RETENTION AGREEMENT
This Retention Agreement is dated as of April 1, 2001 and is between
Merisel, Inc., a Delaware corporation (the "Company"), Merisel Americas, Inc., a
Delaware corporation ("Merisel Americas"), and Xxxxxxx X. Xxxxxx ("Executive").
The Company and Executive hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
shall have the meanings set forth below:
(a) "Base Salary" shall mean Executive's annual base salary as provided
for in paragraph 2 hereunder or as the same may be increased from time to time,
exclusive of any bonus or incentive compensation, benefits (whether standard or
special), automobile allowances, relocation or tax equalization payments,
pension payments or reimbursements for professional services.
(b) "Canada Sale Transaction" shall mean a transaction in which the
capital stock of, or substantially all of the assets of, Merisel Canada Inc.
are sold to an unrelated third party.
(c) The "Company" shall mean Merisel, Inc., a Delaware corporation,
and each of its successor enterprises that result from any merger,
consolidation, reorganization, sale of assets or otherwise.
(d) A resignation by Executive shall be with "Good Reason" if after the
date hereof (i) there has been a material reduction in Executive's job
responsibilities from those that existed immediately prior to such reduction, it
being understood that a reduction in responsibilities resulting from a reduction
in the size of the Company's business shall not constitute a material reduction
in Executive's job responsibilities, (ii) without Executive's prior written
approval, the Company requires Executive to be based anywhere other than, or
within a 20-minute commute from, Executive's current location, it being
understood that required travel on the Company's business to an extent
consistent with Executive's normal and customary business travel obligations
does not constitute "Good Reason," or (iii) there is a reduction in Executive's
Base Salary.
(e) "Intercompany Note" shall mean the intercompany note or notes
payable by Merisel Canada to Merisel Americas, which at March 19, 2001 had a
principal amount of CDN$7,426,891.
(f) "Merisel Americas" shall mean Merisel Americas, Inc., a Delaware
corporation and wholly owned subsidiary of the Company, and each of its
successor enterprises that result from any merger, consolidation,
reorganization sale of assets or otherwise.
(g) "Merisel Canada" shall mean Merisel Canada Inc., an Ontario, Canada
corporation and wholly owned subsidiary of Merisel Americas, and each of its
successor enterprises that result from any merger, consolidation,
reorganization, sale of assets or otherwise.
(h) "Sale Proceeds" means the payments received from a purchaser in a
Canada Sale Transaction or SWL Sale Transaction, reduced by the amount of third
party debt or liabilities of Merisel Americas or Merisel Canada repaid by
Merisel Americas or Merisel Canada in connection with the transaction, plus the
aggregate amount of cash paid by Merisel Canada to Merisel Americas subsequent
to the date hereof to reduce the outstanding balance of the Intercompany Note.
(i) "SWL Sale Transaction" shall mean a transaction in which assets
relating to Merisel Americas' software licensing business are sold to an
unrelated third party.
(i) "Termination for Cause" shall mean if the Company or Merisel
Americas terminates Executive's employment for any of the following reasons:
Executive's misconduct (misconduct includes physical assault, insubordination,
falsification or misrepresentation of facts on company records, fraud,
dishonesty, willful destruction of company property or assets, or harassment of
another associate by Executive in violation of the Company's or Merisel
Americas' policies); excessive absenteeism; abuse of sick time; or Executive's
conviction for or a plea of nolo contendere by Executive to a felony or any
crime involving moral turpitude.
2. Terms of Employment.
(a) Effective as of the date hereof, Executive shall assume the
positions of Chief Executive Officer and President of the Company and of Merisel
Americas.
(b) Executive shall be paid an annual base salary of $400,000.
3. Bonus Payments. Executive will be entitled to bonus payments in
accordance with the terms set forth on Schedule I hereto.
4. Severance Obligations. If Executive's employment by the Company
terminates for any reason other than as a result of a Termination for Cause,
death or permanent disability, or Executive's resignation without Good Reason,
then: (A) on the effective date of such termination, the Company shall make a
lump sum payment to Executive equal to one times Executive's Base Salary, and
(B) the Company shall reimburse Executive for the cost of Executive's COBRA
payments (at the level of coverage, including dependent care coverage, as in
effect immediately prior to such termination) under the Company's health
insurance plans for a twelve-month period following the date of such
termination. The payments to be made to Executive upon a termination
contemplated by this paragraph 4 are in addition to the payments made to
employees by the Company upon termination in the ordinary course, such as
reimbursement for business expenses and vacation pay through the date of
termination.
