UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD JUNE 8, 2011

 

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 8, 2011, at 10:00 a.m. local time. We are holding this meeting:

 

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

 

2.    To consider an advisory “say on pay” 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;

 

3.    To consider an advisory “say on frequency” vote regarding the frequency of the vote on our executive compensation program (once every year, every two years or every three years);

 

4.    To consider an amendment and restatement of the Ingram Micro Inc. Amended and Restated 2003 Equity Incentive Plan and consolidation of the Ingram Micro Inc. 2008 Executive Incentive Plan into the 2011 Ingram Micro Incentive Plan, including the authorization of an additional 13,500,000 shares of common stock issuable under the plan;

 

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

 

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

 

The shareholders of record at the close of business on April 11, 2011 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 8, 2011: This Proxy Statement, along with the 2010 Annual Report to Shareholders, is available on the following website: www.edocumentview.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/us/ecomms.

 

 

TABLE OF CONTENTS

 

 

1600 East Saint Andrew Place
Santa Ana, California 92705

 

 

This proxy statement is furnished to you by the Board of Directors of Ingram Micro (the “Board”) and contains information related to the 2011 annual meeting of our shareholders to be held on Wednesday, June 8, 2011, 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 19, 2011. It is first being mailed to our shareholders on April 19, 2011.

 

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

 

The purpose of the 2011 annual meeting is:

 

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

 

2.    To consider an advisory “say on pay” 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;

 

3.    To consider an advisory “say on frequency” vote regarding the frequency of the vote on our executive compensation program (once every year, every two years or every three years);

 

4.    To consider the 2011 Ingram Micro Incentive Plan, including the authorization of an additional 13,500,000 shares of common stock issuable under the plan;

 

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

 

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

 

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.”

 

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.

 

Holders of record of our Class A common stock at the close of business on April 11, 2011 (“Record Date”) may vote at the annual meeting. As of the Record Date, the Company had 161,027,566 issued and outstanding shares of Class A common stock. Each share of Ingram Micro common stock that you own entitles you to one 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:

 

 

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 June 3, 2011. If you do not provide the trustee with your voting instructions, the trustee will not vote on your behalf.

 

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.

 

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 ten 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 of the advisory “say on pay” 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 (see “Proposal No. 2 – Advisory Vote on Executive Compensation”);

 

3.    For a “1 YEAR” frequency in the advisory “say on frequency” vote regarding the frequency of the vote on our executive compensation program (once every year, every two years or every three years) (see “Proposal No. 3 – Advisory Vote on the Frequency of Holding Future Advisory Votes on Executive Compensation”);

 

4.    “FOR” approval of the 2011 Ingram Micro Incentive Plan, including the authorization of an additional 13,500,000 shares of common stock issuable under the plan (“Proposal No. 4 – Approval of 2011 Incentive Plan”); and

 

5.    “FOR” ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current year (see “Proposal No. 5 – 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.

 

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 50% of the votes cast with respect to the director’s election). Abstentions and broker nonvotes 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 voting, so abstaining has the same effect as a vote “AGAINST” the proposal.

 

With respect to Proposal No. 3, the advisory vote on the frequency of holding future advisory “say on pay” votes on executive compensation, you may vote “1 YEAR,” “2 YEARS,” “3 YEARS” or “ABSTAIN.” If you abstain from voting on Proposal No. 3, the abstention will not have an effect on the outcome of the vote.

 

With respect to Proposal No. 4, approval of the 2011 Ingram Micro 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 2011 Plan, (i) each of the Ingram Micro Inc. Amended and Restated 2003 Equity Incentive Plan (the “2003 Plan”) and the Ingram Micro Inc. 2008 Executive Incentive Plan (the “Executive Incentive Plan”) will continue in full force in accordance with its terms as in effect immediately prior to the adoption of the 2011 Plan, and the 2011 Plan will not take effect, and (ii) the Company may continue to grant awards under each of the 2003 Plan and the Executive Incentive Plan subject to the terms and conditions set forth therein. 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. 5 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 voting, 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, 3 or 4 if it does not receive voting instructions from you. Such broker nonvotes will not have an effect on the outcome of the votes.

 

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.

 

The Company will bear the costs of soliciting proxies.

 

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 10 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.

