FORM OF STOCK APPRECIATION RIGHTS AGREEMENT
Exhibit 10.1
This Stock Appreciation Rights Agreement dated as of ___, is between WESCO
International, Inc., a Delaware corporation (the “Company”), and the Grantee whose name appears on
the signature page (the “Grantee”).
The Board of Directors of the Company (the “Board”) has designated the Compensation Committee
of the Board (the “Committee”) to administer the Company’s 1999 Long-Term Incentive Plan (as
amended from time to time, the “Plan”).
The Board has determined to grant to the Grantee, under the Plan, a Stock Appreciation Right
with respect to the aggregate number of shares of the Company’s Common Stock, par value $.01 per
share (the “Common Stock”), set forth on the signature page (the “SAR Shares”) at an exercise price
of $ per SAR Share.
To evidence the Stock Appreciation Right, and to set forth its terms and conditions under the
Plan, the Company and the Grantee agree as follows:
1. Confirmation of Grant; Exercise Price. The Company grants to the Grantee,
effective as of the date of this Agreement, a Stock Appreciation Right (the “SAR”) with respect to
the SAR Shares at an exercise price of $ per share (the “Exercise Price”). This Agreement is
subordinate to, and the terms and conditions of the SAR are subject to, the terms and conditions of
the Plan.
2. Vesting Term. Equally at a rate of one-third of the amount granted on ___,
___ and ___ as long as the Grantee is employed by the Company or one of its subsidiaries.
Notwithstanding the foregoing, the SARs shall be 100% fully vested upon the Grantee’s Retirement at
Normal Retirement Age, death or Permanent Disability (as defined below).
3. Exercisability. Provided that the Grantee remains employed by the Company through
each vesting date, and to the extent the SAR has not previously expired, each SAR shall be
exercisable upon vesting.
4. Termination of SAR.
(a) Normal Termination Date. Unless an earlier termination date is specified in
Section 4(b), the SAR shall terminate on ___ (the “Normal Termination Date”).
(b) Early Termination. If the Grantee’s Active Employment (as defined below) is
voluntarily or involuntarily terminated for any reason whatsoever prior to the Normal Termination
Date, other than by reason of Retirement at Normal Retirement Age, death or Permanent Disability,
any portion of the SAR that has not become exercisable on or before the effective date of such
termination of employment shall terminate on such effective date. Any portion of the SAR that has
become exercisable
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on or before the date of the Grantee’s termination of Active Employment,
including as a result of Retirement at Normal Retirement Age, death or Permanent Disability,
shall remain exercisable for whichever of the following periods is applicable, and if not exercised
within that period, shall terminate upon the expiration of that period: (i) if the Grantee’s
Active Employment is terminated by reason of the Grantee’s death or Permanent Disability (both an
“Extraordinary Termination”), then any SAR held by the Grantee and then exercisable shall remain
exercisable solely until the first to occur of (A) the first anniversary of the Grantee’s
termination of Active Employment or (B) the Normal Termination Date of the SAR, (ii) if the
Grantee’s Active Employment is terminated by reason of the Grantee’s Retirement (also an
“Extraordinary Termination”), then any SAR held by the Grantee and then exercisable shall remain
exercisable solely until the first to occur of (A) the third anniversary of the Grantee’s
termination of Active Employment or (B) the Normal Termination Date of the SAR, and (iii) if the
Grantee’s Active Employment is terminated for any reason other than an Extraordinary Termination,
then any then exercisable SARs held by the Grantee shall remain exercisable solely until the first
to occur of (A) 60 days after the date of the Grantee’s termination of Active Employment or (B) the
Normal Termination Date of the SAR. Nothing in this Agreement shall be deemed to confer on the
Grantee any right to continue in the employ of the Company or any of its direct or indirect
subsidiaries, or to interfere with or limit in any way the right of the Company or any of its
direct or indirect subsidiaries to terminate the Grantee’s employment at any time.
