EXHIBIT 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made and entered into by and between
Theodore R. Sanders (“Employee”) and PC Mall, Inc. (“PC Mall” or the “Company”),
effective March 22, 2005 (the “Effective Date”).

RECITALS

A.         PC Mall is a rapid response direct marketer of computer hardware,
software, peripheral, and electronics products. The Company engages in the
highly competitive market of offering hardware, software, peripherals,
components, and accessories for users of computer products, as well as
electronic equipment.

B.         The Company has spent significant time, effort, and money to acquire
and develop certain goodwill and Proprietary Information (as defined below) that
it considers vital to its business, and which has become of great value to PC
Mall in amassing its clientele and maintaining its operations.

C.         The Company also has developed a substantial body of Proprietary
Information regarding the methods and systems of operation, which is used by the
Company for the acquisition and management of client accounts. PC Mall has also
acquired, at great expense and time, Proprietary Information regarding the
particularized needs of its clientele, including information regarding its
client’s finances, marketing, operations, and product needs. The Company has, at
all times, kept its Proprietary Information secret, and such information has
given the Company a competitive advantage over others engaged in the same type
of business.

D.         The Company desires to employ Employee as Chief Financial Officer of
PC Mall, Inc. Employee desires to accept such employment with the Company on the
terms and conditions set forth in this Agreement.

TERMS OF EMPLOYMENT

NOW, THEREFORE, in consideration of the benefits to be derived from the mutual
observance of the agreements and covenants hereinafter contained, the parties
agree, covenant, and represent as follows:

1.

Position And Responsibilities.

1.1  Employment. The Company hereby employs Employee as the Chief Financial
Officer of PC Mall. Employee will work at the Company’s headquarters in
Torrance, California, or at such other location as PC Mall may from time to time
direct. Employee shall perform all services appropriate to his position as Chief
Financial Officer, as well as such other services as may be assigned from time
to time by the Company. The Company shall retain full discretion and control
over the means and methods by which Employee performs the above services, and of
the places that Employee renders such services.

 

1.2  Devotion Of Time To The Business. Employee shall devote his entire
professional time to his employment with PC Mall, and shall expend his best
efforts on behalf of the Company. Employee agrees to abide by all policies,
rules, regulations, and decisions adopted by the Company during the Employee’s
employment with the Company. Except upon prior written consent by the Company,
Employee will not, during any time he is employed by the Company: (i) accept any
other employment; or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that might interfere
with Employee’s duties and responsibilities under this Agreement or create a
conflict of interest with the Company.

2.

Warranties And Conditions Of Employment.

2.1  Employee represents and warrants that he will not use for the benefit of,
disclose to the Company, or induce the Company to use any confidential or
proprietary information belonging to any former employer or any other entity
unless he has the advance, written permission from the employer or entity to do
so, or unless the Company has been granted such permission.

2.2  Employee represents and warrants that he has not entered into any
agreements or understandings with any former employer or entity that would
affect his ability to work for, or devote his full and best efforts to his
employment with the Company.

 

3.

Compensation And Benefits.

3.1  Base Salary. As compensation for Employee’s services, the Company will pay
to Employee an annual base salary in the gross amount of $300,000 (the “Base
Salary”), payable in accordance with the Company’s regularly established payroll
practices.

3.2  Annual Bonus: Employee shall be eligible to participate in the Executive
Bonus Plan in the discretion of the Company’s Compensation Committee.

3.3  Discretionary Bonus. Employee shall eligible to receive discretionary
bonuses from time to time in the discretion of the Company’s Compensation
Committee and the Company’s Chief Executive Officer.

3.4  Automobile Allowance. Employee shall entitled to receive a monthly
automobile allowance of $695.00, subject to periodic adjustment by the Company’s
Compensation Committee.

3.5  Benefits. Employee shall be eligible to participate in the Company’s
benefit plans made generally available to similarly situated employees of the
Company, including group medical, life and disability insurance, and retirement
programs. Employee’s eligibility to participate in the Company’s benefit plans
shall be in accordance with the terms of the benefit plans established by the
Company or the governing plan documents, which may be amended from time to time
in the Company’s sole discretion.

