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SCHEDULE 14A
(RULE 14a-101)SCHEDULE 14A INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ X ][X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under sec.240.14a-12
WESCO --------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)INTERNATIONAL, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (check(Check the appropriate box):
[ X ][X] No fee required.
[ ] $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2)of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1)(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------
2)(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------
3)(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (SetO-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------
4)(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------
5)(5) Total fee paid:
--------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)O-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1)(1) Amount Previously Paid:
--------------------------------------------------------
2)(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------
3)(3) Filing Party:
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4)(4) Date Filed:
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2
[LOGO]
2000
-----------------------------[WESCO INTERNATIONAL LOGO]
2001
=================================
Notice of Annual Meeting
and Proxy Statement
WESCO INTERNATIONAL, INC.
- -------------------------
Commerce Court, Suite 7002700
Four Station Square
Pittsburgh, PA 15219
3
WESCO INTERNATIONAL, INC.
COMMERCE COURT, SUITE 700
FOUR STATION SQUARE
PITTSBURGH, PENNSYLVANIA 15219
NOTICE OF 20002001 ANNUAL MEETING OF STOCKHOLDERS
April 20, 2000May 23, 2001
The Annual Meeting of the Stockholders of WESCO International, Inc.
will be held on Tuesday,Wednesday, May 23, 2000,2001, at 2:00 p.m., E.D.S.T., at the Sheraton
Inn, 7 Station Square, Pittsburgh, Pennsylvania 15219 to consider and take
action on the following:
1) Election of a class of twothree directors for a three-year term
expiring in 2003;2004; and
2) Transaction of any other business properly brought before the
meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE PROPOSAL.
Stockholders of record at the close of business on April 10, 20009, 2001 will be
entitled to vote at the Annual Meeting or any adjournments thereof. A list of
stockholders entitled to vote will be available at the Annual Meeting and during
ordinary business hours for ten days prior to the meeting at our corporate
offices, Commerce Court, Suite 700, Four Station Square, Pittsburgh,
Pennsylvania, 15219 for examination by any stockholder for any legally valid
purpose.
WESCO International, Inc. stockholders or their authorized
representatives by proxy may attend the meeting. If your shares are held through
an intermediary such as a broker or a bank, you should present proof of your
ownership at the meeting. Proof of ownership could include a proxy from your
bank or broker or a copy of your account statement.
In order to assure a quorum, it is important that stockholders who do
not expect to attend the meeting in person fill in, sign, date and return the
enclosed proxy in the accompanying envelope.
By order of the Board of Directors,
/s/ DANIEL A. BRAILER
----------------------
Daniel A. Brailer
Secretary
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WESCO INTERNATIONAL, INC.
COMMERCE COURT, SUITE 700
FOUR STATION SQUARE
PITTSBURGH, PENNSYLVANIA 15219
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 23, 20002001
PROXY SOLICITATION AND VOTING INFORMATION
The accompanying proxy is solicited by the Board of Directors of WESCO
International, Inc. (the "Company") for use at the Annual Meeting of the
Stockholders (the "Annual Meeting") to be held on May 23, 20002001 at the Sheraton
Inn, 7 Station Square, Pittsburgh, Pennsylvania 15219 at 2:00 p.m., local time,
and at any adjournment or postponement thereof. The proxies will be voted if
properly signed, received by the Secretary of the Company prior to the close of
voting at the Annual Meeting, and not revoked. If no direction is given in the
proxy, it will be voted "FOR" the election of the directors nominated by the
Board of Directors. The Company has not received timely notice of any
stockholder proposals for presentation at the Annual Meeting as required by
Section 14a-4(c) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Action will be taken at the Annual Meeting for the election of
directors and any other business that properly comes before the meeting, and the
proxy holders have the right to and will vote in accordance with their judgment.
A stockholder who has returned a proxy may revoke it at any time before
it is voted at the Annual Meeting by delivering a revised proxy bearing a later
date, by voting by ballot at the Annual Meeting, or by delivering a written
notice withdrawing the proxy to the Secretary of the Company at the address set
forth above.
This Proxy Statement, together with the accompanying proxy, is first
being mailed to stockholders on or about April 20, 2000.2001. The Company's 19992000
Annual Report to Stockholders accompanies this Proxy Statement. The cost of this
solicitation of proxies will be borne by the Company. In addition to soliciting
proxies by mail, the Board of Directors of the Company, without receiving
additional compensation for this service, may solicit in person. Arrangements
also will be made with brokerage firms and other custodians, nominees and
fiduciaries to forward proxy soliciting material to the beneficial owners of the
Common Stock, par value $.01 per share, of the Company ("Common Stock") held of
record by such persons, and the Company will reimburse such brokerage firms,
custodians, nominees and fiduciaries for reasonable out-of-pocket expenses
incurred by them in doing so. The cost of this proxy solicitation will consist
primarily of printing, legal fees, and postage and handling.
Holders of Common Stock at the close of business on April 10, 20009, 2001 (the
"Record Date") are entitled to vote at the Annual Meeting or any adjournment or
adjournments thereof. On that
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date, 45,519,06144,840,310 shares of Common Stock were issued and outstanding (including
4,653,1314,653,161 shares of Class B Common Stock). The presence, in person or by proxy,
of stockholders holding
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5 at least a majority of the shares of Common Stock will
constitute a quorum for the transaction of business at the Annual Meeting.
Stockholders are entitled to cast one vote per share on each matter presented
for consideration and action at the Annual Meeting. Proxies that are transmitted
by nominee holders on behalf of beneficial owners will count toward a quorum and
will be voted as instructed by the nominee holder. The Board of Directors will
be elected by a plurality of the votes cast at such election.
BOARD OF DIRECTORS AND ELECTION OF DIRECTORS
The Board of Directors of the Company (the "Board") consists of seveneight
members, divided into three classes. The terms of office of the three classes of
directors (Class I, Class II and Class III) end in successive years. The term of
the Class III directors expires this year, and their successors are to be elected
at the Annual Meeting for a three-year term expiring in 2003.2004. The terms of the
Class III and Class III directors do not expire until 20012003 and 2002, respectively.
The Board has nominated MichaelRobert J. CheshireTarr, Jr., Anthony D. Tutrone, and
James A. SternKenneth L. Way for election as Class III directors. The accompanying proxy will
be voted for the election of these nominees, unless authority to vote for one or
more nominees is withheld. In the event that any of the nominees is unable or
unwilling to serve as a director for any reason (which is not anticipated), the
proxy will be voted for the election of any substitute nominee designated by the
Board. The nominees for directors have previously served as members of the Board
of the Company.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF
THE CLASS III DIRECTOR NOMINEES.
