EX-10.1
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”)
made this 20th day of November 2008 between SED INTERNATIONAL
HOLDINGS, INC., a Georgia corporation (the “Company”)
and Jonathan Elster, an individual resident of the State of Georgia
(the “Executive”).
WITNESSETH:
WHEREAS
,
Executive and SED INTERNATIONAL, INC., a wholly-owned subsidiary of
the Company and a Georgia corporation (the
“Subsidiary”) have entered into an amended and restated
employment on February 20, 2008 (the “Employment
Agreement”) setting forth the terms and conditions of
Executive’s employment with the Subsidiary; and
WHEREAS
,
on November 11, 2008, the Board of Directors of the Company (the
“Board”) approved and authorized an extension to the
Term of this Agreement, by one year, until July 1, 2010;
and
WHEREAS
,
the Company wishes to assume the Employment Agreement and become
the contracting party thereunder, and Executive agrees to such
assumption subject to a guaranty of the Company’s obligations
by the Subsidiary.
NOW,
THEREFORE ,
in consideration of the foregoing, the continued employment of the
Executive, and the mutual covenants and agreements hereinafter set
forth, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Employment
of Executive: Duties of Executive .
The Company hereby employs Executive as its Executive Vice
President, and Executive hereby accepts employment by the Company
in that capacity subject to the terms and conditions set forth in
this Agreement. Executive shall faithfully perform for the Company,
or as it directs, the Subsidiary, the duties of said office (as
described in the Bylaws of the Company) and shall perform such
other duties of an executive, managerial or administrative nature
as are from time to time assigned or delegated to the Executive by
the Company. The Executive shall report to the Chief Executive
Officer of the Company. Throughout his employment hereunder,
Executive shall devote substantially all of his time, energy and
skill to perform the duties of his employment (vacations as
provided hereunder and reasonable absences because of illness
excepted), and shall use his best efforts to follow and implement
all management policies and decisions of the Company and the
Subsidiary. Executive shall not become involved in the management
of any other company, partnership, proprietorship or other entity,
other than an affiliate of the Company (including the Subsidiary),
without the consent of the Board; provided, however , that
as long as it does not interfere with Executive's employment
hereunder Executive may serve as a director in a company that does
not compete with the businesses of the Company, the Subsidiary or
any other affiliate of the Company (“Other
Affiliates”), and may serve as an officer or director or
otherwise participate in educational welfare, social, religious or
civic organizations. The Executive shall not be required to
relocate from the Atlanta, Georgia metropolitan area in connection
with the performance of his duties hereunder.
2. Compensation
Benefits and Reimbursement of Expenses.
(a)
As
compensation for his services hereunder, the Company, or the
Subsidiary, shall
pay
Executive an annual base salary of Two Hundred Sixty One Thousand
Seven Hundred Dollars ($261,700.00) . Such salary shall be paid in
accordance with the normal payroll practices of the Company, or the
Subsidiary, as the case may be, and shall be subject to such
deductions and withholdings as are required by law or by the
policies of the Company, or the Subsidiary, as the case may be,
from time to time in effect.
(b)
Executive
shall be entitled to received an annual bonus ("Bonus") with
respect to each fiscal year of the Company ending during the Term
of this Agreement in an amount equal to three percent (3%) of the
Company's Pretax Adjusted Annual Income (as defined immediately
hereafter). “Pretax Adjusted Annual Income” shall mean,
with respect to a given fiscal year, earnings before taxes as
reported on the Company's audited consolidated statement of
operations for such fiscal year, excluding extraordinary
nonoperational costs and profits.
(c)
Executive
shall be entitled to participate or to continue participation in
any present or future group life, health and hospitalization or
disability insurance plans, pension or retirement plans or similar
death benefits as are available to management executives of the
Company and/or the Subsidiary on the same terms as such other
similarly situated executives, in each case to the extent that
Executive is eligible under the terms of such plans or
programs.
(d)
Executive
shall be entitled to four (4) weeks of paid vacation per year,
subject to the Company’s or the Subsidiary's, as the case may
be, normal employee policies for unused vacation as adopted and
amended from time to time.
(e)
Executive
shall be reimbursed in accordance with the policies of the Company,
or the Subsidiary, as the case may be, as adopted and amended from
time to time, for all reasonable and appropriate expenses incurred
by him in connection with the performance of his duties of
employment hereunder; provided, however, Executive shall as
a condition of such reimbursement, submit verification of the
nature and amount of such expenses in accordance with the
reimbursement policies from time to time.
(f)
Certain
Definitions.
·
"Associate"
means
(1) any corporation, partnership or other entity of which a
specified person
is an officer or partner, or is, directly or indirectly, the
beneficial owner of ten percent (10%)
or more of any class of equity securities thereof, (2) any trust or
estate in which the specified
person has a substantial beneficial interest or as to which the
specified person serves as
trustee or in a similar fiduciary capacity, (3) any relative or
spouse of such specified person,
or any relative of such spouse, who has the same home as such
specified person, and (4)
any person who is a trustee, officer or partner of such specified
person or of any corporation,
partnership or other entity that is an affiliate of such specified
person.
·
"
Beneficial Owner " shall be defined by reference to Rule
13d-3 under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) as such
Rule is in effect on the date hereof;
provided, however, that any individual, corporation, partnership,
Group, association or
other person or entity which, directly or indirectly, owns or has
the right to acquire any of SED's
or the Subsidiary's outstanding securities entitled to vote
generally in the election of directors
at any time in the future, whether such right is contingent,
absolute, direct or indirect,
pursuant to any agreement, arrangement or understanding or upon
exercise of conversion
rights, warrants or options or otherwise, shall be deemed the
Beneficial Owner of such
securities.
