stock
option plan and agreement for the Company's Executive Vice President of
Operations -- Distribution (the "EVP Operations-Distribution Plan"), a form of
which is attached to this Proxy Statement as Appendix A. A specific discussion
of the EVP Operations-Distribution Plan follows and a more general discussion of
the EVP Operations-Distribution Plan, along with the other Executive Officer
Plans subject to shareholder approval, is set forth below.
The EVP Operations-Distribution Plan for Mr. Zerbe provides for the
granting of options to purchase an aggregate of up to 37,500 shares of Common
Stock. The options become exercisable as to 3,750 shares on May 1, 1999, 7,500
shares on May 1, 2000, 11,250 shares on May 1, 2001, and the remaining 15,000
shares on May 1, 2002. All options expire, if not exercised, on May 1, 2010. The
options are exercisable at a purchase price of $14.50, which equals one half the
closing price per share of Common Stock on May 8, 1995, the date the stock
option was granted, resulting in a dollar value benefit of $543,750. The
affirmative vote of the holders of at least a majority of the outstanding shares
of Common Stock present and entitled to vote at the Annual Meeting is required
to approve the adoption of the EVP Operations-Distribution Plan. Unless
otherwise specified, all properly executed proxies received by the Company will
be voted in favor of the EVP Operations-Distribution Plan.
The Company recommends voting "For" Proposal No. 3.
PROPOSAL NO. 4 -- ADOPTION OF STOCK OPTION PLAN AND AGREEMENT
FOR THE COMPANY'S VICE PRESIDENT, SECRETARY AND TREASURER
The Company's Compensation Committee has determined it is in the best
interest of the Company to provide Mr. Stephen J. Chapko with compensation in
the form of additional equity interests in the Company. In view of the
foregoing, the Compensation Committee adopted, subject to shareholder approval,
the stock option plan and agreement for the Company's Vice President, Secretary
and Treasurer (the "Secretary and Treasurer Plan"), a form of which is attached
to this Proxy Statement as Appendix A. A specific discussion of the Secretary
and Treasurer Plan follows and a more general discussion of the Secretary and
Treasurer Plan, along with the other Executive Officer Plans subject to
shareholder approval, is set forth below.
The Secretary and Treasurer Plan for Mr. Chapko provides for the granting
of options to purchase an aggregate of up to 18,750 shares of Common Stock. The
options become exercisable as to 1,875 shares on May 1, 1999, 3,750 shares on
May 1, 2000, 5,625 shares on May 1, 2001, and the remaining 7,500 shares on May
1, 2002. All options expire, if not exercised, on May 1, 2010. The options are
exercisable at a purchase price of $14.50, which equals one-half the closing
price per share of Common Stock on May 8, 1995, the date the stock option was
granted, resulting in a dollar value benefit of $271,875. The affirmative vote
of the holders of at least a majority of the outstanding shares of Common Stock
present and entitled to vote at the annual meeting is required to approve the
adoption of the Secretary and Treasurer. Unless otherwise specified, all
properly executed proxies received by the Company will be voted in favor of the
Secretary and Treasurer.
The Company recommends voting "For" Proposal No. 4.
11
<PAGE> 14
GENERAL DISCUSSION OF EXECUTIVE OFFICER PLANS
The following general discussion applies to the Executive Officer Plans
subject to shareholder approval and discussed in Proposals Nos. 2, 3, and 4
above. The discussion herein sets forth the material terms of the Executive
Officer Plans and is qualified in its entirety by reference to the form of the
Executive Officer Plan set forth as Appendix A hereto.
Options granted pursuant to the Executive Officer Plans generally are not
subject to sale, assignment or transfer other than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order,
and may be exercised during the Optionee's lifetime only by him or by his legal
representative or, following the Optionee's death, by his executors,
administrators, heirs or devisees. The option price and number of shares subject
to options granted under the Executive Officer Plans are subject to adjustment
upon a recapitalization, stock split, stock dividend or certain other corporate
transactions. In the event the Optionee's employment is terminated at the
election of the Company or the Optionee terminates his employment for "Good
Reason," as defined in the Executive Officer Plans, all options will vest and
will become immediately exercisable. In addition, all options held by the
Optionee will vest and become immediately exercisable upon the death or
disability of the Optionee or upon the occurrence of certain events constituting
a "Change in Control," as defined in the Executive Officer Plans. In the event
the Optionee elects to terminate his employment with the Company other than for
Good Reason, for a period of 90 days following such termination he may exercise
his options to the extent they have become exercisable during such time
according to the vesting schedule set forth above.