CLASS I DIRECTORS--NOMINEES FOR TERMS TO EXPIRE
CLASS I DIRECTORS--PRESENT TERM EXPIRES IN 2003
MICHAEL J. CHESHIRE Mr. Cheshire is Chairman and Chief Executive
Age: 51 Officer of Gerber
Age: 52 Scientific, Inc. Prior to
Director since 1998 joining Gerber Scientific in 1997, Mr.
Director since 1998 Cheshire spent 21 years with the General Signal Corporation and was most
recently president of their electrical group.
JAMES A. STERN Mr. Stern has been Chairman of The Cypress
Age: 49 Group L.L.C. ("Cypress")
Age: 50 since its formation
Director since 1998 in April 1994. Prior to joining Cypress, Mr. Stern
Director since 1998 was a managing director with Lehman Brothers, Inc. ("Lehman Brothers")
and served as head of the Merchant Banking Group. During his career at
Lehman Brothers, he also served as head of that firm's Investment
Banking, High Yield and Primary Capital Markets Groups. Mr. Stern is
also a director of AMTROL, Inc., Cinemark USA, Inc., Frank's Nursery &
Crafts, Inc. and Lear Corporation, and a trustee of Tufts University.
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CONTINUING CLASS II DIRECTORS--PRESENT TERM EXPIRES IN 2001
ROBERT J. TARR, JR. Mr. Tarr has been the Chairman, Chief
Age: 56 Executive Officer and President of
Director since 1998
CLASS II DIRECTORS--NOMINEES FOR TERMS TO EXPIRE IN 2004
ROBERT J. TARR, JR. Mr. Tarr has been the Chairman, Chief Executive Officer and President of
Age: 57 HomeRuns.com, Inc. since February 2000. Prior to joining HomeRuns.com, he worked for
more than 20 years in senior executive roles
for Harcourt General, Inc., including six
years as President, Chief Executive Officer
and Chief Operating Officer of Harcourt
General, Inc. (formerly General Cinema
Corporation) and the Neiman Marcus Group,
Inc. Mr. Tarr is also a director of Barneys
Inc., Hannaford Bros., Houghton Mifflin &
Co., Inc. and the John Hancock Financial
Services, Inc.
ANTHONY D. TUTRONE Mr. Tutrone has been a Managing Director of
Age: 35 Cypress since 1998 and has been a member of
Director since 1998 Cypress since its formation in April 1994.
Prior to joining Cypress, he was a member of
the Merchant Banking Group of Lehman
Bothers. Mr. Tutrone is also a director of
AMTROL, Inc. and Danka Business Systems PLC.
KENNETH L. WAY Mr. Way has been Chairman and Chief
Age: 60 Executive Officer of Lear Corporation since
Director since 1998 1988 and has been affiliated with Lear
Corporation and its predecessor companies
for 34 years in engineering, manufacturing
and general management capacities. Mr. Way
is also a director of CMS Energy Corporation
and Comerica, Inc.
CONTINUING CLASS III DIRECTORS--PRESENT TERM EXPIRES IN 2002
ROY W. HALEY Mr. Haley has been Chief Executive Officer
Age 53 of the Company since February 1994. From
Chairman of the Board and 1988 to 1993, Mr. Haley was an executive at
Chief Executive Officer; American General Corporation, a diversified
Director since 1994 financial services company, where he served
as Chief Operating Officer and as President
and a director. Mr. Haley is also a director
of Cambrex Corporation and United
Stationers, Inc.
JAMES L. SINGLETON Mr. Singleton has been a Vice Chairman of
Age: 44 Cypress since its formation in April 1994.
Director since 1998 he worked for more than 20 years in senior executive roles for Harcourt
General, Inc., including six years as President, Chief Executive Officer
and Chief Operating Officer of Harcourt General, Inc. (formerly General
Cinema Corporation) and The Neiman Marcus Group, Inc. Mr. Tarr is also
a director of the John Hancock Financial Services, Inc., Houghton
Mifflin & Co., and Barneys New York, Inc.
ANTHONY D. TUTRONE Mr. Tutrone has been a Managing Director of Cypress since 1998 and has
Age: 36 been a member of Cypress since its formation in April 1994. Prior to
Director since 1998 joining Cypress, he was a member of the merchant Banking Group at Lehman
Brothers. Mr. Tutrone is also a director of AMTROL, Inc. and Danka
Business Systems PLC.
KENNETH L. WAY Mr. Way has been Chairman of Lear Corporation since 1988 and has been
Age: 61 affiliated with Lear Corporation and its predecessor companies for 35
Director since 1998 years in engineering, manufacturing and general management capacities.
Mr. Way is also a director of Comerica, Inc. and CMS Energy
Corporation.
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CONTINUING CLASS III DIRECTORS--PRESENT TERM EXPIRES IN 2002
ROY W. HALEY Mr. Haley has been Chief Executive Officer of the Company since February
Age: 54 1994. From 1988 to 1993, Mr. Haley was an executive at American General
Chairman of the Board, President Corporation, a diversified financial services company, where he served as
and Chief Executive Officer and a Chief Operating Officer and as President and a director. Mr. Haley is
Director since 1994 also a director of United Stationers, Inc. and Cambrex Corporation.
GEORGE L. MILES, JR. Mr. Miles has been President and Chief Executive Officer of WQED
Age: 59 Pittsburgh since September 1994. Mr. Miles is also a director of
Director since 2000 Equitable Resources.
JAMES A. SINGLETON Mr. Singleton has been a Vice Chairman of Cypress since its formation in
Age: 45 April 1994. Prior to joining Cypress, he was a Managing Director in the
Director since 1998 Merchant Banking Group at Lehman Brothers. Mr. Singleton is also a
director of Cinemark USA, Inc., Club Corp, Inc., Danka Business Systems
PLC, Genesis Health Ventures, Inc., L.P., HomeRuns.com, Inc., L.P. Thebault
Company, and Williams Scotsman, Inc.
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MEETINGS AND COMMITTEES OF THE BOARD
The Board has three standing committees: an Executive Committee, an
Audit Committee and a Compensation Committee. The Board does not have a
nominating committee. The full Board held sevenfour meetings in 1999.2000. Each director
attended 75% or more of the aggregate number of meetings of the Board and the
committees of the Board on which he served.
Executive Committee
The Executive Committee consists of Messrs. Cheshire, Haley, Singleton
and Stern, with Mr. Singleton serving as Chairman. It is responsible for
overseeing the management of the affairs and business of the Company and has
been delegated authority to exercise the powers of the Board during intervals
between Board meetings. The Executive Committee held twothree meetings in 1999. Each
director attended 75% or more of the aggregate number of the total number of
meetings of the Board and the committees of the Board on which he served, other
than Mr. Tarr.2000.
