EXHIBIT 10.5
AMENDMENT TO
EMPLOYMENT AGREEMENT 11/17/00
THIS AMENDMENT to the "Employment Agreement 11/17/00" effective January 1, 2001
(the "Employment Agreement") between INSIGHT DIRECT WORLDWIDE, INC. ("Company")
and XXXX XXXXXXXX ("Executive") is entered into as of October 9, 2001.
R E C I T A L S
A. Executive is currently employed by Company, a wholly owned subsidiary of
Insight Enterprises, Inc. ("Parent"). The terms and conditions of such
employment are set forth in the Employment Agreement.
B. Effective as of October 9, 2001, the parties wish to amend the Employment
Agreement as provided in this Amendment.
IN CONSIDERATION of the premises and the respective covenants and agreements of
Company and Executive contained in this Amendment, the sufficiency of which is
hereby acknowledged, Company and Executive agree as follows:
1. Amendment and Effect. Except to the extent the Employment Agreement is
modified by this Amendment, it shall remain in full force and effect. Without
limiting the foregoing, this Amendment shall replace and nullify any and all
previous arrangements regarding Executive's bonus or "Incentive Compensation."
Any terms beginning with an initial capital letter used in this Amendment and
not otherwise defined herein shall have the meanings given them in the
Employment Agreement.
2. Delete Section 2 ("POSITION AND DUTIES") of the Employment Agreement in
its entirety and replace with the following:
"2. POSITION AND DUTIES
"(a) Job Duties. Company does hereby employ, engage and hire Executive to
serve in an executive capacity, and Executive does hereby accept and
agree to such employment, engagement, and hiring. Executive's duties
and authority during the Employment Period shall be such executive
duties as the Company's or Parent's Board of Directors (the "Board")
or the Parent's President shall reasonably determine from time to
time. Executive's title as of October 9, 2001 shall be President of
the Company, and his duties as of that date shall include
responsibility for the day-to-day operations of the Company. Such
title and duties may be changed from time to time by the Board or
the Parent's President, provided that such duties and authority
shall not be materially different than the date of this agreement;
further that the authority of the Executive shall not be diminished
and that the Executive shall not be demoted. Executive will devote
substantially all of his working time and effort to his duties on
behalf of the Company, provided that such devotion of time shall not
be materially different from Executive's devotion of time at the
date of this Agreement, reasonable absences because of illness,
vacation, and personal and family exigencies excepted.
"(b) Best Efforts. Executive agrees that at all times during the
Employment Period he will faithfully, and to the best of his
ability, experience and talents, perform the duties that
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may be required of and from him and fulfill his responsibilities
hereunder pursuant to the express terms hereof. Executive's
ownership of, or participation (including any board memberships) in,
any entity (other than Company ) must be disclosed to the Board;
provided, however, that Executive need not disclose any equity
interest held in any public company or any private company that is
not engaged in a competing business as defined in Section 9 of this
Agreement when such interest constitutes less than one percent
(1.0%) of the issued and outstanding equity of such public or
private company."
3. In Section 3(a) ("Base Salary") of the Employment Agreement, change the
amount of Executive's Base Salary from $270,000 per annum to $300,000 per annum,
which change is to be effective as of April 15, 2002.
4. Add the following Section 3(d) to the Employment Agreement:
"(d) Incentive Compensation.
"(1) During the Employment Period, the Executive shall be entitled
to an incentive bonus, calculated and payable quarterly, equal
to one percent (1.0%) of Parent's "net earnings," provided
that Parent's net earnings exceed the Minimum Amount for the
applicable fiscal quarter. This bonus can be paid either in
cash or restricted stock at the Company's sole discretion. At
no time will the vesting schedule of the restricted stock be
greater than three years. If there is a Change in Control of
the Company, the incentive bonus will be paid only in cash
from that quarter forward. Additionally, in a Change in
Control of the Company, all restricted stock previously issued
will be immediately converted to cash by the Company. If the
Company terminates Executive's employment without Cause, then
all restricted stock vests immediately. If Executive
terminates his employment with Good Reason, then all
restricted stock vests immediately.
"(2) For purposes of calculating Executive's incentive bonus
pursuant to this subsection 3(d), Parent's "net earnings"
shall be Parent's consolidated net after tax earnings prior to
any incentive bonus amounts for Executive and other executives
of Parent. All calculations to determine Company's "net
earnings" shall be on a basis consistent with financial
accounting and reporting methods applied for prior accounting
periods of Parent and Company, provided, however, that changes
thereto required by U.S. Generally Accepted Accounting
Principles shall be deemed acceptable. The amounts payable
pursuant to this subsection 3(d) shall be paid on or before
thirty (30) days after the public financial reporting by
Parent at the end of the applicable fiscal quarter. For
purposes of this subsection 3(d), the term "Minimum Amount"
means an amount equal to eighty percent (80%) of the average
of Parent's net earnings for the immediately preceding four
fiscal quarters ended prior to the applicable fiscal quarter.
"(3) If upon final presentation of consolidated financial
statements to Parent by Parent's outside Certified Public
Accountants the "net earnings" of Parent requires adjustment,
then, within thirty (30) days after such presentation, Company
or Executive, as the case may be, shall pay to the other the
amount necessary to cause the net amount of incentive bonus
paid to be the proper amount after adjustment; provided that
if Executive shall pay Company pursuant to the provisions of
this subsection 3(d)(3), then the amount the Executive shall
pay will be reduced by the taxes withheld by the Company
attributable to such
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amount (the "Withheld Portion"), and the Company shall apply
the Withheld Portion toward Company's withholding obligations
with regard to any subsequent payments of Base Salary and
incentive compensation made pursuant to this Section 3."
5. Executive hereby acknowledges receipt on October 9, 2001 of a stock option
grant for 75,000 shares of the Company's stock, 25,000 shares of which
constitute consideration paid to Executive in exchange for his agreement to this
Amendment, which stock option grant (a) shall be subject to the terms of the
Company's stock option plan and the grant documents, (b) carries an exercise
price of $14.11 per share and (c) vests ratably on an annual schedule over two
(2) years from the date of grant.
THIS AMENDMENT AGREED TO AND ACCEPTED BY:
COMPANY:
INSIGHT DIRECT WORLDWIDE, INC.,
an Arizona corporation
/s/ Xxxxxxx X. Crown
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By: XXXXXXX X. CROWN,
CHIEF EXECUTIVE OFFICER
/s/ Xxxx Xxxxxxxx
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EXECUTIVE: XXXX XXXXXXXX
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