Document:

Exhibit 10.46

 

EXHIBIT 10.46

2003 EXECUTIVE RETENTION AGREEMENT

     2003 EXECUTIVE RETENTION AGREEMENT (“Agreement”) dated as of December 19,
2003 (the “Effective Date”) by and between Ingram Micro Inc., a Delaware
corporation (the “Company”), and MICHAEL J. GRAINGER (“Executive”).

     WHEREAS, Executive is presently employed by the Company in a key
management capacity; and

     WHEREAS, Executive and the Company have previously entered into a 2000
Executive Retention Agreement dated as of January 31, 2000 (including all
modifications thereto, the “2000 Agreement”); and

     WHEREAS, Executive desires, and the Board of Directors of the Company (the
“Board”) has determined that it is in the best interests of the Company and its
stockholders, to terminate the 2000 Agreement and to enter into this Agreement
on the terms set forth below.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Agreement, and of
other good and valuable consideration including, but not limited to,
Executive’s continuing employment with the Company, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:

ARTICLE 1

TERM OF AGREEMENT

     Section 1.01. Term. The term of this Agreement shall commence on the
Effective Date and shall terminate as follows: (i) if Executive is elected to
the position of Chief Executive Officer of the Company (“CEO”) when Kent Foster
ceases to be CEO for any reason, then this Agreement shall terminate upon the
Executive’s election as CEO and (ii) if Executive is not elected to the
position of CEO at such time and if Executive does not timely give notice
pursuant to Section 2.01 below that Executive is terminating his employment
with the Company, then this Agreement shall terminate as of the close of
business on the fifth (5th) business day after the Company’s public
announcement of the election of another person as CEO. Upon the termination of
this Agreement pursuant to clause (i) of the preceding sentence, Executive
shall then have the same benefits as the Company’s other senior executives as
outlined in the Company’s Executive Officer Severance Policy as it may be
amended from time to time.

     Section 1.02.
Termination of 2000 Agreement. The 2000 Agreement shall
terminate immediately upon the execution of this Agreement by Executive and the
Company.

ARTICLE 2

CERTAIN EVENTS

     Section 2.01. Right to Certain Benefits. Executive shall be entitled to
receive the Severance Benefits set forth in Article 3 below, upon (i) the
termination of Executive’s employment by the Company for any reason other than
for Cause, prior to the termination of this Agreement as provided in Section
1.01, (ii) the Company’s election of someone other than Executive to the
position of CEO upon Kent Foster’s ceasing to be CEO for any reason if, within
five (5) business days of the Company’s public announcement of such other
person’s election as

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CEO, Executive gives notice to the Company of Executive’s decision to
terminate his employment with the Company upon such date as may be selected by
the Company which is not later than sixty (60) days from the date Executive
gives such notice to the Company, or (iii) Executive’s voluntary termination of
his employment for Good Reason (A) within ninety (90) days after the event
constituting Good Reason or (B) prior to the termination of this Agreement as
provided in Section 1.01, whichever is earlier.

ARTICLE 3

SEVERANCE BENEFITS

     Section 3.01. Benefits. Subject to Executive’s execution of an
agreement in substantially the form set forth as Exhibit A hereto, with such
changes in the competitor companies named therein as the Board shall reasonably
determine (the “Release”), and except to the extent provided in Section 6.07
and Section 6.09 of this Agreement, Executive shall be entitled to the benefits
set forth below in this Article 3 (the “Severance Benefits”) solely upon any of
the events set forth in Section 2.01 above.

     Section 3.02. Severance Pay. For each month of the Continuation Period
(as defined below), Executive shall receive severance pay (“Severance Pay”)
equal to one-twelfth (1/12) of the sum of (a) Executive’s annual Base Salary at
its highest annual rate during the one-year period immediately prior to the
Continuation Period and (b) Executive’s annual target bonus opportunity for the
year in which his employment terminates. The Severance Pay shall be paid to
Executive in accordance with the Company’s normal pay dates and payroll
practices as in effect through the Continuation Period. As used herein,
“Continuation Period” means the period, commencing with the termination of
Executive’s employment, equal to six (6) months plus one (1) month for each
full year and any partial year of Executive’s employment with the Company,
measured from the date Executive was hired by the Company’s former parent
corporation.

     Section 3.03. Annual Bonus. After Executive’s actual annual bonus is
determined for the year in which the Continuation Period begins, Executive
shall receive an amount in cash equal to such actual annual bonus, if any,
prorated on a daily basis based on the number of days of Executive’s active
employment during such year. Such bonus shall be calculated and paid on the
same basis, and at the same time and in the same manner, as such annual bonus
payments are made to actively employed executive officers of the Company.

