SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
INACOM CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number,
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NOTICE OF
ANNUAL MEETING
OF STOCKHOLDERS
PROXY STATEMENT
INACOM CORP.
FARNAM EXECUTIVE CENTER
10810 FARNAM DRIVE
OMAHA, NEBRASKA 68154
(402) 392-3900
[LOGO]
[LOGO]
NOTICE OF MEETING
To InaCom Corp. Stockholders:
The annual meeting of stockholders of InaCom Corp. will be held on April 18,
1996 at 9:00 A.M. local time, at InaCom's administrative offices, Farnam
Executive Center, 10810 Farnam Drive, Omaha, Nebraska 68154.
We hope you will be able to attend this year's Stockholders' Meeting. If you
do not expect to be present and wish your stock to be voted, please sign, date
and mail the enclosed proxy form. If you later decide to attend the meeting, you
may withdraw your proxy at that time and vote your shares in person.
Matters to be considered by the stockholders:
Item 1. Election of Directors.
Item 2. Approval of the appointment of independent accountants for fiscal
year 1996.
Stockholders of record as of the close of business on March 1, 1996 are
eligible to vote at the annual Stockholders' Meeting.
By order of the Board of Directors.
[LOGO]
MICHAEL A. STEFFAN,
March 18, 1996 Secretary
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 18, 1996
To our Stockholders:
The Board of Directors of InaCom Corp. ("InaCom" or "Company") solicits your
proxy in the form enclosed for use at the Annual Meeting of Stockholders to be
held on Thursday, April 18, 1996.
Stockholders of record at the close of business on March 1, 1996 are entitled
to vote at the meeting. The Company at March 1, 1996 had issued and outstanding
10,024,211 shares of common stock. All holders of common stock are entitled to
one vote for each share of stock held by them. The presence of a majority of the
outstanding shares of common stock, represented in person or by proxy at the
meeting, will constitute a quorum. Shares represented by proxies that are marked
"abstain" will be counted as shares present for purposes of determining the
presence of a quorum. Proxies relating to "street name" shares that are voted by
brokers on some matters will be treated as shares present for purposes of
determining the presence of a quorum, but will not be treated as shares entitled
to vote at the annual meeting on those matters as to which authority to vote is
withheld by the broker ("broker non-votes").
The seven nominees receiving the highest vote totals will be elected as
directors of InaCom. Accordingly, abstentions and broker non-votes will not
affect the outcome of the election of directors. All other matters to be voted
on will be decided by the affirmative vote of a majority of the shares present
or represented at the meeting and entitled to vote. On any such matter, an
abstention will have the same effect as a negative vote. A broker non-vote will
not be counted as an affirmative vote or a negative vote because shares held by
brokers will not be considered entitled to vote on matters as to which the
brokers withhold authority.
A stockholder giving a proxy may revoke it before the meeting by mailing a
signed instrument revoking the proxy to: Secretary, InaCom Corp., Farnam
Executive Center, 10810 Farnam Drive, Omaha, Nebraska 68154. To be effective,
the revocation must be received by the Secretary before the date of the meeting.
A stockholder may attend the meeting in person, and at that time withdraw the
proxy and vote in person. This proxy statement is being mailed to stockholders
on or about March 18, 1996.
The cost of solicitation of proxies, including the cost of reimbursing banks
and brokers for forwarding proxies and proxy statements to their principals,
will be borne by the Company.
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CERTAIN STOCKHOLDERS
The following table sets forth information relating to the beneficial
ownership of the Company's common stock by each person known to the Company to
be the beneficial owner of more than 5% of the outstanding shares of common
stock, by each director, by each of the executive officers named in the Summary
Compensation Table, and by all directors and executive officers as a group.