The Executive Officer Plans also provides for certain limited stock
appreciation rights, pursuant to which the Optionee can, following a "Change in
Control" as defined in the Executive Officer Plans, surrender his option to the
Company in return for a cash payment equal to the excess of the "Change in
Control Price" of the shares of Common Stock subject to the option over the
aggregate exercise price payable upon the exercise of the option. The "Change in
Control Price" is defined as the highest market price reported during either (a)
the 30 days prior to either the Optionee's election to exercise the limited
stock appreciation right or (b) the 30 days prior to the occurrence of the
Change in Control; or, in the event of any merger, consolidation or
reorganization in which the Company is not the survivor or shares of Common
Stock are converted into cash or other securities or other property (a
"Termination Merger"), the Change in Control Price is the higher of (i) the fair
market value of the consideration received per share by holders of Common Stock
of the Company in connection with such Termination Merger, or (ii) the highest
price reported for the Company's Common Stock during the 30-day period
immediately preceding the date of the Change in Control. The Company, upon a
Change in Control, will make a cash payment to the Optionee in an amount
sufficient to pay all excise taxes imposed by Section 4999 of the Code with
respect to any compensation received by Optionee pursuant to the Executive
Officer Plans, so as to place the Optionee in the same after-tax position had
there been no such taxes.
Options granted pursuant to the Executive Officer Plans are "non-qualified"
stock options and are not intended to qualify as incentive stock options under
Section 422 of the Code. The Optionee will realize no income at the time he is
granted a non-qualified stock option. Ordinary income will be realized by the
Optionee when the non-qualified stock option is exercised. The amount of such
income will be equal to the excess of the fair market value on the exercise date
of the shares of Common Stock issued to the Optionee over the exercise price of
such shares. The Optionee's holding period for federal income tax purposes with
respect to the shares acquired will begin on the date of exercise. The tax basis
of the stock acquired upon the exercise of the option will be equal to the sum
of (i) the exercise price of such option and (ii) the amount included in income
with respect to the exercise of such option. Any gain or loss on the subsequent
sale of the stock will be either a long term or short term capital gain or loss
depending on the Optionee's holding period for the Common Stock disposed by the
Optionee.
The Company will be entitled, subject to the usual rules as to
reasonableness of compensation, to a deduction for federal income tax purposes
in the same amount as the Optionee is considered to have realized ordinary
income upon the exercise of the option. The deduction will be allowed for the
taxable year of the Company in which such ordinary income is recognized by the
Optionee. Any such deductions will be limited
12
<PAGE> 15
to the maximum deduction allowable pursuant to the Internal Revenue Code,
including the limitations on excessive employee remuneration under Section
162(m) of the Internal Revenue Code.
For accounting purposes, the granting of options pursuant to the Executive
Officer Plans will result in a charge against income equal to the difference
between the option price for the shares subject to the grant and the fair market
value of such shares as of the date the option price is fixed. In this case, the
option price is $14.50, which equals one-half the closing price per share of
Common Stock on May 8, 1995, the date the stock options were granted, resulting
in an aggregate dollar value benefit of $1,359,375 to the executive officers as
a group. The charge against income, net of the related tax benefit, will be
spread over the vesting period for the options.
PROPOSAL NO. 5 -- RATIFICATION AND APPOINTMENT OF
INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected Grant Thornton LLP as
its independent public accountants to audit the accounts of the Company for the
fiscal year ending March 30, 1996. Grant Thornton has advised the Company that
it will have a representative in attendance at the Annual Meeting who will
respond to appropriate questions presented at such meeting.
Management recommends that the appointment of Grant Thornton LLP as
independent public accountants of the Company for the fiscal year ending March
30, 1996, be ratified by the shareholders. Unless otherwise specified, all
properly executed proxies received by the Company will be voted for such
ratification at the meeting or any adjournment thereof.
The Company recommends voting "For" Proposal No. 5.
OTHER MATTERS
The Board of Directors knows of no other matters than those described above
which are likely to come before the Annual Meeting. If any other matters
properly come before the meeting, persons named in the accompanying form of
proxy intend to vote such proxy in accordance with their best judgment on such
matters.
Under the federal securities laws, Company directors, certain officers, and
ten percent shareholders are required to report to the SEC, by specific due
dates, transactions and holdings in the Company's Common Stock. The Company
believes that during the 1995 fiscal year all of these filing requirements were
satisfied.
PROPOSALS AND NOMINATIONS FOR NEXT ANNUAL MEETING
Any proposals of holders of Common Stock of the Company intended to be
presented at the Annual Meeting of Shareholders of the Company to be held in
1996 must be received by the Company, addressed to the Secretary of the Company,
7433 Harwin Drive, Houston, Texas 77036, no later than January 24, 1996, to be
included in the proxy statement relating to that meeting.
Pursuant to the Company's Bylaws, any nomination of persons to be elected
as directors at the Annual Meeting of Shareholders of the Company to be held in
1996 must be received by the Secretary of the Company not later than the close
of business on the tenth day following the date on which notice of the 1996
annual meeting is first given to shareholders. Such nomination or nominations
must be in writing from a shareholder of record and must attach a written
consent of each person so nominated to serve on the Board of Directors. In
addition, the notice must set forth (i) the name, age, business address and
residence address of each nominee proposed in such notice, (ii) the principal
occupation or employment of each nominee, (iii) the number of shares of stock of
the Company that are beneficially owned by each such nominee and (iv) such other
information in respect of such nominee as would be required by the federal
securities laws and the rules
13
<PAGE> 16
and regulations promulgated thereunder in respect of an individual nominated as
a director of the Company and for whom proxies are solicited by the Board of
Directors.
