EMPLOYMENT AGREEMENT
This Employment Agreement is dated as of _______, 1995
and is between Merisel, Inc. (the "Company"), a Delaware
corporation, and the undersigned executive officer of the
Company ("Executive").
Executive and the Company desire to set forth certain
of the terms and conditions governing Executive's employment
by the Company. Accordingly, Executive and the Company
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 Executive's annual base
salary, 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.
"Biweekly Base Salary" shall mean one-twenty-sixth (1/26) of
the Base Salary at the time in question.
(b) "Company" shall mean Merisel, Inc., a Delaware
corporation, and each of its successor enterprises that
result from any merger, consolidation, reorganization, sale
of assets or otherwise.
(c) "CEO Event" shall mean if Xxxxxxx X. Xxxxxxx, in
his capacity as the Chief Executive Officer of the Company
is terminated by the Board of Directors.
(d) "Covered Termination" shall mean any cessation of
the Executive's employment by the Company that occurs prior
to a CEO Event other than as a result of (i) Termination
for Cause or (ii) Executive's death or permanent disability.
(e) "CEO Covered Termination" shall mean any
cessation of the Executive's employment by the Company that
occurs after a CEO Event other than as a result of (i)
Termination for Cause, (ii) Executive's death or permanent
disability, or (iii) Executive's resignation without Good
Reason (as hereinafter defined).
(f) A resignation by Executive shall be with "Good
Reason" if after a CEO Event (i) there has been a material
reduction in Executive's job responsibilities from those
that existed immediately prior to the CEO Event, it being
understood that a mere change in title alone shall not
constitute a material reduction in Executive's job
responsibilities, (ii) without Executive's prior written
approval, the Company requires Executive to be based
anywhere other than the Executive's then current location,
it being understood that required travel on the Company's
business to an extent consistent with Executive's business
travel obligation prior to the CEO Event does not constitute
"Good Reason", (iii) there is a reduction in Executive's
Base Salary from that in effect on the date hereof or as the
same may be increased from time to time, except that an
across-the-board reduction in the salary level of all of the
Company's executive officers in the same percentage amount
as part of a general salary level reduction shall not
constitute "Good Reason," or (iv) a successor to all or
substantially all of the business and assets of the Company
fails to furnish Executive with the assumption agreement
required by Section 8 hereof; provided, however, that if the
Company elects to take one of the actions described in the
foregoing clauses (i), (ii), or (iii) in lieu of a
Termination of the Executive for Cause, then if the
Executive subsequently resigns as a result of such action
being taken such resignation shall not be for "Good Reason."
(g) "Termination for Cause" shall mean if the Company
terminates Executive's employment for any of the following
reasons: Executive 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 Executive); poor job performance; excessive
absenteeism; abuse of sick time; creating or contributing to
unsafe working conditions; violation of company policy; or
Executive conviction for or a plea of nolo contendere by
Executive to a felony or any crime involving moral
turpitude.
(h) "Benefit Period" shall mean a period of one year
commencing with the day next following the effectiveness of
a Termination Event.
(i) "Expiration Date" shall mean August 15, 1998.
(j) "Termination Event" shall mean any Covered
Termination or CEO Covered Termination.
2. "AT-WILL" EMPLOYMENT. Subject to the express
provisions of this Agreement, the Company shall have no
obligation to retain or continue Executive as an employee
and Executive's employment status as an "at-will" employee
of Company is not affected by this Agreement.
3. Covered Termination. If a Covered Termination
shall occur on or before the Expiration Date and if
Executive is not otherwise eligible to receive compensation
under Section 4 below:
(a) The Company shall promptly pay Executive all
salary and other compensation, including unused vacation
pay, earned by him or her through the effective date of such
Covered Termination;
(b) During the Benefit Period, the Company shall pay
to Executive, every two weeks in accordance with Company'
standard payroll practices, Executive's Biweekly Base Salary
immediately prior to the effective date of such Covered
Termination. In the event that Executive dies during such
Benefit Period, Company agrees that it shall pay any
payments remaining unpaid under this Section 3(b) as a death
benefit to Executive's estate on the same terms;
(c) Company shall make a lump sum payment to Executive
within two weeks of the effective date of the Covered
Termination equal to the average of the annual performance
bonus received by the Executive over the three year period
preceding the effective date of the Covered Termination;
(d) Company will reimburse Executive for the cost of
Executive's COBRA payments under Company's health insurance
plans during the Payment Period. The amount of such
reimbursement will be grossed up so that Executive will
receive an amount equal to the COBRA payments, after taking
into account all applicable taxes; and
(e) Company will recommend to the Company's Option
Committee for such Option Committee to cause the next
installment of unvested options to purchase the stock of
the Company previously granted to Executive to vest as of
the date of such Covered Termination.