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Audit Committee
The Audit Committee consists of Messrs. Cheshire, Miles and Tarr, with
Mr. Tarr serving as Chairman. ItChairman and operates under a written charter, which is
included as Appendix A to this Proxy Statement. The Audit Committee is
responsible forfor: (a) recommending the firm to be appointed as independent
accountants to audit the Company's financial statements and to perform services
related to the audit; (b) reviewing the scope and results of the audit with the
independent accountants; (c) reviewing with the management and the independent
accountants the Company's year end operating results; (d) considering the
adequacy of the internal accounting audit and control procedures of the Company,Company; and
(e) reviewing the non-audit services to be performed by the independent
accountants, if any, and considering the effect of such performance on the
accountants' independence. The Audit Committee held fourfive meetings in 1999.2000 and
has furnished the following report:
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Company is composed of three independent directors.
The Committee operates under a written charter, which is included as an appendix
to this Proxy Statement.
Management of the Company has the primary responsibility for the financial
statements and the reporting process including the system of internal controls.
The Audit Committee is responsible for reviewing the Company's financial
reporting process on behalf of the Board of Directors.
In this context, the Audit Committee has met and held discussions with
management and the independent auditors. Management represented to the Committee
that the Company's financial statements were prepared in accordance with
generally accepted accounting principles, and the Committee reviewed and
discussed the Company's audited financial statements with management and the
independent auditors. The Committee discussed with the independent auditors
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with the Audit Committee).
In addition, the Committee has discussed with the independent auditors, the
auditor's independence from the Company and its management, including the
matters in the written disclosures required by the Independence Standards Board
Standard No. 1 (Independence Discussions With Audit Committees).
The Committee discussed with the Company's internal and independent auditors the
overall scope and plan for their respective audits. The Committee meets with the
internal and independent auditors, with and without management present, to
discuss the results of their examinations, their evaluations of the Company's
internal controls, and the overall quality of the Company's financial reporting.
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In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors (and the Board has approved) that the
audited financial statements be included in the Annual Report on Form 10-K for
the year ended December 31, 2000 for filing with the Securities and Exchange
Commission. The Committee and the Board have also appointed the selection of the
Company's independent auditors, PricewaterhouseCoopers LLP, for the year 2001.
RESPECTFULLY SUBMITTED:
THE AUDIT COMMITTEE:
Robert J. Tarr, Jr., Chairman
Michael J. Cheshire
George L. Miles, Jr.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS:
In addition to performing the audit of the Company's 2000 consolidated financial
statements, PricewaterhouseCoopers LLP provided various other services during
2000. The aggregate fees billed for 2000 for each of the following categories of
services are set forth below:
o Audit and review of the Company's 2000 financial statements $579,000
o All other services $109,000
PricewaterhouseCoopers LLP did not provide any services related to financial
information systems design and implementation during 2000.
"All other services" includes (i) tax planning, (ii) acquisitions due diligence
reviews, and (iii) pension and foreign statutory reporting.
The Audit Committee reviews summaries of the services provided by
PricewaterhouseCoopers LLP and the related fees and has considered whether the
provision of non-audit services is compatible with maintaining the independence
of PricewaterhouseCoopers LLP.
On recommendation of the Audit Committee, the Board has appointed
PricewaterhouseCoopers LLP to audit the 2001 financial statements.
Representatives from this firm will be at the annual meeting to make a
statement, if they choose, and to answer any questions you may have.
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Compensation Committee
The Compensation Committee consists of Messrs. Singleton, Stern, Singleton, Tarr,
Tutrone and Way, with Mr. Stern serving as Chairman. It is responsible for the
review, recommendation and approval of compensation arrangements for directors
and executive officers, for the approval of such arrangements for other senior
level employees, and for the administration of certain benefit and compensation
plans and arrangements of the Company. The Compensation Committee held two
meetings in 1999.2000.
COMPENSATION OF DIRECTORS
Members of the Board who are also employees of the Company do not
receive cash compensation for their services as directors. Each director of the
Company who is not an employee of the Company or any of its subsidiaries or
Cypress is entitled to receive an annual director's fee of $25,000. Each
director$25,000, payable in
cash or shares of common stock, or a combination of cash and common stock, at
the directors' election. Effective January 1, 2000, the Company meetingestablished the
criteria during 1999 did receive $25,000.
The Company established the Deferred Compensation Plan for Non-Employee Directors in 1999 under which
non-employee directors can elect to defer 25% or more of the annual director's
fee. Amounts deferred under this arrangement will, on the deferral date, be
converted into stock units (common stock equivalents) which will be credited to
a bookkeeping account in the director's name. For purposes of determining the
number of stock units to be credited to a director for a particular year, the
average of the high and low trading prices of the Common Stock on the first
trading day in January of that year will be used. Distribution of deferred stock
units will be made in a lump sum or installments, in the form of shares of
Common Stock, in accordance with the distribution schedule selected by the
director at the time the deferral election is made.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation information for the
Company's Chief Executive Officer and for the Company's four other most highly
compensated executive officers with compensation in excess of $100,000 for 1997,
1998,
1999 and 19992000 (the "Named Executive Officers").
LONG-TERM
COMPENSATION
-------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING FISCAL ------------------------- OPTIONS (#S) ALL OTHER
FISCAL ----------------------- OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION(S) YEAR SALARY ($) BONUS ($) (#S) (1) COMPENSATION ($)(2)(3)(4)(5)
- ------------------------------ ---- -------------------------------------------------- --------- ------------ ------------------------------------ ------------- -----------------------
Roy W. Haley, 2000 518,750 350,000 100,000 31,069
Chairman of the Board 1999 500,000 200,000 -- 23,925
Chairman of the Board35,925
and Chief Executive Officer 1998 500,000 425,000 867,000 1,074,000
and Chief Executive Officer 1997 466,667 425,000 -- 52,3001,086,000
James H. Mehta 2000 275,000 70,000 25,000 14,100
Vice President, Business 1999 275,000 40,000 -- 2,938
Vice President, Business14,938
Development 1998 275,000 115,000 190,740 564,638
Development 1997 258,339 115,000 -- 13,325576,638
Patrick M. Swed, 2000 227,500 100,000 35,000 20,825
Vice President, Operations 1999 216,667 70,000 -- 10,300
Vice President, Operations22,300
1998 200,000 130,000 190,740 472,900
1997 200,000 130,000 -- 33,000
Steven A. Burleson 1999 184,171 65,000 -- 4,675484,900
William M. Goodwin 2000 191,752 100,000 35,000 19,340
Vice President, Chief 1998 153,337 130,000 127,160 322,419
Financial Officer 1997 135,006 115,000 -- 9,438
Donald H. ThimjonOperations 1999 180,841 60,000 -- 8,50020,425
1998 158,340 100,000 127,160 372,000
Donald H. Thimjon 2000 191,752 100,000 35,000 19,468
Vice President, Operations 1999 180,841 60,000 -- 20,500
1998 158,340 110,000 127,160 375,892
1997 146,667 100,000 -- 23,637387,892
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(1) All options granted in 1998 were granted under the Company's 1998 Stock
Option Plan. All
options granted in 1998Plan and have an exercise price of $10.75 per share. All options
granted in 2000 were granted under the Company's 1999 Long-Term
Incentive Plan ("LTIP") and have an exercise price of $9.875 per share.