 

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, public sector, and other business experience, the majority as senior executives in industries different from that of 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, 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, the ability to maintain a collegial environment, and 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 Record Date):

 

 

Mr. Atkins, age 60, has recently retired from the position of Senior Executive Vice President and Chief Financial Officer of Wells Fargo & Company in San Francisco, California. 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. Mr. Atkins brings to the Board extensive accounting and financial skills important in the understanding and oversight of our financial reporting, enterprise and operational risk management and corporate finance, tax and treasury matters.

 

 

Ms. Heisz, age 50, 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. Before joining Lazard in 2003, Ms. Heisz was 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 and leading the Gaming and Leisure Group. She was also a vice president at Salomon Brothers, where she developed the firm’s industry-leading gaming practice and a senior consultant specializing in strategic information systems

at Price Waterhouse. Ms. Heisz is a member of the Board of Directors of HCC Insurance Holdings, Inc. She previously served on the Board of Directors of International Game Technology from June 2003 to October 2008 and Eldorado Resorts LLC from November 1996 to March 2008. Ms. Heisz’s career in the investment banking industry, deep understanding of capital markets and her previous board experience bring to the Board expertise in oversight of our financial reporting, enterprise and operational risk management and corporate finance, tax and treasury matters.

 

 

Mr. Ingram, age 49, is Chairman of Ingram Industries Inc. and CEO of Ingram Content Holdings, Ingram Industries’ operating division of Ingram Book Group related companies, Ingram Digital related companies, and Lightning Source Inc., a print-on-demand and digital distribution company. 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 our Acting Chief Executive Officer from May 1996 to August 1996 and held a variety of positions at the Company from 1991 through 1994, including Vice President of Purchasing and 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 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.

 

 

Mr. Ingram, age 50, 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.

 

 

Dr. Laurance, age 65, is the owner of Laurance Enterprises LLC, a private advisory services company. He is also the owner of Nightingale Properties LLC, a Hawaiian real estate development 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 director of the Saint John’s Health Center and serves on the Board of Trustees of the Polytechnic School. He also serves on the Board of Trustees of the Children’s Bureau 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. from 1994 to 2008. 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 important in the Board’s oversight of management.

 

Ms. Levinson, age 69, 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 November 2006 through June 2007, Ms. Levinson was also Executive Chair of XI Technologies. 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 DemandTec, Inc. Ms. Levinson’s executive and consulting career brings to the Board 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.

 

 

Mr. McGregor, age 55, 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 led Microsoft’s original Windows team. 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 to the Board significant IT industry business knowledge to provide insight on Ingram Micro strategy, compensation practices, risk management and implementation of sound corporate governance practices for the company.

 

 

Mr. Smith, age 67, 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 such 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 from April 2005 to June 2006 and on the Board of Directors of Alliant Techsystems from December 1997 to August 2009. Mr. Smith’s senior executive positions in large multi-national, complex corporations bring to the Board in-depth knowledge of business operations, strategy and corporate governance. With his experience on audit committees of other public companies, Mr. Smith provides strong accounting and financial skills important in the understanding and oversight of our financial reporting and corporate governance matters.

 

Mr. Spierkel, age 54, has been our Chief Executive Officer since June 2005. He previously served as President from March 2004 to June 2005, as Executive Vice President and President of Ingram Micro Europe from June 1999 to March 2004, and as Senior Vice President and President of Ingram Micro Asia-Pacific from July 1997 to June 1999. Prior to joining Ingram Micro, Mr. Spierkel was Vice President of Global Sales and Marketing at Mitel Inc., a manufacturer of telecommunications and semiconductor products, from March 1996 to June 1997 and was President of North America at Mitel from April 1992 to March 1996. Mr. Spierkel is a member of the Board of Directors of PACCAR. As a seasoned executive and Chief Executive Officer of Ingram Micro, Mr. Spierkel brings in-depth knowledge of Ingram Micro business operations and strategy that is important to the Board’s oversight of long-term strategy, succession planning, enterprise risk management, compensation and corporate governance practices for the Company.

 

 

Mr. Wyatt, age 75, 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 Chairman of the Universities Research Association. He previously served on the Board of Directors of Hercules Incorporated from August 2001 to November 2008 and El Paso Corporation from October 1999 to May 2009. 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 on the Board and the Company, and deep understanding of Ingram Micro’s business and operations, corporate governance, enterprise risk management and financial accounting requirements.

