Exhibit 10(hh)
CHANGE OF CONTROL AGREEMENT
THIS CHANGE OF
CONTROL AGREEMENT by and between Pioneer-Standard Electronics,
Inc., an Ohio corporation (the “Company”), and Martin
F. Ellis (the “Employee”), is dated as of the 30th day
of June, 2003.
WITNESSETH:
WHEREAS, the Board
of Directors of the Company (the “Board”), has
determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued
dedication of the Employee, notwithstanding the possibility,
threat, or occurrence of a Change of Control (as defined below) of
the Company; and
WHEREAS, the Board
believes it is imperative to diminish the inevitable distraction of
the Employee by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control, to encourage
the Employee’s full attention and dedication to the Company
currently and in the event of any threatened or pending Change of
Control, and to provide the Employee with compensation arrangements
upon a Change of Control which provide the Employee with individual
financial security and which are competitive with those of other
corporations;
NOW, THEREFORE, in
consideration of the mutual covenants set forth herein and other
good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the parties hereto agree as
follows:
Section 1. Effective Date
and Change of Control.
1.1
(a) Effective Date . This Agreement shall become effective
only upon the “Effective Date,” which shall be the
first date during the “Change of Control Period” (as
defined in Section 1.1(b)) on which a Change of Control (as
defined in Section 1.2) occurs. Until such time, the Employee
shall have no rights against the Company and the Company shall not
have any obligations to the Employee under or by virtue of this
Agreement. Anything in this Agreement to the contrary
notwithstanding, if the Employee’s employment with the
Company is terminated prior to the date on which a Change of
Control occurs, and it is reasonably demonstrated that such
termination (1) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or
(2) otherwise arose in connection with or anticipation of a
Change of Control, then for all purposes of this Agreement the
“Effective Date” shall mean the date immediately prior
to the date of such termination.
(b) The
“Change of Control Period” is the period commencing on
the date hereof and ending on the first anniversary of such date;
provided, however, that commencing on the date one (1) year
after the date hereof, and on each annual anniversary of such date
(such date and each annual anniversary thereof is hereinafter
referred to as the “Renewal Date”), the Change of
Control Period shall be automatically extended so as to terminate
one (1) year from such Renewal Date, unless the Company shall
give written notice to the Employee at least sixty (60) days
prior to the Renewal Date that the Change of Control Period shall
not be so extended and that this Agreement shall terminate upon the
Renewal Date; provided, however, that such notice may not be given
at any time during the nine (9) month period following the
Effective Date.
1.2
Change of Control . For the purpose of this Agreement, a
“Change of Control” shall mean:
(a) The
acquisition by any person, entity or “group,” within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the “Exchange Act”) (excluding,
for this purpose, the Company or its Subsidiaries, The Pioneer
Stock Benefit Trust, or any employee benefit plan of the Company or
its Subsidiaries which acquires beneficial ownership of voting
securities of the Company), of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of either the then outstanding Common Shares or the
combined voting power of the Company’s then outstanding
voting securities entitled to vote generally in the election of
directors; or
(b) Individuals
who, as of the date hereof, constitute the Board (as of the date
hereof the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election
contest relating to the election of the Directors of the Company,
as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) shall be, for purposes of this
Agreement, considered as though such person were a member of the
Incumbent Board; or
(c) Approval
by the shareholders of the Company of a reorganization, merger,
consolidation, in each case, with respect to which persons who were
the shareholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately
thereafter, own more than 80% of the combined voting power entitled
to vote generally in the election of directors of the reorganized,
merged or consolidated company’s then outstanding voting
securities, or a liquidation or dissolution of the Company or of
the sale of all or substantially all of the assets of the
Company.
Section 2. Termination of
Employment .
2.1
Termination by the Company .
(a)
Company’s Right to Terminate . Subject to (i) the
Company’s obligations under Section 3.1 hereof
subsequent to the Effective Date, or (ii) under any written
employment agreement between the Company and the Employee, the
Employee’s employment with the Company may be terminated at
any time without Cause.
(b)
Cause . The Company may terminate the Employee’s
employment for “Cause.” For purposes of this Agreement,
“Cause” means (i) any material breach this
Agreement, or of Employee’s duties or responsibilities in the
course of his/her employment; (ii) an act or acts of personal
dishonesty taken by the Employee and intended to result in personal
enrichment of the Employee at the expense of the Company;
(iii) intentional misconduct that materially injures the
Company, monetarily or otherwise; or (iv) the conviction of
the Employee of a felony.
2.2
Termination by the Employee .
The
Employee’s employment with the Company (i) shall
automatically terminate upon death and (ii) may be voluntarily
terminated by the Employee at any time for any reason, in the
Employee’s sole discretion.
2
2.3
Transfers . Transfer of the Employee among the Company and
affiliated entities at least 80% directly or indirectly owned by
the Company (“Subsidiaries”) shall not be deemed to be
a termination of employment.
2.4
Notice of Termination .
Any
termination by the Company or by the Employee shall be communicated
by Notice of Termination to the other party hereto given in
accordance with Section 8(d) of this Agreement. For purposes of
this Agreement, a “Notice of Termination” means a
written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) in the case of a
termination for Cause, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Employee’s employment under the provision so indicated, and
(iii) if the date of termination is other than the date of
receipt of such notice, specifies the date of termination (which
date shall be not more than fifteen (15) days after the giving
of such notice).
Section 3. Obligations of
the Company upon Termination .
3.1
Without Cause or for Good Reason . If, at any time prior to
the date that is twelve (12) months subsequent to the
Effective Date, the Employee’s employment with the Company
shall be terminated either (i) by the Company without Cause,
or (ii) by the Employee for Good Reason, as provided in
Section 3.4, below:
(a) the
Company shall pay to the Employee within thirty (