5. Restrictions on Exercise; Non-Transferability of SAR.
(a) Restrictions on Exercise. The SAR may be exercised only with respect to full
shares of Common Stock. No fractional shares of Common Stock shall be issued. Notwithstanding any
other provision of this Agreement, the SAR may not be exercised in whole or in part, and no
certificates representing Shares shall be delivered, (i) unless all requisite approvals and
consents of any governmental authority of any kind having jurisdiction over the exercise of options
have been secured, (ii) unless the issuance of SAR Shares upon the exercise of the SAR are exempt
from registration under applicable U.S. federal and state securities laws, and applicable non-U.S.
securities laws, or the SAR Shares have been registered under such laws, and (iii) unless all
applicable U.S. federal, state and local and non-U.S. tax withholding requirements have been
satisfied. The Company shall use commercially reasonable efforts to obtain the consents and
approvals referred to in clause (i) of the preceding sentence and to satisfy the withholding
requirements referred to in clause (iii) of the preceding sentence so as to permit the SAR to be
exercised.
(b) Non-Transferability of SAR. The SAR may be exercised only by the Grantee or by
his estate. The SAR is not assignable or transferable, in whole or in part, and it may not,
directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated
or otherwise disposed of or encumbered (including without limitation by gift, operation of law or
otherwise) other than by will or by the laws of descent and distribution to the estate of the
Grantee upon his death, provided that the deceased Grantee’s beneficiary or the
representative of his estate shall acknowledge and agree in writing, in a form reasonably
acceptable to the Company, to be bound by the provisions of this Agreement and the Plan as if the
beneficiary or the estate were the Grantee.
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(c) Certain Definitions. As used in this Agreement the following terms shall have the
following meanings:
(i) “Active Employment” shall mean active employment with the Company or any direct or
indirect subsidiary of the Company.
(ii) “Fair Market Value” shall mean the closing price per share of the Common Stock on
the New York Stock Exchange or other established stock exchange (or exchanges) on the applicable
date, or if no sale of Common Stock has been recorded on such day, then on the next preceding day
on which a sale was so made. If shares of Common Stock are not traded on an established stock
exchange on the applicable date, Fair Market Value shall be determined by the Committee in good
faith.
(iii) “Retirement at Normal Retirement Age” shall mean retirement at age 65 or later.
(iv) “Permanent Disability” shall mean a physical or mental disability or infirmity
that prevents the performance of the Grantee’s employment-related duties lasting (or likely to
last, based on competent medical evidence presented to the Board) for a continuous period of six
months or longer. The Board’s reasoned and good faith judgment of Permanent Disability shall be
final, binding and conclusive on all parties hereto and shall be based on any competent medical
evidence presented to it by the Grantee or by any physician or group of physicians or other
competent medical expert employed by the Grantee or the Company to advise the Board.
6. Exercise of the SAR and Tax Withholding.
(a) Exercise. To the extent that the SAR becomes and remains exercisable as provided
in Section 3 and subject to any reasonable administrative regulations as the Board or the Committee
may have adopted, the SAR may be exercised, in whole or in part, by notice to the Secretary of the
Company or the Option Administration Department in writing given 15 business days prior to the date
on which the Grantee expects to exercise the SAR (the “Exercise Date”), specifying the number of
SAR Shares with respect to which the SAR is being exercised (the “Exercise Shares”) and the
expected Exercise Date, provided that if shares of Common Stock are traded on a U.S.
national securities exchange or bid and ask prices for shares of Common Stock are quoted over the
NASDAQ National Market (“NASDAQ”) operated by the National Association of Securities Dealers, Inc.,
notice may be given five business days before the Exercise Date. Upon exercise of the SAR, the
Grantee shall be entitled to receive a number of shares of Common Stock (the “Net SAR Shares”)
equal to the quotient obtained by dividing x by y, where:
| x | = | the number of Exercise Shares multiplied by the excess, if any, of (A) the Fair Market Value of a share of Common Stock on the Exercise Date over (B) the Exercise Price, and | |
| y | = | the Fair Market Value of a share of Common Stock on the Exercise Date. |
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No fractional share of Common Stock shall be issued to make any payment with respect to the SAR; if
any fractional share would be issuable, the number of Net SAR Shares payable to the Grantee shall
be rounded down to the next whole share (no payment of cash, shares or other consideration shall be
made with respect to any
fractional share). The Company may require the Grantee to furnish or execute any other documents
that the Company reasonably deems necessary (i) to evidence the exercise, (ii) to determine whether
registration is then required under the U.S. Securities Act of 1933, as amended (the “Securities
Act”), and (iii) to comply with or satisfy the requirements of the Securities Act, applicable state
or non-U.S. securities laws or any other law.
