EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is entered into as of this fifth day of
June, 1998 by and among WESCO International, Inc., a Delaware corporation
("Holding"), its wholly owned subsidiary WESCO Distribution, Inc., a Delaware
corporation (the "Company"), and Xxx X. Xxxxx ("Executive").
W I T N E S S E T H :
WHEREAS, Executive is currently employed as President and Chief
Executive Officer of each of Holding and the Company;
WHEREAS, Holding and the Company each desires to continue
Executive's employment and to enter into an agreement setting forth the terms
and conditions of such continued employment;
WHEREAS, Executive desires to accept such continued employment and
to enter into such an agreement;
WHEREAS, Holding, the Company and Executive each acknowledges and
agrees that, in the course of his employment with Holding and the Company,
Executive has had and will continue to have a prominent role in the management
of the business, and the development of the goodwill, of the Holding, Company
and their respective Affiliates (as defined below) and has established and
developed and will continue to establish and develop relations and contacts with
the principal customers and suppliers of Holding, the Company and their
respective Affiliates in the United States, Canada and Mexico and the rest of
the world, all of which constitute valuable goodwill of, and could be used by
Executive to compete unfairly with, Holding, the Company and their respective
Affiliates; and
WHEREAS, (i) in the course of his employment with Holding and the
Company, Executive has obtained and will continue to obtain confidential and
proprietary information and trade secrets concerning the business and operations
of Holding, the Company and their respective Affiliates in the United States,
Canada and Mexico and the rest of the world that could be used to compete
unfairly with Holding, the Company and their respective Affiliates; (ii) the
covenants and restrictions contained in Sections 7 through 12, inclusive, are
intended to protect the legitimate interests of Holding, the Company and their
respective Affiliates in their respective goodwill, trade secrets and other
confidential and proprietary information; and (iii) Executive desires to be
bound by such covenants and restrictions;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable
consideration, Holding, the Company and Executive hereby agree as follows:
1. Agreement to Employ. Upon the terms and subject to the conditions
of this Agreement, Holding and the Company each hereby continues the employment
of Executive and Executive hereby accepts such continued employment with Holding
and the Company.
2. Term; Position and Responsibilities.
(a) Term of Employment. Unless Executive's employment is sooner
terminated pursuant to Section 6, Holding and the Company shall each employ
Executive during the period commencing on the date hereof (the "Commencement
Date") and ending on the third anniversary of the Commencement Date; provided,
however, that on each day following the Commencement Date, the period of
Executive's employment pursuant to this Agreement shall be automatically
extended, upon the same terms and conditions, for an additional day unless
either the Company (on its own behalf and on behalf of Holding) or Executive
gives written notice (a "Non-Extension Notice") to the other of its intention
not to extend such period of Executive's employment hereunder, provided,
further, that delivery of a Non-Extension Notice by the Company shall not
constitute a termination of Executive's employment by Holding or the Company
unless such notice specifically provides for such termination of employment and
the specific date thereof. The period during which Executive is employed
pursuant to this Agreement, including any extension thereof in accordance with
the preceding sentence, shall be referred to as the "Employment Period".
(b) Position and Responsibilities. During the Employment Period,
Executive shall serve as the President and Chief Executive Officer of each of
Holding and the Company and, in addition, in such other executive capacity or
capacities for Holding, the Company or any of their respective Subsidiaries (as
defined below) as may be determined from time to time by or under the authority
of the Board of Directors of the Company (the "Board") or the Board of Director
of Holding (the "Holding Board"). During the Employment Period, Executive shall
devote all of his skill, knowledge and working time (except for (i) reasonable
vacation time and absence for sickness or similar disability and (ii) to the
extent that it does not interfere with the performance of Executive's duties
hereunder and is in compliance with Section 7 through 12, inclusive, and normal
Company policies, such reasonable time as may be devoted to the fulfillment of
civic responsibilities) to the conscientious performance of the duties if his
positions with Holding, the Company and any of their respective Subsidiaries.
Executive represents that he is entering into this Agreement voluntarily and
that his employment and compliance by him with the terms and conditions of this
Agreement will not conflict with or result in the breach of any agreement to
which he is a party or by which he
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may be bound. Holding and the Company will each use its reasonable best efforts
to cause Executive to be nominated and elected to serve as a member of the Board
and the Holding Board during the Employment Period.
