<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 Rule 14a-11(c) or Rule 14a-12
ANICOM, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
ANICOM, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/X/ Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[ANICOM INC. LETTERHEAD]
August 28, 1996
To the Stockholders of ANICOM, INC.:
You are cordially invited to attend a Special Meeting of Stockholders of Anicom,
Inc. to be held at the offices of Katten Muchin & Zavis, 525 West Monroe Street,
Suite 1600, Chicago, Illinois 60661 on Wednesday, September 25, 1996 at 9:00
a.m., local time.
The attached Notice of Special Meeting and Proxy Statement fully describe the
formal business to be transacted at the Special Meeting, which includes the
approval of an amendment to the Company's Certificate of Incorporation to
increase the Company's total authorized Common Stock, the approval of the
Amended and Restated 1995 Directors Stock Option Plan and the approval of the
Company's delisting its Common Stock from the Chicago Stock Exchange.
Directors and officers of the Company will be present to help host the Special
Meeting and to respond to any questions that our stockholders may have. Whether
or not you plan to attend the Special Meeting, it is important that your shares
be represented. Regardless of the number of shares you own, please date, sign
and mail the enclosed Proxy promptly.
We look forward to seeing you on September 25, 1996.
Sincerely,
Alan B. Anixter Scott C. Anixter
ALAN B. ANIXTER SCOTT C. ANIXTER
Chairman of the Board Chairman and Chief Executive Officer
<PAGE> 3
[ANICOM INC. LETTERHEAD]
-----------------------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 25, 1996
-----------------------------------------
To the Stockholders of
Anicom, Inc.:
NOTICE IS HEREBY GIVEN that a Special Meeting of the Stockholders (the "Special
Meeting") of Anicom, Inc. (the "Company") will be held at the offices of Katten
Muchin & Zavis, 525 West Monroe Street, Suite 1600, Chicago, Illinois 60661 on
Wednesday, September 25, 1996 at 9:00 a.m., local time. A Proxy and a Proxy
Statement for the Special Meeting are enclosed.
The Special Meeting is for the following purposes:
(1) To approve an amendment to the Company's Certificate of
Incorporation to increase the Company's total authorized common
stock.
(2) To approve the Amended and Restated Anicom, Inc. 1995
Directors Stock Option Plan.
(3) To approve the Company's delisting its Common Stock from the
Chicago Stock Exchange.
(4) To transact such other business as may properly come before
the Special Meeting or any adjournments thereof.
The close of business on August 26, 1996 has been fixed as the record date
for determining stockholders entitled to notice of and to vote at the Special
Meeting or any adjournments thereof. For a period of at least ten days prior
to the Special Meeting, a complete list of stockholders entitled to vote at the
Special Meeting shall be open to the examination of any stockholder during
ordinary business hours at the offices of Katten Muchin & Zavis, 525 West
Monroe Street, Suite 1600, Chicago, Illinois 60661.
Information concerning the matters to be acted upon at the Special Meeting
is set forth in the accompanying Proxy Statement.
By Order of the Board of Directors,
David R. Shevitz
DAVID R. SHEVITZ
Corporate Secretary
Rosemont, Illinois
August 28, 1996
STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING
IN PERSON ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 4
ANICOM, INC.
6133 NORTH RIVER ROAD
SUITE 410
ROSEMONT, ILLINOIS 60018
(847) 518-8700
---------------
PROXY STATEMENT
---------------
SPECIAL MEETING OF STOCKHOLDERS
SEPTEMBER 25, 1996
The accompanying Proxy is solicited by the Board of Directors of Anicom,
Inc. (the "Company") for use at the Special Meeting of Stockholders to be held
on September 25, 1996, or at any adjournments thereof (the "Special Meeting").
Giving the Proxy will not in any way affect a stockholder's right to attend the
Special Meeting and to vote in person. The approximate date on which this
Proxy Statement and the accompanying Proxy will be mailed or otherwise
delivered to stockholders is August 28, 1996.
A Proxy in the accompanying form which is properly signed, dated, returned
and not revoked will be voted in accordance with the instructions contained
therein. Unless contrary instructions are given, Proxies will be voted for
approval of each of the items on the Proxy. Discretionary authority is
provided in the Proxy as to any matters not specifically referred to therein.
Management is not aware of any other matters which are likely to be brought
before the Special Meeting. However, if any such matters properly come before
the Special Meeting, it is understood that the Proxy holder or holders are
fully authorized to vote thereon in accordance with his or their judgment and
discretion.
The Proxy may be revoked at any time before it is exercised by providing
written notice of such revocation to Anicom, Inc., 6133 North River Road, Suite
410, Rosemont, Illinois 60018, Attn: Corporate Secretary. The Proxy also may
be revoked by the attendance and voting by a stockholder at the Special Meeting
or by the execution and delivery to the Company of a Proxy dated subsequent to
a prior Proxy.
RECORD DATE AND OUTSTANDING SHARES
The Board of Directors has fixed the close of business on August 26, 1996
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Special Meeting. As of August 1, 1996, there were
outstanding 6,281,928 shares of Common Stock. The outstanding shares of Common
Stock constitute the only outstanding voting securities of the Company entitled
to be voted at the Special Meeting. Each holder of Common Stock is entitled to
one vote for each share held by such person with respect to each matter to be
voted on at the Special Meeting.
REQUIRED VOTE
The affirmative vote of a majority of the outstanding shares of Common
Stock entitled to vote thereon is required to approve the amendment to the
Company's Certificate of Incorporation. The affirmative vote of a majority of
the shares of Common Stock entitled to vote thereon that are present in person
or by Proxy at the Special Meeting is required (i) to approve the Amended and
Restated Anicom, Inc. 1995 Directors Stock Option Plan (the "Amended and
Restated Directors Plan") and (ii) to approve the delisting of the Company's
Common Stock from the Chicago Stock Exchange.
<PAGE> 5
QUORUM; ABSTENTIONS AND BROKER NON-VOTES
The presence at the Special Meeting in person or by Proxy of the holders
of a majority of the outstanding shares of Common Stock is necessary to
constitute a quorum. Abstentions and broker non-votes will be included in
determining the presence of a quorum. Abstentions and broker non-votes will
have the same effect as votes against the proposal to approve the amendment to
the Company's Certificate of Incorporation. Abstentions will be considered
present and entitled to vote with respect to the proposal to approve the
Amended and Restated Directors Plan and the proposal to delist the Company's
Common Stock from the Chicago Stock Exchange and will have the same effect as
votes against such proposals. Broker non-votes will not be considered present
and entitled to vote with respect to such proposals and will have no effect on
the voting of such proposals.
PROXIES
Scott C. Anixter and Donald C. Welchko, the persons named as proxies on
the Proxy accompanying this Proxy Statement, have been selected by the Board of
Directors of the Company to serve in such capacity. Messrs. Anixter and
Welchko are both directors of the Company. Each executed and returned Proxy
will be voted in accordance with the directions indicated thereon, or if no
direction is indicated, such Proxy will be voted in accordance with the
recommendations of the Board of Directors contained in this Proxy Statement.
AMENDMENT OF COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE TOTAL AUTHORIZED COMMON STOCK
(PROPOSAL 1)
In August 1996, the Board of Directors proposed and recommended for
adoption by the Company's stockholders an amendment to the Company's
Certificate of Incorporation that would increase the total authorized common
stock of the Company from 10,000,000 shares to 30,000,000 shares. No change
will be made to the number of authorized shares of Preferred Stock. The
Company's stockholders are asked to approve this amendment.
The proposed amendment provides that paragraph A of Article Four of the
Company's Certificate of Incorporation be amended to read in its entirety as
follows:
"A. The Corporation shall have authority to issue the
following classes of stock, in the number of shares and at
the par value as indicated opposite the name of the class:
<TABLE>
<CAPTION>
NUMBER OF PAR VALUE
CLASS SHARES AUTHORIZED PER SHARE
--------------- ----------------- ---------
<S> <C> <C>
Common Stock 30,000,000 $.001
Preferred Stock 1,000,000 $ .01"
</TABLE>
REASONS FOR THE PROPOSAL -- As of August 1, 1996, there were 6,281,928
shares of Common Stock issued and outstanding, and 1,300,000 shares reserved
for issuance under the Company's stock option and stock incentive plans
including shares under the Second Amended and Restated Anicom, Inc.
1995 Stock Incentive Plan, the Anicom, Inc. 1996 Stock Incentive Plan and the
Amended and Restated Directors Plan, subject to stockholder approval of the
Amended and Restated Directors Plan at the Special Meeting. In addition,
138,182 shares were reserved for issuance pursuant to certain warrants.
Consequently, 2,279,890 shares of Common Stock were available for future
issuance as of August 1, 1996.
2
<PAGE> 6
Subject to stockholder approval of the increase in authorized stock, the
Company intends to declare a 2-for-1 stock split effected in the form of a 100%
stock dividend. In addition, the Board of Directors believes that it is
desirable for the Company to have available additional authorized but unissued
shares of Common Stock to provide the Company with shares of Common Stock to be
used for general corporate purposes, future acquisitions and equity financings.
Approval of the proposed amendment now will eliminate the delays and expense
which otherwise would be incurred if stockholder approval were required to
increase the authorized number of shares of Common Stock for possible future
transactions involving the issuance of additional shares.
EFFECT OF INCREASE -- The additional shares of Common Stock may be issued,
subject to certain exceptions, by the Board of Directors at such times, in such
amounts and upon such terms as the Board may determine without further approval
of the stockholders. The Company's current stockholders could suffer a
dilution of voting rights, net income and net tangible book value per share of
the Common Stock as the result of any such issuance of Common Stock depending
on the number of shares issued and the purpose, terms and conditions of the
issuance.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE AMENDMENT
TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE COMPANY'S NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK.
