o Preliminary Proxy Statement | ||
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
þ Definitive Proxy Statement | ||
o Definitive Additional Materials | ||
o Soliciting Material Pursuant to Section 240.14a-12 |
þ | No fee required. |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
o | Fee paid previously with preliminary materials. |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(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) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
2005 | |
Notice of Annual Meeting | |
and Proxy Statement |
1) | Election of a class of three Directors for a three-year term expiring in 2008; | |
2) | Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal year ending December 31, 2005; and | |
3) | Transaction of any other business properly brought before the meeting. |
By order of the Board of Directors, | |
MARCY SMOREY-GIGER | |
Corporate Secretary |
Roy W. Haley Age: 58 Chairman of the Board and Chief Executive Officer Director since 1994 | Mr. Haley has been Chief Executive Officer of the Company since February 1994, and Chairman of the Board since 1998. From 1988 to 1993, Mr. Haley was an executive at American General Corporation, a diversified financial services company, where he served as Chief Operating Officer, as President and as a Director. Mr. Haley is also a Director of United Stationers, Inc. and Cambrex Corporation, and is Chairman of the Pittsburgh Branch of the Federal Reserve Bank of Cleveland. | |
George L. Miles, Jr. Age: 63 Director since 2000 | Mr. Miles has been President and Chief Executive Officer of WQED Multimedia since September 1994. Mr. Miles is also a Director of Equitable Resources, Westwood One, ATS-Chester, Inc., Citizens Financial Group and Harley-Davidson, Inc. | |
James L. Singleton Age: 49 Director since 1998 | Mr. Singleton is Co-Chairman of The Cypress Group, L.L.C. and was a founding partner of that firm in April 1994. Prior to that time, he was a Managing Director in the Merchant Banking Group at Lehman Brothers. Mr. Singleton is also a Director of ClubCorp Inc., Danka Business Systems PLC, Scotsman Holdings, Inc., and The Meow Mix Company. |
Michael J. Cheshire Age: 56 Director since 1998 | Mr. Cheshire was the Chairman and Chief Executive Officer of Gerber Scientific, Inc., from 1998 to 2001 and President and Chief Operating Officer from 1997 to 1998. Prior to joining Gerber Scientific, Mr. Cheshire spent 21 years with the General Signal Corporation and was most recently President of their electrical group. Mr. Cheshire is a Director of Del Global Technologies Corporation, United Way of the Connecticut Capital Region and a corporator with Farmington Savings Bank. |
2
James A. Stern Age: 54 Director since 1998 | Mr. Stern is CEO and Co-Chairman of The Cypress Group L.L.C. since its formation in April 1994. Prior to joining Cypress, Mr. Stern was a managing Director with Lehman Brothers, Inc. 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., Lear Corporation, Medpointe, Inc., and Affinia Group, Inc., and is Chairman of the Board of Trustees of Tufts University. | |
William J. Vareschi Age: 62 Director since 2002 | Mr. Vareschi retired as Chief Executive Officer of Central Parking Corporation in May 2003. Before joining Central Parking Corp., his prior business career of more than 35 years of service was spent with the General Electric Company, which he joined in 1965. He held numerous financial management positions within GE, including Chief Financial Officer for GE Plastics Europe (in the Netherlands), GE Lighting (Cleveland, Ohio), and GE Aircraft Engines (Cincinnati, Ohio). In 1996, Mr. Vareschi became President and Chief Executive Officer of GE Engine Services, a position he held until his retirement in 2000. Mr. Vareschi was elected to the Board of WMS Industries Inc. on December 9, 2004. |
Sandra Beach Lin Age: 47 Director since 2002 | Ms. Lin joined Avery Dennison Corporation in 2005 as Group Vice President, Specialty Materials & Converting Worldwide. She previously served as President, Alcoa Closure Systems International, joining Alcoa in 2002 after 20 years of business experience in the specialty chemicals, medical products, and automotive components industries. She joined Honeywell (then AlliedSignal) in 1994 and held various general management positions, most recently serving as President of Bendix Commercial Vehicle Systems. Before joining Honeywell, she held a variety of business segment general management, product marketing, and sales roles at Smith & Nephew Perry, Crest Ultrasonics, and American Cyanamid. Ms. Lin is a member of the Committee of 200, an international, professional organization of preeminent women entrepreneurs and corporate leaders. She is also a member of the Board of the Tauber Manufacturing Institute at the University of Michigan. |
