April 19, 1999
To the Stockholders of ANICOM, INC.:
You are cordially invited to attend the Annual Meeting of Stockholders of
Anicom, Inc. to be held at Harris Trust & Savings Bank, 111 West Monroe Street,
Chicago, Illinois 60603, on Wednesday, May 19, 1999 at 2:00 p.m., local time.
The attached Notice of Annual Meeting and Proxy Statement fully describe the
formal business to be transacted at the Annual Meeting, which includes the
election of four directors of the Company, the ratification of increases to the
number of shares available under the Company's 1996 Stock Incentive Plan and the
Directors Option Plan and an amendment to the Directors Option Plan.
Directors and officers of the Company will be present to help host the Annual
Meeting and to respond to any questions that our stockholders may have. By
attending the Annual Meeting, you will have an opportunity to hear the plans for
our Company's future, to meet your officers and directors and to participate in
the business of the Annual Meeting. Whether or not you plan to attend the Annual
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 May 19, 1999.
Sincerely,
/s/ ALAN B. ANIXTER /s/ SCOTT C. ANIXTER
ALAN B. ANIXTER SCOTT C. ANIXTER
Chairman of the Board Chairman and Chief Executive Officer
<PAGE>
_____________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 19, 1999
_____________
To the Stockholders of ANICOM, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders (the
"Annual Meeting") of Anicom, Inc. (the "Company") will be held at Harris Trust &
Savings Bank, 111 West Monroe Street, Chicago, Illinois 60603, on Wednesday, May
19, 1999 at 2:00 p.m., local time. A Proxy and a Proxy Statement for the Annual
Meeting are enclosed.
The Annual Meeting is for the following purposes:
(1) To elect four directors of the Company.
(2) To approve an amendment to the Anicom, Inc. 1996 Stock
Incentive Plan.
(3) To approve amendments to the Anicom, Inc. Amended and Restated
Directors Option Plan.
(4) To transact such other business as may properly come before
the Annual Meeting or any adjournments thereof.
The close of business on April 5, 1999 has been fixed as the record
date for determining stockholders entitled to notice of, and to vote, at the
Annual Meeting or any adjournments thereof. For a period of at least ten days
prior to the Annual Meeting, a complete list of stockholders entitled to vote at
the Annual Meeting shall be open to the examination of any stockholder during
ordinary business hours at the offices of Harris Trust & Savings Bank, 111 West
Monroe Street, Chicago, Illinois 60603.
Information concerning the matters to be acted upon at the Annual
Meeting is set forth in the accompanying Proxy Statement.
By Order of the Board of Directors,
/s/ DAVID R. SHEVITZ
David R. Shevitz
Corporate Secretary
Rosemont, Illinois
April 19, 1999
STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE ANNUAL 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>
Anicom, Inc.
6133 North River Road
Suite 1000
Rosemont, Illinois 60018
(847) 518-8700
_____________
PROXY STATEMENT
_____________
ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 1999
The accompanying Proxy is solicited by the Board of Directors of
Anicom, Inc. (the "Company") for use at the Annual Meeting of Stockholders to be
held on May 19, 1999, or at any adjournments thereof (the "Annual Meeting").
Giving the Proxy will not in any way affect a stockholder's right to attend the
Annual 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 April 19, 1999.
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 authority to vote for the election of directors (or
for any nominee) is withheld, Proxies will be voted for the directors proposed
by the Board, and, if no contrary instructions are given, Proxies will be voted
for approval of each of the remaining 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 Annual Meeting. However, if any such matters properly come
before the Annual 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 Company's Annual Report to Stockholders for the year ended December
31, 1998, containing financial and other information pertaining to the Company,
is enclosed with this Proxy Statement. However, the Annual Report to
Stockholders does not constitute a part of this Proxy Statement.
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 1000, Rosemont, Illinois 60018, Attn: Corporate Secretary. The Proxy
also may be revoked by the attendance and voting by a stockholder at the Annual
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 April 5, 1999
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting. As of March 9, 1999, there were outstanding
25,120,202 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 Annual Meeting. Each holder of Common Stock is entitled to one vote
for each share held by such person with respect to each matter (including
election of directors) to be voted on at the Annual Meeting.
<PAGE>
REQUIRED VOTE
A plurality of the shares voted in person or by proxy is required to
elect the nominees for directors. 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 Annual Meeting is required to approve the amendment to the Anicom,
Inc. 1996 Stock Incentive Plan (the "1996 Stock Incentive Plan") and the
amendments to the Amended and Restated Anicom, Inc. 1995 Directors Stock Option
Plan (the "Directors Option Plan"). Stockholders will not be allowed to cumulate
their votes in the election of directors.
QUORUM; ABSTENTIONS AND BROKER NON-VOTES
The required quorum for the transaction of business at the Annual
Meeting will be a majority of the shares of Common Stock issued and outstanding
on the Record Date. Abstentions and broker non-votes will be included in
determining the presence of a quorum. Abstentions will be considered present and
entitled to vote with respect to the proposals to approve the amendments to the
1996 Stock Incentive Plan and to the Directors Option Plan 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 on such proposals. Neither abstentions nor broker
non-votes will have any effect on the voting on the proposal to elect directors.
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.
ELECTION OF DIRECTORS
(Proposal 1)
The Company's Board of Directors consists of ten directors. The
Restated Certificate of Incorporation of the Company provides that the members
of the Board of Directors shall be divided into three classes of directors with
respect to the terms for which its members shall hold office. The term of the
directors in Class I expires with this Annual Meeting.
The persons named in the enclosed form of Proxy, unless otherwise
directed therein, intend to vote such Proxy FOR the election of the nominees
named below as director for the term specified. If the nominees become
unavailable for any reason, the persons named in the form of Proxy are expected
to consult with management of the Company in voting the shares represented by
them. Management has no reason to believe that the nominees will be unavailable
or unwilling to serve if elected to office. To the knowledge of management, the
nominees intend to serve the term for which election is sought.
The Board of Directors has nominated four persons for election as
director in Class I at this Annual Meeting, to serve for a three-year term
expiring at the annual meeting of stockholders in 2002 or until his successor is
elected and qualified. The nominees are currently serving as directors and have
consented to serve for a new term.
2
<PAGE>
Nominees for Election as Directors
The following persons, if elected at the Annual Meeting, will serve as
directors until the earlier of the 2002 annual meeting of stockholders or until
their successors are duly elected and qualified:
<TABLE>
<CAPTION>
Name Age Position With the Company and Principal Occupation Director Since
- --------------------------- ------ -------------------------------------------------- --------------
<S> <C> <C> <C>
Scott C. Anixter.......... 50 Chairman, Chief Executive Officer and Director 1993
Carl E. Putnam............ 50 President, Chief Operating Officer and Director 1994
Peter H. Huizenga......... 60 Director; President of Huizenga Capital 1997
Management
Lee B. Stern(1)........... 72 Director; President of LBS Co. 1994
- ------------------
<FN>
(1) Member of the Compensation Committee.
</FN>
</TABLE>
Scott C. Anixter has been Chairman, Chief Executive Officer and a
Director of the Company since its inception. Mr. Anixter is the son of Alan B.
Anixter.
Carl E. Putnam has served as President and Chief Operating Officer of
the Company since its inception and was named a Director of the Company in
December 1994. Mr. Putnam spent 15 years at Anixter Bros., Inc. where he last
served as a Regional Vice President.
Peter H. Huizenga has served as a Director of the Company since June
1997. He is the President of Huizenga Capital Management, an equity investment
company. Until May 1997, Mr. Huizenga was a director of Waste Management, Inc.
(NYSE:WMX), a company he co-founded in 1968. He serves as a director of
Milwaukee Mutual Insurance Company. Mr. Huizenga is also Of Counsel for the law
firm of Hlustik, Huizenga, Williams & Vander Woude Ltd.
Lee B. Stern has served as a Director of the Company since December
1994. Mr. Stern has been a member of the Chicago Board of Trade since 1949 and
since December 1992, he has served as the President of LBS Co., a member firm of
the Chicago Board of Trade. From January 1970 to December 1992, Mr. Stern served
as President of Lee B. Stern & Co., Ltd., a commodities futures commission
merchant clearing member of both the Chicago Board of Trade and the Chicago
Mercantile Exchange. Since 1982, Mr. Stern has been a director of AAR Corp.
(NYSE: AIR), a leading supplier of products and services for the aviation
industry. Mr. Stern has been an owner and director of the Chicago White Sox
since 1976 and was the owner and founder of the championship Chicago Sting
professional soccer team.