     Section 3.04. Long-Term Cash Incentive Award Program. Executive’s
participation in the 2002-2004 and 2003-2005 cycles under the Company’s
Executive Long-Term Cash Incentive Award Program, as well as any subsequent
cycles, shall cease effective as of the beginning of the Continuation Period.
Award payments under such program, if any, shall be prorated based on the
number of full months of Executive’s active employment during the cycle in
question and calculated based on the actual Company achievement versus the peer
group at the end of each cycle. Such award payments shall be made following
the close of each cycle at the same time and in the same manner as such award
payments are made to actively employed participants in such program.

     Section 3.05. Health Coverage.

     (a)  The Company shall provide continued medical, dental and vision
insurance coverage, to the same extent as provided for other executives of the
Company generally, for Executive and his enrolled dependents through the
Continuation Period. Executive shall pay the same percentage of the total
expense or specific amounts, as the case may be, for these coverages as
Executive was paying immediately prior to the beginning of the Continuation
Period.

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     (b)  At the end of the Continuation Period, Executive may elect to
participate in the Company’s Executive Retiree Medical Plan (the “Retiree
Plan”). Under the terms of the Retiree Plan, Executive and his eligible
dependents may continue to participate in the Company-sponsored medical plans
until Executive attains age 65 or becomes eligible for Medicare, whichever
occurs first. Executive shall be responsible for payment of one hundred
percent (100%) of the applicable monthly insurance premium for such coverage
under the Retiree Plan.

     (c)  During the Continuation Period, the Company shall reimburse Executive
for the documented costs, including laboratory and test fees, of annual
physical examinations (not to exceed one annually) in an amount not to exceed
one thousand five hundred dollars ($1,500) per examination.

     Section 3.06. Equity-Based Compensation.

     (a)  Executive’s unvested stock options, restricted stock awards and other
stock-based incentive compensation awards (if any) granted under the Company’s
equity-based compensation plans shall continue to vest through the Continuation
Period.

     (b)  Executive has attained age 50 and has more than five (5) years of
service with the Company, and, therefore, his vested stock options, including
such options (or portions thereof) as vest during the Continuation Period,
shall be exercisable by him for five (5) years from the beginning of the
Continuation Period, except that if any such option would otherwise terminate
sooner, such option shall not be exercisable after its termination date.
Otherwise, Executive’s vested options shall be exercisable according to their
terms.

     Section 3.07. Retirement Plans.

     (a)  Executive’s right to have contributions allocated to his account in
the Company’s 401(k) Investment Savings Plan (the “401(k) Plan”) shall cease
effective with the beginning of the Continuation Period. Executive shall be
entitled to leave such account invested in the 401(k) Plan or roll it over to
an IRA or another employer’s qualified plan.

     (b)  Executive shall be entitled to continue to participate in the
Company’s Supplemental Investment Savings Plan throughout the Continuation
Period up to the full amount of employee contributions permitted; provided,
however, that the Company’s matching contribution under such plan shall cease
effective with the beginning of the Continuation Period. Executive’s account
balance under such plan shall be distributed to him in accordance with his
distribution election form, on file with the Company.

ARTICLE 4

CERTAIN TAX REIMBURSEMENT PAYMENTS

     Section 4.01.
Gross-up Payment. If any portion of the Severance
Benefits or any other payment under this Agreement, or under any other
agreement with the Company or plan of the Company, including but not limited to
stock options and other long-term incentives (in the aggregate “Total
Payments”) would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then Executive shall be entitled
under this paragraph to an additional amount (the “Gross-Up Payment”) such that
after payment by Executive of all of Executive’s applicable Federal, state and
local taxes, including any Excise Tax, imposed upon such additional amount,
Executive shall retain an amount equal to the Excise Tax imposed on the Total
Payments. For purposes of this Section 4.01, Executive’s applicable Federal,
state and local taxes shall be computed at the

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maximum marginal rates, taking into account the effect of any loss of
personal exemptions resulting from receipt of the Gross-Up Payment.

     Section 4.02. Determinations. All determinations required to be made
under this Article 4, including whether a Gross-Up Payment is required under
Section 4.01, and the assumptions to be used in determining the Gross-Up
Payment, shall be made by PricewaterhouseCoopers LLP, or such other firm as the
Company may designate in writing (the “Accounting Firm”), which shall provide
detailed supporting calculations both to the Company and Executive within
twenty (20) business days of the receipt of notice from Executive that he has
become entitled to the Severance Benefits pursuant to Section 2.01, or such
earlier time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the Person effecting the change in
control of the Company or is otherwise unavailable, Executive may appoint
another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company.