APPROVAL OF THE AMENDED AND RESTATED
1995 DIRECTORS STOCK OPTION PLAN
(PROPOSAL 2)
Subject to stockholder approval, the Board of Directors adopted the
Amended and Restated Directors Plan effective as of May 23, 1996. Stockholder
approval of the Amended and Restated Directors Plan is sought (i) to qualify
the Amended and Restated Directors Plan under Rule 16b-3 of the Securities
Exchange Act of 1934, as amended (the "Act"), and thereby render certain
transactions under the Amended and Restated Directors Plan exempt from certain
provisions of Section 16 of the Act and (ii) to qualify the Amended and
Restated Directors Plan under Section 162(m) of the Internal Revenue Code and
thereby allow the Company to deduct for federal income tax purposes all stock
options granted under the plan.
The Board of Directors originally adopted the Anicom, Inc. 1995 Directors
Stock Option Plan (the "Directors Plan"), effective January 20, 1995, in order
to provide for the grant of options to acquire shares of the Company's Common
Stock to the non-employee directors of the Company. In adopting the Directors
Plan, the Board of Directors noted that many other companies had adopted equity
plans to compensate their non-employee directors and that such plans
appropriately compensate non-employee directors. The Board continues to believe
that equity plans are appropriate to compensate non-employee directors and to
align the interests of the non-employee directors with the interests of the
Company's stockholders. Furthermore, the Board believes that the Directors
Plan, as originally adopted, did not provide option grants of a sufficient size
to fully accomplish these objectives. Accordingly, the Board of Directors has
approved the Amended and Restated Directors Plan pursuant to which each
non-employee director will be granted an option to purchase 5,000 shares of the
Company's Common Stock on the date that the Amended and Restated Directors Plan
is approved by the Company's stockholders (the "Restatement Effective Date").
The Amended and Restated Directors Plan also increases the number of shares
covered by options to be granted to non-employee directors on the date of each
subsequent annual meeting from 2,500 shares to 5,000 shares. The maximum total
number of shares covered by options which may be granted under the Amended and
Restated Directors Plan to each non-employee director is 25,000. The number of
shares reserved for issuance under the Amended and Restated Directors Plan has
been increased from 50,000 shares to 100,000 shares.
3
<PAGE> 7
The Amended and Restated Directors Plan is administered by the Option
Committee of the Company's Board of Directors. The Option Committee is
authorized to construe the provisions of the Amended and Restated Directors
Plan and to adopt rules and regulations for adminstering the Amended and
Restated Directors Plan to the extent consistent with Rule 16b-3(c)(2)(ii)
under the Act.
The following brief summary of certain features of the Amended and
Restated Directors Plan is qualified in its entirety by reference to the full
text of such plan as set forth in Appendix A hereto.
TERMS OF THE AMENDED AND RESTATED DIRECTORS PLAN
The Amended and Restated Directors Plan provides for the issuance of
options to purchase up to 100,000 shares of Common Stock, which shares are
reserved and available for purchase upon the exercise of options granted under
the Amended and Restated Directors Plan. Only directors who are not employees
or officers of the Company are eligible to participate in the Amended and
Restated Directors Plan. There currently are four non-employee directors
eligible to participate in the Amended and Restated Directors Plan.
Under the Amended and Restated Directors Plan, each non-employee director
who was a director on February 22, 1995 was granted an option to purchase 2,500
shares of Common Stock at a purchase price of $6.00 per share, which was the
offering price of the Common Stock in the Company's initial public offering.
Each non-employee director who was a director on February 22, 1996 was granted
an additional option to purchase 2,500 shares of Common Stock at a purchase
price of $11.50, which was the closing price of the Common Stock on such date
as quoted on the NASDAQ National Market. Thus, each of the Company's four
non-employee directors, William R. Anixter, Lee B. Stern, Ira J. Kaufman and
Michael Segal has been granted options to purchase a total of 5,000 shares of
Common Stock. The closing price of the Company's Common Stock on August 13,
1996 was $14.25.
Each non-employee director who is a director of the Company on the
Restatement Effective Date will receive an option to purchase 5,000 shares of
Common Stock. Each non-employee director who becomes a director of the Company
after the Restatement Effective Date will be granted an option to purchase
5,000 shares of the Company's Common Stock on the date he or she becomes a
director of the Company (the "Initial Grant Date"). On the date of the
Company's annual meeting of stockholders in the calendar year after the
Restatement Effective Date, or the Initial Grant Date in the case of a new
director, and on the date of each annual meeting of stockholders thereafter,
each non-employee director who is still a director on such date will be granted
an option to purchase 5,000 shares of Common Stock. The total number of shares
for which options may be granted to a director under the Amended and Restated
Directors Plan shall not exceed 25,000 shares. If there are not sufficient
shares remaining and available to all non-employee directors eligible for an
automatic grant at the time at which an automatic grant would otherwise be
made, then each eligible non-employee director shall receive an option to
purchase a pro rata number of shares.
All options granted under the Amended and Restated Directors Plan are
immediately exercisable on the date of grant. If any options under the Amended
and Restated Directors Plan are surrendered before exercise or lapse without
exercise, in whole or in part, the shares reserved for grant will revert to the
status of available shares. All options expire on the earlier to occur of (a)
seven years following the grant date and (b) the termination of the
non-employee director's directorship for "Cause" (as defined in the Directors
Plan). In the event of a non-employee director's death or "Disability" (as
defined in the Directors Plan), any vested, unexpired and unexercised option
granted to such non-employee Director shall become immediately exercisable for
a period of one (1) year (or such other period as the Option Committee may
specify) or until the expiration of the option period, whichever is shorter.
4
<PAGE> 8
Except as provided in any option agreement or as determined by the Option
Committee, options may only be transferred under the laws of descent and
distribution or, if permitted without liability under applicable law, pursuant
to a qualified domestic relations order. Otherwise, options shall be
exercisable only by the director during such director's lifetime. The option
exercise price is payable by the director (i) in cash, (ii) in shares of Common
Stock having a fair market value equal to the exercise price, (iii) by delivery
of evidence of indebtedness, (iv) by authorizing the Company to retain shares
of Common Stock having a fair market value equal to the exercise price, (v) by
"cashless exercise" as permitted under the Federal Reserve Board's Regulation
T, or (vi) by any combination of the foregoing.
In the event of any stock dividends, stock splits, combinations,
recapitalizations, reorganizations, liquidations or similar transactions, the
Company will appropriately adjust the number of shares available under the
Amended and Restated Directors Plan, the number of shares covered by
outstanding options and the exercise prices of such outstanding options.
The Board of Directors or the Option Committee may amend the Amended and
Restated Directors Plan, subject to stockholder approval if required by
applicable law. No amendment may impair the rights of a holder of an
outstanding option without the consent of such holder, nor may an amendment be
made in any manner which fails to comply with Rule 16b-3(c)(2)(ii)(B) under the
Act. In addition, any amendment by the Option Committee is subject to approval
by the Board of Directors.
DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES
The following summary of tax consequences with respect to options under
the Amended and Restated Directors Plan is not comprehensive and is based upon
laws and regulations in effect on August 1, 1996. Such laws and regulations
are subject to change.
A director granted an option under the Amended and Restated Directors Plan
does not recognize taxable income upon grant, and the Company is not entitled
to a deduction for Federal income tax purposes upon such grant. Upon exercise
of an option, participants generally will be taxed at ordinary income tax rates
on the difference between the exercise price of the option and the fair market
value of the Common Stock issued thereunder. In determining the amount of the
difference, the fair market value will be determined on the date of exercise.
The Company will receive a corresponding deduction for the amount of income
recognized by a participant upon exercise of an option. Any gain or loss
realized upon the subsequent sale of the Common Stock issued upon exercise of
the option (measured by the difference between the fair market value,
determined or utilized by the optionee as described above, and the sale price)
will be taxed at either long-term or short-term capital gain (or loss) rates,
depending on the selling stockholder's holding period. Such subsequent sale
would have no tax consequences for the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF
THE AMENDED AND RESTATED ANICOM, INC. 1995 DIRECTORS STOCK OPTION PLAN.
5
<PAGE> 9
EXECUTIVE COMPENSATION
The following table provides information concerning the annual and other
compensation for services in all capacities to the Company for the last three
fiscal years of those persons who were at December 31, 1995 (i) the Chief
Executive Officer and (ii) the only other highly compensated (combined salary
and bonus) executive officers of the Company whose total annual salary and
bonus equalled or exceeded $100,000 (collectively, the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
------------------------------------ ------------
SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION OTHER ANNUAL UNDERLYING COMPENSATION
YEAR SALARY ($) BONUS ($) COMPENSATION OPTIONS (#) ($)
- ------------------------------------------------- ---- ---------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Scott C. Anixter
Co-Chairman and Chief Executive Officer(1)(2).. 1995 150,000 --- 13,900 --- 1,500
1994 67,500 12,500 25,123 --- ---
1993 67,500 --- 13,890 --- ---
Carl E. Putnam
President and Chief Operating Officer(1)(3)...... 1995 138,000 --- --- 30,000 5,266
1994 128,000 19,500 --- --- 1,701
1993 90,025 --- --- --- 529
Robert L. Swanson
Senior Executive Vice President(1)(4)............ 1995 106,000 --- --- 20,000 1,060
1994 96,000 6,000 --- --- ---
1993 72,000 --- --- --- ---
Donald C. Welchko
Chief Financial Officer(5)....................... 1995 110,000 --- --- 12,000 1,100
</TABLE>
(1) The data for the fiscal year ended December 31, 1993 reflects the
compensation paid during the nine months ended December 31, 1993 and
includes compensation paid by the Predecessor Corporation during the three
months ended June 30, 1993.
