Ingram Micro 2007 Annual Report Download - page 65

applicable performance goals have been achieved for such performance period and approve any payments, which
determination and approvals will be recorded in the minutes of the Human Resources Committee. In determining
the amount earned under such awards, with respect to any award granted to one or more eligible individuals, the
Human Resources Committee will have the right to reduce or eliminate (but not to increase) the amount payable at a
given level of performance to take into account additional factors that the Human Resources Committee may deem
relevant to the assessment of individual or corporate performance for the performance period.
Awards may be paid in a lump sum or in installments following the close of the performance period or, in
accordance with procedures established by the Human Resources Committee, on a deferred basis. With respect to
any award that is intended to constitute Qualified Performance-Based Compensation, a participant will be eligible
to receive payment pursuant to such awards for a performance period only if and to the extent the performance goals
for such period are achieved, and only after the Human Resources Committee has certified in writing that such goals
have been achieved. In no event may any participant be paid more than $7,500,000 under any one or more awards
under the 2008 EIP in any fiscal year of the Company.
The EIP is not the exclusive method pursuant to which the Company may establish or otherwise make available
bonus or incentive payments to its executive officers and other key employees.
Tax Deductions and Section 162(m) of the Code.
The Company generally should be entitled to a federal income tax deduction at the same time and for the same
amount as the recipient recognizes ordinary income, subject to the limitations of Section 162(m) of the Code with
respect to compensation paid to certain “covered employees.” Under Section 162(m), income tax deductions of
publicly-held corporations may be limited to the extent total compensation (including base salary, annual bonus,
stock option exercises and non-qualified benefits paid) for certain executive officers exceeds $1 million in any one
year. The Section 162(m) deduction limit, however, does not apply to Qualified Performance-Based Compensation
as provided for by the Code and established by an independent compensation committee.
The 2008 EIP is structured in a manner that is intended to provide the Human Resources Committee with the
ability to provide awards that satisfy the requirements for Qualified Performance-Based Compensation under
Section 162(m) of the Code. The remuneration attributable to those awards should not be subject to the $1 million
limitation. We have not, however, requested a ruling from the Internal Revenue Service or an opinion of counsel
regarding this issue. This discussion will neither bind the Internal Revenue Service nor preclude the Internal
Revenue Service from adopting a contrary position.
When will the 2008 EIP become effective?
The 2008 EIP became effective as of June 6, 2007, subject to approval by our shareholders at our annual
meeting.
Can the 2008 EIP be amended or terminated?
The Human Resources Committee may at any time terminate or from time to time amend the 2008 EIP in
whole or in part, but no such action will adversely affect any rights or obligations with respect to any awards
theretofore made under the 2008 EIP. However, unless our shareholders have first approved, no amendment of the
2008 EIP will be effective which would increase the maximum amount which can be paid to any one executive
officer under the 2008 EIP in any fiscal year, which would change the specified performance goals for payment of
awards, or which would modify the requirement as to eligibility for participation in the 2008 EIP.
What are the incentive payment opportunities that have been granted under the 2008 EIP and the prior
EIP to date?
Under the 2008 EIP, for the period beginning January 1, 2008 and ending March 31, 2008, the Human
Resources Committee granted awards in the form of annual bonuses payable in cash and three-year performance-
vested restricted stock units payable in shares of the Company’s common stock, in the amounts shown in the New
EIP Benefits table below. Under the prior EIP, awards were granted in the form of annual bonuses and performance-
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