3
<PAGE>
Other Directors
The following persons will continue as directors of the Company after
the Annual Meeting until their terms of office expire (as indicated below) or
until their successors are elected and qualified.
<TABLE>
<CAPTION>
Class and Year
Position With the Company and Principal Director In Which Term
Name Age Occupation Since Will Expire
- ----------------------------- ----- ------------------------------------------------ --------- -----------------
<S> <C> <C> <C> <C>
Alan B. Anixter............. 78 Chairman of the Board and Director 1993 Class III 2001
William R. Anixter(1) (2)... 75 Director; President of Chama Resources, Inc. 1994 Class III 2001
Ira J. Kaufman.............. 71 Director; Senior Managing Director of Mesirow 1994 Class III 2001
Financial, Inc.
Donald C. Welchko(1)........ 44 Vice President, Chief Financial Officer and 1995 Class II 2000
Director
Thomas J. Reiman............ 49 Director; Senior Vice President-Public Policy, 1997 Class II 2000
Ameritech
Michael Segal(1)(2)......... 56 Director; Chairman and CEO of Near North 1994 Class II 2000
National Group
- ------------------
<FN>
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
</FN>
</TABLE>
Alan B. Anixter has been Chairman of the Board and a Director of the
Company since its inception. Mr. Anixter was the co-founder and Chairman of
Anixter Bros., Inc., an international specialist in the distribution of wire,
cable and related products, and served as the Chairman of Anixter Bros., Inc.
until 1988. In 1989, Mr. Anixter founded Alanburt, Inc., a management advisory
firm, for which he continues to serve as President. Mr. Anixter is the father of
Scott C. Anixter and the brother of William R. Anixter.
William R. Anixter has served as a Director of the Company since
December 1994. Mr. Anixter was the co-founder and Vice-Chairman of Anixter
Bros., Inc., and served as the Vice-Chairman of Anixter Bros., Inc. until 1987.
Since 1989, Mr. Anixter has served as President of Chama Resources, Inc., a real
estate management company located in Albuquerque, New Mexico. Mr. Anixter is the
brother of Alan B. Anixter.
Ira J. Kaufman has served as a Director of the Company since December
1994. In September 1995, Mr. Kaufman joined Mesirow Financial, Inc., a
securities broker-dealer located in Chicago, Illinois, as Senior Managing
Director. From April 1990 to September 1995, Mr. Kaufman served as Chairman of
the Board Emeritus, and was employed by Rodman & Renshaw, Inc., a securities
broker-dealer and commodities futures commission merchant located in Chicago,
Illinois. From prior to January 1989 until April 1990, Mr. Kaufman served as
Chairman of the Board and Chief Executive Officer of Rodman & Renshaw, Inc.
Prior to that time, Mr. Kaufman served as Chairman of the Board and Chief
Executive Officer of Exchange National Bank in Chicago, Illinois. Mr. Kaufman
has served as a Director of First Eagle National Bank, an independent national
bank located in Hanover Park, Illinois, since September 1993, and as a Director
of Wells-Gardner Electronics Corporation, a video monitor manufacturing company
located in Chicago, Illinois, since February 1997.
Donald C. Welchko has served as Vice President, Chief Financial Officer
and a Director of the Company since January 1995. From 1986 to December 1994,
Mr. Welchko served as a Vice President-Corporate Lending of Harris Trust and
Savings Bank. Mr. Welchko previously served as a Vice President-Cash Management
of Harris Trust and Savings Bank.
4
<PAGE>
Thomas J. Reiman has served as a Director of the Company since June
1997. Mr. Reiman has been Senior Vice President of Public Policy for Ameritech
Corporation since October 1997 after serving as Ameritech's Senior Vice
President of State and Government Affairs. He has served in various executive
capacities for Ameritech since 1994. From 1992 to 1994, Mr. Reiman was the
President of Indiana Bell Telephone Company Incorporated.
Michael Segal has served as a Director of the Company since December
1994. Since 1969, Mr. Segal has been the Chairman and Chief Executive Officer of
Near North National Group, an insurance brokerage firm located in Chicago,
Illinois.
Meetings and Committees of the Board of Directors
During 1998, the total number of meetings of the Board of Directors was
eight. During the last full fiscal year, each Director attended at least 75% of
the aggregate total number of meetings of the Board of Directors and the total
number of meetings held by all committees of the Board of Directors on which he
served.
The Board of Directors has an Audit Committee currently composed of
Donald C. Welchko, William R. Anixter and Michael Segal. The Audit Committee met
on one occasion during 1998. The Audit Committee generally has responsibility
for recommending independent accountants to the Board for selection, reviewing
the plan and scope of the accountants' audit, reviewing the Company's audit and
control functions and reporting to the full Board of Directors regarding all of
the foregoing.
The Board of Directors established a Compensation Committee in March
1997. The Compensation Committee, which is currently composed of William R.
Anixter, Michael Segal and Lee B. Stern, has responsibility for reviewing with
management the overall compensation policies to be followed by the Company,
establishing the compensation of the Company's executive officers, determining
option grants for the Company's officers and preparing the report of the
Compensation Committee for the Company's Proxy Statement in 1999 and in future
years. The Compensation Committee met on four occasions during 1998.
The Board of Directors established an Investment Committee in May 1998.
The Investment Committee, which is composed of Donald C. Welchko, Peter H.
Huizenga and Thomas J. Reiman, has responsibility for review of investments in
potential acquisition candidates as well as oversight of certain other company
investments. The Investment Committee did not meet during 1998.
The Company does not have a Nominating Committee.
Compensation of Directors
During 1998, members of the Board of Directors who were not also
employees or consultants of the Company received options to purchase 1,000
shares of Common Stock for each meeting they attend pursuant to the Directors
Option Plan. Beginning in 1999, non-employee directors will receive, subject to
Stockholder approval after the 1999 Annual Meeting, options to purchase 2,000
shares of Common Stock for each Board meeting they attend pursuant to the
Directors Option Plan and 1,000 shares of Common Stock for each Committee
meeting they attend. Non-employee directors also receive annual grants of
options to purchase 10,000 shares of Common Stock under the Directors Option
Plan.
5
<PAGE>
EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The following persons are executive officers of the Company who are not
identified in the tables entitled "Election of Directors - Nominees for Election
as Directors" and "Election of Directors - Other Directors," above.
Name Age Position
- --------------------------- ----- ---------------------------------------
Robert L. Swanson........ 50 Senior Executive Vice President
John P. Figurelli........ 52 Executive Vice President - Operations
Robert L. Swanson was named a Senior Executive Vice President of the
Company in March 1996. Prior to that time, he served as Executive Vice President
of the Company.
John P. Figurelli was named Executive Vice President - Operations in
March 1999. Previously, he served as Vice President of Logistics and
Administration since July 1998. Mr. Figurelli joined Anicom as Vice President of
Credit Services in August 1997. Prior to joining the Company, Mr. Figurelli was
Vice President of Credit and Financial Services for Anixter International, Inc.
from 1994 until August 1997. Prior to 1994, Mr. Figurelli was Director of Credit
- - North America for Anixter Bros., Inc.
Compliance with Section 16(a) of The Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires executive officers, directors and persons who
beneficially own more than ten percent (10%) of the Company's stock ("Reporting
Persons"), to file initial reports of ownership and reports of changes in
ownership with the Securities and Exchange Commission ("SEC") and Nasdaq.
Reporting Persons are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the executive officers and directors,
the Company believes that all Section 16(a) filing requirements applicable to
Reporting Persons were complied with.
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, 1998 (i) the Chief
Executive Officer and (ii) the other four most highly compensated (combined
salary and bonus) executive officers of the Company whose total annual salary
and bonus equaled or exceeded $100,000 (collectively, the "Named Officers").