BENEFICIAL
OWNERSHIP PERCENT
NAME OF BENEFICIAL OWNER AS OF MARCH 1, 1996 OF CLASS
- ----------------------------------------------- ------------------- --------
FMR Corp. ..................................... 1,299,300(1) 13.0%
82 Devonshire Street
Boston, Massachusetts 02109
Legg Mason, Inc. ............................. 807,400(2) 8.1%
111 South Calvert Street
Baltimore, Maryland 21202
Cumberland Associates ......................... 650,000(3) 6.5%
1114 Avenue of the Americas
New York, New York 10036
Manley Fuller Asset Management ................ 525,000(4) 5.2%
1185 Avenue of the Americas
New York, New York 10036
Rick Inatome .................................. 540,423(5)(6) 5.2%
1800 West Maple Road
Troy, Michigan 48084
Joseph Inatome ................................ 540,423(5)(6) 5.2%
4957 Mt. Pleasant Lane
Las Vegas, Nevada 89113
Bill Fairfield................................. 271,775(6) 2.6%
Robert Schultz................................. 22,725(6) *
George DeSola.................................. 9,500(6) *
Michael Steffan................................ 51,761(6) *
David Guenthner................................ 67,335(6) *
All Executive Officers and Directors as a 1,016,159(6) 9.8%
Group .........................................
(15 persons)
* Less than 1% of outstanding common stock. See "Election of Directors"
for stock ownership information on certain other directors.
(1) Based on a Schedule 13G, dated January 10, 1996, filed by FMR Corp. with
the Securities and Exchange Commission.
(2) Based on a Schedule 13G, dated February 13, 1996 filed by Legg Mason,
Inc. with the Securities and Exchange Commission.
(3) Based on a Schedule 13D, dated April 26, 1995, filed by Cumberland
Associates with the Securities and Exchange Commission.
(4) Based on a Schedule 13G, dated February 13, 1996, filed by Manley Fuller
Asset Management with the Securities and Exchange Commission.
(5) Beneficial ownership for each of Rick Inatome and Joseph Inatome
includes 427,799 shares which Rick Inatome and Joseph Inatome, acting together,
are empowered to vote pursuant to the terms of a September 1993 voting agreement
(the "1993 Voting Agreement"), as reported on Schedule 13D, as amended, filed
with the Securities and Exchange Commission. The following shares are subject to
the 1993 Voting Agreement: 214,734 shares owned directly by Rick Inatome, 1,122
shares owned by Rick Inatome and Joyce Inatome, 1,122 shares owned by Joyce
Inatome under Uniform Gifts to Minors Act, 74,968 shares owned directly by
Joseph Inatome, 48,353 shares owned directly by Nan Inatome, and 87,500 shares
owned jointly by Rick Inatome and Nan Inatome. The 1993 Voting Agreement
terminates on September 30, 2003. Joseph Inatome and Nan Inatome are the parents
of Rick Inatome.
(6) Beneficial ownership includes shares which the persons indicated have,
or within sixty days of March 1, 1996 will have, the right to acquire through
the exercise of stock options as follows: Rick Inatome, 107,916 shares; Joseph
Inatome, 4,708 shares; Bill Fairfield 106,850 shares; Robert Schultz 18,600
shares; George DeSola 3,500 shares; Mike Steffan 34,700 shares; David Guenthner
55,400 shares; and all directors and executive officers as a group, 341,674
shares.
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ELECTION OF DIRECTORS
The Company's Board of Directors is composed of seven members elected on an
annual basis.
The following table sets forth the Company's nominees for the Board of
Directors. Each nominee is a member of the present Board of Directors.
COMMON STOCK OWNED
BENEFICIALLY AS OF
MARCH 1, 1996
--------------------
DIRECTOR NUMBER OF PERCENT
NOMINEE FOR DIRECTOR AND PRINCIPAL OCCUPATION OR EMPLOYMENT SINCE SHARES OF CLASS
- ------------------------------------------------------------------------------------- -------- --------- --------
Joseph Auerbach, Age 79.............................................................. 9/14/87 10,800 *
Professor of Business Administration, Emeritus, at the Harvard Business School;
Counsel to the firm of Sullivan & Worcester, Boston.
Bill L. Fairfield, Age 49............................................................ 3/1/85 271,775(1) 2.6%
President and Chief Executive Officer of the Company since March 1985; Director,
Norwest Bank Nebraska, N.A. and Sitel Corp.