3.6  Vacation. Employee shall be entitled to take paid vacation pursuant to the
Company’s existing policies regarding paid vacations. Employee will accrue four
weeks of paid vacation per year. Employee’s vacation time will accrue on a
monthly basis at a rate of 1.66 days per month. Vacation time that is not used
may be carried over to the next calendar year, but Employee will cease to accrue
vacation time beyond his annual entitlement (i.e., 20 days). Vacation accruals
will recommence after Employee has taken vacation and his accrued vacation time
has dropped below the maximum annual entitlement.

3.7  Withholdings. The Company shall have the right to deduct and withhold
amounts from all payments as required under applicable law. Additional amounts
may be withheld from payments to the extent such withholding is authorized in
writing by Employee.

4.

Employment At Will.

4.1  At any time, the Company or Employee may terminate Employee’s employment
for any reason, or no reason at all, with or without cause, and without prior
notice. The Company will pay Employee all compensation then due and owing.
Thereafter, all of the Company’s obligations under this Agreement shall cease.
The Company may discipline, demote, or dismiss Employee as provided in this
Section notwithstanding anything to the contrary contained in or arising from
any statements, policies, or practices of the Company relating to the
employment, discipline, or termination of its employees.

4.2  If, however, the Company terminates Employee’s employee without Cause (as
defined below in Section 4.4) at any point, upon execution of a severance and
release agreement that is acceptable to the Company’s Board of Directors and
that contains, among other things, a release provision, PC Mall shall pay
Employee the equivalent of six months of Base Salary. This severance payment
will be paid in equal installment over a period of six months. After the Company
has satisfied its severance payment obligations under this Section, all
obligations of the Company under this Agreement shall immediately cease.

4.3  Notwithstanding Section 4.2, the Company may terminate Employee’s
employment for Cause at any time, without prior notice, and without any
obligation to pay any severance. If Employee is terminated for Cause, the
Company shall pay Employee all compensation to which he is entitled up through
the date of termination and thereafter, all obligations of the Company shall
immediately cease.

4.4  For purposes of this Agreement, the term “Cause” shall mean: (i) a material
breach of any term set forth in this Agreement; (ii) Employee’s failure to
follow the reasonable instructions of the Company; (iii) misconduct on
Employee’s part that is materially injurious to the Company, monetarily or
otherwise, including misappropriation of trade secrets, fraud, or embezzlement;
(iv) Employee’s conviction for fraud or any other felony; or (v) if Employee
exhibits in regard to his employment unavailability for service, misconduct,
dishonesty, or habitual neglect.

5.

Termination Obligations.

5.1  Resignation From All Offices And Directorships. In the event Employee’s
employment is terminated for any reason, Employee shall be deemed to have
resigned voluntarily from all offices, directorships, and other positions held
with the Company, if he was serving in any such capacities at the time of
termination.

 

 5.2  Cooperation With The Company. In the event that Employee’s employment is
terminated for any reason, Employee will cooperate with the Company in the
winding up or transferring to other employees any pending work or projects.
Employee will also cooperate with the Company in the defense of any action
brought by any third party against the Company that relates to Employee’s
employment with the Company.

5.3  Return Of Documents And Other Information. Employee agrees that all
property, including, without limitation, all equipment, tangible Proprietary
Information, documents, books, records, reports, notes, contracts, lists,
computer disks (and other computer-generated files and data), and copies
thereof, created on any medium and furnished to, obtained by, or prepared by
Employee in the course of, or incident to his employment, belongs to the Company
and shall be returned promptly to the Company upon termination of Employee’s
employment for any reason.

5.4  Termination Of Benefits. All benefits to which Employee is otherwise
entitled shall cease upon Employee’s termination, unless explicitly continued
either under this Agreement or under any specific written policy or benefit plan
of the Company.

 

6.

Proprietary Information; Non-Disclosure; and Non-Solicitation.