(b) Withholding. Whenever the Net SAR Shares are to be issued pursuant to the
exercise of the SAR, the Company may require the recipient of the Net SAR Shares to remit to the
Company an amount sufficient to satisfy the employer’s minimum statutory U.S. federal, state and
local and non-U.S. tax withholding requirements. If shares of Common Stock are traded on a U.S.
national securities exchange or bid and ask prices for shares of Common Stock are quoted on the
NASDAQ, the Company may, if requested by the Grantee, withhold Net SAR Shares to satisfy applicable
minimum statutory withholding requirements, subject to the provisions of the Plan and any rules
adopted by the Board or the Committee regarding compliance with applicable law, including, but not
limited to, Section 16(b) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange
Act”).
7. Representations and Warranties of the Company. The Company represents and warrants
to the Grantee that (a) the Company has been duly incorporated and is an existing corporation in
good standing under the laws of the State of Delaware, (b) this Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms, and (c) the Net SAR Shares,
when issued and delivered upon exercise of the SAR in accordance with the terms of this Agreement,
will be duly authorized, validly issued, fully paid and nonassessable, and free and clear of any
liens or encumbrances other than those created pursuant to this Agreement or otherwise in
connection with the transactions contemplated hereby.
8. Change in Control and Adjustments to Reflect Capital Changes.
(a) Accelerated Vesting Upon Change in Control. In the event of a Change in Control,
the SAR shall become immediately and fully exercisable unless such Change in Control results from
the Grantee’s beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
Common Stock or other Company Voting Securities (as defined in the Plan).
(b) Recapitalization. The number and kind of shares subject to the SAR and the
Exercise Price of the SAR shall be appropriately adjusted to reflect any stock dividend, stock
split or share combination or any recapitalization, merger, consolidation, exchange of shares,
liquidation or dissolution of the Company or other change in capitalization with a similar
substantive effect upon the Plan or the SAR. The Committee shall have the power and sole
discretion to determine the amount of the adjustment to be made in each case.
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(c) Certain Mergers. After any Merger in which the Company is not the surviving
corporation or pursuant to which a majority of the shares which are of the same class as the shares
that are subject to the SAR are exchanged for, or converted into, or otherwise become shares of
another corporation, the surviving,
continuing, successor or purchasing corporation, as the case may be (the “Acquiring Corporation”),
will either assume the Company’s rights and obligations under this Agreement or substitute an award
in respect of the Acquiring Corporation’s stock for the SAR, however, if the Acquiring Corporation
does not assume or substitute for the SAR, the Board shall provide prior to the Merger that any
unexercisable and/or unvested portion of the SAR shall be immediately exercisable and vested as of
a date prior to the Merger, as the Board so determines. The exercise and/or vesting of the SAR
that was permissible solely by reason of this Section 8(c) shall be conditioned upon the
consummation of the Merger. If the SAR is neither assumed by the Acquiring Corporation nor
exercised as of the date of the Merger, the SAR shall terminate effective as of the effective date
of the Merger. Comparable rights shall accrue to the Grantee in the event of successive Mergers of
the character described above.
(d) Certain Definitions.
(i) “Change in Control” means the first to occur of the following events: (a) the acquisition
by any person, entity or “group” (as defined in Section 13(d) of the Exchange Act), other than the
Company, its subsidiaries, any employee benefit plan of the Company or its subsidiaries, or any
successor investment vehicle, of 30% or more of the combined voting power of the Company’s then
outstanding voting securities; (b) the merger or consolidation of the Company, as a result of which
persons who were stockholders of the Company immediately prior to such merger or consolidation, do
not, immediately thereafter, own, directly or indirectly, more than 70% of the combined voting
power entitled to vote generally in the election of directors of the merged or consolidated
company; (c) the liquidation or dissolution of the Company; (d) the sale, transfer or other
disposition of all or substantially all of the assets of the Company to one or more persons or
entities that are not, immediately prior to such sale, transfer or other disposition, affiliates of
the Company; and (e) during any period of not more than two years, individuals who constitute the
Board as of the beginning of the period and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a transaction described in
clause (a) or (b) of this sentence) whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then
still in office who were directors at such time or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the Board.