6
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
--------------
Annual Compensation Awards
------------------- ------
Securities All Other
Other Annual Underlying Compensation
Name and principal position Year Salary ($) Bonus ($) Compensation ($) Options (#)(1) ($)
- --------------------------------------- ------ ----------- ----------- ------------------ ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Scott C. Anixter 1998 360,000 100,000 -- 100,000 1,406
Chairman and Chief Executive 1997 300,000 72,500 43,070 100,000 2,875
Officer (2) 1996 240,000 27,500 (3) 38,110 225,000 2,500
Carl E. Putnam 1998 312,000 100,000 -- 100,000 1,904
President and Chief Operating 1997 260,000 75,000 -- 100,000 2,600
Officer (4) 1996 220,000 25,000 (3) -- 125,000 6,215
Donald C. Welchko 1998 204,000 100,000 -- 100,000 1,681
Vice President and Chief 1997 170,000 75,000 -- 75,000 1,700
Financial Officer (5) 1996 150,000 25,000 (3) -- 81,000 1,550
Robert L. Swanson 1998 150,000 20,000 -- 20,000 1,264
Senior Executive Vice 1997 140,000 12,500 -- 15,000 1,399
President (6) 1996 124,000 10,000 -- 30,000 1,268
John P. Figurelli 1998 135,000 40,000 -- 62,500 338
Executive Vice President - 1997 46,922 10,000 -- 10,000 --
Operations (7) 1996 -- -- -- -- --
- ------------------
<FN>
(1) During 1996, the Company declared and paid a 100% stock dividend effected
in the form of a two-for-one stock split. The number of securities
underlying options granted during each year has been adjusted to reflect
the stock dividend.
(2) "Other Annual Compensation" includes $15,500 and $14,000 which are
attributable to club fees paid by the Company in 1997 and 1996,
respectively, and $15,000 which represents amounts paid by the Company for
a car allowance in 1996. "All Other Compensation" includes $1,406, $2,875
and $2,500 in Company matching contributions to the Company's 401(k) Plan
in 1998, 1997 and 1996, respectively. The Company and Mr. Anixter have
entered into an employment agreement under which Mr. Anixter will receive
an annual base salary of $400,000 in 1999. See "Employment Agreements."
(3) The bonuses for 1996 for each of Messrs. Anixter, Putnam and Welchko were
paid in January 1997 based upon 1996 performance, but were subject to being
employed for the full year of 1997.
(4) "All Other Compensation" includes $4,095 for premiums paid by the Company
for Mr. Putnam on life and disability insurance policies in 1996 and
$1,904, $2,600 and $2,120 in Company matching contributions to the
Company's 401(k) Plan in 1998, 1997 and 1996, respectively. The Company and
Mr. Putnam have entered into an employment agreement under which Mr. Putnam
will receive an annual base salary of $345,000 in 1999. See "Employment
Agreements."
(5) "All Other Compensation" includes $1,681, $1,700, and $1,550 in Company
matching contributions to the Company's 401(k) Plan in 1998, 1997 and 1996,
respectively. The Company and Mr. Welchko have entered into an employment
agreement under which Mr. Welchko will receive an annual base salary of
$230,000 in 1999. See "Employment Agreements."
(6) "All Other Compensation" includes $1,264, $1,399, and $1,268 in Company
matching contributions to the Company's 401(k) Plan in 1998, 1997 and 1996,
respectively. The Company and Mr. Swanson have entered into an employment
agreement under which Mr. Swanson will receive an annual base salary of
$165,000 in 1999. See "Employment Agreements."
(7) "All Other Compensation" includes $338 in Company matching contributions to
the Company's 401(k) Plan in 1998.
</FN>
</TABLE>
7
<PAGE>
Option Grants in 1998
The following table provides information on grants of stock options in
1998 to the Named Officers pursuant to the Second Amended and Restated Anicom,
Inc. 1995 Stock Incentive Plan (the "1995 Stock Incentive Plan") or the 1996
Stock Incentive Plan. No stock appreciation rights were granted by the Company
in 1998.
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
Potential Realizable
Value at
Number of Assumed Annual Rates of
Shares Stock Price Appreciation
Underlying Percent of Total for
Options Options Granted Exercise or Option Terms
Granted to Employees In Base Price Expiration ---------------------------
Name (#)(1) Fiscal Year ($/Sh)(1) Date 5% ($) 10% ($)
- --------------------------- ------------ ------------------ ------------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Scott C. Anixter.......... 100,000(2) 6.00% $ 9.94 11/10/08 624,995 1,583,860
Carl E. Putnam............ 100,000(2) 6.00 9.94 11/10/08 625,995 1,583,860
Donald C. Welchko......... 100,000(2) 6.00 9.94 11/10/08 625,995 1,583,860
Robert L. Swanson......... 20,000(2) 1.20 9.94 11/10/08 124,999 316,772
John P. Figurelli......... 10,000(3) .60 15.00 01/12/08 94,334 239,061
2,500(4) .15 13.00 06/03/08 20,439 51,797
10,000(5) .60 8.50 08/31/08 53,456 135,468
40,000(2) 2.40 9.94 11/10/08 249,998 633,544
- ------------------
<FN>
(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 become exercisable in five equal annual increments, beginning
on November 10, 1999, the first anniversary of the date of grant.
(3) These Options become exercisable in three equal annual increments,
beginning on January 12, 1999, the first anniversary of the date of grant.
(4) These Options become exercisable in three equal annual increments,
beginning on June 3, 1999, the first anniversary of the date of grant.
(5) These Options become exercisable in three equal annual increments,
beginning on August 31, 1999, the first anniversary of the date of grant.
</FN>
</TABLE>
Year-End 1998 Option Values
The following table provides information on the Named Officers'
unexercised options at December 31, 1998. All such options were granted under
either the 1995 Stock Incentive Plan or the 1996 Stock Incentive Plan.
8
<PAGE>
YEAR-END 1998 OPTION VALUES
<TABLE>
<CAPTION>
Numbers of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at 12/31/98 at Fiscal Year End(1)
------------------------- --------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------------------------------ ------------------------- --------------------------
<S> <C> <C>
Scott C. Anixter.......................... 110,000/315,000 $39,420/$59,130
Carl E. Putnam............................ 99,400/276,600 185,827/154,510
Donald C. Welchko......................... 61,800/218,200 92,497/73,490
Robert L. Swanson......................... 39,000/66,000 139,367/97,291
John P. Figurelli......................... 3,333/69,167 0/6,880
- ------------------
<FN>
(1) The value of the "in-the-money" options represents the difference between
the exercise price of such options and $9.188, the closing sale price of
the Common Stock on December 31, 1998.
</FN>
</TABLE>
Employment Agreements
The Company has entered into employment agreements with each of Scott
C. Anixter, Carl E. Putnam, Robert L. Swanson and Donald C. Welchko. Each of Mr.
Anixter's, Mr. Putnam's, Mr. Swanson's and Mr. Welchko's employment agreements
contains non-competition and non-solicitation provisions commencing on the date
of the employment agreement and ending three years after termination of
employment (two years with respect to Mr. Swanson). With respect to Messrs.
Anixter, Putnam, and Welchko, if any such executives' employment with the
Company is terminated at any time by the Company without cause, by such
executive for good reason, or due to the death or disability of the executive,
then such executive will receive a termination payment equal to the greater of
(i) his base salary and minimum targeted bonus for the remaining term of
employment, or (ii) two times the sum of his highest base salary and bonus for
any of the three years immediately preceding the year in which he is terminated.
During the 36 months following a change in control, the multiple of total
compensation noted in clause (ii) of the prior sentence would be equal to three,
rather than two.
In the event of a change in control, the employment agreements provide
for certain 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 (20%
with respect to Messrs. Anixter, Putnam and Welchko, 50% with respect to Mr.
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, each of Messrs. Anixter, Putnam and Welchko would be entitled to a
transaction bonus in an amount equal to between one and two times their
respective highest total compensation in any of the three years immediately
prior to the year in which the change in control occurs. The applicable multiple
of their respective total compensation would depend upon the total transaction
value of the change in control.
If, during the six month period beginning on the 180th day after a
change in control, any of Messrs. Anixter, Putnam or Welchko terminates his
employment with the Company without good reason, such executive would receive a
termination payment equal to the sum of his highest base salary and bonus during
any of the three years immediately preceding the year in which such termination
occurs. In addition, if the employment of any of Messrs. Anixter, Putnam or
Welchko is terminated following a change in control either by the Company
without cause, by such executive with or without good reason, or due to the
death or disability of such executive, the Company will be obligated to pay such
executive (or his spouse) an annual payment equal to 50% of the sum of (i) such
executive's average base salary for the three years ending with (and including)
the year in which the change in control occurs, plus (ii) the average amount of
the minimum bonus payment such executive is eligible for in the year in which a
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change in control occurs and his bonuses for each of the prior two years;
provided that the present value of such payments to Messrs. Anixter, Putnam and
Welchko, in the aggregate, as of the effective date of the change in control,
and after taking into account any tax gross-up payments payable to any of them
with respect to such payments, will not exceed 2% of the transaction value of
the change in control.