2
·
"
Code " means the Internal Revenue Code of 1986, as
amended.
·
"
Continuing Director " means a director who either was a
member of either the Board or the Board
of Directors of the Subsidiary (the “Subsidiary
Board”), as the case may be, on the date
hereof, or who becomes a member of the Board or the Subsidiary
Board, as the case may be,
subsequent to such date and whose election or nomination for
election to the Board or the Subsidiary
Board, as the case may be, was Duly Approved by the Continuing
Directors of either
the Board or the Subsidiary Board, as the case may be, at the time
of such election or nomination,
either by a specific vote or by approval of the proxy statement
issued by that company
on behalf of either the Board or the Subsidiary Board, as the case
may be, in which such
person is named as a nominee for director.
·
"
Duly Approved by the Continuing Directors " means an action
approved by the vote of at least
a majority of the Continuing Directors then on either the Board or
the Subsidiary Board, as
the case may be; provided, however, if the votes of such Continuing
Directors in favor of such
action would be insufficient to constitute an act of the entire
Board of Directors of either the
Company or the Subsidiary, as the case may be, if a vote by all of
its members had been taken,
or if the number of persons constituting the Continuing Directors
of either the Company
or the Subsidiary, as the case may be, shall be equal to or less
than three, then the term
Duly Approved by the Continuing Directors shall mean an action
approved by the unanimous
vote of the Continuing Directors then on the Board or the
Subsidiary Board, as the case
may be.
·
"
Group " means persons who act in concert as described in
Section 13(d)(3) of the Exchange Act
as in effect on the date hereof.
(g)
If a Change of Control occurs during the term of this Agreement, or
during any extension
thereof, and:
(1)
the Executive’s employment is terminated involuntarily, or
voluntarily by the Executive based on (i) material changes in the
nature or scope of the Executive’s duties or employment, (ii)
a reduction in compensation of the Executive made without the
Executive’s consent, (iii) a relocation of Company’s or
the Subsidiary’s executive offices farther than 35 miles from
the present location of the executive offices, or (iv) a good faith
determination made by the Executive, upon consultation with the
Chief Executive Officer of the Company, that it is necessary or
appropriate for the Executive to relocate from the Atlanta, Georgia
Metropolitan Area to enable Executive to perform his duties
hereunder, the Executive may, in his sole discretion, give written
notice within thirty (30) days after the date of termination of
employment to the Chief Executive Officer of the Company that he is
exercising his rights hereunder and requests payment of the amounts
provided for under this Section 2(g); or
(2)
the Executive gives written notice of his termination of employment
for any reason concurrently with the time a Change of Control
occurs or any time within thirty (30) days after the date the
Change of Control becomes effective to the Company, he may exercise
his rights hereunder and request payment of the amounts provided
for under this Section 2(g) (the notice provided pursuant to
Subsection (g)(1) or Subsection (g)(2) is referred to as the
“Notice of Exercise”).
3
If
the Executive gives a Notice of Exercise to receive the payments
provided for hereunder, the Company shall pay to, or for the
benefit of the Executive, immediately upon the Company’s
receipt of the Notice of Exercise, a lump sum cash payment for
damages suffered by the Executive by reason of the Change in
Control (the “Executive Payment”) in an amount equal to
the aggregate present value (as determined in accordance with
Section 280G(d)(4) of the Code) of all annual salary, of all Bonus
payments for the remainder of the Term calculated based on the
assumption that the Pretax Adjusted Annual Income for each year
remaining in the Term is equal to the highest Pretax Adjusted
Annual Income preceding the effective date of termination
hereunder, and any other benefits due to the Executive pursuant to
Section 2 hereof for the remainder of the Term; provided,
however , in the event the period from the date of Executive's
termination hereunder through the remainder of the Term is less
than twelve (12) months, then the Executive shall receive a lump
sum payment equal to the aggregate present value (as determined in
accordance with Section 280G(d)(4) of the Code) of (i) his then
current annual salary and the value of all other benefits payable
to the Executive annualized for a twelve (12) month period pursuant
to Section 2 hereof other than the Bonus, and (ii) a Bonus equal in
amount to the highest Bonus payment paid to the Executive during
the Term.
The
Executive Payment shall be in addition to and shall not be offset
or reduced by (i) any other amounts that have been earned or
accrued or that have otherwise become payable or will become
payable to the Executive or his beneficiaries, but have not been
paid by the Company at the time the Executive gives the Notice of
Exercise including, without limitation, salary, bonuses, severance
pay, consulting fees, disability benefits, termination benefits,
retirement benefits, life and health insurance benefits or any
other compensation or benefit payment that is part of any previous,
current or future contract, plan or agreement, written or oral, and
(ii) any indemnification payments that may have accrued but not
paid or that may thereafter become payable to the Executive
pursuant to the provisions of the Company’s Articles of
Incorporation, Bylaws or similar policies, plans or agreements
relating to indemnification of directors and officers of the
Company under certain circumstances. The Executive Payment shall
not be reduced by any present value calculations.
In
the event the Executive dies during the term of this Agreement, the
Executive’s legal representative shall be entitled to receive
the Executive Payment, provided that the Noti