3
Robert J. Tarr, Jr. Age: 61 Director since 1998 | Mr. Tarr is a professional director and private investor. He is also a special partner of Chartwell Investments, LLP, a private equity firm. He was the Chairman, Chief Executive Officer and President of HomeRuns.com, Inc. from February 2000 to September 2001. 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, Chief Operating Officer, and he currently is a Director of Harcourt General, Inc. (formerly General Cinema Corporation) and The Neiman Marcus Group, Inc. | |
Kenneth L. Way Age: 65 Director since 1998 | Mr. Way served as Chairman of Lear Corporation from 1988 to 2003, and was affiliated with Lear Corporation and its predecessor companies for 36 years in engineering, manufacturing and general management capacities. Mr. Way retired on January 1, 2003. Mr. Way is also a Director of Comerica, Inc., CMS Energy Corporation, Cooper Standard Automotive, United Way and Karmanos Cancer Institute, and is on the Board of Trustees for Henry Ford Health Systems. |
4
• | Director Qualifications; | |
• | Significant Changes in Job Responsibilities of Directors; | |
• | Elected Term; | |
• | Director Responsibilities; | |
• | Committees of the Board; | |
• | Meetings in Executive Session; | |
• | Director Access to Officers and Employees; | |
• | Director Compensation; | |
• | Director Orientation and Continuing Education; | |
• | Evaluation of the Chief Executive Officer; | |
• | Executive Compensation and Ownership Guidelines. |
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1. | Any Director newly appointed by the Board will stand for re-election by stockholders at the next Annual Meeting. | |
2. | Stockholders will be asked on an annual basis to ratify and approve the appointment of the Company’s independent registered public accounting firm as previously approved by the Board. | |
3. | Board members will be expected to maintain beneficial ownership of Company common stock in an amount valued at no less than two times their annual retainer fee. | |
4. | Management personnel will be expected to maintain beneficial ownership of Company common stock based on a schedule established by the Board. More particularly, the Chief Executive Officer will be expected to maintain beneficial ownership in an amount valued at no less than four times his or her approved base salary, and Vice Presidents will be expected to maintain beneficial ownership in an amount valued at no less than two times their respective base salary levels. |
• | The name and address of the proposed candidate; | |
• | The proposed candidate’s resume or a listing of his or her qualifications to be a Director of the Company; | |
• | A description of what would make such person a good addition to the Board; | |
• | A description of any relationship that could affect such person’s qualifying as an independent Director, including identifying all other public company Board and committee memberships; | |
• | A confirmation of such person’s willingness to serve as a Director if selected by the Nominating and Governance Committee; | |
• | Any information about the proposed candidate that, under the federal proxy rules, would be required to be included in the Company’s Proxy Statement if such person were a nominee; and | |
• | The name of the stockholder submitting the name of the proposed candidate, together with information as to the number of shares owned and the length of time of ownership. |
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Report of the Audit Committee |
9
Relationship with Independent Registered Public Accounting Firm |
2004 | 2003 | |||||||
Audit fees | $ | 1,407,000 | $ | 507,000 | ||||
Audit-related fees | 32,000 | 126,000 | ||||||
Tax fees | 522,000 | 628,000 | ||||||
All other fees | — | — | ||||||
$ | 1,961,000 | $ | 1,261,000 |
Audit Committee Pre-approval Policies and Procedures |
Appointment of Independent Registered Public Accounting Firm |
10
Compensation of Directors |
11
Long-Term | |||||||||||||||||||||
Compensation | |||||||||||||||||||||
Securities | |||||||||||||||||||||
Annual Compensation | Underlying | All Other | |||||||||||||||||||
Fiscal | Equity Awards | Compensation ($) | |||||||||||||||||||