In the event of a change in control, if Mr. Swanson's employment with
the Company is terminated by him for good reason or by the Company without cause
during the next 36 months, the Company is obligated to pay him a lump sum cash
payment equal to the greater of (i) $500,000, or (ii) three times his 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 Mr. Swanson terminates employment with the Company without good
reason during the next six months, the Company shall pay him an amount equal to
20% of the amount described in the prior sentence. Following a change in
control, if Mr. Swanson's employment with the Company is terminated by him for
good reason or by the Company without cause during the next 36 months, Mr.
Swanson 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, Swanson and Welchko 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.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
In March 1997, the Board of Directors established a Compensation
Committee, composed of William R. Anixter, Michael Segal and Lee B. Stern. The
Compensation Committee has responsibility for reviewing with management the
overall compensation policies to be followed by the Company, establishing the
base compensation and bonus of the Company's executive officers, determining
option grants to executive officers and preparing the report of the Compensation
Committee for the Company's Proxy Statement. Additionally, in the first quarter
of 1998, the Company engaged an outside expert in executive compensation matters
to assist the Compensation Committee in making compensation decisions regarding
the Company's chief executive officer, president and chief financial officer.
The compensation policy of the Company has been, and will remain, to
provide a total compensation package that attracts and retains quality
individuals that possess the extent of industry experience necessary for the
Company to continue to maintain strong relationships with major vendors and
customers and to implement the Company's integrated growth strategy. The
executive compensation program is intended to recognize individual contribution
to corporate performance and increases in stockholder value.
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Base Compensation
Individual base compensation levels for executive officers are
established based upon a variety of factors, including the particular
executive's scope of responsibilities, tenure with the Company and industry
experience, and attainment of performance goals in recent years. In 1998, the
Compensation Committee retained a consultant to review the total compensation
package of executives in companies representative of those with which Anicom
competes for executive talent. The consultant compiled information on
fifty-three companies. Twenty-seven of these companies were high growth
companies against which the Company believes it competes for executive talent
and is not limited to companies that specialize in the sale and distribution of
communications-related wire, cable, fiber optics and computer network and
connectivity products. The remaining twenty-six were companies within Anicom's
industry. Based upon its review and the analysis prepared by the Company's
executive compensation consultant, the Compensation Committee believes that the
current base compensation levels of executive officers of the Company are at or
below the current compensation of similar executives in the representative
companies.
Bonuses
Individual bonuses for each year are determined based upon an
evaluation of individual performance during the prior year as compared to such
person's performance goals. Generally, performance criteria are established by
the Company's Chief Executive Officer in consultation with the other executive
officers. The performance goals for each officer take into account a wide range
of departmental and company-wide objectives. For 1998, the Compensation
Committee considered, among other things, the Company's successful integration
of a number of acquired companies in 1998, the Company's realization of strong
internal growth, the increase of the Company's credit facility while reducing
its interest rate and a variety of operational improvements implemented in 1998.
Based on the analysis of the representative companies performed by the executive
compensation consultant, the Compensation Committee believes that the bonus
provided to the chief executive officer, president and chief financial officer
are comparable to or below the current bonus levels of similar executives in the
representative companies.
Stock Options
The Company currently has in place two stock incentive plans for
associates: The 1995 Stock Incentive Plan and the 1996 Stock Incentive Plan. The
purpose of each of the plans is to promote the overall financial objectives of
the Company and its stockholders by motivating eligible participants to achieve
long-term growth in stockholder equity in the Company and to retain the
association of these individuals. Each of the executive officers of the Company
is eligible to participate in each of these plans. Each of these plans is
administered by the Compensation Committee which consists of William R. Anixter,
Michael Segal and Lee B. Stern. The Compensation Committee considered the
factors outlined above under the caption "Bonuses" in approving the grant of
options to purchase the following number of shares to each of the Named Officers
in 1998: Scott C. Anixter - 100,000 shares; Carl E. Putnam - 100,000 shares;
Donald C. Welchko - 100,000 shares; Robert L. Swanson - 20,000 shares; and John
P. Figurelli - 40,000 shares. In arriving at these grants, the Compensation
Committee considered that total cash compensation (defined as base salary and
bonus) was below market for each of the Company's chief executive officer,
president and chief financial officer as compared to similar executives in the
representative companies.
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Compensation of the Chief Executive Officer
Base compensation for the Company's Chief Executive Officer, Scott C.
Anixter, in 1998 was determined by the Compensation Committee. In 1998, Mr.
Anixter's base compensation was $360,000, as compared to $300,000 in 1997. This
increase was determined based upon the significant growth experienced by the
Company and based upon an evaluation of the Chief Executive Officer's
contribution to achieving such growth. Mr. Anixter's 1998 bonus and option
grants, as well as his 1999 base compensation, were established by the
Compensation Committee based upon recommendations provided by the Company's
executive compensation consultant and the assessment of other chief executive
officers' salaries. As with the other executive officers of the Company, Mr.
Anixter's performance based compensation consisted of a combination of stock
option grants and a cash bonus determined based upon an evaluation of his
contribution to the Company's growth and performance in 1998.
Section 162(m)
The Board of Directors currently intends for all compensation paid to
executive officers to be tax deductible to the Company pursuant to Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). Section
162(m) of the Code provides that compensation paid to executive officers in
excess of $1 million cannot be deducted by the Company for federal income tax
purposes unless, in general, such compensation is performance based, is
established by an independent committee of directors, is objective and the plan
or agreement providing for such performance based compensation has been approved
in advance by stockholders. The requirements of Section 162(m) of the Code,
however, are uncertain at this time and, the Company believes, arbitrary and
inflexible. In the future, the Board of Directors may determine to adopt a
compensation program that does not satisfy the conditions of Section 162(m) of
the Code if, in the Board of Directors' judgment, after considering the
additional costs of not satisfying Section 162(m) of the Code, such program is
appropriate.
Compensation Committee of the Board of Directors
William R. Anixter
Michael Segal
Lee B. Stern
Compensation Committee Interlocks and Insider Participation
William R. Anixter, Michael Segal and Lee B. Stern were members of the
Compensation Committee for 1998. In 1998, Near North National Group received
approximately $126,529 in commissions earned from insurance premiums paid by the
Company to Near North National Group. Michael Segal, a director of the Company,
is the Chairman and Chief Executive Officer of Near North National Group.
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PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on
the Common Stock of the Company since its initial public offering on February
22, 1995 with the cumulative total return of all stocks in the Nasdaq
Non-Financial Sector and all companies in the SIC classification of the Peer
Group1/ (assuming the investment of $100 in the Common Stock at its closing
price on February 23, 1995 and in each index on January 31, 1995 and the
reinvestment of all dividends).
- --------------------------------------------------------------------------------
2/23/95 12/31/95 12/31/96 12/31/97 12/31/98
- --------------------------------------------------------------------------------
Anicom, Inc. 100 177 308 529 306
- --------------------------------------------------------------------------------
Peer Group (1) 100 143 151 169 135
- --------------------------------------------------------------------------------
Nasdaq Non-Financial 100 140 170 199 292
- --------------------------------------------------------------------------------
(1) The Peer Group is an index of the twenty-one (21) domestic companies listed
on the NASDAQ National Market which have indicated that their primary
industry is electrical goods (SIC Codes 5063-5065) (compiled by FactSet
Research Systems, Inc.).
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SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth, as of March 31, 1999, 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.
Number of Shares Percent oF
Name and Address(1) Beneficially Owned Ownership
- ------------------------------------------- ------------------- -----------
Scott C. Anixter(2)........................ 2,248,000 8.89%
Alan B. Anixter(3)......................... 300,002 1.19%
Carl E. Putnam(4).......................... 248,502 *
Donald C. Welchko(5)....................... 86,802 *
Robert L. Swanson(6)....................... 174,052 *
John P. Figurelli(7)....................... 7,631 *
William R. Anixter(8)...................... 110,000 *
Peter H. Huizenga(9)....................... 999,680 3.97%
Ira J. Kaufman(10)......................... 106,000 *
Thomas J. Reiman(11)....................... 35,000 *
Michael Segal(12).......................... 87,000 *
Lee B. Stern(12)........................... 142,500 *
Northwestern Mutual Life
Insurance Company(13)................... 1,461,540 5.82%
Directors and executive officers
as a group (12 persons)................. 6,006,709 23.09%
- ------------------
* less than one percent.
(1) Except as otherwise indicated, the address of each stockholder listed is
c/o Anicom, Inc., 6133 North River Road, Suite 1000, Rosemont, Illinois
60018.
