April 9, 1996
Xxxxxxx X. Xxxxxx
Vice President, Treasurer and Assistant Secretary
Xxxxxxx, Inc.
000 Xxxxxxxxxxx Xxxx.
El Segundo, CA 90245
PERSONAL AND CONFIDENTIAL
Dear Xxx:
This letter amends that certain letter agreement
between you and Merisel, Inc. ("Merisel"), dated November
29, 1995 (the "Letter Agreement"). Except as specifically
amended hereby, the Letter Agreement remains in full force
and effect.
Notwithstanding anything to the contrary contained in
the Letter Agreement, for purposes of the Letter Agreement,
as amended hereby, your employment shall be considered to be
terminated without cause, if (A) your employment is
terminated for any reason, other than your 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
you), excessive absenteeism, abuse of sick time or your
conviction for or a plea of nolo contendere by you to a
felony or any crime involving moral turpitude or (B) you
resign due to any of the following having occurred (i) there
has been a material reduction in your job responsibilities
from those that existed on the date hereof, (ii) without
your prior written approval, you are required to be based
anywhere other than your current location, it being
understood that required business travel to an extent
consistent with your current business travel obligations
does not constitute a requirement that you be based
somewhere other than your current location, (iii) there has
been a reduction in your base salary, other than an across-
the-board reduction in the salary level of all of Xxxxxxx's
Vice Presidents in the same percentage amount as part of a
general salary level reduction, or (iv) a successor to all
or substantially all of the business and assets of Xxxxxxx
fails to furnish you with the assumption agreement required
below.
Retention Bonus. In order to induce you to remain as
an employee of Merisel, Xxxxxxx shall guarantee to pay all
of your annual target bonus for 1996 (the "Guaranteed Target
Bonus"), a quarter of which Guaranteed Target Bonus shall be
paid quarterly as provided in the next sentence.
Accordingly, provided that you continue to be employed by
Xxxxxxx on the date that the earnings for the applicable
fiscal quarter of Xxxxxxx are released (the "Earnings
Release Date"), Xxxxxxx shall pay to you the Guaranteed
Target Bonus for that quarter on the next regularly
scheduled payday following the Earnings Release Date;
provided, however, for the first fiscal quarter of 1996,
the "Earnings Release Date" shall be April 15, 1996 and the
Guaranteed Target Bonus shall be paid no later than the
second regularly scheduled payday following such date. The
amount of Guaranteed Target Bonus paid to you, that would
not have otherwise been earned by you, shall be excluded
from the calculation of the Severance Payment under the
Letter Agreement.
In addition, in order to induce you to remain as an
employee of Xxxxxxx, Xxxxxxx agrees to also pay to you a
bonus of $25,000 on each of June 1, 1996, September 1, 1996
and January 1, 1997, provided that you continue to be
employed by Xxxxxxx on such dates ("the Retention
Bonuses")(together with the Guaranteed Target Bonus, the
"Guaranteed Bonuses"). The amount of Retention Bonuses paid
to you shall be excluded from the calculation of the
Severance Payment under the Letter Agreement. Any unpaid
Guaranteed Bonuses will be paid to you in full upon any
termination without cause following a Change in Control.
Mitigation. You shall have no obligation to mitigate
the amount of any payment provided for in the Letter
Agreement, as amended hereby, by seeking employment or
otherwise.
Assumption Agreement. Merisel 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 Merisel, expressly to assume and
agree to perform the Letter Agreement, as amended hereby and
to further amend it so that it will not expire and the
minimum payout will always be at least 12 months of your
maximum compensation, and otherwise perform the terms in a
manner at least as favorable to you and at least to the same
extent that Xxxxxxx would be required to perform it whether
or not such succession had taken place.
A "Change of Control" shall have occurred if (i) any
person, corporation, partnership, trust, association,
enterprise or group shall become the beneficial owner,
directly or indirectly, of outstanding capital stock of the
Company possessing at least 50% of the voting power (for the
election of directors) of the outstanding capital stock of
the Company, or (ii) there shall be a sale of all or
substantially all of the Company's assets or the Company
shall merge or consolidate with another corporation and the
stockholders of the Company immediately prior to such
transaction do not own, immediately after such transaction,
stock of the purchasing or surviving corporation in the
transaction (or of the parent corporation of the purchasing
or surviving corporation) possessing more than 50% of the
voting power (for the election of directors) of the
outstanding capital stock of that corporation, which
ownership shall be measured without regard to any stock of
the purchasing, surviving or parent corporation owned by the
stock holders of the Company before the transaction.
If you agree to the terms of this amendment to the
Letter Agreement and intend to be bound by the Letter
Agreement, as amended hereby, please so indicate by signing
the enclosed copy of this letter and returning it to me.
Thank you.
Sincerely,
/s/Xxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
Chief Executive Officer
Accepted and agreed to:
/s/Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
