Exhibit 10.5 

 

AMENDMENT TO EMPLOYMENT AGREEMENT

 

This Amendment (this “Amendment”), made as of the 23rd day of June 2019 (the
“Amendment Date”), to the Employment Agreement, which was entered into on June
8, 2004, by and between PCM, Inc., a Delaware corporation (formerly known as PC
Mall, Inc. and referred to herein as the “Company”), and Robert Newton
(“Employee”) and which was amended by the parties on March 22, 2005 (as amended,
the “Agreement” and attached hereto as Exhibit A).

 

W I T N E S E T H:

 

WHEREAS, the parties wish to update and modify certain parts of the Agreement by
this Amendment; and

 

WHEREAS, this Amendment is a written agreement signed by the parties as required
by Section 10 of the Agreement with respect to modifying the Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 

1.   Restatement of Section 3.1. Section 3.1 of the Agreement shall be hereby
entirely replaced with the below language. For avoidance of doubt, the below
revisions to Sections 3.1 and 3.2 are intended purely to merely reflect the
current level of base salary and annual bonus opportunity as of the Amendment
Date and does not (i) alter the current amount of base salary or annual bonus or
(ii) connote when such base salary or bonus amounts were changed in the past or
(iii) provide any entitlement to greater compensation or backpay.

 

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 $378,000 (the “Base
Salary”), payable in accordance with the Company’s regularly established payroll
practices.

 

2.   Restatement of Section 3.2. Section 3.2 of the Agreement shall be hereby
entirely replaced with the below language:

 

3.2  Annual Bonus. Employee will be eligible to earn an annual bonus in the
total amount of $152,000 (or approximately 40% of Employee’s annual base salary
in 2017), which will be paid in accordance with the Company’s existing, or to be
established, annual bonus plan or program. The Company’s annual bonus plan or
program is subject to change from time to time by the Company in its sole
discretion.

 

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3.   Restatement of Section 4.2. Section 4.2 of the Agreement shall be hereby
entirely replaced with the below language:

 

4.2  If, however, Employee’s employment terminates due to a Qualifying
Termination (as defined below in Section 4.4) at any point, after execution (and
non-revocation) 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, the Company shall pay Employee the equivalent of six months of
Employee’s then-Base Salary (“Cash Severance”) plus the below medical insurance
benefits (the “Release Agreement”). The Release Agreement must become effective
by its own terms within fifty-five days after termination of Employee’s
employment in order for any severance benefits to be made. The Cash Severance
payments will be paid as follows: (i) the first installment in an amount equal
to one-sixth of Base Salary will be paid to Employee on the 60th day after
Employee’s termination of employment and (ii) thereafter the Company shall make
four equal monthly installments (each in an amount equal to one-twelfth of Base
Salary) to Employee commencing with the calendar month following the calendar
month of the payment made under clause (i). For purposes of this paragraph, any
reductions to Base Salary which were not agreed to in writing by Employee shall
be disregarded with respect to determining what Employee’s then-Base Salary was
as of the time of the Qualifying Termination. In addition to the Cash Severance,
subject to immediate cessation if Employee obtains medical coverage through
another employer (or Employee is offered other medical coverage through another
employer but Employee does not accept such coverage), the Company shall continue
to pay the Company portion of the premium for Employee’s Company group medical
insurance coverage for Employee and his dependents (who were being covered under
the Company’s group medical insurance as of immediately before the date of the
Qualifying Termination) for the twelve month period commencing on the first day
of the calendar month following the date of the Qualifying Termination provided
that Employee timely pays any portion of the necessary premiums that Employee
would be required to pay if Employee were still an employee and Employee timely
makes the necessary elections to continue such group medical coverage after the
date of the Qualifying Termination. Notwithstanding the foregoing, if the
Company determines that its payment of the premiums on Employee’s behalf would
result in a violation of the nondiscrimination rules of Code Section 105(h)(2)
or any statute or regulation of similar effect (including but not limited to the
2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health
Care and Education Reconciliation Act), then the Company shall instead each
month during such twelve month period (or shorter duration if the Employee
ceases to be covered under the Company’s group medical insurance plan) provide
Employee with a taxable payment equal to the amount of the Company-portion of
the premiums which Employee may, but is not required to, use towards the cost of
such medical coverage. After the Company has satisfied its severance payment
obligations under this Section, all obligations of the Company under this
Agreement shall immediately cease.