     Section 4.03. Subsequent Redeterminations. Executive agrees (unless
requested otherwise by the Company) to use reasonable efforts to contest in
good faith any subsequent determination by the Internal Revenue Service that
Executive owes an amount of Excise Tax greater than the amount determined
pursuant to Section 4.02; provided, that Executive shall be entitled to
reimbursement by the Company of all fees and expenses reasonably incurred by
Executive in contesting such determination. In the event the Internal Revenue
Service or any court of competent jurisdiction determines that Executive owes
an amount of Excise Tax that is either greater or less than the amount
previously taken into account and paid under this Article 4, the Company shall
promptly pay to Executive, or Executive shall promptly repay to the Company, as
the case may be, the amount of such excess or shortfall. In the case of any
payment that the Company is required to make to Executive pursuant to the
preceding sentence (a “Later Payment”), the Company shall also pay to Executive
an additional amount such that after payment by Executive of all of Executive’s
applicable Federal, state and local taxes, including any interest and penalties
assessed by any taxing authority, on such additional amount, Executive shall
retain an amount equal to the total of Executive’s applicable Federal, state
and local taxes, including any interest and penalties assessed by any taxing
authority, arising due to the Later Payment. In the case of any repayment of
Excise Tax that Executive is required to make to the Company pursuant to the
second sentence of this Section 4.03, Executive shall also repay to the Company
the amount of any additional payment received by Executive from the Company in
respect of applicable Federal, state and local taxes on such repaid Excise Tax,
to the extent Executive is entitled to a refund of (or has not yet paid) such
Federal, state or local taxes.

ARTICLE 5

SUCCESSORS AND ASSIGNMENTS

     Section 5.01. Successors. The Company shall require any successor
(whether by reason of a change in control, direct or indirect, by purchase,
merger, consolidation, or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
the obligations under this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken place.

     Section 5.02. Assignment by Executive. This Agreement shall inure to
the benefit of and be enforceable by Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. If Executive should die or become disabled while any
amount is owed but unpaid to Executive hereunder, all such amounts, unless
otherwise provided herein, shall be paid to Executive’s devisee, legatee, legal
guardian or other designee, or if there is no such designee, to Executive’s
estate. Executive’s rights hereunder shall not otherwise be assignable.

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ARTICLE 6

MISCELLANEOUS

     Section 6.01. Notices. Any notice required to be delivered hereunder
shall be in writing and shall be addressed

     if to the Company, to:

	 
	Ingram Micro Inc.
	1600 East St. Andrew Place
	Santa Ana, California 92705
	Attn: General Counsel;

     if to Executive, to Executive’s last known address as reflected on the
books and records of the Company

or such other address as such party may hereafter specify for the purpose by
written notice to the other party hereto. Any such notice shall be deemed
received on the date of receipt by the recipient thereof if received prior to 5
p.m. in the place of receipt and such day is a business day in the place of
receipt. Otherwise, any such notice shall be deemed not to have been received
until the next succeeding business day in the place of receipt.

     Section 6.02. Legal Fees and Expenses. Executive shall pay the first
twenty-five thousand dollars ($25,000) of all legal expenses, including
attorney fees, he reasonably incurs as a result of (i) the Company’s refusal to
provide Severance Benefits or other amounts payable in accordance herewith upon
an event set forth in Section 2.01, (ii) the Company’s (or any third party’s)
contesting the validity, enforceability, or interpretation of the Agreement,
(iii) any conflict between the parties pertaining to this Agreement, or (iv)
Executive’s pursuing any claim under Section 6.15; provided, however, that if
Executive is the prevailing party in any claim or dispute with respect to
clauses (i), (ii), (iii) or (iv) of this Section 6.02, Executive shall be
entitled to reimbursement from the Company for the amount of such expenses and
fees in excess of twenty-five thousand dollars ($25,000) reasonably incurred by
him that he actually paid and for which he was not previously reimbursed.

     Section 6.03. Arbitration. Executive and the Company each shall have
the right and option to elect (in lieu of litigation) to have any dispute or
controversy arising under or in connection with this Agreement settled by
arbitration, conducted before a panel of three arbitrators sitting in a
location selected by Executive within fifty (50) miles from the location of
Executive’s principal place of employment with the Company, in accordance with
the rules of the American Arbitration Association then in effect. Executive’s
or the Company’s election to arbitrate, as herein provided, and the decision of
the arbitrators in that proceeding, shall be binding on the Company and
Executive. Judgment may be entered on the award of the arbitrator in any court
having jurisdiction. In connection with any such arbitration, the arbitrators’
fees and expenses shall be divided equally between the parties and each party
shall otherwise bear its own fees and expenses; provided, however, that
Executive shall pay the first twenty-five thousand dollars ($25,000) of
Executive’s reasonably incurred fees and expenses (including his share of
arbitrators’ fees and expenses divided between the parties); and provided,
further, that if Executive is the prevailing party in any matter arbitrated
under this Section 6.03, Executive shall be entitled to reimbursement from the
Company for the amount of such expenses and fees in excess of twenty-five
thousand dollars ($25,000) reasonably incurred by him as he actually paid and
for which he was not previously reimbursed.

