RETENTION AGREEMENT
This Retention Agreement is dated as of August 10, 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) "Base Salary" shall mean Associate's annual base salary as in
effect on the date hereof 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) The "Company" shall mean Merisel Americas, Inc., a Delaware
corporation, and each of its successor enterprises that result from any
merger, consolidation, reorganization, sale of assets or otherwise.
(c) "Benefit Period" shall mean the number of weeks of Base Salary that
Associate is entitled to be paid as a severance payment under paragraph 3
hereunder.
(d) 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, except
that an across-the-board reduction in the salary level of all of the Company's
executives in the same percentage amount as part of a general salary level
reduction shall not constitute "Good Reason."
(e) "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. Retention Bonus. If Associate remains an employee of the Company
through the Completion Date (as defined below) or if Associate's employment with
the Company terminates prior to the Completion Date 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 $100,000 (the "Retention Bonus"). The Retention Bonus
shall be in lieu of any bonus that would otherwise have been payable to
Associate for 2000. "Completion Date" shall mean 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.
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 as severance compensation (the
"Severance Payment") an amount equal to one times Associate's Base Salary, which
shall be paid to Associate bi-weekly in equal amounts over a period of 52 weeks
("Payment Period") 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 a twelve-month period following the date of such
termination. 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. Change of Control Agreement. Associate and the Company agree that in
no event shall Associate be entitled to payments under paragraph 3(A) of this
Agreement and any Change of Control Agreement entered into between Associate and
the Company or any affiliate of the Company that in the aggregate exceed the
amounts that could be payable under any such Change of Control Agreement.
8. 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.
9. Confidentiality. Associate agrees that the terms of this Agreement
and the amount and nature of all payments received by Associate in connection
with the termination of Associate's employment with the Company 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.
10. Assumption Agreement. The Company will require any successor
(whether direct or indirect, by purchase, merger consolidation or otherwise) to
all or substantially all of the business and assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it whether or not such
succession had taken place.
11. 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 and each party shall pay half of
all costs associated with the arbitration including the arbitrator's fees.
12. 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, together with the
Change of Control Agreement and the Merisel Employment Agreement entered into
between Associate and the Company, 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.
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 AMERICAS, INC.
By:
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Xxxxx Xxxxxx
President and Chief Executive Officer
XXXXX XXXXXXXX