Name and Principal Position(s) | Year | Salary ($) | Bonus ($)(1) | (#s)(2) | (3)(4)(5)(6) | ||||||||||||||||
Roy W. Haley | 2004 | 685,833 | 1,470,000 | 200,000 | 62,869 | ||||||||||||||||
Chairman and | 2003 | 615,000 | 300,000 | 300,000 | 35,072 | ||||||||||||||||
Chief Executive Officer | 2002 | 615,000 | 175,000 | — | 31,722 | ||||||||||||||||
Stephen A. Van Oss | 2004 | 325,000 | 387,000 | 70,000 | 32,957 | ||||||||||||||||
Senior Vice President and Chief | 2003 | 300,000 | 130,000 | 70,000 | 25,710 | ||||||||||||||||
Financial and Administrative Officer | 2002 | 282,500 | 130,000 | — | 23,479 | ||||||||||||||||
William M. Goodwin | 2004 | 242,000 | 280,500 | 30,000 | 36,131 | ||||||||||||||||
Vice President, Operations | 2003 | 235,833 | 118,000 | 38,000 | 23,548 | ||||||||||||||||
2002 | 230,000 | 85,000 | — | 22,025 | |||||||||||||||||
Patrick M. Swed(7) | 2004 | 275,000 | 212,420 | 27,500 | 32,563 | ||||||||||||||||
Vice President, Operations | 2003 | 275,000 | — | 38,000 | 23,445 | ||||||||||||||||
2002 | 275,000 | — | — | 19,422 | |||||||||||||||||
Donald H. Thimjon | 2004 | 242,000 | 280,500 | 35,000 | 35,012 | ||||||||||||||||
Vice President, Operations | 2003 | 235,833 | 76,200 | 38,000 | 23,874 | ||||||||||||||||
2002 | 230,000 | 61,000 | — | 23,000 |
(1) | Bonus amounts reflect compensation earned in the indicated fiscal year, but approved and paid in the following year. Bonus amounts reflect awards under documented performance objectives and plans and are inclusive of a special one-year Value Acceleration Program payment approved by the Board for performance substantially above established goals. |
(2) | All equity awards granted to the Named Executive Officers in 2004, 2003 and 2002 were granted under the Company’s 1999 Long-Term Incentive Plan (“LTIP”), as amended and approved by the Board and stockholders. SARs granted in 2004 have an exercise price of $24.02 per share. Stock options granted in 2003 have an exercise price of $5.90 per share. Stock options granted in 2001 have an exercise price of $4.50 per share. Awards granted under the LTIP are subject to certain time and performance-based vesting requirements. |
(3) | Includes contributions by the Company under the WESCO Distribution, Inc. Retirement Savings Plan in the amounts of (a) $6,000, $2,600, $4,925, $6,000, and $6,000 for Messrs. Haley, Van Oss, Goodwin, Swed, and Thimjon, respectively, in 2004 (b) $6,000, $2,400, $4,500, $6,000, and $6,000 for Messrs. Haley, Van Oss, Goodwin, Swed, and Thimjon, respectively, in 2003, (c) $5,100, $2,200, $4,125, $5,100, and $5,100 for Messrs. Haley, Van Oss, Goodwin, Swed, and Thimjon, respectively, in 2002. An award under the Company’s Retirement Savings Plan in the form of a discretionary contribution was made to all employees in 2004, specifically, in the amounts of $5,000, $3,000, $7,000, $7,000, and $7,000 for Messrs. Haley, Van Oss, Goodwin, Swed and Thimjon, respectively. |
(4) | Includes contributions by the Company under the WESCO Distribution, Inc. Deferred Compensation Plan in the amounts of (a) $22,700, $10,613, $5,779, $2,063, and $3,341 for Messrs. Haley, Van Oss, Goodwin, Swed and Thimjon, respectively, in 2004, (b) $14,750, $10,500, $5,036, $2,063, and $2,666 for Messrs. Haley, Van Oss, Goodwin, Swed and Thimjon, respectively, in 2003, (c) $12,300, $8,525, $3,738, $0, and $3,738 for Messrs. Haley, Van Oss, Goodwin, Swed and Thimjon, respectively, in 2002. An award under the Company’s Retirement Savings Plan in the form of a discretionary contribution was |
12
made in 2004 to the Deferred Compensation Plan in the amounts of $14,750, $3,450, $4,219, $2,625, and $3,519 for Messrs. Haley, Van Oss, Goodwin, Swed and Thimjon, respectively. | |
(5) | Includes an annual automobile allowance paid by the Company in the amount of $12,000 for each of Messrs. Haley, Van Oss, Goodwin, Swed and Thimjon in each of 2004, 2003, and 2002. |
(6) | Includes the dollar value of insurance premiums paid by the Company for each executive officer’s term life insurance in the amounts of (a) $2,419, $1,294, $2,208, $2,875 and $3,152 for Messrs. Haley, Van Oss, Goodwin, Swed, and Thimjon, respectively, in 2004, (b) $2,322, $810, $2,012, $3,382, and $3,208 for Messrs. Haley, Van Oss, Goodwin, Swed, and Thimjon, respectively, in 2003, (c) $2,322, $754, $2,162, $2,322, and $2,162 for Messrs. Haley, Van Oss, Goodwin, Swed, and Thimjon, respectively, in 2002. |
(7) | Patrick M. Swed will retire employment from the Company as of May 1, 2005. |