Options granted under both the 1998 Stock Option Plan and the LTIP are
subject to certain time and performance-based vesting requirements. Of
the options granted in 1998, 433,500, 95,370, 95,370, 63,580 and 63,580
options held by Messrs. Haley, Mehta, Swed, Goodwin, and Thimjon,
respectively, are currently exercisable. None of the options granted
under the LTIP are currently exercisable.
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(2) Includes contributions under the WESCO Distribution, Inc. retirement
savings plan in the amounts of (a) $4,800, $2,938,$2,100, $4,800, $4,675$3,945 and
$4,800 for Messrs. Haley, Mehta, Swed, BurlesonGoodwin and Thimjon,
respectively, in 2000, (b) $4,800, $2,938, $4,800, $3,750 and $4,800
for Messrs. Haley, Mehta, Swed, Goodwin and Thimjon, respectively, in
1999 (b)and (c) $12,800, $7,738, $16,000, $9,169$4,000 and $16,000 for Messrs.
Haley, Mehta, Swed, BurlesonGoodwin and Thimjon, respectively, in 1998 and (c)
$9,550, $7,675, $15,950, $8,388 and $15,950 for Messrs. Haley, Mehta, Swed,
Burleson and Thimjon, respectively, in 1997.
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91998.
(3) Includes contributions by the Company under the WESCO Distribution,
Inc. deferred compensation plan in the amounts of (a) $14,269, $-0-,
$4,025, $3,395 and $2,668 for Messrs. Haley, Mehta, Swed, Goodwin and
Thimjon, respectively, in 2000, (b) $19,125, $-0-, $5,500, $-0-$4,675 and
$3,700 for Messrs. Haley, Mehta, Swed, BurlesonGoodwin and Thimjon,
respectively, in 1999 (b)and (c) $61,200, $6,900, $16,900, $3,250$5,992 and
$9,884 for Messrs. Haley, Mehta, Swed, Burleson and Thimjon, respectively, in 1998 and
(c) $42,750, $5,650, $17,050, $1,050 and $7,687 for Messrs. Haley, Mehta,
Swed, BurlesonGoodwin, and Thimjon,
respectively, for 1997.1998.
(4) Includes special retention bonus payments in 1998 in the amounts of
$1,000,000, $550,000, $440,000, $310,000$350,008 and $350,008 for Messrs.
Haley, Mehta, Swed, BurlesonGoodwin and Thimjon, respectively.
(5) Includes an annual automobile allowance in the amount of $12,000 per
year for Messrs. Haley, Mehta, Swed, Goodwin and Thimjon.
OPTION GRANTS IN LAST FISCAL YEAR
NoThe following table sets forth information for each Named Executive Officer with
regard to stock options granted during 2000:
% OF
TOTAL
OPTIONS
NUMBER OF GRANTED POTENTIAL REALIZABLE VALUE AT
SECURITIES TO ASSUMED RATES OF STOCK PRICE
UNDERLYING EMPLOYEES APPRECIATION FOR OPTION TERM(1)
OPTIONS IN FISCAL EXERCISE EXPIRATION -------------------------------
NAME GRANTED YEAR PRICE ($/SH) DATE 5% 10%
- ---------------- --------------------------- ----------------------- -------------------------------
Roy W. Haley 100,000 6.23% $9.875 5/11/2010 $621,033 $1,573,821
James H. Mehta 25,000 1.57% 9.875 5/11/2010 155,258 393,455
Patrick M. Swed 35,000 2.18% 9.875 5/11/2010 217,362 550,837
William M. Goodwin 35,000 2.18% 9.875 5/11/2010 217,362 550,837
Donald H. Thimjon 35,000 2.18% 9.875 5/11/2010 217,362 550,837
- --------------------
(1) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
the Named Executive Officers in 1999.their expiration date. These assumptions are not intended to forecast future
appreciation of our stock price. The potential realizable value computation
does not take into account federal or state income tax consequences of
option exercises or sales of appreciated stock.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The table below sets forth information for each Named Executive Officer
with regard to the aggregate stock options held at December 31, 1999.2000. No stock
options were exercised by any of the Named Executive Officers during 1999.2000.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT FY-END
OPTIONS AT FY-END (#) AT FY-END ($)(1)(2)
NAME (EXERCISABLE) (UNEXERCISABLE) (EXERCISABLE) (UNEXERCISABLE)
------------------------------------------ ----------------------------- -----------------------------(EXERCISABLE - UNEXERCISABLE) (EXERCISABLE - UNEXERCISABLE)
-------------------------------------------- ------------------------------------------------------------------
Roy W. Haley 1,504,534 650,250 $9,201,2171,721,284 533,500 $9,336,434 -0-
James H. Mehta 543,031 143,055 3,415,411590,716 120,370 3,591,259 -0-
Patrick M. Swed 377,723 143,055 2,358,122425,408 130,370 2,392,776 -0-
Steven A. Burleson 97,682 95,370 470,798William M. Goodwin 228,888 98,580 1,198,483 -0-
Donald H. Thimjon 197,098 95,370 1,181,126228,888 98,580 1,198,483 -0-
- ------------------------------------------
(1) Based on the closing market price per share of $8.875$7.25 as reported on the
NYSE on December 31, 1999.29, 2000.
(2) Certain of the options have an exercise price in excess of $8.875$7.25 per
share; accordingly,share. Accordingly, no value is reflected in the table for those
options whichthat are not in-the-money.
