Ingram Micro 2007 Annual Report Download - page 58

would impair his or her rights. In the event of certain corporate transactions or events affecting the shares or our corporate
structure, the Committee may make certain adjustments as set forth in the Amended 2003 Plan.
When does the Amended 2003 Plan terminate?
Unless earlier terminated by our Board of Directors, the Amended 2003 Plan will terminate on May 6, 2013.
What happens in the event of a merger or other corporate transaction or event?
In the event of a merger of the Company into another corporation, each outstanding award may be assumed, or
substituted for an equivalent award, by the successor corporation. If the successor corporation does not provide for
the assumption or substitution of the awards, the Committee may cause all awards to become fully exercisable prior
to the date of the merger. If an award becomes exercisable in lieu of assumption or substitution in connection with a
merger, the award will be exercisable for 15 days and will terminate at the end of such period.
In addition, in the event of a merger or in the event of certain other unusual or nonrecurring transactions or
events affecting us or any of our affiliates, or our financial statements or the financial statements of any of our
affiliates, or of changes in applicable laws, regulations or accounting principles, the administrator may, in its
discretion and on such terms and conditions as it deems appropriate, take one or more of the following actions:
• provide for the purchase of an award for an amount of cash equal to the amount that could have been attained
upon the exercise of such award or realization of the participant’s rights;
• provide for the replacement of one or more awards with other rights or property selected by the administrator
in its sole discretion having an aggregate value not exceeding the amount that could have been attained upon
the exercise of such award or realization of the participant’s rights had such award been currently exercisable
or payable or fully vested,
• provide that one or more awards will be assumed by the successor or survivor corporation, or a parent or
subsidiary thereof, or will be substituted for by similar options, rights or awards covering the stock of the
successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the
number and kind of shares and prices;
• adjust the number and type of shares of the Company’s stock (or other securities or property) subject to
outstanding awards, and/or in the terms and conditions of (including the grant, exercise or purchase price),
and the criteria included in, outstanding options, rights and awards and options, rights and awards that may
be granted in the future;
• provide that the award will be exercisable or payable or fully vested as to all shares covered thereby,
notwithstanding anything to the contrary in the award agreement or the Amended 2003 Plan; and
• provide that the award cannot vest, be exercised or become payable after such event.
What are the U.S. federal income tax consequences under the Amended 2003 Plan?
The Amended 2003 Plan is not subject to any provision of the Employee Retirement Income Security Act of
1974, as amended, and is not qualified under Section 401(a) of the Code.
Options. There will generally be no federal income tax consequences to a participant or to us upon the grant
of either an incentive stock option or a nonqualified stock option under the Amended 2003 Plan. The maximum term
of an option is 10 years.
Nonqualified stock option. A participant will recognize ordinary income when he or she exercises a
nonqualified stock option. The amount of the income is the amount by which the fair market value of the stock
received upon exercise of the option (assuming the stock is fully vested in the employee at that date) exceeds the
exercise price of the option. We generally will be entitled to an income tax deduction equal to the amount included
as compensation in the gross income of the participant at the time that income is required to be recognized by the
participant, i.e., at the time of exercise of the option.
Incentive stock option. A participant will not recognize any immediately taxable income when he or she
exercises an incentive stock option. A participant can defer income recognition until the time that shares are sold
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