Potential Realizable Value | ||||||||||||||||||||||||
Number of | % of Total | at Assumed Rates of | ||||||||||||||||||||||
Securities | SARs | Stock Price Appreciation | ||||||||||||||||||||||
Underlying | Granted to | for SAR Term(2) | ||||||||||||||||||||||
SARs | Employees | Exercise | Expiration | |||||||||||||||||||||
Name | Granted(1) | in Fiscal Year | Price ($/Sh) | Date | 5% | 10% | ||||||||||||||||||
Roy W. Haley | 200,000 | 18.6 | % | 24.02 | 9/29/2014 | 3,022,000 | 7,656,000 | |||||||||||||||||
Stephen A. Van Oss | 70,000 | 6.5 | % | 24.02 | 9/29/2014 | 1,057,700 | 2,679,600 | |||||||||||||||||
William M. Goodwin | 30,000 | 2.7 | % | 24.02 | 9/29/2014 | 453,300 | 1,148,400 | |||||||||||||||||
Patrick M. Swed | 27,500 | 2.55 | % | 24.02 | 9/29/2014 | 415,525 | 1,052,700 | |||||||||||||||||
Donald H. Thimjon | 35,000 | 3.25 | % | 24.02 | 9/29/2014 | 528,850 | 1,339,800 |
(1) | During 2003, the Company adopted the measurement provisions of SFAS No. 123, “Accounting for Stock-Based Compensation” and began expensing stock option and SARs awards. The Company recognized $2.9 million of compensation expense in the year ended December 31, 2004. |
(2) | Amounts represent hypothetical gains that could be achieved for the respective options if exercised at the end of the option term. These gains are based on assumed rates of stock price appreciation of 5% and 10% compounded annually from the date the respective options were granted to their expiration date. These assumptions are not intended to forecast future appreciation of our stock price. The potential realizable value computation does not take into account federal or state income tax consequences of option exercises or sales of appreciated stock. |
Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Underlying Unexercised Option/ | In-the-Money Option/SARs | |||||||||||||||||||||||
SARs Awards at FY-End | Awards at FY-End(1) | |||||||||||||||||||||||
Shares | ||||||||||||||||||||||||
Acquired | Value | (Exercisable — Unexercisable) | (Exercisable — Unexercisable) | |||||||||||||||||||||
on Exercise | Realized | |||||||||||||||||||||||
Name | (#) | ($) | (#) | (#) | ($) | ($) | ||||||||||||||||||
Roy W. Haley | — | — | 641,875 | 925,125 | 12,610,019 | 16,504,111 | ||||||||||||||||||
Stephen A. Van Oss | 17,500 | 187,210 | 109,296 | 242,676 | 2,450,914 | 4,250,486 | ||||||||||||||||||
William M. Goodwin | 20,000 | 334,600 | 72,142 | 173,018 | 1,424,197 | 3,242,450 | ||||||||||||||||||
Patrick M. Swed | 50,000 | 731,552 | 131,879 | 194,361 | 2,552,629 | 3,678,794 | ||||||||||||||||||
Donald H. Thimjon | — | — | 42,142 | 178,018 | 857,497 | 3,270,550 |
(1) | Based on the closing market price per share of $29.64 as reported on the NYSE on December 31, 2004. |
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Responsibilities and Goals |
Executive Officer Compensation |
• | Base salaries for the Company’s executives are targeted at or near the median of similarly sized industrial distribution companies and other large distributors or wholesalers. Salaries for each executive are reviewed annually, taking into account factors such as overall company performance in relation to competition and industry circumstances, changes in duties and responsibilities, strategic and operational accomplishments, and individual performance. From time to time (and not necessarily on an annual basis), the Committee adjusts base salaries for executive officers (including Mr. Haley) based on performance, and if appropriate to reflect competitive pay practices of peer companies. | |
• | Annual incentives are awarded for achievement of strategic and operational objectives, improvement in operating results, and performance in relation to financial goals of the Company, which are established at the beginning of the year. Cash bonus incentive awards granted for 2004 performance reflect significant financial and operational achievements, which exceeded targeted performance levels. |
15
• | Long-term incentives generally are granted in the form of equity awards such as stock options or SARs. The Committee believes that equity awards are an effective long-term link between executive performance and stockholder value. The Committee authorized a SARs grant in September 2004, and each of the Named Executive Officers received an equity award as shown in the table reflecting SARs Grants in the Last Fiscal Year. |
CEO Compensation |
Conclusions |
16
Wesco International, Inc. | Russell 2000 | Peer Group | ||||||||||