W. Grant Gregory, Age 55............................................................. 12/17/92 1,500 *
Chairman, Gregory & Hoenemeyer, Inc., New York; Director, Bozell Inc., Ambac, Inc.,
Ambac Indemnity Group and HCIA Health Care Inc.
Rick Inatome, Age 42................................................................. 8/6/91 540,423(2) 5.2%
Chairman of the Board of Directors; Co-founder Inacomp Computer Centers, Inc. in 1976
and its Chief Executive Officer from 1979 to August 1991; Director, Atlantic
Beverage, American Speedy Print, Liberty BIDCO, Action Technologies, Inc. and Saturn
Electronic and Engineering, Inc.
Joseph Inatome Age 70................................................................ 8/6/91 540,423(2) 5.2%
Co-founder Inacomp Computer Centers, Inc., and an executive officer until July 1989,
and director until August 1991; Director, American Speedy Print.
Gary Schwendiman, Age 55............................................................. 7/8/87 4,800 *
Professor of International Studies in the College of Business at the University of
Nebraska-Lincoln; Dean of the College of Business Administration for the University
of Nebraska-Lincoln from 1977 to 1994. Director, The Gallup Organization, Inc. and
Security Mutual Life Insurance Co.
Durward B. Varner, Age 79............................................................ 7/8/87 6,900 *
President Emeritus University of Nebraska, Chairman Emeritus University of Nebraska
Foundation
* Less than 1% of outstanding common stock.
(1) Beneficial ownership for Mr. Fairfield includes 106,850 shares which he
has, or will have within 60 days of March 1, 1996, the right to acquire through
the exercise of stock options.
(2) See notes (5) and (6) under Certain Stockholders.
It is intended that proxies will be voted for the election of these nominees.
In the event any nominee should become unavailable, which the Board of Directors
has no reason to believe will be the case, the proxy holders will have
discretionary authority in that instance to vote the proxies for a substitute.
- 3 -
DIRECTORS MEETINGS AND COMPENSATION
The Board of Directors meets on a regularly scheduled basis. The Board of
Directors met nine times during 1995.
The Board of Directors has assigned certain responsibilities to committees.
The Audit Committee, which met six times in 1995, is responsible for
recommending to the Board of Directors, subject to stockholder approval, the
independent certified public accounting firm to be retained each year. The Audit
Committee meets periodically with the certified public accountants and
management to review performance. Members of the Audit Committee are Joseph
Auerbach (Chairman), Joseph Inatome, Gary Schwendiman and Durward Varner.
The Compensation Committee, which met four times in 1995, determines the
amounts and types of remuneration to be paid to management employees. Members of
the Compensation Committee are Durward Varner (Chairman), Gary Schwendiman, W.
Grant Gregory and Joseph Auerbach. The Company does not have a standing
Nominating Committee.
Directors who are not employees of InaCom receive fees of $15,000 per annum
plus $1,250 per meeting attended and the right to designate a charity to receive
up to $20,000 of computer equipment annually. The compensation committee
chairman receives an additional $250 per compensation committee meeting and the
audit committee chairman receives an additional $750 per audit committee
meeting. Directors do not receive fees for meetings held via telephone
conference; during 1995, two director meetings and one compensation committee
meeting were held by telephone conference. Directors who are not employees of
InaCom receive 100 shares of common stock of the Company for each regular Board
meeting attended by the director subsequent to the prior annual stockholders'
meeting (other than meetings by written consent or telephone conference).
Directors Auerbach, Joseph Inatome, Schwendiman and Varner each received 900
shares of common stock and W. Grant Gregory received 800 shares of common stock
on April 20, 1995. On April 18, 1996, for meetings attended subsequent to the
April 20, 1995 stockholders' meeting, directors Auerbach, Joseph Inatome,
Schwendiman and Varner will each receive 700 shares of common stock and W. Grant
Gregory will receive 600 shares of common stock.
- 4 -
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table shows compensation paid by the
Company for services rendered during fiscal years 1995, 1994 and 1993 for the
Chief Executive Officer and the other four most highly compensated executive
officers of the Company whose salary and bonus exceeded $100,000 in 1995.
