DEF 14A 1 d502823ddef14a.htm DEF 14A DEF 14A
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  x                            Filed by a Party other than the Registrant  ¨

Check the appropriate box:

 

¨   Preliminary Proxy Statement
¨   Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x   Definitive Proxy Statement
¨   Definitive Additional Materials
¨   Soliciting Material Pursuant to Rule 14a-12

Ingram Micro Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x   No fee required.
¨   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

 

   

 

  (2)  

Aggregate number of securities to which transaction applies:

 

 

   

 

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

   

 

  (4)  

Proposed maximum aggregate value of transaction:

 

 

   

 

  (5)   Total fee paid:
   
   

 

¨   Fee paid previously with preliminary materials
¨   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.
  (1)  

Amount previously paid:

 

 

   

 

  (2)  

Form, Schedule or Registration Statement No.:

 

 

   

 

  (3)  

Filing Party:

 

 

   

 

  (4)  

Date Filed:

 

 

   

 

 

 

 


Table of Contents

 

LOGO

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD JUNE 5, 2013

To our shareholders:

We will hold our annual meeting of shareholders at our Santa Ana campus, 1600 East Saint Andrew Place, Santa Ana, California 92705, on Wednesday, June 5, 2013, at 10:00 a.m. local time. We are holding this meeting:

1.    To elect the eleven director nominees named in this proxy statement to our Board, each for a term of one year;

2.    To approve, on an advisory basis, the compensation of our named executive officers, as described in the Compensation Discussion and Analysis, executive compensation tables and accompanying narrative disclosures in this proxy statement;

3.    To approve an amendment to the Ingram Micro Inc. 2011 Incentive Plan;

4.    To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current year; and

5.    To transact any other business that properly comes before the meeting.

The shareholders of record at the close of business on April 9, 2013 will be entitled to vote at the meeting or any postponements or adjournments of the meeting. Whether or not you expect to attend, we urge you to sign, date and promptly return the enclosed proxy card in the enclosed postage prepaid envelope or vote via telephone or the Internet in accordance with the instructions on the enclosed proxy card. If you attend the meeting, you may vote your shares in person, which will revoke any prior vote.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on June 5, 2013: This Proxy Statement, along with the 2012 Annual Report to Shareholders, is online at www.edocumentview.com/im or, if you are a registered holder, at www.envisionreports.com/im.

Receive Proxy Materials Electronically: With your consent, we will send all future proxy voting materials to you by email. To enroll to receive future proxy materials online if you are a registered holder, please go to www.computershare.com/investor.

April 23, 2013

Santa Ana, California

By order of the Board of Directors,
LOGO

Larry C. Boyd

Executive Vice President, Secretary and
General Counsel


Table of Contents

TABLE OF CONTENTS

 

 

 

     Page

PROXY STATEMENT

   1

ABOUT THE MEETING

   1

Purpose of the 2013 Annual Meeting

   1

Quorum

   1

Who May Vote

   2

How to Vote

   2

How Proxies Work

   3

Proposals You Are Asked to Vote on and the Board’s Voting Recommendation

   3

Vote Necessary to Approve Proposals

   3

Revoking Your Proxy

   4

Proxy Solicitation Costs

   4

PROPOSAL NO. 1 ELECTION OF DIRECTORS

   4

Recommendation of the Board of Directors

   4

Director Nominee Experience and Qualifications

   4

BOARD OF DIRECTORS

   8

Compensation of Board of Directors

   8

Committees of the Board of Directors

   13

Compensation Committee Interlocks and Insider Participation

   14

Corporate Governance

   15

Independence Determination for Directors

   17

Audit Committee Financial Qualifications

   17

Director Nominations

   18

Contacting the Board and Further Information on Corporate Governance

   19

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   20

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

   22

TRANSACTIONS WITH RELATED PERSONS

   22

REPORT OF THE HUMAN RESOURCES COMMITTEE

   23

COMPENSATION DISCUSSION AND ANALYSIS

   23

SUMMARY COMPENSATION TABLE

   42

PLAN-BASED AWARDS GRANTED IN LAST FISCAL YEAR

   45

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2012

   46

OPTION EXERCISES AND STOCK VESTED INFORMATION FOR FISCAL YEAR 2012

   49

NONQUALIFIED DEFERRED COMPENSATION FOR FISCAL YEAR 2012

   50

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

   51

PROPOSAL NO. 2 ADVISORY VOTE ON EXECUTIVE COMPENSATION

   57

Recommendation of the Board of Directors

   57

Vote Required

   58

PROPOSAL NO. 3 APPROVAL OF AMENDMENT TO 2011 INCENTIVE PLAN

   58

Recommendation of the Board of Directors

   58

Introduction

   58

New Plan Benefits

   67

Awards Granted Since Inception

   67

Equity Compensation Plan Information

   68

PROPOSAL NO.  4 RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

   69

Recommendation of the Board of Directors

   69

REPORT OF THE AUDIT COMMITTEE

   71

HOUSEHOLDING OF PROXY MATERIALS

   72

ANNUAL REPORT

   73

STOCK PERFORMANCE GRAPH

   73

OTHER MATTERS

   74

SHAREHOLDER PROPOSALS

   74

EXHIBIT A

   A-1

 

i


Table of Contents

LOGO

1600 East Saint Andrew Place

Santa Ana, California 92705

PROXY STATEMENT

This proxy statement is furnished to you by the Board of Directors of Ingram Micro (the “Board”) and contains information related to the 2013 annual meeting of our shareholders to be held on Wednesday, June 5, 2013, beginning at 10:00 a.m., local time, at our Santa Ana campus, 1600 East Saint Andrew Place, Santa Ana, California 92705, and any postponements or adjournments thereof. The enclosed form of proxy is solicited by our Board. The date of this proxy statement is April 23, 2013. It is first being mailed to our shareholders on April 23, 2013.

References in this proxy statement to “we”, “us”, “our”, “the Company” and “Ingram Micro” refer to Ingram Micro Inc.

ABOUT THE MEETING

Purpose of the 2013 Annual Meeting

The purpose of the 2013 annual meeting is:

1.    To elect the eleven director nominees named in this proxy statement to our Board, each for a term of one year;

2.    To approve, on an advisory basis, the compensation of our named executive officers, as described in the Compensation Discussion and Analysis, executive compensation tables and accompanying narrative disclosures in this proxy statement;

3.    To approve an amendment to the Ingram Micro Inc. 2011 Incentive Plan;

4.    To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current year; and

5.    To transact any other business that properly comes before the meeting.

Quorum

A quorum is the minimum number of shares required to hold and transact business at a meeting. The presence in person or by proxy of the holders of a majority of the outstanding shares of common stock will constitute a quorum for the transaction of business at the meeting. Votes cast by proxy or in person at the meeting will be counted by the persons appointed by the Company to act as election inspectors for the meeting. The election inspectors will treat shares represented by proxies that reflect abstentions as shares that are present and entitled to vote for purposes of determining the presence of a quorum. Abstentions, however, do not constitute a vote “for” or “against” any matter and thus will be disregarded in the calculation of a plurality or of “votes cast”.

 

1


Table of Contents

The election inspectors will treat shares referred to as “broker nonvotes” (i.e., shares held by a broker or nominee over which the broker or nominee lacks discretionary power to vote and for which the broker or nominee has not received specific voting instructions from the beneficial owner) as shares that are present and entitled to vote for purposes of determining the presence of a quorum.

Who May Vote

Holders of record of our Class A common stock at the close of business on April 9, 2013 (“Record Date”) may vote at the annual meeting. As of the Record Date, the Company had 152,389,765 issued and outstanding shares of Class A common stock. Each share of Ingram Micro common stock that you own entitles you to one vote.

How to Vote

You may vote in person at the meeting or by proxy. We recommend that you vote by proxy even if you plan to attend the meeting. You can always change your vote at the meeting.

If you are a registered shareholder (meaning your name is included on the shareholder file maintained by our transfer agent, Computershare Trust Company, N.A.), you can vote by proxy in any of the following ways:

 

   

By Internet.  If you have Internet access, you may submit your proxy from any location in the world by following the “To vote over the Internet” instructions on the proxy card. The deadline for voting electronically is 3:00 a.m. (Pacific Time) on June 5, 2013.

 

   

By Telephone.  You may submit your proxy by following the “To vote by telephone” instructions on the proxy card. The deadline for voting by telephone is 3:00 a.m. (Pacific Time) on June 5, 2013.

 

   

In Writing.  You may do this by signing your proxy card, or for shares held in street name, the voting instruction card included by your broker, bank or other nominee, and mailing it in the accompanying enclosed, pre-addressed envelope. If you provide specific voting instructions, your shares will be voted as you instruct. If you sign, but do not provide instructions, we will follow the Board’s recommendations and vote your shares as described in the section entitled “Proposals You Are Asked to Vote on and the Board’s Voting Recommendation” below. The deadline for voting by mail is 3:00 a.m. (Pacific Time) on June 5, 2013 (your proxy card must be received by that time).

If your shares are held in the name of a bank, broker or other nominee, you will receive instructions from such nominee that you must follow in order for your shares to be voted.

If you participate in our 401(k) Investment Savings Plan (“Ingram Micro 401(k) Plan”), you may vote an amount of shares of common stock equivalent to the interest in common stock credited to your account as of the Record Date. You may vote by instructing Fidelity Investments, the trustee of the plan, pursuant to the instruction card being mailed with this proxy statement to plan participants. The trustee will vote your shares in accordance with your duly executed instructions if they are received by May 31, 2013. If you do not provide the trustee with your voting instructions, the trustee will not vote on your behalf.

 

2


Table of Contents

How Proxies Work

Our Board is asking for your proxy. Giving us your proxy means you authorize us to vote your shares at the meeting in the manner you direct. You may abstain from voting from any of the proposals. If you sign your proxy card but do not provide instructions, we will follow the Board’s recommendations and vote your shares as described in the section entitled “Proposals You Are Asked to Vote on and the Board’s Voting Recommendation” below.

Proposals You Are Asked to Vote on and the Board’s Voting Recommendation

If you properly fill in your proxy card and send it to us in time to vote, or vote by the Internet or telephone, one of the individuals named on your proxy card will vote your shares as your proxy and as you have directed. If you sign the proxy card but do not make specific choices, your proxy will follow the Board’s recommendations and vote your shares:

1.    “FOR” election of the eleven director nominees named in this proxy statement to our Board, each for a term of one year (see “Proposal No. 1 — Election of Directors”);

2.    “FOR” approval, on an advisory basis, of the compensation of our named executive officers, as described in the Compensation Discussion and Analysis, executive compensation tables and accompanying narrative disclosures in this proxy statement (see “Proposal No. 2 — Advisory Vote on Executive Compensation”);

3.    “FOR” approval of the amendment to the Ingram Micro Inc. 2011 Incentive Plan (“Proposal No. 3 —Approval of First Amendment to 2011 Incentive Plan”); and

4.    “FOR” ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current year (see “Proposal No. 4 — Ratification of the Selection of PricewaterhouseCoopers LLP as Our Independent Registered Public Accounting Firm”).

If any other matter is properly presented at the meeting, your proxy will vote in accordance with the best judgment of the individual voting your shares as your proxy. At the time this proxy statement went to press, we knew of no other matters to be acted on at the meeting.

Vote Necessary to Approve Proposals

In the election of directors under Proposal No. 1, you may vote “FOR”, “AGAINST” or “ABSTAIN” with respect to each of the nominees. If you elect to abstain in the election of directors, the abstention will not impact the election of directors. In tabulating the voting results for the election of directors, only “FOR” and “AGAINST” votes are counted. Each nominee shall be elected to the Board of Directors by the majority of the votes cast with respect to the director’s election (that is, the number of votes “FOR” a director’s election must exceed the number of “AGAINST” votes cast with respect to the director’s election). See “Board of Directors — Corporate Governance — Majority Voting Policy” in this proxy statement. Abstentions will not be taken into account in determining the outcome of the election.

With respect to Proposal No. 2, the “say on pay” advisory vote regarding the compensation of our named executive officers, as described in the Compensation Discussion and Analysis, executive compensation tables and accompanying narrative disclosures in this proxy statement, you may vote “FOR”, “AGAINST” or “ABSTAIN”. The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the proposal is required for approval of this proposal. Abstentions are treated as shares present or represented and entitled to vote, so abstaining has the same effect as a vote “AGAINST” the proposal.

 

3


Table of Contents

With respect to Proposal No. 3, approval of an amendment to the Ingram Micro Inc. 2011 Incentive Plan (the “2011 Plan”) requires the affirmative vote of a majority of the shares of Class A common stock present or represented at the annual meeting and entitled to vote on the proposal. If a majority of the shares of Class A common stock present or represented at the annual meeting and entitled to vote on the proposal do not vote to approve the amendment to the 2011 Plan, the amendment will not take effect and the 2011 Plan will continue in full force in accordance with its terms as currently in effect. Abstentions are treated as shares present or represented and voting, so abstaining has the same effect as a vote “AGAINST” the proposal.

Approval of the ratification of the selection of our independent registered public accounting firm under Proposal No. 4 requires the affirmative vote of the majority of the shares of common stock present or represented by proxy with respect to such proposal. Abstentions are treated as shares present or represented and entitled to vote, so abstaining has the same effect as a vote “AGAINST” the proposal.

Under current New York Stock Exchange (“NYSE”) rules, if your broker holds your shares in its name, your broker is not permitted to vote your shares on Proposals 1, 2 or 3 if it does not receive voting instructions from you. Such broker nonvotes will not have an effect on the outcome of the votes.

Revoking Your Proxy

You may revoke your proxy by: (1) sending in another signed proxy card with a later date; (2) providing subsequent Internet or telephone voting instructions; (3) notifying our Secretary in writing before the meeting that you have revoked your proxy; or (4) voting in person at the meeting.

Proxy Solicitation Costs

The Company will bear the costs of soliciting proxies.

PROPOSAL NO. 1 ELECTION OF DIRECTORS

Recommendation of the Board of Directors

The Board of Directors recommends that you vote “FOR” the election of each of the nominees for election as directors as described below, which is designated as Proposal No. 1 on the enclosed proxy card.

On the recommendation of the Governance Committee, the Board has nominated the eleven persons named below for election as directors this year, each to serve for a one-year term or until the director’s successor is elected and qualified.

Director Nominee Experience and Qualifications

The Board annually reviews the appropriate skills and characteristics required of directors in the context of the current composition of the Board, our operating requirements and the long-term interests of our shareholders. The Board believes that its members should possess a variety of skills, professional experience, and backgrounds in order to effectively oversee our business. All of our nominees are seasoned leaders who bring to the Board a vast array of public company, financial services, private company, and other business experience, the majority as senior executives in industries different from that of Ingram Micro or are in industries synergistic with Ingram Micro. Each has been chosen to stand for election in part because of his or her ability and willingness to ask difficult questions, understand Ingram Micro’s challenges and evaluate the strategies proposed by management,

 

4


Table of Contents

as well as their implementation. Each of the nominees has a long record of professional integrity, a dedication to his or her profession, a strong work ethic that includes coming fully prepared to meetings and being willing to spend the time and effort needed to fulfill one’s professional obligations and the ability to maintain a collegial environment, and the majority of the nominees have the experience of having served as a board member of a sophisticated global company. Specific experience, qualifications, attributes and skills of each nominee are described in that nominee’s biography below (biographies are current as of the date of the proxy statement):

 

Howard I. Atkins   Director since April 2004

Mr. Atkins, age 62, is the former Senior Executive Vice President and Chief Financial Officer of Wells Fargo & Company in San Francisco, California, retiring in February 2011. Prior to joining Wells Fargo in 2001, Mr. Atkins was Executive Vice President and Chief Financial Officer of New York Life Insurance Company in New York, New York from 1996 to 2001. Mr. Atkins also served as Executive Vice President and Chief Financial Officer of New Jersey-based Midlantic Corporation from 1991 to 1996. Mr. Atkins joined the former Chase Manhattan Bank in 1974 and was, successively, in asset/liability management, in U.S. capital markets/derivatives, head of Capital Markets for Europe, the Middle East and Africa, and head of the Bank’s worldwide derivatives trading business. He was Chase Manhattan Bank’s Treasurer from 1988 until 1991 when he became Chief Financial Officer of Midlantic Corporation. Mr. Atkins is a member of the Board of Directors of Occidental Petroleum Corporation. As former chief financial officer of one of the largest financial services companies in the country, Mr. Atkins brings extensive accounting and financial skills that are important in the understanding and oversight of our financial reporting, enterprise and operational risk management and corporate finance, tax and treasury matters.

 

Leslie Stone Heisz   Director since March 2007

Ms. Heisz, age 52, is an experienced investment banking and finance executive. Ms. Heisz joined Lazard Freres & Co. in 2003 as a senior advisor and served as a managing director from 2004 through April 2010, providing strategic financial advisory services for clients in a variety of industries. Ms. Heisz was a managing director of Dresdner Kleinwort Wasserstein (and its predecessor Wasserstein Perella & Co.) for six years, and a director prior to that, specializing in mergers and acquisitions, as well as leveraged finance and leading the Gaming and Leisure Group and the Los Angeles office. She was also a vice president at Salomon Brothers, where she developed the firm’s industry-leading gaming practice and was a senior consultant specializing in strategic information systems at Price Waterhouse. Ms. Heisz has been a member of the Board of Directors of HCC Insurance Holdings, Inc. since November 2010 and a member of the Board of Directors of Towers Watson & Co. since April 2012. She previously served on the Board of Directors of International Game Technology and Eldorado Resorts LLC. Ms. Heisz’s career in the investment banking industry, deep understanding of capital markets and previous board experience brings expertise in oversight of our financial reporting, enterprise and operational risk management, corporate finance, tax and treasury matters and implementation of sound corporate governance practices.

 

John R. Ingram   Director since April 1996

Mr. Ingram, age 51, is Chairman of the Ingram Industries Inc. board of directors and also Chairman and Chief Executive Officer of Ingram Content Group, Inc., which includes Ingram Book Company, Lightning Source Inc. and Ingram Digital. He was Vice Chairman of Ingram Industries from June 1999 to April 2008. He was Co-President of Ingram Industries from January 1996 to June 1999. Mr. Ingram was also President of Ingram Book Company from January 1995 to October 1996. Mr. Ingram served as Acting Chief Executive Officer of Ingram Micro from May 1996 to August 1996 prior to Ingram Micro being a public company and held a variety of positions at the privately held Company from 1991 through 1994, including Vice President of Purchasing, Vice President of Management Services at Ingram Micro Europe, and Director of Purchasing. Mr. Ingram is a seasoned executive with Ingram Industries, and has valuable experience in digital distribution. Mr. Ingram’s history with Ingram Micro brings in-depth knowledge of the Company that assists the Board in overseeing

 

5


Table of Contents

management and is important to the Board’s oversight of strategy, risk management and implementation of sound corporate governance practices. Mr. Ingram is the brother of Orrin H. Ingram II, who is also a director of the Company.