(2) Includes 704,426 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, 604,800 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 and 785,774 shares held by
Anixter Enterprises, L.P., a limited partnership of which Scott C. Anixter
is general partner. Also includes 150,000 shares issuable on or before June
5, 1999 upon exercise of options granted pursuant to the 1995 Stock
Incentive Plan or the 1996 Stock Incentive Plan.
(3) Includes 50,000 shares held in a trust for the benefit of Gail Anixter,
Alan B. Anixter's wife, for which Gail Anixter has sole voting and
investment power as trustee and of which Alan B. Anixter disclaims
beneficial ownership. Also includes 160,000 shares issuable on or before
June 5, 1999 upon exercise of options granted pursuant to the 1995 Stock
Incentive Plan or the 1996 Stock Incentive Plan.
(4) Includes 126,200 shares issuable on or before June 5, 1999 upon exercise of
options granted pursuant to the 1995 Stock Incentive Plan or the 1996 Stock
Incentive Plan.
(5) Includes 600 shares held in custodial accounts for the benefit of Mr.
Welchko's children and includes 75,400 shares issuable on or before June 5,
1999 upon exercise of options granted pursuant to the 1995 Stock Incentive
Plan or the 1996 Stock Incentive Plan.
(6) Includes 47,800 shares issuable on or before June 5, 1999 upon exercise of
options granted pursuant to the 1995 Stock Incentive Plan or the 1996 Stock
Incentive Plan.
(7) Includes 6,666 shares issuable on or before June 5, 1999 upon exercise of
options granted pursuant to the 1995 Stock Incentive Plan or the 1996 Stock
Incentive Plan.
(8) Includes 57,000 shares issuable upon exercise of options granted pursuant
to the Directors Option Plan.
(9) Includes 31,000 shares issuable upon exercise of options granted pursuant
to the Directors Option Plan. Includes 654,403 shares held in various
trusts of which Peter H. Huizenga as trustee has sole voting and investment
power and of which Peter H. Huizenga disclaims beneficial ownership.
Includes 173,116 shares held in two trusts of which the spouse of Peter H.
Huizenga, Heidi Huizenga, as trustee, has sole voting and investment power
and of which Peter H. Huizenga disclaims beneficial ownership.
(10) Includes 28,000 shares issuable upon exercise of common stock warrants and
58,000 shares issuable upon exercise of options granted pursuant to the
Directors Option Plan.
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(11) Includes 33,000 shares issuable upon exercise of options granted pursuant
to the Directors Option Plan.
(12) Includes 57,000 shares issuable upon exercise of options granted pursuant
to the Directors Option Plan.
(13) As reported on a Schedule 13G filed by The Northwestern Mutual Life
Insurance Company on February 9, 1998. According to such Schedule 13G, The
Northwestern Mutual Life Insurance Company has sole voting power and sole
dispositive power with respect to all of these shares. The address of this
stockholder is 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
CERTAIN TRANSACTIONS
In connection with the formation of the Company, on June 30, 1993, the
Company, Alan B. Anixter, Scott C. Anixter, individually and as custodian of
certain accounts for the benefit of his children, Carl E. Putnam, Robert L.
Swanson and William K. Leino entered into a shareholders agreement. This
agreement has been terminated. Under this agreement, certain parties to this
agreement and their affiliates may not sell or otherwise transfer any of their
shares of Common Stock to anyone not a party to this agreement, except certain
permitted transferees (as defined), unless he or she has first provided other
parties to this agreement or the Company an option to purchase such shares at a
price computed in accordance with the terms of the agreement. This agreement
also provides Scott C. Anixter and certain affiliated parties of Scott C.
Anixter with the first option to purchase shares of Common Stock owned by other
parties to this agreement upon the occurrence of certain events including, but
not limited to, death, disability or bankruptcy. This agreement terminates on
the first to occur of (i) the dissolution of the Company, (ii) a shareholder
becoming the beneficial owner of all of the shares of Common Stock which are
subject to this agreement and (iii) notice of termination executed by all of the
parties to this agreement.
Ira J. Kaufman, a director of the Company, is a Senior Managing
Director of Mesirow Financial, Inc., which served as a placement agent for a
private placement by the Company of its Common Stock in December 1997. Mesirow
received a placement agent fee of $780,000 in connection with such transaction.
In 1998, Near North National Group received approximately $126,529 in
commissions earned from insurance premiums paid by the Company to Near North
National Group. Michael Segal, a director of the Company, is the Chairman and
Chief Executive Officer of Near North National Group.
In April 1998, the Company entered into an agreement with Robert
Brzustewicz, Sr. regarding his employment with the Company ("Brzustewicz
Agreement"). Pursuant to the Brzustewicz Agreement, the Company and Mr.
Brzustewicz agreed to accelerate the expiration of Mr. Brzustewicz' term of
employment in consideration for the payment of $600,000. The Company also agreed
to provide health insurance to Mr. Brzustewicz until March 12, 2001. The Company
agreed that the remaining 100,000 options to purchase up to 300,000 shares of
the Company's common stock at an exercise price of $6.1875 per share, which were
previously granted to Mr. Brzustewicz, shall fully vest as of the date of the
Brzustewicz Agreement, and be exercisable through March 12, 2006. Pursuant to
the Brzustewicz Agreement, Mr. Brzustewicz is subject to the non-competition and
non-solicitation provisions of his employment agreement until March 12, 2003.
In April 1998, the Company entered into an agreement with Glen M. Nast
regarding his employment with the Company ("Nast Agreement"). Pursuant to the
Nast Agreement, the Company and Mr. Nast agreed to accelerate the expiration of
Mr. Nast's term of employment in consideration for the payment of $540,000. The
Company also agreed to provide health insurance to Mr. Nast until March 12,
2001. The Company agreed that the remaining 4,000 options to purchase up to
5,000 shares of the Company's common stock at an exercise price of $8.75 per
share, which were previously granted to Mr. Nast, shall fully vest as of the
date of the Nast Agreement, and be exercisable through December 9, 2006.
Pursuant to the Nast Agreement, Mr. Nast is subject to the non-competition and
non-solicitation provisions of his employment agreement until March 12, 2003.
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AMENDMENT TO 1996 STOCK INCENTIVE PLAN
(Proposal 2)
Subject to the approval of the Company's stockholders at the Annual
Meeting, the Board of Directors has approved an amendment to the 1996 Stock
Incentive Plan to increase the number of shares of common stock reserved for
issuance under the Plan from 2,600,000 to 3,800,000. The 1996 Stock Incentive
Plan, as amended, remains in all other respects identical to the 1996 Stock
Incentive Plan as originally adopted by the Company's stockholders. A copy of
the amendment to the 1996 Stock Incentive Plan is set forth in Appendix A
hereto.
Stockholder approval of the amendment to the 1996 Stock Incentive Plan
is sought to continue (i) to qualify the 1996 Stock Incentive Plan, as amended,
under Rule 16b-3 of the Act and thereby render certain transactions under the
1996 Stock Incentive Plan exempt from certain provisions of Section 16 of the
Act and (ii) to qualify certain compensation under the 1996 Stock Incentive Plan
as performance based compensation that is tax deductible without limitation
under Section 162(m) of the Code.
The following is a brief summary of certain features of the 1996 Stock
Incentive Plan, as amended.
General
The 1996 Stock Incentive Plan is a flexible plan that provides the
Option Committee broad discretion to fashion the terms of the awards to provide
eligible participants with stock-based incentives including: (i) non-qualified
and incentive stock options for the purchase of Common Stock, (ii) stock
appreciation rights ("SARs"), (iii) restricted stock ("Restricted Stock"), and
(iv) deferred stock ("Deferred Stock"). The persons eligible to participate in
the 1996 Stock Incentive Plan are officers, directors, employees and consultants
of the Company. It is estimated that approximately 1,150 persons are eligible to
participate in the 1996 Stock Incentive Plan. The purpose of the 1996 Stock
Incentive Plan is to promote the overall financial objectives of the Company and
its stockholders by motivating eligible participants to achieve long-term growth
in stockholder equity in the Company and to retain the association of these
individuals. The 1996 Stock Incentive Plan will be administered by the Option
Committee. The Option Committee is and shall remain comprised of at least two
independent directors, within the meaning of Rule 16b-3. Members of the Option
Committee will not be eligible to participate in the 1996 Stock Incentive Plan.