By Order of the Board of Directors
Stephen J. Chapko, Secretary
May 24, 1995
THE COMPANY WILL FURNISH WITHOUT CHARGE ADDITIONAL COPIES OF ITS ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED APRIL 1, 1995 TO INTERESTED
SECURITY HOLDERS ON REQUEST. THE COMPANY WILL FURNISH TO ANY SUCH PERSON ANY
EXHIBITS DESCRIBED IN THE LIST ACCOMPANYING SUCH REPORT UPON PAYMENT OF
REASONABLE FEES RELATING TO THE COMPANY'S FURNISHING SUCH EXHIBITS. REQUESTS FOR
COPIES SHOULD BE DIRECTED TO THE SECRETARY AT THE COMPANY'S ADDRESS PREVIOUSLY
SET FORTH.
14
<PAGE> 17
APPENDIX A -- FORM OF EXECUTIVE OFFICER PLAN
KENT ELECTRONICS CORPORATION
STOCK OPTION PLAN AND AGREEMENT
1. Grant. Under the terms, provisions, and conditions of this Stock Option
Plan and Agreement by and between Kent Electronics Corporation (the "Company"),
and (the "Optionee"), the Company hereby grants to Optionee
the option to purchase shares of the Company's Common Stock, without
par value (the "Stock"), at the option price specified herein, subject to
adjustment as provided herein (the "Option"). The Option is not an "incentive
stock option" as described in Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Duration of Option and Option Price. The Option shall be for a term
commencing on the date hereof and ending fifteen (15) years from the date
hereof. The option price payable by the Optionee upon exercise of the Option as
to each share subject to the Option will be $14.50, which equals one-half of the
closing price of one share of the Stock, as reported by the New York Stock
Exchange, on the date hereof.
3. Amount Exercisable and Schedule of Exercisability. Except as otherwise
provided herein, this Option may be exercised as to shares, on and
after May 1, 1999; as to an additional shares, on and after May 1,
2000; as to an additional shares, on and after May 1, 2001; and as to
all remaining shares, on and after May 1, 2002. This Option shall immediately
become fully vested and exercisable as to all shares subject hereto upon the
death or Disability (as hereinafter defined) of Optionee, or upon the occurrence
of a "Change in Control" (as hereinafter defined), or upon the Company's
termination of its employment of Optionee at the election of the Company, or
upon Optionee's termination of his employment by the Company for "Good Reason"
(as defined herein at Section 11), or such earlier date as set forth in Section
9 hereof. The Option may be exercised, so long as it is valid and outstanding,
from time to time in whole (as to shares then exercisable) or in part; provided,
however, no fractional shares of Stock shall be issued. The Option is
cumulative, and may be exercised as to any or all shares of Stock covered hereby
from and after the time it becomes exercisable as to such shares through the
date of termination of the Option.
4. Exercise of Options. The Option shall be exercisable, in whole or in
part, by the delivery of written notice to the Company setting forth the number
of shares of Stock with respect to which the Option is to be exercised. In order
to be effective, such written notice shall be accompanied at the time of its
delivery to the Company by payment of the option price for such shares of Stock,
which payment shall be made (a) in cash or by personal check, cashier's check,
certified check, or postal or express money order payable to the order of the
Company in an amount (in United States dollars) equal to the option price
multiplied by the number of shares of Stock with respect to which the Option is
exercised or (b) in shares of Stock as set forth in this Section 4. Such notice
may be delivered in person or by messenger or courier service to the Secretary
of the Company, or shall be sent by registered mail, return receipt requested,
to the Secretary of the Company, and in all such cases delivery shall be deemed
to have been made on the date such notice is received.
At the time when the Optionee (or other holder of the Option pursuant to
Section 5) makes payment to the Company for the shares of Stock issuable upon
the exercise of the Option, the Company may require the Optionee to pay to the
Company an additional amount equal to any federal, state or local taxes (which
the Company deems necessary or appropriate to be withheld in connection with the
exercise of such Option) in such forms of payment as are described in the first
paragraph of this Section 4. In the event that Optionee does not pay to the
Company any such amount required for withholding taxes, to the extent
applicable, the employer (for payroll tax purposes) of Optionee shall have the
right to withhold such required amount from any sum payable, or to become
payable, to Optionee, upon such terms and conditions as the Company in its
discretion shall prescribe.
Payment of the option price may be made, in whole or in part, in shares of
Stock previously held by the Optionee (or other holder of the Option pursuant to
Section 5). If payment is made in whole or in part in shares of Stock, then the
Optionee (or other holder of the Option pursuant to Section 5) shall deliver to
the Company, in payment of the option price of the shares of Stock with respect
to which such Option is exercised, (i) certificates registered in the name of
such Optionee (or other holder of the Option pursuant to
<PAGE> 18
Section 5) representing a number of shares of Stock legally and beneficially
owned by such Optionee (or other holder of the Option pursuant to Section 5),
free of all liens, claims and encumbrances of every kind, such certificates to
be accompanied by stock powers duly endorsed in blank by the record holder of
the shares represented by such certificates; and (ii), if the option price of
the shares of Stock with respect to which such Option is to be exercised exceeds
the fair market value of such shares of Stock, cash or a personal check,
cashier's check, certified check, or postal or express money order payable to
the order of the Company in an amount (in United States dollars) equal to the
amount of such excess. If the fair market value of such Shares of Stock
delivered to the Company exceeds the option price of the shares of Stock with
respect to which such Option is to be exercised, the Company shall promptly
deliver, or cause to be delivered, to Optionee a replacement share certificate
representing the number of shares of Stock in excess of those surrendered in
payment of the option price.