(2) "Other Annual Compensation" includes $13,900, $15,123 and $13,890 which
are attributable to club fees paid by the Company in 1995, 1994 and 1993,
respectively. "All Other Compensation" includes $1,500 in Company
matching contributions to the Company's 401(k) Plan. The Company and Mr.
Anixter have entered into an employment agreement under which Mr. Anixter
will receive an annual base salary of $240,000 in 1996. See "Employment
Agreements."
(3) "All Other Compensation" includes $3,886, $1,701 and $529 for premiums
paid by the Company for Mr. Putnam on life and disability insurance
policies in 1995, 1994 and 1993, respectively and $1,380 in Company
matching contributions to the Company's 401(k) Plan in 1995. The Company
and Mr. Putnam have entered into an employment agreement under which Mr.
Putnam will receive an annual base salary of $180,000 in 1996. See
"Employment Agreements."
(4) "All Other Compensation" includes $1,060 in Company matching
contributions to the Company's 401(k) Plan in 1995. The Company and Mr.
Swanson have entered into an employment agreement under which Mr. Swanson
will receive an annual base salary of $124,000 in 1996. See "Employment
Agreements."
(5) "All Other Compensation" includes $1,100 in Company matching
contributions to the Company's 401(k) Plan in 1995.
6
<PAGE> 10
OPTION GRANTS IN 1995
The following table provides information on grants of stock options in
1995 to the Named Officers pursuant to the Company's 1995 Stock Incentive Plan.
No stock appreciation rights were granted by the Company in 1995.
OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF TOTAL ANNUAL RATES OF STOCK
NUMBER OF SHARES OPTIONS GRANTED TO PRICE APPRECIATION
UNDERLYING OPTIONS EMPLOYEES IN FISCAL EXERCISE OR BASE EXPIRATION FOR OPTION TERMS (1)
NAME GRANTED (#) YEAR PRICE ($/SH) DATE 5% ($) 10% ($)
- ----------------- ------------------ ------------------- ---------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Carl E. Putnam..... 20,000(2) 9.7% $6.00 02/22/05 $75,400 $191,200
10,000(3) 4.9 9.00 11/20/05 56,600 143,400
Robert L. Swanson.. 12,000(2) 5.8 6.00 02/22/05 45,240 114,720
8,000(3) 3.9 9.00 11/20/05 45,280 114,720
Donald C. Welchko.. 6,000(2) 2.9 6.00 02/22/05 22,620 57,360
6,000(3) 2.9 9.00 11/20/05 33,960 86,040
</TABLE>
(1) Potential realizable value is presented net of the option exercise price
but before any Federal or state income taxes associated with exercise.
These amounts represent certain assumed rates of appreciation only.
Actual gains, if any, on stock option exercise are dependent on the future
performance of the Common Stock, as well as the option holder's continued
employment throughout the vesting period. The amounts reflected in the
table may not necessarily be achieved.
(2) These Options became exercisable in five equal annual increments,
beginning on February 22, 1996, the first anniversary of the date of
grant.
(3) These Options become exercisable in five equal annual increments,
beginning on November 20, 1996, the first anniversary of the date of
grant.
YEAR-END 1995 OPTION VALUES
The following table provides information on the Named Officers'
unexercised options at December 31, 1995. All such options were granted under
the Company's 1995 Stock Incentive Plan. None of the Named Officers exercised
any options during 1995.
YEAR-END 1995 OPTION VALUE
<TABLE>
<CAPTION>
NUMBERS OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT 12/31/95 AT FISCAL YEAR END(1)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------- ------------------------- -------------------------
<S> <C> <C>
Carl E. Putnam....... --/30,000 --/$108,750
Robert L. Swanson.... --/20,000 --/68,500
Donald C. Welchko.... --/12,000 --/37,500
</TABLE>
(1) The value of the "in-the-money" options represents the difference between
the exercise price of such options and $10.625, the closing sale price of
the Common Stock on December 29, 1995.
7
<PAGE> 11
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of Scott C.
Anixter, Carl E. Putnam, Robert L. Swanson, Robert Brzustewicz, Sr. and Glen M.
Nast. Each of Mr. Anixter's, Mr. Putnam's and Mr. Swanson's employment
agreements contains non-competition and non-solicitation provisions commencing
on the date of the employment agreement and ending two years after termination
of employment (unless such termination occurs following a change in control).
In the event of a change in control, the employment agreements provide for
severance payments to such employees. A "change in control" of the Company is
triggered upon the acquisition by any individual, entity or group of a stated
percentage of the then outstanding shares of Common Stock of the Company (30%
with respect to Mr. Anixter, 50% with respect to Messrs. Putnam and Swanson),
the approval by the stockholders of certain specified types of corporate
transactions or business combinations, or the replacement of a majority of the
incumbent Board of Directors.
Following a change in control of the Company, if (i) during the next 24
months, Mr. Anixter's employment with the Company is terminated by either Mr.
Anixter or the Company for any reason, or (ii) at any time Mr. Anixter's
employment with the Company is terminated by him for good reason or by the
Company without cause, the Company is obligated to pay Mr. Anixter the greater
of (i) $1,000,000 or (ii) three times Mr. Anixter's average annual compensation
during each of the five full fiscal years immediately prior to the date of
termination of employment. In the event of a change in control, if (i) during
the next 24 months, Mr. Anixter's employment with the Company is terminated for
any reason or (ii) at any time his employment is terminated by him with good
reason or by the Company without cause, Mr. Anixter will have the option of
extending the non-competition and non-solicitation provisions for two years
following termination for additional consideration in an amount equal to two
times his highest annual compensation during any of the five full fiscal years
immediately prior to termination of employment.
In the event of a change in control, if either Mr. Putnam's or Mr.
Swanson's employment with the Company is terminated by such employee for good
reason or by the Company without cause during the next 36 months, the Company
is obligated to pay such employee a lump sum cash payment equal to the greater
of (i) $1,000,000 for Mr. Putnam, $500,000 for Mr. Swanson, or (ii) three times
such employee's average annual compensation during each of the five full fiscal
years immediately prior to the date of termination of employment. In addition,
following a change in control, if either Mr. Putnam or Mr. Swanson terminates
employment with the Company without good reason during the next 6 months, the
Company shall pay to such employee an amount equal to 20% of the amount
described in the prior sentence. Following a change in control, if either Mr.
Putnam's or Mr. Swanson's employment with the Company is terminated by such
employee for good reason or by the Company without cause during the next 36
months, such employee will have the option of extending the non-competition and
non-solicitation provisions for an additional term of two years for additional
consideration in an amount equal to two times the highest annual compensation
during any of the five full fiscal years immediately prior to termination of
employment. Messrs. Anixter, Putnam and Swanson also are entitled to gross-up
payments to the extent that the payments described above are subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code. The aggregate
base salary paid to Messrs. Anixter, Putnam and Swanson in 1995 was $394,000
and the aggregate base salary to be paid to them in 1996 is $544,000.
Each of Mr. Brzustewicz's and Mr. Nast's employment agreements provides for
an initial term of five years with a base salary of $240,000 per year for Mr.
Brzustewicz and $200,000 per year for Mr. Nast. Each of Mr. Brzustewicz's and
Mr. Nast's employment agreements also contains non-competition and
non-solicitation provisions commencing on the date of the employment agreement
and ending two years after termination of such person's employment. However, if
the Company fails to offer to renew
8
<PAGE> 12
Mr. Brzustewicz's or Mr. Nast's employment agreement, then such person would no
longer be subject to the non-competition or non-solicitation provisions of his
employment agreement.
If either Mr. Brzustewicz's or Mr. Nast's employment is terminated by the
Company during the initial five year term without Cause (as defined in such
agreements), the Company is obligated to continue to pay such person an annual
amount equal to the sum of his Base Salary and bonus earned for the year prior
to the year in which the employee is terminated, payable in equal monthly
installments. If the Company fails to pay such employee a severance payment
due him, such employee would be released from the non-competition or
non-solicitation provisions of his employment agreement. However, such release
would not be the employee's only remedy for such failure and the Company would
still be obligated to pay any post-termination benefits due to the employee
under his agreement.
In connection with his employment agreement, Mr. Brzustewicz was granted
an option to purchase 150,000 shares of the Company's common stock at an
exercise price of $12.375 per share, which option vests in three equal annual
installments, commencing on March 12, 1997. In addition, Mr. Brzustewicz was
elected to the Company's Board of Directors as of the date of his employment
agreement for a term expiring in 1998. Furthermore, the Company agreed to use
its reasonable efforts to recommend Mr. Brzustewicz for election at the
Company's 1998 annual meeting of stockholders.
9
<PAGE> 13
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth, as of August 1, 1996, certain information
with respect to the beneficial ownership of the Company's Common Stock by (i)
each person known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii)
each Named Officer and (iv) all executive officers and directors as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS(1) NUMBER OF SHARES PERCENT OF
BENEFICIALLY OWNED (2) OWNERSHIP (6)
---------------------- -------------
<S> <C> <C>
Scott C. Anixter(2)..................................... 1,044,000 16.6%
Alan B. Anixter(3)...................................... 55,001 *
Carl E. Putnam(4)....................................... 61,101 1.0%
Robert L. Swanson(5).................................... 64,901 1.0%
Donald C. Welchko(6).................................... 3,501 *
Robert Brzustewicz, Sr.................................. 85,346 1.4%
William R. Anixter(7)................................... 30,000 *
Ira J. Kaufman(7)(8).................................... 29,000 *
Michael Segal(7)........................................ 15,000 *
Lee B. Stern(7)......................................... 44,000 *
Directors and executive officers as a group (11 persons) 1,466,233 23.2%
</TABLE>
* less than one percent.