3. Compensation.
(a) Base Salary. As compensation for the services to be performed by
Executive during the Employment Period, the Company will pay Executive a base
salary at the annual rate of $500,000. The Compensation Committee of the Holding
Board (the "Compensation Committee") will review Executive's annual base salary
rate from time to time during the Employment Period and, may, in its discretion,
adjust such annual rate from time to time based upon the performance of
Executive, the financial condition of Holding and the Company, prevailing
industry salary scales and such other factors as the Compensation Committee
shall consider relevant. The Company shall pay Executive his base salary in
semi-monthly installments, or in such other installments as may be mutually
agreed upon by the Company and Executive. The annual base salary payable to
Executive under this Section 3(a), as the same may be increased from time to
time and without regard to any reduction therefrom in accordance with the next
sentence, shall hereinafter be referred to as the "Base Salary". The Base Salary
payable under this Section 3(a) shall be reduced to the extent that Executive
elects to defer such Base Salary under the terms of any deferred compensation,
savings plan or other voluntary deferral arrangement that may be maintained or
established by the Company.
(b) Incentive Compensation. During the Employment Period, Executive
shall be entitled to participate at a level commensurate with his positions and
duties with Holding and the Company in the Company's annual incentive
compensation program for executive officers (the "Annual Incentive Plan") in
accordance with the generally applicable terms thereof as in effect from time to
time. Executive shall be entitled to an annual cash bonus under the Annual
Incentive Plan for each fiscal year of the Company ending during the Employment
Period equal to a percentage of his Base Salary, not to exceed 200%, if the
Compensation Committee determines that the Company and Executive have achieved
the financial and other performance objectives established by the Compensation
Committee for such fiscal year. Notwithstanding the foregoing, in the event of a
Change in Control (as defined below), Executive shall be entitled to a minimum
annual cash bonus equal to 50% of his then current Base Salary for each fiscal
year of the Company ending thereafter during the Employment Period.
4. Benefits.
(a) General. During the Employment Period, Executive shall be
entitled to participate in all of the Company's profit
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sharing, pension, savings, deferred compensation, supplemental savings, life,
medical, dental and disability insurance plans, as the same may be amended and
in effect from time to time, applicable to its senior executives, provided that
Executive shall not be entitled to participate in any severance plan of the
Company or otherwise receive any severance benefits under any other type of
plan.
(b) Vacation. During the Employment Period, Executive shall be
entitled to four weeks of paid vacation annually.
(c) Certain Club Dues. The Company shall reimburse Executive for the
annual dues paid by him for membership in one local country club selected by
Executive.
5. Expenses. The Company shall reimburse Executive for reasonable
travel, lodging and meal expenses incurred by him in connection with his
performance of services hereunder upon submission of evidence, satisfactory to
the Company, of the incurrence and purpose of each such expense.
6. Termination of Employment.
(a) Termination Due to Death or Disability. Executive's employment
with Holding and the Company shall automatically terminate upon his death or
Disability. For purposes of this Agreement, "Disability" shall mean a physical
or mental disability or infirmity that prevents the performance by Executive of
his duties hereunder lasting (or likely to last, based on competent medical
evidence presented to the Board) for a continuous period of six months or
longer. The reasoned and good faith judgment of the Board as to Disability shall
be final and binding and shall be based on such competent medical evidence as
shall be presented to it by Executive or by any physician or group of physicians
or other competent medical experts employed by Executive or the Company to
advise the Board.
(b) Termination by the Company for Cause. Executive's employment
with Holding and the Company may be terminated during the Employment Period by
Holding and the Company for "Cause". "Cause" shall mean (i) the willful failure
of Executive substantially to perform his duties hereunder (other than any such
failure due to physical or mental illness) after a demand for substantial
performance is delivered to Executive by the Board, which notice identifies the
manner in which the Board believes that Executive has not substantially
performed his duties hereunder, (ii) Executive's engaging in willful serious
misconduct that is materially injurious to Holding, the Company or any of their
respective Affiliates, (iii) Executive's conviction of, or entering a plea of
nolo contendere to, a crime that constitutes a felony, (iv) the material or
willful breach by Executive of any written covenant or agreement with Holding,
the Company or any of their respective Affiliates (x) not to disclose any
information pertaining to Holding, the Company or any of
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their respective Affiliates, (y) not to compete or interfere with Holding, the
Company or any of their respective Affiliates, including without limitation a
breach of any of the covenants set forth in any of Sections 7, 8, 9, 10, 11 or
12 hereof, or (z) relating to any shares of capital stock of Holding or options
in respect of any such stock owned or controlled by Executive. For purposes of
this paragraph, no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his action or omission was in the best
interest of the Company. Notwithstanding the foregoing, the Executive shall not
be deemed to have been terminated for Cause without (1) 60 days notice to the
Executive setting forth the reasons for the Company's intention to terminate for
Cause, during which 60 day period the Executive may, if possible, cure or remedy
the action or omission giving rise to Cause, (2) an opportunity for the
Executive, together with his counsel, to be heard before the Board of Directors
of the Company and (3) delivery to the Executive of a Notice of Termination, as
defined in subsection (e) hereof, from the Board of Directors finding that in
the good faith opinion of the Board of Directors the Executive was guilty of
conduct set forth in this paragraph (b), and specifying the particulars thereof
in detail.