 

The Board of Directors held 10 meetings during fiscal year 2010. 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 2010. 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 2010 annual meeting of shareholders on June 9, 2010 (other than Mr. McGregor who joined the Board after the 2010 annual meeting).

 

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 or restricted stock/restricted stock units and meeting fees for attending meetings of the Board and Board 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 and restricted stock/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 new calendar year or within 30 days of initial appointment or election to the 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 partial year service. In addition,

the mix of cash, stock options and restricted stock/restricted stock units for the annual award is subject to the following assumptions and restrictions:

 

•    Cash. On December 1, 2010, the Board approved certain changes to our director compensation policy. If cash is selected as a component of compensation, the amount that may be selected by directors is subject to the following terms:

 

 

 

 

 

No minimum amount applies with respect to directors who do not serve as Audit Committee members or committee chairs.

 

Prior to December 1, 2010, the amount of cash retainer that could be selected by directors, other than committee chairs and the NEC, ranged from $0 to $70,000. Committee chairs were paid a minimum of $15,000 cash and could have elected a maximum amount of $85,000. The Audit Committee chair was paid a minimum of $20,000 in cash and could have elected a maximum of $90,000. The NEC could have selected cash compensation ranging from $0 to $170,000.

 

Board members are allowed to defer 100% of their cash compensation in accordance with Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”) and Department of Treasury regulations and other interpretive guidance issued thereunder.

 

•    Equity-based Compensation. Equity-based compensation must be selected by directors as a component of compensation. The equity-based compensation may consist of stock options, restricted stock, restricted stock units or a combination thereof and, pursuant to the changes to our director compensation policy adopted by the Board on December 1, 2010, is required to have an annual value of at least $130,000 for directors other than the NEC, and $260,000 for the NEC. Prior to December 1, 2010, the equity-based compensation was required to have an annual value of at least $110,000 for directors other than the NEC, and $260,000 for the NEC.

 

Pursuant to the changes to our director compensation policy adopted by the Board on December 1, 2010, the aggregate amount of the annual cash retainer and the value of the annual equity-based compensation selected by the director may not exceed the following amounts:

 

 

Prior to December 1, 2010, the aggregate amount of the annual cash retainer and the value of the annual equity-based compensation selected by the director could not exceed $180,000 for directors, other than committee chairs and the NEC, $195,000 for committee chairs, other than the Audit Committee chair, $200,000 for the Audit Committee chair and $430,000 for the NEC.

 

•    Option Awards. Options are granted as nonqualified stock options. Pursuant to the changes to our director compensation policy adopted by the Board on December 1, 2010, options will be granted to directors on the first trading day of March of each calendar year. Prior to December 1, 2010, options were granted to directors at the time of the annual stock option grant made to our management each year (the “management grant date”). For 2010 awards, the management grant date was March 1, 2010 and number of options granted was based on the dollar value of the amount of stock options selected, divided by the value per share of the Company’s stock utilizing the closing price on the 15th of the month prior to grant date as the “stock value” to determine the appropriate Black-Scholes value per option, rounded up to the next whole share. The value per share was determined in accordance with Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“ASC 718”). The options have an exercise price equal to the closing price of our common stock on the NYSE on the date of grant, vest one-tenth per month and have a term of ten years less one day.

 

•    Restricted Stock/Restricted Stock Units. Restricted stock and/or restricted stock units may also be granted to directors. Pursuant to the changes to our director compensation policy adopted by the Board on December 1, 2010, restricted stock and/or restricted stock units will be granted to directors on the first trading day of March of each calendar year. Prior to December 1, 2010, restricted stock and/or restricted stock units were granted to directors on the management grant date. The number of shares granted are equal to the dollar value of the amount of restricted stock 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. Restrictions on the restricted shares granted in 2010 lapsed and shares underlying the restricted stock units granted in 2010 vested on December 31, 2010. Restricted stock units may be deferred in accordance with Section 409A and Department of Treasury regulations and other interpretive guidance issue thereunder.

 

Meeting Fees. Meeting fees were suspended in 2010. On December 1, 2010 the Board amended the director compensation policy to eliminate meeting fees altogether.

 

2010 Compensation of Non-Employee Directors. The following table lists the 2010 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 NEC and for committee chairs.