6.1  Proprietary Information: For purposes of this Agreement, “Proprietary
Information” means all information and any idea in whatever form, tangible or
intangible, whether disclosed to or learned or developed by Employee, pertaining
in any manner to the business of the Company or to the Company’s affiliates
(including subsidiaries), consultants, customers, and business associates,
unless: (i) the information is or becomes publicly known through lawful means;
(ii) the information was rightfully in Employee’s possession or part of my
general knowledge prior to his employment by the Company; or (iii) the
information is disclosed to Employee without confidential or proprietary
restriction by a third party who rightfully possesses the information and did
not learn of it, directly or indirectly, from the Company. Employee further
understands that the Company considers the following information to be included,
without limitation, in the definition of Proprietary Information:
(a) techniques, development tools and processes, computer printouts, computer
programs, design manuals; (b) information about costs, profits, revenues,
margins and markets; (c) plans for future development and new product concepts;
(d) customer names, addresses, telephone numbers, facsimile numbers, credit card
numbers, contact persons and customer preferences; (e) vendor names, addresses,
telephone numbers, facsimile numbers, contact persons, vendor preferences and
pricing; (f) marketing plans, bidding information, costs of product, services
and other items, proposal information, proposal methods and policies, price
schedules, product profit margins, price setting methods and policies, customer
service methods and policies and service plans and policies; (g) product plans,
product development plans, product specifications, sources of supply, methods of
operation and related materials conceived, created or reduced to practice in the
performance of services for the Company; (h) the Company’s business plans,
accounting records, computer records, computer systems, networking and
telecommunication systems, management information systems and programs, audits
and other financial data related to products and services provided by the
Company; (i) labor rates, commission rates and plans, commission schedules,
employee lists, employee performance evaluations and related information,
employee titles, outside contracting sources and rates, benefit costs and
research reports; and (j) all documents, books, papers, and other data of any
kind and description, including electronic data recorded or retrieved by any
means, that have been or will be given to Employee by the Company (or any
affiliate of it), as well as written or verbal instructions or comments.

6.2  Non-Disclosure. Employee agrees that his work with the Company will involve
access to and creation of Proprietary Information. Employee further agrees to
hold all Proprietary Information in strict confidence and never to use or
disclose any Proprietary Information to anyone at any time, including after the
termination of his employment, except to the extent necessary to carry out his
responsibilities as an employee of the Company, or as specifically authorized in
writing by an authorized officer of the Company, other than Employee.

6.3  Location And Reproduction. Employee shall maintain at his work station and
any other place under his control only such Proprietary Information as he has a
current “need to know.” Employee shall return to the appropriate person or
location or otherwise properly dispose of Proprietary Information once that need
to know no longer exists.

6.4  Return Of Third Party Information: Employee represents and warrants that he
has returned all property, information, and trade secrets belonging to all prior
employers, if any.

6.5  Non-Solicitation: Employee understands and agrees that, because of his
responsibilities at the Company, he will help to develop, and will be exposed to
the Company’s business strategies, information on customers and clients, and
other valuable Proprietary Information, and that use or disclosure of such
Proprietary Information in breach of this Agreement would be extremely difficult
to detect or prove. Employee acknowledges that the Company’s relationships with
its employees, customers, clients, vendors, and other persons are valuable
business assets. Therefore, Employee agrees as follows:

 

(a)  Employee shall not, for a period of two years after he is no longer
employed by the Company, directly or indirectly solicit, induce, recruit, or
encourage any officer, director, or employee of the Company, or any of the
Company’s affiliates, to leave the Company or terminate his or her employment
with the Company;

 

(b)  Employee shall not, for a period of one year after he is no longer employed
by the Company: (i) divert or attempt to divert any business from the Company or
any of the Company’s affiliates; (ii) interfere with any business relationship
or contract between the Company, including the Company’s affiliates, and any of
its customers, clients, members, vendors, business partners, or suppliers; or
(iii) for the purpose of selling products or services competitive with the
Company’s or the Company’s affiliates, solicit any person, firm, corporation or
entity of any kind, that was a customer, client or prospective client of the
Company at any time during the one year period preceding the termination date of
Employee’s employment.