 

Orrin H. Ingram II   Director since September 1999

Mr. Ingram, age 52, is President and Chief Executive Officer of Ingram Industries Inc. Mr. Ingram held numerous positions with Ingram Materials Company and Ingram Barge Company before being named Co-President of Ingram Industries in January 1996. He was named to his present position as President and Chief Executive Officer of Ingram Industries in June 1999. He remains Chairman of Ingram Barge Company. Mr. Ingram is a member of the Board of Directors of Coca-Cola Enterprises Inc. Mr. Ingram is a seasoned executive with Ingram Industries, and has valuable experience serving on the Board of a beverage distribution company. Mr. Ingram’s history with Ingram Micro brings in-depth knowledge of the Company that assists the Board in overseeing management and is important to the Board’s oversight of strategy, compensation practices, risk management and implementation of sound corporate governance practices. Mr. Ingram is the brother of John R. Ingram, who is also a director of the Company.

 

Dale R. Laurance   Director since May 2001

Dr. Laurance, age 67, is the owner of Laurance Enterprises LLC, a private investment and advisory services company. He retired from Occidental Petroleum Corporation on December 31, 2004, where he had served as President since 1996 and Director since 1990. From 1983 to 1996 he served in various management and executive positions with Occidental Petroleum Corporation. Dr. Laurance also serves on the Advisory Board of Hancock Park Associates. Dr. Laurance is a member of the Board of Trustees of the Polytechnic School and the Advisory Board of the Golden West Humanitarian Foundation. Dr. Laurance has been our Chairman of the Board since the Company’s annual meeting of shareholders in June 2007. He previously served on the Board of Directors of Jacobs Engineering Group Inc. Dr. Laurance is an experienced executive and has extensive experience in the areas of international business, financial reporting, strategy, regulatory compliance, and corporate governance as a senior executive and board member of Occidental Petroleum Corporation. Dr. Laurance brings strong leadership skills and complex business operational experience and provides strategic counsel that is important in the Board’s oversight of management.

 

Linda Fayne Levinson   Director since August 2004

Ms. Levinson, age 71, is an advisor to professionally funded, privately held ventures. Ms. Levinson was Non-Executive Chair of the Board of Connexus, Inc. (formerly VendareNetBlue), a privately held Internet media company, until May 2010 when it was merged into Epic Advertising. From February through July 2006, Ms. Levinson was also Interim CEO of that company. From 1997 until May 2004, Ms. Levinson was a Partner of GRP Partners, a venture capital firm investing in early stage technology companies in the financial services, Internet media and online retail sectors. From 1982 until 1998, Ms. Levinson was President of Fayne Levinson Associates, an independent consulting firm advising major corporations. Ms. Levinson also has been an executive at Creative Artists Agency, Inc.; a Partner of Wings Partners, a Los Angeles-based merchant bank; a Senior Vice President of American Express Travel Related Services Co., Inc.; and a Partner of McKinsey & Company, where she became the first woman partner in 1979. Ms. Levinson also serves as a member of the Board of Directors of NCR Corporation, Jacobs Engineering Group Inc., The Western Union Company and Hertz Global Holdings, Inc. and its wholly-owned subsidiary The Hertz Corporation and was a previous member of the Board of DemandTec, Inc. Ms. Levinson’s executive and consulting career brings in-depth knowledge of business operations and strategy, and an extensive breadth and depth of experience related to compensation strategies and corporate governance through her long tenure serving on the boards of a number of large international companies, including as chair of compensation committees.

 

6


Table of Contents
Scott A. McGregor   Director since June 2010

Mr. McGregor, age 57, is President and Chief Executive Officer of Broadcom Corporation, a global leader in semiconductors for wired and wireless communications. Prior to joining Broadcom in January 2005, Mr. McGregor was President and Chief Executive Officer of Philips Semiconductor, a $6-billion subsidiary of the Netherlands-based Royal Philips Electronics, from 2001 through 2004. In addition to his CEO role, he was also a member of the Group Management Committee of Royal Philips Electronics. He joined Philips Semiconductors in February 1998 as head of its Emerging Businesses unit. Before joining Philips, Mr. McGregor served in various senior management positions from 1990 to 1998, most recently as senior vice president and general manager, at Santa Cruz Operation Inc., a provider of network computing solutions. He has also held management positions at Digital Equipment Corporation (now part of Hewlett-Packard) and at Microsoft’s was architect and development team leader for the original version of Microsoft Windows®. He began his career at Xerox Corporation’s Palo Alto Research Center (PARC). Mr. McGregor is a member of the Board of Directors of Broadcom Corporation. He previously served on the Board of Directors of Progress Software Corporation. Mr. McGregor is a seasoned business executive who brings in-depth business knowledge to provide insight on Ingram Micro strategy, compensation practices, risk management and implementation of sound corporate governance practices for the Company.

 

Alain Monié   Director since November 2011

Alain Monié, age 62, has been our President and Chief Executive Officer since January 2012, after rejoining the Company following a year as Chief Executive Officer of APRIL Management Pte., a multinational industrial company based in Singapore. Prior to his role at APRIL Management Pte., Mr. Monié served as President and Chief Operating Officer of Ingram Micro from 2007 to 2010. He joined Ingram Micro in February 2003 as Executive Vice President. He became President of the company’s Asia-Pacific region in early 2004 and also served as Executive Vice President and President of Ingram Micro Asia-Pacific from January 2004 to August 2007. He spent more than two years as President of the Latin American Division of Honeywell International. He joined Honeywell through the corporation’s merger with Allied Signal Inc., where he built a 17-year career on three continents, progressing from a regional sales manager to head of Asia-Pacific operations from October 1997 to December 1999. Mr. Monié has been a member of the Board of Directors of Amazon.com, Inc. since November 2008. As a seasoned executive and chief executive officer of Ingram Micro, Mr. Monié brings in-depth knowledge of Ingram Micro business operations and strategy that is important to the Board’s oversight of strategy, succession planning, enterprise risk management, compensation and implementation of sound corporate governance practices for the Company.

 

Paul Read   Director since September 2012

Mr. Read, age 46, is Chief Financial Officer and Executive Vice President of Flextronics, a $30 billion, industry-leading, Fortune Global 500 electronics manufacturing services provider with more than 200,000 employees and operations in 30 countries. Prior to being named Chief Financial Officer in June 2008, Mr. Read was Executive Vice President of Finance for Flextronics’ worldwide operations. Mr. Read's financial management and operations background includes increasingly important roles at Flextronics where he has led many critical initiatives that included serving as the lead executive responsible for the integration of the Solectron acquisition. Prior to joining Flextronics in 1995, he held various senior financial positions in the United Kingdom with Allied Steel and Wire, STI Telecommunications and Associated British Foods. Mr. Read graduated from the University of Wales as a qualified Chartered Management Accountant. He is a seasoned business executive with valuable perspective on successfully operating a complex global organization and who brings extensive accounting and financial skills that are important in the understanding and oversight of Ingram Micro’s financial reporting, enterprise and operational risk management, and corporate finance, tax and treasury matters.

 

7


Table of Contents
Michael T. Smith   Director since May 2001

Mr. Smith, age 69, is the former Chairman of the Board and Chief Executive Officer of Hughes Electronics Corporation, a world-leading provider of digital television entertainment, broadband services, satellite-based private business networks, and global video and data broadcasting, serving from October 1997 to May 2001. Prior to assuming these positions in October 1997, Mr. Smith was Vice Chairman of Hughes Electronics and Chairman of Hughes Aircraft Company, responsible for the aerospace, defense electronics and information systems businesses of Hughes Electronics. He joined Hughes Electronics in 1985, the year the company was formed, as Senior Vice President and Chief Financial Officer after spending nearly 20 years with General Motors Corporation in a variety of financial management positions. Mr. Smith is a member of the Board of Directors of Teledyne Technologies, FLIR Inc. and Wabco Holdings Incorporated. He previously served on the Board of Directors of Anteon International Corporation and Alliant Techsystems. Mr. Smith’s senior executive positions in large multi-national complex corporations bring in-depth knowledge of business operations, strategy and corporate governance. With his experience on audit committees of other public companies, Mr. Smith brings strong accounting and financial skills that are important in the understanding and oversight of our financial reporting and corporate governance matters.

 

Joe B. Wyatt   Director since October 1996

Mr. Wyatt, age 77, has been Chancellor Emeritus of Vanderbilt University in Nashville, Tennessee since his retirement as Chancellor of Vanderbilt University, a position that he held from 1982 to 2000. Mr. Wyatt has also been a principal of The Washington Advisory Group since August 2000. Mr. Wyatt was previously a Director of Ingram Industries from April 1990 through October 1996. He also serves as a Director and Past Chairman of the Universities Research Association. He previously served on the Board of Directors of Hercules Incorporated, Reynolds Metals Company, Sonat Incorporated, and El Paso Corporation. As one of the Company’s most tenured directors, and as former chair of our Audit Committee for many years, Mr. Wyatt provides a focused historical perspective of the Board and the Company, and a deep understanding of Ingram Micro’s business and operations, corporate governance, enterprise risk management and financial accounting requirements.

BOARD OF DIRECTORS

The Board of Directors held 12 meetings during fiscal year 2012. All current directors attended more than 75% of the total number of meetings of the Board and the committees on which he or she served in 2012 (other than Mr. Read, who attended all of the meetings of the Board and the committees on which he served in 2012 after he joined the Board in September 2012). The Board and its committees regularly hold executive sessions of non-employee directors without management present. As a matter of policy, directors are encouraged and expected to attend the annual meeting of shareholders. All current directors attended Ingram Micro’s 2012 annual meeting of shareholders on June 6, 2012 (other than Mr. Read, who joined the Board after the 2012 annual meeting, and Mr. John Ingram).

Compensation of Board of Directors

Ingram Micro pays directors who are not employed by the Company (“non-employee directors”) an annual award which may consist of a combination of cash, stock options, restricted stock and/or restricted stock units. No meeting fees are paid to directors for attending meetings of the Board and committees on which they serve. Any director who is an employee of Ingram Micro does not receive separate compensation for service on the Board.

Annual Award. The mix of cash, stock options, restricted stock and/or restricted stock units for the annual award must be selected by each non-employee director before December 31 of each year prior to the start of the calendar year in which the annual award will be made or within 30 days of initial appointment or election to the

 

8


Table of Contents

Board, as the case may be. If a Board member does not file an election form with respect to a calendar year by the specified date, the Board member will be deemed to have elected to receive the compensation in the manner elected by the Board member in his or her last valid election, or if there had been no prior election, will be deemed to have elected to receive the eligible compensation in the form of nonqualified stock options. The award is prorated for any partial year of service. In addition, the mix of cash, stock options, restricted stock and/or restricted stock units for the annual award is subject to the following assumptions and restrictions:

•  Annual Award Maximum. The aggregate amount of the annual award (including any annual cash retainer and the value of any annual equity-based compensation) selected by the director may not exceed the following amounts:

 

   

$430,000 for the non-executive Chairman of the Board;

 

   

$240,000 for the Audit Committee chair;

 

   

$215,000 for other Audit Committee members;

 

   

$235,000 for the Human Resources Committee chair, $230,000 for the Governance Committee chair, and $220,000 for the Executive Committee chair, subject to an additional $5,000 if any of these chairs is also on the Audit Committee; and

 

   

$210,000 for all other directors.

•  Cash. The amount of the cash portion of any annual award that may be selected by directors is subject to the following terms:

 

   

The maximum amount of the cash retainer that may be selected annually is as follows:

 

   

$170,000 for the non-executive Chairman of the Board;

 

   

$110,000 for the Audit Committee chair;

 

   

$85,000 for other Audit Committee members;

 

   

$105,000 for the Human Resources Committee chair, $100,000 for the Governance Committee chair, and $90,000 for the Executive Committee chair, subject to an additional $5,000 if any of these chairs is also on the Audit Committee; and

 

   

$80,000 for all other directors.

 

   

The only minimum cash retainer is for Audit Committee members and other committee chairs who must select the following minimum amount of the cash retainer annually (subject to adjustment for partial years of service):

 

   

$30,000 for the Audit Committee chair;

 

   

$5,000 for other Audit Committee members; and

 

   

$25,000 for the Human Resources Committee chair, $20,000 for the Governance Committee chair, and $10,000 for the Executive Committee chair, subject to an additional $5,000 if any of these chairs is also on the Audit Committee.

Equity-based Compensation. Any non-cash portion of the annual award is in the form of equity-based compensation, which may consist of stock options, restricted stock, restricted stock units or a combination thereof.

 

9


Table of Contents

Option Awards. Options are granted to directors on the first trading day of January of each calendar year. For 2012 awards, the grant date was January 3, 2012 and the number of options granted was based on the dollar value of stock options selected, divided by the Black-Scholes value (using the closing price on the 15th of the month prior to grant date as the “stock value” to determine the appropriate Black-Scholes value), rounded up to the next whole share. The value per option was determined in accordance with Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“ASC 718”). The options each have an exercise price equal to the closing price of our common stock on the NYSE on the date of grant, vested monthly beginning on January 31, 2012 and continuing through December 31, 2012 and have a maximum term of ten years.

•  Restricted Stock/Restricted Stock Units. Restricted stock and/or restricted stock units, as applicable, are granted to directors on the first trading day of January of each calendar year. The number of shares granted is equal to the dollar value of the amount of restricted stock or restricted stock units selected divided by the closing price of our common stock on the NYSE on the date of grant rounded up to the next whole share. The restricted shares and restricted stock units granted in 2012 vested on December 31, 2012. Settlement of restricted stock units may be deferred in accordance with Section 409A and Department of Treasury regulations and other interpretive guidance issue thereunder.

2012 Compensation of Non-Employee Directors. The following table lists the 2012 non-employee director compensation which consists of: (1) an annual Board retainer payable in cash, stock options, restricted stock, restricted stock units or a combination thereof, based on each Board member’s election and (2) additional compensation for the non-executive Chairman of the Board and for committee chairs. Mr. Monié does not receive separate compensation for his service on the Board.

NON-EMPLOYEE DIRECTOR COMPENSATION

(for fiscal year 2012)

 

Name

  Fees Earned
or Paid in
Cash
($)
    Stock Awards
($)  (1)
    Option
Awards
($) (1)
    Non-Equity
Incentive Plan
Compensation
($)
    Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
    All Other
Compensation
($)
    Total
($)
 

Howard I. Atkins (2)(12)

    85,000        130,001                                    215,001   

Leslie Stone Heisz (3)(12)

    110,000        130,001                                    240,001   

John R. Ingram (4)(12)

    80,000        130,001                                    210,001   

Orrin H. Ingram II (5)(12)

    80,000               140,798                             220,798   

Dale R. Laurance (6)(12)

           430,010                                    430,010   

Linda Fayne Levinson (7)(12)

    105,000        130,001                                    235,001   

Scott A. McGregor (8)(12)

    96,667        130,001                                    226,668   

Paul Read (9)(12)

    28,333        43,345                                    71,678   

Michael T. Smith (10)(12)

    95,000        130,001                                    225,001   

Joe B. Wyatt (11)(12)

    80,000               157,039                             237,039   

 

(1)

Since the information required to be disclosed under these columns are the amounts equal to the grant date fair value of the awards determined pursuant to ASC 718, these amounts may not conform to the exact dollar value of equity awards granted to our Board members. See notes 2 and 12 to Ingram Micro’s consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 29, 2012, which was filed with the SEC on February 27, 2013, for a discussion of the assumptions used and the estimated forfeiture rate which is not required to be taken into account for these ASC 718 values. Unless noted otherwise, restricted stock or restricted stock units disclosed under “Stock Awards” were granted on January 3, 2012 and restrictions lapsed on December 31, 2012. The closing price of Ingram Micro stock on January 3, 2012 was $18.31. Stock options disclosed under “Option Awards” were granted on January 3, 2012 with an exercise

 

10


Table of Contents
  price of $18.31 per share, vest at a rate of one-twelfth per month over a twelve-month period commencing January 31, 2012 and expire ten years less one day from grant date. The $5.79 per share fair value of the January 3, 2012 stock option award was determined in accordance with ASC 718 using a Black-Scholes model and the following assumptions: stock price volatility of 34.55%; expected option life of 5 years; dividend yield of 0%; and risk free interest rate of 0.89%.

 

(2) Mr. Atkins was eligible to receive annual Board compensation in the amount of $215,000 (reflecting his service as a member of the Audit Committee), of which he elected to receive $85,000 in cash and $130,000 in restricted stock. The cash portion was paid in four equal quarterly installments.

 

(3) Ms. Heisz was eligible to receive annual Board compensation in the amount of $240,000 (reflecting her service as Chair of the Audit Committee), of which she elected to receive $110,000 in cash and $130,000 in restricted stock units. Ms. Heisz deferred receipt of her restricted stock units until her retirement from the Board. The cash portion was paid in four equal quarterly installments.

 

(4) Mr. J. Ingram was eligible to receive annual Board compensation in the amount of $210,000, of which he elected to receive $80,000 in cash and $130,000 in restricted stock. The cash portion was paid in four equal quarterly installments.

 

(5) Mr. O. Ingram was eligible to receive annual Board compensation in the amount of $210,000, of which he elected to receive $80,000 in cash and $130,000 in stock options. The cash portion was paid in four equal quarterly installments.

 

(6) Dr. Laurance was eligible to receive annual Board compensation in the amount of $430,000 (reflecting his service as Chairman of the Board), of which he elected to receive all $430,000 in restricted stock units. Dr. Laurance deferred receipt of his restricted stock units until his retirement from the Board.

 

(7) Ms. Levinson was eligible to receive annual Board compensation in the amount of $235,000 (reflecting her service as Chair of the Human Resources Committee), of which she elected to receive $105,000 in cash and $130,000 in restricted stock units. Ms. Levinson deferred receipt of her restricted stock units until April 1, 2013. The cash portion was paid in four equal quarterly installments.

 

(8) Mr. McGregor was eligible to receive annual Board compensation in the amount of $215,000 (reflecting his service as a member of the Audit Committee), of which he elected to receive $85,000 in cash and $130,000 in restricted stock units. The cash portion was paid in four equal quarterly installments. Mr. McGregor became Chair of the Governance Committee as of June 6, 2012, which increased his cash compensation by $11,667 for 2012.

 

(9) Mr. Read joined the Board on September 1, 2012 and was eligible to receive Board compensation in the amount of $71,667 (reflecting his service as a member of the Audit Committee), of which he elected to receive $28,333 in cash and $43,334 in restricted stock. The cash portion was paid in quarterly installments.

 

(10) Mr. Smith was eligible to receive annual Board compensation in the amount of $235,000 ($230,000 due to his service as Chair of the Governance Committee and an additional $5,000 due to his service as a member of the Audit Committee), of which he elected to receive $105,000 in cash and $130,000 in restricted stock. The cash portion was paid in four equal quarterly installments. Mr. Smith stepped down as Chair of the Governance Committee as of June 6, 2012, which reduced his 2012 cash compensation by $10,000.

 

(11) Mr. Wyatt was eligible to receive annual Board compensation in the amount of $225,000 (including $220,000 due to his service as Chair of the Executive Committee and an additional $5,000 due to his service as a member of the Audit Committee), of which he elected to receive $80,000 in cash and $145,000 in stock options. The cash portion was paid in four equal quarterly installments.