LONG-TERM COMPENSATION
----------------------
ANNUAL RESTRICTED
COMPENSATION STOCK
------------------ AWARDS NUMBER ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(4) AMOUNT(1) OF OPTIONS COMPENSATION(2)
- --------------------------------------------------------------- ---- -------- -------- --------- ---------- ---------------
Bill Fairfield 1995 $373,554 $729,261 $ 419,000 12,500 $43,986
President, Chief Executive 1994 $296,151 $175,000 0 20,000 $27,081
Officer and Director 1993 $275,000 $190,000 $ 475,000 150,000 $41,342
Robert Schultz 1995 $162,500 $343,780 0 8,000 $17,733
President and General 1994 $144,231 $ 72,000 0 10,000 $13,379
Manager, Client Services 1993 $100,000 $ 61,578 0 0 $19,168
Division and Direct Operations
George DeSola (3) 1995 $181,731 $279,040 0 8,000 $20,923
President and General 1994 $136,634 $ 75,000 $ 60,750 7,000 $ 5,140
Manager, Communications 1993 -- -- -- -- --
Division
Michael Steffan 1995 $152,885 $292,914 0 8,000 $11,333
President and General 1994 $121,154 $ 63,000 0 10,000 $ 8,746
Manager, 1993 $ 96,923 $ 83,420 0 0 $ 8,856
Distribution/Operations
David Guenthner 1995 $175,000 $261,502 0 8,000 $15,370
Executive Vice President 1994 $171,154 $ 50,000 0 10,000 $15,815
and Chief Financial Officer 1993 $149,038 $ 61,102 0 0 $16,482
(1) Mr. Fairfield received restricted stock awards of 55,000 shares in 1995
and 25,000 shares in 1993. Vesting for the restricted stock awards received by
Mr. Fairfield in 1995 and 1993 occurs in installments of 10% annually beginning
on January 17, 1996 with respect to the 1995 award and 20% annually beginning on
August 10, 1994 with respect to the 1993 award. Mr. DeSola received a restricted
stock award of 6,000 shares in 1994. Vesting for the restricted stock award for
Mr. DeSola occur in two equal installments on March 16, 1995 and 1996. At the
end of fiscal 1995, Mr. Fairfield and Mr. DeSola were the only executive
officers named above holding restricted shares; the aggregate value of their
unvested restricted stock (70,000 shares) and (3,000 shares), respectively,
valued at the closing price of the Company's Common Stock at December 30, 1995
without giving effect to the diminution of value attributable to the
restrictions on such stock, was $988,750 and $42,375, respectively.
(2) Amounts reported in this column represent contributions by the Company
to the Company's 401 (k) savings plan and the related supplemental savings plan.
Company contributions to such plans for 1995, 1994 and 1993, respectively for
the named executive officers were: Mr. Fairfield, $33,685, $16,735 and $28,750;
Mr. Schultz, $11,099, $6,719 and $10,899; Mr. DeSola, $11,603 and $5,140; Mr.
Steffan, $9,715, $7,121 and $6,745; and Mr. Guenthner, $10,125, $10,554 and
$9,342. In addition, this column also includes the amount of the premium paid by
the Company in 1995, 1994 and 1993, respectively for split-dollar insurance on
the named executive officers under the Company's Executive Death Benefit Plan as
follows: Mr. Fairfield, $10,301, $10,346 and $12,592; Mr. Schultz, $6,634,
$6,660 and $8,269; Mr. DeSola, $9,320 in 1995; Mr. Steffan, $1,618, $1,625 and
$2,111; and Mr. Guenthner, $5,245, $5,261 and $7,140.
(3) Mr. DeSola became an executive officer of the Company in 1994.
(4) Bonus compensation includes all amounts earned for 1995 services;
payment of certain bonus amounts has been deferred.
- 5 -
OPTION GRANTS IN FISCAL YEAR 1995
The following table sets forth information on grants of stock options pursuant
to the InaCom 1994 Stock Plan during the fiscal year ended December 30, 1995, to
the executive officers named in the Summary Compensation Table. No stock
appreciation rights were granted during fiscal 1995.
