CDW Corp Form 8-K Summary
Business Context and Reporting Period
This Form 8-K was filed by CDW Corporation on March 24, 2014. The report details amendments to existing executive compensation agreements and the execution of new agreements with specific executive officers, effective as of January 1, 2014.
Key Financial Metrics
The filing text does not provide a clear value for revenue, profit, cash flow, margins, debt, or liquidity. This report focuses exclusively on executive compensation arrangements and does not contain financial performance data.
Material Changes
- Amended Agreements: The Company assumed and amended Compensation Protection Agreements for Thomas E. Richards, Dennis G. Berger, Douglas E. Eckrote, Christine A. Leahy, Jonathan J. Stevens, and Ann E. Ziegler.
- Removal of Tax Gross-Up: A key modification to the amended agreements was the removal of the tax gross-up provision upon a change in control.
- New Agreements: New Compensation Protection Agreements were entered into with Neal J. Campbell, Christina M. Corley, Christina V. Rother, and Matthew A. Troka.
Outlook, Risks, and Unusual Items
Severance Terms: Upon termination without "cause" or for "good reason," executives are entitled to:
- Accrued obligations.
- Prorated annual incentive bonus.
- Two years of base salary continuation.
- Two times the annual incentive bonus (or average bonus over three years if post-change in control).
- Two years of health and welfare benefits continuation.
- Outplacement services up to $20,000.
Conditions and Risks:
- Release Requirement: Receipt of benefits (except accrued obligations) is conditioned on the execution of a general release agreement.
- Excise Tax Reduction: Payments may be reduced to avoid Section 4999 excise tax if the reduction results in a higher net after-tax amount for the executive.
- Noncompetition: Executives must sign an 18-month noncompetition and nonsolicitation agreement. Breach of this agreement results in the cessation of severance and a requirement to repay all benefits received.
- Term: Agreements expire on the third anniversary of the effective date, with extensions possible in the event of a change in control.
Investor Verification Checklist
- Verify the specific terms of the amended agreements for Thomas E. Richards and the form agreements for other executives in Exhibits 10.1 and 10.2.
- Confirm the impact of removing the tax gross-up provision on the total potential payout for executives in a change of control scenario.
- Review the Noncompetition Agreement (Exhibit 10.3) to understand the scope of the 18-month restrictions and the clawback provisions for breach.
- Assess the financial liability of the two-year salary and bonus continuation clauses relative to the company's current cash position.