 

11


Table of Contents
(12) The table below shows the aggregate numbers of equity awards outstanding for each non-employee director as of December 29, 2012, the last day of our 2012 fiscal year. All unvested equity awards shown in the table below vested on December 31, 2012.

 

                   Unexercised Stock Options  

Name

   Unvested
RSAs
     Unvested
RSUs
         Vested              Unvested      

Howard Atkins

     7,100                           

Leslie S. Heisz

                               

John R. Ingram

     7,100                 37,596           

Orrin H. Ingram

                     162,406         2,026   

Dale R. Laurance

                     43,558           

Linda Fayne Levinson

                     31,676           

Scott A. McGregor

             7,100                   

Paul Read

     2,846                           

Michael T. Smith

             7,100         49,551           

Joe B. Wyatt

                     168,492         2,260   

Stock Ownership Requirement. Each director is required to achieve and maintain ownership of shares of our common stock with an aggregate value (market price multiplied by the number of shares) equal to three times the maximum amount of cash retainer that may be selected by each member of the Board in their capacity as Board members under our director compensation policy (not taking into account additional cash compensation for other special roles on the Board such as being the Chairman of the Board, a Committee chair or being a member of a specific Board Committee) beginning five years from the date of his or her election to the Board. All current directors, with the exception of Mr. Read, who joined the Board in September 2012, meet this stock ownership requirement as of the Record Date.

Other Information. Each director is reimbursed for expenses incurred in attending meetings of the Board and Board committees. Each director is able to elect to defer his or her cash compensation through a nonqualified deferral plan. Directors who defer cash compensation may elect to have earnings, or losses, credited to their deferrals as if their deferrals were invested in the various investment options available under the Company’s Supplemental Investment Savings Plan, a nonqualified deferred compensation plan for directors. Directors are not credited with “above-market” or “preferential” interest.

 

12


Table of Contents

Committees of the Board of Directors

Our Board has standing Audit, Executive, Governance and Human Resources Committees. These Board committees frequently meet in executive session with no members of management present. Copies of the charters for each of these committees are available by using the “Investor Relations” and then “Corporate Governance” links on the Company’s website at www.ingrammicro.com. The following table lists members of the committees as of the date of this proxy statement.

 

Name

   Audit
Committee
   Executive
Committee
   Governance
Committee
   Human
Resources
Committee

Dale R. Laurance

      *      

Howard I. Atkins

   *          *

Leslie S. Heisz

   Chair    *      

John R. Ingram

         *    *

Orrin H. Ingram II

      *       *

Linda Fayne Levinson

         *    Chair

Scott A. McGregor

   *       Chair   

Alain Monié

      *      

Paul Read

   *          *

Michael T. Smith

   *       *   

Joe B. Wyatt

   *    Chair    *   

 

* Member

Audit Committee — 9 meetings in 2012. The Audit Committee assists our Board’s oversight of (1) the integrity of our financial reporting processes, financial statements and systems of internal controls regarding finance, accounting, legal and ethical compliance, (2) our compliance with legal and regulatory requirements, (3) the independence and qualification of our independent registered public accounting firm and (4) the performance of our independent auditors and internal audit department. In addition, the Audit Committee is charged with providing an avenue of open communication among our independent registered public accounting firm, management, our internal audit department, and our Board. The Audit Committee also appoints our independent registered public accounting firm, discusses and reviews in advance the scope of and the fees to be paid in connection with the annual audit and reviews the results of the audit with our independent registered public accounting firm. The Audit Committee discusses the Company’s earnings press releases, as well as financial information and outlook provided to analysts and rating agencies. A detailed list of the Audit Committee’s functions is included in its charter, which can be accessed by using the “Investor Relations” and then “Corporate Governance” links on the Company’s website at www.ingrammicro.com.

Executive Committee — no meetings in 2012. The Board established the Executive Committee in 2009. The purpose of the Executive Committee is to act when necessary on behalf of the full Board between regularly scheduled Board meetings, usually when timing is critical. The Executive Committee has and may exercise all of the powers and authority of the Board, subject to such limitations as the Board and/or applicable law may from time to time impose. A detailed list of the Executive Committee’s functions is included in its charter, which can be accessed by using the “Investor Relations” and then “Corporate Governance” links on the Company’s website at www.ingrammicro.com.

Governance Committee — 5 meetings in 2012. The Governance Committee is responsible for developing and recommending to the Board a set of corporate governance principles applicable to the Company, and thereafter recommending such changes as it deems appropriate to maintain effective corporate governance. In addition, the Governance Committee is responsible for identifying candidates for election to the Board of Directors, developing and reviewing background information for candidates, making recommendations to the Board regarding such candidates, reviewing and making recommendations to the Board with respect to candidates for director proposed by shareholders, and recommending the members of Board committees, as well

 

13


Table of Contents

as Board committee chair positions for election by the Board. The Governance Committee also reviews and recommends for consideration and approval by the Board the form and amounts of compensation for non-employee directors, including equity-based awards, and oversees the annual self-evaluations of the Board and its committees, as well as director performance and board dynamics. A detailed list of the Committee’s functions is included in its charter, which can be accessed by using the “Investor Relations” and then “Corporate Governance” links on the Company’s website at www.ingrammicro.com.

Human Resources Committee — 6 meetings in 2012. The Human Resources Committee, consisting of independent directors, assists the Board in overseeing and establishing the compensation of all executive officers and administering all stock-related and long-term executive incentive plans applicable to management. The Human Resources Committee reviews and reports to the Board on our key strategic and operational human resource issues, ensuring that investments in human assets provide maximum return to all partners — shareholders, associates, customers, and vendors. The Committee’s oversight areas include executive compensation strategy, succession planning processes and key leader succession planning, and work environment assessment and improvement. A detailed list of the Human Resources Committee’s functions is included in its charter and can be accessed by using the “Investor Relations” and then “Corporate Governance” links on the Company’s website at www.ingrammicro.com.

 

   

Outside Advisors to the Human Resources Committee. The executive compensation advisor engaged by the Human Resources Committee continues to be Frederic W. Cook & Co., Inc. (“Cook”), an independent executive compensation consulting firm which reports solely to the Human Resources Committee. No member of the Human Resources Committee or of management has any affiliation with Cook. The Human Resources Committee periodically seeks input from Cook on a range of external market factors, including evolving executive compensation trends, and general observations on the Company’s executive compensation programs. Cook has also advised the Governance Committee of the Board on Board compensation matters for non-management Board members. Cook does not provide any other services to the Company or management. The Human Resources Committee has determined that there are no conflicts of interest with Cook’s work for the Committee.

 

   

Management Input to the Human Resources Committee. The Human Resources Committee frequently requests management to assist in accomplishing its work, including requests for specific analyses to assist with decision making. The Ingram Micro Human Resources, Finance, and Legal departments work with the Human Resources Committee Chair to help set meeting agendas and to coordinate the distribution of materials to the Committee in advance of its meetings. Generally, our President and Chief Executive Officer, our Chief Operating and Financial Officer, Executive Vice President, Secretary and General Counsel, and Executive Vice President of Human Resources attend Committee meetings. Management does not make any recommendations to the Human Resources Committee on compensation of the CEO. In addition, no members of management are present during the Human Resources Committee’s deliberations on CEO compensation. The Human Resources Committee frequently meets in executive session with no members of management present.

 

   

Human Resources Committee Meetings. The Human Resources Committee’s process and decision-making regarding 2012 executive compensation are further described under “Compensation Discussion and Analysis” below.

The Board may form other committees from time to time in addition to the Audit, Executive, Governance and Human Resources Committees described above.

Compensation Committee Interlocks and Insider Participation

No member of the Human Resources Committee had any “interlock” relationship to report during our fiscal year ended December 29, 2012.

 

14


Table of Contents

Corporate Governance

Code of Conduct. Our code of conduct applies to all members of the Board of Directors, all executives of the Company and all other Ingram Micro associates and codifies our commitment to the highest standards of corporate governance. If we make any amendment to the code of conduct or grant any waiver, including any implicit waiver, from a provision of the code of conduct to our Chief Executive Officer, Chief Financial Officer or Controller, we will disclose the nature of the amendment or waiver at www.ingrammicro.com or on a current report on Form 8-K.

Corporate Governance Guidelines. Effective corporate governance that ensures management follows the highest ethical standards is not a new concept to the Company. It is an important principle that is embraced at all levels of the Company, beginning with how our Board operates and in our Corporate Governance Guidelines (the “Guidelines”). Members of our Board are kept informed about our business through discussions with our Chief Executive Officer, Chief Operating and Financial Officer and other key members of management, by reviewing materials provided to them, and by participating in meetings of the Board and its committees. Our Board members provide feedback to management on a regular basis and routinely meet in executive session, without any members of management.

The Guidelines address important corporate governance policies and procedures, including those relating to (1) composition of the Board and membership criteria; (2) director qualifications (such as independence, simultaneous service on other Boards and conflicts of interests); (3) Board member responsibilities (including attendance at annual shareholder meetings); (4) establishment of the Board agenda; (5) establishment of a lead director position; (6) regularly scheduled meetings of non-employee Board members; (7) Board size; (8) Board committees; (9) Board member access to management and independent advisors; (10) director compensation; (11) director orientation and continuing education; (12) management evaluation and management succession; and (13) annual performance evaluation of the effectiveness of the Board and its committees.

Our Board expects to consider further amendments to the Guidelines from time to time as rules and standards are revised and/or finalized by various regulatory agencies, including the SEC and the NYSE, and to address any changes in our operations, organization or environment.

Majority Voting Policy. In March 2011, our Board amended the Company’s Bylaws to change the voting standard for the election of directors in uncontested elections from a plurality to a majority voting standard, subject to the rights of any series or class of stock to elect directors under specified circumstances, as set forth in the Company’s Certificate of Incorporation. Under our majority voting policy, in an uncontested election, each nominee shall be elected to the Board of Directors by the majority of the votes cast with respect to the director’s election (that is, the number of votes “for” a director’s election must exceed the number of “against” votes cast with respect to that director’s election). Directors will continue to be elected by plurality vote in contested elections (that is, when the number of nominees for election exceeds the number of directors to be elected).

If a nominee who is serving as a director is not elected at the annual meeting, Delaware law provides that the director would continue to serve on the Board as a “holdover director”. However, under our Bylaws, if the director fails to be elected by the majority of the votes cast in an uncontested election, the director shall immediately tender his or her resignation to the Board of Directors. In that situation, the Governance Committee will act on an expedited basis to determine whether to accept the director’s resignation, and submit its recommendation to the Board. The Board will act on the Governance Committee’s recommendation and publicly disclose its decision within 90 days following certification of the shareholder vote. The Governance Committee in making its recommendation, and the Board in making its decision, may each consider any factors or other information that it considers appropriate and relevant. The Board expects that any director whose resignation becomes effective pursuant to this policy will excuse himself or herself from participating in the consideration of his or her resignation by either the Governance Committee or the Board of Directors.

Board Leadership Structure. The positions of Chairman of the Board and Chief Executive Officer of the Company have been separated since June 2005. We believe this leadership structure is appropriate at this time

 

15


Table of Contents

because it allows the Company to fully benefit from the leadership ability, industry experience and history with the Company that each of these individuals possess. The Guidelines further provide that non-employee directors shall choose a Lead Director when the Chairman of the Board is not independent of management and that the Chairman of the Board shall perform the duties of the Lead Director when the Chairman is independent of management. As non-executive Chairman of the Board, Dr. Laurance is our Lead Director and as such, has presided at executive sessions of the Company’s non-employee directors since his election as Chairman on June 6, 2007.

Board’s Role in Risk Oversight. Management, which is responsible for day-to-day risk management, continually monitors the material enterprise risks facing the Company, including strategic risks, operational risks, financial risks and legal and compliance risks. Management has, since 2007, conducted an annual risk assessment of our business through an Enterprise Risk Management (“ERM”) process to assist the Board in conducting its oversight of the Company’s risks. The ERM process is global in nature and has been developed to identify and assess the Company’s risks, including inherent risks of our business, as well as to identify steps to mitigate and manage risks.

The Board of Directors is responsible for exercising oversight over management’s identification and management of, and planning for, those risks. The Board has delegated to certain committees oversight responsibility for those risks that are directly related to their area of focus (see descriptions of our Audit Committee’s, Human Resources Committee’s and Governance Committee’s areas of responsibilities under “Audit Committee”, “Human Resources Committee” and “Governance Committee” above; see also “Information on Compensation Risk Assessment” below). The Board and its committees exercise their risk oversight function by carefully evaluating the reports they receive from management and by making inquiries of management with respect to areas of particular interest to the Board. Board oversight of risk is enhanced by our Chairman of the Board’s attendance at virtually all committee meetings and by the provision of committee reports to the full Board following each regular quarterly committee meeting. In addition, the full Board receives periodic updates and in-depth information specifically related to the Company’s enterprise risk management.

Information on Compensation Risk Assessment. The compensation risk assessment process and conclusions described below are the basis for the Human Resources Committee’s conclusion that risks arising from the Company compensation policies and programs are not reasonably likely to have a material adverse effect on the Company.

In early 2013, at the request of the Human Resources Committee, management conducted a review of the long-term and short-term incentive, and commission- and productivity-based variable compensation programs for Company employees for each of our operating regions (North America, Europe, Latin America, Asia-Pacific and Mobility), as well as Corporate staff members. These compensation programs were reviewed to identify any aspects of such programs’ design or operation which might pose a potential material risk to the Company and any factors which would balance, control or otherwise mitigate such potential risks.

Our analysis included a review of compensation program details, participant information, plan administrative oversight and design features, with particular consideration given to how certain compensation design elements might build risk into a program. We assessed our potential compensation risks relating to pay mix, performance metrics, performance goals and payout curves, payment timing and adjustments, equity incentives, stock ownership requirements and trading policies, performance appraisal, and leadership and culture, and did not identify any areas of material risk. Management’s risk assessment report was reviewed and discussed, and its findings approved by the Human Resources Committee at its meeting of March 5, 2013, at which the Human Resources Committee also had input on the report from its independent compensation consultant.

In making this finding, our analysis noted that the Company’s approach to compensation utilizes a mix of cash and equity and annual and long-term incentives, as well as multiple performance metrics for its various plans, in an attempt to balance out incentives or program features which individually might create an inclination to take unnecessary risks. For example, for our executive officers, overall compensation is weighted towards

 

16


Table of Contents

long-term incentive compensation, which discourages a focus on adverse short-term risk taking and encourages prudent investment for sustained growth. Long-term incentive programs are based on Company-wide financial results which discourage those participants who have only regional or business unit responsibilities from pursuing localized rewards without regard for broader corporate risks. Payout caps on short-term and long-term incentive award programs for our executive officers and corporate executive leadership team also mitigate imprudent risk-taking. The fact that long-term incentives are primarily paid in shares of Company stock and our typical practice of using rolling three-year performance measurement periods for these plans links management rewards with shareholder interests and also discourages imprudent risk taking. We also ensure that financial and performance metrics which drive incentive arrangements are aligned with the Company’s business plans and/or strategic objectives. Multiple levels of internal controls and approval processes serve to prevent manipulation of compensation outcomes. Finally, our stock ownership and holding guidelines for officers and board members, “clawback” policies for all or portions of annual, long-term incentive and severance payments to officers, negative discretion by the Committee over incentive program payouts for the executive officers, and negative discretion by management over incentive program payouts below the executive officer level all serve to further mitigate compensation risks for the Company.

Independence Determination for Directors

The Board of Directors adopted director independence standards as part of the Guidelines. The Guidelines include the independence requirements of the NYSE listing standards. Pursuant to the Guidelines, the Board undertook its annual review of director independence in March 2013.

In making these director independence determinations, the Board considered transactions and relationships between each director or any member of his or her immediate family and the Company and its subsidiaries and affiliates.

The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent. As a result of this review, the Board determined that all of the directors nominated for election at the annual meeting are independent of the Company and its management under the standards set forth in the Guidelines, as well as under Audit Committee independence requirements of the SEC and the NYSE, with the exception of Alain Monié. Mr. Monié is considered an inside director because of his current employment as a senior executive of the Company. All other directors serving on the Board during 2012 were also independent under these standards and requirements, with the exception of Gregory M.E. Spierkel, who was our Chief Executive Officer until January 20, 2012 and a member of our Board until April 15, 2012. All of the members of the Human Resources, Audit and Governance Committees are independent.

Audit Committee Financial Qualifications

Our Board has determined that each member of the Audit Committee: (1) meets the independence criteria prescribed by applicable law and rules of the SEC for Audit Committee membership and (2) is an “independent director” within the meaning of NYSE listing standards and the standards established by the Company. Each member of the Audit Committee also meets the NYSE’s financial literacy requirements. No member of our Audit Committee serves on more than three audit committees of public corporations.

In addition, the Board of Directors has designated each of Howard Atkins, Leslie Stone Heisz, Scott McGregor, Paul Read and Michael Smith as an “audit committee financial expert” as such term is defined in Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC.

 

17


Table of Contents

The Board has also determined that these five directors meet the NYSE’s accounting or related financial management expertise requirements through experience gained:

 

   

For Mr. Atkins, as a seasoned finance and accounting executive, including in his former role as Senior Executive Vice President and Chief Financial Officer of Wells Fargo & Company in San Francisco, California, in his prior roles as Executive Vice President and Chief Financial Officer of New York Life Insurance Company in New York and as Executive Vice President and Chief Financial Officer of New Jersey-based Midlantic Corporation;

 

   

For Ms. Heisz, as an experienced investment banking and finance executive, including in her role as former managing director of the Los Angeles office of Lazard Freres & Co., where she provided strategic financial advisory services for clients in a variety of industries, as managing director of the Los Angeles office of Dresdner Kleinwort Wasserstein (and its predecessor Wasserstein Perella & Co.) for six years, specializing in mergers and acquisitions as well as leveraged finance, as a vice president at Salomon Brothers, and as a senior consultant at Price Waterhouse;

 

   

For Mr. McGregor, as a seasoned executive with active supervisory experience of financial and accounting functions, including as President and Chief Executive Officer of Broadcom Corporation and President and Chief Executive Officer of Philips Semiconductor;

 

   

For Mr. Read, as a seasoned executive with active supervisory experience of financial and accounting functions, including as Chief Financial Officer of Flextronics; and

 

   

For Mr. Smith, in previous positions as former Chairman of the Board and Chief Executive Officer of Hughes Electronics Corporation, Vice Chairman of Hughes Electronics and Chairman of Hughes Aircraft Company, as Senior Vice President and Chief Financial Officer of Hughes Electronics, and in nearly 20 years with General Motors Corporation in a variety of financial management positions.