6.6  Injunctions. Employee acknowledges that the restrictions contained in
Section 6 are reasonable and necessary in view of the nature of Company’s
businesses, in order to protect the legitimate interests of Company, and that
any violation thereof would result in irreparable injury to Company. Therefore,
Employee agrees that, in the event of a breach or threatened breach by Employee
of the provisions of the paragraphs above, the Company shall be entitled to
obtain from any court of competent jurisdiction, preliminary and permanent
injunctive relief restraining Employee from any violation of the foregoing.

7.

Arbitration.

7.1  The Company and Employee hereby agree that, to the fullest extent permitted
by law, any and all claims or controversies between them (or between Employee
and any present or former officer, director, agent, or employee of the Company
or any parent, subsidiary, or other entity affiliated with the Company) shall be
resolved by final and binding arbitration.

7.2  Claims subject to arbitration shall include, without limitation, contract
claims, tort claims, claims relating to compensation and stock options, as well
as claims based on any federal, state, or local law, statute, or regulation,
including but not limited to any claims arising under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, and the California Fair Employment and Housing Act. However,
claims for unemployment benefits, workers’ compensation claims, and claims under
the National Labor Relations Act shall not be subject to arbitration.

7.3  Any arbitration proceeding shall be conducted in accordance with the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association (“the AAA Rules”). The arbitrator shall apply the same
substantive law, with the same statutes of limitations and same remedies that
would apply if the claims were brought in a court of law.

7.4  Either the Company or Employee may bring an action in court to compel
arbitration under this Agreement and to enforce an arbitration award. Otherwise,
neither party shall initiate or prosecute any lawsuit or claim in any way
related to any arbitrable claim, including without limitation any claim as to
the making, existence, validity, or enforceability of the agreement to
arbitrate. Nothing in this Agreement, however, precludes a party from filing an
administrative charge before an agency that has jurisdiction over an arbitrable
claim. Moreover, nothing in this Agreement prohibits either party from seeking
provisional relief pursuant to Section 1281.8 of the California Code of Civil
Procedure.

7.5  All arbitration hearings under this Agreement shall be conducted in Los
Angeles, California, unless otherwise agreed by the parties. The arbitration
provisions of this Agreement shall be governed by the Federal Arbitration Act
(“FAA”), unless the FAA does not apply, in which case the California Arbitration
Act shall apply. In all other respects, this Agreement shall be construed in
accordance with the laws of the State of California, without reference to
conflicts of law principles.

7.6  Each party shall pay its own costs and attorney’s fees, unless a party
prevails on a statutory claim, and the statute provides that the prevailing
party is entitled to payment of its attorneys’ fees. In that case, the
arbitrator may award reasonable attorneys' fees and costs to the prevailing
party as provided by law. The Company agrees to pay the costs and fees of the
arbitrator to the extent required by law.

7.7  The parties also understand and agree that this agreement constitutes a
waiver of their right to a trial by jury of any claims or controversies covered
by this agreement. the parties agree that none of those claims or controversies
shall be resolved by a jury trial.

 

8.

Severability.

8.1  Severability Of Unenforceable Provisions. The provisions of this Agreement
are severable. In the event that any one or more of the provisions contained in
this Agreement, or the application thereof in any circumstances is held invalid,
illegal, or unenforceable in any respect for any reason, the validity and
enforceability of any such provision in every other respect and of the remaining
provisions of this Agreement shall not be in any way impaired or affected, it
being intended that all of the rights and privileges contained in this Agreement
shall be enforceable to the fullest extent permitted by law.

8.2  Scope. To the extent that any provision hereof is deemed unenforceable by
virtue of its scope, but could be enforceable by reducing the scope, Employee
and the Company agree that same shall be enforced to the fullest extent
permissible under the laws and public policies applied in the jurisdiction in
which enforcement is sought, and that the Company shall have the right, in its
sole discretion, to modify such invalid or unenforceable provision to the extent
required to be valid and enforceable.

9.

Successors.

This Agreement and the rights and obligations of the parties hereto shall be
binding upon and inure to the benefit of any successor or successors of the
Company by way of reorganization, merger, acquisition or consolidation, and any
assignee of all or substantially all of the Company’s business and properties.