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PERCENT OF PRICE
TOTAL OPTIONS PER APPRECIATION FOR
NUMBER OF GRANTED TO SHARE OPTION TERM(2)
OPTIONS EMPLOYEES IN EXERCISE -----------------
NAME GRANTED(1) FISCAL 1995 PRICE EXPIRATION DATE 5% 10%
- -------------------------------------------------------- ---------- ------------- -------- ----------------- ------- --------
Bill Fairfield 12,500 8.0% $ 9.56 October 19, 2005 $75,153 $190,452
Robert Schultz 8,000 5.1% $ 9.56 October 19, 2005 $48,098 $121,889
George DeSola 8,000 5.1% $ 9.56 October 19, 2005 $48,098 $121,889
Mike Steffan 8,000 5.1% $ 9.56 October 19, 2005 $48,098 $121,889
David Guenthner 8,000 5.1% $ 9.56 October 19, 2005 $48,098 $121,889
(1) The options were granted on October 19, 1995 at the fair market price of
the Company's common stock on the date of the grant. Each option vests 50% on
October 19, 1996 and 25% on each of the next two anniversary dates.
(2) Potential realizable value is based on the assumption that the common
stock price appreciates at the annual rate shown (compounded annually) from the
date of grant until the end of the ten-year option term. The numbers are
calculated based on the requirements promulgated by the Securities and Exchange
Commission. The actual value, if any, an executive may realize will depend on
the excess of the stock price over the exercise price on the date the option is
exercised (if the executive were to sell the shares on the date of exercise), so
there is no assurance that the value realized will be at or near the potential
realizable value as calculated in this table.
OPTION EXERCISES IN FISCAL 1995 AND FISCAL YEAR-END VALUES
The following table sets forth information on aggregate option exercises in
the last fiscal year and information with respect to the value of unexercised
options to purchase the Company's Common Stock for the executive officers named
in the Summary Compensation Table.
NUMBER
OF NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS HELD AT IN-THE-MONEY OPTIONS HELD
ACQUIRED DECEMBER 30, 1995 AT DECEMBER 30, 1995(1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------- -------- -------- ----------- ------------- ----------- -------------
Bill Fairfield 0 0 101,850 147,500 $ 112,464 $128,938
Robert Schultz 0 0 16,100 15,500 $ 5,313 $ 72,458
George DeSola 0 0 1,750 13,250 $ 3,719 $ 61,676
Mike Steffan 0 0 32,200 15,500 $ 71,186 $ 72,458
David Guenthner 0 0 52,900 15,500 $ 129,960 $ 72,458
(1) Value is common stock closing price at 1995 fiscal year end, less the
option exercise price, multiplied by the number of shares.
- 6 -
EMPLOYMENT, CONSULTING AND OTHER AGREEMENTS
A consulting agreement between Rick Inatome and Inacomp Computer Centers,
Inc., which was assumed by InaCom in connection with the 1991 merger between the
Company and Inacomp Computer Centers, Inc., became effective on August 5, 1994.
The consulting agreement requires payments to Mr. Inatome for a period of five
years beginning with a fee equal to 110% of base salary as of August 5, 1994 and
increasing annually by 10% of such base salary during the term thereafter. The
Company paid Mr. Inatome $356,250 under the consulting agreement during 1995.
The Company leases certain office and warehouse space in Troy, Michigan to an
entity controlled by Rick Inatome. The lease commenced February 1, 1995, extends
through January 31, 2000, and provides certain renewal options, an option to
terminate the lease after two years, and a purchase option. The lease requires
base rental payments of $10,050 per month with the lessee paying applicable
taxes, utilities and insurance.