Director Nominations

General Criteria and Process. In identifying and evaluating director candidates, the Governance Committee does not set specific criteria for directors. As expressed in the Governance Committee charter, in nominating candidates, the Governance Committee shall comply with the requirements of the Company’s Bylaws and take into consideration such other factors as it deems appropriate. These factors may include judgment, skill, diversity, experience with businesses and other organizations of comparable size, the interplay of the candidate’s experience with the experience of other Board members, and the extent to which the candidate would be a desirable addition to the Board and any committees of the Board. The Governance Committee may use and pay for assistance from consultants, including obtaining background checks, and advice from outside counsel, to assist its review and evaluation.

In evaluating candidates, the Governance Committee considers a wide variety of qualifications, attributes and other factors and recognizes that a diversity of viewpoints and practical experiences can enhance the effectiveness of the Board. Accordingly, as part of its evaluation of each candidate, the Governance Committee takes into account how that candidate’s background, experience, qualifications, attributes and skills may complement, supplement or duplicate those of other prospective candidates.

Shareholder Nominations. Shareholders who wish to recommend nominees for consideration by the Governance Committee may submit their nominations in writing to our Corporate Secretary at the address set forth below under “Annual Report”. The Governance Committee may consider such shareholder recommendations when it evaluates and recommends nominees to the Board for submission to the shareholders at each annual meeting. Shareholders proposing nominees for director must comply with the eligibility, advance notice and other provisions of the Company’s shareholder nominations policy. Under the policy, the shareholder

 

18


Table of Contents

must provide timely notice of the nomination to us to be considered by the Governance Committee in connection with the Company’s next annual meeting of shareholders. To be timely, the Corporate Secretary must receive the shareholder’s nomination and the information required in the policy on or before December 30th of the year immediately preceding such annual meeting. A copy of the policy is available on the Investor Relations section of the Company’s website, www.ingrammicro.com.

Contacting the Board and Further Information on Corporate Governance

Any interested person who desires to communicate with the Company’s non-employee directors may so do as follows:

 

   

confidentially or anonymously through the Company’s Hotline, 1 (877) INGRAM2, or 1 (877) 464-7262; or

 

   

by writing to the Board of Directors. The Corporate Secretary will promptly forward such interested person communications so received to the Company’s Board of Directors, to the individual director or directors to whom the communication was addressed or to other appropriate departments or outside advisors, depending on the nature of the concern. Interested persons who wish to communicate directly with the Board of Directors may do so by writing to our Corporate Secretary, Worldwide Legal Department, Ingram Micro Inc., 1600 East Saint Andrew Place, Santa Ana, California 92705.

Our code of conduct, the Guidelines, our shareholder nominations policy and our committee charters are accessible by following the links to “Corporate Governance” on the Company’s website at www.ingrammicro.com. Furthermore, upon request to our Corporate Secretary at the address set forth immediately above under “Annual Report”, we will provide copies of our code of conduct, the Guidelines, our shareholder nominations policy and our committee charters without charge.

 

19


Table of Contents

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows the amount of common stock beneficially owned (unless otherwise indicated) by our directors, our named executive officers as set forth in the Summary Compensation Table found on page 42 of this proxy statement, our directors and executive officers as a group, and beneficial owners of more than 5% of our common stock. Except as otherwise indicated, all information is as of March 15, 2013. On March 15, 2013, there were 151,401,217 shares of common stock outstanding (excluding treasury shares).

 

      Common Stock  

Name

         Shares Beneficially      
Owned
        % of Class (1)      

Directors:

    

Dale R. Laurance

     73,549 (2)(3)     *      

Howard I. Atkins

     56,154        *      

Leslie S. Heisz

     6,626 (3)     *      

John R. Ingram (4)

     4,383,614 (2)(5)     2.9   

Orrin H. Ingram II (4)

     4,494,205 (2)(5)     3.0   

Linda Fayne Levinson

     67,216 (2)     *      

Scott A. McGregor

     17,335        *      

Paul Read

     2,846        *      

Michael T. Smith

     109,751 (2)     *      

Joe B. Wyatt

     223,742 (2)     *      
    

Named Executive Officers:

    

Alain Monié

     293,270  (2)     *      

William D. Humes

     446,265  (2)     *      

Keith W.F. Bradley

     75,537  (2)     *      

Shailendra Gupta

     228,658  (2)     *      

Alain Maquet

     203,225  (2)     *      

Gregory M.E. Spierkel (6)

     1,367,230  (2)     *      

Executive Officers and Directors, as a group (24 persons)

     8,523,598  (2)(3)(5)      5.5   
    

Other 5% Shareholders:

    

Artisan Partners Holdings LP

     13,420,760  (7)      8.9   

BlackRock, Inc.

     9,793,013  (8)      6.5   

Donald Smith & Co., Inc.

     11,958,563  (9)      7.9   

FMR LLC

     10,565,803  (10)      7.0   

The Vanguard Group

     8,266,735  (11)      5.5   

 

 * Represents less than 1% of our outstanding common stock.

 

(1) Treasury shares are not included when calculating percent of class of Common Stock.

 

20


Table of Contents
(2) The following table shows the number of shares of our common stock beneficially owned by our directors, our named executive officers and our directors and executive officers as a group in respect of: (i) vested options, (ii) options that vest within 60 days of March 15, 2013, (iii) shares of common stock held by Fidelity Investments as administrator of the Ingram Micro 401(k) Plan, based on information received from such administrator as of December 31, 2012, and (iv) shares of common stock held by New York Life Retirement Plan Services as record keeper and custodian of the Ingram 401(k) Plan administered by The Ingram 401(k) Committee, based on information received from such administrator as of December 31, 2012.

 

Name

  Vested Options     Options Scheduled to
Vest within 60 days of
March 15, 2013
    Shares Held by
Fidelity Investments
as Administrator
of the

Ingram
Micro 401(k) Plan
    Shares Held by
New York Life Retirement Plan
Services as Record Keeper and
Custodian of the Ingram 401(k)
Plan Administered by the
Ingram 401(k) Committee
for Ingram Industries Inc.
 

Dale R. Laurance

    43,558                        

Howard I. Atkins

                           

Leslie S. Heisz

                           

John R. Ingram

    29,795                      8,184   

Orrin H. Ingram II

    168,737        4,305               16,946   

Linda Fayne Levinson

    31,676                        

Scott A. McGregor

                           

Paul Read

                           

Michael T. Smith

    49,551                        

Joe B. Wyatt

    175,057        4,305                 

Alain Monié

    274,920                        

William D. Humes

    340,312                        

Keith W.F. Bradley

    73,770               1,142          

Shailendra Gupta

    118,781                        

Alain Maquet

    130,958                        

Gregory M.E. Spierkel

    1,067,469                        

Executive Officers and Directors, as a group (24 persons)

    2,819,180        8,610        2,585        25,130   
       

 

(3) Excludes 138,053 and 37,411 restricted stock units owned by Dr. Laurance and Ms. Heisz, respectively, which are vested, but for which settlement is deferred and will not occur within 60 days of March 15, 2013.

 

(4) Mr. J. Ingram and Mr. O. Ingram are trustees of the E. Bronson Ingram QTIP Marital Trust (the “QTIP Trust”), and accordingly each can be deemed to be the beneficial owner of shares held by the QTIP Trust.

 

(5) Includes 4,099,259, 4,099,259 and 4,099,259 shares, for Mr. J. Ingram, Mr. O. Ingram, and all executive officers and directors as a group, respectively, which shares are held by various trusts or foundations of which these individuals are trustees or where such individuals could each be deemed to be the beneficial owner of the shares.

 

(6) Mr. Spierkel’s status as CEO ended January 20, 2012, but he remained a member of the Board of Directors until April 15, 2012.

 

(7) This information was obtained from the Schedule 13G filed with the SEC on February 7, 2013 by Artisan Partners Holdings LP (“Artisan”), 875 East Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202, representing shares held as of December 31, 2012. Artisan reports shared voting power with respect to 13,962,059 shares and shared dispositive power with respect to 13,962,059 shares.

 

(8) This information was obtained from the Schedule 13G filed with the SEC on February 6, 2013 by BlackRock, Inc. (“BlackRock”), 40 East 52nd Street, New York, New York 10022, representing shares held as of December 31, 2012. BlackRock reports sole voting power with respect to 9,793,013 shares and sole dispositive power with respect to 9,793,013 shares.

 

21


Table of Contents
(9) This information was obtained from the Schedule 13G filed with the SEC on February 13, 2013 by Donald Smith & Co., Inc. (“Donald Smith & Co.”), 152 West 57th Street, New York, New York 10019, representing shares held as of December 31, 2012. Donald Smith & Co. reports sole voting power with respect to 6,211,844 shares and sole dispositive power with respect to 11,958,563 shares.

 

(10) This information was obtained from the Schedule 13G filed with the SEC on February 14, 2013 by FMR LLC, 82 Devonshire Street, Boston, Massachusetts 02109, representing shares held as of December 31, 2012. Edward C. Johnson 3d, Chairman of FMR LLC, and FMR LLC, through its control of Fidelity and Pyramis, have sole voting power with respect to 861,120 shares and sole dispositive power with respect to 10,565,803 shares. FMR’s shares include 10,565,803 shares held by Fidelity Management & Research Company (“Fidelity”), 82 Devonshire Street, Boston, Massachusetts 02109, which is a wholly-owned subsidiary of FMR LLC, and 861,120 shares held by Pyramis Global Advisors, LLC (“Pyramis”), 900 Salem Street, Smithfield, Rhode Island, 02917, which is a wholly-owned subsidiary of FMR LLC.

 

(11) This information was obtained from the Schedule 13G filed with the SEC on February 6, 2013 by The Vanguard Group (“Vanguard”), 100 Vanguard Blvd., Malvern, Pennsylvania, 19355, representing shares held as of December 31, 2012. Vanguard reports sole voting power with respect to 108,844 shares, sole dispositive power with respect to 8,166,491 shares, and shared dispositive power with respect to 100,244 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, reports beneficial ownership of 100,244 shares as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, reports beneficial ownership of 8,600 shares as a result of its serving as investment manager of Australian investment offerings.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based upon a review of filings with the SEC and/or written representations that no other reports were required, we believe that all of our directors and executive officers complied during fiscal 2012 with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 other than Mr. Monié, who, due to our administrative error, filed one late report relating to one transaction, and Mr. Soumbasakis, who due to our administrative errors, filed three late reports relating to three transactions.

TRANSACTIONS WITH RELATED PERSONS

The Board adopted the Company’s Related Person Transaction Policy in November 2007, which policy is in writing, to assist the Board in reviewing and taking appropriate action concerning related person transactions and assist the Company in preparing the disclosure that the Securities and Exchange Commission rules require to be included in the Company’s applicable filings as required by the Securities Act of 1933 and the Securities Exchange Act of 1934 and their related rules. This policy is intended to supplement, and not to supersede, the Company’s other policies that may be applicable to or involve transactions with related persons, such as our policies for determining director independence and the Company’s Code of Conduct and Conflicts of Interests policies. The policy covers any financial transaction, arrangement or relationship or any series of similar transactions, arrangements or relationships (including indebtedness and guarantees of indebtedness and transactions involving employment and similar relationships) involving the Company and any director, nominee or executive officer, or any immediate family member thereof, or any 5% or greater beneficial owner of the Company’s voting securities, in each case, having a direct or indirect material interest in such transaction. Any such transaction must be approved or ratified by the Board or a designated committee thereof consisting solely of independent directors, which unless the Board designates otherwise, shall be the Governance Committee of the Board or the Chair of the Governance Committee in between regular meetings of the Committee.

Mr. Paul Bay, currently our Senior Executive Vice President and President, Ingram Micro North America, was promoted to an executive officer position in November 2012. A relative of Mr. Bay is a long-time employee of the Company and had annual cash compensation for 2012 of less than $250,000.

 

22


Table of Contents

We have entered into an indemnification agreement with each of our directors and executive officers. The indemnification agreements and our certificate of incorporation require us to indemnify our directors and executive officers to the fullest extent permitted by Delaware law.

REPORT OF THE HUMAN RESOURCES COMMITTEE

The following Report of the Human Resources Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Ingram Micro filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent we specifically incorporate this Report by reference therein.

The Human Resources Committee of the Board of Directors has furnished the following report.

The Human Resources Committee has reviewed and discussed the “Compensation Discussion and Analysis” section of the proxy statement with management of Ingram Micro, and based on this review and discussion, recommended to the Board of Directors of Ingram Micro that such “Compensation Discussion and Analysis” be included in Ingram Micro’s proxy statement for the 2013 annual meeting of shareholders for filing with the SEC.

 

Members of the Human Resources Committee of the Board of Directors of Ingram Micro Inc.

Linda Fayne Levinson (Chair)

Howard I. Atkins

John R. Ingram

Orrin H. Ingram

Paul Read

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis reviews the compensation provided to our Chief Executive Officer, our Chief Financial Officer, our three other most highly compensated officers, and our former Chief Executive Officer, who was not serving as one of our executive officers at the end of our fiscal year ended December 29, 2012 (collectively, the Named Executive Officers, or “NEOs”) as determined under the rules of the SEC and set forth in the Summary Compensation Table. The NEOs for the fiscal year ended December 29, 2012 (or “fiscal 2012”) are as follows:

 

2012 NEOs

  

Position as of December 29, 2012

“Corporate NEOs”:

  

Alain Monié (1)

   President and Chief Executive Officer (“CEO”)

William D. Humes (2)

   Chief Operating and Financial Officer (“COFO”)

“Regional NEOs”:

  

Keith Bradley (3)

   Senior Executive Vice President and President Ingram Micro North America

Shailendra Gupta

   Senior Executive Vice President and President Ingram Micro Asia Pacific

Alain Maquet

   Senior Executive Vice President and President Ingram Micro Europe, Middle East, and Africa (“EMEA”)

“Previous Corporate NEOs”:

  

Gregory M.E. Spierkel (4)

   Former Chief Executive Officer (“former CEO”)

 

(1) Mr. Monié was President and COO prior to being promoted January 20, 2012 to President and CEO.

 

(2) Mr. Humes was Chief Financial Officer prior to being promoted April 26, 2012 to Chief Operating and Financial Officer.

 

23


Table of Contents
(3) Mr. Bradley’s status as Senior Executive Vice President and President Ingram Micro North America ended on December 31, 2012. Mr. Bradley continued to provide transition services through March 6, 2013.

 

(4) Mr. Spierkel’s status as CEO ended on January 20, 2012, but he agreed to remain through April 15, 2012 to assist with the transition to a new CEO.

Executive Summary

This section provides an explanation and analysis of the decision-making behind the compensation provided to the NEOs for fiscal 2012, all as further described in this Compensation Discussion and Analysis.

Decisions Regarding Material Elements of Compensation. The following summarizes the decisions of the Human Resources Committee (the “Committee”) regarding the material elements of 2012 compensation. Some of these decisions, particularly relating to our annual cash incentive plan targets and payouts, were affected by the economic environment, which was slowly improving in 2011 and 2012.

 

   

Modest Base Pay Increases. In November 2011, the Committee decided to move the 2012 annual salary review to March in order to better align with the Company’s performance review cycle. In March 2012, the Committee approved modest increases for 2012 base salaries for our Regional NEOs of less than 5% over their 2011 base salaries. These increases were effective starting June 2012.

 

   

Promotion-Related Changes. When Mr. Monié was promoted to CEO in January 2012, the Committee decided that it was appropriate and consistent with peer group data to keep his cash compensation targets, including base salary, the same as for the prior CEO so that any increase in pay would result from successful performance. As described below, the Committee reduced the annual long-term equity incentive award target for the CEO position from $4.2 million to $3.5 million. As further described below, Messrs. Humes and Gupta each received a more significant salary increase later in 2012 as a result of their respective assumptions of additional roles and responsibilities.

 

   

Setting Challenging Targets Under Our Annual Executive Incentive Award Program (“EIAP”). The financial targets under the cash-based EIAP for fiscal 2012 approved by the Committee reflected the improving demand environment reported by the Company during 2011 and the desire of the Committee to drive focus on growth opportunities. In particular, the Committee’s desire to drive certain growth objectives resulted in the Committee setting certain 2012 objectives for the CEO that, if achieved, might modify his annual EIAP up or down 20%. In late 2012, the Committee implemented a special project incentive for Mr. Gupta with a target payout of SGD $500,000 for the achievement of specific integration objectives related to our acquisition of Brightpoint, Inc. (“BrightPoint”) that must be completed by July 1, 2014. The performance results under our EIAP are further described below, but reflected the Company’s 2012 worldwide sales increase by 4%, net income increase by 25% and earnings per share increase by 30% over 2011 as a result of solid performance in key markets and the Company’s fourth quarter acquisition of BrightPoint and Aptec Holdings Ltd. (“Aptec”). Included in these results were the negative impact on sales resulting from weak economic conditions in Europe, problems in some countries in adjusting to disruptions after a new enterprise resource management system and continued sluggish recovery in 2012. This resulted in mixed results across different regions, with some missing and others exceeding the financial metrics set for fiscal 2012. As a result, amounts earned by the NEOs under the 2012 EIAP varied from 27.4% to 124.6% of target.

 

   

Granting 100% Performance-Based Equity Awards. The Committee again granted only performance-based restricted stock units (“RSUs”) to our NEOs. These RSUs consisted of three separate grants:

 

  (1) 40% of the target grant value would be earned based on achievement of fiscal 2012 pre-tax profitability goals and, to the extent earned, will vest in equal installments in June 2014 and 2015;

 

24


Table of Contents
  (2) up to 60% of the target grant value will be eligible for vesting in June 2015 based on achievement of earnings per share and return on invested capital goals over a three-year performance measurement period (2012-2014); and

 

  (3) an additional number of RSUs (but no more than the target number of RSUs granted in program 2) may be earned based on the achievement of total shareholder return over a three-year performance measurement period (2012-2014) as compared to a peer index.

The target grant value of the RSUs for the NEOs, including our new CEO, was between 128% and 412% of their respective base salaries. These amounts align award values with those of their peers in our comparator group of companies, reflect individual performance levels and responsibilities, keep stock dilution to a competitive level, and are consistent with the Committee’s desire to place significant weight on long-term performance.

Focus on Long-Term Value Creation. At executive management levels, compensation focuses on long-term shareholder value creation, reflecting the fact that, in conjunction with the Board, Ingram Micro’s NEOs are responsible for setting and achieving long-term strategic goals. In support of this responsibility, compensation is heavily weighted towards equity incentives and other performance-based compensation that rewards long-term value creation for shareholders. The following charts show the CEO and other NEO target and actual compensation mix for 2012.

 

25


Table of Contents

In the tables below, target compensation equals the sum of 1) base salary, 2) target EIAP award, and 3) grant date fair value of equity awards assuming target level performance over the measurement period (as disclosed in the Summary Compensation Table). The actual compensation replaces target EIAP awards with the value that was actually earned but does not adjust for the equity portion of the target.

 

LOGO

 

LOGO

Pay-for-Performance and CEO Compensation. As illustrated by the above charts, Ingram Micro emphasizes pay-for-performance with performance-based compensation constituting 87% of the CEO’s total target compensation and 73% of other NEOs’ total target compensation. This performance-based compensation requires the achievement of specific performance targets intended to drive shareholder value over the long term in order for the compensation to be paid. This is illustrated by the following comparison of the CEO’s total compensation compared to annual total shareholder return (“TSR”) over the past three years.