As promptly as practicable after the receipt by the Company of (i) such
written notice from the Optionee (or other holder of the Option pursuant to
Section 5) setting forth the number of shares of Stock with respect to which
such Option is to be exercised, (ii) payment of the option price of such shares
in the form required by the foregoing provisions of this Section 4, and (iii) an
amount equal to any federal, state or local taxes which the Company deems
necessary or appropriate to be withheld incident to the exercise of the Option,
the Company shall cause to be delivered to such Optionee (or other holder of the
Option pursuant to Section 5) certificates representing the number of shares of
Stock with respect to which such Option has been so exercised.
All proceeds received pursuant to the exercise of the Option shall be added
to the general funds of the Company to be used for any corporate purpose.
For purposes of determining the value of shares of Stock delivered in
payment of all or any portion of the option price pursuant to this Section 4,
the "fair market value" of such shares shall equal the average of the daily
averages of the high and low sales price per share of the Stock as reported by
the New York Stock Exchange (or such other principal exchange or market on which
the Stock is traded as of the applicable dates) on each day on which such trades
are reported of the five trading days prior to Optionee's exercise of the
Option.
5. Transferability of Option. The Option shall not be subject to sale,
assignment or transfer, other than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
the Code. The designation of a beneficiary by Optionee shall not constitute a
transfer. The Option shall be exercisable (i) during Optionee's lifetime, only
by Optionee (or in the event of his incapacity, by his legal representative) or
(ii) following Optionee's death, by such persons as set forth in Section 6.
6. Termination of Options in Certain Cases. In the event of the death of
the Optionee while in the employ of the Company (or while affiliated with the
Company in the discretion of the Board), the Option shall become fully vested
and shall terminate on the earlier of (i) the date of expiration of the Option,
or (ii) twelve (12) months following the date of Optionee's death. After the
death of the Optionee, his executors, administrators or any person(s) to whom
the Option was transferred by will or by the laws of descent and distribution,
shall have the right, at any time prior to the expiration of the period
described in the first sentence of this paragraph, to exercise the Option.
If, before the date of expiration of the Option, the Optionee shall be
retired in good standing from the employ of the Company (or from another
affiliation with the Company in the discretion of the Board) including
retirement for reasons of Disability, the Option shall terminate on the earlier
of (i) the date of expiration of the Option, or (ii) three (3) years following
the date of such retirement. As used herein, the term "Disability" shall mean a
total and permanent disability resulting from a mental or physical incapacity
which prevents Optionee from performing the full scope of his duties for the
Company (as such duties exist on the date immediately prior to the occurrence of
such incapacity) and lasting or expected to last for a period of at least 180
days. Disability shall be determined in good faith by the Board of Directors of
the Company based on the opinion of a licensed physician. In the event of such
retirement, the Optionee (or, in the event of his incapacity, his legal
representative) shall have the right, at any time prior to the expiration of the
period described in the first sentence of this paragraph, to exercise the Option
to the same extent to which he was
A-2
<PAGE> 19
entitled to exercise it immediately prior to such retirement (and, in the case
of retirement for Disability or under circumstances constituting a termination
of Optionee's employment by the Company at the Company's election, the Option
shall fully vest and become exercisable, as set forth herein).
If, before the date of expiration of the Option, the Optionee's employment
by the Company shall be terminated by the Company at its election, or shall be
terminated by Optionee for Good Reason, this Option shall immediately vest fully
and become exercisable as to all shares covered hereby. In such event, Optionee
shall have the right to exercise the Option at any time prior to the earlier of
(i) the date of expiration of the Option or (ii) twelve (12) months following
the date of such termination of employment.
If, before the date of expiration of the Option, the Optionee's employment
or other affiliation with the Company terminates at the election of Optionee for
any reason other than Good Reason (other than in connection with Optionee's
retirement in accordance with the second paragraph of this Section 6), the
Option shall terminate on the earlier of (i) the date of expiration of such
Option, or (ii) ninety (90) days after the date of termination of the Optionee's
employment or other affiliation with the Company. In such event, the Option
shall be exercisable and shall vest as to all shares that, pursuant to the
schedule set forth in Section 3 hereof, become exercisable on or prior to the
date of termination of the Option.
For purposes of this Stock Option Plan and Agreement, employment by the
Company shall include employment by any subsidiary of the Company.
7. No Rights as Shareholder. No holder of the Option shall have any rights
as a shareholder with respect to shares covered by the Option until the date of
exercise of the Option as to such shares; and, except as otherwise provided in
Section 9 hereof, no adjustment for dividends, or otherwise, shall be made if
the record date therefor is prior to the date of such exercise.