(c) Termination Without Cause. A termination "Without Cause" shall
mean a termination during the Employment Period of Executive's employment with
the Company and Holding by the Company and Holding other than any such
termination due to death or Disability as described in Section 6(a) or for Cause
as described in Section 6(b).
(d) Termination by Executive. During the Employment Period,
Executive may terminate his employment with the Company and Holding for "Good
Reason". "Good Reason" shall mean a termination of Executive's employment with
Holding and the Company by Executive during the Employment Period and within 30
days following (i) any assignment to Executive of any duties that are
significantly different from, and result in a substantial diminution of,
Executive's duties as of the Commencement Date, (ii) delivery by the Company of
a Non-Extension Notice, (iii) the failure of Holding or the Company, whichever
is applicable, to obtain the assumption of this Agreement by a Successor (as
defined below) as contemplated by Section 13, (iv) the removal of Executive
from, or the failure to reelect or redesignate Executive to, the positions of
President and Chief Executive Officer of Holding and the Company or the failure
by Holding or the Company to use its reasonable best efforts to cause Executive
to be nominated and elected to serve as a member of the Board or the Holding
Board, (v) a reduction in the rate of Executive's Base Salary or (vi) a material
reduction in the aggregate level of employee benefits provided to Executive
pursuant to Section 4(a) hereof, provided that, (x) within 30 days following the
occurrence of any such event, Executive shall have delivered
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written notice to the Board of his intention to terminate his employment for
Good Reason, which notice specifies in reasonable detail the circumstances
claimed to give rise to Executive's right to terminate his employment for Good
Reason, and Holding or the Company, whichever is applicable, shall not have
cured such circumstance to the reasonable satisfaction of Executive, (y) the
occurrence of any such event in connection with a termination of Executive's
employment for Cause as provided in Section 6(b) or due to Executive's death or
Disability as provided in Section 6(a) shall not constitute an event permitting
Executive to terminate his employment for Good Reason and (z) the events
described in clauses (v) and (vi) shall constitute an event permitting Executive
to terminate his employment for Good Reason only if such event occurs following
a Change in Control.
(e) Notice of Termination. Any termination of Executive's employment
by the Company and Holding pursuant to Section 6(a) (in the case of Disability),
6(b) or 6(c), or by Executive pursuant to Section 6(d), shall be communicated by
a written "Notice of Termination" addressed to Executive, in the case of any
such termination by Holding and the Company, or to Holding and the Company, in
the case of any such termination by Executive. A "Notice of Termination" shall
mean a notice stating that Executive's employment hereunder has been or will be
terminated, indicating the specific termination provisions of Section 6 of this
Agreement relied upon and setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for such termination of employment.
(f) Payments Upon Certain Terminations.