(1) The address of each stockholder listed is c/o Anicom, Inc., 6133 North
River Road, Suite 410, Rosemont, Illinois 60018.
(2) Includes 50,000 shares held by Mr. Anixter's wife, Penny W. Anixter,
360,000 shares held by trusts for the benefit of Scott C. Anixter's
children of which Penny W. Anixter has sole voting and investment power as
investment advisor, and 302,400 shares held in custodial accounts for the
benefit of Scott C. Anixter's children of which Scott C. Anixter has sole
voting and investment power as custodian.
(3) Includes 25,001 shares held in a trust for the benefit of Mr. Anixter's
wife, Gail Anixter, of which Alan B. Anixter has sole voting and
investment power as trustee and of which Alan B. Anixter disclaims
beneficial ownership. Also includes 5,000 shares issuable on or before
September 30, 1996 upon exercise of options granted pursuant to the Second
Amended and Restated 1995 Stock Incentive Plan.
(4) Includes 1,000 shares issuable on or before September 30, 1996 upon
exercise of options granted pursuant to the Second Amended and Restated
1995 Stock Incentive Plan.
(5) Includes 2,400 shares issuable on or before September 30, 1996 upon
exercise of options granted pursuant to the Second Amended and Restated
1995 Stock Incentive Plan. Also includes 1,500 shares held in custodial
accounts for the benefit of Mr. Swanson's children and 1,000 shares held
in a custodial account for the benefit of Mr. Swanson's spouse, over which
Mr. Swanson's spouse has sole voting and investment power.
(6) Includes 300 shares held in custodial accounts for the benefit of Mr.
Welchko's children and includes 1,200 shares issuable on or before
September 30, 1996 upon exercise of options granted pursuant to the Second
Amended and Restated 1995 Stock Incentive Plan.
(7) Includes 5,000 shares issuable upon exercise of options granted pursuant
to the Anicom, Inc. 1995 Directors Stock Option Plan. Excludes 5,000
shares which will become issuable pursuant to options to be granted if the
Amended and Restated 1995 Anicom, Inc. Directors Stock Option Plan is
approved at the Special Meeting.
(8) Includes 14,000 shares issuable upon exercise of common stock warrants.
10
<PAGE> 14
APPROVAL OF THE COMPANY'S DELISTING ITS COMMON STOCK
FROM THE CHICAGO STOCK EXCHANGE
(PROPOSAL 3)
Subject to the vote of the Company's stockholders at the Special Meeting,
the Company intends to apply to the Chicago Stock Exchange and the Securities
and Exchange Commission to withdraw the Company's Common Stock from listing on
the Chicago Stock Exchange. The Company's Common Stock is currently listed and
traded on both the Chicago Stock Exchange and on the National Association of
Securities Dealers Automated Quotation System (Nasdaq) National Market. Under
the rules of the Chicago Stock Exchange, the Exchange may require that a
proposed withdrawal from listing be submitted to a vote of the stockholders.
Applicable rules of the Securities and Exchange Commission do not directly
require a vote of the stockholders, but do require that the Company demonstrate
its efforts to comply with the rules of the Chicago Stock Exchange.
The Board of Directors of the Company believes that maintenance of the
dual listings on both the Chicago Stock Exchange and the Nasdaq National Market
is not in the best interests of the Company's stockholders. Through August 13,
1996, the volume of trading of the Company's Common Stock was 9,882,900 shares.
All of this trading activity has taken place on the Nasdaq National Market.
No trading of the Company's Common Stock has taken place on the Chicago Stock
Exchange since May 1995. Accordingly, the Board of Directors believes that the
costs of maintaining a listing on the Chicago Stock Exchange do not justify the
Company's continued listing on such exchange given the lack of trading on the
Chicago Stock Exchange.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF
THE COMPANY'S DELISTING ITS COMMON STOCK FROM THE CHICAGO STOCK EXCHANGE.
OTHER MATTERS
SOLICITATION
The cost of soliciting Proxies in the accompanying form will be borne by
the Company. In addition to the solicitation of Proxies by the use of the
mails, certain officers and associates (who will receive no compensation
therefor in addition to their regular salaries) may be used to solicit Proxies
personally and by telephone and telegraph. In addition, banks, brokers and
other custodians, nominees and fiduciaries will be requested to forward copies
of the Proxy material to their principals and to request authority for the
execution of Proxies. The Company will reimburse such persons for their
expenses in so doing. In addition, the Company has engaged MacKenzie Partners,
New York, New York to assist in soliciting Proxies for a fee of approximately
$3,000 plus reasonable out of pocket expenses.
STOCKHOLDER LIST
A list of stockholders entitled to vote at the Special Meeting, arranged
in alphabetical order, showing the address of and number of shares registered
in the name of each stockholder, will be open to the examination of any
stockholder, for any purpose germane to the Special Meeting, during ordinary
business hours, for a period of at least ten days prior to the Special Meeting
and continuing through the date of the Special Meeting, at the offices of
Katten Muchin & Zavis, 525 West Monroe Street, Suite 1600, Chicago, Illinois
60661.
INCORPORATION BY REFERENCE
No documents are incorporated herein by reference.
11
<PAGE> 15
Please date, sign and return the enclosed Proxy at your earliest
convenience in the enclosed envelope. No postage is required for mailing in
the United States. A prompt return of your Proxy will be appreciated.
By Order of the Board of Directors,
DAVID R. SHEVITZ
David R. Shevitz, Corporate Secretary
12
<PAGE> 16
APPENDIX A
AMENDED AND RESTATED
ANICOM, INC.
1995 DIRECTORS STOCK OPTION PLAN
<PAGE> 17
AMENDED AND RESTATED
ANICOM, INC.
1995 DIRECTORS STOCK OPTION PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
ESTABLISHMENT 1
- -------------
1.1 Purpose. 1
ARTICLE II
DEFINITIONS 1
2.1 "Affiliate" 1
2.2 "Agreement" or "Award Agreement" 1
2.3 "Anixter Family" 2
2.4 "Board of Directors" or "Board" 2
2.5 "Cause" 2
2.6 "Change in Control" 2
2.7 "Code" or "Internal Revenue Code" 2
2.8 "Commission" 2
2.9 "Committee" 2
2.10 "Common Stock" 2
2.11 "Company" 2
2.12 "Director" 3
2.13 "Disability" 3
2.14 "Disinterested Person" 3
2.15 "Effective Date" 3
2.16 "Exchange Act" 3
2.17 "Fair Market Value" 3
2.18 "Grant Date" 4
2.19 "Initial Grant Date" 4
2.20 "Nonqualified Option" 4
2.21 "Option" 4
2.22 "Option Period" 4
2.23 "Option Price" 4
2.24 "Participant" 4
2.25 "Plan" 4
2.26 "Public Offering" 4
2.27 "Representative" 4
2.28 "Rule 16b-3" 4
2.29 "Securities Act" 5
2.30 "Termination of Directorship" 5
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
ARTICLE III
ADMINISTRATION
<S> <C> <C>
5
3.1 Committee Structure and Authority 5
ARTICLE IV
STOCK SUBJECT TO PLAN 7
4.1 Number of Shares 7
4.2 Release of Shares 7
4.3 Restrictions on Shares 7
4.4 Shareholder Rights 8
4.5 Reasonable Efforts To Register 8
4.6 Anti-Dilution 8
ARTICLE V
OPTION GRANTS 9
5.1 Eligibility 9
5.2 Grant and Exercise 9
5.3 Terms and Conditions 9
5.4 Termination by Reason of Death 10
5.5 Termination by Reason of Disability 10
5.6 Other Termination 11
5.7 Cashing Out of Option 11
ARTICLE VI
PROVISIONS APPLICABLE TO STOCK ACQUIRED UNDER THE PLAN 11
6.1 Transfer of Shares 11
6.2 Limited Transfer During Offering 11
6.3 Committee Discretion 11
6.4 No Company Obligation 12
ARTICLE VII
CHANGE IN CONTROL PROVISIONS 12
7.1 Impact of Event 12
7.2 Definition of Change in Control 12
ARTICLE VIII
MISCELLANEOUS 13
8.1 Amendments and Termination 13
8.2 Unfunded Status of Plan 13
8.3 General Provisions 14
8.4 Mitigation of Excise Tax 15
8.5 Options in Substitution for Options Granted by Other
Corporations 15
8.6 Procedure for Adoption 15
8.7 Procedure for Withdrawal 15
8.8 Delay 15
</TABLE>
-ii-
<PAGE> 19
<TABLE>
<CAPTION>
<S> <C> <C>
8.9 Headings 16
8.10 Severability 16
8.11 Successors and Assigns 16
8.12 No Obligation to Give Notice 16
8.13 No Third Party Beneficiaries 16
8.14 Entire Agreement 17
</TABLE>
-iii-
<PAGE> 20
AMENDED AND RESTATED
ANICOM, INC.
1995 DIRECTORS STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT
1.1 Purpose.
The Anicom, Inc. 1995 Directors Stock Option Plan (the "Plan") was
previously established by Anicom, Inc. (the "Company") effective as of January
20, 1995. The Plan is hereby amended and restated in its entirety effective as
of May 23, 1996. The purpose of the Plan is to promote the overall financial
objectives of the Company and its stockholders by motivating directors of the
Company who are not employees to achieve long-term growth in shareholder equity
in the Company and to retain the association of those individuals. The Plan's
amendment and restatement and the grant of awards thereunder is expressly
conditioned upon the Plan's approval by the Company's stockholders to the
extent required by Rule 16b-3 of the Securities Exchange Act of 1934, as
amended. If such approval is not obtained on or before July 31, 1997, then the
Plan, as amended and restated, and all Awards thereunder to the extent affected
by the amendment and restatement shall be null and void ab initio, in which
case, the Plan shall continue in full force and effect as originally approved
by the stockholders of the Company.