 

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4.   Restatement of Section 4.4. Section 4.4 of the Agreement shall be hereby
entirely replaced with the below language:

 

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.

 

For purposes of this Agreement, the term “Good Reason” shall mean: the
occurrence of any one or more of the following without Employee’s written
consent: (i) a material reduction of the material duties and responsibilities
assigned to Employee, (ii) a material reduction (of at least ten percent in the
aggregate) in Employee’s Base Salary under Section 3.1; (iii) a material
reduction (of at least ten percent in the aggregate) in Employee’s annual bonus
opportunity under Section 3.2; (iv) a relocation of Employee’s principal place
of employment to a new location that is more than fifty (50) miles away; or (v)
the Company’s material breach of this Agreement.

 

Notwithstanding the foregoing, “Good Reason” shall only be found to exist if,
prior to Employee’s resignation and within ninety (90) days after the initial
existence of an alleged event of Good Reason, Employee has provided written
notice to the Company describing such alleged Good Reason event(s), and the
Company does not cure or remedy such event within thirty (30) days following the
Company’s receipt of such notice from Employee, and the date of Employee’s
termination of employment due to Employee’s resignation for Good Reason occurs
within thirty (30) days after the expiration of the foregoing thirty (30) day
cure/remedy period. The foregoing Good Reason definition is intended to satisfy
the Good Reason safe harbor requirements under the Internal Revenue Code Section
409A regulations.

 

For purposes of this Agreement, the term “Qualifying Termination” shall mean
that Employee has experienced a “separation from service” (as defined under
Internal Revenue Code Section 409A) with the Company due to (i) Employee’s
resignation of employment for Good Reason or (ii) the Company terminating
Employee’s employment without Cause. A separation from service due to Employee’s
death or disability is not a Qualifying Termination.

 

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5.   Addition of New Section 16. Section 16 of the Agreement shall be hereby
added to the Agreement and shall contain the below language:

 

16.   Section 409A. This Agreement and its payments and benefits are intended to
comply with (or be exempt from) the requirements of Internal Revenue Code
Section 409A (“Section 409A”) and will be interpreted and administered in
accordance with such intention. In the event this Agreement or any other payment
or benefit provided to Employee is deemed to be subject to Section 409A,
Employee consents to the Company adopting such conforming amendments or taking
such actions as the Company deems necessary, in its discretion (and without an
obligation to do so), to comply with Section 409A. For purposes of Section 409A,
each payment made to Employee pursuant to this Agreement or otherwise will be
designated as a separate payment. To the extent any nonqualified deferred
compensation payment to Employee could be paid in one or more of Employee’s
taxable years depending upon Employee completing certain employment-related
actions, then any such payments will commence or occur in the later taxable year
to the extent required by Section 409A. The Company reserves the right to at any
time terminate any nonqualified deferred compensation plan or arrangement
involving Employee in accordance with the Section 409A plan termination
regulations. Notwithstanding anything to the contrary, if upon Employee’s
“separation from service” (as defined under Section 409A) Employee is then a
“specified employee” (as defined under Section 409A), then to the extent
necessary to comply with Section 409A and avoid the imposition of taxes under
Section 409A, the Company shall defer payment of “nonqualified deferred
compensation” subject to Section 409A payable as a result of and within six (6)
months following Employee’s separation from service until the earlier of (i) the
first business day of the seventh month following Employee’s separation from
service (or if later, and solely if required in order to avoid or minimize the
amount of any Section 409A taxes, December ___, 2020 which is the date that is
eighteen months after the Agreement was amended on June ___, 2019), or (ii) ten
(10) days after the Company receives written notification of Employee’s death.
Any such delayed payments shall be made without interest.

 

6.        Scope. Except as otherwise provided in this Amendment, the provisions
of the Agreement shall continue in full force and effect on and after the
Amendment Date.

 

7.        Defined Terms. Except as otherwise defined in this Amendment, the
capitalized terms in this Amendment shall have the same meaning as such terms
have in the Agreement.

 

8.        Governing Law. This Amendment 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.

 

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9.        Counterparts. This Amendment may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties have caused this Amendment to the Agreement to
be duly executed and delivered as of the Amendment Date.