(i) Termination Without Cause or for Good Reason. In the event of a
termination during the Employment Period of Executive's employment with
Holding and the Company as a result of (A) Executive's death, (B)
Executive's Disability, (C) a termination by the Company and Holding
Without Cause or (D) a termination by Executive for Good Reason (any such
termination, a "Qualifying Termination"), the Company shall pay to
Executive (or in the case of his death, to his spouse) his full Base
Salary through the Date of Termination (as defined below) and an amount
equal to the pro rata amount of annual incentive compensation for the
portion of the fiscal year preceding the Date of Termination that would
have been payable to Executive pursuant to Section 3(b) if he had remained
employed for the entire fiscal year, determined on the basis of the actual
performance achieved by the Company and Executive through the Date of
Termination and the performance objectives established for such fiscal
year, pro rated to reflect the calculation of such annual incentive
compensation for the portion of the fiscal year preceding the Date of
Termination. In addition, in the event of a Qualifying Termination, (x)
all options to purchase shares of the Class A Common Stock of Holding (the
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"Options") granted to Executive on or after the Commencement Date shall
become fully vested as of the Date of Termination and shall remain
exercisable until the eighteen month anniversary of the Date of
Termination in accordance with the terms set forth in the management stock
option agreements evidencing each such Option and (y) the Company shall
pay or, in the case of the Continued Benefits (as defined below), provide
to Executive (or, following his death, to Executive's designated
beneficiary or beneficiaries), as liquidated damages,
(A) his Average Base Salary (as defined below), which shall be
payable in installments on the Company's regular payroll dates, for
the period beginning on the Date of Termination and ending (I) in
the case of a termination due to Executive's death or Disability, on
the second anniversary of the Date of Termination or (II) in the
case of a termination by the Company and Holding Without Cause or by
Executive with Good Reason, on the third anniversary of the Date of
Termination (the applicable period, the "Severance Period") and
(B) on the last day of each calendar month included in the Severance
Period, an amount equal to one-twelfth of the Average Annual Bonus
(as defined below); and
(C) continued coverage for Executive and his eligible dependents
under the Company's medical and life insurance plans referred to in
Section 4(a) (the "Continued Benefits") during the period commencing
on the Date of Termination and ending on the second anniversary of
the Date of Termination, subject to timely payment by Executive of
all premiums, contributions and other co-payments required to be
paid by senior executives of the Company under the terms of such
plans as in effect from time to time;
provided that the Company may, at any time, pay to Executive, in a
single lump sum and in satisfaction of the Company's obligations
under clauses (A) and (B) of this Section 6(f)(i), an amount equal
to the present value (as determined by the Company using a discount
rate equal to the then prevailing applicable federal short-term rate
under section 1274(d) of the Internal Revenue Code of 1986, as
amended (the "Code"), of the sum of the installments of the Average
Base Salary and Average Annual Bonus then remaining to be paid to
Executive pursuant to clauses (A) and (B) above and, provided
further, that in the event of a Qualifying Termination due to
Executive's death or Disability, each installment of Average Base
Salary shall be reduced by the amount, if any, payable as salary
continuation or other similar compensation replacement
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pursuant to any disability or death benefit plan of the Company.
Executive shall not have a duty to mitigate the costs to the Company
under this Section 6(f)(i), except that the Continued Benefits shall
be reduced or canceled if comparable medical benefit coverage is
provided or offered to Executive by any subsequent employer or other
Person for which Executive performs services, including but not
limited to consulting services, at any time after the Date of
Termination.
The term "Average Annual Bonus" means the average of the annual
bonuses paid to Executive pursuant to the Annual Incentive Plan for
each of the two fiscal years of the Company ending immediately prior
to the Date of Termination and the term "Average Base Salary" means
the average of the annual base salary rate of Executive in effect
immediately prior to the Date of Termination and as of the last day
of the fiscal year of the Company ending immediately prior to the
Date of Termination; provided that if Executive's employment is
terminated by Executive following a Change in Control pursuant to
clause (v) of the definition of Good Reason, Executive's annual base
salary rate in effect immediately prior to any reduction thereof
shall be substituted for Executive's annual base salary rate in
effect immediately prior to the Date of Termination in calculating
the Average Base Salary.
(ii) Qualifying Termination Following a Change in Control. In the
event of a termination of Executive's employment with Holding and the Company by
the Company Without Cause or by Executive for Good Reason at any time during the
Employment Period and during the two year period following a Change in Control,
in addition to the compensation and benefits described in (f)(i) above, (x)
Executive shall be entitled to Continued Benefits during the entire Severance
Period and (y) Executive shall be granted three additional years of service
credit for vesting and benefit accrual purposes under the Company's
non-qualified pension plans.