 

 

NON-EMPLOYEE DIRECTOR COMPENSATION
(for fiscal year 2010)

 

 

 

 

 

 

Stock Ownership Requirement. Each director is required to achieve and maintain ownership of at least 15,000 shares of our common stock (with vested but unexercised stock options counted as owned shares) beginning five years from the date of his or her election to the Board. All current directors, with the exception of Mr. McGregor who joined the Board mid-year in 2010, meet this stock ownership requirement.

 

Other Information. Each director is also reimbursed for expenses incurred in attending meetings of the Board and Board committees. Each director is also 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.

 

Our Board has standing Audit, Executive, Governance and Human Resources Committees. The 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 the Proxy Statement.

 

 

 

 

Audit Committee — 12 meetings in 2010. 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 — 2 meetings in 2010. 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 — 6 meetings in 2010. 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 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 2010. 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.

 

 

 

 

Generally, at the last Human Resources Committee meeting of each fiscal year, the following actions are approved or reviewed:

 

 

 

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 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 meet in executive session, without any members of management, at each regular meeting.

 

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 Articles 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 50% of the 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 election that is not a contested 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. If an incumbent director’s resignation is not accepted, he or she will continue to serve until the next annual meeting and until his or her successor is duly elected, or until his or her earlier resignation or removal.

 

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 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 of 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 discussed under “Audit Committee,” “Human Resources Committee” and “Governance Committee” above; see also “Information on Compensation Risk Assessment”). 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 the fact that our Chairman of the Board attends virtually all committee meetings and that committee reports are provided 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 2011, 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 and Asia Pacific), including 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 2011, 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 all of 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 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.

 

The Board of Directors adopted director independence standards as part of the Guidelines. These 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 2011.

 

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, including certain arm’s-length, ordinary course commercial relationships between the Company and Wells Fargo (where Mr. Atkins previously served as an executive officer) relating to a sublease between a Company subsidiary and a subsidiary of Wells Fargo and nonrecourse sales of receivables assets by the Company to Wells Fargo. The aggregate amounts involved in these commercial transactions did not exceed the greater of $1 million or 2% of the consolidated gross revenues of either the Company or Wells Fargo.

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, as well as all other directors serving on the Board 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 Gregory Spierkel. Mr. Spierkel is considered an inside director because of his current employment as a senior executive of the Company. All of the members of the Human Resources, Audit and Governance Committees are independent.

 

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 Michael Smith, Leslie Heisz, Howard Atkins and Scott McGregor 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.

 

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

 

 

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 directors must comply with the eligibility, advance notice and other provisions of the policy. Under the policy, the shareholder 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.

 

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

 

 

Our code of conduct, the Guidelines, and shareholder nominations policy and 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 below under “Annual Report,” we will provide copies of our code of conduct, the Guidelines, shareholder nominations policy and committee charters without charge.

 

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 41 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 4, 2011. At March 4, 2011, there were 160,645,681 shares of common stock outstanding (excluding treasury shares).

 

 

 

 

 

 

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 year 2010 with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, except for one report relating to sales on the same date under a 10b5-1 plan for Mr. John R. Ingram and one report relating to sales on the same date under a 10b5-1 plan for Mr. Orrin H. Ingram, which, due to our administrative error, were untimely filed on behalf of each of them.

 

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. No material related person transactions were identified during fiscal year 2010.

 

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 2011 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
Scott A. McGregor

 

In this section we provide an explanation and analysis of the material elements of the compensation provided to our Chief Executive Officer, our Chief Financial Officer and our three other most highly compensated officers (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 in 2010 are as follows:

 

 

The Company operates in the extremely competitive, rapidly changing, and low-margin high-technology distribution and service industry. The broad objectives of the executive compensation program established by the Company and approved by the Human Resources Committee (“the Committee”) are:

 

 

While the following portions of this Compensation Discussion and Analysis will explain in more detail the considerations that went into the base pay, annual incentive, and long-term incentive award decisions for 2010, the following summarizes the decisions of the Committee, which were affected by the economic downturn of late 2008 and 2009 and the improving economic environment that began toward the end of 2009.

 

 

 

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 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.