     Section 6.04. Unfunded Agreement. The obligations of the Company under
this Agreement represent an unsecured, unfunded promise to pay benefits to
Executive and/or

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Executive’s beneficiaries, and shall not entitle Executive or such
beneficiaries to a preferential claim to any asset of the Company.

     Section 6.05. Non-Exclusivity of Benefits. Unless specifically provided
herein, neither the provisions of this Agreement nor the benefits provided
hereunder shall reduce any amounts otherwise payable, or in any way diminish
Executive’s rights as an employee of the Company, whether existing now or
hereafter, under any compensation and/or benefit plans (qualified or
nonqualified), programs, policies, or practices provided by the Company, for
which Executive may qualify. Vested benefits or other amounts which Executive
is otherwise entitled to receive under any plan, policy, practice, or program
of the Company (i.e., including, but not limited to, vested benefits under any
qualified or nonqualified retirement plan), at or subsequent to the date of
termination of Executive’s employment shall be payable in accordance with such
plan, policy, practice, or program except as expressly modified by this
Agreement.

     Section 6.06. Employment Status. Nothing herein contained shall
interfere with the Company’s right to terminate Executive’s employment with the
Company at any time, with or without Cause, subject to the Company’s obligation
to provide such Severance Benefits and other amounts as may be required
hereunder.

     Section 6.07. Mitigation.

     (a)  In no event shall Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to Executive
under any of the provisions of this Agreement, nor, except as provided below,
shall the amount of any payment hereunder be reduced by any compensation earned
by Executive as a result of employment by another employer.

     (b)  Notwithstanding any other provision of this Agreement to the contrary,
including, without limitation, Section 6.07(a), in the event that Executive’s
employment with the Company is terminated so as to entitle him to receive the
Severance Benefits described in Article 3 of this Agreement, and if following
such termination of employment Executive is subsequently employed by any party
or becomes self-employed where, in either case, Executive becomes eligible to
receive Base Salary and an annual bonus opportunity comparable in the aggregate
to such compensation Executive received from the Company immediately prior to
such termination, then all cash payments pursuant to Section 3.02 shall
automatically cease on the first of the month immediately following the month
in which Executive becomes entitled to such compensation; provided, however,
that no other Severance Benefits shall be affected or reduced nor shall the
period of time during which any of Executive’s equity-based awards may vest or
be exercised as provided in Section 3.06 be affected or reduced.

     Section 6.08. No Set-Off. The Company’s obligations to make all
payments and honor all commitments under this Agreement shall be absolute and
unconditional and, except as provided in Section 6.09, shall not be affected by
any circumstances including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company may have against
Executive.

     Section 6.09. Entire Agreement. This Agreement represents the entire
agreement between the Executive and the Company and its affiliates with respect
to Executive’s employment and/or severance rights, and supersedes all prior
discussions, negotiations, and agreements concerning such rights, including,
but not limited to, any prior severance agreement made between Executive and
the Company; provided, however, that any amounts payable to Executive hereunder
shall be reduced by any amounts paid to Executive as required by any applicable
local law in connection with any termination of Executive’s employment.

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     Section 6.10. Tax Withholding. Notwithstanding anything in this
Agreement to the contrary, the Company shall withhold from any amounts payable
under this Agreement all Federal, state, city, or other taxes as are legally
required to be withheld.

     Section 6.11. Waiver of Rights. The waiver by either party of a breach
of any provision of this Agreement shall not operate or be construed as a
continuing waiver or as a consent to or waiver of any subsequent breach hereof.

     Section 6.12. Severability. In the event any provision of the Agreement
shall be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Agreement, and the Agreement shall
be construed and enforced as if the illegal or invalid provision had not been
included.

     Section 6.13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without
reference to principles of conflict of laws.

     Section 6.14. Counterparts. This Agreement may be signed in several
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were on the same instrument.

     Section 6.15. Claim Review Procedure. If Executive is denied benefits
under this Agreement, Executive may request, in writing, a review of the denial
by the Company or its designee within sixty (60) days of receiving written
notice of the denial. The Company shall respond in writing to a written
request for review within ninety (90) days of receipt of such request. Neither
the claim procedure set forth in this Section 6.15 nor Executive’s failure to
adhere to such procedure shall diminish Executive’s right to enforce this
Agreement through legal action, including arbitration as provided in Section
6.03.