For purposes of this Agreement, the term "Change in Control" shall
mean any of the following occuring on or after the Commencement Date:
(W) the acquisition by any person, entity or "group" (as defined in
Section 13(d) of the Securities Exchange Act of 1934, as amended), other
than Holding, the Company, any of their respective Subsidiaries, any
employee benefit plan of Holding, the Company or any such Subsidiary, or
Cypress Merchant Banking Partners, L.P. ("Cypress") or its affiliates, of
50% or more of the combined voting power of
8
Holding's or the Company's then outstanding voting securities;
(X) the merger or consolidation of Holding or the Company, as a
result of which persons who were stockholders of Holding or the Company,
as the case may be, immediately prior to such merger or consolidation, do
not, immediately thereafter, own, directly or indirectly, more than 50% of
the combined voting power entitled to vote generally in the election of
directors of the merged or consolidated company;
(Y) the liquidation or dissolution of Holding or the Company, other
than any such liquidation of Holding or the Company into the other; and
(Z) the sale, transfer or other disposition of all or substantially
all of the assets of Holding or the Company to one or more persons or
entities that are not, immediately prior to such sale, transfer or other
disposition, Affiliates of Holding, the Company or Cypress.
The June 5, 1998 recapitalization (the "Recapitalization") of the Company,
pursuant to the Recapitalization Agreement among Thor Acquisitions L.L.C., CDW
Holding Corporation and certain Securityholders of CDW Holding Corporation,
dated as of March 27, 1998 shall be deemed to result in a Change in Control.
(iii) Termination for Cause or by Executive without Good Reason. In
the event of a termination of Executive's employment with Holding and the
Company during the Employment Period as a result of a termination by the Company
for Cause or a termination by Executive without Good Reason, the Company shall
pay Executive his full Base Salary through the Date of Termination and Executive
shall not be entitled to the payment of, or to be provided, any severance or
termination compensation or benefits.
(iv) Accrued Benefits Under Company Plans. Except as specifically
set forth in this Section 6(f), Executive shall be entitled to receive all
amounts payable and benefits accrued under any otherwise applicable plan,
policy, program or practice of the Company in which Executive was a participant
during his employment with the Company or Holding in accordance with the terms
thereof, provided that Executive shall not be entitled to receive any payments
or benefits under any such plan, policy, program or practice providing any bonus
or incentive compensation or severance compensation or benefits (and the
provisions of this Section 6(f) shall supersede the provisions of any such plan,
policy, program or practice).
(g) Date of Termination. As used in this Agreement, the term "Date
of Termination" shall mean (i) if Executive's employment is terminated by his
death, the date of his death,
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(ii) if Executive's employment is terminated by the Company for Cause, the date
on which Notice of Termination is given as contemplated by Section 6(e) or, if
later, the date of termination specified in such Notice, and (iii) if
Executive's employment is terminated by the Company Without Cause, due to
Executive's Disability or by Executive for any reason, the date that is 30 days
after the date on which Notice of Termination is given as contemplated by
Section 6(e) or, if no such Notice is given, 30 days after the date of
termination of employment.
(h) Resignation upon Termination. Effective as of any Date of
Termination under this Section 6 or otherwise as of the date of Executive's
termination of employment with the Company, Executive shall resign, in writing,
from all Board memberships and other positions then held by him with Holding,
the Company and their respective Affiliates.
(i) Certain Additional Payments by the Company.
(i) Anything in this Agreement to the contrary notwithstanding, if
it is determined that any payment or distribution by the Company to or for
the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise
pursuant to or by reason of any other agreement, policy, plan, program or
arrangement, including without limitation any stock option, stock
appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (a
"Payment"), would be subject to the excise tax imposed by Section 4999 of
the Code (or any successor provision thereto) by reason of being
"contingent on a change in ownership or control" of the Company, within
the meaning of Section 280G of the Code (or any successor provision
thereto) or to any similar tax imposed by state or local law, or any
interest or penalties with respect to such excise tax (such tax or taxes,
together with any such interest and penalties, are hereafter collectively
referred to as the "Excise Tax"), then the Executive will be entitled to
receive an additional payment or payments (a "Gross-Up Payment") in an
amount such that, after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such taxes), including
any Excise Tax, imposed upon the Gross-Up Payment, the Executive retains
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. All determinations required to be made under this Section,
including whether an Excise Tax is payable by the Executive and the amount
of such Excise Tax and whether a Gross-Up Payment is required and the
amount of such Gross-Up Payment, will be made by a nationally recognized
firm of certified public accountants (the "Accounting Firm") selected by
the Company in its sole discretion.