4. CEO Covered Termination. If a CEO Event shall
occur on or before the Expiration Date and if a CEO Covered
Termination shall occur within one year after the CEO Event:
(a) The Company shall promptly pay Executive all
salary and other compensation, including unused vacation
pay, earned by him or her through the effective date of such
CEO Covered Termination;
(b) During the Benefit Period, the Company shall pay
to Executive, every two weeks in accordance with Company'
standard payroll practices, Executive's Biweekly Base Salary
immediately prior to the effective date of such CEO Covered
Termination. In the event that Executive dies during such
Period, Company agrees that it shall pay any payments
remaining unpaid under this Section 4(b) as a death benefit
to Executive's estate on the same terms.
(c) Company shall make a lump sum payment to Executive
within two weeks of the effective date of the CEO Covered
Termination equal to the average of the annual performance
bonus received by the Executive over the three year period
preceding the effective date of the CEO Covered Termination;
(d) Company will reimburse Executive for the cost of
Executive's COBRA payments under Company's health insurance
plans during the Payment Period. The amount of such
reimbursement will be grossed up so that Executive will
receive an amount equal to the COBRA payments, after taking
into account all applicable taxes; and
(e) Company will recommend to the Company's Option
Committee for such Option Committee to cause all unvested
options to purchase the stock of the Company previously
granted to Executive to vest as of the date of such CEO
Covered Termination.
5. Withholding. Company shall deduct from all
payments paid to Executive 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.
6. Mitigation. Executive shall have no obligation to
mitigate the amount of any payment provided for in this
Agreement by seeking employment or otherwise, unless the
Company in its sole discretion determines that Executive's
choice of new employer following the Termination Event is
detrimental to the Company. Executive shall not be entitled
to payment hereunder if Executive's employment ceases as a
result of Executive's death or permanent disability or
Executive resigns without Good Reason.
7. Executive's Obligations. In exchange for Company
providing the above described benefits to Executive,
Executive agrees to the following:
(a) Executive agrees to continue to observe and comply
with all company policies during Executive's employment by
Company;
(b) Executive agrees that during the Benefit Period,
Executive 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 term of this Agreement, or if longer,
the Benefit Period, Executive will not, on behalf of any
business enterprise other than the Company and its
subsidiaries, solicit the employment of or hire any person
that is or was employed by the Company or any of its
subsidiaries at any time on or after January 1, 1995;
(d) Within two weeks of the effective date of any
Termination Event, and prior to receiving any severance
compensation from Company in respect of such Termination
Event, whether under this Agreement or otherwise, Executive
will execute and deliver to Company a Release and a
Confidentiality Agreement, each substantially in the form
provided to Executive with this Agreement, with such changes
as Company might request; and
(e) In the event of any breach by Executive of the
restrictions contained in this Agreement, Company shall have
no further obligation to compensate Executive hereunder and
Executive acknowledges that the harm to Company cannot be
reasonably or adequately compensated in damages in any
action at law. Accordingly, Executive agrees that, upon any
violation of such restrictions, Company shall be entitled to
preliminary and permanent injunctive relief in addition to
any other remedy, without the necessity of proving actual
damages.
8. 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.
9. Miscellaneous. This Agreement shall be binding
upon and inure to the benefit of Company and Executive;
provided that Executive shall not assign any of Executive's
rights or duties under this Agreement without the express
prior written consent of Company. This Agreement sets forth
the parties' 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 parties. 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.
This Agreement shall continue in effect until the
Expiration Date provided, however, that if on the Expiration
Date monies are then owed by the Company hereunder, then
this Agreement shall continue in effect until the Benefit
Period shall have expired.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement, as of the day and year first written above.
MERISEL, INC.
By:_______________________
Its:_______________________
"EXECUTIVE"
__________________________
__________________________
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