EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the
first day of June, 1999 between Xxxxxx Xxxxxx (hereinafter referred to
as "Employee") and SED International, Inc., a Georgia Corporation
(hereinafter referred to as the "Company").
W I T N E S S E T H :
WHEREAS, the Company desires to enter into this Agreement
regarding Employee's employment by the Company, and Employee desires
to accept the terms of said employment;
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, it is hereby agreed
as follows:
1. EMPLOYMENT OF EMPLOYEE. This Agreement is effective for a
period of one (1) year commencing on June 1, 1999, unless this
Agreement is sooner terminated pursuant to the provisions hereof.
Employee agrees to such employment on the terms and conditions herein
set forth and agrees to devote his best efforts to his duties under
this Agreement and to perform such duties diligently and
efficiently and in accordance with the written policies of the
Company.
During the term of this Agreement, Employee shall be employed as
President, SED Magna, and Senior V.P. Latin America Division,
reporting to the President, SED International. In Employee's capacity
as President, SED Magna, Employee shall be responsible for all
operations of SED Magna, oversight management of the Company's Latin
America Division consisting of Argentina, Columbia, Miami and Puerto
Rico and such other and further duties as may from time to time become
necessary for management of the Company and the Latin American
Division, as determined by either the Chief Executive Officer or
President of SED International.
Employee shall devote substantially all of Employee's business
time, attention and energies to the business of the Company, shall act
at all times in the best interests of the Company, and shall not
during the term of this Agreement be engaged in any other significant
business activity, whether or not such business is pursued for gain,
profit or other pecuniary advantage, except as contemplated by this
Agreement.
2. COMPENSATION AND BENEFITS.
(a) Employee's annual base salary during the term of this
Agreement shall be $160,000.
(b) Employee's base salary shall be paid by the Company
pursuant to its customary payroll practices.
(c) Furthermore, the employee will receive a Brazilian
Premium as additional compensation as a result of accepting the
position to relocate himself and his family to Sao Paulo, Brazil. The
Brazilian Premium will be payable only as long as the employee is
stationed in Sao Paulo, Brazil and will be pro-rated over the year if
the employee vacates the Sao Paulo position before one year from June
1, 1999. The Brazilian Premium consists of the following:
[bullet] Additional compensation equal to U.S. $60,000
per year payable in Reals.
[bullet] Exclusive use of a four-bedroom apartment in
the Paraiso district of Sao Paulo with the
rent, utilities and maintenance costs paid by
SED Magna after final approval by the
President of the Company of the original
lease.
[bullet] Furniture at a cost limited to $20,000 for an
unfurnished apartment in Sao Paulo.
[bullet] Four-family round-trip airline tickets (equal
to 16 tickets) between Sao Paulo and Miami
for one year beginning on June 1, 1999 on a
coach level basis.
Arrangements for these trips, with reasonable
notice, must be made through the Company.
[bullet] $1 million term life insurance for the
benefit of employee's family paid for by the
Company for the duration of this assignment.
[bullet] An incentive of U.S. $60,000 if the
performance of SED Magna equals or exceeds
U.S. $1 million in net income fully taxed
U.S. GAAP basis for the twelve months
beginning June 1, 1999.
(d) The Company or SED Magna will pay off the lease
balance on the Employee's Expedition not to exceed $5,790.84. SED
Magna will lease or buy, during the term of the Employee's assignment
at SED Magna, one four-door, mid-size vehicle for his use in Brazil.
(e) The Company shall provide Employee such medical
coverage and other benefits as mandated by Brazilian law for employees
of SED Magna, subject to Employee meeting any eligibility or other
requirements of such coverages or benefits. Employee and immediate
family members will have medical and dental coverage equal to coverage
as if the Employee was an U.S. Employee of the Company, paid for by
SED Magna.
(f) Employee shall be entitled to three (3) weeks of paid
vacation per year.
(g) Employee and family will be covered under the
Company's kidnap insurance policy.
3. PERSONNEL POLICIES. Employee shall conduct himself at all
times in a businesslike and professional manner as appropriate for a
person in his position and shall represent the Company in all respects
as complies with good business and ethical practices.
4. BUSINESS EXPENSES. Employee shall be reimbursed by the
Company for ordinary, necessary and reasonable business expenses
consistent with the Company's policies concerning reimbursement of
such expenses; provided that, Employee shall first document said
business expenses in the manner generally required by the Company
under its policies and procedures, and in any event, the manner
required to meet applicable regulations of the Internal Revenue
Service relating to the deductibility of such expenses.
