Severance And Non-competition Agreement

SEVERANCE AND NON-COMPETITION AGREEMENT


by and between


CORE-MARK INTERNATIONAL, INC.


and


GARY L. WALSH


Dated as of August 7, 1996


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TABLE OF CONTENTS


PAGE


1. Severance............................................................... 2


2. Acknowledgments......................................................... 2


3. Non-Competition......................................................... 3


4. Confidential Information................................................ 5


5. Employees of the Company................................................ 5


6. Consultants of the Company, Etc......................................... 6


7. Rights and Remedies Upon Breach......................................... 6


8. Severability of Covenants............................................... 7


9. Blue Pencilling......................................................... 8


10. Enforceability in Jurisdictions......................................... 8


11. Amendment and Modification.............................................. 8


12. Notices................................................................. 8


13. Assignment.............................................................. 9


14. Governing Law........................................................... 10


15. Counterparts............................................................ 10


16. Entire Agreement........................................................ 10


SEVERANCE AND NON-COMPETITION AGREEMENT


SEVERANCE AND NON-COMPETITION AGREEMENT, dated as of August 7, 1996, by and between Gary L. Walsh (the "MANAGEMENT STOCKHOLDER") and CORE-MARK INTERNATIONAL, INC., a Delaware corporation (the "COMPANY").


WHEREAS, concurrently with the execution of this Agreement, Jupiter Partners L.P., a Delaware limited partnership ("JUPITER"), is acquiring from the Company a majority of the common stock, par value $.01 per share, of the Company (the "COMMON STOCK") in a transaction in which the Management Stockholder is reducing his indirect interest in the Company in exchange for significant proceeds;


WHEREAS, concurrently with the execution of this Agreement, the Company and all of the holders of its Common Stock, including the Management Stockholder, are entering into a Stockholders Agreement (the "STOCKHOLDERS AGREEMENT");


WHEREAS, in order to induce the Management Stockholder to continue to serve as a key employee of the Company, the Company is willing to provide severance compensation to the Management Stockholder to the extent provided herein; and


WHEREAS, as a condition to Jupiter's obligation to acquire a majority interest in the Company pursuant to the Stockholders Agreement, thus resulting in significant proceeds to the Management Stockholder, the Management Stockholder has agreed to certain non-competition arrangements as provided herein.


NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:


2


1. SEVERANCE. If the Management Stockholder's employment by the Company and its subsidiaries is terminated (a) by the Company, other than for Cause (as defined in Section 3) or (b) due to the resignation of the Management Stockholder for Good Reason (as defined below), the Company may, in its sole discretion, continue to pay to the Management Stockholder, for a period of up to one year following such termination, the Management Stockholder's base salary as in effect at the effective date of such termination, less such deductions or amounts to be withheld as required by applicable law and regulations (the "SEVERANCE"). As used in this Agreement, "GOOD REASON" means (i) a reduction of such Management Stockholder's base salary payable during any fiscal year by the Company and its Subsidiaries, (ii) the failure of the Company to pay such Management Stockholder his base salary or any of his benefits to which he is entitled to be paid during any fiscal year, if such failure is not cured within ten days thereof, or (iii) a relocation of such Management Stockholder's principal base of operation to any location other than a location within 50 miles of San Francisco during the term of such Management Stockholder's employment with the Company.


2. ACKNOWLEDGMENTS. The Management Stockholder hereby acknowledges that the agreements and covenants contained in Section 3 (Non-Competition), Section 4 (Confidential Information), Section 5 (Employees of the Company), Section 6 (Consultants of the Company), and Section 7 (Rights and Remedies Upon Breach) of this Agreement are essential to protect the business and goodwill of the Company. As used in Sections 2, 3, 4, 5 and 6 of this Agreement, the term "COMPANY" shall be deemed to include the Company and its subsidiaries.


3


3. NON-COMPETITION. During (A) the period the Management Stockholder is an employee of the Company (the "EMPLOYMENT PERIOD") and (B) provided that the Company has become bound to provide, and for so long as the Company shall pay, the Severance to such Management Stockholder, for a period of one year thereafter, if the Management Stockholder's employment with the Company is terminated by the Company for Cause (as defined below) or terminates as a result of his resignation other than a resignation for Good Reason, the Management Stockholder agrees that he shall not in the United States of America or Canada, or any other geographic region in which the Company is doing business at the time of such termination, directly or indirectly, (i) engage in any activities that compete, directly or indirectly, with the Company for the Manag ...