The Company has long-term cash incentive agreements with Messrs. Fairfield,
Guenthner and Steffan. The agreements were entered into in 1987. Under each
agreement, the executive will receive a cash incentive bonus to be established
and paid as follows: the incentive bonus will be an amount equal to $7
multiplied by the number of shares acquired by the executive upon exercise of
stock options granted to such executive under the 1987 Stock Option Plan;
provided, however, that the $7 amount will be reduced on a dollar-for-dollar
basis if the fair market value of the Company's common stock on the date of
payment is less than $12 and will be further reduced on a proportionate basis if
the Company's return on stockholders' equity is less than 20% for the fiscal
year preceding the payment date.
The Company loaned $107,300 to Mr. Guenthner in January 1994 pursuant to a
promissory note which bears interest at the prime rate and is payable in five
annual amortized installments commencing April 1, 1996. As of March 1, 1996,
$107,300, plus accrued interest, remained outstanding under the promissory note.
The Company entered into change-in-control agreements (the "Agreements") in
1994 with seven of its senior officers, including Messrs. Fairfield, Schultz,
DeSola, Steffan and Guenthner. The Agreements provide generally that, if the
officer is terminated (excluding a termination on account of death or for cause,
but including a termination by the officer for good reason, all as defined in
the Agreements) within twelve months following a change-in-control of the
Company (as defined in the Agreements), the officer will receive certain
severance benefits including (i) payment of a lump sum equal to a multiple (3.0
for Mr. Fairfield, 1.5 for Messrs. Guenthner and Steffan, and 1.0 for the other
officers) of the sum of (A) the annual rate of base salary on the date of
termination and (B) the average annual incentive bonus received by the officer
for the three fiscal years preceding the fiscal year in which the
change-in-control occurred, and (ii) certain reasonable legal fees and expenses
incurred as a result of termination.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors (the "Committee"). The
Committee is composed of nonemployee directors. The Committee's executive
compensation policies are designed to provide competitive levels of compensation
that integrate pay with the Company's annual and long-term performance goals,
reward above-average corporate performance, encourage constant strategic
analysis, recognize individual initiative and achievements, and assist the
Company in attracting, motivating and retaining qualified executives.
The Committee believes that the Company's current executive compensation
program has been designed and is administered in a manner consistent with these
objectives. Compensation paid under the program for fiscal 1995 met the
requirements to be deductible under the Internal Revenue Code's $1 million
compensation limit.
The program consists of three components: base salary, annual incentives, and
long-term incentives. The Committee recommended or established the executive
compensation within each of these components during 1995. In determining
competitive levels of compensation, the Committee obtains and utilizes
information from outside compensation consultants and other sources such as
executive compensation surveys and comparative analyses of compensation data in
proxy statements of others. The Committee specifically reviews compensation data
for those companies included in the Peer Group Index used in the performance
graph.
BASE SALARY. The Committee targets base salary for executives at a level
somewhat below the competitive median for the Company's peer competitors,
intending that the Company rely to a larger degree on annual
- 7 -
incentives and long-term compensation to achieve its compensation goals. For the
purpose of establishing these levels, the Committee reviews available
compensation information of competitive companies and is periodically advised by
independent compensation consultants concerning salary competitiveness.
The Committee approves all salary changes for the Company's executive
officers, and bases individual salary changes on a combination of factors,
including the performance of the executive, salary level relative to the
competitive market, and the recommendations of the Company's chief executive
officer.
The Committee reviewed the base salary of the Chief Executive Officer in
January 1995. The Committee increased the Chief Executive Officer's base salary
for 1995 to $375,000 following a review of chief executive officer compensation
in the computer reseller industry and the Chief Executive Officer's performance
during the difficult environment in the computer reseller industry during 1994.
ANNUAL INCENTIVES. The Committee believes that an executive's contribution to
the Company's profitability should form the basis for annual incentives, since
such results maximize earnings in the best interests of the Company. The
Committee also believes that bonuses are a necessary part of the Company's
compensation structure since base compensation is maintained at levels below
competitive medians.
The Committee established during 1995 a program for paying short-term cash
bonuses based on the Company's annual "economic value added" improvement (the
"Program"). The Program defines "economic value added" as net operating profit
after tax minus a capital charge based on the Company's cost of equity and debt
capital. Bonuses are earned only if the Company's economic value added increases
over the prior year, with higher bonus levels paid if the economic value added
exceeds targets established by the Committee. If the performance targets are
exceeded, two-thirds of the bonus attributable to such excess is payable only
over the following two years, subject to reduction if the Company's economic
value added drops below the prior year's performance.