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(ii) The Executive will notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment. Such notification will be
given as promptly as practicable but no later than 10 business days after
the Executive actually receives notice of such claim and the Executive
will further apprise the Company of the nature of such claim and the date
on which such claim is requested to be paid (in each case, to the extent
known by the Executive). The Executive will not pay such claim prior to
the earlier of (y) the expiration of the 30-calendar-day period following
the date on which he gives such notice to the Company and (z) the date
that any payment of amount with respect to such claim is due. If the
Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive will:
(a) provide the Company with any written records or documents in his
possession relating to such claim reasonably requested by the Company;
(b) take such action in connection with contesting such claim as the
Company will reasonably request in writing from time to time, including
without limitation accepting legal representation with respect to such
claim by an attorney competent in respect of the subject matter and
reasonably selected by the Company;
(c) cooperate with the Company in good faith in order effectively to
contest such claim; and
(d) permit the Company to participate in any proceedings relating to
such claim.
Without limiting the foregoing provisions of this Section 6(i), the Company will
control all proceedings taken in connection with the contest of any claim
contemplated by this Section 6(i) and, at its sole option, may pursue or forego
any and all administrative appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim (provided, however, that the
Executive may participate therein at his own cost and expense) and may, at its
option, either direct the Executive to pay the tax claimed and xxx for a refund
or contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Company will determine.
7. Unauthorized Disclosure. During the period of Executive's
employment with Holding or the Company and the ten year period following any
termination of such employment, without the prior written consent of the Holding
Board or its authorized representative, except to the extent required by an
order of
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a court having jurisdiction or under subpoena from an appropriate government
agency, in which event, Executive shall use his best efforts to consult with the
Holding Board prior to responding to any such order or subpoena, and except as
required in the performance of his duties hereunder, Executive shall not
disclose any confidential or proprietary trade secrets, customer lists,
drawings, designs, information regarding product development, marketing plans,
distribution plans, sales plans, management organization information (including
but not limited to data and other information relating to members of the Holding
Board, the Board or the Board of Directors of any of Holding's or the Company's
Affiliates or to management of Holding, the Company or any of their respective
Affiliates), operating policies or manuals, business or strategic plans,
financial records, packaging design or other financial, commercial, business or
technical information (a) relating to Holding, the Company or any of their
respective Affiliates or (b) that Holding, the Company or any of their
respective Affiliates may receive belonging to suppliers, customers or others
who do business with the Holding, the Company or any of their respective
Affiliates (collectively, "Confidential Information") to any third person unless
such Confidential Information has been previously disclosed to the public or is
in the public domain (other than by reason of Executive's breach of this Section
7).
8. Non-Competition. During the period of Executive's employment with
Holding or the Company and, following any termination thereof, the period ending
on (i) in the case of a Qualifying Termination, the date the Severance Period
expires or (ii) in the event of any other termination of Executive's employment,
the second anniversary of the Date of Termination (such applicable periods,
collectively, the "Restriction Period"), Executive shall not, directly or
indirectly, become employed in an executive capacity by, engage in business
with, serve as an agent or consultant to, or become a partner, member, principal
or stockholder (other than a holder of less than 1% of the outstanding voting
shares of any publicly held company) of, any Person that competes, anywhere in
the United States, Canada or Mexico, with any part of the business of Holding,
the Company or any of their respective Subsidiaries. For purposes of this
Section 8, the phrase employment "in an executive capacity" shall mean
employment in any position in connection with which Executive has or reasonably
would be viewed as having powers and authorities with respect to any other
Person or any part of the business thereof that are substantially similar, with
respect thereto, to the powers and authorities assigned to the President or
Chief Executive Officer or any other executive officer of Holding or the Company
in the By-Laws of Holding or the Company as in effect on the date hereof, a copy
of the relevant portions of which has been delivered to Executive on or before
the date hereof, and which Executive hereby confirms that he has reviewed.
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9. Non-Solicitation of Employees. During the Restriction Period,
Executive shall not, directly or indirectly, for his own account or for the
account of any other Person anywhere in the United States, Canada or Mexico, (i)
solicit for employment, employ or otherwise interfere with the relationship of
Holding, the Company or any of their respective Affiliates with any natural
person throughout the United States, Canada or Mexico who is or was employed by
or otherwise engaged to perform services for Holding, the Company or any of
their respective Affiliates during the six-month period preceding such
solicitation, employment or interference, other than any such solicitation or
employment on behalf of Holding, the Company or any of their respective
Affiliates during Executive's employment with Holding and the Company, or (ii)
induce any employee of Holding, the Company or any of their respective
Affiliates who is a member of management to engage in any activity which
Executive is prohibited from engaging in under any of Sections 7, 8, 9 or 10 or
to terminate his employment with Holding, the Company or any of their respective
Affiliates.
