EXHIBIT 10.2
EXECUTION VERSION
EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (the “Agreement”) made this 12th day of
August 2009, effective as of June 1, 2009, between SED
INTERNATIONAL HOLDINGS, INC., a Georgia corporation (the
“Company”) and Mark DiVito, an individual resident of
the State of Georgia (the “Executive”).
WITNESSETH:
WHEREAS
, Executive has been employed by SED
INTERNATIONAL, INC., a wholly-owned subsidiary of the Company and a
Georgia corporation (the “Subsidiary”); and
WHEREAS , the Executive and the Company desire to enter into
an agreement with respect to the Executive’s employment by
the Company.
NOW, THEREFORE , in consideration of the foregoing, the
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 Vice President of
Operations, 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 of Directors of the Company (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 SED
International de Colombia Ltda and Intermaco S.R.L. (“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 One
Hundred Sixty-Two Thousand and Two-Hundred Dollars ($162,200.00)
(“Salary”). 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 a bonus (“Bonus”) at the
sole discretion of the Board.
(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 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 adopted by the Company.
3.
Term and Termination.
(a)
The term (“Term”) of this Agreement and of
Executive’s employment hereunder shall commence as of June 1,
2009 and shall continue for a period of one (1) year thereafter
unless earlier terminated as provided in Section 3(b) of
this
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EXECUTION VERSION
Agreement. The Term will
automatically be extended for an additional one-year period
following the expiration of the Term and of any such extension of
the Term thereafter (each extension of the Term being an
“Extension Term”) without further action by the
Executive or Company unless written notice not to renew is given to
the other, by either the Company or Executive, not less than
90-days prior to the expiration of the Term or any Extension Term
(such notice shall be referred to herein as a “Nonrenewal
Notice”). In the event a Nonrenewal Notice is given by one
party to the other as provided in the immediately preceding
sentence, then the automatic extension of the Term or any Extension
Term, as may be applicable, shall thereafter be of no further force
and effect.
(b)
This Agreement and Executive’s employment shall terminate
upon Executive’s death. This Agreement and Executive’s
employment hereunder may also be terminated (i) upon mutual
agreement of Executive and the Company; (ii) unilaterally by the
Company, upon written notice to Executive, for Good Cause (as
defined in Section 3(c) below); (iii) unilaterally by the Company,
upon written notice to Executive, without Good Cause or (iv) upon
written notice to Executive, if Executive shall at any time be
unable to perform the essential functions of his job hereunder, by
reason of a physical or mental illness or condition with or without
reasonable accommodation, for a continuous period of one hundred
eighty (180) consecutive days, as permitted by law and as certified
by a physician or physicians selected by the Board.
(c)
As used in this Agreement, “Good Cause” means: (i) any
act of fraud or dishonesty; (ii) any act of theft or embezzlement;
(in) the breach of any material provision of this Agreement by
Executive (provided that such breach is not cured by Executive
within thirty (30) days of receiving written notice of such breach
from the Company); (iv) violation of the policies and procedures of
the Company or the Subsidiary (v) failure to comply with the
written directions of the Board; (vi) engaging in any unlawful
harassment or discrimination; (vii) the conviction of Executive of
any crime involving moral turpitude (whether felony or misdemeanor)
or involving any felony; (viii) any act of moral turpitude by
Executive that materially adversely affects the Company, the
Subsidiary or any Other Affiliates and any of their business
reputations; (ix) violation of state or federal securities laws;
(x) failure to perform job duties after receiving written notice
from the Board and a reasonable opportunity to cure or (xi) any
other matter constituting “good cause” under the laws
(including inter alia, statutes, regulations or judicial case law)
of the State of Georgia.
(d)
Upon the termination of this Agreement and Executive’s
employment hereunder:
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(i)
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pursuant to a Nonrenewal Notice
given by the Company and Section 3(b)(iii), the Executive shall be
eligible to receive a cash payment from the Company equal to six
months of his Salary or, if greater, the amount of his Salary, for
the remainder of the Term or Extension Term, as may be applicable,
beginning on the date such Nonrenewal Notice or notice under
Section 3(b)(iii) is given to the Executive in accordance with
Section 8 (“Severance Payment”). This payment is
contingent upon Executive signing an Agreement and General Release
as set forth in subsection f. This payment will be made not less
than eight (8) days nor more than twenty (20) days after Executive
delivers to the Company an executed original of the Agreement and
General Release referenced in subsection f; or
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(ii)
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as provided in Section
3(b)(except subsection (iii)), neither the Company nor the
Subsidiary, as applicable, shall have any further obligation to
Executive other than (i) for payment of Salary, Bonus amounts,
expense reimbursement and other benefits earned or accrued and
unpaid at the effective date of such termination; and (ii) any
indemnification payments that may become payable to 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.