5. LOCATION OF EMPLOYMENT. From June 1, 1999 to May 31, 2000
the position and place of employment is in Sao Paulo, Brazil at SED
Magna Distribuidora LDTA.
6. TERMINATION.
(a) This Agreement may be terminated for good cause by the
Company upon written notice to Employee. As used herein, "good cause"
means: (i) any act of fraud or malfeasance; (ii) any act of theft or
embezzlement; (iii) the breach of any material provision of this
Agreement by Employee (provided that such breach is not cured by
Employee within 30 days of receiving written notice of such breach
from the Company); (iv) failure to comply with the written
directions of the President of SED International provided that those
directions would not require the Employee to break any law in the U.S.
or Brazil; (v) engaging in any unlawful harassment or discrimination;
(vi) the conviction of Employee of any crime involving moral turpitude
(whether felony or misdemeanor) or involving any felony; (vii) any act
of moral turpitude by Employee that materially adversely affects the
Company or its business reputation; (viii) violation of state or
federal securities laws; (ix) violation of the laws, rules
and regulations of any stock exchange, over-the-counter trading
system, including the Nasdaq Stock Market, Inc., or the National
Association of Securities Dealers, Inc.
(b) This Agreement also shall terminate immediately upon
the death of Employee, or immediately upon written notice to Employee
if Employee shall at any time be unable to perform the essential
functions of his job hereunder, by reason of a physical or mental
illness or condition, with or without physical accommodation, for a
continuous period of 180 consecutive days, as certified by
a physician or physicians selected by the Board of Directors of the
Company.
(c) In the event of termination under subsections (a) or
(b) of this Section 6, the salary and other benefits provided herein
shall be paid to Employee up to the effective date of termination of
this Agreement, and not thereafter, subject to any benefit
continuation requirements under applicable laws or regulations.
(d) The Company may terminate this Employment Agreement at
any time without "good cause" upon written notice to Employee. In the
event of such termination, Company shall pay to Employee the (i)
greater of (a) Employee's base salary, less applicable withholdings,
for the remaining period of the Agreement or (b) three (3) months of
base salary, less applicable withholdings and for the remaining period
of the Agreement, the Brazilian premium pro rated for period of time
employed at SED Magna, and vesting of options and grants. All
such payments owing under this Section shall be payable concurrently
at the time of termination. Other than the payments of the base
salary, benefits amounts and Brazilian premium as specified herein, no
further payments of any kind shall be made to Employee.
7. PRODUCTS, NOTES, RECORDS AND SOFTWARE. All memoranda,
notes, records and other documents and computer software created,
developed, compiled or used by Employee or made available to Employee
during the term of this Agreement concerning or relative to the
business of the Company, including without limitation, all customer
data, marketing and sales information,
billing information, service data and other technical material of the
Company, is the Company's property. Employee agrees to deliver all
such materials to the Company within three (3) business days after the
termination of this Agreement.
8. NONDISCLOSURE. Employee acknowledges and agrees that
during the term of this Agreement, he will have access to and become
familiar with information that the parties acknowledge to be
confidential, valuable and uniquely proprietary information regarding
the Company, its customers and employees. Employee further
acknowledges that the disclosure or unauthorized use of Trade
Secrets or confidential information by Employee would harm the
Company's business. Employee therefore promises and agrees that,
during the term of Employee's employment and for two (2) years
thereafter, Employee shall not use or disclose, directly or
indirectly, for any purpose any such confidential or proprietary
information which includes, without limitation, technical
materials of the Company, sales and marketing information, customer
account records, billing information, training and operations
information, materials and memoranda, personnel records and pricing
and financial information relating to the business, accounts, vendors,
suppliers, customers, prospective customers, employees and affairs of
the Company. Employee further agrees that Employee will
not, at any time during or after the term of Employee's employment
with the Company, use, reveal or divulge any Trade Secrets as defined
under applicable state law.