8. Employment or Affiliation Obligation. The grant of this Option shall
not impose upon the Company any obligation to employ or to continue any
employment or other affiliation with the Optionee. The right of the Company to
terminate its employment or affiliate relationship with any person, including
the Optionee, shall not be diminished or affected by reason of the fact that
this Option has been granted.
9. Changes in the Company's Capital Structure. The existence of the Option
shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of, or affecting, the
Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
The number of shares covered by this Option and the price per share thereof
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Stock resulting from the subdivision or consolidation of shares
or any other capital adjustment, the payment of a stock dividend or any other
increase in such shares effected without receipt of consideration by the Company
or any other decrease therein effected without a distribution of cash, property,
or other securities in connection therewith.
If (i) the Company is merged into or consolidated with another corporation
under circumstances where the Company is not the surviving corporation or where
the Stock is converted into other securities, cash or other property in
connection with such merger or consolidation, (ii) the Company is recapitalized
in such a manner that shares of Stock are converted into or exchanged for other
securities of the Company, (iii) the Company sells or otherwise disposes of
substantially all its assets to another person, corporation or entity, or (iv) a
tender offer is announced that, if successfully completed, would result in a
Change in Control, then in any such case, on a date at least 30 days prior to
the effective date of any such merger, consolidation, recapitalization,
exchange, sale or acquisition or tender offer (or, in the case of such tender
offer, on such later date as is practicable, but in any such case at least ten
days prior to the termination of such tender offer), as the case may be, any
limitations as to amount exercisable each year shall be modified so that this
Option from and after such date shall be exercisable in full. In addition, with
respect to any event described in the preceding sentence, after the effective
date of such merger, consolidation, recapitalization, exchange, sale or
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<PAGE> 20
acquisition, as the case may be, Optionee shall be entitled, upon exercise of
such Option to receive in lieu of shares of Stock, shares of such stock or other
securities of the Company or the surviving or acquiring corporation or such
other property at the rate per share as the holders of shares of Stock received
pursuant to the terms of the merger, consolidation, exchange, recapitalization,
sale or acquisition.
Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class or securities convertible into shares of stock of
any class for cash or property or for labor or services, either upon direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number, class or price of shares of Stock then
subject to the Option.
10. Change in Control. A "Change in Control" shall be deemed to have
occurred on the earliest of the following dates:
(i) The date any entity or person (including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934) shall have become
the beneficial owner of, or shall have obtained voting control over, thirty
percent (30%) or more of the outstanding common shares of the Company;
(ii) The date the shareholders of the Company approve a definitive
agreement (A) to merge or consolidate the Company with or into another
corporation, in which the Company is not the continuing or surviving
corporation or pursuant to which any common shares of the Company would be
converted into cash, securities or other property of another corporation,
other than a merger of the Company in which holders of common shares
immediately prior to the merger have the same proportionate ownership of
common stock of the surviving corporation immediately after the merger as
immediately before, or (B) to sell or otherwise dispose of substantially
all the assets of the Company; or
(iii) The first date as of which Continuing Directors (as defined in
Article IX of the Company's Articles of Incorporation) fail to constitute a
majority of the members of the Company's Board of Directors.
11. Termination of Employment by Optionee for Good Reason. For purposes of
this Stock Option Plan and Agreement a termination of Optionee's employment for
"Good Reason" shall be deemed to occur if Optionee tenders his resignation to
the Board of Directors after there has been a significant and material
diminishment in the nature and scope of the authority, power, function and duty
attached to Optionee's management position with the Company as of the effective
date of this Agreement (which shall include, but not be limited to, the
appointment of any officer to whom Optionee shall report other than the Chairman
of the Board, Chief Executive Officer, President or Chief Operating Officer),
and such diminishment lasts for at least thirty (30) consecutive days and is not
cured or corrected by the Company within ten (10) days after Optionee provides
notice of same to the Company pursuant to the notice provisions hereof.
Executive's termination of his employment with the Company for Good Reason may
take place at any time after the events set forth in the preceding sentence have
occurred, and such termination need not be effected within any specified time
period after the occurrence of such events. Such termination for Good Reason
shall result in the Option immediately becoming fully vested and exercisable as
to all shares covered hereby.
12. Limited Stock Appreciation Rights. Notwithstanding any other
provisions in this Stock Option Plan and Agreement, upon the occurrence of any
Change in Control, and thereafter so long as this Option is in effect, Optionee
shall have the right to require the Company (or if the Company is not the
survivor of a merger, consolidation or reorganization, such survivor) to
purchase from him any or all unexercised options granted under this Stock Option
Plan and Agreement at a purchase price equal to (i) the excess of the Change in
Control Price (as hereinafter defined) per share over the option price per share
multiplied by (ii) the number of shares subject to the Option specified by the
Optionee for purchase in a written notice to the Company or such survivor,
addressed to the attention of the Corporate Secretary.
