Ingram Micro 2007 Annual Report Download - page 54

2003 Plan and 1.9 shares for every share granted under any award under the Amended 2003 Plan other than
an option or stock appreciation right. This change increases the number of full-value shares, such as
performance restricted stock units, that can be issued under the plan, but is also intended to reduce the
aggregate shares that can be issued. Under the proposed amendment, the aggregate shares available for
future grant will be reduced by approximately 10%. The proposed amendment gives the Company more
flexibility to grant equity awards that best support the Company’s business strategies, such as the current
performance restricted stock unit program;
• provides the business criteria on which performance goals will be based for awards intended to constitute
“qualified performance-based compensation” within the meaning of Section 162(m) of the Code; and
• prohibits repricing of stock options or stock appreciation rights and cancellation of outstanding options or
stock appreciation rights in exchange for cash payments or other awards without approval of the Company’s
shareholders. Previously, the plan did not prohibit such cancellations.
The Amended 2003 Plan is being submitted to shareholders in accordance with the shareholder approval
requirements of the New York Stock Exchange with respect to equity compensation plans and to allow for qualified
performance-based compensation that is paid under the Amended 2003 Plan to be deductible by the Company for
federal income tax purposes under Section 162(m) of the Code.
If the Amended 2003 Plan is approved by the Company’s shareholders, no future awards will be made under
the Company’s prior plans, which include the 2003 Plan, the Ingram Micro Inc. 2000 Equity Incentive Plan, the
Ingram Micro Inc. 1998 Equity Incentive Plan, and the Ingram Micro Inc. 1996 Equity Incentive Plan.
If the Amended 2003 Plan is not approved by the Company’s shareholders:
• the 2003 Plan will continue in full force in accordance with its terms as they were in effect immediately prior
to the adoption of the Amended 2003 Plan, and the Amended 2003 Plan will not take effect, and
• the Company will continue to make awards under the 2003 Plan and its prior equity compensation plans
according to the terms of those plans.
The following is a summary of the material terms of the Amended 2003 Plan and is not intended to be
complete. However, a copy of the Amended 2003 Plan is attached to this proxy statement as Exhibit A and you are
advised to review the actual terms of the Amended 2003 Plan.
Recommendation of the Board of Directors
The Board of Directors recommends a vote for the approval of the Amended 2003 Plan, which is designated
as Proposal No. 2 on the enclosed proxy card.
What is the purpose of the Amended 2003 Plan?
The purpose of the Amended 2003 Plan is to effectively tie the interests of our management to the interests of
our shareholders by: (1) attracting and retaining exceptional board members, executive personnel and other key
employees; (2) motivating our employees and board members by means of performance-related incentives to
achieve longer-range performance goals, thereby increasing shareholder value; and (3) enabling our employees and
board members to participate in our long-term growth and financial success.
How is the Amended 2003 Plan administered?
Our Board of Directors has appointed its Human Resources Committee to administer the Amended 2003 Plan
with respect to the Company’s executives and associates, and its Governance Committee to administer the
Amended 2003 Plan with respect to directors (both, the “Committee”). Each Committee member who will
administer the Amended 2003 Plan is a “non-employee director” within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, an “outside director” as determined under Section 162(m) of the Code, and an
“independent director” under the rules of the New York Stock Exchange. The Committee has broad discretion,
subject to contractual restrictions affecting the Company, to determine the specific terms and conditions of each
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