EMPLOYMENT AGREEMENTS
Employment Agreement with the Chief Executive Officer. The Company is a
party to an employment agreement with Mr. Haley providing for a rolling
employment term of three years. Pursuant to this agreement, Mr. Haley is
entitled to an annual base salary of $500,000 and an annual incentive bonus
equal to a percentage of his annual base salary ranging from 0% to 200%. The
actual amount of Mr. Haley's annual incentive bonus will be determined based
upon the Company's financial performance as compared to the annual performance
objectives established for the relevant fiscal year. If Mr. Haley's employment
is terminated by the Company without "cause," by Mr. Haley for "good reason" or
as a result of Mr. Haley's death or disability,
7
10 Mr. Haley is entitled to
continued payments of his average annual base salary and his average annual
incentive bonus, reduced by any disability payments for the three-year period,
or in the case of a termination due to Mr. Haley's death or disability, the
two-year period, following such termination, and continued welfare benefit
coverage for the two-year period following such termination. In addition, in the
event of any such qualifying termination, all outstanding options held by Mr.
Haley will become fully vested.
The agreement further provides that, in the event of the termination of
Mr. Haley's employment by the Company without cause or by Mr. Haley for good
reason, in either such case, within the two-year period following a "change in
control" of the Company, in addition to the termination benefits described
above, Mr. Haley is entitled to receive continued welfare benefit coverage and
payments in lieu of additional contributions to the Company's Retirement Savings
Plan and Deferred Compensation Plan for the three year period following such
change in control.
12
14
The Company has agreed to provide Mr. Haley with an excise tax gross up with
respect to any excise taxes Mr. Haley may be obligated to pay pursuant to
Section 4999 of the United States Internal Revenue Code of 1986 on any excess
parachute payments. In addition, following a change in control, Mr. Haley is
entitled to a minimum annual bonus equal to 50% of his base salary, and the
definition of "good reason" is modified to include certain additional events.
The agreement also contains customary covenants regarding nondisclosure of
confidential information and non-competition and non-solicitation restrictions.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Responsibilities and Goals:
The Compensation Committee, composed of non-employee directors, has the
responsibility of administering executive compensation and benefit programs,
policies and practices. The Committee consists of Messrs. Stern, Singleton,
Tarr, Tutrone and Way, with Mr. Stern serving as Chairman. The Committee engages
the assistance of outside consultants and uses third-party surveys in its
consideration of compensation levels and incentive plan designs.
On an annual basis, the Committee reviews and approves the compensation
and benefit programs for the executive officers, including the Chairman and
Chief Executive Officer.
Executive Officer Compensation:
The objective of the Company's compensation program for executive
officers (including Mr. Haley, Chief Executive Officer) is to motivate and
reward executive management for achieving high levels of business performance
and outstanding financial results. This reflects the Company's commitment to
attract, develop, retain and motivate the high caliber of executive required to
perform in the competitive distribution industry, and to ensure positive
business performance and continued growth in shareholder value.
8
11
The Company's compensation program for executive officers consists of a
base salary, annual incentive bonuses and long-term incentives. Executives have
significant amounts of compensation at risk, based on performance. Executives
are also encouraged to maintain a significant equity stake in the Company since
this most closely aligns the interests of management with those of the
shareholders. Each of the Company's executive officersNamed Executive Officers maintains ana
significant equity investment in the Company, exclusiveCompany. The lowest equity ownership
position of stock options, ofthe Named Executive Officers is at least two5 times their base salary. Mr. Haley's equity ownership is greater than 18 times his
base salary.
o Base salaries for the Company's executives are targeted at the
median of similarly sized industrial servicesand electrical
distribution companies. Salaries for each executive are
reviewed annually, taking into account factors such as changes
in duties and responsibilities, individual performance and
changes in the competitive marketplace.
13
15
o Annual incentives are awarded for successfully achieving
financial and operational goals of the Company which are
established at the beginning of the year.
o Long-term incentives are generally granted in the form of
stock options. The Committee believes that stock options are
the most effective long-term link between executive
performance and shareholder value.
CEO Compensation
In determining the 19992000 compensation of Mr. Haley, the Company's Chief
Executive Officer, the Committee assessed his individual performance and
leadership, as reflected in the Company's financial and operating performance
(including such factors as sales, operating income, earnings per share, cash
flow and capitalization), new business development initiatives and acquisition
programs.
The Committee recognized and acknowledged the Company's record levels
of sales and operating earnings, and the significant effort required to
accomplish the Company's initial public offering and improved financial
structure. The Company, however, maintains demanding performance based
standards, and since performance targets were not fully achieved, the annual
cash bonus payments for Mr. Haley and other Named Executive Officers were
significantly reduced in relation to prior years.
In 1999,2000, Mr. Haley received a base salary of $500,000$518,750 and a cash bonus
in the amount of $200,000. No stock option awards$350,000 paid in March 2001. In addition, options to purchase
100,000 shares of Common Stock at $9.875 per share were granted to Mr. Haley
under the LTIP (Long Term Incentive Plan) in 1999.2000. This information is also
shown in the Summary Compensation Table in this Proxy Statement.
9
12
Conclusions
The Committee's goal is to maintain compensation and benefit programs
that are competitive within the distribution industry and clearly linked to
shareholder value. The Committee believes that the 19992000 compensation levels
disclosed in this Proxy Statement are reasonable and appropriate.
The Committee intends to ensure that compensation paid to its executive
officers is within the limits of, or exempt from, the deductibility limits of
162(m) of the Internal Revenue Code and expects that all compensation will be
deductible. However, it reserves the right to pay compensation that is not
deductible if it determines that to be in the best interests of the Company and
the shareholders.
RESPECTFULLY SUBMITTED:
=======================
COMPENSATION COMMITTEE
James A. Stern, Chairman
James L. Singleton
Robert J. Tarr, Jr.
Anthony D. Tutrone
Kenneth L. Way
14
16
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is an officer or employee of
the Company. No member of the Committee has a current or prior relationship, and
no officer who is a statutory insider of the Company has a relationship to any
other company, required to be described under the Securities and Exchange
Commission rules relating to disclosure of executive compensation.
10
13
COMPARATIVE STOCK PERFORMANCE
The following performance graph compares the total stockholder return
of an investment in the Company's Common Stock to that of a peer group of 28
other
industrial and construction products distributors(1)distributors(1,2) and the Russell 2000
index of small cap stocks for the period commencing May 11, 1999, the date on
which the Common Stock was first publicly traded, and ending on December 31,
1999.2000. The graph assumes that the value of the investment in the Company's Common
Stock was $100 on May 11, 1999. The historical information set forth below is
not necessarily indicative of future performance. The Company does not make or
endorse any predictions as to future stock performance.
STOCKHOLDER RETURNWESCO INTERNATIONAL, INC.