5. Withholding. The Company shall deduct from all payments paid to
Executive under this Agreement any required amounts for social security, federal
and state income tax withholding, federal or state unemployment insurance
contributions, and state disability insurance or any other required taxes.
6. At-Will Employee; Termination of Employment. The Company shall
have no obligation to retain or continue Executive as an employee and
Executive's employment status as an "at-will" employee of the Company is not
affected by this Agreement.
7. Mitigation. Executive shall have no obligation to mitigate the
amount of any payment provided for in this Agreement by seeking employment or
otherwise.
8. Executive's Obligations. In exchange for the Company agreeing to
provide the above-described benefits to Executive, Executive agrees that prior
to receiving any severance compensation from the Company in respect of such
termination, whether under this Agreement or otherwise, Executive will execute
and deliver to the Company a Waiver, Release and Confidentiality Agreement in
the form provided by the Company.
9. Confidentiality. Executive agrees that the terms of this Agreement
and the amount and nature of all payments received by Executive hereunder shall
remain confidential and shall not be disclosed to any other person (other than
Executive's family members, attorneys and accountants who shall be informed of
and bound by the confidentiality provisions of this Agreement) other than as
required by court order, legal process or applicable law.
10. Arbitration. Any dispute that may arise between Executive and the
Company in connection with or relating to this Agreement, including any monetary
claim arising from or relating to this Agreement, will be submitted to final and
binding arbitration in Los Angeles, California, in accordance with the rules of
the American Arbitration Association ("AAA") then in effect. Such arbitration
shall proceed before a single arbitrator who shall be selected by the mutual
agreement of the parties. If the parties are unable to agree on the selection of
an arbitrator, such arbitrator shall be selected in accordance with the
Employment Dispute Resolution Rules and procedures of the AAA. The decision of
the arbitrator, including determination of the amount of any damages suffered,
shall be conclusive, final and binding on such arbitrating parties, their
respective heirs, legal representatives, successors, and assigns. Each party to
any such arbitration proceeding shall bear her or his own attorney's fees and
costs in connection with any such arbitration, except that the Company shall pay
the fees of the arbitrator.
11. Guaranty by Merisel Americas. Merisel Americas guarantees the
payment of all amounts payable hereunder by the Company.
12. Miscellaneous. This Agreement shall be binding upon and inure to
the benefit of the Company and Executive; provided that Executive shall not
assign any of Executive's rights or duties under this Agreement without the
express prior written consent of the Company. The Company shall have the right
to assign its obligations hereunder to Merisel Americas, Inc. This Agreement,
together with the Merisel Employment Agreement entered into between Executive
and Merisel Americas, sets forth the parties' entire agreement with regard to
the subject matter hereof, and supersedes any other agreements, representations,
or warranties made by either party to the other with respect to the subject
matter of this Agreement, including the Bonus Agreement dated as of August 10,
2000 between Merisel Americas and Executive and the Severance Agreement dated as
of March 3, 1999 between the Company and Executive. This Agreement may be
amended only by a written agreement signed by both parties. Should any
provisions of this Agreement be declared to be or be determined by any court to
be illegal or invalid, the validity of the remaining parts, terms or provisions
shall not be affected thereby and said illegal or invalid part, term or
provision shall be deemed not to be part of this Agreement. This Agreement shall
be governed by and construed in accordance with the laws of the State of
California. Any waiver by either party of any breach of any provision of this
Agreement shall not operate as or be construed as a waiver of any subsequent
breach. If any legal action is necessary to enforce the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorneys' fees in addition
to any other relief to which that party may be entitled.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument, which shall be effective upon the
execution hereof by all of the parties hereto. A complete set of counterparts
shall be made available to each party hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
of the day and year first written above.
MERISEL, INC.
By:
-------------------------------------------------
Name:
Title:
MERISEL AMERICAS, INC.
By:
-------------------------------------------------
Name:
Title:
XXXXXXX X. XXXXXX