     Section 6.16. Indemnification. The Company shall indemnify Executive
(and Executive’s legal representatives or other successors) to the fullest
extent permitted by the Certificate of Incorporation and By-Laws of the
Company, as in effect at such time or on the Effective Date, or by the terms of
any indemnification agreement between the Company and Executive, whichever
affords or afforded greater protection to Executive, and Executive shall be
entitled to the protection of any insurance policies the Company may elect to
maintain generally for the benefit of its directors and officers (and to the
extent the Company maintains such an insurance policy or policies, Executive
shall be covered by such policy or policies, in accordance with its or their
terms, to the maximum extent of the coverage available for any Company officer
or director), against all costs, charges and expenses whatsoever incurred or
sustained by Executive or Executive’s legal representatives at the time such
costs, charges and expenses are incurred or sustained, in connection with any
action, suit or proceeding to which Executive (or Executive’s legal
representatives or other successors) may be made a party by reason of
Executive’s being or having been a director, officer or employee of the Company
or any Subsidiary of the Company or Executive’s serving or having served any
other enterprise as a director, officer, employee or fiduciary at the request
of the Company.

ARTICLE 7

DEFINITIONS

     For purposes of this Agreement, the following terms shall have the
meanings set forth below.

     “Accounting Firm” has the meaning set forth in Section 4.02 hereof.

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     “Base Salary” means, at any time, the then-regular annual rate of pay
which Executive is receiving as annual salary.

     “Board” has the meaning set forth in the third Recital of this Agreement.

     “Cause” means the occurrence of any one or more of the following:

          (a) A demonstrably willful and deliberate material act or failure to act
by Executive (other than as a result of incapacity due to physical or mental
illness) which is committed in bad faith, without reasonable belief that such
action or inaction is in the best interests of the Company, and which act or
inaction is not remedied within fifteen business days of written notice from
the Company;

          (b) Executive’s gross negligence in the performance of Executive’s duties
hereunder; or

          (c) Executive’s conviction for committing an act of fraud, embezzlement,
theft, or any other act constituting a felony involving moral turpitude.

     Notwithstanding the foregoing, Executive shall not be deemed to have been
terminated for the reasons set forth in clause (a) or (b) of this definition
unless and until there shall have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote (which cannot be delegated) of
not less than three-quarters of the entire membership of the Board at a meeting
of the Board called and held for such purpose (and after reasonable notice to
Executive an opportunity for Executive, together with Executive’s counsel, to
be heard before the Board), finding that, in the good faith opinion of the
Board, Executive is guilty of conduct set forth above in such clauses (a) or
(b) of this definition and specifying the particulars thereof in detail.

     “CEO” has the meaning set forth in Section 1.01 hereof.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Company” has the meaning set forth in the introductory paragraph of this
Agreement.

     “Continuation Period” has the meaning set forth in Section 3.02 hereof.

     “Effective Date” has the meaning set forth in the introductory paragraph
of this Agreement.

     “Excise Tax” has the meaning set forth in Section 4.01 hereof.

     “Executive” has the meaning set forth in the introductory paragraph of
this Agreement.

     “401(k) Plan” has the meaning set forth in Section 3.07(a) hereof.

     “Good Reason” means, without Executive’s express written consent, the
occurrence of any one or more of the following:

          (a) a reduction in Executive’s then-existing authorities, duties,
responsibilities and status as an officer of the Company, excluding any
designated acting or temporary authorities, duties, responsibilities and
status; provided, however, an insubstantial and inadvertent act that is
remedied by the Company promptly after receipt of notice thereof given by
Executive shall not constitute Good Reason;

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          (b) the Company’s requiring Executive to be based at a location in excess
of thirty-five (35) miles from Executive’s then-existing principal job location
or office; except for required travel on the Company’s business to an extent
consistent with Executive’s business travel obligations;

          (c) reduction by the Company of Executive’s Base Salary or total annual
target compensation from the highest level at any time in the year prior to
such reduction by more than 10%;

          (d) the failure by the Company to keep in effect compensation, retirement,
health and welfare benefits, or perquisite programs under which Executive
receives benefits substantially similar, in the aggregate, to his benefits
under such programs immediately prior to the Effective Date (other than
pursuant to an equivalent reduction in such benefits of the Company’s other
senior executives).

     “Gross-Up Payment” has the meaning set forth in Section 4.01 hereof.

     “Later Payment” has the meaning set forth in Section 4.03 hereof.

     “Person” means an individual, corporation, partnership, association, trust
or any other entity or organization.

     “Release” has the meaning set forth in Section 3.01 hereof.

     “Retiree Plan” has the meaning set forth in Section 3.05(b) hereof.

     “Severance Benefits” has the meaning set forth in Section 3.01 hereof.

     “Severance Pay” has the meaning set forth in Section 3.02 hereof.

     “Subsidiary” of the Company means any other Person of which securities or
other ownership interests having voting power to elect a majority of the board
of directors or other Persons performing similar functions are at the time
directly or indirectly owned by the Company.

     “Total Payments” has the meaning set forth in Section 4.01 hereof.

     “2000 Agreement” has the meaning set forth in the second Recital of this
Agreement.

     IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement, to be effective as of the day and year first written above.