 

 

The peer group consists of:

 

 

This comparator peer group is summarized by the following measures:

 

 

 

 

 

 

2.    Internal equity is important.

 

 

3.    At executive management levels, compensation increasingly focuses on longer-term shareholder value creation.

 

 

 

 

 

Pay-for-Performance and CEO Compensation: Ingram Micro’s target total compensation mix is 82% performance-based for the CEO and 68% for the other NEOs. Our emphasis on at-risk compensation resulted in total compensation that is strongly correlated to total shareholder return (“TSR”) over the past three years. Comparing the CEO’s total compensation against annual TSR demonstrates this relationship.

 

 

 

 

 

Ingram Micro’s three-year TSR (measured from the closing price on December 31, 2007 to the closing price on December 31, 2010) was in line with the S&P 500 and its industry group, slightly below the comparator group, and at the 75th percentile of the technology distributor peer group. However, in 2010, Ingram Micro’s one-year TSR (measured from the closing price on December 31, 2009 to the closing price on December 31, 2010) was between the 28th percentile and the 34th percentile compared to these groups. Over this one-year period where we lagged the market, the CEO’s actual compensation decreased by 19%, demonstrating a strong pay-for-performance relationship.

 

 

 

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, why the metric was selected and the compensation programs which use that metric.

 

 

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 based on benchmarking results or recommendations received from its independent outside advisor. 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.

 

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 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, market surveys as well as Ingram Micro’s overall Company 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 November 2009 and determined that increases to executive officer pay in the beginning of 2010 would be premature given the economic environment and as a result froze the NEOs salaries until the end of 2010. The Committee subsequently met in November 2010 and determined that the economy and the Company’s profitability had recovered enough to justify resuming annual merit increases for the Company’s senior leadership team, including the NEOs. The increase for each of the NEOs was less than 5%. In keeping with the pay philosophy of focusing on performance based compensation, the Committee decided to provide the CEO an increase only in his 2011 annual equity based long-term incentive award.

 

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

 

 

In early 2009, the Committee approved management’s recommendation to implement a cost saving measure in North America by reducing the annual target incentive awards for all associates in the North American region, including Mr. Bradley (who is responsible for North American operations). In January 2010, the Committee approved returning Mr. Bradley’s 2010 target incentive to the previous level of 70% of his base salary thereby realigning his target incentives with his internal peers.

 

In 2010, the EIAP performance measurement period was returned to the Company’s previous standard of the full fiscal year and the utilization of PT and WCD as the primary financial metrics. Incentive performance targets were set within the first 90 days of the fiscal year and approved by the Committee. Payments under annual bonus programs are intended to qualify for tax deductibility under Section 162(m) of the Code as performance-based compensation.

 

 

Each of Ingram Micro’s four reporting regions (North America, EMEA, Latin America, and Asia Pacific) is made up of five to thirteen different countries and/or business units. The performance in each of these thirty-two countries/business units is compared against their individual bonus plan targets to determine that country/business unit’s bonus payout. The weighted average (based on each country/business unit’s 2010 Board approved business plan revenue) of these thirty-two bonus payouts is determined and utilized for 80% of each Corporate NEO’s bonus payment. The weighted average bonus results of the countries/business units that make up each region are utilized for 60% of the respective Regional NEO’s bonus payment while the overall results for their respective regions are used for determining 20% of their annual incentive awards. Each NEO’s annual incentive award has a 20% component derived from the Company’s overall performance.

 

The component for overall Company performance under the 2010 EIAP was put in place primarily to drive focus on growing PT while continuing the awareness in the need to balance WCD to effectively manage capital. The 2010 program required a minimum level of PT performance before any award is 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 140% of the Board approved operating plan PT results in a maximum award payment). WCD is used as a modifier to decrease or increase the payout earned through the achievement of PT, with the potential of completely eliminating all earned award. Generally, every WCD greater than the target range negatively modifies the PT achievement by 10 percentage points. Generally, every WCD below the target range increases the PT achievement by 5 percentage points with the multiplier capped at 110%.

 

Corporate NEOs. Under the terms of the 2010 EIAP, the Corporate NEOs earned award payments as follows:

 

2010 EIAP (Corporate Results): Total Award Earned = [(A x B) + C] = 170.3% of Target Award Earned (see following tables)

 

 

 

 

 

Regional NEOs. Under the terms of the 2010 EIAP, Regional NEOs earned award payments as follows:

 

 

Long-term incentives are granted under the Ingram Micro Inc. Amended and Restated 2003 Equity Incentive Plan (the “2003 Plan”) and the 2008 Ingram Micro Inc. Executive Incentive Plan (“EIP”), which were approved by shareholders. The EIP in conjunction with the 2003 Plan permits the granting of stock options, stock appreciation rights, RSUs, performance shares, and cash awards. Each RSU entitles an executive to one share of Company stock if and when the executive becomes vested in the RSU.