10. Non-Solicitation of Customers. During the Restriction Period,
Executive shall not, directly or indirectly, for his own account or for the
account of any other Person anywhere in the United States, Canada or Mexico,
solicit or otherwise attempt to establish any business relationship of a nature
that is competitive with the business or relationship of Holding, the Company or
any of their respective Affiliates with any Person throughout the United States,
Canada or Mexico which is or was a customer, client or distributor of Holding,
the Company or any of their respective Affiliates during the twelve-month period
preceding the Date of Termination, other than any such solicitation on behalf of
Holding, the Company or any of their respective Affiliates during Executive's
employment with Holding and the Company.
11. Return of Documents. In the event of the termination of
Executive's employment for any reason, Executive shall deliver to the Company
all of (a) the property of each of Holding, the Company or any of their
respective Affiliates and (b) the non-personal documents and data of any nature
and in whatever medium of each of Holding, the Company or any of their
respective Affiliates, and he shall not take with him any such property,
documents or data or any reproduction thereof, or any documents containing or
pertaining to any Confidential Information.
12. Injunctive Relief with Respect to Covenants; Forum, Venue and
Jurisdiction. Executive acknowledges and agrees that the covenants, obligations
and agreements of Executive contained in Sections 7, 8, 9, 10, 11 and 12 relate
to special, unique and extraordinary matters and that a violation of any of the
terms of such covenants, obligations or agreements will cause Holding and the
Company irreparable injury for which adequate
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remedies are not available at law. Therefore, Executive agrees that Holding and
the Company shall be entitled to an injunction, restraining order or such other
equitable relief (without the requirement to post bond) as a court of competent
jurisdiction may deem necessary or appropriate to restrain Executive from
committing any violation of such covenants, obligations or agreements. These
injunctive remedies are cumulative and in addition to any other rights and
remedies Holding or the Company may have. Holding, the Company and Executive
each hereby irrevocably submits to the exclusive jurisdiction of the courts of
Pennsylvania and the Federal courts of the United States of America, in each
case located in Pittsburgh, Pennsylvania, in respect of the injunctive remedies
set forth in this Section 12 and the interpretation and enforcement of Sections
7, 8, 9, 10, 11 and 12 insofar as such interpretation and enforcement relate to
any request or application for injunctive relief in accordance with the
provisions of this Section 12, and the parties hereto hereby irrevocably agree
that (a) the sole and exclusive appropriate venue for any suit or proceeding
relating solely to such injunctive relief shall be in such a court, (b) all
claims with respect to any request or application for such injunctive relief
shall be heard and determined exclusively in such a court, (c) any such court
shall have exclusive jurisdiction over the person of such parties and over the
subject matter of any dispute relating to any request or application for such
injunctive relief, and (d) each hereby waives any and all objections and
defenses based on forum, venue or personal or subject matter jurisdiction as
they may relate to an application for such injunctive relief in a suit or
proceeding brought before such a court in accordance with the provisions of this
Section 12.
Notwithstanding any other provision hereof, the Company's
obligations to pay Executive any amount pursuant to Section 6(f) is subject to
Executive's compliance with his obligations under Sections 7, 8, 9, 10, 11 and
12.
13. Assumption of Agreement. Holding or the Company will require any
successor (by purchase, merger, consolidation or otherwise) to all or
substantially all of its business and/or assets, by agreement in form and
substance reasonably satisfactory to Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that Holding or
the Company, whichever is applicable, would be required to perform it if no such
succession had taken place. As used in this Agreement, the term "Holding" or
"Company" shall mean Holding or the Company, as the case may be, as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this Section 13 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
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14. Entire Agreement. Except as otherwise expressly provided herein,
this Agreement constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof, and all promises, representations,
understandings, arrangements and prior agreements relating to such subject
matter (including those made to or with Executive by any other person or entity)
are merged herein and superseded hereby.
15. Indemnification. The Company agrees that it shall indemnify and
hold harmless Executive to the fullest extent permitted by Delaware law from and
against any and all liabilities, costs, claims and expenses including without
limitation all costs and expenses incurred in defense of litigation, including
attorneys' fees, arising out of the employment of Executive hereunder, except to
the extent arising out of or based upon the gross negligence or willful
misconduct of Executive.