ARTICLE II
DEFINITIONS
For purposes of the Plan, the following terms are defined as set forth
below:
2.1 "Affiliate" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated association or other
entity (other than the Company) that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Company including, without limitation, any member of an affiliated group of
which the Company is a common parent corporation as provided in Section 1504 of
the Code.
2.2 "Agreement" or "Award Agreement" means, individually or collectively,
any agreement entered into pursuant to the Plan pursuant to which an Option is
granted to a Participant.
<PAGE> 21
2.3 "Anixter Family" means Alan B. Anixter, William R. Anixter, Scott C.
Anixter, their spouses, heirs and any group (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), of which any of the foregoing persons is a member for purposes of
acquiring, holding or disposing of securities of the Company, any trust
established by or for the benefit of any of the foregoing and any other entity
controlled by or for the benefit of any of the foregoing.
2.4 "Board of Directors" or "Board" means the Board of Directors of the
Company.
2.5 "Cause" shall mean, for purposes of whether and when a Participant has
incurred a Termination of Employment for Cause, any act or omission which
permits the Company to terminate the written agreement or arrangement between
the Participant and the Company or an Affiliate for Cause as defined in such
agreement or arrangement, or in the event there is no such agreement or
arrangement or the agreement or arrangement does not define the term "cause,"
then Cause shall mean (a) an act of fraud or dishonesty by Participant that
results in gain or personal enrichment of Participant at the Company's expense,
(b) Participant's conviction of a felony-class crime or any act involving moral
turpitude, (c) any material breach by Participant of any provision of this
Agreement that has not been cured by Participant within thirty days of written
notice of such breach from the Company, (d) the Participant's willful engaging
in gross misconduct materially injurious to the Company that has not been cured
by Participant within thirty days of written notice specifying the alleged
willful gross misconduct and material injury, or (e) any intentional act or
gross negligence by Participant that has a material, detrimental effect on the
reputation or business of the Company.
2.6 "Change in Control" has the meaning set forth in SECTION 7.2.
2.7 "Code" or "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, final Treasury Regulations thereunder and any subsequent
Internal Revenue Code.
2.8 "Commission" means the Securities and Exchange Commission or any
successor agency.
2.9 "Committee" means the person or persons appointed by the Board of
Directors to administer the Plan, as further described in the Plan. Initially,
the Committee shall consist of Scott C. Anixter and Alan B. Anixter.
2.10 "Common Stock" means the shares of Common Stock, $.001 par value,
whether presently or hereafter issued, and any other stock or security resulting
from adjustment thereof as described hereinafter or the common stock of any
successor to the Company which is designated for the purpose of the Plan.
2.11 "Company" means Anicom, Inc., a Delaware corporation, and includes any
successor or assignee corporation or corporations into which the Company may be
merged, changed or consolidated; any corporation for whose securities the
securities of the Company shall be exchanged; and any assignee of or successor
to substantially all of the assets of the Company.
-2-
<PAGE> 22
2.12 "Director" means each and any director who serves on the Board and who
is not an officer or employee of the Company or any of its Affiliates.
2.13 "Disability" means a mental or physical illness, injury, or infirmity
that prevents Participant from fulfilling his or her duties for the Company or
an Affiliate for a period of sixty (60) consecutive days in the manner
ordinarily required of him or her. Notwithstanding the foregoing, a Disability
shall not qualify under the Plan if it is the result of (i) a willfully
self-inflicted injury or willfully self-induced sickness; or (ii) an injury or
disease contracted, suffered, or incurred, while participating in a criminal
offense. The determination of Disability shall be made by the Committee. The
determination of Disability for purposes of the Plan shall not be construed to
be an admission of disability for any other purpose.
2.14 "Disinterested Person" shall have the meaning set forth in Rule 16b-3,
or any successor definition adopted by the Commission and shall mean a person is
also an "outside director" under Section 162(m) of the Code.
2.15 "Effective Date" means the date on which the Plan is approved by the
Company's stockholders to the extent required by Rule 16b-3.
2.16 "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
2.17 "Fair Market Value" means the value of the Common Stock determined on
the basis of the good faith determination of the Committee, without regard to
whether the Common Stock is restricted or represents a minority interest,
pursuant to the applicable method described below:
(a) if the Common Stock is listed on a national securities exchange
or quoted on The Nasdaq Stock Market (either the Nasdaq Stock Market or
the Nasdaq Small Cap Market (in either case, ("NASDAQ")), the closing
price of the Common Stock on the relevant date (or, if such date is not a
business day or a day on which quotations are reported, then on the
immediately preceding date on which quotations were reported), as
reported by the principal national exchange on which such shares are
traded (in the case of an exchange) or by the NASDAQ, as the case may be;
(b) if the Common Stock is not listed on a national securities
exchange or quoted on the NASDAQ, but is actively traded in the
over-the-counter market, the average of the closing bid and asked prices
for the Common Stock on the relevant date (or, if such date is not a
business day or a day on which quotations are reported, then on the
immediately preceding date on which quotations were reported), or the
most recent preceding date for which such quotations are reported; and
(c) if, on the relevant date, the Common Stock is not publicly
traded or reported as described in (a) or (b), the value determined in
good faith by the Committee.
-3-
<PAGE> 23
2.18 "Grant Date" means the date that as of which an Option is granted
pursuant to the Plan.
2.19 "Initial Grant Date" means the date that as of which an Option is
initially granted pursuant to the Plan. Unless otherwise designated, the
Initial Grant Date is the date on which a director takes office.
2.20 "Nonqualified Option" means an Option granted under the Plan other
than an incentive stock option within the meaning of Section 422 of the Code.
2.21 "Option" means the right to purchase the number of shares of Common
Stock specified by the Plan at a price and for a term fixed by the Plan, and
subject to such other limitations and restrictions as the Plan and the
Committee imposes.
2.22 "Option Period" means the period during which the Option shall be
exercisable in accordance with the Agreement and the Plan.
2.23 "Option Price" means the price at which the Common Stock may be
purchased under an Option as provided in SECTION 5.3.
2.24 "Participant" means a Director to whom an Option has been granted,
under the Plan, and in the event a person becomes a Representative, then the
term "Participant" shall mean such Representative. For purposes of this
Agreement, the term "Termination of Directorship" shall be deemed to be binding
on a Representative of the Director.
2.25 "Plan" means the Anicom, Inc. 1995 Directors Stock Option Plan, as
herein set forth and as may be amended from time to time.
2.26 "Public Offering" means an initial public offering of shares of Common
Stock under the Securities Act.
2.27 "Representative" means (a) the person or entity acting as the executor
or administrator of a Participant's estate pursuant to the last will and
testament of a Participant or pursuant to the laws of the jurisdiction in which
the Participant had the Participant's primary residence at the date of the
Participant's death; (b) the person or entity acting as the guardian or
temporary guardian of a Participant; (c) the person or entity which is the
beneficiary of the Participant upon or following the Participant's death; or
(d) any person to whom an Option has been permissibly transferred including,
without limitation, a trust for the benefit of the Participant, the
Participant's parents, spouse or descendants, or a custodian under a uniform
gifts to minors act or similar statute for the benefit of the Participant's
descendants, to the extent permitted by the Committee and not inconsistent with
the Rule 16b-3; provided that only one of the foregoing shall be the
Representative at any point in time as determined under applicable law and
recognized by the Committee.
2.28 "Rule 16b-3" means Rule 16b-3, as promulgated under the Exchange Act,
as amended from time to time, or any successor thereto.
-4-
<PAGE> 24
2.29 "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
2.30 "Termination of Directorship" means the occurrence of any act or event
that results in the person's ceasing, for whatever reason, to be a Director of
the Company or of any Affiliate, including, without limitation, death,
Disability, dismissal, severance at the election of the Participant,
retirement, or severance as a result of the discontinuance, liquidation, sale
or transfer by the Company or its Affiliates of all businesses owned or
operated by the Company or its Affiliates.
In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.
ARTICLE III
ADMINISTRATION
3.1 Committee Structure and Authority. The Plan shall be administered by
the Committee which, except as provided herein, may be comprised of one or more
persons. The Committee shall be a committee of the Board of Directors, unless
such committee does not exist or the Board establishes a committee whose sole
purpose is the administration of the Plan; provided that only those members of
the Committee of the Board who participate in the decision relative to Options
under the Plan shall be deemed to be part of the "Committee" for purposes of
the Plan. In the absence of an appointment, the Board or the portion thereof
that are Disinterested Persons shall be the Committee. A majority of the
Committee shall constitute a quorum at any meeting thereof (including telephone
conference) and the acts of a majority of the members present, or acts approved
in writing by a majority of the entire Committee without a meeting, shall be
the acts of the Committee for purposes of the Plan. The Committee may
authorize any one or more of its members or an officer of the Company to
execute and deliver documents on behalf of the Committee. The Committee shall
include no less than the number of Disinterested Persons required for
application of Rule 16b-3. No member of the Committee shall exercise any
discretion respecting himself or herself under the Plan. The Board shall have
the authority to remove, replace or fill any vacancy of any member of the
Committee upon notice to the Committee and the affected member. Any member of
the Committee may resign upon notice to the Board. The Committee may allocate
among one or more of its members, or may delegate to one or more of its agents,
such duties and responsibilities as it determines.
