June 1, 1995
Xxxx Xxxxxx
Vice President
Merisel Americas, Inc.
000 Xxxxxxxxxxx Xxxx.
El Segundo, CA 90245
PERSONAL AND CONFIDENTIAL
Dear Xxxx:
In light of the ongoing search for a new president for
Merisel Americas, Inc. ("Americas"), I believe that it is a
good idea to set forth in writing the agreement we have
reached with respect to certain aspects of your employment
by Americas. Your employment status as an "at-will"
employee of Americas is not affected by this agreement.
Xxxxxxx retains the right to terminate your employment at
any time, with or without cause.
A. Salary and Bonus. Effective as of May 1, 1995,
your base salary will be increased to $166,000 per annum.
When Americas resumes paying performance bonuses, your bonus
target level will be set at $30,000 per annum.
B. Housing Allowance. Provided that you purchase a
new home in the Los Angeles area by January 1, 1996,
Americas will pay certain closing costs, grossed up to a net
tax amount, in connection with the purchase of your new
home. Such costs will be paid in accordance with Americas'
relocation policy. Under the relocation policy reimbursed
closing costs are loan origination fees or points up to 1%,
appraisal fees and credit reports, title search and
insurance, property transfer tax, deed stamps and recording
and transfer fees. In addition, Americas will loan you up to
$50,000 to help you finance your home purchase. Such loan
will be secured by a second deed of trust on your home and
will bear interest at the rate of 10% per annum. The
principal will be due upon certain events, including when
you sell or refinance your home or when your employment with
Americas terminates. Before the loan funds, you and your
husband will need to execute a promissory note and the deed
of trust. The form of promissory note is attached for your
review.
X. Xxxxxxxxx Payments. We have agreed that if at any
time during the Applicable Time Period (as defined below),
Americas terminates your employment, without cause, then
Americas shall do the following:
(a) Americas will pay you as severance compensation
(the "Severence Payment") an amount equal to (i) your annual
base salary as in effect on the date of such termination
(the "Determination Date") plus (ii) the amount of any
performance bonus payment earned and paid to you during the
fifty two weeks immediately prior to the Determination Date
plus (iii) an amount equal to the sales commissions paid to
you for the three fiscal quarters preceding the
Determination Date. The Severence Payment shall be paid to
you over a period of thirty eight weeks (the "Payment
Period"), one nineteenth (1/19) of which shall be paid every
two weeks in accordance with Americas' standard payroll
practices. The Payment Period shall commence on the first
Americas' payday following the Determination Date. In the
event that you die or become disabled during the Payment
Period, Americas agrees that it shall pay any Severence
Payment remaining unpaid as a death or disability benefit to
your estate on the same terms. Americas shall deduct from
the Severence Payment paid to you any required amounts for
social security, federal and state income tax withholding,
federal or state unemployment insurance contributions, and
state disability insurance;
(b) Americas will reimburse you for the cost of your
COBRA payments under Americas's health insurance plans
during the Payment Period. The amount of such reimbursement
will be grossed up so that you will receive an amount equal
to the COBRA payments, after taking into account all
applicable taxes;
(c) Americas will pay you for all unused accrued
vacation pay through the Determination Date; and
(d) Americas will recommend to the Merisel, Inc.'s
Option Committee for such Option Committee to cause all
unexpired and unvested options to purchase the stock of
Merisel, Inc. previously granted to you to vest as of the
Determination Date.
As used in this agreement, "Applicable Time
Period" shall mean the time of my current tenure as
President of Americas plus one year from the date that my
successor, as President of Americas, is hired. For purposes
of this agreement, your employment shall be considered to be
terminated without cause, if (i) your employment is
terminated for any reason, other than your misconduct
(misconduct includes, but is not limited to, physical
assault, insubordination, falsification or misrepresentation
of facts on company records, fraud, dishonesty, willful
destruction of company property or assets, or sexual
harassment of another Associate by you), poor job
performance, excessive absenteeism, abuse of sick time,
creating or contributing to unsafe working conditions,
violation of company policy or your conviction for or a plea
of nolo contendere by you to a felony or any crime involving
moral turpitude or (ii) there is a material reduction in
your job responsibilities, other than as a result of the
reasons listed in the preceding clause (i).
D. Your Obligations. In exchange for Americas
providing the above described benefits to you, you agree to
the following:
(A) You agree to continue to observe and comply with
all company policies and all lawful and reasonable
directions and instructions during your employment by
Americas;
(B) You agree that during the Payment Period, you will
not directly or indirectly (a) engage in; (b) own or control
any debt equity, or other interest in (except as a passive
investor of less that 5% of the capital stock or publicly
traded notes or debentures of a publicly held company); or
(c) (1) act as director, officer, manager, employee,
participant or consultant to or (2) be obligated to or
connected in any advisory business enterprise or ownership
capacity with, any of Tech Data Corp., Xxxxxx Micro, Inc.,
Computer 2000 AG (C2000), Intelligent Electronics, Inc.,
MicroAge, Inc., Inacom Corp., Compucom, Entex Information
Services, Inc. or Vanstar Corp. or with any subsidiary,
division or successor of any of them or with any entity that
acquires, whether by acquisition, merger or otherwise, any
significant amount of the assets or substantial part of any
of the business of any of them;
(C) During the Payment Period, you will not solicit
the employment of or hire any person that is or was employed
by Xxxxxxx, Inc. or any of its subsidiaries at any time on
or after January 1, 1995;
(D) Within two weeks of the Determination Date and
prior to receiving any severance compensation from Americas,
you will execute and deliver to Americas a Release and a
Confidentiality Agreement, each substantially in the form
enclosed with this agreement, with such changes as Americas
might request; and
(E) In the event of any breach by you of the
restrictions contained in this agreement, Americas shall
have no further obligation to compensate you hereunder and
you acknowledge that the harm to Americas cannot be
reasonably or adequately compensated in damages in any
action at law. Accordingly, you agree that, upon any
violation of such restrictions, Americas shall be entitled
to preliminary and permanent injunctive relief in addition
to any other remedy, without the necessity of proving actual
damages.
This agreement shall be binding upon and inure to
the benefit of Americas and you; provided that you shall not
assign any of your rights or duties under this agreement
without the express prior written consent of Americas. This
agreement sets forth our entire agreement with regard to the
subject matter hereof. No other agreements,
representations, or warranties have been made by either
party 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 of us. 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.
If you agree to the terms of this agreement and intend
to be bound by it, please so indicate by signing the
enclosed copy of this letter and returning it to me. Thank
you.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
President, Merisel Americas, Inc.
Accepted and agreed to:
/s/Xxxx Xxxxxx
Xxxx Xxxxxx