STOCK PRICE PERFORMANCE
GRAPHMAY 11, 1999 - DECEMBER 31, 2000
11 May 1999 31 Dec 1999
----------- -----------5/11/99 6/30/99 12/31/99 6/30/00 12/31/00
------- ------- -------- ------- --------
WESCO................ 100 49.310
WESCO International 100.00 113.88 49.31 53.22 40.28
Russell 2000 100.00 100.14 112.97 118.49 111.62
Peer Group........... 100 88.426
Russell 2000......... 100 112.970Group 100.00 97.81 93.25 90.07 92.77
Old Peer Group 100.00 97.70 88.43
15
17
(1) The current peer group includes the following 23 companies: Airgas,
Inc., Applied Industrial Technologies, Barnes Group, Inc., Barnett, Inc., Building
Materials Holding Corporation, Cameron Ashley Building Products, Inc., Fastenal Company, Grainger (W.W.), Inc.,
Hughes Supply, Inc., Industrial Distribution Group, Inc., Innovative Valve Technology, Inc., JLK Direct
Distributors, Inc., Kaman Corp.,
KEVCO, Inc., Lawson Products, Inc., Maxco, Inc., MSC Industrial Direct
Co., Inc., NCH Corporation, Noland Company, Pameco Corp., Park-Ohio
Holdings Corp., Pentacon, Inc., Premier Farnell PLC, SCP Pool
Corporation, Strategic Distribution Inc., SunSource, Inc., and Watsco,
Inc.
(2) During the course of 2000, five of the companies included in the peer
group against which the performance of the Common Stock was compared in
the Proxy Statement for the Company's 2000 Annual Meeting ceased to be
independent public companies and, as a consequence, are no longer
included in the peer group with respect to fiscal 2000. Those five
companies are: Barnett, Inc., Cameron Ashley Building Products, Inc.,
Innovative Valve Technology, Inc., JLK Direct Distributors, Inc., and
Wilmar Industries, Inc. The performance graph compares the performance
of the Common Stock to both the old peer group and the new peer group
with respect to the period from May 11, 141999 to December 31, 1999, and
to that of the new peer group, only, with respect to fiscal 2000.
CERTAIN TRANSACTIONS AND RELATIONSHIPS WITH THE COMPANY
AMENDED AND RESTATED REGISTRATION AND PARTICIPATION AGREEMENT. In
connection with the Company's recapitalization in 1998, an investor group led by
The Cypress Group L.L.C. ("Cypress"), which included, among others, Chase
Capital Partners and Co-Investment Partners, L.P. and Clayton, DubilierDublier & Rice
("CD&R"), Westinghouse and the Company entered into a registration and
participation agreement (the "Registration and Participation Agreement"), which
amended and restated the previous agreement among CD&R, Westinghouse and the
Company, to reflect, among other things, the succession of the investor group to
CD&R's and Westinghouse's rights and obligations thereunder. Pursuant to the
Registration and Participation Agreement, the investor group and the management
stockholders have the right, under certain circumstances and subject to certain
conditions, to request that the Company register under the Securities Act shares
of common stock held by them. Subject to certain conditions and exceptions, the
investor group and the management stockholders also have the right to require
that shares of common stock held by them be included in any registration under
the Securities Act commenced by the Company. The Registration and Participation
Agreement provides that the Company will pay all expenses in connection with the
first three registrations requested by the investor group and the management
stockholders. The Registration and Participation Agreement also provides that
the Company will indemnify the investors and the management stockholders and
their affiliates for certain liabilities they may incur under the securities
laws.
In addition, the Registration and Participation Agreement provides that
so long as Cypress owns any of our securities, Cypress shall have the right to
designate one director to our Board of Directors and the Board of Directors of
WESCO Canada. At the time we entered the Registration and Participation
Agreement, Cypress was not affiliated with WESCO, and we believe the transaction
was made on terms no less favorable to us than we could have obtained from an
unaffiliated party.
16
18
MANAGEMENT STOCKHOLDERS. Each member of management who holds common
stock is a party to a stock subscription agreement with the Company which
provides that each management stockholder is entitled to certain benefits of,
and bound by certain obligations in, the Registration and Participation
Agreement, including certain registration rights thereunder.
A portion of the purchase price paid for common stock purchased by
certain management stockholders has been financed by full-recourse bank loans
guaranteed by WESCO. As of December 31, 1999, Messrs. Haley, Mehta, Swed,
Goodwin, Kramp, Piraino, Van and Vanderhoff had outstanding loans guaranteed by
the Company in the amount of $3,054,872, $0, $0, $0, $0, $0, $49,686 and $0
respectively, and since January 1, 1999, the largest amounts outstanding under
such loans were $3,054,872, $899,944, $343,200, $260,572, $68,700, $266,634,
$49,686 and $282,832 respectively. Messrs. Kramp and Piraino are no longer with
the Company.
1217
1519
SECURITY OWNERSHIP
The following table sets forth the beneficial ownership of the
Company's Common Stock as of April 10, 20009, 2001 by each person or group known by the
Company to beneficially own more than five percent of the outstanding Common
Stock, each director, and the executive officers named in the Summary
Compensation Table, and by all directors and executive officers as a group.
Unless otherwise indicated, the holders of all shares shown in the table have
sole voting and investment power with respect to such shares. In determining the
number and percentage of shares beneficially owned by each person, shares that
may be acquired by such person pursuant to options or convertible stock
exercisable or convertible within 60 days of the date hereof are deemed
outstanding for purposes of determining the total number of outstanding shares
for such person and are not deemed outstanding for such purpose for all other
stockholders.
SHARES
BENEFICIALLY PERCENT OWNED
NAME OWNED BENEFICIALLY
- ---------------------------------------------------- ---------------- --------------------------------------------------------------------------- ------------------------------------------
Cypress Merchant Banking Partners L.P.(1) 18,580,966 40.8%41.5%
c/o The Cypress Group L.L.C.
65 East 55th Street
New York, New York 10222
Cypress Offshore Partners L.P. (1) 962,370 2.1%
Bank of Bermuda (Cayman) Limited
P.O. Box 513 G.T. Third Floor
British America Tower
George Town, Grand Cayman
Cayman Islands, B.W.I.
Chase Equity Associates,JPMorgan Partners (BHCA), L.P.(2) 4,653,131 10.2%10.4%
c/o Chase CapitalJPMorgan Partners, L.P.