Among other things, the Committee shall have the authority, subject to the
terms of the Plan and the limitation of section (c)(2)(ii) of Rule 16b-3 so
that the Plan is described in that section:
(a) to determine the terms and conditions of any Option hereunder
(including, but not limited to, the Option Period, any exercise
restriction or limitation and any exercise acceleration or forfeiture
waiver regarding any Option and the shares of Common Stock relating
thereto);
-5-
<PAGE> 25
(b) to adjust the terms and conditions, at any time or from time to
time, of any Option, subject to the limitations of SECTION 8.1;
(c) to provide for the forms of Agreement to be utilized in
connection with the Plan;
(d) to determine whether a Participant has a Disability or is in
retirement;
(e) to determine what securities law requirements are applicable to
the Plan, Options, and the issuance of shares of Common Stock and to
require of a Participant that appropriate action be taken with respect to
such requirements;
(f) to cancel, with the consent of the Participant or as otherwise
provided in the Plan or an Agreement, outstanding Options;
(g) to require as a condition of the exercise of an Option or the
issuance or transfer of a certificate of Common Stock, the withholding
from a Participant of the amount of any federal, state or local taxes as
may be necessary in order for the Company or any other employer to obtain
a deduction or as may be otherwise required by law;
(h) to determine whether and with what effect an individual has
incurred a Termination of Directorship;
(i) to determine whether the Company or any other person has a right
or obligation to purchase Common Stock from a Participant and, if so, the
terms and conditions on which such Common Stock is to be purchased;
(j) to determine the restrictions or limitations on the transfer of
Common Stock;
(k) to determine whether an Option is to be adjusted, modified or
purchased, or is to become fully exercisable, under the Plan or the terms
of an Agreement;
(l) to interpret and make a final determination with respect to the
remaining number of shares of Common Stock available under the Plan;
(m) to determine the permissible methods of Option exercise and
payment, including cashless exercise arrangements;
(n) to adopt, amend and rescind such rules and regulations as, in
its opinion, may be advisable in the administration of the Plan; and
(o) to appoint and compensate agents, counsel, auditors or other
specialists to aid it in the discharge of its duties.
-6-
<PAGE> 26
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Option issued under the Plan (and any Agreement) and to otherwise
supervise the administration of the Plan. The Committee's policies and
procedures may differ with respect to Options granted at different times or to
different Participants.
Any determination made by the Committee pursuant to the provisions of the
Plan shall be made in its sole discretion, and in the case of any determination
relating to an Option, may be made at the time of the grant of the Option or,
unless in contravention of any express term of the Plan or an Agreement, at any
time thereafter. All decisions made by the Committee pursuant to the
provisions of the Plan shall be final and binding on all persons, including the
Company and Participants. Any determination shall not be subject to de novo
review if challenged in court.
ARTICLE IV
STOCK SUBJECT TO PLAN
4.1 Number of Shares. Subject to adjustment under SECTION 4.6, the total
number of shares of Common Stock reserved and available for distribution
pursuant to Options under the Plan shall be 100,000 shares of Common Stock
authorized for issuance on the Effective Date. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares.
4.2 Release of Shares. If any shares of Common Stock that have been
optioned cease to be subject to an Option, if any shares of Common Stock that
are subject to any Option are forfeited, if any Option otherwise terminates
without issuance of shares of Common Stock being made to the Participant, such
shares, or if any shares (whether or not restricted) of Common Stock that were
previously issued under the Plan are received by the Company in connection with
the exercise of an Award, such shares, in the discretion of the Committee, may
again be available for distribution in connection with Options under the Plan.
4.3 Restrictions on Shares. Shares of Common Stock issued upon exercise of
an Option shall be subject to the terms and conditions specified herein and to
such other terms, conditions and restrictions as the Committee in its
discretion may determine or provide in the Option Agreement. The Company shall
not be required to issue or deliver any certificates for shares of Common
Stock, cash or other property prior to (i) the listing of such shares on any
stock exchange (or other public market) on which the Common Stock may
then be listed (or regularly traded), (ii) the completion of any registration
or qualification of such shares under federal or state law, or any ruling or
regulation of any government body which the Committee determines to be
necessary or advisable, and (iii) the satisfaction of any applicable
withholding obligation in order for the Company or an Affiliate to obtain a
deduction with respect to the exercise of an Option. The Company may cause any
certificate for any share of Common Stock to be delivered to be properly marked
with a legend or other notation reflecting the limitations
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<PAGE> 27
on transfer of such Common Stock as provided in the Plan or as the
Committee may otherwise require. The Committee may require any person
exercising an Option to make such representations and furnish such information
as it may consider appropriate in connection with the issuance or delivery of
the shares of Common Stock in compliance with applicable law or otherwise.
Fractional shares shall not be delivered, but shall be rounded to the next
lower whole number of shares.
4.4 Shareholder Rights. No person shall have any rights of a shareholder
as to shares of Common Stock subject to an Option until, after proper exercise
of the Option or other action required, such shares shall have been recorded on
the Company's official shareholder records as having been issued or
transferred. Upon exercise of the Option or any portion thereof, the Company
will have thirty (30) days in which to issue the shares, and the Participant
will not be treated as a shareholder for any purpose whatsoever prior to such
issuance. No adjustment shall be made for cash dividends or other rights for
which the record date is prior to the date such shares are recorded as issued
or transferred in the Company's official shareholder records, except as
provided herein or in an Agreement.
4.5 Reasonable Efforts To Register. If there has been a Public Offering,
the Company intends to register under the Securities Act the Common Stock
delivered or deliverable pursuant to Options on Form S-8 if available to the
Company for this purpose (or any successor or alternate form that is
substantially similar to that form to the extent available to effect such
registration), in accordance with the rules and regulations governing such
forms. If the Committee deems registration to be in the Company's best
interests, the Company will use efforts to cause the registration statement to
become effective and will file such supplements and amendments to the
registration statement as may be necessary to keep the registration statement
in effect until the earliest of (a) one year following the expiration of the
Option Period of the last Option outstanding, (b) the date the Company is no
longer a reporting company under the Exchange Act and (c) the date all
Participants have disposed of all shares delivered pursuant to any Option. The
Company may delay the foregoing obligation if the Committee reasonably
determines that any such registration is not in the Company's best interests or
if there is no material benefit to Participants in the Plan.
4.6 Anti-Dilution. In the event of any Company stock dividend, stock
split, combination or exchange of shares, recapitalization or other change in
the capital structure of the Company, corporate separation or division
of the Company (including, but not limited to, a split-up, spin-off, split-off
or distribution to Company shareholders other than a normal cash dividend),
sale by the Company of all or a substantial portion of its assets (measured on
either a stand-alone or consolidated basis), reorganization, rights offering, a
partial or complete liquidation, or any other corporate transaction, Company
share offering or event involving the Company and having an effect similar to
any of the foregoing, then the Committee shall adjust or substitute, as the
case may be, the number of shares of Common Stock available for Options under
the Plan, the number of shares of Common Stock covered by outstanding Options,
the exercise price per share of outstanding Options, and any other
characteristics or terms of the Options as the Committee shall deem necessary
or appropriate to reflect equitably the effects of such changes to the
Participants; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated by rounding to the next lower whole number of
shares with
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<PAGE> 28
appropriate payment for such fractional share as shall reasonably be
determined by the Committee.
ARTICLE V
OPTION GRANTS
5.1 Eligibility. Each Director shall be granted Options to purchase shares
of Common Stock as provided herein.
5.2 Grant and Exercise. Each Director who is a Director on the Effective
Date shall be granted an Option on such date to purchase 5,000 shares of Common
Stock without further action by the Board or the Committee. Each Director who
joins the Board after the Effective Date shall be granted an Option on the
Initial Grant Date to purchase 5,000 shares of Common Stock without further
action by the Board or the Committee. On the date of the Company's annual
meeting of stockholders in the calendar year following the Effective Date and
on the date of each annual meeting of stockholders thereafter, each such
Director who is still a Director on such anniversary date shall be granted an
additional Option to purchase 5,000 shares of Common Stock without further
action by the Board or the Committee; provided that the total number of shares
for which Options have been granted to a Director under this Plan shall not
exceed 25,000 shares.
If the number of shares of Common Stock available to grant under the Plan
on a scheduled date of grant is insufficient to make all automatic grants
required to be made pursuant to the Plan on such date, then each eligible
Director shall receive an Option to purchase a pro rata number of the remaining
shares of Common Stock available under the Plan; provided further, however,
that if such proration results in fractional shares of Common Stock, then such
Option shall be rounded down to the nearest number of whole shares of Common
Stock. In all events, the Option Price shall be the Fair Market Value per
share on the date the Option is granted. Each Option granted under the Plan
shall be evidenced by an Agreement, in a form approved by the Committee, which
shall embody the terms and conditions of such Option and which shall be subject
to the express terms and conditions set forth in the Plan. Such Agreement
shall become effective upon execution by the Participant.
5.3 Terms and Conditions. Options shall be subject to such terms and
conditions as shall be determined by the Committee, including the following:
(a) Option Period. The Option Period of each Option shall be seven
(7) years.
(b) Exercisability. Subject to SECTION 7.1, Options shall be
exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee
provides that any Option is exercisable only in installments, the
Committee may at any time waive such installment exercise provisions, in
whole or in part. In addition, the Committee may at any time accelerate
the exercisability of any Option.
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<PAGE> 29
(c) Method of Exercise. Subject to the provisions of this Article V
and an Agreement, a Participant may exercise Options, in whole or in
part, at any time during the Option Period by the Participant's giving
written notice of exercise on a form provided by the Committee to the
Company specifying the number of shares of Common Stock subject to the
Option to be purchased. Such notice shall be accompanied by payment in
full of the purchase price by cash or check or such other form of payment
as the Company may accept. If approved by the Committee, payment in full
or in part may also be made (i) by delivering Common Stock already owned
by the Participant having a total Fair Market Value on the date of such
delivery equal to the Option Price; (ii) by the execution and delivery of
a note or other evidence of indebtedness (and any security agreement
thereunder) satisfactory to the Committee and permitted in accordance
with SECTION 5.3(E); (iii) by authorizing the Company to retain shares
of Common Stock which would otherwise be issuable upon exercise of the
Option having a total Fair Market Value on the date of delivery equal to
the Option Price; (iv) by the delivery of cash or the extension of credit
by a broker-dealer to whom the Participant has submitted a notice of
exercise or otherwise indicated an intent to exercise an Option (in
accordance with Part 220, Chapter II, Title 12 of the Code of Federal
Regulations, a so-called "cashless" exercise); or (v) by any combination
of the foregoing. No shares of Common Stock shall be issued until full
payment therefor has been made.