12/99 | 100.00 | 100.00 | 100.00 | |||||||||
12/00 | 81.69 | 96.98 | 93.48 | |||||||||
12/01 | 55.77 | 99.39 | 109.90 | |||||||||
12/02 | 61.86 | 79.03 | 110.04 | |||||||||
12/03 | 99.72 | 116.38 | 139.66 | |||||||||
12/04 | 333.97 | 137.71 | 176.65 |
* | $100 invested on 12/31/99 in stock or index— |
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2000 | 2001 | 2002/2003/2004 | ||
Airgas, Inc. Applied Industrial Technologies Barnes Group, Inc. Building Materials Holding Corp. Fastenal Company Grainger (W.W.), Inc. Hughes Supply, Inc. Industrial Distribution Group, 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 Corp. Strategic Distribution, Inc. SunSource, Inc. Watsco, Inc. | Airgas, Inc. Applied Industrial Technologies Barnes Group, Inc. Building Materials Holding Corp. Fastenal Company Grainger (W.W.), Inc. Hughes Supply, Inc. Industrial Distribution Group, Inc. Kaman Corp. KEVCO, Inc. Lawson Products, Inc. Maxco, Inc. MSC Industrial Direct Co., Inc. NCH Company Noland Company Pameco Corp. Park-Ohio Holdings Corp. Premier Farnell PLC SCP Pool Corp. Strategic Distribution, Inc. Watsco, Inc. | Airgas, Inc. Applied Industrial Technologies Barnes Group, Inc. Building Materials Holding Corp. Fastenal Company Grainger (W.W.), Inc. Hughes Supply, Inc. Industrial Distribution Group, Inc. Kaman Corp. Lawson Products, Inc. Maxco, Inc. MSC Industrial Direct Co., Inc. Noland Company Park-Ohio Holdings Corp. Premier Farnell PLC SCP Pool Corp. Strategic Distribution, Inc. Watsco, Inc. |
18
Shares | Percent | ||||||||
Beneficially | Owned | ||||||||
Name | Owned | Beneficially | |||||||
Cypress Merchant Banking Partners L.P.(1) | 12,431,663 | 26.5 | % | ||||||
c/o The Cypress Group L.L.C. 65 East 55th Street New York, New York 10222 | |||||||||
Cypress Offshore Partners L.P.(1) | 643,873 | 1.4 | % | ||||||
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. | |||||||||
Putnam, LLC d/b/a Putnam Investments | 2,336,461 | 5.0 | % | ||||||
One Post Office Square Boston, Massachusetts, 02109 | |||||||||
James L. Singleton(1) | 13,075,536 | 27.9 | % | ||||||
James A. Stern(1) | 13,075,536 | 27.9 | % | ||||||
Roy W. Haley | 1,391,791 | 2.9 | % | ||||||
Stephen A. Van Oss | 197,761 | * | |||||||
William M. Goodwin | 167,394 | * | |||||||
Donald H. Thimjon | 124,834 | * | |||||||
Robert J. Tarr, Jr. | 51,120 | * | |||||||
Kenneth L. Way | 49,553 | * | |||||||
Michael J. Cheshire | 5,120 | * | |||||||
George L. Miles, Jr. | 3,501 | * | |||||||
Sandra Beach Lin | 350 | * | |||||||
Patrick Swed | 100 | * | |||||||
William J. Vareschi | — | — | |||||||
All 17 executive officers and Directors as a group | 15,128,082 | 31.7 | % |
* | Indicates ownership of less than 1% of the Common Stock. |
(1) | The Cypress Group L.L.C. (“Cypress”) is the general partner of Cypress Associates L.P. Cypress Associates L.P. is the general partner of Cypress Merchant Banking Partners L.P. and Cypress Offshore Partners 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. Messrs. Singleton and Stern disclaim beneficial ownership of such shares. |
19
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its oversight of the Company’s accounting and financial reporting principles, policies and internal controls and the performance of the internal audit function; | |
its oversight of the quality and integrity of the Company’s financial statements and the independent audit thereof; | |
selecting, evaluating and, where deemed appropriate, replacing the Company’s outside auditors; | |
evaluating the independence, qualification and performance of the Company’s outside auditors; | |
evaluating the performance of the Company’s internal auditors; and | |
ensuring the Company’s compliance with legal and regulatory requirements. |
A-1
With respect to the outside auditors, the Audit Committee shall: |
have sole authority to appoint, compensate, retain, oversee, evaluate and replace the Company’s outside auditors including resolution of disagreements between management and the auditor regarding financial reporting) and to approve all audit services and audit engagement fees and terms and any non-audit engagements by the outside auditors; | |
instruct the outside auditors that they report directly to the Committee; | |
at least annually, review the services proposed to be rendered to the Company by the outside auditors, including the nature, type and scope of services contemplated and the related fees to be rendered by the firm during the year, and approve the appropriate services and fees; | |