 

   

In 2010, annual TSR was 9.4% and the former CEO’s total compensation earned during 2010 decreased by 19%.

 

26


Table of Contents
   

In 2011, annual TSR was -4.7% and the former CEO’s total compensation earned during 2011 decreased by 4.5%. However, the former CEO received the first payment of a cash retention bonus in 2011, which was earned based on 2009 performance and continued employment through 2011; when this retention payment is added to his total 2011 compensation, his compensation increased by 9.5% over 2010.

 

   

In 2012, annual TSR was -7.0% after the close of a significant acquisition in mid-October and two other acquisitions earlier in the year. The current CEO’s total compensation decreased by 1% when compared to the 2011 compensation of the former CEO.

The Company is focused on improving absolute and relative TSR performance and has added a relative TSR component to its equity-based long-term incentive awards in 2012, as further described below under “2012 Performance Awards”.

Focus on Best Practices. The Committee periodically examines the Company’s executive compensation practices in an effort to align them with best practices in executive compensation and evolving trends. For example (and as described further below):

 

   

Executives are subject to significant stock ownership guidelines, including the requirement for executives to obtain permission from the Company before selling shares, even during an open trading period;

 

   

A clawback policy exists that provides for the repayment of incentive compensation in appropriate circumstances;

 

   

Different performance metrics are used under the Company’s short-term and long-term incentive plans;

 

   

Awards under the Company’s short-term and long-term incentive plans are capped to limit windfalls;

 

   

The Company has a policy prohibiting its associates (including our executive officers and directors) from using Company stock in hedging transactions;

 

   

None of the Company’s directors or executive officers engage in short sales of Company securities, hold Company securities in a margin account or pledge Company securities as collateral for a loan, and any Company securities transaction requires approval from the General Counsel;

 

   

Benefits and perquisites represent a very small proportion of NEO compensation;

 

   

The Company’s change in control policy requires a double trigger before benefits are paid and does not have any provision for tax gross-ups;

 

   

The Committee retains and consults with its independent outside compensation consultant on a regular basis and has sole discretion to engage or terminate its compensation consultants and other advisors.

Effect of Prior Shareholder Say-on-Pay Advisory Vote. In June 2012, our shareholders approved our executive compensation programs, as disclosed in last year’s proxy statement, in an advisory “say-on-pay” vote, with 88% of votes cast in favor of approval. While this result did not impact decisions about our 2012 compensation programs, which were already in place by June, we believe the approval of our 2011 compensation programs shows strong support for the types of programs discussed in this proxy statement and, accordingly, that no material changes to our compensation programs are necessary. In an effort to further weight our compensation programs towards value creation for shareholders, for fiscal 2012, our performance RSUs included a TSR metric, as further described below.

 

27


Table of Contents

Independence of Compensation Consultant. After review and consultation with Cook, the Committee determined that Cook is independent and that there is no conflict of interest resulting from retaining Cook currently or during fiscal 2012. In reaching these conclusions, the Committee considered the factors set forth in the SEC rules that recently became effective.

Overall Design and Rewards of the Executive Compensation Program

Design Elements. The Company operates in the extremely competitive, rapidly changing, and low-margin high-technology distribution and service industry. The broad objectives and key features of each element of the executive compensation program established by the Company and approved by the Committee are:

 

Compensation Element

 

Objectives

 

Key Features

Base Salary   Links performance and pay by providing competitive levels of base salary for each executive officer based on his or her role and responsibilities within the Company. Used to attract and retain executive talent in a very competitive marketplace.  

Reflects:

•    Peer median for positions with similar responsibilities and business size.

 

•    An executive’s responsibilities and performance, as demonstrated over time.

 

•    Local country indexation as applicable.

    Salaries are reviewed annually to ensure they are externally competitive, reflect individual performance and are internally equitable relative to other Ingram Micro executives.
Annual Executive Incentive Award Program  

Provides incentives to focus executives on the actions necessary to attain the Company’s Board-approved annual business plan.

 

Identifies what is expected for the year from the standpoint of corporate, regional, and country results.

 

Links reward to accomplishment as executives are measured and rewarded on accomplishments within their control and responsibility and encourages and rewards both profitable growth and operating efficiency.

 

Committee establishes incentive targets as a percentage of each NEO’s base salary that approximate the median market practice of comparable positions at comparator peer group companies.

 

Payouts depend on meeting performance targets such as pre-tax profit, working capital days, and specified operating objectives over the course of a one-year performance period.

 

Performance targets vary for Corporate NEOs versus Regional NEOs to reflect appropriate differences in our operations within the United States and abroad.

Equity-Based Long-Term Incentive Award Program  

Aligns the long-term goals of our executives with those of our shareholders, increases shareholder value, and retains executive officers.

 

Increases linkage to shareholders by rewarding stock price appreciation and tying wealth accumulation to performance.

 

Retention is enhanced through the overlapping of multi-year performance periods.

 

Committee reviews competitive, market-median, long-term incentive award values for each NEO and the individual performance of each NEO to establish the equity-based award values to be granted to each NEO.

 

Payouts depend on meeting performance targets such as pre-tax profit, total shareholder return, return on invested capital or earnings per share results over the performance measurement period.

 

28


Table of Contents

Compensation Element

 

Objectives

 

Key Features

Benefits and Perquisites   Provide conservative levels of nonperformance-based compensation.   In general, our NEOs participate in the Company’s broad-based health and welfare, life insurance, disability and retirement programs for management employees.

Design Principles. Ingram Micro believes a major portion of NEO compensation should be at risk and subject to the financial performance of the Company. The only guaranteed forms of NEO compensation are base salaries, benefit programs and perquisites that are generally available to all management associates. The remainder of compensation must be earned through the attainment of predetermined financial or strategic performance objectives or share price appreciation. Compensation programs are designed within a framework based on the achievement of pre-established financial targets and alignment of the financial interests of our NEOs with those of our shareholders by providing appropriate near- and long-term financial incentives that reward executives for achieving objectives that are designed to enhance shareholder value. Our key design principles include:

1.    Target executive compensation with reference to the market median (50th percentile) for each element of pay and in total to be competitive with other employment opportunities.

 

   

A competitive compensation program is critical in attracting, retaining and motivating the Company’s senior leadership in order to achieve its long-term business and financial objectives.

 

   

The Company benchmarks executive officer compensation annually against survey data from Mercer’s Executive Benchmark Database covering general industry companies with annual revenues between $5 billion and $10 billion, as well as a comparator peer group of 38 publicly traded companies in four related industries (Technology Distributors, Electronic Equipment Manufacturers, Logistics and Health Care Distributors, and Retailers and Other Companies), to assess the competitiveness of total compensation and pay mix. This comparator peer group is a closer match to the market capitalization of the Company than the general industry data and was modified for 2012. Family Dollar Stores, PetSmart and Dick’s Sporting Goods have been replaced in the peer group by Grainger (WW), United Stationers, and Wesco Industries because the Committee decided these firms are more relevant and appropriate for the peer group. The following revised peer group of companies was used when determining 2012 compensation for our NEOs:

 

Technology Distributors

  

Electronic Equipment

Manufacturers

  

Logistics and Healthcare

Distributors

  

Retailers and Other

Companies

•    Anixter Int’l

•    Arrow Electronics

•    Avnet

•    BrightPoint*

•    Insight Enterprises

•    ScanSource

•    SYNNEX

•    Tech Data

  

•    Agilent Technologies

•    AVX

•    Celestica

•    Flextronics Int’l

•    Itron

•    Jabil Circuit

•    Mettler-Toledo

•    Molex

•    Vishay Intertech

  

•    AmerisourceBergen

•    C.H. Robinson

•    Henry Schein

•    McKesson

•    Owens & Minor

•    Pacer Int’l

•    Patterson Companies

•    PSS World Medical

•    UTi Worldwide

  

•    AECOM Tech

•    Ashland

•    AutoNation

•    Grainger (WW)

•    Lexmark

•    Office Depot

•    O’Reilly Automotive

•    Oshkosh

•    Timken

•    United Stationers

•    Wesco Industries

•    Williams-Sonoma

 

 

* BrightPoint has been removed from our peer group as a result of its acquisition in October 2012.

 

29


Table of Contents

This comparator peer group is summarized by the following measures:

 

     2012 Comparator Peer Group
Data as of December 31, 2011 ($ in millions)
 
     Revenue*      Market Cap      Employees  

75th percentile

   $ 10,331       $ 4,928         22,099   

Median

     6,376         2,701         13,150   

25th percentile

     3,793         1,645         7,718   

Ingram Micro

     36,259         2,912         15,650   

 

  * Twelve-month revenue as of December 31, 2011

 

  ¡  

Size: Companies with market capitalization that generally range around Ingram Micro’s market capitalization.

 

  ¡  

Business Focus: Publicly traded companies with representation weighted towards distribution, and other industries, because the competition for talent is broader than just distribution companies.

 

  ¡  

Consistency: The peer group should be relatively stable and preferably be multi-national companies.

 

   

Ingram Micro management engages an executive compensation consulting firm to conduct a total compensation study of executive officers. For 2012 compensation decisions, management engaged Mercer to collect and report the general industry survey data which was then reviewed by Cook, the Committee’s independent outside advisor. Due to the unique revenue characteristics of a distribution business (e.g., high revenues at low margins), revenue is not directly comparable to general industry benchmarks. As a result, general industry market data was used for companies with significantly lower revenues than Ingram Micro. Cook provided the Committee with its own analysis and conclusions to be drawn from the data and advised the Committee on setting appropriate compensation levels for Ingram Micro’s NEOs, including our CEO.

 

   

Cook’s compensation report examined the competitiveness of Ingram Micro’s executive compensation programs in total and by each element of compensation (base pay, annual incentives, and long-term incentives). In doing so, the value of each of Ingram Micro’s NEOs’ compensation elements was compared to median information available from the defined comparator group. Benefits and perquisites were not included in the 2012 report as they represent a small portion of our executive officer’s total remuneration.

2.    Internal pay equity is important.

 

   

Ingram Micro establishes a series of salary grades and ranges, with a salary range “midpoint” that is designed to reflect market median levels as reported in the general industry survey data. Salary grades for our executive officer positions are aligned with salary ranges of market median officer positions that most closely approximate their job responsibilities at Ingram Micro.

 

   

Balancing competitiveness with internal equity helps support management development and movement of talent worldwide throughout Ingram Micro. Differences in actual compensation between employees in similar positions will reflect individual performance, future potential and business results. This effort also helps Ingram Micro promote talented managers to positions with increased responsibilities and provides meaningful developmental opportunities.

3.    At executive management levels, compensation increasingly focuses on longer term shareholder value creation, which is demonstrated by the charts above under “Focus on Long-Term Value Creation”, showing that long-term incentive compensation is the most important element of the pay mix for the NEOs.

4.    Pay-for-Performance.

 

   

Ingram Micro emphasizes pay-for-performance, as indicated by the charts above under “Focus on Long-Term Value Creation”, which show that 87% of the CEO’s total target compensation and 73% of

 

30


Table of Contents
 

the other NEOs’ total target compensation is performance-based. This performance-based compensation requires the achievement of specific performance targets intended to drive shareholder value over the long term in order for the compensation to be paid.

What is Rewarded. Executive compensation is designed to reward achievement of targeted financial results and individual performance. Our performance metrics are based on GAAP financial results, but, as determined by the Committee, may exclude restructuring charges and other expenses directly related to our cost-reduction programs, noncash charges for the impairment of goodwill, and the impacts of any unplanned acquisitions. These metrics are regularly used by our management internally to understand, manage and evaluate our business and make operating decisions. The following table defines each performance metric used as an executive incentive measure, and states why the metric was selected and the compensation programs which use that metric.

 

Metric

  

Definition

  

Why Selected

  

Pay Programs

Earnings Per Share (“EPS”)    EPS is defined as net income divided by weighted average number of diluted shares outstanding.    EPS is widely tracked and reported by analysts and used as a measure to evaluate Ingram Micro’s performance. EPS growth is used in recognition of both the effect it can have on Ingram Micro’s stock price and the prevalence of its use by other companies.    Equity-Based Long-Term Incentive Award Program
Pre-tax Profit (“PT”)    PT is based upon results reported under generally accepted accounting principles. Exclusions of any items from the calculation of PT must be pre-approved by the Committee.    PT is considered an important performance measurement to ensure focus on profitability.   

Annual Executive Incentive Award Program

Equity-Based Long-Term Incentive Award Program

Return On Invested Capital (“ROIC”)    ROIC is defined as operating income, net of income taxes calculated based on Ingram Micro’s applicable effective tax rate for the fiscal year, divided by the average invested capital for the fiscal year. Average invested capital is equity plus debt less cash and cash equivalents at the beginning of the performance period and at the end of each quarter therein.    ROIC provides a measure of the efficiency with which Ingram Micro invests its capital in the business. ROIC incorporates elements of both profit generation and the capital invested in the business and provides a meaningful gauge of the level of overall shareholder value generation when compared to the weighted average cost of capital.    Equity-Based Long-Term Incentive Award Program

 

31


Table of Contents

Metric

  

Definition

  

Why Selected

  

Pay Programs

Working Capital Days (“WCD”)    WCD is defined as Days Sales Outstanding plus Days Inventory Outstanding minus Days Payable Outstanding at the end of a month (13-month average).    Because of the extensive investment in working capital inherent in this business, Ingram Micro believes that this focus encourages efficient use of capital, thus improving shareholder value.    Annual Executive Incentive Award Program
Individual performance is assessed via the Performance Management Process (“PMP”)    PMP is designed to establish specific objectives for associates related to overall Ingram Micro goals and help them understand their role in meeting these objectives. Objectives are established for specific initiatives, major responsibilities key to their position, critical competencies, and individual developmental requirements.    PMP is an effective tool in assessing performance against individual goals. Once Ingram Micro objectives are established, salaried associates (including NEOs) set individual objectives aligned with the Company’s strategic direction. At year end, salaried associate performance is assessed against established goals and executive competencies and behaviors.   

Base Salary

Equity-Based Long-Term Incentive Award Program

Annual Executive Incentive Award Program

Total Shareholder Return (“TSR”)    TSR is the increase (or decrease) in stock price plus any dividends paid over a period of time divided by the market stock price at the beginning of the period.    In 2012 we added this metric to increase focus on TSR and increasing value to our shareholders.    Equity-Based Long-Term Incentive Award Program

Elements of Compensation

The elements of NEO compensation are annual base salary, annual bonus, long-term equity-based incentives, benefits and perquisites. The mix and proportion of these elements to total compensation is benchmarked annually against the survey median data and peer group of comparator companies for each NEO. The Committee, at its sole discretion, may make changes to the mix or relative weighting of each compensation element. The Committee reviews tally sheets that itemize the total compensation package of each NEO and takes into consideration the impact a change in one element may have on other elements and total compensation. A summary of each element of compensation and how the amount and formula are determined is presented below.

How Designed and Determined

Base Salary: Each NEO is eligible for a salary review annually. The Committee reviews and takes into consideration recommendations for changes to base salaries of NEOs and other Section 16 reporting officers

 

32


Table of Contents

from our CEO (except with respect to his own compensation) and Cook. Our CEO’s recommendations are based on a number of considerations, including the executive’s scope of responsibilities within the organization, his personal assessment of the executive’s performance and overall contribution to the achievement of Ingram Micro’s short-term and long-term objectives, the executive’s performance in relation to individual performance objectives established during the PMP, the executive’s pay history, the executive’s current salary versus the competitive median levels reported by the peer group of companies and market surveys, internal equity considerations and Ingram Micro’s overall Company performance. However, there is no set formula or weighting assigned to these factors. Our CEO discusses his recommendations with Cook and the Committee, but the Committee in executive session makes a final determination of base pay for each NEO upon completion of these discussions.

Our CEO’s salary is determined by the Committee based on its review of his overall performance, data on competitive compensation levels for CEOs in the comparator group of companies, proxy information for direct competitors and market surveys, as well as Ingram Micro’s overall performance. These considerations are discussed among the Committee members and Cook in executive session of the Committee. No members of management are present during these deliberations.

The Committee met in March 2012 and determined the annual merit increase appropriate for each NEO, effective the first pay period in June 2012. The increase for each of the NEOs prior to the promotion increases described below was less than 5%. In keeping with the pay philosophy of focusing on performance-based compensation, the Committee decided to maintain base pay and target cash incentives for the CEO position at the 2011 level (and not to increase the CEO’s base salary during 2012) and to reduce the target annual long-term equity incentive award for the CEO position from $4.2 million to $3.5 million.

The Committee met in April 2012 and approved the promotion to Chief Operating and Financial Officer and appropriate increase in pay for Mr. Humes. As a result of Mr. Humes’ assumption of the additional responsibilities of Chief Operating Officer in addition to his role as Chief Financial Officer, the Committee increased his base salary 25% to $650,000, which is inclusive of any merit increase he would have received in June. Also, as a result of Mr. Gupta being assigned global integration responsibilities resulting from the BrightPoint acquisition, the Committee approved a 9% increase in his base compensation to SGD $850,000 effective July 1, 2012.

Annual Executive Incentive Award Program: Each NEO has a cash incentive target established by the Committee as a percentage of base salary, as set forth in the table below. The percentage approximates the median market practice of comparable positions based on the data from our comparator peer group (see “Design Principles”).

 

     Target Annual Incentive as % of
Annual Base Salary
 
     2012  

Mr. Monié

     150 % (1) 

Mr. Humes

     90 % (1) 

Mr. Bradley

     70

Mr. Gupta

     70

Mr. Maquet

     70

Mr. Spierkel

     150

 

(1) Mr. Monié’s target prior to his promotion to Chief Executive Officer on January 20, 2012 was 90%. Mr. Humes’ target prior to his assumption of Chief Operating Officer duties on April 26, 2012 was 70%. The calculation of the annual bonus payment at the end of the year applied the respective target to earnings during that time for each NEO.

 

33


Table of Contents

For 2012 the EIAP required the achievement of PT, WCD and in some cases strategic objectives over the full fiscal year in order for an NEO to receive his target annual incentive. These metrics drive a focus on growing PT while balancing WCD to effectively manage capital as well as provide a focus on effective implementation of key strategies. All goals were approved by the Committee within the first 90 days of the fiscal year. As illustrated by the following chart, all NEOs had 20-30% of their EIAP tied to the overall Company PT and WCD performance, with the remainder generally tied to the PT and WCD performance of their respective region. The CEO and COFO were also given specified strategic objectives to focus on growth opportunities as further described below.

 

     Weighting of Annual Incentive
     Overall  Company
Results
    Weighted Roll-Up of
Country Results
    Corresponding
Region Results
   

Strategic Objectives

Mr. Monié

     30     70          +/-20% multiplier

Mr. Humes (1)

     21     49          30%

Mr. Bradley

     30     50     20  

Mr. Gupta

     30     50     20  

Mr. Maquet

     30     50     20  

Mr. Spierkel

     30     70         

 

(1) Mr. Humes’ EIAP is weighted 70% to financial results (of which 30%, or 21% of his total EIAP, is tied to overall company results and 70%, or 49% of his total EIAP, is tied to the weighted roll-up of country results) and 30% to strategic objectives.