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(e)
Except as otherwise provided in this Agreement, any payments to
which the Executive shall be entitled under this Section 3
including, without limitation, any economic equivalent of Incentive
Compensation and any other benefits, shall be made as promptly as
possible following any termination date provided for in subsections
3(a) through (d), each being referred to herein as a
“termination date”; provided, however , that if
the Executive is deemed a “specified employee” of the
Company, or the Subsidiary, within the meaning of Section
409A(a)(2)(B)(i) of the Code (or any successor provision), no
payment under this Section 3 in connection with the
Executive’s termination of employment (other than a payment
of salary through the date of such termination, and payments on
account of termination of employment by reason of death) shall be
made until the date which is six (6) months after the date of the
termination of the employment of the Executive (or, if earlier, the
date of death of the Executive); provided further, if the Company
determines based upon written advice of counsel that any such
payment if made during the calendar year that includes the
termination date would not be deductible by either the Company, or
the Subsidiary, as the case may be, in whole or in part by reason
of Code Section 162(m), such payment shall be made on January 2 of
the following calendar year (or such later date as may be required
under the preceding proviso if the Executive is a “specified
employee “). Any payment deferred as provided for in this
subsection (e) shall include, when paid, an incremental earnings
factor payment equal to ten (10%) percent of the amount deferred
multiplied by a fraction the numerator of which is the number of
days that such payment is deferred and the denominator of which is
365; provided, however, that in no event shall the amount of
interest contracted for, charged or received hereunder
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EXECUTION VERSION
exceed the maximum non-usurious
amount of interest allowed by applicable law.
If
the amount of any payment due to the Executive cannot be finally
determined within thirty (30) days after the termination date, such
amount shall be estimated on a good faith basis by the Company and
the estimated amount shall be paid thirty (30) days after such
termination date (or on such later date as may be determined under
the immediately preceding sentence). As soon as practicable
thereafter, the final determination of the amount due shall be made
and any adjustment requiring a payment to or from the Executive
shall be made as promptly as practicable.
(f)
In consideration for the Severance Payment, the Executive agrees
that upon termination of this Agreement and Executive’s
employment, the Executive shall in good faith execute and deliver
to the Company any and all documents and agreements that it may
reasonable request, and take any and all additional actions
reasonably requested of him by the Company including but not
limited to, delivering to the Company an executed copy of an
Agreement and General Release releasing the Company, the
Subsidiaries, and Other Affiliates including, but not limited to,
the members of the boards of directors, employees, officers and
agents thereof (the “Released Parties”) in the final
form approved by the Company (the “Release”),
substantially in the form attached as Exhibit A hereto. The
Executive further agrees to indemnify and hold harmless the
Released Parties in the event he pursues any claim encompassed by
the Release against any one or all of them. The parties agree that
the intention of the Release is to fully discharge the Released
Parties from any and all claims that the Executive is permitted to
discharge under applicable laws.
4. Agreement Not to Solicit Employees and Customers . As
part of the consideration for the compensation and benefits to be
paid to Executive hereunder, in keeping with Executive’s
duties as a fiduciary and in order to protect the Company’s,
the Subsidiary’s, or any Other Affiliates’, interest in
the business relationships developed by Executive with the
customers and potential customers of the Company, the Subsidiary,
or any Other Affiliates, Executive agrees that during the Term of
Executive’s employment under this Agreement and for a period
of two (2) years from the date of the termination of such
employment (at any time for any reason, with or without cause),
Executive shall not, without the prior written consent of the
Company, directly or indirectly: (A) recruit or solicit any
employees of the Company, the Subsidiary, or any Other Affiliates
for the purpose of encouraging or enticing such person to end his
or her relationship with the Company, the Subsidiary o