(ii) “Merger” means any merger, reorganization, consolidation, share exchange, transfer of
assets or other transaction having similar effect involving the Company.
9. No Rights as Stockholder. The Grantee shall have no voting or other rights as a
stockholder of the Company with respect to any SAR Shares until the exercise of the SAR and the
issuance of a certificate or certificates to him for Net SAR
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Shares. No adjustment shall be made
for dividends or other rights for which the record date is prior to the issuance of such
certificate or certificates.
10. Non-Competition, Non-Solicitation and Confidentiality.
(a) Non-Competition and Non-Solicitation. During Grantee’s Active Employment and for
a period of one year thereafter:
(1) Grantee shall not directly or indirectly call upon, contact or solicit any
customer or prospective customer of the Company or its subsidiaries (i) with whom Grantee
dealt directly or indirectly or for which Grantee had responsibility while employed by the
Company or its subsidiaries, or (ii) about whom Grantee acquired confidential information
during Grantee’s employment with the Company or its subsidiaries, for the purpose of
offering, selling or providing products or services that are competitive with those then
offered by the Company or its subsidiaries. Grantee shall not solicit or divert, or attempt
to solicit or divert, either directly or indirectly, any opportunity or business of the
Company or its subsidiaries to any competitor.
(2) Grantee shall not, to the detriment of the Company or its subsidiaries, directly
or indirectly, as an owner, partner, employee, agent, consultant, advisor, servant or
contractor, engage in or facilitate or support others to engage in the distribution of
electrical construction products or electrical and industrial maintenance, repair and
operating supplies, or the provision of integrated supply services, or any other business
that is in competition with any of the business activities of the Company or its
subsidiaries in which Grantee was engaged during Grantee’s Active Employment and in which
the Company or its subsidiaries were engaged prior to the termination of Grantee’s Active
Employment. This provision shall not prevent Grantee from owning less than 1% of a
publicly-owned entity or less than 3% of a private equity fund.
(3) Grantee shall not, directly or indirectly, solicit the employment of or hire as an
employee or consultant or agent (i) any employee of the Company or its subsidiaries or (ii)
any former employee of the Company or its subsidiaries whose employment ceased within 180
days prior to the date of such solicitation or hiring.
(b) Confidentiality. “Confidential Information” means information regarding the
business or operations of the Company or its subsidiaries, both oral and written, including, but
not limited to, documents and the Company or subsidiary information contained in such documents;
drawings; designs; plans; specifications; instructions; data; manuals; electronic media such as
computer disks, computer programs, and data stored electronically; security code numbers;
financial, marketing and strategic information; product pricing and customer information, that the
Company or its subsidiaries disclose to the Grantee or the Grantee otherwise learns or ascertains
in any manner as a result of, or in relation to, Grantee’s employment by the Company or its
subsidiaries. Other than as required by applicable law, Grantee agrees: (1) to use Confidential
Information only for the purposes required or appropriate for Grantee’s
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employment with the Company
or its subsidiaries; (2) not to disclose to anyone Confidential Information without the Company’s
prior written approval; and (3) not to allow anyone’s use or access to Confidential Information,
other than as required or appropriate for Grantee’s employment with the Company or its
subsidiaries. The foregoing shall not apply to information that is in the public domain, provided
that Grantee was not responsible, directly or indirectly, for such information entering into
public domain without the Company’s approval. Grantee agrees to return to the Company all
Confidential Information in Grantee’s possession upon termination of Grantee’s employment or at any
time requested by the Company.
(c) The foregoing provisions shall survive and remain in full force and effect regardless of
any expiration, termination or cancellation of this Agreement.