The 2012 program required a minimum level of PT performance before any award could be earned and this award could be increased or decreased based on the management of WCD. The maximum award earned for significant overachievement of performance against PT is 200% of the target award value (generally, achieving 130% to 145% of the Board-approved operating plan PT results in a maximum award payment).

After the potential award based on PT is calculated, WCD is used as a modifier to decrease or increase the payout. The first two working capital days worse than the target range decreases the PT achievement by 5 percentage points each, with each additional day worse decreasing the multiplier by 10 percentage points, with the potential of reducing the award to zero. Every working capital day better than the target range increases the PT achievement by 5 percentage points, with the positive modifier capped at 110% of the PT achievement. The Committee set additional goals for Mr. Monié which focused on growing through acquisition and greenfield investments, among other key strategic objectives. In determining that Mr. Monié should receive the full 20% multiplier for the strategic objective component of Mr. Monié’s EIAP, the Committee particularly recognized the acquisition of Promark, Aptec and BrightPoint as well as further investments into greenfield opportunities. Mr. Humes was given additional strategic objectives requiring him to ensure successful implementation of key global projects. In determining that Mr. Humes should receive 121.7% of the target award value for the strategic objective component of Mr. Humes’ EIAP, the Committee particularly recognized Mr. Humes’ successful implementation of key global projects to strengthen the Company’s capital structure, financial controls and shared service centers.

 

34


Table of Contents

The following chart illustrates the calculation of the overall Company achievement and weighted roll-up achievement that together make up the worldwide financial achievement under the 2012 EIAP. The total financial award earned = [(A x B) + C] = 109.4% of Target Award.

2012 EIAP Achievement:

 

Overall Company Results

 

Minimum

  Target
(Plan)
  Maximum  

Actual

A. Consolidated Worldwide PT Target and Results (000)

  $330,907   $441,210       $573,572   $422,104(1)

% of Incentive Award Earned

  50.0%   100.0%   200.0%   91.3%

x  B. Worldwide WCD Modifier Target and Results

  +11 days   26.1 – 27.8 days   -2 days   26.4 days

% Modifies Incentive Earned in “A”

  0%   100%   110%   100%

=  A x B = Total Company Results = % of
Incentive Award Earned

        91.3%

Achievement of Overall Company Results:

        x 30%

27.4%

       
+  C. Weighted Average Earned Award of
Each Country/Operating Unit Worldwide
 

2012 Plan Revenue
Weighting

  Weighted Achievement      

% of Incentive
Award Earned

North America

  42.8%   59.6%    

EMEA

  30.2%   19.4%    

Latin America

  5.1%   8.5%    

Asia Pacific

  21.9%   29.6%    

Total Region Weighted Average Component

  100%   117.1%   x 70%   = 82.0%

Worldwide Financial Achievement % of Target Award Earned Incentive Award:

  82.0% + 27.4% = 109.4%

 

(1) PT for worldwide and regional results excludes the impact of material acquisitions and other costs as outlined in the program, consisting primarily of reorganization costs associated with profit enhancement programs and integration costs. Incentive awards for PT achievement between the specified minimum, target and maximum are interpolated on a straight-line basis. The PT achievement is subject to a WCD positive or negative multiplier as noted above.

NEOs. Under the terms of the 2012 EIAP, NEOs earned award payments as follows:

 

2012

   Region      Worldwide
Financial
Achievement
     Strategic
Objectives
Achievement
   Total %  of
Target
Incentive
 
        (100%)       (multiplier)   

Mr. Monié

     Worldwide         109.4%       20%      131.3%   
        (70%)       (30%)   

Mr. Humes

     Worldwide         109.4%       121.7%      113.1%   
        (100%)       (N/A)   

Mr. Spierkel (1)

     Worldwide         109.4%       0      109.4%   

2012

   Region      Total
Company
Results

(30%)
     Region
Results
(70%)
   Total % of
Target
Incentive
 

Mr. Bradley

     North America         91.3%       138.9%      124.6%   

Mr. Gupta

     Asia Pacific         91.3%       0%      27.4%   

Mr. Maquet

     EMEA         91.3%       60.7%      69.9%   

 

(1) Mr. Spierkel received a prorated award based on the number of days he was employed by the Company during 2012.

 

35


Table of Contents

The Company does not disclose regional PT or WCD target goals because of its conclusion that disclosure of such goals is not material to an understanding of the compensation program applicable to its NEOs and that competitive harm would result from their disclosure. Like the overall PT and WCD goals disclosed above, the regional goals are set at levels where achievement of the target award is intended to be challenging, but realistically possible. In addition to payment under the EIAP, Mr. Gupta received a discretionary bonus in recognition of his launching and leading the Company’s BrightPoint integration effort and in driving expansion into the Middle East through the acquisition of Aptec.

Equity-Based Long-Term Incentive Award Programs

2012 Performance Awards. For 2012, the Committee decided to continue its practice of granting only performance-vesting RSUs to the executive officers and to delay the 2012 annual equity grants to the first trading day of June to better align with the performance management process. Each RSU entitles an executive to one share of Company stock if and when the RSU becomes both earned and vested. The Committee’s determination of individual values of the RSU awards with respect to NEOs, other than the CEO, was based on its evaluation of recommendations by the CEO that included the review of competitive data, market median, long-term incentive award values for each NEO and the individual performance of each NEO. With respect to the CEO, the Committee, in its sole discretion, determined the long-term equity value by considering the CEO was new in the position and comparative peer group information. During this process the Committee consulted with its outside advisor, Cook. As a result of individual performance, the target grant values for the NEOs were generally between the 50th and 75th percentile.

 

   

For the 2012 grants of performance-vesting RSUs, the target dollar value granted for the NEOs (excluding Mr. Spierkel) ranged from 115% to 412% of their respective base salaries. The Committee’s target dollar value is equal to the actual grant value because the closing price on the grant date was used to determine the number of units to issue on the grant date.

 

     2012 Annual Equity-Based Long-Term Incentive
Award Program Grant Values
 
     Actual Value at Grant for
Target Award (1)
     Upside Value at Grant
TSR Award (2)
 

Mr. Monié

   $ 3,500,000       $ 738,489   

Mr. Humes

     1,440,013         303,839   

Mr. Bradley

     775,000         163,520   

Mr. Gupta

     800,000         168,795   

Mr. Maquet

     770,000         162,464   

Mr. Spierkel

               

 

(1) The Actual Value at grant was divided by $17.46, the closing price on the grant date of June 1, 2012, to determine the number of RSUs (rounded up to the nearest share) granted and that will be earned for target level performance. This value is slightly different than the value reflected in the Summary Compensation Table due to this rounding of the shares.

 

(2) While we grant a determined number of RSUs for target level performance, in 2012 the upside opportunity only exists in the TSR RSUs granted. Since this upside is found in a separate equity grant of TSR RSUs (as defined below) we have provided the accounting value, $6.14 per RSU, of this additional 2012 grant. More details of this accounting value can be found in the Summary Compensation Table footnotes below.

 

   

With the approval of the Committee, grants of equity may also be awarded to the NEOs at other times during the year upon their initial employment with the Company or promotion within the organization. In such cases, as with Mr. Monié’s promotion grants in 2012, the effective date of the grant will be the first trading day of the month that follows the Committee’s approval and the effective date of employment or promotion.

 

36


Table of Contents

While the Committee decided to continue its practice of tying 40% of the performance-vesting RSUs granted to the achievement of 2012 PT goals (the “PT RSUs”) and 60% to the achievement of EPS and ROIC goals (the “EPS/ROIC RSUs”), it significantly modified the EPS and ROIC plan and added a TSR requirement (the “TSR RSUs”). The RSUs granted to the NEOs in June 2012 consisted of the following three types of performance-vesting RSUs (with the goals and target dollar values approved by the Committee within the first 90 days of the fiscal year):

(1) PT RSUs. The PT RSUs represented 40% of the target RSUs that are eligible to be earned based on the achievement of fiscal 2012 PT goals, with vesting of any earned amount in equal installments in June 2014 and June 2015. The Committee certified on March 5, 2013 that the 2012 PT result exceeded the predetermined target level ($50 million), resulting in 100% of the PT RSUs becoming eligible for vesting on the following schedule: 50% on June 1, 2014, and 50% on June 1, 2015 as long as the participant is employed in good standing on the vesting date (other than due to specified conditions such as death or termination without cause).

(2) EPS/ROIC RSUs. The EPS/ROIC RSUs represented 60% of the target RSUs that are eligible for vesting based on EPS and ROIC achievement over a three-year period (fiscal 2012-2014). If the three-year cumulative compounded annual EPS growth and three-year average ROIC targets are met, they will fully vest on June 1, 2015 (or at the time of the Committee’s certification of the EPS and ROIC performance for the three-year period, if later) if the NEO remains employed by the Company on the vest date (other than due to specified conditions such as death or termination without cause). The Committee believes the targets were set with appropriate levels of difficulty for the three-year performance measurement period. The maximum number of EPS/ROIC RSUs available to vest under this 2012 program will be capped at the target number of units.

 

      % of Target Award That Vests
on June 1, 2015

Performance over fiscal years 2012 – 2014

   Threshold   Target   Maximum

Cumulative compounded annual EPS growth

   17.5%   70%   140%

Average ROIC

   7.5%   30%   60%

Combined payout %

   25%   100%   Capped at 100%

(3) TSR RSUs. For 2012 grants, the Committee revised the criteria for upside beyond 100% of target. Instead of upside being based on over-achievement of EPS and ROIC goals, as in the prior year, any amount earned over the target number of RSUs will require the Company’s three-year TSR to exceed a three-year TSR peer index. Achievement of TSR below the index results in an award of 0% of TSR RSUs, and the maximum award for Ingram Micro TSR significantly exceeding peer group TSR is 100% of the TSR RSUs. The earned portion will vest on the third anniversary of the date of grant as long as the participant is employed in good standing on the vesting date (other than due to specified conditions such as death or termination without cause). The combination of the EPS/ROIC RSUs with the TSR RSUs has the opportunity to have a total combined payout of 200% of the target level associated with the EPS/ROIC RSUs, similar to previous years.

Performance Awards from Prior Years. As previously disclosed, the 2010 Executive Long-Term Performance Share Program (EPS/ROIC RSUs) had a three-year performance measurement period (January 2010 – December 2012). In establishing the 2010 program, the Committee determined that any related costs, benefits and invested capital from a material acquisition in the final year of the measurement period should be excluded from the calculation of EPS and ROIC results. Based on this exclusion, the three-year EPS compound annual growth rate was 15.9% and the three-year average ROIC was 11.9% for the measurement period. These results exceeded the minimum requirements and thus resulted in the combined achievement level under the plan of 173.5% of the target 2010 EPS/ROIC RSUs being earned (vested) by the participants, including the NEOs, who met the employment requirements of the award. Vesting of the earned shares occurred on March 5, 2013, upon the certification of the results by the Committee.

 

37


Table of Contents

Stock Ownership and Retention Policy; Policy against Hedging Transactions

Our stock ownership and retention policy requires our Section 16 reporting officers to achieve holdings of Ingram Micro common stock with a value equal to three to six times their base salary. The multiple is determined by salary grade. The CEO’s target is six times his base salary. The target for the other NEOs is four times their base salaries. NEOs are not required to reach their share ownership target level by a specific date. Instead, until the ownership requirement is met, they are required to retain 50% of their net after-tax shares resulting from the vesting of all restricted stock or RSU awards and 50% of the net after-tax shares resulting from the exercise of stock option awards. Shares owned include: shares held by the executive directly or through a broker, shares held jointly by the executive and his/her current spouse, shares held by the executive’s current spouse, shares held by the executive’s dependent children, shares held by the executive in a custodial account or irrevocable trust, and shares held by the executive in the Ingram Micro 401(k) Plan. As of December 29, 2012, the executive officers had not yet achieved their share ownership target level.

The Company’s Insider Trading Policy and Executive Stock Ownership and Retention Policy provides that shares of Ingram Micro stock shall not be made subject to a hedge transaction or puts and calls. None of the Company’s directors or executive officers engage in short sales of Company securities, hold Company securities in a margin account or pledge Company securities as collateral for a loan.

Compensation Recovery Policy

The Committee adopted a Compensation Recovery Policy in January 2010. This policy, commonly referred to as a “clawback” policy, authorizes the Company to recover annual or long-term incentive compensation earned and received or realized in the previous 36 months by the NEOs, other Section 16 reporting officers, the Senior Vice President & Controller, and the Vice President of Internal Audit (each a “Covered Employee”) in the event of a “recoverable event” (as defined in the policy). A recoverable event includes a covered employee’s engagement in certain conduct that is detrimental to Ingram Micro, or the grant, vesting and/or payment of “incentive compensation” (as defined in the policy), or the calculation of the magnitude of any such incentive compensation, that is based on materially inaccurate financial results or performance metrics.

Under the policy, Ingram Micro’s Board of Directors or the Committee, may, in its sole discretion, take any or all of the following actions upon its determination that a recoverable event has occurred with respect to a Covered Employee: (i) cause the Covered Employee to forfeit any unvested incentive compensation as of the recoverable event, (ii) cause the Covered Employee, regardless of prior vesting, to forfeit any unpaid incentive compensation as of the recoverable event, and/or (iii) recover any and all incentive compensation earned and received or realized by the Covered Employee during the period commencing on the date of the occurrence of the recoverable event and ending on the date on which it determines that the recoverable event has occurred, but not to exceed the 36-month period preceding the date of such determination (with interest).

This policy is applicable to our short-term and long-term incentive award programs adopted by the Company for its executive officers and other key employees designated by the Committee as Covered Employees.

Severance Recoupment Policy

Ingram Micro has instituted a policy that stipulates that if an executive officer receives any severance payments or other benefits under the Executive Officer Severance Policy and the Company subsequently determines that the executive officer had engaged in conduct which constituted “cause” for the termination of his employment by the Company, the executive officer will reimburse the Company for all payments and the value of all benefits received by the executive officer which would not have been received if the executive officer’s employment had been terminated by the Company for “cause”, including interest.

 

38


Table of Contents

Benefits and Perquisites

We do not use benefit programs or perquisites as a primary compensatory element or as an enhancement to executive officer compensation. In general, our executive officers participate in Ingram Micro’s broad-based health and welfare, life insurance, disability, and retirement programs for management employees. Perquisites are generally limited to home or mobile office computer and telecommunications equipment and services and a periodic health examination provided by the Company.

For U.S. executive officers, the Company offers participation in a 401(k) plan with Company matching contributions as the only qualified retirement program. In addition, Ingram Micro offers certain U.S. highly compensated employees, including the NEOs based in the U.S., an opportunity to participate on a voluntary basis in our Supplemental Investment Savings Plan (the “Supplemental Plan”), a nonqualified deferred compensation arrangement. In general, the Supplemental Plan operates to restore 401(k) plan benefits, including Company matching contributions, which were reduced or limited by the Internal Revenue Code (the “Code”). Participants in both the 401(k) plan and the Supplemental Plan may elect to defer a total of up to 50% of their base salary and annual bonus. In 2012, the Company’s matching contribution was equal to 50% of the first 5% of eligible compensation deferred under the Ingram Micro 401(k) Plan and Supplemental Plan.

Mr. Gupta is an Indian citizen and receives a retirement contribution of 15% of base salary each year. The Company contributes the maximum amount into the Singapore Central Provident Fund under his name and the remainder is paid to him in cash. The amount of this payment in 2012 is noted under “All Other Compensation” in the “Summary Compensation Table” elsewhere in this proxy statement.

Mr. Maquet is a French citizen and continues to participate in the French social insurance programs to which the Company contributed in 2012. As part of his expatriate assignment to Belgium, the Company agreed to pay him what he would have received under the Ingram Micro France SARL profit sharing program had he remained an employee of Ingram Micro France SARL. The amount of the profit sharing program payments in 2012 is noted under “All Other Compensation” in the “Summary Compensation Table” elsewhere in this proxy statement. Additionally, as a result of meeting a specified age requirement in November 2012, Mr. Maquet is also eligible for a mandatory French retirement plan under the applicable collective bargaining arrangement broadly available to French employees, as further described on page 56 of this proxy statement under Note 5 to the Payments Upon Termination table.

Relocation Assistance and Expatriate Assignment Arrangements

As an international company, we recruit executives globally. We also provide career development opportunities and promotions by moving our executives to locations throughout the world. We have an International Expatriate Assignment Policy applicable to associates working for Ingram Micro who are transferred from their home country of residence and placed on an international assignment for a specified period of time and whom management has approved to be covered by this policy. We generally provide assistance relating to such relocation, including travel costs, home leave for the associate and the associate’s family, reimbursements for necessary work and residency permits, disposition of home country automobile, transportation, storage of household goods and personal effects, cost of living allowances, relocation and housing assistance, reimbursements for customary and reasonable transaction expenses, dependent education costs, and tax preparation services for home and host country income tax filings.

In addition, Ingram Micro’s International Assignment Tax Equalization Policy is intended to eliminate tax inequities or benefits that normally result from accepting a temporary expatriate foreign assignment. Ingram Micro associates covered under this policy will be provided tax equalization benefits. Accordingly, such associate will not recognize any income tax-related financial losses or gains as a result of an international assignment. Part of this tax protection requires that the Company pay the tax on some of the allowances in order for the associate to receive the full allowance that is meant to cover his or her actual expense. In order to ensure

 

39


Table of Contents

that the associate pays no more or no less tax as a result of an international assignment, the associate will be responsible for a “stay-at-home” tax liability, an estimate of the home country tax the associate would have paid had he or she remained in the home country. To assist the associate in meeting the stay-at-home tax liability, an estimated amount of tax is withheld from the associate’s pay each pay period (hypothetical tax) if the stay-at-home country is a tax withholding country. In general, if upon final determination of the associate’s actual stay-at-home tax for a given tax year, the total actual stay-at-home tax exceeds the hypothetical tax that was withheld from the associate’s pay for that tax year, the associate will reimburse Ingram Micro for the difference. If the actual stay-at-home tax is less than the associate’s hypothetical tax withheld, Ingram Micro will reimburse the associate for the difference.

Mr. Maquet, a French citizen, was promoted to the position of Senior Executive Vice President and President of the Company’s EMEA Region effective July 1, 2009. Upon his promotion to this position, he was required to relocate to Belgium and continues to receive benefits under the Company’s International Assignment Tax Equalization Policy. As an expatriate, Mr. Maquet is tax-equalized to France for all components of his compensation except equity and participates in the French social programs (medical, unemployment, and pension benefits). He receives a housing allowance, dependent children education reimbursement, transportation allowances, and Belgium representation pay as reported under the “Other Compensation” column in the “Summary Compensation Table” elsewhere in this proxy statement. To ensure Mr. Maquet receives the full value of the allowances tied to his international assignment, these payments are tax equalized and the Company pays the local taxes due on these payments.