The Committee selected eleven participants for the Program during 1995 and
established the portion of the total award allocable to each such participant,
the economic value added performance for 1994 and the improvement targets for
1995. The allocable share of each participant, including the Chief Executive
Officer, was generally based on the relative relationship of each such person's
base salary.
Based on these factors, following a review of the Company's 1995 financial
statements, the Committee approved the payment of bonuses totaling approximately
$2,259,000 to the eleven senior officers. The bonus payments for the named
executive officers are reflected in the Summary Compensation Table. Potential
bonus payments aggregating approximately $4,068,000 were deferred pursuant to
the terms of the Program and will be earned and paid if the Company meets
certain economic value added levels in 1996 and 1997.
LONG-TERM INCENTIVES. The Company's long-term incentives for executive
officers are provided through restricted stock awards and stock option grants
under InaCom's 1990 and 1994 Stock Plans.
The Committee utilizes restricted stock awards in order to provide additional
incentive related to specific corporate objectives. The Committee granted 61,000
restricted shares to executive officers during 1995, including 55,000 restricted
shares to the Company's Chief Executive Officer.
The Committee determined to make a special long-term stock incentive grant to
the Chief Executive Officer in 1995 in order to assist the Chief Executive
Officer in building a substantial financial commitment in the Company and to
ensure the services of the Chief Executive Officer over a long period of time.
The Committee particularly desired to promote employment stability, and noted
that four persons who were executive officers of the Company during 1994 were
not employed by the Company at the time of the restricted stock grant to the
Chief Executive Officer. The restricted stock grant to the Chief Executive
Officer vests 10% per year beginning January 17, 1996 (the first anniversary of
the date of grant). The vested portions are forfeited if the Chief Executive
Officer's employment terminates prior to the vesting date, and the grant
immediately vests in the event of death, disability or change-of-control of the
Company. The value (on the date of grant) of each annual vested installment of
the restricted stock grant was approximately 10% of the Chief Executive
Officer's base salary.
The Committee also provides long-term incentives through annual grants of
stock options. Stock options are granted at the prevailing market price of the
Company's common stock and therefore have value only if the Company's stock
price increases. Option grants generally vest over a period of two to three
years, and the executives must be employed by the Company at the time of vesting
in order to exercise the options. The size of the option grants is based upon
competitive practice and position level, the expected contribution of each
member of the executive officer group to the Company's strategic and operational
goals, and the Committee's desire to
- 8 -
provide the executive officers with an opportunity to build a meaningful stake
in the Company with the objective of aligning the executive officers' long-range
interests with those of the Company stockholders. Past stock option grants are
not considered when determining the number of stock options to grant in a given
year.
The Committee intends to grant options on an aggregate of 1% to 1.5% of the
Company's outstanding common stock on an annual basis. The Committee granted
options to 55 employees in October and December 1995 for an aggregate of 157,000
shares of the Company's common stock, which options vest in installments over
three years. The options granted to the Chief Executive Officer are included in
the Option Grants Table and reflect the Committee's practice of granting options
to the Chief Executive Officer at a level approximately 1.5 to 2 times the level
of the next most senior executive.
InaCom Compensation Committee
Durward B. Varner, Chairman
Joseph Auerbach
W. Grant Gregory
Gary Schwendiman
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STOCK PRICE PERFORMANCE GRAPH
The following performance graph compares the performance of the Company's
common stock to the Total Return Index for the NASDAQ Stock Market-United States
Companies (Broad Market Index) and a Peer Group Index developed by the Company.