(d) In addition to any rights available to it at law or in equity, in the event Grantee
breaches the provisions of this Section 10, the Company may cancel any unexercised SARs granted
under this Agreement.
(e) If any provision of this Agreement shall be invalid or unenforceable to any extent, the
remaining provisions of this Agreement shall not be affected, and each remaining provision shall be
enforceable to the fullest extent permitted by law. If any provision of this Agreement is so broad
as to be unenforceable, then such provision shall be interpreted to be only as broad as is
enforceable.
(f) Notwithstanding any provision to the contrary, the non-compete, non-solicitation and
confidentiality covenants of this Section 10 shall be in addition to, and shall not be deemed to
supersede, any existing covenants or other agreements between the Grantee and the Company or any of
its subsidiaries.
11. Miscellaneous.
(a) Notices. All notices and other communications required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been given if delivered
personally or sent by certified or express mail, return receipt requested, postage prepaid, or by
any recognized international equivalent of such delivery, to the Company, or the Grantee, as the
case may be, at the following addresses or to such other address as the Company or the Grantee, as
the case may be, shall specify by notice to the others:
(i) if to the Company, to it at:
WESCO International, Inc.
Suite 700
000 Xxxx Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Suite 700
000 Xxxx Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Legal Department
(ii) if to the Grantee, to the Grantee at the address set forth on the signature page.
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All notices and communications shall be deemed to have been received on the date of delivery or on
the third business day after the mailing thereof.
(b) Binding Effect; Benefits. This Agreement shall be binding upon and inure to the
benefit of the parties to this Agreement and their respective successors and assigns. Nothing in
this Agreement, express or implied, is intended or shall be construed to give any person other than
the parties to this Agreement or their
respective successors or assigns any legal or equitable right, remedy or claim under or in
respect of any agreement or any provision contained herein.
(c) Waiver; Amendment.
(i) Waiver. Any party hereto or beneficiary hereof, may, by written notice to the
other parties (A) extend the time for the performance of any of the obligations or other actions of
the other parties under this Agreement, (B) waive compliance with any of the conditions or
covenants of the other parties contained in this Agreement and (C) waive or modify performance of
any of the obligations of the other parties under this Agreement. Except as provided in the
preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party or beneficiary, shall be deemed to constitute a waiver
by the party or beneficiary taking such action of compliance with any representations, warranties,
covenants or agreements contained herein. The waiver by any party hereto or beneficiary hereof of
a breach of any provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by a party or beneficiary to exercise any right or
privilege hereunder shall be deemed a waiver of such party’s or beneficiary’s rights or privileges
hereunder or shall be deemed a waiver of such party’s or beneficiary’s rights to exercise the same
at any subsequent time or times hereunder.
(ii) Amendment. This Agreement may not be amended, modified or supplemented orally,
but only by a written instrument executed by the Grantee and the Company.
(d) Assignability. Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof shall be assignable by the Company or the Grantee
without the prior written consent of the other parties.
(e) Applicable Law. This Agreement shall be governed by and construed in accordance
with the law of the Commonwealth of Pennsylvania, regardless of the law that might be applied under
principles of conflict of laws, except to the extent that the corporate law of the State of
Delaware specifically and mandatorily applies.
(f) Section and Other Headings, etc. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or interpretation of
this Agreement. In this Agreement all references to “dollars” or “$” are to United States dollars.
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(g) Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which together shall constitute one and the
same instrument.
(h) Delegation by the Board. All of the powers, duties and responsibilities of the
Board specified in this Agreement may, to the full extent permitted by applicable law, be exercised
and performed by any duly constituted committee thereof to the extent authorized by the Board to
exercise and perform such powers, duties and responsibilities.
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IN WITNESS WHEREOF, the Company and the Grantee have executed this Agreement as of the date first
above written.
| WESCO INTERNATIONAL, INC. |
||||
| By: | ||||
| THE GRANTEE: |
||||
| By: | ||||
Total Number of Stock
Appreciation Rights Awarded:
Appreciation Rights Awarded:
Exercise price: $
Grant Date:
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