(d) Non-transferability of Options. Except as provided herein or
in an Agreement, no Option shall be transferable by the Participant
other than by will or by the laws of descent and distribution, and all
Options shall be exercisable during the Participant's lifetime only by
the Participant. If and to the extent permitted by Rule 16b-3 and except
as otherwise provided herein or by an Agreement, every Option granted
hereunder shall be freely transferable, but only if such transfer is
exempt under Rule 16b-3 or is the Committee adopts Securities Exchange
Act Release 34-28869 of the Securities Exchange Commission the Committee
may permit an Option to be transferred pursuant to a domestic relations
order which would be a "qualified domestic relations order" as defined in
Section 414 of the Code if such section applied to the Option.
5.4 Termination by Reason of Death. Unless otherwise provided in an
Agreement or determined by the Committee, if a Participant incurs a Termination
of Directorship due to death, any vested, unexpired and unexercised Options
held by such Participant shall thereafter be fully exercisable for a period of
one (1) year (or such other period or no period as the Committee may specify)
immediately following the date of such death or until the expiration of the
Option Period, whichever period is the shorter.
5.5 Termination by Reason of Disability. Unless otherwise provided in an
Agreement or determined by the Board, if a Participant incurs a Termination of
Directorship due to a Disability, any vested, unexpired and unexercised Options
held by such Participant shall thereafter be fully exercisable by the
Participant for the period of one (1) year (or such other period or no period
as the Committee may specify) immediately following the date of such
Termination of Directorship or until the expiration of the Option Period,
whichever period is shorter, and the Participant's death at any time following
such Termination of Directorship due to Disability shall not affect the
foregoing.
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<PAGE> 30
5.6 Other Termination. Unless otherwise provided in an Agreement or
determined by the Committee, if a Participant incurs a Termination of
Directorship by the Company for Cause, any vested, unexpired and unexercised
Stock Option held by such Participant shall terminate immediately upon notice
of termination by the Company. The death or Disability of a Participant after
a Termination of Directorship otherwise provided herein shall not extend the
exercisability of the time permitted to exercise an Option.
5.7 Cashing Out of Option. On receipt of written notice of exercise, the
Committee may elect to cash out all or part of the portion of any Option for
which at least six months has elapsed since the Grant Date (provided that such
limitation shall not apply to an Option granted to a Participant who has
subsequently died) to be exercised by paying the Participant an amount, in cash
or Common Stock, equal to the excess of the Fair Market Value of the Common
Stock that is subject to the Option over the Option Price times the number of
shares of Common Stock subject to the Option on the effective date of such cash
out. Cash outs relating to Options held by Participants who are actually or
potentially subject to Section 16(b) of the Exchange Act shall comply with the
"window period" provisions of Rule 16b-3, to the extent applicable, and, Fair
Market Value shall be determined in accordance with the definition set forth in
SECTION 2.16.
ARTICLE VI
PROVISIONS APPLICABLE TO STOCK ACQUIRED UNDER THE PLAN
6.1 Transfer of Shares. A Participant may at any time make a transfer of
shares of Common Stock received pursuant to the exercise of an Option to his
parents, spouse or descendants or to any trust for the benefit of the foregoing
or to a custodian under a uniform gifts to minors act or similar statute for
the benefit of any of the Participant's descendants. Any transfer of shares
received pursuant to the exercise of an Option shall not be permitted or valid
unless and until the transferee agrees to be bound by the provisions of the
Plan, and any provision respecting Common Stock under the Agreement, provided
that "Termination of Directorship" shall continue to refer to the Termination
of the Directorship of the Participant.
6.2 Limited Transfer During Offering. In the event there is an effective
registration statement under the Securities Act pursuant to which shares of
Common Stock shall be offered for sale in an underwritten offering, a
Participant shall not, during the period requested by the underwriters
managing the registered public offering, effect any public sale or distribution
of shares received directly or indirectly pursuant to an exercise of an Option.
6.3 Committee Discretion. The Committee may in its sole discretion include
in any Agreement an obligation that the Company purchase a Participant's shares
of Common Stock received upon the exercise of an Option (including the purchase
of any unexercised Options which have not expired), or may obligate a
Participant to sell shares of Common Stock to the Company upon such terms and
conditions as the Committee may determine and set forth in an Agreement. The
provisions of this Article VI shall be construed by the Committee in its sole
discretion, and shall be subject to such other terms and conditions as the
Committee may from time to time determine.
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6.4 No Company Obligation. None of the Company, an Affiliate or the
Committee shall have any duty or obligation to affirmatively disclose material
information regarding the Company to a record or beneficial holder of Common
Stock or an Option, and such holder shall have no right to be advised of any
material information regarding the Company or any Affiliate at any time prior
to, upon or in connection with receipt or the exercise of an Option or the
Company's purchase of Common Stock in accordance with the terms hereof.
ARTICLE VII
CHANGE IN CONTROL PROVISIONS
7.1 Impact of Event. Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change in Control (as defined in SECTION 7.2),
any Options outstanding as of the date such Change in Control and not then
exercisable shall become fully exercisable to the full extent of the original
grant.
7.2 Definition of Change in Control. For purposes of the Plan, a "Change
in Control" shall mean the happening of any of the following events:
(a) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "PERSON")
of the beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of fifty percent (50%) or more of the then
outstanding shares of common stock of the Company (the "OUTSTANDING
COMPANY COMMON STOCK") or (ii) the approval by the stockholders of the
Company of a reorganization, merger, consolidation, complete liquidation
or dissolution of the Company, the sale or disposition of all or
substantially all of the assets of the Company or similar corporate
transaction (in each case referred to in this SECTION 7.2(A) as a
"CORPORATE TRANSACTION") or, if consummation of such Corporate
Transaction is subject, at the time of such approval by stockholders, to
the consent of any government or governmental agency, the obtaining of
such consent (either explicitly or implicitly) provided such acquisition
or beneficial ownership would result in any other Person's beneficially
owning fifty percent (50%) or more of the Outstanding Company Common
Stock; excluding, however, the following: (A) any acquisition by the
Company or by an employee benefit plan (or related trust) sponsored or
maintained by the Company or an Affiliate, (B) any acquisition by a
member of the Anixter Family, or (C) any acquisition by or consummation
of a Corporate Transaction with an Affiliate.
(b) A change in the composition of the Board such that the
individuals who, as of the date of the Initial Public Offering (the
"PUBLIC OFFERING"), constitute the Board (such Board shall be hereinafter
referred to as the "INCUMBENT BOARD") cease for any reason to constitute
at least a majority of the Board; provided, however, for purposes of this
SECTION 7.2(B), that any individual who becomes a member of the Board
subsequent to the date of the Company's Public Offering whose election,
or nomination for election by the Company's stockholders, was approved by
a vote of at least a majority of those individuals who are members of the
Board and who were also members of the Incumbent
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<PAGE> 32
Board (or deemed to be such pursuant to this provision) shall be
considered as though such individual were a member of the
Incumbent Board; but, provided, further, that any such individual
whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board shall
not be so considered as a member of the Incumbent Board.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendments and Termination. The Board may amend, alter, or discontinue
the Plan at any time, but no amendment, alteration or discontinuation shall be
made which would (a) impair the rights of a Participant under an Option
theretofore granted without the Participant's consent, except such an amendment
made to cause the Plan to qualify for the exemption provided by Rule 16b-3 or
(b) disqualify the Plan from the exemption provided by Rule 16b-3. In addition,
no such amendment shall be made without the approval of the Company's
shareholders to the extent such approval is required by law or agreement.
Notwithstanding the foregoing, the Plan may not be amended more than once every
six (6) months to change the Plan provisions listed in section (c)(2)(ii)(A) of
Rule 16b-3, other than to comport with changes in the Code or Rule 16b-3.
The Committee may amend the Plan at any time provided that (a) no
amendment shall impair the rights of any Participant under any Option
theretofore granted without the Participant's consent, (b) no amendment shall
disqualify the Plan from the exemption provided by Rule 16b-3, and (c) any
amendment shall be subject to the approval or rejection of the Board.
Notwithstanding the foregoing, the Plan may not be amended more than once every
six (6) months to change the Plan provisions listed in section (c)(2)(ii)(A) of
Rule 16b-3, other than to comport with changes in the Code or Rule 16b-3.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments and to grant Options which qualify for beneficial
treatment under such rules without shareholder approval.
8.2 Unfunded Status of Plan. It is intended that the Plan be an "unfunded"
plan for incentive and deferred compensation. The Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Common Stock or make payments; provided, however, that,
unless the Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.
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<PAGE> 33
8.3 General Provisions.
(a) Representation. The Committee may require each person
purchasing or receiving shares pursuant to an Option to represent to and
agree with the Company in writing that such person is acquiring the
shares without a view to the distribution thereof. The certificates for
such shares may include any legend which the Committee deems appropriate
to reflect any restrictions on transfer.
(b) No Additional Obligation. Nothing contained in the Plan shall
prevent the Company or an Affiliate from adopting other or additional
compensation arrangements for its employees.