	 	 	 	 	 
	EXECUTIVE	 	
 	Ingram Micro Inc.	 
	 	 	 	 	 
		 	
By:
		 
	
	 	 	
	 
	Michael J. Grainger	 	
Name:	 	 
	 	 	
 	Title:	 

9Exhibit 10.47

 

EXHIBIT 10.47

SEPARATION AGREEMENT

          This Separation Agreement (this “Agreement”) is made and entered into as
of January 30, 2004 by and between Ingram Micro Inc., a Delaware corporation
(the “Company”), and JAMES E. ANDERSON, JR. (“Executive”) (the Company and
Executive hereinafter referred to together as the “Parties”).

          WHEREAS, the Parties have heretofore entered into that certain Executive
Retention Agreement between the Parties dated as of January 31, 2000, as
amended, attached as Exhibit A hereto (as modified by this Agreement, the
“Retention Agreement”).

          WHEREAS, the Parties have agreed that Executive shall terminate his
employment with the Company on January 31, 2004 and that such termination shall
constitute a “Constructive Event” within the meaning of the Retention
Agreement.

          WHEREAS, the purpose of this Agreement is to confirm the agreed upon
terms, conditions and arrangements concerning the termination of Executive’s
employment with the Company.

          NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and agreements herein contained, the sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, agree as follows:

     1.     Resignation. Effective as of January 31, 2004 (the “Effective Date”),
and subject to Executive’s not revoking the Release (as defined below), (a)
Executive agrees to resign all of his positions with the Company and the
Company agrees to accept Executive’s resignation from such positions, and (b)
each of the Parties agrees to execute and deliver to the other a Release (the
“Release”) in the form attached hereto as Exhibit B.

     2.     Separation Payments.

		
	 	     (a) Subject to all of the terms and conditions of the Retention
Agreement and any other applicable benefit or compensation plans or
arrangements of the Company in which the Executive is a participant, the
Company agrees to make the payments and to provide the benefits to
Executive as set forth in this Section 2; provided, however, that no
payments or benefits shall be paid or provided pursuant to Section 2(d)
or (e), below, sooner than eight (8) days after the date on which
Executive executes and delivers the Release.

		
	 	     (b) On the Effective Date, the Company shall pay Executive, in
accordance with Section 2.04(b)(i) of the Retention Agreement,
Executive’s “Accrued Compensation” (as defined in Section 2.03(a) of the
Retention Agreement) through and including the Effective Date; provided,
however, that the Company shall reimburse Executive for his unreimbursed
business expenses as soon as practicable after submission

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	 	by Executive of proper documentation in accordance with the
Company’s policy with respect to reimbursement of such expenses.

		
	 	     (c) The Company shall provide to Executive, in accordance with
Section 2.04(b)(ii) of the Retention Agreement, Executive’s “Accrued
Benefits” (as defined in Section 2.03(a) of the Retention Agreement)
through and including the Effective Date.
	 
	 	     (d) Subject to Executive’s not revoking the Release, the Company
shall pay Executive, in accordance with Section 2.04(b)(iii) of the
Retention Agreement, in equal installments at the times and in accordance
with the applicable Company payroll system, over a period of nineteen
(19) months measured from the Effective Date, the sum of Executive’s
“Basic Termination Benefit,” “Bonus Amount” and “Basic Bonus Amount”
(each as defined in Section 2.04(a)(iii), 2.03(b)(ii) and 2.03(c),
respectively, of the Retention Agreement). Notwithstanding any
interpretation of the Retention Agreement to the contrary, the Parties
agree that this sum shall be one million sixty-five thousand six hundred
forty- three dollars ($1,065,643.00). For purposes of this Agreement,
notwithstanding any interpretation of the Retention Agreement to the
contrary, the Parties agree further that the “Payment Period” pursuant to
the Retention Agreement and this Agreement shall extend for nineteen (19)
months from the Effective Date through August 31, 2005.
	 
	 	     (e) Subject to Executive’s not revoking the Release, the Company
shall provide to Executive, in accordance with Section 2.04(b)(iv) of the
Retention Agreement, Executive’s “Additional Benefits” (as defined in
Section 2.03(d) of the Retention Agreement and as may be modified below)
through and in respect of the “Payment Period” (as set forth in Section
2(d) above). Notwithstanding any interpretation of the Retention
Agreement to the contrary, the Parties agree that such Additional
Benefits shall consist solely of the following:

		
	 	     (i) Executive’s continued participation under the Company’s
medical care and dental plans (or any successor medical or dental
plans adopted by the Company) in which Executive participates as in
effect immediately prior to the Effective Date (subject to changes
in coverage levels applicable to all employees generally covered by
such plans), if he elects to receive continuation coverage under
the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”), for the applicable period under COBRA commencing with
the Effective Date; provided, however, that if Executive elects
such coverage, the Company shall provide such coverage at the
Company’s expense during the Payment Period (whether or not such
period exceeds the period of COBRA “continuation coverage” (within
the meaning of Section 4980B(f)(2) of the Internal Revenue Code of
1986, as amended)), and Executive shall be eligible after the
Payment Period to participate in the Company’s Executive Retiree
Medical Plan or any successor retiree medical plan of the Company,
as in effect from time to time (the “Retiree Plan”), at his own
expense and in accordance with the terms and conditions of such
retiree medical plan. Under the terms of the Retiree Plan as of
the Effective Date hereof, subject to any amendment or termination
of the Retiree Plan, Executive and his eligible dependents may
continue to participate in the

2

 

		
	 	Company-sponsored medical plans until Executive attains age 65
or becomes eligible for Medicare, whichever occurs first.
Executive shall be responsible for payment of one hundred percent
(100%) of the applicable monthly insurance premium for such
coverage under the Retiree Plan;

		
	 	     (ii) reimbursement of the documented costs, including
laboratory and test fees, of annual physical examinations (not to
exceed one annually) for Executive in an amount not to exceed one
thousand five hundred dollars ($1,500) per examination;
	 
	 	     (iii) Executive’s participation in the Company’s Supplemental
Investment Savings Plan (the “Supplemental Plan”) during the
Payment Period up to the full amount of employee contributions
permitted; provided, however, that the Company shall not be
required to make any matching contributions with respect to
Executive’s contributions during the Payment Period; and provided,
further, that Executive’s account balance under the Supplemental
Plan shall be distributed to him, in forty (40) equal quarterly
installments beginning in the fourth calendar quarter of 2005; and
	 
	 	     (iv) continued vesting, during the Payment Period, of
outstanding stock options granted to Executive prior to the
Effective Date pursuant to the Company’s “Stock Plans” (as defined
in Section 2.02(b)(i) of the Retention Agreement). A summary of
the status of Executive’s stock options as of January 15, 2004 is
attached hereto as Exhibit C.

     3.     Stock Option Exercises. Executive has attained age 50 and has more
than five (5) years of service with the Company, and, therefore, Executive’s
outstanding vested stock options granted to him prior to the Effective Date
pursuant to the Company’s “Stock Plans” (as defined in Section 2.02(b)(i) of
the Retention Agreement), including such options (or portions thereof) as vest
during the Payment Period, shall be exercisable by him for five (5) years from
the Effective Date hereof, except that if any such option would otherwise
terminate sooner, such option shall not be exercisable after its termination
date. Otherwise, Executive’s outstanding vested stock options shall be
exercisable according to their terms.

     4.     401(k) Plan. Executive’s right to have contributions allocated to his
account in the Company’s 401(k) Investment Savings Plan (the “401(k) Plan”)
shall cease effective with the Effective Date. Executive shall be entitled to
leave such account invested in the 401(k) Plan or roll it over to an individual
retirement account or another employer’s qualified plan.

     5.     Long Term Incentive Plan.

		
	 	     (a) With respect to the Company’s 2002 Long-Term Executive Cash
Incentive Award Program, as amended from time to time (the “2002 Cash
Program”), Executive shall receive a payment equal to thirty-six
thirty-sixths (36/36) of the final calculated payout amount, if any,
attributable to Executive’s award under the 2002 Cash Program, calculated
based on the Company’s actual achievement compared with the Company’s
peer group at the end of the 2002 Cash Program cycle, in accordance with
the

3

 

		
	 	terms and conditions of the 2002 Cash Program. Such payment shall
be (i) made in accordance with the applicable Company payroll system at
or about the same time as the Company makes payments to other
participants in the 2002 Cash Program and (ii) in full satisfaction of
any and all amounts payable to Executive under the 2002 Cash Program.
	 
	 	     (b) With respect to the Company’s 2003 Long-Term Executive Cash
Incentive Award Program, as amended from time to time (the “2003 Cash
Program”), Executive shall continue to participate in the 2003 Cash
Program during the Payment Period as if he were an actively employed
participant in the 2003 Cash Program. Accordingly, Executive shall
receive a payment equal to thirty-two thirty-sixths (32/36) of the final
calculated payout amount, if any, attributable to Executive’s award under
the 2003 Cash Program, calculated based on the Company’s actual
achievement compared with the Company’s peer group at the end of the 2003
Cash Program cycle, in accordance with the terms and conditions of the
2003 Cash Program. Such payment shall be (i) made in accordance with the
applicable Company payroll system at or about the same time as the
Company makes payments to other participants in the 2003 Cash Program and
(ii) in full satisfaction of any and all amounts payable to Executive
under the 2003 Cash Program.
	 
	 	     (c) Executive shall not be entitled to participate in the Company’s
2004 Long-Term Executive Cash Incentive Award Program.