10.

Amendments; Waivers.

This Agreement may not be orally modified or amended. It may only be modified or
amended by an instrument in writing signed by Employee and by a duly authorized
representative of the Company, other than Employee. No failure to exercise and
no delay in exercising any right, remedy, or power under this Agreement shall
operate as a waiver thereof or as a waiver of any other right, remedy, or power,
nor shall any single or partial exercise of any right, remedy, or power
hereunder preclude any other or further exercise of any other right, remedy, or
other power provided herein or by law or in equity. 

11.

Notices.

All notices, requests, demands, and other communications hereunder shall be in
writing, and shall be delivered in person, by facsimile, or by certified or
registered mail with return receipt requested. Each such notice, request,
demand, or other communication shall be effective: (a) if delivered by hand,
when delivered at the address specified in this Section; (b) if given by
facsimile, when such facsimile is transmitted to the telefacsimile number
specified in this Section and confirmation is received; or (c) if given by
certified or registered mail, three days after the mailing thereof. Notices
shall be delivered as follows:

If to the Company:

PC Mall, Inc.

Care of: PC Mall, Inc.

2555 W. 190th Street

Torrance, CA 90504

Attention: Frank Khulusi

Fax: (310) 353-7411

 

With a copy to:

Morrison & Foerster LLP

19900 MacArthur Boulevard, 12th Floor

Irvine, California 92612

Attention: Robert M. Mattson, Esq.

Fax: (949) 251-0900

 

If to the Employee:

 Theodore R. Sanders

Care of: PC Mall, Inc.

2555 W. 190th Street

Torrance, CA 90504

Attention: Ted Sanders

Fax: (310) 353-7411

 

Any party may change its address by notice giving notice to the other party of a
new address in accordance with the foregoing provisions.

12.

Assignment.

 

No benefit hereunder shall be subject to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any attempt to do so
shall be void. The Company shall be permitted to assign this Agreement to any
affiliate or any successor.

13.

Integration.

 

This Agreement is intended to be the final, complete, and exclusive statement of

the terms of Employee’s employment by the Company. This Agreement supersedes all
other prior and contemporaneous agreements and statements, whether written or
oral, express or implied, pertaining in any manner to the employment of
Employee, and it may not be contradicted by evidence of any prior or
contemporaneous statements or agreements. To the extent that the practices,
policies, or procedures of the Company, now or in the future, apply to Employee
and are inconsistent with the terms of this Agreement or the offer letter, the
provisions of this Agreement shall control.

 

14.

Interpretation.

 

The language in all parts of this Agreement shall be in all cases construed
simply according to its fair meaning and not strictly for or against any party.
Whenever the context requires, all words used in the singular will be construed
to have been used in the plural, and vice versa. The descriptive headings of the
sections and subsections of this Agreement are inserted for convenience only and
shall not control, limit, or affect the interpretation or construction of any of
the provisions herein.

15.

Governing Law.

 

This Agreement has been negotiated and executed in the State of California and
shall in all respects be governed by and interpreted in accordance with the laws
of the State of California without giving effect to principles of conflict of
laws.

 

** SIGNATURES ON NEXT PAGE **

 

EMPLOYEE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT AND UNDERSTANDS ITS
CONTENTS. EMPLOYEE FURTHER ACKNOWLEDGES THAT THE COMPANY HAS ADVISED HIM OF HIS
RIGHT TO CONSULT WITH LEGAL COUNSEL OF HIS OWN CHOICE CONCERNING THIS AGREEMENT.
BY SIGNING THIS AGREEMENT, EMPLOYEE AND THE COMPANY AGREE TO BE BOUND BY ALL OF
THE TERMS AND CONDITIONS OF THIS AGREEMENT.

The parties have executed this Agreement on the dates noted below.

 

 

Dated: 3/22/05

/s/ PC Mall, Inc.

 

 

By: /s/ Frank Khulusi

 

Title: Chairman, CEO and President

 

 

Dated: 3/22/05

/s/ Theodore R. Sanders

THEODORE R. SANDERS