Mr. Monié, a French citizen, was rehired as President and Chief Operating Officer effective November 1, 2011. Mr. Monié was relocated from his previous position in Singapore to the United States and is treated as a “local” hire and is not provided tax equalization or other expatriate benefits. The Company agreed to provide Mr. Monié a reduced relocation package, of which the final payments were made in early 2012.

Executive Retiree Medical Program

The Company maintains a U.S. Executive Retiree Medical Program (“Retiree Medical”). The Retiree Medical allows all U.S.-based executives, who are at least age 55 with 10 or more years of service or at least age 60 with 5 or more years of service, and their enrolled dependents, to continue participation in the Company’s fully insured plan upon departure from the Company. The participant in the Retiree Medical is responsible for 100% of the applicable insurance premiums for their enrolled dependents and themselves and may only participate until the retiree or participating dependent becomes eligible for coverage under another employer’s medical care plan or Medicare benefits. Mr. Spierkel was eligible for this benefit upon his separation from the Company in April 2012. No other U.S.-based NEO is currently eligible for this benefit.

Change in Control and Termination of Employment Arrangements

Change in Control Policy. In September 2010, the Committee adopted the Company’s Change in Control Policy (the “CIC Policy”) which applies to all of our NEOs. The CIC Policy is intended to provide eligible officers of the Company with reasonable financial security in their employment and position with the Company, without distraction from uncertainties regarding their employment created by the possibility of a potential or actual change in control of the Company. The CIC Policy is a “double-trigger” policy in that it entitles a participant to severance benefits (including accelerated vesting of equity awards) in the event the participant’s employment terminates under specified circumstances in connection with, or within 24 months following, a change in control, subject to the participant’s execution of a release and covenant agreement satisfactory to the Company. The CIC Policy also provides that, if equity awards are not assumed or substituted in a change in control, the equity awards will become fully vested and any performance targets for uncompleted performance periods shall be treated as satisfied at target. A summary of the terms and conditions of the CIC Policy, including a detailed description of the severance benefits and estimated values of these benefits, is set forth under “Potential Payments on Termination or Change in Control” elsewhere in this proxy statement. The CIC Policy does not provide for any tax gross-up to participants.

 

40


Table of Contents

Executive Officer Severance Policy. The Executive Officer Severance Policy (the “Severance Policy”) applies to our CEO and our executive officers elected by the Board of Directors (which includes all the NEOs). Under the terms of the Severance Policy, executive officers are entitled to severance benefits if their employment is terminated by the Company without “cause” outside of the change in control context and certain conditions are satisfied. In such cases, subject to the execution of a release and covenant agreement satisfactory to the Company, eligible executive officers will be entitled to the severance benefits described in “Potential Payments on Termination or Change in Control” elsewhere in this proxy statement. The Committee believes the Severance Policy provides a reasonable level of protection such that our executive officers are not concerned with potential personal economic exposure in the event of actions by the Company and so instead are focused on our business goals and objectives. The Committee periodically reviews both the Severance Policy and the CIC Policy to ensure they are providing appropriate protections compared to the estimated costs.

Former Executive Officers. As further described under “Potential Payments Upon Termination or Change in Control” in this proxy statement, in connection with Mr. Spierkel’s departure from the Company in April 2012 and Mr. Bradley’s departure in March 2013, the Committee approved their receipt of severance benefits consistent with the Severance Policy. In addition, because Mr. Spierkel had been with the Company for 15 years and had reached age 55 when his employment ended, he was eligible for the retirement-related partial vesting of equity awards under our equity compensation programs. The Committee believed that the amount of benefits Mr. Spierkel received upon his departure appropriately reflected his long tenure with the Company, including serving as CEO since 2005.

Employment Agreement with Alain Maquet. Mr. Maquet’s French employment contract states Mr. Maquet or the Company is required to provide the other with six months’ notice prior to termination for any reason other than cause. In addition, the Company has agreed that severance benefits under his original French employment contract are frozen and he will be provided severance pay equal to thirty-two months of average salary (defined as base salary and target annual bonus) upon termination of his employment by the Company for any reason other than cause. We also agreed that should Mr. Maquet be terminated for any reason other than cause during his current assignment to Belgium, Ingram Micro will repatriate Mr. Maquet and his family to France under similar relocation terms and conditions.

Internal Revenue Code Section 162(m) Policy

The Committee considers the anticipated tax treatment to us and our executive officers when reviewing our executive compensation and other compensation programs. While the tax impact of any compensation arrangement is one factor to be considered, such impact is evaluated in light of the Committee’s overall compensation philosophy and objectives. The Committee will consider ways to maximize the deductibility of executive compensation, while retaining the discretion it deems necessary to compensate officers in a manner commensurate with performance and the competitive environment for executive talent. Code Section 162(m) disallows a tax deduction for individual compensation exceeding $1 million in any taxable year for a public company’s chief executive officer and up to three other most highly compensated executive officers (other than the chief financial officer), unless the compensation qualifies as “performance-based compensation” within the meaning of Section 162(m). The Committee reserves the right to use its judgment to award compensation to our executive officers that may be subject to the deduction limit under Code Section 162(m) when the Committee believes that such compensation is appropriate, consistent with the Committee’s philosophy and in our and our shareholders’ best interests.

The Committee generally seeks to structure performance-based compensation in a manner that is intended to avoid the disallowance of deductions under Code Section 162(m). It is intended that both the short-term and long-term incentive compensation awarded by the Company is deductible as performance-based compensation. Nevertheless, there can be no assurance that our performance-based compensation will be treated as qualified performance-based compensation under Code Section 162(m), and the Committee retains full authority to grant non-deductible compensation.

 

41


Table of Contents

SUMMARY COMPENSATION TABLE

The following table sets forth information concerning total compensation earned or paid to our NEOs for services rendered to us during the 2012, 2011 and 2010 fiscal years.

 

Name and Principal
Position

  Year     Salary
($) (1)
    Bonus
($) (2)
    Stock
Awards
($) (3)
    Option
Awards
($)
    Non-Equity
Incentive Plan
Compensation
($) (4)
    All Other
Compensation
($) (5)
    Total
($)
 

Alain Monié (6)

    2012        840,501               4,453,150               1,613,670        34,169        6,941,490   

President and Chief

    2011        110,769               3,023,567               99,692        21,924        3,255,952   

Executive Officer

    2010        425,000               1,682,492                      7,028        2,114,520   

William D. Humes (7)

    2012        606,000               1,743,851               575,905        15,540        2,941,296   

Chief Operating and

    2011        520,000               899,185               561,732        12,890        1,993,807   

Financial Officer

    2010        500,000               823,391               596,050        6,640        1,926,081   

Keith W.F. Bradley

    2012        538,462               938,518               469,647        16,837        1,963,464   

Senior Executive Vice

    2011        525,000               844,837               775,555        13,010        2,158,402   

President and President,

    2010        510,000               823,391               682,584        8,740        2,024,715   

Ingram Micro North

America

               

Shailendra Gupta

    2012        647,027        147,329        968,794               124,100        143,252        2,030,502   

Senior Executive Vice

    2011        600,982        195,020        861,122               318,331        163,243        2,138,698   

President and President,

    2010        528,984               823,391               539,140        210,850        2,102,365   

Ingram Micro Asia Pacific

               

Alain Maquet

    2012        550,886               932,450               269,549        198,583        1,951,468   

Senior Executive Vice

    2011        576,454               861,122               458,637        255,074        2,151,287   

President and President,

    2010        530,480               823,391               597,851        331,102        2,282,824   

Ingram Micro EMEA

               

Gregory M. E. Spierkel (8)

    2012        261,539                             1,005,079        2,487,622        3,754,240   

Former Chief Executive

    2011        850,000               4,577,935               1,554,075        22,350        7,004,360   

Officer

    2010        850,000               3,364,966               2,171,325        12,577        6,398,868   

 

(1) Salary — The information provided is as of the last payroll period ending prior to the end of our fiscal year.

 

   

Mr. Maquet’s 2012 salary was paid in Euros and was converted to U.S. dollars for reporting purposes using the 2012 fiscal year average exchange rate as of December 29, 2012 of EUR 1 = US$1.2859.

 

   

Mr. Gupta’s 2012 salary was paid in Singapore Dollars and was converted to U.S. dollars for reporting purposes using the 2012 fiscal year average exchange rate as of December 29, 2012 of SGD 1 = US$0.8007.

 

(2) Mr. Gupta received a discretionary bonus in recognition of his launching and leading the Company’s BrightPoint integration effort and for driving expansion into the Middle East through the acquisition of Aptec.

 

(3) Stock Awards reflect the aggregate grant date fair value, calculated in accordance with ASC 718, for performance-based RSU awards granted during the respective year. Performance-based RSU awards granted during 2012 included an annual award granted to the NEOs on June 1, 2012, including the TSR RSUs which will only vest if the Company outperforms its designated peer group. The valuation assumptions and methodology used to determine such amounts are set forth in Notes 2 and 12 to our Consolidated Financial Statements included in our Form 10-K for the year ended December 29, 2012.

 

42


Table of Contents
(4) Non-Equity Incentive Plan Compensation for 2012 represents the 2012 EIAP that was paid in March 2013. Mr. Spierkel’s award was pro-rated for the time that he was with the Company in 2012. Mr. Spierkel also received his final $600,000 payment under the 2009 Retention Program in 2012. Mr. Gupta’s EIAP payment was converted using the 2012 fiscal year average exchange rate as of December 29, 2012 of SGD 1 = US$0.8007. Mr. Maquet’s EIAP payment was converted using the 2012 fiscal year average exchange rate as of December 29, 2012 of EUR 1 = US$1.2859.

 

(5) The amounts in this column for 2012 are itemized in the “All Other Compensation Table – Fiscal Year 2012” table below.

 

(6)   LOGO

The “Total Realized Compensation” shown above includes all cash compensation as disclosed in the Summary Compensation Table and any income on the exercise of stock options and RSUs released during that calendar year.

Over the past six years, Mr. Monié’s realized compensation has been lower than the disclosed compensation in the Summary Compensation Table. Mr. Monié was promoted to the position of President and Chief Operating Officer in 2007 and was provided relocation from Singapore to the United States as well as a $2,000,000 relocation bonus at that time. The income from the relocation bonus in addition to income tied to his expatriate compensation package and physical relocation was the primary driver behind his realized compensation reaching the level shown above. In 2008, Mr. Monié did not earn non-equity incentive plan compensation under the 2008 EIAP and only received his base salary and less than $20,000 in other compensation. Mr. Monié resigned from the Company on August 23, 2010, resulting in no annual bonus being earned during 2010 and the cancellation of all stock awards granted in 2010, which were valued at $1,682,492 on the date of grant. Mr. Monié was rehired by the Company on November 1, 2011 as President and COO. In January 2012, Mr. Monié was promoted to President and CEO.

 

(7) Mr. Humes, who had been our Chief Financial Officer, was promoted to Chief Operating and Financial Officer as of April 26, 2012.

 

(8) Mr. Spierkel retired as Chief Executive Officer as of January 20, 2012 but remained employed with Ingram Micro until April 15, 2012 to assist with the transition.

 

43


Table of Contents

All Other Compensation Table — Fiscal Year 2012

 

Name

   Company
Contributions
to Retirement
Savings Plans
($) (a)
     Health/
Welfare
Benefits
($) (b)
     Expatriate
Compensation
($) (c)
     Tax
Equalization
($) (d)
     Misc.
($) (e)
     Total All
Other
Compensation
($)
 

Alain Monié

     21,013         1,890                         11,266         34,169   

William D. Humes

     15,150         390                                 15,540   

Keith W.F. Bradley

     13,462         1,890                         1,485         16,837   

Shailendra Gupta

     97,054         647         45,551                         143,252   

Alain Maquet

     18,316         1,447         170,479         7,841         500         198,583   

Gregory M.E. Spierkel

     6,538         1,917                         2,479,167         2,487,622   

 

(a) Company Contributions to Retirement Savings Plans — Consists of employer contributions to qualified and nonqualified retirement savings plans and personal retirement accounts.

 

(b) Health/Welfare Benefits — Consists of executive physical examinations and executive long-term disability insurance premiums.

 

(c) Expatriate Compensation — For Mr. Maquet, consists of $77,154 in housing allowance for Belgium, $76,318 in dependent children education reimbursement and the remaining $17,007 consists of his transportation allowance, property management fees and Belgium representation pay. For Mr. Gupta, it consists of $43,238 in transportation allowances and $2,313 in parking.

 

(d) Tax Equalization — Consists of foreign taxes paid, tax settlements and other taxes related to foreign assignments that were paid by the Company in 2012 over and above the individual’s stay-at-home tax obligations.

 

(e)

Miscellaneous — Consists of the remainder of Mr. Monié’s relocation expenses for his move back to the U.S.; Mr. Bradley’s spouse travel; Mr. Maquet’s U.S. income tax return preparation (imputed); and Mr. Spierkel’s severance payment, which is the product of 1/12th the sum of his annual base salary ($850,000) and his annual bonus at 100% achievement ($1,275,000) multiplied by 14 years of service.

 

44


Table of Contents

PLAN-BASED AWARDS GRANTED IN LAST FISCAL YEAR

The following table provides information relating to plan-based awards granted to the NEOs during the 2012 fiscal year ended December 29, 2012.

GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR 2012

 

    Grant
Date
  Human
Resources
Committee
Meeting
Dates
Approving
Awards
    Estimated Future
Payouts Under
Non-Equity Incentive
Plan Awards
    Estimated Future
Payouts Under
Equity Incentive
Plan Awards
    Grant Date
Fair Value
of Stock
and Options
Awards
($)
 

Name

      Threshold
($)
    Target
($)
    Maximum
($)
    Threshold
(#)
    Target
(#)
    Maximum
(#)
   

Alain Monié

  (1) 06/01/12     03/06/12                                    80,183        80,183        1,399,995   
  (1) 06/01/12     03/06/12                             30,069        120,275        120,275        2,100,002   
  (1) 06/01/12     03/06/12                             3,608               120,275        738,489   
  (2) N/A     03/06/12        614,591        1,229,182        3,245,040                               
  (3) 02/01/12     01/16/12                             1,667        6,667        13,334        128,806   
  (3) 02/01/12     01/16/12                                    4,444        4,444        85,858   

William D. Humes

  (1) 06/01/12     03/06/12                                    32,990        32,990        576,005   
  (1) 06/01/12     03/06/12                             12,372        49,485        49,485        864,008   
  (1) 06/01/12     03/06/12                             1,485               49,485        303,838   
  (2) N/A     03/06/12        254,600        509,200        1,120,240                               

Keith W.F. Bradley

  (1) 06/01/12     03/06/12                                    17,755        17,755        310,002   
  (1) 06/01/12     03/06/12                             6,658        26,632        26,632        464,995   
  (1) 06/01/12     03/06/12                             799               26,632        163,520   
  (2) N/A     03/06/12        188,462        376,923        829,231                               

Shailendra Gupta

  (1) 06/01/12     03/06/12                                    18,328        18,328        320,007   
  (1) 06/01/12     03/06/12                             6,873        27,491        27,491        479,993   
  (1) 06/01/12     03/06/12                             825               27,491        168,795   
  (2) N/A     03/06/12        226,460        452,919        996,422                               

Alain Maquet

  (1) 06/01/12     03/06/12                                    17,640        17,640        307,994   
  (1) 06/01/12     03/06/12                             6,615        26,460        26,460        461,992   
  (1) 06/01/12     03/06/12                             794               26,460        162,464   
  (2) N/A     03/06/12        192,810        385,620        848,365                               

Gregory M.E. Spierkel

  (2) N/A     03/06/12        185,137        370,274        814,603                               

 

(1) Ingram Micro granted three separate awards of performance-based RSUs under our 2011 Incentive Plan on June 1, 2012 to reward achievement of financial goals that support increased shareholder value. The metrics are defined and discussed in more detail in “Compensation Discussion and Analysis” above.

 

(2) Award granted under the 2012 EIAP. Pursuant to the 2012 EIAP, the threshold value can be further reduced down to $0 as a result of poor working capital days performance. See the discussion above under “Compensation Discussion and Analysis — How Designed and Determined — Annual Executive Incentive Award Program”.

 

(3) Mr. Monié received additional grants of PT RSUs (4,444) and EPS/ROIC RSUs (6,667) on February 1, 2012 under the 2011 Performance Share Program in recognition of his promotion to President & Chief Executive Officer. Payout value presented in the table is based upon the closing price ($19.32) of Ingram Micro stock on the date of grant. See footnotes 1 and 2 above for additional information.

 

45


Table of Contents

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2012

The following table provides information relating to outstanding equity awards and stock vested held by the NEOs at December 29, 2012.