review and, as appropriate, pre-approve those engagements that may arise during the course of the year that are outside the scope of the initial services and fees pre-approved by the Audit Committee; | |
annually evaluate the outside auditor’s qualifications, performance and independence, including that of the lead audit partner for the Company’s account, taking into account the opinions of management and the Company’s internal auditors; | |
ensure regular rotation of the lead partner on the Company’s account as required by applicable SEC regulation and consider whether regular rotation of the outside audit firm is appropriate; | |
ensure that the outside auditors prepare and deliver annually the Statement as to Independence (it being understood that the outside auditors are responsible for the accuracy and completeness of this Statement), 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 take appropriate action to satisfy itself of the outside auditors’ independence; |
A-2
meet with the outside auditors to discuss the planning and staffing of the annual audit and the results of their examination and their evaluation of internal controls and the overall quality of financial reporting; | |
approve in advance any non-audit services that are proposed to be furnished to the Company by the Company’s outside auditors as permitted by law and review the disclosure of such arrangements in the Company’s periodic reports; | |
set clear hiring policies for employees or former employees of the Company’s outside auditors; and | |
review with the outside auditor any audit problems or difficulties, including any restrictions on the scope of the outside auditor’s activities or access to requested information and any significant disagreements with management, and management’s response; and | |
at least annually, obtain and review a report by the independent auditor describing: (i) the firm’s internal quality-control procedures; (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm; and (iii) any steps taken to deal with any such issues and (iv) (to assess the auditor’s independence) all relationships between the auditors and the Company. |
With respect to the internal audit department, the Audit Committee shall: |
appoint and/or replace the Director of the Internal Audit Department and maintain a direct reporting line to the Audit Committee. The Director of the Internal Audit Department shall maintain an administrative reporting line to the Chief Financial Officer; | |
advise the Director of the Internal Audit Department of requirements to provide to the Audit Committee summaries of and, as appropriate, the complete internal audit department reports along with management’s responses thereto; and | |
discuss with the outside auditors the internal audit department’s responsibilities, budget and staffing and any recommended changes in the planned scope of the internal audit. |
With respect to financial reporting principles and policies and internal audit controls and procedures, the Audit Committee shall: |
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; | |
meet with the outside auditors, with and without representatives of management and the internal audit department present, to: |
discuss the scope of the annual audit; | |
discuss the Company’s annual and quarterly financial statements prior to filing, including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as the results of the outside auditor’s review of the annual and quarterly financial statements; | |
review and discuss the Company’s press releases, including the type and presentation of information to be included (paying particular attention to any use of pro forma or adjusted non-GAAP information), as well as financial information and earnings guidance provided to analysts and rating agencies; |
A-3
discuss any other significant matters arising from any audit or report or communication above, whether raised by management, the internal audit department or the outside auditors, relating to the Company’s financial statements; | |
review and discuss material off-balance sheet transactions; | |
confirm that there are no material non-compliance issues with SEC reporting requirements that would require accounting restatements of special disclosures; | |
discuss the effect of regulatory accounting initiatives and off-balance sheet structures on the Company’s financial statements; | |
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; | |