For purposes of this Stock Option Plan and Agreement, the term "Change in
Control Price" of shares of Stock shall mean (a) except in the case of a Change
in Control that results from a merger, consolidation or reorganization in which
the Company is not the survivor or shares of Stock are converted into cash or
other
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<PAGE> 21
securities or other assets (a "Termination Merger"), the higher of (I) the
highest sales price per share of the Stock on the New York Stock Exchange (or if
the Company's Stock is not then traded on the New York Stock Exchange, on the
principal exchange or market where such Stock is actively traded) on the trading
days during the thirty (30) days immediately preceding the date the Optionee so
notified the Company of his election pursuant to the preceding paragraph or (II)
the highest sales price per share of the Stock on the New York Stock Exchange
(or if the Company's Stock is not then traded on the New York Stock Exchange, on
the principal exchange or market where such stock is actively traded) on the
trading days during the thirty (30) days immediately preceding the date of the
Change in Control; and (b) in the case of a Change in Control that results from
a Termination Merger, the higher of (I) the fair market value of the
consideration receivable per share by holders of Stock of the Company in such
Termination Merger (which fair market value as to any securities included in
such consideration shall be the highest sales price per unit of such security on
the principal exchange or market where such security is actively traded on the
trading days during the thirty (30) days immediately preceding the date of the
Termination Merger, and as to any such security not actively traded in any
market, and as to all other property included in such consideration, shall be
the fair market value determined by the Committee (hereinafter defined) in good
faith exercised in a reasonable manner) or (II) the amount determined pursuant
to clause (a)(II) of this Section 12. The amount payable to Optionee by the
Company or the survivor in a Termination Merger, as the case may be, shall be
paid in cash or by certified check, and shall be reduced by the amount of any
taxes required to be withheld.
13. Administration. This Stock Option Plan and Agreement shall be
administered by a committee of at least two persons to be appointed by the Board
of Directors of the Company (the "Committee"). All members of the Committee
shall be persons who are "disinterested persons," as set forth in Rule 16b-3
under the Securities Exchange Act of 1934, as amended, or any successor rule
thereto ("Rule 16b-3"). Meetings shall be held at such times and places as shall
be determined by the Committee. A majority of the members of the Committee shall
constitute a quorum for the transaction of business, and the vote of a majority
of those members present at any meeting shall decide any question brought before
the meeting. No member of the Committee shall be liable for any act or omission
of any other member of the Committee or for any act or omission on his own part,
including but not limited to the exercise of any power or discretion given to
him under this Stock Option Plan and Agreement, except those resulting from his
own gross negligence or willful misconduct.
14. Notices. Any notice, consent, request or other communication
("Notice") required or permitted to be given hereunder shall be in writing. Such
Notice shall be (a) personally delivered or delivered by messenger, or (b)
mailed by certified mail, return receipt requested, postage prepaid, or (c) sent
by telecopy or the equivalent (provided, however, that the original Notice of
which a facsimile has been transmitted shall in all cases be delivered to the
addressee within two (2) business days following such transmission). Notices
given hereunder shall be addressed as follows:
<TABLE>
<S> <C>
If to Company: If to Optionee:
Kent Electronics Corporation --------------------------------
7433 Harwin Drive c/o Kent Electronics Corporation
Houston, Texas 77036 7433 Harwin Drive
Attention: Secretary Houston, Texas 77036
</TABLE>
Any Notice given in accordance herewith shall be deemed effective and to
have been received by the party to whom such Notice is directed (a) upon
delivery, if delivered personally or by messenger or sent by telecopy or the
equivalent, or (b) three (3) days after the date of deposit in the U.S. Mail, if
sent by mail and the return receipt is received by the sender, or upon actual
receipt by the party receiving Notice in the event that such return receipt is
not received by the sender.
15. Amendment. This Stock Option Plan and Agreement may be modified or
amended only by a written instrument executed by the Company and Optionee, and
any such modification or amendment may be authorized on behalf of the Company by
the Committee; provided, however, that so long as Optionee and the Company
desire that this Stock Option Plan and Agreement comply with Rule 16b-3, or any
successor or similar provisions thereto, any such amendment that would require
the vote or approval of a specified
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<PAGE> 22
percentage of the Company's shareholders in order to assure that this Stock
Option Plan and Agreement complies with Rule 16b-3, or any successor or similar
provisions thereto, shall only be made upon obtaining such required shareholder
vote, or taking such other action in connection with such amendment as the Board
of Directors or such authorized Committee deems advisable to operate this Stock
Option Plan and Agreement in accordance with Rule 16b-3 or such successor or
similar rule. However, no termination or amendment of this Stock Option Plan and
Agreement may, without the consent of the Optionee, adversely affect the rights
of Optionee as to any portion of the Option then outstanding.
16. Severability. In the event that any provision of this Stock Option
Plan and Agreement shall be held illegal, invalid, or unenforceable for any
reason, such provision shall be fully severable, but shall not affect the
remaining provisions hereof, and this Stock Option Plan and Agreement shall be
construed and enforced as if the illegal, invalid, or unenforceable provision
had not been included herein.
17. Gender, Tense and Headings. Whenever the context so requires, words of
the masculine gender used herein shall include the feminine and neuter, and
words used in the singular shall include the plural. Section headings as used
herein are inserted solely for convenience and reference and are not to be
interpreted as part of the construction of this Stock Option Plan and Agreement.