The Peer Group Index consists of Intelligent Electronics, Inc., CompuCom
Systems, Inc., MicroAge, Inc. and Dataflex Corporation. The performance graph
shows cumulative, five-year stockholder returns with the returns of the Peer
Group weighted according to each such company's stock market capitalization. The
graph assumes that the value of the investment in the Company's common stock and
each Index was $100 at December 31, 1990 and that any dividends were reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
INACOM CORP. TOTAL RETURN INDEX FOR NASDAQ STOCK MARKET (US COMPANIES) SELF-DETERMINED PEER GROUP
1990 100 100 100
1991 83.3 160.6 173.6
1992 120.8 186.9 124.1
1993 112.5 214.5 316.1
1994 58.3 209.7 126.0
1995 117.7 296.3 146.4
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COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16 (a) of the Securities Exchange Act of 1934 requires executive
officers and directors to file reports of changes in ownership of InaCom's
common stock with the Securities and Exchange Commission. Executive officers and
directors are required by SEC regulations to furnish InaCom with copies of all
Section 16 (a) forms they file. Based solely on a review of the copies of such
forms furnished to InaCom and written representations from InaCom's executive
officers and directors, InaCom believes that all persons subject to these
reporting requirements filed the required reports on a timely basis during 1995,
except that Cris Freiwald, an executive officer, did not timely report one
transaction.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of KPMG Peat Marwick LLP has been appointed by the Board of Directors
to conduct the 1996 audit of the Company's financial statements. The same firm
conducted the 1995 audit. The Board of Directors requests stockholder approval
of their appointment. A representative from KPMG Peat Marwick LLP will be
present at the Stockholders' Meeting and will have the opportunity to make a
statement and to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the next annual
stockholders' meeting must be received by the Company no later than November 20,
1996 in order for such proposals to be considered for inclusion in the Company's
proxy statement relating to such meeting.
The Company's bylaws set forth certain procedures which stockholders must
follow in order to nominate a director or present any other business at an
annual stockholders' meeting. Generally, a stockholder must give timely notice
to the Secretary of the Company. To be timely, such notice must be received by
the Company at 10810 Farnam Drive, Omaha, Nebraska, 68154, not less than thirty
nor more than sixty days prior to the meeting. The bylaws specify the
information which must accompany any such stockholder notice. Details on the
provision of the bylaws may be obtained by any stockholder from the Secretary of
the Company.
OTHER MATTERS
The Board of Directors does not know of any matter, other than those described
above, that may be presented for action at the annual meeting of stockholders.
If any other matter or proposal should be presented and should properly come
before the meeting for action, the persons named in the accompanying proxy will
vote upon such matter and upon such proposal in accordance with their best
judgment.
By Order of the Board of Directors
[LOGO]
MICHAEL A. STEFFAN
Secretary
InaCom Corp.
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I N A C O M C O R P.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS APRIL 18, 1996
The undersigned hereby constitutes and appoints Bill L. Fairfield and David C.
Guenthner, or either of them, with full power of substitution in each of them,
for and on behalf of the undersigned to vote as proxies, as directed and
permitted herein at the annual meeting of stockholders of the Company to be held
at the administrative offices of the Company, Farnam Executive Center, 10810
Farnam Drive, Omaha, Nebraska 68154, on April 18, 1996 at 9:00 a.m. and at any
adjournment thereof, upon matters set forth in the Proxy Statement, and, in
their judgment and discretion, upon such other business as may properly come
before the meeting.
ITEM 1.
Election of Directors - for the following nominees for Director:
Joseph Auerbach, Bill L. Fairfield, W. Grant Gregory, Joseph T. Inatome,
Rick Inatome, Gary Schwendiman, Durward B. Varner.
/ / Vote For All Nominees
/ / Withhold Vote For All Nominees
Withhold Vote For Only The Following Nominee(s) ________________________________
ITEM 2.
Approval of appointment of independent accountants KPMG Peat Marwick LLP for
fiscal 1996.
/ / For / / Against / / Abstain
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. This proxy, when
properly executed, will be voted in the manner directed herein by the
undersigned stockholder. If no direction is made, this proxy will be voted for
proposals 1 and 2.
Dated this ______ day of ________________________________________________, 1996.
Signature ______________________________________________________________________
Signature ______________________________________________________________________
(When signing as attorney, executor, administrator, trustee, guardian
or conservator, designate full title. All joint tenants must sign.)