9. RESTRICTIVE COVENANTS. Employee acknowledges and agrees
that, because of his employment he has access to confidential or
proprietary information concerning vendors, suppliers and customers of
the Company and has established relationships with such vendors,
suppliers and customers. In exchange for valuable consideration to be
given by the Company to Employee, as provided herein, Employee agrees
to the following provisions:
(a) Employee agrees that during the term of his employment
and for a period of one (1) year thereafter, if the Employee leaves
voluntarily or Employee is terminated for "good cause," Employee shall
not, directly or indirectly, either individually, in partnership,
jointly, or in conjunction with, or on behalf of, any person, firm,
partnership, corporation, or unincorporated association or entity of
any kind, solicit or contact, for the purpose of providing products or
services the same as or substantially similar to those provided by the
Company, any person or entity that, during the term of Employee's
employment with the Company, was a customer of the Company with
whom Employee had contact during the last twelve (12) months of his
employment, or was a prospective customer of the Company with whom
Employee had contact during the last twelve (12) months of his
employment;
(b) Employee agrees that during the term of his employment
and for a period of one (1) year thereafter, if the Employee leaves
voluntarily or Employee is terminated for "good cause," Employee shall
not, directly or indirectly, either individually, in partnership,
jointly, or in conjunction with, or on behalf of, any person, firm,
partnership, corporation, or unincorporated association or entity of
any kind, hire or solicit, or attempt to hire or solicit, for
employment any person who was employed by the Company up
to 90 days prior to the date of termination of this Agreement, or
persuade or attempt to persuade any such person to terminate or modify
his or her employment relationship, whether or not pursuant to a
written agreement, with the Company; and
(c) Employee agrees that during the term of his
employment, he shall not, directly or indirectly, either individually,
in partnership, jointly, or in conjunction with, or on behalf of, any
person, firm, partnership, corporation, or unincorporated association
or entity of any kind (i) provide operational or management services
to the following competitors of the Company: Xxxxxx Micro, Inc., Tech
Data Corp., CHS Electronics, Inc., Microage, Inc., ASI
Corp. or Supercom, Inc., or any of their respective affiliates, which
purchase, market and sell computer products, cellular telephones and
related products; or (ii) otherwise obtain any interest in (except as
a stockholder holding less than two percent (2%) interest in a
corporation which is traded on a national exchange or
over-the-counter), or perform services for, or otherwise
participate in the ownership, management, or control of, the companies
listed above.
Employee acknowledges that the time restrictions and scope
included in this Section 9 are as narrow as possible and cannot be
reduced and still adequately protect the Company's business interests.
Employee acknowledges that the scope of this Section 9 is reasonable
and necessary to protect the Company's legitimate business interests.
10. REMEDY FOR BREACH. Employee agrees that the damage to the
Company resulting from any actual or threatened breach by Employee of
the covenants contained in Sections 7, 8 and 9 of this Agreement would
be immediate, irreparable and difficult to measure, and that money
damages would not be an adequate remedy. Therefore, Employee agrees
that the Company shall be entitled to specific performance of the
covenants in such sections or injunctive relief, by temporary or
permanent injunction or other appropriate judicial remedy,
writ or order, or both, in addition to any damages which the Company
may be legally entitled to recover.
11. SURVIVAL. The provisions of Sections 7, 8, 9 and 10 shall
survive termination of this Agreement.
12. INVALIDITY OF ANY PROVISION. It is the intent of the
parties hereto that the provisions of this Agreement shall be enforced
to the fullest extent permissible under the laws and public policies
of each state and jurisdiction in which such enforcement is sought,
but that the unenforceability (or the modification to conform with
such laws or public policies) of any provision hereof shall not render
unenforceable or impair the remainder of this Agreement which
shall be deemed amended to delete or modify, as necessary, the invalid
or unenforceable provisions. The parties further agree to alter the
balance of this Agreement in order to render the same valid and
enforceable.
13. APPLICABLE LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of Florida.
14. WAIVER OF BREACH. The waiver by the Company of a breach by
Employee of any provision of this Agreement may only be made in
writing and shall not operate or be construed as a waiver of any
subsequent breach by Employee.
15. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of the Company, its subsidiaries and affiliates, and their
respective successors and assigns.
16. ENTIRE AGREEMENT. This instrument contains the entire
agreement of the parties and supersedes all prior agreements regarding
Employee's employment by the Company, including, but not limited to,
oral discussions, letter agreements, or any other document concerning
the possibility of employment with the Company. This Agreement may
only be changed by an agreement in writing signed by the party against
whom enforcement of any waiver, changes, modification, extension or
discharge is sought. It cannot be changed orally.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under seal as of the date first above shown.
EMPLOYEE:
_____________________________(SEAL)
COMPANY:
SED INTERNATIONAL, INC.
By:_______________________________
Title:____________________________
(CORPORATE SEAL)
