SEVERANCE AGREEMENT
This Severance Agreement ("Agreement") is dated as of September 29,
2000 and is between Merisel Americas, Inc., a Delaware corporation (the
"Company"), and Xxxxx Xxxxxxxx ("Associate").
The Company and Associate hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
shall have the meanings set forth below:
(a) A resignation by Associate shall be with "Good Reason" if after the
date hereof (i) there has been a material reduction in Associate's job
responsibilities from those that existed immediately prior to such reduction, it
being understood that neither a mere change in title alone nor a reduction in
responsibilities resulting from a reduction in the size of the Company's
business shall constitute a material reduction in Associate's job
responsibilities, (ii) without Associate's prior written approval, the Company
requires Associate to be based anywhere other than, or within a 20 minute
commute from, the Associate's current location, it being understood that
required travel on the Company's business to an extent consistent with
Associate's normal and customary business travel obligations does not constitute
"Good Reason," or (iii) there is a reduction in Associate's base salary.
(b) "Termination for Cause" shall mean if the Company terminates
Associate's employment for any of the following reasons: Associate'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
Associate in violation of the Company' policies); excessive absenteeism; abuse
of sick time; or Associate's conviction for or a plea of nolo contendere by
Associate to a felony or any crime involving moral turpitude.
2. Bonus Payments. So long as Associate remains an employee of the
Company, Associate will be entitled to lump sum payments (each a "Bonus") in the
amounts and subject to the conditions set forth below. On the date on which the
Company has completed the sale, restructuring and/or winding down in all
material respects of its U.S. distribution business, as set forth in a plan
approved by the Board of Directors of Merisel, Inc. and provided to the
operating agent under the Company's asset securitization facility, as such plan
may be amended, the Company shall make a lump sum payment to Associate equal to
$10,000. On the date on which the Company has completed the sale or accounts
receivable refinancing of Merisel Open Computing Alliance, Inc. ("MOCA"), the
Company shall make a lump sum payment to Associate equal to $10,000. On the date
on which the Company has completed the sale and/or winding down in all material
respects of its Canadian distribution business, or on the date of the first
quarterly earnings announcement of Merisel, Inc. after the date hereof which
includes profitable results for the Canadian business, the Company shall make a
lump sum payment to Associate equal to $10,000. If Associate's employment with
the Company terminates prior to the payment of one or more Bonuses for any
reason other than as a result of Termination for Cause, death or permanent
disability, or Associate's resignation without Good Reason, then the Company
shall make a lump sum payment to Associate equal to the aggregate of the amounts
set forth above that have not been paid to Associate prior thereto.
3. Severance Obligations. If Associate's employment by the Company
terminates for any reason other than as a result of a Termination for Cause,
death or permanent disability, or Associate's resignation without Good Reason,
then (A) the Company shall pay Associate base severance and enhanced severance,
as determined under the Company's severance policy as in effect on the date
hereof, which severance compensation shall be paid to Associate bi-weekly in
accordance with the Company's standard payroll practices, and (B) the Company
shall reimburse Associate for the cost of Associate'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 the
period during which Associate is entitled to such severance payments. The
payments to be made to Associate upon a termination contemplated by this
paragraph 3 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.
4. Withholding. The Company shall deduct from all payments paid to
Associate 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.
5. At-Will Employee. The Company shall have no obligation to retain or
continue Associate as an employee and Associate's employment status as an
"at-will" employee of the Company is not affected by this Agreement.
6. Mitigation. Associate shall have no obligation to mitigate the
amount of any payment provided for in this Agreement by seeking employment or
otherwise.
7. Associate's Obligations. In exchange for the Company agreeing to
provide the above-described benefits to Associate, Associate agrees that prior
to receiving any severance compensation from the Company in respect of such
termination, whether under this Agreement or otherwise, Associate will execute
and deliver to the Company a Waiver, Release and Confidentiality Agreement
substantially in the form provided to Associate with this Agreement.
8. Confidentiality. Associate agrees that the terms of this Agreement
and the amount and nature of all payments received by Associate hereunder shall
remain confidential and shall not be disclosed to any other person (other than
Associate'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.
9. Arbitration. Any dispute that may arise between Associate 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.
10. Miscellaneous. This Agreement shall be binding upon and inure to
the benefit of the Company and Associate; provided that Associate shall not
assign any of Associate's rights or duties under this Agreement without the
express prior written consent of the Company. This Agreement sets forth the
parties' entire agreement with regard to the subject matter hereof. Neither
party has made any other agreements, representations, or warranties to the other
with respect to the subject matter of this Agreement. 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.
11. 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 AMERICAS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Executive Vice President and Chief Financial Officer
XXXXX XXXXXXXX
By: /s/ Xxxxx Xxxxxxxx
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