The 1996 Stock Incentive Plan provides for the grant of options and
other awards of up to 3,800,000 shares of Common Stock. In the discretion of the
Option Committee, shares of Common Stock subject to an award under such Plan
that remain unissued upon termination of such award, are forfeited or are
received by the Company as consideration for the exercise or payment of an award
shall become available for additional awards under the Plan. In the event of a
stock dividend, stock split, recapitalization, sale of substantially all of the
assets of the Company, reorganization or other similar event, the Option
Committee will adjust the aggregate number of shares of Common Stock subject to
the 1996 Stock Incentive Plan and the number, class and price of such shares
subject to outstanding awards.
The Board of Directors or Option Committee may amend, modify or
discontinue the 1996 Stock Incentive Plan at any time, except if such amendment
(i) impairs the rights of a participant without the participant's consent, or
(ii) would disqualify the Plan from the exemption provided by Rule 16b-3 under
the Act. Amendments may be subject to stockholder approval under applicable law.
Any amendment by the Option Committee is subject to approval of the Board of
Directors. The Option Committee may amend the terms of any award granted under
the Plan (other than to decrease the option price), subject to the consent of a
participant if such amendment impairs the rights of such participant.
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Awards Under the 1996 Stock Incentive Plan
Stock Options. The Option Committee shall determine the number of
shares of Common Stock subject to the options to be granted to each participant.
During any three-calendar-year period, options to purchase no more than 400,000
shares of Common Stock may be granted to any participant in the 1996 Stock
Incentive Plan. The Compensation Committee may grant non-qualified stock
options, incentive stock options or a combination thereof to a participant. Only
persons who on the date of the grant are employees of the Company may be granted
options which qualify as incentive stock options. Options granted under the 1996
Stock Incentive Plan will provide for the purchase of Common Stock at prices
determined by the Option Committee, but in no event will an option intended as
an incentive stock option be granted at less than fair market value on the date
of grant. When incentive stock options are granted to an individual who owns
Common Stock possessing more than 10% of the combined voting power of all
classes of stock of the Company, the option price shall not be less than 110% of
fair market value. No non-qualified stock option or incentive stock option shall
be exercisable later than the tenth anniversary date of its grant. In the case
of an incentive stock option granted to a participant who owns more than 10% of
the combined voting power of all classes of stock of the Company or any parent
or subsidiary of the Company, such option shall not be exercisable later than
the fifth anniversary date of its grant. No incentive stock option shall be
granted later than the tenth anniversary date of the adoption of the 1996 Stock
Incentive Plan or its approval by the stockholders of the Company, whichever is
earlier.
Options granted under the 1996 Stock Incentive Plan shall be
exercisable at such times and subject to such terms and conditions set forth in
the 1996 Stock Incentive Plan and as the Option Committee shall determine or
provide in an option agreement. Except as provided in any option agreement,
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
participant during such participant's lifetime. The option exercise price shall
be payable by the participant (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, (vi) by
certifying ownership of shares of Common Stock to the satisfaction of the Option
Committee for later delivery to the Company as specified by the Option Committee
or (vii) by any combination of the foregoing. Upon termination of a
participant's employment with the Company due to death or Disability (as defined
in the 1996 Stock Incentive Plan), all of such participant's options shall be
exercisable for the shorter of their remaining term or one year after
termination of employment (or such other period as the Option Committee may
determine). If a participant retires, all of such participant's options shall
terminate, except that, to the extent such options are then exercisable, such
options may be exercised for the shorter of their remaining terms or one year
(or such shorter period as the Option Committee may specify) after termination
of employment. If a participant involuntarily ceases to be an employee of the
Company (other than due to death, Disability or as a result of termination for
Cause), all of such participant's options shall terminate, except that, to the
extent such options are then exercisable, such options may be exercised for the
shorter of their remaining terms or three months (or such shorter period as the
Option Committee may specify) after termination of employment. If a participant
voluntarily ceases to be an employee of the Company (other than due to
retirement) or is terminated as a result of Cause (as defined in the Plan), all
of his outstanding options shall terminate immediately.
Upon receipt of a notice from a participant to exercise an option, the
Option Committee may elect to cash out all or part of any such option by paying
the participant, in cash or shares of Common Stock, the following amount: (i)
the excess of the fair market value of the Common Stock subject to the
unexercised option over the exercise price of the option, multiplied by (ii) the
number of shares for which the option is to be exercised.
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Stock Appreciation Rights. An SAR shall entitle a participant to
receive Common Stock, cash or a combination thereof. If granted in conjunction
with an option, the exercise of an SAR shall require the cancellation of the
corresponding portion of the option. SARs may be granted on or after the
corresponding grant of non-qualified stock options, but only at the same time as
the corresponding grant of incentive stock options. The Option Committee in its
discretion shall determine the number of SARs awarded to a participant, but in
no event shall SARs covering more than 400,000 shares of Common Stock be granted
to any participant during any three-calendar-year period. The Option Committee
shall determine the terms and conditions of any SAR which shall be subject to an
agreement between the Company and the participant. If granted in conjunction
with options, the SAR shall be exercisable for and during the same period as the
corresponding options. Upon exercise of an SAR, a participant shall receive an
amount in cash, shares of Common Stock or both equal to (i) the excess of the
fair market value of the Common Stock over the option price per share (if the
SAR is granted in conjunction with an option), multiplied by (ii) the number of
shares of Common Stock subject to the SAR. In the case of an SAR granted on a
stand alone basis, the Option Committee shall determine in its discretion the
value to be used in lieu of the option price. In no event shall an SAR granted
in tandem with an incentive stock option be exercised unless the fair market
value of the Common Stock at the time of the exercise exceeds the option price.
With respect to participants who are subject to Section 16(b) of the Exchange
Act (generally officers and directors of the Company) ("16(b) Persons"), the
Option Committee may require that the SARs be exercised in compliance with Rule
16b-3, including the restriction that an SAR shall not be exercisable within the
first six months of its term. The transferability and termination provisions of
an SAR are as set forth above with respect to stock options.
Restricted Stock. Restricted Stock awards are grants of shares of
Common Stock, usually without cash consideration from the participant, that are
subject to restrictions on transferability and ownership. The Option Committee
in its discretion shall determine the persons to whom Restricted Stock shall be
granted, the number of shares of Restricted Stock to be granted to each
participant, the periods for which Restricted Stock is restricted, and any other
restrictions to which the Restricted Stock is subject. The Option Committee may
condition the award of Restricted Stock on such performance goals and other
criteria as it may determine. The terms and conditions of the Restricted Stock
shall be confirmed in and subject to an agreement between the Company and the
participant. During the restriction period, the Option Committee may require
that the certificates evidencing the Restricted Stock be held by the Company.
During the restriction period, the Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered. Other than the foregoing
restrictions, the participant shall have all the rights of a holder of Common
Stock. If a restriction relates to a period of employment and the participant's
employment terminates during the restriction period due to death or Disability,
the restrictions on the Restricted Stock shall lapse. If a participant's
employment terminates for any other reason, unless otherwise agreed by the
Option Committee, the remaining Restricted Stock shall be forfeited by the
participant to the Company.
Deferred Stock. Deferred Stock awards are grants of shares of Common
Stock, usually without cash consideration, that are to be delivered in the
future. The Option Committee in its discretion shall determine the persons to
whom Deferred Stock shall be granted, the number of shares of Deferred Stock to
be granted to each participant, the duration of the period prior to which Common
Stock will be delivered, the conditions under which receipt of the Common Stock
will be deferred, and any other terms and conditions of the granting of the
award. The terms and conditions of the Deferred Stock shall be confirmed in and
subject to an agreement between the Company and the participant. The Option
Committee may condition the award of Deferred Stock on such performance goals
and criteria as it may determine. During the deferral period, the Deferred Stock
may not be sold, assigned, transferred, pledged or otherwise encumbered. At the
expiration of the deferral period, the Option Committee may deliver to the
participant Common Stock, cash equal to the fair market value of such Common
Stock or a combination thereof for the shares covered by the Deferred Stock
awards. Cash dividends on Common Stock subject to Deferred Stock awards shall be
automatically deferred and reinvested in Deferred Stock, and stock dividends on
Common Stock subject to Deferred Stock awards shall be paid in the form of
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Deferred Stock. If a participant's employment terminates during the deferred
period due to death or Disability, the deferral restrictions shall lapse. If a
participant's employment terminates for any other reason, unless otherwise
agreed by the Option Committee, the rights to the shares still covered by
Deferred Stock awards shall be forfeited by the participant.
Changes in Control
Upon the occurrence of a Change in Control (as defined in the 1996
Stock Incentive Plan), the following shall occur: (i) all unexercised stock
options and SARs shall become immediately exercisable, and (ii) all restrictions
on the Restricted Stock and deferral limitations on the Deferred Stock shall
lapse.