 

During late 2008, the Committee reviewed (1) the data provided by Cook on the various forms of equity the peer group companies were providing to their executives, (2) the relative advantages and disadvantages of using stock options, (3) the fact that the Company does not provide any defined benefit pension benefits or other retirement benefits to executive officers other than the Ingram Micro 401(k) Plan or similar plans that are available to all Company employees, and (4) the fact that for most executive officers the long-term incentive awards serve as the primary source for accumulation of substantial resources to fund their retirement. Based on this review and taking into account the volatility of the company’s stock price in late 2008 and early 2009, the Committee decided the executive officers would only receive performance-vesting RSUs during 2009.

 

2010 Performance Awards. At their meeting in January 2010, the Committee decided to continue its practice of only granting performance-vesting RSUs to the executive officers and approved the equity-based award values to be granted to each executive officer. These values were established as a percentage of each officer’s salary grade range mid-point, which mid-point reflected competitive, market-median, long-term incentive award values. In 2010 all the NEOs (other than the CEO) are at the same salary grade and so their award amounts were the same, as shown in the table below. The Committee’s determination of grant values with respect to NEOs other than the CEO was based on its evaluation of recommendations by the CEO (which the Committee, in its discretion, approved). With respect to the CEO, the Committee, in its sole discretion, determined the long-term equity value. The 2010 grants to our CEO were in accordance with the Committee’s previously approved target value for our CEO’s salary grade range based on our CEO’s performance and comparative peer

group information. During this process the Committee consulted with its outside advisor, Cook, and the target grant values for the NEOs were generally between the 50th and 75th percentile.

 

 

 

The actual value at grant varies from the total target grant value due to the change in the share price between the determination of the target value (and resulting number of RSUs to be granted) and the actual value on the date of grant.

 

As described above, the same process and procedure for granting equity awards to our NEOs was followed in 2010 as in 2009 including the use of the first trading day of March for the equity grant date:

 

 

In 2010, the annual equity-based grant of the executive officers, including the NEOs, was made up of performance-vesting RSUs: 60% of which may vest on March 1, 2013 (or, if later, the Committee’s certification of the EPS and ROIC performance for the three year performance measurement period 2010 through 2012). The remaining 40% of the RSUs may vest based on the achievement of fiscal year 2010 PT goals. If the PT goal for fiscal year is reached and certified by the Committee, restrictions on these units will lapse 50% on March 1, 2012 and 50% on March 1, 2013. The granting of performance-vesting RSUs is intended to qualify as performance-based compensation that is not subject to the deduction limits of section 162(m) of the Internal Revenue Code.

 

The RSUs, whose vesting is tied to EPS and ROIC achievement over the three-year period, were granted on March 1, 2010 to participating executives, including NEOs, and will generally vest on March 1, 2013 if the three year cumulative compounded annual EPS growth and three year average ROIC targets are met. The Committee believes the targets were set with appropriate levels of difficulty for the three-year performance measurement period.

In the case of RSUs whose vesting was tied to PT, the Committee certified on March 8, 2011 that the 2010 PT result ($436 million) exceeded the predetermined target level ($50 million), resulting in 100% of the RSUs that were granted on March 1, 2010 to participating executives, including the NEOs, to vest on the following schedule: fifty percent of the RSU’s will vest on March 1, 2012, and fifty percent will vest on March 1, 2013 as long as the participant is employed in good standing on the vesting date.

 

The Committee intentionally set the PT target level at a level with a high likelihood of achievement in order to provide enhanced executive retention and to assist the executives to accumulate shares in compliance with the Company’s stock ownership and retention policy as well as to enable executives to accumulate resources to fund their future retirement.

 

Performance Awards from Prior Years. The 2008 Executive Long-Term Performance Share Program (“2008 Performance Share Program”), with a 3-year performance measurement period (2008-2010), did not achieve the minimum threshold established by the Committee for EPS growth rate and, therefore, no awards were earned (vested) by any of the participants, including the NEOs.