16. Miscellaneous.
(a) Binding Effect. This Agreement shall be binding on and inure to
the benefit of each of Holding and the Company and their respective successors
and permitted assigns. This Agreement shall also be binding on and inure to the
benefit of Executive and his heirs, executors, administrators and legal
representatives.
(b) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement (except in connection with any request or
application for injunctive relief in accordance with Section 12) shall be
resolved by binding arbitration. The arbitration shall be held in Pittsburgh,
Pennsylvania and, except to the extent inconsistent with this Agreement, shall
be conducted in accordance with the Rules of the American Arbitration
Association then in effect at the time of the arbitration, and otherwise in
accordance with principles which would be applied by a court of law or equity.
The arbitrator shall be acceptable to both the Company and Executive. If the
parties cannot agree on an acceptable arbitrator, the dispute shall be heard by
a panel of three arbitrators, one appointed by the Company, one appointed by
Executive, and the third appointed by the other two arbitrators. All expenses of
arbitration shall be borne by the party who incurs the expense, or, in the case
of joint expenses, by both parties in equal portions.
(c) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Pennsylvania without reference to
principles of conflict of laws.
(d) Taxes. Holding or the Company may withhold from any payments
made under this Agreement all federal, state, city or other applicable taxes as
shall be required pursuant to any law, governmental regulation or ruling.
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(e) Amendments. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is approved
by the Board and the Holding Board or a person authorized thereby and is agreed
to in writing by Executive and such officer as may be specifically designated by
the applicable Board. No waiver by any party hereto at any time of any breach by
any other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No waiver of any provision of this Agreement shall be implied
from any course of dealing between or among the parties hereto or from any
failure by any party hereto to assert its rights hereunder on any occasion or
series of occasions. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement.
(f) Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
(g) Notices. Any notice or other communication required or permitted
to be delivered under this Agreement shall be (i) in writing, (ii) delivered
personally, by courier service or by certified or registered mail, first-class
postage prepaid and return receipt requested, (iii) deemed to have been received
on the date of delivery or on the third business day after the mailing thereof,
and (iv) addressed as follows (or to such other address as the party entitled to
notice shall hereafter designate in accordance with the terms hereof):
(A) if to the Company or Holding, to it at:
WESCO Distribution, Inc.
Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chairman
(B) if to Executive, to him at the address listed on the signature
page hereof.
Copies of any notices or other communications given under this Agreement shall
also be given to:
The Cypress Group
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx
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and
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
(h) Survival. Sections 7 through 16, inclusive, and, if Executive's
employment terminates in a manner giving rise to a payment under Section 6(f),
Section 6(f), shall survive the termination of the employment of Executive
hereunder.
(i) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
(j) Headings. The section and other headings contained in this
Agreement are for the convenience of the parties only and are not intended to be
a part hereof or to affect the meaning or interpretation hereof.
(k) Certain Definitions.
(k) Certain Definitions.
"Affiliate": with respect to any Person, means any other Person
that, directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with the first Person, including but
not limited to a Subsidiary of the first Person, a Person of which the first
Person is a Subsidiary, or another Subsidiary of a Person of which the first
Person is also a Subsidiary.
"Control": with respect to any Person, means the possession,
directly or indirectly, severally or jointly, of the power to direct or cause
the direction of the management policies of such Person, whether through the
ownership of voting securities, by contract or credit arrangement, as trustee or
executor, or otherwise.
"Person": any natural person, firm, partnership, limited liability
company, association, corporation, company, trust, business trust, governmental
authority or other entity.
"Subsidiary": with respect to any Person, each corporation or other
Person in which the first Person owns or Controls, directly or indirectly,
capital stock or other ownership interests representing 50% or more of the
combined voting power of the outstanding voting stock or other ownership
interests of such corporation or other Person.
"Successor": of a Person means a Person that succeeds to the first
Person's assets and liabilities by merger,
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liquidation, dissolution or otherwise by operation of law, or a Person to which
all or substantially all the assets and/or business of the first Person are
transferred.
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IN WITNESS WHEREOF, Holding and the Company have each duly executed
this Agreement by its authorized representative and Executive has hereunto set
his hand, in each case effective as of the date first above written.
WESCO INTERNATIONAL, INC.
By:
-------------------------------
Name:
Title:
WESCO DISTRIBUTION, INC.
By:
-------------------------------
Name:
Title:
Executive:
----------------------------------
Xxx X. Xxxxx
Address:
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