18. Governing Law. The provisions of this Stock Option Plan and Agreement
shall be construed according to the laws of the State of Texas, except as
superseded by federal law. This Agreement is performable in Harris County,
Texas. In the event that any dispute arises under this Agreement, the Optionee
shall have the right, in addition to all other rights and remedies provided by
law, at his election to seek arbitration in Houston, Texas under the rules of
the American Arbitration Association by serving a notice to arbitrate upon the
Company, or to institute a judicial proceeding in a court of competent
jurisdiction located in Harris County, Texas. In the event that the Company
institutes any legal proceeding against the Optionee to resolve a dispute under
this Agreement, the Optionee shall have the right either to seek arbitration in
Houston, Texas or to institute a judicial proceeding in a court located in
Harris County, Texas, as provided in the preceding sentence, and the Company
shall dismiss its proceeding or take such other action as may be reasonably
requested by the Optionee in order for such proceeding to be brought in the
forum selected by the Optionee in accordance with the preceding sentence.
19. Shareholder Approval. This Stock Option Plan and Agreement is subject
to approval and ratification by the vote of the holders of a majority of shares
of Stock present in person or by proxy and entitled to vote at a meeting of
shareholders of the Company. If such shareholder approval is not received on or
before December 31, 1995, the Option shall be null and void.
20. Requirement of Bonus Payment In Certain Circumstances. (a) In the
event that the Optionee is deemed to have received an excess parachute payment
(as such term is defined in Section 280G(b) of the Internal Revenue Code of
1986, as amended (the "Code")) which is subject to the excise taxes (the "Excise
Taxes") imposed by Section 4999 of the Code in respect of any payment of
compensation to the Optionee from the Company pursuant to this Stock Option Plan
and Agreement, whether in the form of cash, property, stock, stock options,
securities or otherwise, the Company shall make the Bonus Payment to the
Optionee promptly after the date on which the Optionee receives or is deemed to
have received any excess parachute payments.
(b) (i) The term "Bonus Payment" means a cash payment in an amount equal
to the sum of (A) all Excise Taxes payable by the Optionee, plus (B) all
additional Excise Taxes and federal or state income taxes to the extent
such taxes are imposed in respect of the Bonus Payment, such that the
Optionee shall be in the same after-tax position and shall have received
the same benefits that he would have received if the Excise Taxes had not
been imposed. For purposes of calculating any income taxes attributable to
the Bonus Payment, the Optionee shall be deemed for all purposes to be
paying income taxes at the highest marginal federal income tax rate, taking
into account any applicable surtaxes and other generally applicable taxes
which have the effect of increasing the marginal federal income tax rate
and, if applicable, at the highest marginal state income tax rate to which
the Bonus Payment and the Optionee are subject.
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<PAGE> 23
(ii) An example of the calculation of the Bonus Payment is set forth
below: Assume that the Excise Tax rate is 20%, that the highest federal
marginal income tax rate is 36% and that the Optionee is not subject to
state income taxes. Assume that the Optionee has received an excess
parachute payment in the amount of $1,000,000, on which $200,000 in Excise
Taxes are payable. The amount of the required Bonus Payment is $454,545.45.
The Bonus Payment, less Excise Taxes of $90,909.09 and income taxes of
$163,636.36, yields $200,000.00, the amount of the Excise Taxes payable in
respect of the excess parachute payment.
(c) The Optionee agrees to cooperate reasonably with the Company to
minimize the amount of the excess parachute payments, including without
limitation assisting the Company in establishing that some or all of the
payments received by the Optionee contingent on a change described in Section
280G(b)(2)(A)(i) of the Code are reasonable compensation for personal services
actually rendered by the Optionee before the date of such change or to be
rendered by the Optionee on or after the date of such change. In the event that
the Company is able to establish that the amount of the excess parachute
payments is less than originally anticipated by the Optionee, the Optionee shall
refund to the Company any excess Bonus Payment to the extent not required to pay
Excise Taxes or income taxes (including those incurred in respect of the payment
of the Bonus Payment). Notwithstanding the foregoing, the Optionee shall not be
required to take any actions which his tax advisor advises him in writing (i) is
improper or (ii) exposes the Optionee to material personal liability, and the
Optionee may require the Company to deliver to the Optionee an indemnification
agreement in form and substance satisfactory to the Optionee as a condition to
taking any action required by this Section 20.
(d) The Company shall make any payment required to be made under this
Agreement in cash and on demand. Any payment required to be paid by the Company
under this Agreement which is not paid within five days of receipt by the
Company of the Optionee's demand therefor shall thereafter be deemed delinquent,
and the Company shall pay to the Optionee immediately upon demand interest at
the highest nonusurious rate per annum allowed by applicable law from the date
such payment becomes delinquent to the date of payment of such delinquent sum.