 

Stock Ownership and Retention Policy

 

On December 1, 2009, our Company adopted a revised stock ownership and retention policy. This policy requires our Section 16 reporting officers to hold stock with a value equal to three to six times their base salary in shares of Ingram Micro common stock. The multiple of salary is determined by the salary grade for the position they hold. Mr. Spierkel’s target is six times his base salary. The target for Messrs. Humes, Bradley, Gupta, and Maquet is four times their base salaries. The NEOs are no longer required to reach their share ownership target level by a specific date. However, they are now required to retain 50% of the net after-tax shares resulting from the vesting of all restricted stock or RSU awards and 50% of the net shares resulting from the exercise of stock option awards until their ownership requirement is met. This policy applies to all equity granted under the Company’s equity award plans for compensatory purposes, except for any equity compensation award held in a pre-arranged stock trading plan designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, which plan was in effect prior to December 1, 2009, and has not by its terms expired. Shares owned include: shares held by the executive directly or through a broker, shares held jointly by the executive and his/her spouse, shares held by the executive’s 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 January 1, 2011, none of the executive officers had met their share ownership requirement. 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.

 

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 made in the previous 36 months to the NEOs as well as 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 the 2010 Annual Executive Incentive Award Program (annual bonus) and the 2010 Executive Long-Term Performance Share Programs (LTIP-performance vesting RSUs) and all subsequent short-term or long-term incentive award programs adopted by the Company for its executive officers and key employees designated by the Committee as a Covered Employee.

 

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 made if the executive officer’s employment had been terminated by the Company for “cause,” including interest.

 

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. Similar to other associates who are on assignment outside of their home country, NEOs (i.e., Messrs. Maquet and Gupta) may receive various expatriate assignment benefits and allowances such as goods and services allowances, transportation and housing allowances, educational allowances for accompanying dependent children plus various tax equalization payments related to their assignments. The purpose of tax equalization payments is to insure the associate, or NEO, receives the full allowance to cover the costs of the assignment while the company covers any of the related tax consequences of this allowance. The perquisites we provide to our NEOs are reported in further detail in the “All Other Compensation” column in the “Summary Compensation Table” elsewhere in this proxy statement. See also “Relocation Assistance & Expatriate Assignment Arrangements” for more details for Messrs. Maquet and Gupta.

 

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 IRS regulations. Participants may elect to defer up to 50% of their base salary and annual bonus, when combined with their 401(k) plan deferral. In conformance with Section 409A, deferral and distribution elections are made by each participant prior to the beginning of each calendar year. In 2010, the Company’s matching contribution was equal to 25% of the first 5% of eligible compensation deferred to 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 2010 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 2010. 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 is noted under “All Other Compensation” in the “Summary Compensation Table” elsewhere in this proxy statement.

 

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, and 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 their actual expense. In order to ensure 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). 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. Gupta was relocated to Singapore in 2001 from India by Tech Pacific before it was acquired by the Company in 2004. The Company has honored the terms of Mr. Gupta’s 2002 Tech Pacific employment agreement which includes certain expatriate allowances and the notice of termination provision requiring either party to provide three months’ notice prior to a termination. Effective January 1, 2009, the Committee modified Mr. Gupta’s employment agreement and now Mr. Gupta’s expatriate package is limited to dependent children education reimbursements, transportation and parking allowances and the retirement contribution as reported under the “All Other Compensation” column in the “Summary Compensation Table” elsewhere in this proxy statement. To ensure Mr. Gupta receives the full value of the education reimbursement and transportation allowance, these payments are tax equalized and the company pays the local taxes due on these payments.

 

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 and Tax Equalization Policies. As an expatriate, Mr. Maquet is tax equalized to France 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.

 

Change-in-Control and Termination of Employment Arrangements

 

Change-in-Control Agreements. The Committee adopted the Company’s Change in Control Policy (the “CIC Policy”) in September 2010. The CIC Policy, a so-called “double-trigger” 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 applies to each officer of the Company who is designated by the Committee, in its discretion, to participate therein (the “Participant”). The Committee may add or remove a Participant at any time upon written notice, except that any removal will not be effective until the first anniversary following the date on which such notice was delivered. The Committee designated the Company’s executive officers, including each of the NEOs, as Participants under the CIC Policy.