 

        Option Awards     Stock Awards  

Name

      Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
    Option
Exercise
Price ($)
    Option
Expiration

Date
    Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
    Market Value
of Shares or
Units of
Stock That
Have Not
Vested ($) (a)
    Equity Incentive
Plan Awards:
Number of
Unearned Shares,

Units or Other
Rights That Have
Not Vested (#)
    Equity Incentive
Plan Awards:
Market or Payout
Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested ($) (a)
 

Alain Monié:

               
      59,400        16.64        02/01/14                               
      53,250        14.04        06/30/14                               
      42,960        18.75        01/31/15                               
      47,370        15.59        06/30/15                               
      36,390        19.55        08/22/15                               
      35,550        18.45        08/22/15                               
  (1)                                        17,778        294,048   
  (2)                          11,852        196,032                 
  (3)                          141,483        2,340,129                 
  (4)                          4,444        73,504                 
  (4)                                        6,667        110,272   
  (5)                          80,183        1,326,227                 
  (6)                                        120,275        1,989,349   
  (7)                                        120,275        1,989,349   
   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Total:

      274,920            237,962        3,935,892        264,995        4,383,018   
               

William D. Humes:

               
      20,000        11.00        06/30/13                               
      17,100        16.64        02/01/14                               
      3,126        18.98        02/26/14                               
      12,460        14.04        06/30/14                               
      8,541        16.57        10/12/14                               
      25,410        18.75        01/31/15                               
      8,775        16.80        03/31/15                               
      47,370        15.59        06/30/15                               
      36,390        19.55        01/02/16                               
      35,550        18.45        07/02/16                               
      68,010        20.70        01/02/17                               
      77,580        17.80        01/01/18                               
  (8)                          46,686        772,186                 
  (9)                          8,970        148,364                 
  (1)                                        27,498        454,817   
  (2)                          18,332        303,211                 
  (5)                          32,990        545,655                 
  (6)                                        49,485        818,482   
  (7)                                        49,485        818,482   
   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Total:

      360,312            106,978        1,769,416        126,468        2,091,781   

 

46


Table of Contents
        Option Awards     Stock Awards  

Name

      Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
    Option
Exercise
Price ($)
    Option
Expiration

Date
    Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
    Market Value
of Shares or
Units of
Stock That
Have Not
Vested ($) (a)
    Equity Incentive
Plan Awards:
Number of
Unearned Shares,

Units or Other
Rights That Have
Not Vested (#)
    Equity Incentive
Plan Awards:
Market or Payout
Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested ($) (a)
 

Keith W.F. Bradley:

               
      20,850        16.64        02/01/14                               
      3,500        17.66        03/18/14                               
      5,760        20.00        01/02/15                               
      42,960        18.75        01/31/15                               
      36,390        19.55        01/02/16                               
      35,550        18.45        07/02/16                               
      68,010        20.70        01/02/17                               
      77,580        17.80        01/01/18                               
  (8)                          46,686        772,186                 
  (9)                          8,970        148,364                 
  (1)                                        25,836        427,327   
  (2)                          17,224        284,885                 
  (5)                          17,755        293,668                 
  (6)                                        26,632        440,493   
  (7)                                        26,632        440,493   
   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Total:

      290,600            90,635        1,499,103        79,100        1,308,313   
               

Shailendra Gupta:

               
      12,374        19.24        11/29/14                               
      9,600        19.55        01/02/16                               
      9,660        18.45        07/02/16                               
      5,340        20.70        01/02/17                               
      19,140        20.70        01/02/17                               
      6,892        20.21        07/31/17                               
      25,270        17.80        01/01/18                               
      30,505        18.21        01/31/18                               
  (8)                          46,686        772,186                 
  (9)                          8,970        148,364                 
  (1)                                        26,334        435,564   
  (2)                          17,556        290,376                 
  (5)                          18,328        303,145                 
  (6)                                        27,491        454,701   
  (7)                                        27,491        454,701   
   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Total:

      118,781            91,540        1,514,071        81,316        1,344,966   
               

Alain Maquet:

               
      15,090        18.75        08/01/14                               
      6,880        18.10        02/28/15                               
      21,540        19.55        01/02/16                               
      21,030        18.45        07/02/16                               
      40,260        20.70        01/02/17                               
      45,270        17.80        01/01/18                               
  (8)                          46,686        772,186                 
  (9)                          8,970        148,364                 
  (1)                                        26,334        435,564   
  (2)                          17,556        290,376                 
  (5)                          17,640        291,766                 
  (6)                                        26,460        437,648   
  (7)                                        26,460        437,648   
   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Total:

      150,070            90,852        1,502,692        79,254        1,310,860   

 

47


Table of Contents
        Option Awards     Stock Awards  

Name

      Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
    Option
Exercise
Price ($)
    Option
Expiration

Date
    Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
    Market Value
of Shares or
Units of
Stock That
Have Not
Vested ($) (a)
    Equity Incentive
Plan Awards:
Number of
Unearned Shares,

Units or Other
Rights That Have
Not Vested (#)
    Equity Incentive
Plan Awards:
Market or Payout
Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested ($) (a)
 

Gregory M.E. Spierkel:

               
      59,400        16.64        02/01/14                               
      37,239        17.20        03/22/14                               
      103,320        14.04        06/30/14                               
      83,340        18.75        01/31/15                               
      91,890        15.59        06/30/15                               
      95,670        19.55        01/02/16                               
      93,480        18.45        07/02/16                               
      215,760        20.70        01/02/17                               
      287,370        17.80        1/1/2018                               
  (8)                          190,792        3,155,700                 
  (9)                          36,656        606,290                 
  (1)                                        139,998        2,315,567   
  (2)                          93,332        1,543,711                 
   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Total:

      1,067,469            320,780        5,305,701        139,998        2,315,567   

 

(a) All values are based on the closing price ($16.54) of Ingram Micro stock on the last trading day of the fiscal year (December 28, 2012).

 

(1) Performance-vesting RSUs were granted on March 1, 2011 to reward achievement of goals that support increased shareholder value, and will be earned and become vested in 2014 if Ingram Micro achieves pre-established financial performance goals (EPS growth and average ROIC) over a three-year performance measurement period (2011-2013). If specific threshold performance levels are not met, the awards will be forfeited. The number in the table represents the amount that will vest upon 100% achievement of target results. Mr. Monié’s award was granted on November 1, 2011 and has the same measurement/performance criteria as all other NEOs’ awards.

 

   

Maximum at 200% for Mr. Monié is 35,556 units.

 

   

Maximum at 200% for Mr. Humes is 54,996 units.

 

   

Maximum at 200% for Mr. Bradley is 51,672 units.

 

   

Maximum at 200% for Messrs. Gupta and Maquet is 52,668 units.

 

   

Maximum at 200% for Mr. Spierkel is 279,996 units.

 

(2) Performance-vesting RSUs were granted on March 1, 2011 under the 2011 Performance Share Program. The 2011 PT result exceeded the requirement resulting in 100% of the RSUs being earned and so they vest 50% on March 1, 2013 and 50% on March 1, 2014.

 

(3) Mr. Monié received an additional grant of PT RSUs on November 1, 2011, which would be earned if Ingram Micro achieved pre-established PT performance goals over a one-year performance measurement period (fiscal year 2012). On March 5, 2013, the Committee certified the Company’s PT performance results for fiscal 2012, which resulted in 100% achievement of this award (the amount presented in the table), which will vest 100% on November 1, 2014.

 

(4) Mr. Monié received additional grants of EPS/ROIC RSUs (6,667) and PT RSUs (4,444) on February 1, 2012 under the 2011 Performance Share Program in recognition of his promotion to President & Chief Executive Officer. The number in the table represents the amount that will vest upon 100% achievement of target results, which for the PT RSUs was earned and will vest in 2013 and 2014.

 

48


Table of Contents
(5) Performance-vesting RSUs were granted on June 1, 2012 under the 2012 Performance Share Program. The 2012 PT result exceeded the requirement resulting in 100% achievement of the RSUs, which will vest 50% on June 1, 2014 and 50% on June 1, 2015.

 

(6) Performance-vesting RSUs were granted on June 1, 2012 to reward achievement of goals that support increased shareholder value, and will be earned if Ingram Micro achieves pre-established financial performance goals (EPS growth and average ROIC) over a three-year performance measurement period (2012-2014). If specific threshold performance levels are not met, no shares will be issued in 2015 in respect of such RSUs. The number in the table represents the amount that will vest upon 100% achievement of target results, which is also the maximum amount.

 

(7) Performance-vesting RSUs were granted on June 1, 2012 to reward achievement of goals that support increased shareholder value, and will be earned if Ingram Micro’s TSR over a three-year performance measurement period (2012-2014) exceeds the three-year TSR of a specific peer group over the performance measurement period. If Ingram Micro’s three-year TSR does not exceed the peer group’s TSR, no shares will be issued in 2015 in respect of such RSUs. The number in the table represents the amount that will vest upon Ingram Micro significantly exceeding peer group results, which is the maximum amount.

 

(8) Performance-vesting RSUs were granted under the 2010 Performance Share Program on March 1, 2010 to reward achievement of goals that support increased shareholder value, which would be earned if Ingram Micro achieved pre-established financial performance goals (EPS growth and average ROIC) over a three-year performance measurement period (2010-2012). On March 5, 2013, the Committee certified the Company’s 2010 Performance Share Program’s performance results at 173.5% achievement of target results (the amount presented in this table). The shares vested on March 5, 2013.

 

(9) Performance-vesting RSUs were granted on March 1, 2010 under the 2010 Performance Share Program. The 2010 PT result exceeded the requirement, resulting in 100% payout of the RSUs that were granted. On March 8, 2011, the Committee certified the Company’s PT performance results for fiscal 2010, which resulted in 100% achievement of this award and which vested 50% on March 1, 2012 and 50% on March 1, 2013. The number in the table represents the shares that vested on March  1, 2013.

OPTION EXERCISES AND STOCK VESTED INFORMATION FOR FISCAL YEAR 2012

The following table provides information relating to option exercises and RSU vestings for the NEOs for the period from January 1, 2012 through December 29, 2012.

 

     Option Awards      Stock Awards  

Name

   Number of
Shares

Acquired on
Exercise (#)
     Value
Realized on

Exercise
($) (1)
     Number of
Shares

Acquired  on
Vesting (#)
     Value
Realized on
Vesting ($) (2)
 

Alain Monié

                               

William D. Humes

     52,610         166,101         97,663         1,854,208   

Keith W.F. Bradley

                     93,117         1,769,835   

Shailendra Gupta

                     88,572         1,685,479   

Alain Maquet

     22,470         64,155         72,652         1,382,724   

Gregory M.E. Spierkel

     288,660         2,275,886         420,702         7,964,780   

 

(1) Value realized is the difference between the fair market value of a share of the Company’s common stock on the day of exercise and the exercise price.

 

(2) Value realized is calculated by multiplying the gross number of vested RSUs by the closing price of the Company’s common stock on the day the vesting occurred or, if the vesting occurred on a day the NYSE was closed for trading, the previous trading day.

 

49


Table of Contents

NONQUALIFIED DEFERRED COMPENSATION FOR FISCAL YEAR 2012

The following table provides information relating to nonqualified deferred compensation balances and contributions of the NEOs for the period indicated.

 

Name

   Executive
Contributions
in FY 2012
($) (1)
     Registrant
Contributions
in FY 2012
($) (1)
     Aggregate
Earnings
in FY 2012
($)
     Aggregate
Withdrawals/
Distributions
in FY 2012
($)
    Aggregate
Balance
at End
of FY 2012
($)
 

Alain Monié

     132,864         16,848         5,176                154,888   

William D. Humes

     55,297         12,150         120,427                1,100,500   

Keith W.F. Bradley

     95,308         10,693         116,831                1,242,054   

Shailendra Gupta

                                      

Alain Maquet

                                      

Gregory M.E. Spierkel

     156,258         1,846         155,208         (1,575,226     112,543   

 

(1) Executive officers who are paid on the U.S. payroll may voluntarily participate in the Supplemental Plan, a nonqualified deferred compensation arrangement. The Supplemental Plan, in general, operates to restore 401(k) plan benefits, including Company matching contributions that were reduced or limited by the Internal Revenue Code. Under terms of the Supplemental Plan, participants may elect to defer up to a combined 50% of their base salary and annual bonus between the Supplemental Plan and the 401(k) Plan. In conformance with Section 409A of the Code, deferral and distribution elections are made by each participant prior to the beginning of each calendar year. The Company’s matching contribution is 50% of the first 5% of eligible compensation deferred to the Ingram Micro 401(k) Plan and the Supplemental Plan. Participants may elect to have earnings, or losses, credited to their Supplemental Plan account as if these accounts were invested in the various investment options available under the Company’s 401(k) Plan, but excluding investment in the Ingram Micro Stock Fund. Participants may redirect their investment in the various investment fund options on a daily basis. Account balances are disbursed to participants upon their termination of employment with the Company based on the participant’s election prior to year of deferral. Participants may elect to receive their account balance as a lump-sum cash payment or in installment payments over 5, 10 or 15 years.

 

     Executive contributions are not separately shown in the “Summary Compensation Table” but instead are deferrals from individuals’ salary and/or bonus amount shown in the “Summary Compensation Table”.

 

50


Table of Contents

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

Ingram Micro maintains incentive programs, including award agreements, and Executive Officer Severance and Change in Control Policies which require Ingram Micro to provide payments and benefits to the NEOs in the event of a qualifying termination of employment with Ingram Micro and/or a change in control of Ingram Micro.

The chart below describes the termination provisions of each program and the award agreements, as well as any payments and benefits under the Executive Officer Severance and Change in Control Policies assuming the last date of employment for the NEO was the end of Ingram Micro’s fiscal year, December 29, 2012 (and therefore the cash incentive award would be considered “earned”) and/or that the change in control occurred on December 29, 2012, as applicable. These terms apply to all NEOs except those covered under individual agreements which are explained later in this section.

 

   

Short Term Incentive —

Cash (1)

 

Long-Term

Incentives —

Performance Shares and

Cash

 

Long-Term Incentive —

Stock Options

 

Severance Pay and

Benefits (Under

Severance Policy or CIC

Policy) (2)

Change in Control

(No Termination)

  None   If award is not assumed or substituted with an equivalent award by the successor corporation, it will become fully vested, and any performance targets applicable to the award shall be treated as satisfied.   If option is not assumed or substituted with an equivalent award by the successor corporation, it will become fully vested.   None
Qualifying Termination in Connection with Change in Control   Under CIC Policy, a prorated target bonus for the year of termination will be paid (subject to signing release of claims).   Any performance targets applicable to these awards shall be treated as satisfied and forfeiture restrictions shall lapse. Award becomes fully vested.   Options become fully vested and remain exercisable through the earlier of the second anniversary of the termination date or expiration date per the terms of the grant.   1.5 times (or 2 times for the CEO) the sum of (i) the officer’s annual base salary, (ii) target annual bonus and (iii) the annualized cost of the Company-sponsored medical, dental and vision insurance benefits in effect on the date of termination. Participation in an outplacement program for up to one year, subject to a maximum cost of $20,000.

 

51


Table of Contents
   

Short Term Incentive —

Cash (1)

 

Long-Term

Incentives —

Performance Shares and

Cash

 

Long-Term Incentive —

Stock Options

 

Severance Pay and

Benefits (Under

Severance Policy or CIC

Policy) (2)

Termination for Cause   None   Award shall immediately be cancelled.   Options granted before May 30, 2003: 60 or 90 days to exercise vested options, in accordance with applicable stock option agreement. All other vested and unvested options are cancelled. The Committee, at its sole discretion, may cancel vested but unexercised options.   None
Voluntary Termination   Any earned payment based on actual 2012 Company performance under the terms of the 2012 EIAP.   Award shall immediately be cancelled.   60 or 90 days to exercise vested stock options, in accordance with applicable stock option agreement. All unvested options are cancelled.   None
Retirement (3)   Any earned payment based on actual 2012 Company performance under the terms of the 2012 EIAP.  

The number of units granted during retirement year will be prorated based on the number of full months of service from the grant date through the retirement date divided by 12.

The restrictions will lapse in accordance with the original grant agreement.

  Options will continue to vest in accordance with the original vesting schedules. Executive has five years following the date of retirement to exercise any vested option, provided the option period does not expire first.   None

 

52


Table of Contents
   

Short Term Incentive —

Cash (1)

 

Long-Term

Incentives —

Performance Shares and

Cash

 

Long-Term Incentive —

Stock Options

 

Severance Pay and

Benefits (Under

Severance Policy or CIC

Policy) (2)

Involuntary “Not for Cause” Termination  

Any earned payment based on actual 2012 Company performance under the terms of the 2012 EIAP.

 

In the case where termination date is not the last day of the year, the executive will receive a prorated EIAP payment at the time payments are made under that year’s program.

  The EPS/ROIC & TSR RSUs will be prorated based on the number of full months of service following the grant date through the termination date divided by 36 (with a minimum 12 months participation required). The PT RSUs are cancelled. The restrictions on awards will lapse according to the original grant agreement.   60 or 90 days to exercise vested stock options, in accordance with the applicable stock option agreement; all unvested options are cancelled.  

Executives with less than 12 years of service: payment equal to the sum of their annual base salary and target annual bonus in effect on termination date.

Executives with more than 12 years of service capped at 24 months for the CEO and 18 months for all other NEOs: payment equal to the number of full years of service times one-twelfth of the sum of the annual base salary and target annual bonus in effect on termination date.

Participation in an outplacement program for up to one year following the termination date, subject to a maximum cost of $20,000.

Death   Any earned payment based on actual 2012 Company performance under the terms of the 2012 EIAP.   Eligible for full award payment, if any, based on the Company performance during the measurement period as if the executive had remained employed through the end of the performance measurement period. PT RSUs vest immediately upon the performance measure being met.   All unvested options immediately vest and estate has one to five years following the date of death to exercise unless the options expire first.   None

 

53


Table of Contents
   

Short Term Incentive —

Cash (1)

 

Long-Term

Incentives —

Performance Shares and

Cash

 

Long-Term Incentive —

Stock Options

 

Severance Pay and

Benefits (Under

Severance Policy or CIC

Policy) (2)

Disability   Any earned payment based on actual 2012 Company performance under the terms of the 2012 EIAP.   Eligible for full award payment, if any, based on the Company performance during the measurement period as if the executive had remained employed through the end of the performance measurement period. PT RSUs vest immediately upon the performance measure being met.   All unvested options immediately vest and executive has one to five years following the date of disability to exercise, in accordance with the applicable stock option agreement, unless the options expire first.   None

 

(1) Payment to be calculated and paid on the same basis and at the same time as the annual bonus payments to actively employed Ingram Micro executives under the 2012 EIAP.

 

(2) Severance benefits provided under the Severance Policy and the CIC Policy are subject to the participant’s execution of a release of claims and covenant agreement satisfactory to the Company and are payable in a lump sum cash payment.

 

(3) Prior to January 1, 2007, the definition of retirement for long-term equity incentives under our equity incentive plan was 50 years of age and a minimum of five years of service. Effective January 1, 2007, the definition of retirement under our equity incentive plan for awards granted to participants was amended to provide that normal retirement is defined as age 65 or greater with five or more years of service and early retirement is defined as age 55 or greater with 10 or more years of service. These retirement provisions are applicable to all NEOs.

Payments Upon Termination Table

For purposes of this analysis, we assumed:

 

a. the last date of employment for the NEO (other than Mr. Spierkel, as described below) is the last business day of our last fiscal year, December 29, 2012;

 

b. annual base salary at termination is equal to salary as of December 29, 2012;

 

c. annual target incentive at termination is equal to target incentive as of December 29, 2012; and

 

d. estimated value of accelerated vesting of equity is based on the closing price of our stock ($16.54) on December 28, 2012 (the last trading day of our fiscal year) less, in the case of stock options, the applicable exercise price.

 

54


Table of Contents

Based on these assumptions, the amount of compensation payable to each NEO in each potential situation is listed in the table below:

 

          Long-Term Incentives      Benefits & Perquisites        
    Short Term
Incentive
    Stock
Options &
Performance
Shares (1)
    Severance
Pay
     Proceeds or
Health
Premiums
    Life
Insurance
Disability
Benefits
     Outplacement     Repatriation/
Relocation
Expense
    Total  

Alain Monié

                 

Change in Control Termination

  $ 1,275,000      $ 7,068,049      $ 4,250,000       $ 31,801      $       $ 20,000      $      $ 12,644,850   

Voluntary Termination

    1,613,670                                                    1,613,670   

Involuntary Not for Cause Termination

    1,613,670        247,085        2,125,000                        20,000               4,005,755   

Death (2)

    1,613,670        7,068,049                949,692                              9,631,411   

Disability

    1,613,670        7,068,049                       380,833                       9,062,552   

William D. Humes

                 

Change in Control Termination

    585,000        3,346,536        1,852,500         27,877                20,000               5,831,913   

Voluntary Termination

    575,905                                                    575,905   

Involuntary Not for Cause Termination

    575,905        1,050,114        1,440,833                        20,000               3,086,852   

Death (2)

    575,905        3,346,536                836,732                              4,759,173   

Disability

    575,905        3,346,536                       364,167                       4,286,608   

Keith W.F. Bradley (3)

                 

Change in Control Termination

    385,000        2,530,444        1,402,500         20,082                20,000               4,358,026   

Voluntary Termination

    479,710                                                    479,710   

Involuntary Not for Cause Termination

    479,710        1,466,580        935,000                        20,000