Discussion of Federal Income Tax Consequences
The following summary of tax consequences with respect to the awards
granted under the 1996 Stock Incentive Plan is not comprehensive and is based
upon laws and regulations in effect as of March 1, 1999. Such laws and
regulations are subject to change.
Non-Qualified Stock Options
Participant. Generally, a Participant receiving a non-qualified stock
option does not realize any taxable income for Federal income tax purposes at
the time of grant. Upon exercise of such Option, the excess of the fair market
value of the shares of Common Stock subject to the non-qualified stock option on
the date of exercise over the exercise price will be taxable to the Participant
as ordinary income. The Participant will have a capital gain (or loss) upon the
subsequent sale of the shares of Common Stock received upon exercise of the
option in an amount equal to the sale price reduced by the fair market value of
the shares of Common Stock on the date the option was exercised. The holding
period for purposes of determining whether the capital gain (or loss) is a
long-term or short-term capital gain (or loss) will commence on the date the
non-qualified stock option is exercised.
Tax Withholding. The amount of income that is taxable to a Participant
upon the exercise of a non-qualified stock option will be treated as
compensation income. Accordingly, such amount will be subject to applicable
withholding of Federal, state and local income taxes and Social Security taxes.
If the Participant Uses Company Stock to Pay the Option Exercise Price.
If the Participant who exercises a non-qualified stock option pays the exercise
price by tendering shares of Common Stock and receives back a larger number of
shares of Common Stock, the Participant will realize taxable income in an amount
equal to the fair market value of the additional shares of Common Stock received
on the date of exercise, less any cash paid in addition to the shares of Common
Stock tendered. Upon a subsequent sale of the Common Stock received, the number
of shares of Common Stock equal to the number delivered as payment of the
exercise price will have a tax basis equal to that of the shares of Common Stock
originally tendered. The additional newly-acquired shares of Common Stock
obtained upon exercise of the non-qualified stock option will have a tax basis
equal to the fair market value of such shares on the date of exercise.
The Company. The Company generally will be entitled to a tax deduction
in the same amount and in the same year in which the Participant recognizes
ordinary income resulting from the exercise of a non-qualified stock option.
19
<PAGE>
Incentive Stock Options
Participant. Generally, a Participant will not realize any taxable
income for Federal income tax purposes at the time an Incentive Stock Option is
granted. Upon exercise of the Incentive Stock Option, the Participant will incur
no income tax liability (other than pursuant to the alternative minimum tax, if
applicable). If the Participant transfers shares of Common Stock received upon
the exercise of an Incentive Stock Option within a period of two years from the
date of grant of such Incentive Stock Option or one year from the date of
receipt of the shares of Common Stock (the "Holding Period"), then, in general,
the Participant will have taxable ordinary income in the year in which the
transfer occurs in an amount equal to the excess of the fair market value on the
date of exercise over the exercise price, and will have long-term or short-term
capital gain (or loss) in an amount equal to the difference between the sale
price of the shares of Common Stock and the fair market value of such shares on
the date of exercise. However, if the sale price is less than the fair market
value of such shares on the date of exercise, the ordinary income will be not
more than the difference between the sale price and the exercise price. If the
Participant transfers the shares of Common Stock after the expiration of the
Holding Period, he or she will recognize income taxable at the capital gains tax
rate on the difference between the sale price and the exercise price.
Tax Withholding. If the Participant makes any disqualifying disposition
prior to the completion of the Holding Period with respect to shares of Common
Stock acquired upon the exercise of an Incentive Stock Option granted under the
Plan, then such Participant must remit to the Company an amount sufficient to
satisfy all Federal, state, and local withholding taxes thereby incurred.
If the Participant Uses Common Stock to Pay the Option Exercise Price.
If a Participant who exercises an Incentive Stock Option pays the option
exercise price by tendering shares of Common Stock, such Participant will
generally incur no income tax liability (other than pursuant to the alternative
minimum tax, if applicable), provided any Holding Period requirement for the
tendered shares is met. If the tendered stock was subject to the Holding Period
requirement when tendered, payment of the exercise price with such stock
constitutes a disqualifying disposition. If the Participant pays the exercise
price by tendering shares of Common Stock and the Participant receives back a
larger number of shares, under proposed Treasury Regulations, the Participant's
basis in the number of shares of newly acquired stock equal to the number of the
shares delivered as payment of the exercise price will have a tax basis equal to
that of the shares originally tendered, increased, if applicable, by any amount
included in the Participant's gross income as compensation. The additional newly
acquired shares obtained upon exercise of the Option will have a tax basis of
zero. All Common Stock acquired upon exercise will be subject to the Holding
Period requirement, including the number of shares equal to the number tendered
to pay the exercise price. Any disqualifying disposition will be deemed to be a
disposition of Common Stock with the lowest basis.
The Company. The Company is not entitled to a tax deduction upon grant,
exercise or subsequent transfer of shares of Common Stock acquired upon exercise
of an Incentive Stock Option, provided that the Participant holds the shares
received upon the exercise of such Option for the Holding Period. If the
Participant transfers the Common Stock acquired upon the exercise of an
Incentive Stock Option prior to the end of the Holding Period, the Company
generally is entitled to a deduction at the time the Participant recognizes
ordinary income in an amount equal to the amount of ordinary income recognized
by such Participant as a result of such transfer.
20
<PAGE>
Stock Appreciation Rights
Upon the grant of a Stock Appreciation Right ("SAR"), the Participant
will not recognize any taxable income and the Company will not be entitled to a
deduction. Upon the exercise of an SAR, the consideration paid to the
Participant upon exercise of the SAR will constitute compensation taxable to the
Participant as ordinary income. In determining the amount of the consideration
paid to the Participant upon the exercise of an SAR for the Common Stock, the
fair market value of the shares on the date of exercise is used, except that in
the case of an Insider, the fair market value will be determined six months
after the date on which the Common Stock is transferred unless such Participant
makes an election under Section 83(b) of the Code to be taxed based on the fair
market value on the date of exercise. The Company in computing its Federal
income tax generally will be entitled to a deduction in an amount equal to the
compensation taxable to the Participant.
Other Awards
With respect to other Awards granted under the Plan that result in the
payment or issuance of cash or shares of Common Stock or other property that is
either not restricted as to transferability or not subject to a substantial risk
of forfeiture, the Participant must generally recognize ordinary income equal to
the cash or the fair market value of shares of Common Stock or other property
received. Thus, deferral of the time of payment or issuance will generally
result in the deferral of the time the Participant will be liable for income
taxes with respect to such payment or issuance. The Company generally will be
entitled to a deduction in an amount equal to the ordinary income received by
the Participant. With respect to Awards involving the issuance of shares of
Common Stock or other property that is restricted as to transferability and
subject to a substantial risk of forfeiture, the Participant must generally
recognize ordinary income equal to the fair market value of the shares of Common
Stock or other property received at the first time the shares of Common Stock or
other property become transferable or not subject to a substantial risk of
forfeiture, whichever occurs earlier. The Company generally will be entitled to
a deduction in an amount equal to the ordinary income received by the
Participant. A Participant may elect under Section 83(b) of the Code to be taxed
at the time of receipt of shares of Common Stock or other property rather than
upon lapse of restrictions on transferability or the substantial risk of
forfeiture, but if the Participant subsequently forfeits such shares or property
the Participant would not be entitled to any tax deduction, including a capital
loss, for the value of the shares or property on which he previously paid tax.
The Participant must file such election with the Internal Revenue Service within
30 days of the receipt of the shares of Common Stock or other property.
Parachute Payments
In the event any payments or rights accruing to a Participant upon a
Change in Control, or any other payments Awarded under the Plan, constitute
"parachute payments" under Section 280G of the Internal Revenue Code, depending
upon the amount of such payments accruing and the other income of the
Participant from the Company, the Participant may be subject to an excise tax
(in addition to ordinary income tax) and the Company may be disallowed a
deduction for the amount of the actual payment.
The Board of Directors recommends that stockholders vote FOR the
amendment to the Company's 1996 Stock Incentive Plan.