(c) Withholding. No later than the date as of which an amount first
becomes includible in the gross income of the Participant for Federal
income tax purposes with respect to any Option, the Participant shall pay
to the Company (or other entity identified by the Committee), or make
arrangements satisfactory to the Company or other entity identified by
the Committee regarding the payment of, any Federal, state, local or
foreign taxes of any kind required by law to be withheld with respect to
such amount required in order for the Company or an Affiliate to obtain a
current deduction. Unless otherwise determined by the Committee,
withholding obligations may be settled with Common Stock, including
Common Stock that is part of the Option that gives rise to the
withholding requirement provided that any applicable requirements under
Section 16 of the Exchange Act are satisfied. The obligations of the
Company under the Plan shall be conditional on such payment or
arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment otherwise due to the Participant.
(d) Representation. The Committee shall establish such procedures
as it deems appropriate for a Participant to designate a Representative
to whom any amounts payable in the event of the Participant's death are
to be paid.
(e) Controlling Law. The Plan and all Options made and actions
taken thereunder shall be governed by and construed in accordance with
the laws of the State of Delaware (other than its law respecting choice
of law). The Plan shall be construed to comply with all applicable law,
and to avoid liability to the Company, an Affiliate or a Participant,
including, without limitation, liability under Section 16(b) of the
Exchange Act.
(f) Offset. Any amounts owed to the Company or an Affiliate by the
Participant of whatever nature may be offset by the Company from the
value of any shares of Common Stock, cash or other thing of value under
the Plan or an Agreement to be transferred to the Participant, and no
shares of Common Stock, cash or other thing
of value under the Plan or an Agreement shall be transferred unless and
until all disputes between the Company and the Participant have been
fully and finally resolved and the Participant has waived all claims to
such against the Company or an Affiliate.
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<PAGE> 34
8.4 Mitigation of Excise Tax. If any payment or right accruing to a
Participant under the Plan (without the application of this SECTION 8.4), either
alone or together with other payments or rights accruing to the Participant from
the Company or an Affiliate ("Total Payments") would constitute a "parachute
payment" (as defined in Section 280G of the Code and regulations thereunder)
that is subject to the excise tax imposed by Section 4999 of the Code (or
similar tax and/or assessment), the Company (or its successor or assigns) shall
increase the amounts payable hereunder to the extent necessary to place
Participant in the same after-tax position as he or she would have been in had
no such excise tax been imposed on the payments hereunder. The determination of
the amount of any such excise taxes shall initially be made by an independent
accounting firm employed by the Company. The Participant shall cooperate in good
faith with the Committee in making such determination and providing the
necessary information for this purpose. If, at a later date, it is determined
that the amount of excise taxes payable by Participant is greater than the
amount initially so determined, then the Company (or its successor or assigns)
shall pay Participant an amount equal to the sum of (i) such additional excise
taxes, (ii) any interest, fines and penalties resulting from such underpayment,
plus (iii) an amount necessary to reimburse Participant for any income, excise
or other taxes payable by Participant with respect to the amount specified in
(i) and (ii) above, and the reimbursement provided by this (iii).
8.5 Options in Substitution for Options Granted by Other Corporations.
Options may be granted under the Plan from time to time in substitution for
awards held by employees, directors or service providers of other corporations
who are about to become Directors of the Company or an Affiliate as the result
of a merger or consolidation of the employing corporation with the Company or an
Affiliate, or the acquisition by the Company or an Affiliate of the assets of
the employing corporation, or the acquisition by the Company or Affiliate of the
stock of the employing corporation, as the result of which it becomes a
designated employer under the Plan. The terms and conditions of the Options so
granted may vary from the terms and conditions set forth in the Plan at the time
of such grant as the majority of the members of the Committee may deem
appropriate to conform, in whole or in part, to the provisions of the awards in
substitution for which they are granted.
8.6 Procedure for Adoption. Any Affiliate of the Company may by resolution
of such Affiliate's board of directors, with the consent of the Board of
Directors and subject to such conditions as may be imposed by the Board of
Directors, adopt the Plan for the benefit of its employees as of the date
specified in the board resolution.
8.7 Procedure for Withdrawal. Any Affiliate which has adopted the Plan
may, by resolution of the board of directors of such direct or indirect
subsidiary, with the consent of the Board of Directors and subject to such
conditions as may be imposed by the Board of Directors, terminate its adoption
of the Plan.
8.8 Delay. If at the time a Participant incurs a Termination of
Directorship (other than due to Cause) or if at the time of a Change in Control,
the Participant is subject to "short-swing" liability under Section 16 of the
Exchange Act, any time period provided for under the Plan or an Agreement to the
extent necessary to avoid the imposition of liability shall be suspended and
delayed during the period the Participant would be subject to such liability,
but
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<PAGE> 35
not more than six (6) months and one (1) day and not to exceed the Option
Period. The Company shall have the right to suspend or delay any time period
described in the Plan or an Agreement if the Committee shall determine that the
action may constitute a violation of any law or result in liability under any
law to the Company, an Affiliate or a shareholder of the Company until such time
as the action required or permitted shall not constitute a violation of law or
result in liability to the Company, an Affiliate or a shareholder of the
Company. The Committee shall have the discretion to suspend the application of
the provisions of the Plan required solely to comply with Rule 16b-3 if the
Committee shall determine that Rule 16b-3 does not apply to the Plan.
8.9 Headings. The headings contained in the Plan are for reference
purposes only and shall not affect the meaning or interpretation of the Plan.
8.10 Severability. If any provision of the Plan shall for any reason be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not effect any other provision hereby, and the Plan shall be construed as if
such invalid or unenforceable provision were omitted.
8.11 Successors and Assigns. The Plan shall inure to the benefit of and be
binding upon each successor and assign of the Company. All obligations imposed
upon a Participant, and all rights granted to the Company hereunder, shall be
binding upon the Participant's heirs, legal representatives and successors.
8.12 No Obligation to Give Notice. No provision of the Plan shall be
deemed to create an obligation on the Company to give notice to any person or
entity of any event, except as expressly set forth in this Agreement.
8.13 No Third Party Beneficiaries. Nothing in this Agreement expressed or
implied is intended to confer any right or remedy under or by reason of this
Agreement on any person other than the parties hereto and their respective
heirs, representatives, successors and assigns, nor is anything set forth herein
intended to affect or discharge the obligation or liability of any third persons
to any party to this Agreement nor shall any provision give any third party any
right of subrogation or action over against any part to this Agreement.
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<PAGE> 36
8.14 Entire Agreement. The Plan and the Agreement constitute the entire
agreement with respect to the subject matter hereof and thereof, provided that
in the event of any inconsistency between the Plan and the Agreement, the terms
and conditions of the Plan shall control.
EXECUTED on this 23rd day of May, 1996.
ANICOM, INC.
By: Scott C. Anixter
--------------------------
Its: Chairman
--------------------------
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<TABLE>
<S><C>
PROXY
ANICOM, INC. THIS PROXY IS SOLICITED
6133 NORTH RIVER ROAD, SUITE 410, ROSEMONT, ILLINOIS 60018 ON BEHALF OF THE
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS BOARD OF DIRECTORS.
TO BE HELD ON SEPTEMBER 25, 1996
TO VOTE AT THE SPECIAL MEETING IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS OF ANICOM, INC., SIGN AND
DATE THE REVERSE SIDE OF THIS CARD WITHOUT CHECKING ANY BOX.
The undersigned holder of Common Stock, par value $.001 per share, of Anicom, Inc. (the "Company") hereby appoints Scott C.
Anixter and Donald C. Welchko, or either of them, with full power of substitution in each, as proxies to cast all votes which the
undersigned stockholder is entitled to cast at the Special Meeting of Stockholders (the "Special Meeting") to be held on Wednesday,
September 25, 1996 at 9:00 a.m. local time, at the offices of Katten Muchin & Zavis, 525 West Monroe Street, Suite 1600, Chicago,
Illinois 60661, and at any adjournments thereof, upon the following matters. The undersigned stockholder hereby revokes any proxy or
proxies heretofore given.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER AS DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. UNLESS
CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 AND IN ACCORDANCE WITH THE DETERMINATION OF THE BOARD
OF DIRECTORS AS TO OTHER MATTERS. THE UNDERSIGNED STOCKHOLDER MAY REVOKE THIS PROXY AT ANY TIME BEFORE IT IS VOTED BY DELIVERING TO
THE CORPORATE SECRETARY OF THE COMPANY EITHER A WRITTEN REVOCATION OF THE PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR BY
APPEARING AT THE SPECIAL MEETING AND VOTING IN PERSON. THE UNDERSIGNED STOCKHOLDER HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF
SPECIAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT.
(Continued and to be signed on reverse side.)
</TABLE>
<PAGE> 38
<TABLE>
<S><C>
ANICOM, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
1. PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF For Against Abstain
INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK / / / / / /
2. PROPOSAL TO APPROVE THE AMENDED AND RESTATED For Against Abstain
ANICOM, INC. 1995 DIRECTORS STOCK OPTION PLAN
/ / / / / /
3. PROPOSAL TO APPROVE THE COMPANY'S For Against Abstain
DELISTING ITS COMMON STOCK FROM
THE CHICAGO STOCK EXCHANGE / / / / / /
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Special Meeting, or any
adjournments thereof.
Dated:
-------------------------------------------------
- --------------------------------------------------------
Signature
- --------------------------------------------------------
Signature (if held jointly)
PLEASE DATE AND SIGN EXACTLY AS THE NAME APPEARS HEREON. WHEN SIGNING AS
EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, ATTORNEY-IN-FACT OR OTHER
FIDUCIARY, PLEASE GIVE TITLE AS SUCH. WHEN SIGNING AS CORPORATION, PLEASE SIGN
IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF YOU SIGN
FOR A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AN AUTHORIZED PERSON.
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