discuss guidelines and policies with respect to risk assessment and risk management and inquire about significant risks and exposures, if any, and the steps taken to monitor and minimize such risks; and | |
review the form of opinion the outside auditors propose to render to the Board and stockholders; |
recommend to the Board whether the audited financial statements should be included in the Company’s Form 10-K; | |
obtain from the outside auditors assurance that the audit was conducted in a manner consistent with prior years and in accordance with generally accepted accounting principles and regulatory requirements; and | |
discuss with the Company’s counsel any legal matters that may have a material effect on the financial statements or the Company’s compliance policies, including materials notices to or inquiries received from governmental agencies. |
With respect to reporting, the Audit Committee shall: |
review and approve the Company’s Code of Ethics for its senior officers as required by SEC rules; | |
obtain reports from management, the Company’s internal audit department and the outside auditor that the Company and its subsidiaries and foreign affiliated entities are in conformity with applicable legal requirements, the Company’s Code of Business Conduct and Ethics and the Company’s Code of Ethics for its senior officers and advise the Board with respect to the Company’s policies and procedures regarding compliance with applicable laws and regulations and with the Company’s Code of Business Conduct and Ethics and Code of Ethics for senior officers; | |
review the Company’s compliance and ethics programs at least annually | |
review reports and disclosures of insider and affiliated party transactions and waivers of the Code of Ethics for the Company’s senior officers; and | |
review this Charter at least annually and recommend any changes to the full Board. |
A-4
A-5
This Proxy is solicited on behalf of the Board of Directors. The Board of Directors recommends a vote FOR the | Please o | |
foregoing proposals. | Mark Here | |
for Address | ||
Change or | ||
Comments | ||
SEE REVERSE SIDE |
1. | ELECTION OF DIRECTORS: | |||||||
The election of three directors, | ||||||||
01 Roy W. Haley, 02 George L. Miles, Jr., 03 James L. Singleton for a three-year term to expire in 2008. | ||||||||
FOR all nominees listed above | WITHHOLD AUTHORITY | |||||||
(except as marked to the contrary) | to vote for all nominees listed above | |||||||
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(Instruction: To withhold authority to vote for any nominee,
write that nominee’s name on the line below.
FOR | AGAINST | ABSTAIN | ||||||||
2. | Ratification of Independent | |||||||||
Registered Public Accounting firm for 2005: PricewaterhouseCoopers LLP | o | o | o |
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 the foregoing proposals.
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.
Choose MLinkSM for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on to Investor ServiceDirect® at www.melloninvestor.com/isd where step-by-step instructions will prompt you through enrollment. | Please disregard if you have previously provided your consent decision. |
Signature ______________________________________ Signature ________________________________________ Date: ______________, 2005
Vote by Internet or Telephone or Mail
Internet and telephone voting is available through 11:59 PM Eastern Time
the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.
Internet | Telephone | Mail | ||||||
http://www.proxyvoting.com/wcc | 1-866-540-5760 | Mark sign and date | ||||||
Use the internet to vote your proxy. | OR | Use any tough-tone telephone to vote | OR | your proxy card and | ||||
Have your proxy card in hand when | your proxy. Have your proxy card in | return it in the | ||||||
you access the web site. | hand when you call. | enclosed postage-paid envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
You can view the Annual Report and Proxy Statement
on the Internet at www.wesco.com/annualreport
WESCO International, Inc. 225 West Station Square Drive, Suite 700Pittsburgh, Pennsylvania 15219 | This Proxy is solicited on behalf of the Board of Directors. The Board of Directors recommends a vote FOR the foregoing proposals. | |
PROXY | ||
The undersigned hereby appoints Stephen A. Van Oss and Marcy Smorey-Giger 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 Stockholders to be held May 18, 2005 or any adjournment thereof, upon all matters coming before the meeting. |
Address Change/Comments (Mark the corresponding box on the reverse side)