     6.     2003 Bonus. Executive shall receive one hundred percent (100%) of his
target incentive award under the Company’s 2003 Executive Incentive Award
Program (the “Bonus Program”), regardless of the Company’s actual achievement
under the terms and conditions of the Bonus Program. Such payment shall be (a)
made at or about the same time and in the same manner as the Company makes
payments to other participants in the Bonus Program and (b) in full
satisfaction of any and all amounts payable to Executive under the Bonus
Program.

     7.     Deferred 2003 Retention Payment. In accordance with Executive’s
currently effective election under the Retention Payment Deferral Agreement
between the Executive and the Company dated as of December 16, 2002 (the
“Deferral Agreement”), Executive shall receive payment of his “Deferred Account
Balance” (within the meaning of the Deferral Agreement), in forty (40) equal
quarterly installments beginning on January 31, 2006.

     8.     Loan Forgiveness. As required by the Promissory Note between Executive
and the Company dated as of February 12, 2002 (the “Note”) and the “2002
Letter” (as defined in the Note), the Company agrees to forgive, upon
Executive’s termination of employment pursuant hereto for “Good Reason” within
the meaning of the Retention Agreement, any and all then outstanding principal
and accrued interest on the loan (the “Loan”) represented by the Note. Further
as required by the Note and the 2002 Letter, the Company shall “gross up” the
taxable portion of the Loan, when it is forgiven, at a Federal tax rate of
38.6%, a California tax rate of 9.3% and a FICA/Medicare tax rate of 1.45%, or
the highest applicable tax rates for Executive’s income bracket at that time,
by contributing such grossed up amount to the applicable tax authorities on
Executive’s behalf.

4

 

     9.     Survival of Retention Agreement; Entire Agreement. This Agreement is
intended to modify the Retention Agreement only insofar as the terms and
conditions of this Agreement require. In all other respects, the Retention
Agreement shall remain in effect in accordance with its terms. This Agreement
and the Retention Agreement (as modified by this Agreement) constitute and are
intended to constitute the entire agreement of the Parties concerning the
subject matter hereof and thereof. No covenants, agreements, representations
or warranties of any kind whatsoever have been made by any Party hereto, except
as specifically set forth herein. All prior discussions and negotiations with
respect to the subject matter hereof and thereof are superseded by this
Agreement and by the Retention Agreement (as modified by this Agreement).

     10.     Successors. This Agreement shall inure to the benefit of and be
binding upon the Parties and their respective principals, partners, officers,
directors, shareholders, employees, trustees, trust beneficiaries, agents,
independent contractors and the successors, assigns, heirs, executors,
administrators and representatives of each of the foregoing.

     11.     Further Assurances. The Parties shall, from time to time, promptly
execute and deliver such further instruments, documents and papers and perform
such further acts as may be necessary or proper to carry out and effect the
terms of this Agreement.

     12.     Headings. Headings in this Agreement are for convenience and
reference only and shall not be used to construe its provisions.

     13.     Governing Law. This Agreement shall be interpreted in accordance with
the plain meaning of its terms and not strictly for or against any of the
Parties. This Agreement and all provisions hereof shall be governed by and
construed under the laws of the State of California without regard to the
choice of law rules thereof.

     14.     Modification; Waiver. This Agreement may not be modified or
terminated orally and no modification, termination or waiver shall be valid
unless in writing and signed by all of the Parties. No waiver of any breach of
any provision of this Agreement shall be deemed to be a waiver of any other
breach of this Agreement or any of its provisions.

     15.     Voluntary Execution of Agreement. Executive understands and agrees
that he is receiving the amounts and benefits described in this Agreement as
consideration for his execution of this Agreement and fulfillment of the
covenants and promises contained herein, including without limitation his
execution and nonrevocation of the Release. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
either Party. Executive acknowledges that he has had the opportunity to be
represented and advised by legal counsel concerning the terms and conditions of
this Agreement and his execution of it.

     16.     Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute but one and the same agreement.

     17.     Severability. If any provision of this Agreement, or the application
thereof, is for any reason held to any extent to be invalid or unenforceable,
the remainder of this Agreement and application of such provision to other
persons or circumstances shall be interpreted so as reasonably to effect the
intent of the Parties hereto. The Parties further agree to replace such

5

 

void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of the void or unenforceable provision and to
execute any amendment, consent or agreement deemed necessary or desirable by
the Company to effect such replacement.

[Signature Page Follows]

6

 

          IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement, to be effective as of the day and year first written above.

	 	 	 	 	 
	EXECUTIVE	 	
Ingram Micro Inc.
	 	 	 	 	 
	
	 	
By:
	
	 
	James E. Anderson, Jr.	 	
Name:	 	 
	 	 	
Title:	 	 

S-1

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