 

A Participant is entitled to benefits under the CIC Policy in the event of a termination of the Participant’s employment with the Company by the Company without “Cause” or by the Participant for “Good Reason” either (a) within 24 months after the effective date of a “Change in Control” (as such terms are defined in the CIC Policy) or (b) during the period commencing on the execution of a letter of intent or definitive agreement that results in the consummation of a Change in Control within 6 months after the execution of such letter or agreement and ending on the date that the Change in Control occurs (a “Qualifying Termination”).

 

In the event of a Qualifying Termination, a Participant will receive a lump sum cash payment equal to: (i) a multiple (which is 2.0 for the CEO and 1.5 for all other Participants) times the sum of the Participant’s base salary and target annual bonus, and the annualized cost of the Company-sponsored medical, dental and vision insurance benefits for the Participant and his or her enrolled dependents, and (ii) a pro rata portion of the Participant’s target annual bonus for the fiscal year in which the termination occurs, payable within 15 days after the later of the date of the Participant’s separation from service or the effective date of the Change in Control. A Participant’s right to receive this payment is subject to his or her execution and non-revocation of a general release of claims against the Company. In addition, the Company will provide a Participant with outplacement benefits of up to $20,000 for up to one year following the Qualifying Termination.

 

In addition, immediately prior to the consummation of a Change in Control, each stock option, restricted stock unit, restricted stock unit award and long-term cash award granted by the Company to a Participant will become fully vested and all forfeiture restrictions shall lapse and any performance targets for uncompleted performance periods shall be treated as satisfied at target, in the event that such award is not assumed or substituted with an equivalent award by the successor corporation in the Change in Control. If the Participant incurs a Qualifying Termination, each stock option, restricted stock unit, restricted stock unit award and long-term cash award that is assumed or substituted with an equivalent award by the successor corporation in a Change in Control shall become fully vested and all forfeiture restrictions shall lapse and any performance targets for uncompleted performance periods shall be treated as satisfied at target, and with respect to any stock options, such stock options will generally remain outstanding and exercisable for up to two years following the Qualifying Termination.

 

A Participant’s participation in the Company’s retirement plans and deferred compensation plans on the date of his or her termination of employment will cease on the date of termination of employment and the distribution of benefits thereunder will be made in accordance with the terms of such plans. If a Participant is entitled to a payment or benefit whether payable under the CIC Policy or any other plan, arrangement or agreement with the Company that is subject to the excise tax imposed on certain so-called “excess parachute payments” under Section 4999 of the Internal Revenue Code of 1986, as amended, such payment or benefit will be reduced to the maximum amount that may be paid without being subject to such excise tax, but only if the after-tax benefit of the reduced amount is greater than the after-tax benefit of the unreduced amount.

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 may be entitled to certain severance benefits if their employment is terminated by the Company without “cause” and certain conditions are satisfied. The Committee modified this policy in September 2010 to ensure coordination of severance benefits with the new Change-In-Control policy.

 

In such cases, subject to 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. In general, our NEOs are eligible for separation pay equal to one-twelfth the sum of their annual base salary and target annual bonus multiplied by their full years of service with the Company, with a minimum payment equal to one year’s base salary and target annual bonus and a cap of 24 months with respect to the CEO and 18 months with respect to other officers.

 

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 agreed that severance benefits under his original French employment contract are frozen at the current levels and he will be provided severance pay equal to thirty-two months of average salary (defined as base salary and target annual bonus) upon his termination of 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 recent assignment to Belgium, Ingram Micro will repatriate Mr. Maquet and his family to France under similar relocation terms and conditions.

 

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. In addition, the Committee reserves the right to use its judgment to award compensation to our executive officers that may be subject to the deduction limit 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). Nevertheless, there can be no assurance that our performance-based compensation will be treated as qualified performance-based compensation under Code Section 162(m).

 

The following table sets forth information concerning total compensation earned or paid to our NEOs who served in such capacities as of January 1, 2011 for services rendered to us during the fiscal year ended January 1, 2011.

 

 

 

 

 

 

All Other Compensation Table — Fiscal Year 2010

 

 

 

 

The following table provides information relating to plan-based awards granted to the NEOs during the 2010 fiscal year ended January 1, 2011.

 

GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR 2010

 

 

 

 

 

The following table provides information relating to outstanding equity awards held by the NEOs at 2010 fiscal year ended on January 1, 2011.