(e) In the event that there is any change to the Code which results in the
recodification of Section 280G or Section 4999 of the Code, or in the event that
either such section of the Code is amended, replaced or supplemented by other
provisions of the Code of similar import ("Successor Provisions"), then this
Agreement shall be applied and enforced with respect to such new Code provisions
in a manner consistent with the intent of the parties as expressed herein, which
is to assure that the Optionee is in the same after-tax position and has
received the same benefits that he would have been in and received if any taxes
imposed by Section 4999 or any Successor Provisions had not been imposed.
(f) There shall be no right of set-off or counterclaim, in respect of any
claim, debt or obligation, against any payments required under this Section 20
to the Optionee provided for in this Agreement. No right or interest to or in
any payments required under this Section 20 shall be assignable by the Optionee;
provided, however, that this provision shall not preclude him from designating
one or more beneficiaries to receive any amount that may be payable after his
death and shall not preclude the legal representative of his estate from
assigning any right hereunder to the person or persons entitled thereto under
his will or, in the case of intestacy, to the person or persons entitled thereto
under the laws of intestacy applicable to his estate. The term "beneficiary" as
used in this Agreement shall mean a beneficiary or beneficiaries so designated
to receive any such amount or, if no beneficiary has been so designated, the
legal representative of the Optionee's estate. No right, benefit or interest
under this Section 20 shall be subject to anticipation, alienation, sale,
assignment, encumbrance, charge, pledge, hypothecation, or set-off in respect of
any claim, debt or obligation, or to execution, attachment, levy or similar
process, or assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any action specified in the immediately preceding
sentence shall, to the full extent permitted by law, be null, void and of no
effect.
21. Successors to the Company. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the Company and any
successor of the Company, including, without limitation, any corporation or
other entity acquiring directly or indirectly all or substantially all of the
assets of
A-7
<PAGE> 24
the Company whether by merger, consolidation, sale or otherwise (and such
successor shall thereafter be deemed "the Company" for the purposes of this
Agreement), but shall not otherwise be assignable by the Company.
IN WITNESS WHEREOF, this Stock Option Plan and Agreement is executed,
subject to shareholder approval as set forth herein, effective as of the 8th day
of May, 1995.
KENT ELECTRONICS CORPORATION
By:
------------------------------------
Morrie K. Abramson, Chairman and
Chief Executive Officer
OPTIONEE
--------------------------------------
Printed Name
--------------------------
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<PAGE> 25
KENT ELECTRONICS CORPORATION
7433 HARWIN DRIVE
P HOUSTON, TEXAS 77036
R ANNUAL MEETING OF SHAREHOLDERS JUNE 29, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
O
The undersigned shareholder of Kent Electronics Corporation (the
X "Company") hereby appoints Morrie K. Abramson and Stephen J. Chapko, and
each of them, attorneys-in-fact and proxies of the undersigned, with full
Y power of substitution, to vote in respect of the undersigned's shares of
the Company's Common Stock at the Annual Meeting of Shareholders of the
Company to be held on June 29, 1995, at 10:00 a.m., Houston time, at the
offices of the Company, 7433 Harwin Drive, Houston, Texas 77036 and at any
adjournment(s) thereof, the number of shares that the undersigned would
be entitled to cast if personally present.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES SET FORTH ON
THE REVERSE SIDE AND FOR EACH OF PROPOSALS 2, 3, 4 AND 5.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
* * * * * * * *
* SEE REVERSE *
* SIDE *
* * * * * * * *
<PAGE> 26
[X] PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
1. Election of Max S. Levit and Richard C. Webb to serve term of office
expiring at the Annual Meeting of Shareholders in 1998 and until their
successors shall have been duly elected and qualified:
For, except vote withheld from the following nominee:
______________________________________________________
FOR WITHHOLD
the nominees AUTHORITY
listed below (except to vote for
as marked to the the nominees
contrary below) listed below
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED BELOW AND FOR
EACH OF PROPOSALS 2, 3, 4 AND 5 BELOW. This proxy, when properly executed, will
be voted in the manner directed herein by the undersigned shareholder. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF PROPOSALS 2, 3, 4 AND
5 AND THE BOARD'S DIRECTOR NOMINEES.
2. To adopt a Stock Option Plan and Agreement for the Company's Executive
Vice President of Sales - Distribution.
FOR AGAINST ABSTAIN
3. To adopt a Stock Option Plan and Agreement for the Company's Executive
Vice President of Operations - Distribution.
FOR AGAINST ABSTAIN
4. To adopt a Stock Option Plan and Agreement for the Company's Vice
President, Secretary and Treasurer.
FOR AGAINST ABSTAIN
5. Proposal to ratify the appointment of Grant Thornton LLP as the Company's
independent public accountants for the fiscal year ending March 30, 1996
FOR AGAINST ABSTAIN
6. In their discretion on such other matters as may properly come before the
1995 Annual Meeting of Shareholders or any adjournment(s) thereof; all as
more particularly described in the Proxy Statement, receipt of which is
hereby acknowledged.
SIGNATURE(S) ___________________________________ DATE _________________, 1995
SIGNATURE(S) ___________________________________ DATE _________________, 1995
NOTE: (Please sign your name here exactly as it appears hereon. Joint owners
should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give your full title as it appears hereon.)