21
<PAGE>
AMENDMENT TO THE AMENDED AND RESTATED
ANICOM, INC. 1995 DIRECTORS STOCK OPTION PLAN
(Proposal 3)
Subject to the approval of the Company's stockholders at the Annual
Meeting, the Board of Directors approved an amendment to the Directors Option
Plan to (i) increase the number of shares of common stock reserved for issuance
under the Directors Option Plan from 450,000 to 500,000, (ii) grant to each
non-employee director an Option to Purchase 2,000 shares of Common Stock for
each Board meeting such director attends (including attendance at any Board
meeting after December 31, 1998 but prior to the Annual Meeting) as compensation
for his or her service, and (iii) grant to each non-employee director an Option
to purchase 1,000 shares of Common Stock for each Committee meeting such
director attends (including attendance at any Committee meeting after December
31, 1998 but prior to the Annual Meeting) as compensation for his or her
service. A copy of the amendment to the Directors Option Plan is set forth in
Appendix B hereto.
Stockholder approval of the Directors Option Plan is sought to continue
(i) to qualify the Directors Option Plan, as amended, under Rule 16b-3 of the
Act and thereby render certain transactions under the Directors Option Plan
exempt from certain provisions of Section 16 of the Act and (ii) to qualify the
Directors Option Plan as performance based compensation that is tax deductible
without limitation under Section 162(m) of the Code.
The Board of Directors originally adopted the Directors Option 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 Option 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.
The Directors Option Plan is administered by the Compensation Committee
of the Company's Board of Directors. The following is a brief summary of certain
features of the Directors Option Plan, as amended.
Terms of the Directors Option Plan
The Directors Option Plan provides for the issuance of options to
purchase up to 500,000 shares of Common Stock, which shares are reserved and
available for purchase upon the exercise of options granted under the Directors
Option Plan. Only directors who are not employees or officers of the Company are
eligible to participate in the Directors Option Plan. There currently are six
non-employee directors eligible to participate in the Directors Option Plan.
Each non-employee director who becomes a director of the Company in the
future will be granted an option to purchase 10,000 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 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 10,000 shares of Common Stock. Each
non-employee director will be granted an Option to purchase 2,000 shares of
Common Stock for each Board meeting that such director attends. The total number
of shares for which options may be granted to a director under the Directors
Option Plan shall not exceed 75,000 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.
22
<PAGE>
All options granted under the Directors Option Plan are immediately
exercisable on the date of grant. If any options under the Directors Option 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 Option Plan). In the event of a
non-employee director's death or "Disability" (as defined in the Directors
Option 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.
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
Directors Option 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 Directors
Option 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 Directors Option Plan is not comprehensive and is based upon laws and
regulations in effect on March 1, 1999. Such laws and regulations are subject to
change.
A director granted an option under the Directors Option 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 the
amendment to the Company's Amended and Restated Directors Stock Option Plan.
23
<PAGE>
INDEPENDENT AUDITORS
The Company's Board of Directors, upon recommendation of the Audit
Committee, has selected PricewaterhouseCoopers to audit the financial statements
of the Company for the year ended December 31, 1999. It is expected that
representatives of PricewaterhouseCoopers will be present at the Annual Meeting
and available to respond to questions. Such representatives will be given an
opportunity to make a statement if they desire to do so.
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 $5,000 plus reasonable
out-of-pocket expenses.
Proposals of Stockholders
Proposals of stockholders intended to be considered at the 2000 annual
meeting of stockholders must be received by the Corporate Secretary of the
Company no earlier than November 15, 1999 and no later than December 15, 1999.
Stockholder List
A list of stockholders entitled to vote at the Annual 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 Annual Meeting, during ordinary
business hours, for a period of at least ten days prior to the Annual Meeting
and continuing through the date of the Annual Meeting, at the principal offices
of Harris Trust & Savings Bank, 111 West Monroe Street, Chicago, Illinois 60603.
Annual Report on Form 10-K
The Company will furnish without charge to each person whose Proxy is
being solicited, upon request, a copy of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 as filed with the Securities
and Exchange Commission, including the financial statements and the schedules
thereto. Such Form 10-K was filed with the Securities and Exchange Commission on
March 31, 1999. Requests for copies of such report should be directed to Anicom,
Inc., Attention: Corporate Secretary, 6133 North River Road, Suite 1000,
Rosemont, Illinois 60018-5171.
24
<PAGE>
Incorporation by Reference
No documents are incorporated herein by reference.
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,
/s/ DAVID R. SHEVITZ
David R. Shevitz, Corporate Secretary
25
<PAGE>
APPENDIX A
AMENDMENT TO THE
1996 STOCK INCENTIVE PLAN
RESOLVED, that the 1996 Stock Incentive Plan (the "Plan") be and hereby
is amended, subject to and effective upon stockholders' approval at the Annual
Meeting of Stockholders on May 19, 1999, as follows:
Section 4.1 of the Plan is amended to read as follows:
"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 3,800,000
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."
Except as herein amended, the Plan shall remain in full force and effect.
ANICOM, INC.
By:/s/ SCOTT C. ANIXTER
-----------------------
Scott C. Anixter
Chairman and Chief Executive Officer
<PAGE>
APPENDIX B
AMENDMENT TO THE AMENDED AND RESTATED ANICOM, INC.
1995 DIRECTORS STOCK OPTION PLAN
RESOLVED, that the Amended and Restated Anicom, Inc. 1995 Directors
Stock Option Plan (the "Plan") be and hereby is amended, subject to and
effective upon stockholders' approval at the Annual Meeting of Stockholders on
May 19, 1999, as follows:
Section 4.1 of the Plan is amended to read as follows:
"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 500,000
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."
The first paragraph of Section 5.2 of the Plan is amended to read as follows:
"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
10,000 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 on Option on the Initial Grant Date to purchase
10,000 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 on additional Option to purchase 10,000 shares of Common Stock
without further action by the Board or the Committee. In addition, each
Director shall receive an Option to purchase 2,000 shares of Common
Stock without further action by the Board or the Committee as of the
date of each Board Meeting that such Director attends, whether in
person or by telephone; provided however, that if such Director
attended any Board Meeting that was held on or after January 1, 1999
but prior to the Annual Meeting of Stockholders on March 19, 1999 (the
"1999 Annual Meeting"), such Director shall be granted, on the date of
the 1999 Annual Meeting, an Option to purchase 2,000 shares of Common
Stock for each such prior attendance. In addition, each Director shall
receive an Option to purchase 1,000 shares of Common Stock without
further action by the Board or the Committee as of the date of each
Committee Meeting that such Director attends, whether in person or by
telephone; provided however, that if such Director attended any
Committee Meeting that was held on or after January 1, 1999 but prior
to the Annual Meeting of Stockholders on March 19, 1999 (the "1999
Annual Meeting), such Director shall be granted, on the date of the
1999 Annual Meeting, an Option to purchase 1,000 shares of Common Stock
for each such prior attendance. Notwithstanding anything to the
contrary herein, the total number of shares for which Options have been
granted to a Director under this Plan shall not exceed 75,000 shares."
Except as herein amended, the Plan shall remain in full force and effect.
ANICOM, INC.
By:/s/ SCOTT C. ANIXTER
-----------------------
Scott C. Anixter
Chairman and Chief Executive Officer
<PAGE>
PROXY PROXY
ANICOM, INC.
6133 North River Road, Suite 1000, Rosemont,Illinois 60018
This Proxy is Solicited on Behalf of the Board of Directors.
TO VOTE AT THE ANNUAL 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
Annual Meeting of Stockholders (the "Annual Meeting") to be held on Wednesday,
May 19, 1999 at 2:00 p.m. local time, at Harris Trust & Savings Bank, 111 West
Monroe Street, Chicago, Illinois 60603, 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
Annual Meeting and voting in person. The undersigned stockholder hereby
acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy
Statement.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
RETURN ENVELOPE. If you receive more than one proxy card, please sign and return
ALL cards in the enclosed envelope.
(Continued and to be signed on reverse side.)
<PAGE>
ANICOM, INC.
PLEASE MARK VOTE IN BOX IN THE FOLLOWING MANNER USING DARK INK ONLY.
[ ]
1. ELECTION OF DIRECTORS For Withhold For All
Nominees: Scott C. Anixter, Carl E. All All Except
Putnam, Peter H. Huizenga [ ] [ ] [ ]
and Lee B. Stern
_____________________________________
(Except nominee(s) written above)
2. Proposal to amend the Anicom, Inc. For Against Abstain
1996 Stock Incentive Plan [ ] [ ] [ ]
3. Proposal to amend the Anicom, For Against Abstain
Inc. Amended and Restated [ ] [ ] [ ]
Directors Option Plan
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting, or any
adjournments thereof.
Signature(s) ________________________________________________
Signature (if held jointly) _________________________________
Dated:_____________________________,1999.
Please date and sign exactly as 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.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT.
PLEASE MARK, SIGN, DATE AND RETURN THE ABOVE CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