380 MadisonL.L.C.
1221 Avenue 12thof the Americas, 39th Floor
New York, New York 1001710020
Co-Investment Partners, L.P. 4,653,189 10.2%10.4%
c/o CIP Partners, LLC
660 Madison Avenue
New York, New York 10021
Roy W. Haley 2,762,825 5.9%
StevenJames A. Burleson 163,285 *Singleton (1) 19,543,336 43.6%
James A. Stern (1) 19,543,336 43.6%
1318
1620
SHARES
BENEFICIALLY PERCENT OWNED
NAME OWNED BENEFICIALLY
- ---------------------------------------------------- ---------------- -------------------------------------------------------------------------- ------------------------------------------
Roy W. Haley 2,871,200 6.2%
James H. Mehta 1,031,586 2.2%1,055,428 2.3%
Patrick M. Swed 673,370 1.5%
Donald H. Thimjon 336,685352,580 *
PatrickWilliam M. Swed 649,528 1.4%
James L. Singleton (1) 19,543,336 42.9%
James A. Stern (1) 19,543,336 42.9%
Anthony D. Tutrone -0- *
Michael J. Cheshire 23,120Goodwin 364,440 *
Robert J. Tarr, Jr. 51,120 *
Kenneth L. Way 50,120 *
Michael J. Cheshire 23,120 *
George L. Miles, Jr. 1,000 *
Anthony D. Tutrone -0- *
All executive officers and directors as a group 25,263,806 51.8%27,001,246 56.1%
(16) personspersons(3)
* Indicates ownership of less than 1% of the Common Stock.
- ------------------------------------------------
(1) Cypress Merchant Banking Partners L.P. and Cypress Offshore Partners
L.P. are affiliates of Cypress. The general partner of Cypress Merchant
Banking Partners L.P. and Cypress Offshore Partners L.P. is Cypress
Associates L.P., and The Cypress Group L.L.C. is the general partner of
Cypress Associates L.P. Messrs. Singleton and Stern are members of
Cypress and may be deemed to share beneficial ownership of the shares
of common stock shown as beneficially owned by such Cypress funds. Such
individuals disclaim beneficial ownership of such shares.
The information presented with respect
to Cypress is based on a Schedule 13G filed by Cypress with the Securities
and Exchange Commission (the "Commission") on February 11, 2000.
(2) These shares constitute shares of non-voting Class B common stock which
are convertible at any time into common stock at the option of the
holder.
(3) Included in this figure are 3,211,3593,303,829 shares that may be acquired by
the executive officers and directors pursuant to options or convertible
stock exercisable or convertible within 60 days of the date hereof.
1419
1721
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's
directors, its executive officers and any persons beneficially holding more than
ten percent of the Company's Common Stock are required to report their ownership
of the Company's Common Stock and any changes in that ownership to the
Commission and the New York Stock Exchange. Specific due dates for these reports
have been established and the Company is required to report in this proxy
statement any failure to file by these dates. To the Company's knowledge, for
the fiscal year ended December 31, 2000, each officer and director of the
Company timely filed all of
these filing requirements were satisfiedsuch required reports, except that the Company
inadvertently filed Forms 5 late for 1999.Messrs. Haley, Mehta, Swed, Goodwin,
Thimjon, Van, Van Oss, and Brailer with respect to certain options granted to
them by the Company.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP has served as the independent accountants
for Fiscal 1999.2000. Representatives of PricewaterhouseCoopers LLP will be present
at the Annual Meeting, and will have an opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS FOR 20012002 ANNUAL MEETING
Rule 14a-8 of the Exchange Act contains the procedures for including
certain stockholder proposals in the Company's proxy statement and related
materials. The deadline for submitting a stockholder proposal pursuant to Rule
14a-8 for the 20012002 Annual Meeting of Stockholders (the "2001 Annual Meeting") of
the Company is December 24, 2000.21, 2001. With respect to any stockholder proposal
outside the procedures provided in Rule 14a-8 and received by the Company no
later than December 24, 2000,21, 2001, the Company may be required to include certain
limited information concerning such proposal in the Company's proxy statement so
that proxies solicited for the 20012002 Annual Meeting may confer discretionary
authority to vote on any such matter. Any stockholder proposals should be
addressed to the Secretary of the Company, Commerce Court, Suite 700, Four
Station Square, Pittsburgh, Pennsylvania 15219.
1520
18
PROXY22
APPENDIX A
WESCO INTERNATIONAL, INC.
COMMERCE COURT, SUITE 700
FOUR STATION SQUARE
PITTSBURGH, PENNSYLVANIA 15219AUDIT COMMITTEE CHARTER
I. COMPOSITION OF THE AUDIT COMMITTEE: The Audit Committee shall be
comprised of at least three Directors, all of whom shall have no
relationship to the Company that may interfere with the exercise of
their independence from management and the Company and shall otherwise
satisfy the applicable membership requirements under the rules of the
New York Stock Exchange, Inc. All members of the Committee shall have a
working familiarity with basic financial and accounting processes, and
at least one member shall have accounting or financial management
expertise.
II. PURPOSE OF THE AUDIT COMMITTEE: The purpose of the Audit Committee is
to assist the Board of Directors:
1. in its oversight of the Company's accounting and financial
reporting principles, policies and internal controls;
2. in its oversight of the quality of the Company's financial
statements and the independent audit thereof;
3. in selecting (or nominating the outside auditors to be
proposed for shareholder approval in any proxy statement),
evaluating and, where deemed appropriate, replacing the
outside auditors; and
4. in evaluating the independence of the outside auditors.
The function of the Audit Committee is oversight. Management of the
Company is responsible for the preparation, presentation and integrity
of the Company's financial statements. In addition, management is
responsible for maintaining appropriate accounting and financial
reporting principles and policies and internal controls and procedures
designed to assure compliance with accounting standards and applicable
laws and regulations. Each member of the Audit Committee shall rely on
(i) the integrity of those persons and organizations within and outside
the Company from which it receives information and (ii) the accuracy of
the financial and other information provided to the Audit Committee by
such persons or organizations absent actual knowledge to the contrary
(which shall be promptly reported to the Board of Directors). The Audit
Committee meets regularly with management and the outside auditors to
review and discuss the annual and quarterly reporting process.
The outside auditors for the Company are ultimately accountable to the
Board of Directors and the Audit Committee. The outside auditors shall
submit to the Audit Committee and the Company annually a formal written
statement delineating all relationships between the outside auditors
and the Company ("Statement as to Independence"), addressing at least
the matters set forth in Independence Standard No. 1 adopted by the
Independence Standards Board.
A-1
23
III. MEETINGS OF THE AUDIT COMMITTEE: In addition to such meetings of the
Audit Committee as may be required to discuss the matters set forth
below in Article IV, the Audit Committee should meet separately at
least annually with management, the Director of the internal audit
department and the outside auditors to discuss any matters that the
Audit Committee or any of those persons or firms believe should be
discussed privately. The Audit Committee may request any officer or
employee of the Company or the Company's outside counsel or outside
auditors to attend a meeting of the Audit Committee or to meet with
any members of, or consultants to, the Audit Committee.
IV. DUTIES AND POWERS OF THE AUDIT COMMITTEE: To carry out its oversight
responsibilities, the Audit Committee shall have the following duties
and powers:
1. with respect to the outside auditors,
(i) to provide advice to the Board of Directors in
selecting (or nominating the outside auditors to be
proposed for shareholder approval in any proxy
statement), evaluating or replacing outside auditors;
(ii) to review the fees charged by the outside auditors
for audit and non-audit services;
(iii) to ensure that the outside auditors prepare and
deliver annually a Statement as to Independence (it
being understood that the outside auditors are
responsible for the accuracy and completeness of this
Statement), to actively engage the outside auditors
in a dialogue with respect to any relationships or
services disclosed in this Statement that may impact
the objectivity and independence of the Company's
outside auditors and to recommend that the Board of
Directors take appropriate action in response to this
statement to satisfy itself of the outside auditors'
independence;
(iv) to maintain a clear understanding with management and
the internal audit department, on the one hand, and
the outside auditors, on the other, regarding the
ultimate accountability of the outside auditors; and
(v) to meet with the outside auditors to discuss the
results of their examination and their evaluation of
internal controls and the overall quality of
financial reporting; and
2. with respect to the internal audit department,
(i) to review the appointment and/or replacement of the
Director of the internal audit department; and
(ii) to advise the Director of the internal audit
department that he or she is expected to provide to
the Audit Committee summaries of and, as appropriate,
the significant reports to management prepared by the
internal audit department and management's responses
thereto;
A-2
24
3. with respect to financial reporting principles and policies
and internal audit controls and procedures,
(i) to advise management, the internal audit department
and the outside auditors that they are expected to
provide to the Audit Committee a timely analysis of
significant financial reporting issues and practices;
(ii) to consider any reports or communications (and
management's and/or the internal audit department's
responses thereto) submitted to the Audit Committee
by the outside auditors required by or referred to in
SAS 61 (as codified by AU Section 380), as may be
modified or supplemented;
(iii) to meet with the outside auditors, with and (where
deemed necessary), without representatives of
management and the internal audit department present:
o to discuss the scope of the annual audit;
o to discuss the audited financial statements;
o to discuss any significant matters arising
from any audit or report or communication
referred to in items 2(ii) or 3(ii) above,
whether raised by management, the internal
audit department or the outside auditors,
relating to the Company's financial
statements;
o to review the form of opinion the outside
auditors propose to render to the Board of
Directors and shareholders;
(iv) to meet with management, the Director of the internal
audit department and/or the outside auditors;
o to discuss significant changes to the
Company's auditing and accounting
principles, policies, controls, procedures
and practices proposed or contemplated by
the outside auditors, the internal audit
department or management; and
o to inquire about significant risks and
exposures, if any, and the steps taken to
monitor and minimize such risks;
(v) to obtain from the outside auditors assurance that
the audit was conducted in a manner consistent with
Section 10A of the Securities Exchange Act of 1934,
as amended, which sets forth certain procedures to be
followed in any audit of financial statements
required under the Securities Exchange Act of 1934;
and
A-3
25
(vi) to discuss with the Company's counsel any significant
legal matters that may have a material effect on the
financial statements, the Company's compliance
policies, including materials notices to or inquiries
received from governmental agencies; and
4. with respect to reporting and recommendations,
(i) to prepare any report, including any recommendation
of the Audit Committee, required by the rules of the
Securities and Exchange Commission to be included in
the Company's annual proxy statement;
(ii) to review this Charter at least annually and
recommend any changes to the full Board of Directors;
and
(iii) to report its activities to the full Board of
Directors on a regular basis and to make such
recommendations with respect to the above and other
matters as the Audit Committee may deem necessary or
appropriate.
V. RESOURCES AND AUTHORITY OF THE AUDIT COMMITTEE: The Audit Committee
shall have the resources and authority appropriate to discharge its
responsibilities, including the authority to engage outside auditors
for special audits, reviews and other procedures and to retain special
counsel and other experts or consultants.
A-4
26
Please mark [ X ]
your votes as
indicated in
this example
1. ELECTION OF DIRECTORS: The election of three directors, Robert J.
Tarr, Jr., Anthony D. Tutrone and Kenneth L. Way, for a three year term to
expire in 2003.
FOR all nominees WITHHOLD
listed above AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed above
[ ] [ ]
(Instruction: To withhold authority to vote for any nominee, write that
nominee's name on the line below.)
-----------------------------------------------------------------------
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting. This proxy, when properly
executed will be voted in the manner directed herein by the undersigned
stockholder. If no direction is made, the proxy will be voted for
Proposal 1.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
DATED , 2001
--------------------------
---------------------------------------
Signature
---------------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
27
WESCO INTERNATIONAL, INC. THIS PROXY IS SOLICITED ON BEHALF
COMMERCE COURT, SUITE 700 OF THE BOARD OF DIRECTORS. THE BOARD OF
FOUR STATION SQUARE DIRECTORS RECOMMENDS A VOTE FOR ALL
PITTSBURGH, PENNSYLVANIA 15219 DIRECTOR NOMINEES.
PROXY
The undersigned hereby appoints StevenStephen A. BurlesonVan Oss and Daniel A. Brailer as
Proxies, and each of them with full power of substitution, to represent the
undersigned and to vote all shares of common stock of WESCO International, Inc.,
which the undersigned would be entitled to vote if personally present and voting
at the Annual Meeting of Shareholders to be held May 23, 20002001 or any adjournment
thereof, upon all matters coming before the meeting.
(Continued on reverse side)- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
19
Please mark
your votes as [X]
indicated in
this example
1. ELECTION OF DIRECTORS: THE ELECTION OF TWO DIRECTORS, MICHAEL J. CHESHIRE
AND JAMES A. STERN, FOR A THREE YEAR TERM TO EXPIRE IN 2003.
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting. This Proxy, when properly
executed will be voted in the manner directed herein by the undersigned
stockholder. If no direction is made, the Proxy will be voted for
Proposal 1.
INSTRUCTIONS: To withhold authority to vote
for any individual nominee, write the
nominee's name on the line below:
____________________________________________
FOR ALL nominees WITHHOLD AUTHORITY
listed above. to vote For All
nominees listed above
[ ] [ ]
Please sign exactly as name appears. When
shares are held by joint tenants, both
should sign. When signing as attorney, as
executor, administrator, trustee or
guardian, please give full title as such. If
a corporation, please sign in full corporate
name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
DATED: _______________________________, 2000
____________________________________________
Signature
____________________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
* FOLD AND DETACH HERE *