 

PCM, Inc.,   Employee a Delaware corporation             By:            Name:  
  Robert Newton Its:      

 

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EXHIBIT A

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made and entered into by and between
Robert Newton (“Employee”) and PC Mall, Inc. (“PC Mall” or the “Company”),
effective June 8, 2004 (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 General Counsel
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 General Counsel
of PC Mall, Inc. 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 General
Counsel, 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.

 

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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 $250,000 (the “Base
Salary”), payable in accordance with the Company’s regularly established payroll
practices.

 

3.2       Annual Bonus: Employee will be eligible to earn an annual bonus in the
total amount of $50,000, which will be paid quarterly in accordance with the
Company’s existing, or to be established, annual bonus plan or program. The
Company’s annual bonus plan or program is subject to change from time to time by
the Company in its sole discretion. The Company guarantees that Employee will
receive the full amount of $12,500 (gross) for the first full quarter in which
he is employed by the Company. Thereafter, no bonus quarterly bonus installment
will be guaranteed to Employee.

 

3.3       Payment of State Bar Dues and Education Expenses Related to License.
PC Mall shall pay for Employee’s license renewal fees for the State Bar of
California. PC Mall shall also reimburse Employee for all education expenses
associated with Employee’s efforts to maintain his license to practice law in
the State of California.

 

3.4       Stock Options. Subject to approval by the Company’s Board of
Directors, Employee will be granted an option to purchase an aggregate of 50,000
shares of the Company’s common stock (the “Option”) at an exercise price equal
to the closing price (i.e. the last sale price) of the Company’s common stock on
June 8, 2004. The Option shall vest in equal quarterly installments over a
period of three years. The option agreement will provide for partial
acceleration of vesting in the event of a Change in Control involving the
Company (as defined in the Stock Incentive Plan) as follows: the Option will
vest as to the next four unvested quarterly installments, if any, together with
a prorated portion of the remaining unvested quarterly installment. Vesting of
Employee’s option will be subject to Employee’s continued employment by the
Company. The Option shall expire 90 days after Employee’s termination of
employment by the Company. Employee’s entitlement to the Option is conditioned
upon the execution by Employee and the Company of a stock option agreement and
shall be subject to its terms and the terms of the Stock Incentive Plan.

 

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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 three months of Base Salary. This severance payment
will be paid in equal installment over a period of three 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.

 

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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.

 

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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.

 

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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.

 

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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.

 

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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[ex10-5_001.jpg]

 

With a copy to:

Morrison & Foerster LLP

19900 MacArthur Boulevard, 12th Floor

Irvine, California 92612

Attention: Robert M. Mattson, Esq.

Fax: (949) 251-0900[ex10-5_001.jpg]

If to the Employee:

 

Robert Newton

2803 Corte Esmeralda

San Clemente, California 92673

 

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.

 

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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 **

 

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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: June 8, 2004 /s/ Frank Khulusi   PC MALL, INC.       By: Frank Khulusi  
    Title: President     Dated: June 8, 2004 /s/ Robert Newton   ROBERT NEWTON

 

******************************************************************************

 

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AMENDMENT TO EMPLOYMENT AGREEMENT

 

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is made and entered
into as of March 22, 2005, by and between PC MALL, INC., a Delaware corporation,
(the “Company”), and Robert Newton, an individual (“Employee”).

 

RECITALS

 

WHEREAS, the Company and Employee entered into that certain Employment
Agreement, effective June 8, 2004, setting forth the terms and conditions of
Employee’s employment with the Company (the “Employment Agreement”);

 

WHEREAS, on February 9, 2005 the compensation committee of the Company’s board
of directors approved the modification of the Employment Agreement as set forth
herein; and

 

WHEREAS, the parties hereto mutually desire to amend the Employment Agreement as
provided herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and
covenants contained in this Amendment, the parties hereto agree as follows:

 

1.         Section 4.2 of the Employment Agreement is hereby amended to read in
its entirety as follows:

 

“4.2 If, however, the Company terminates Employee’s employment 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.”

 

2.         Except to the extent specifically modified herein, the Employment
Agreement remains in full force and effect.

 

3.        This Amendment may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other party hereto, it being understood the parties need not
sign the same counterpart.

 

4.        Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Employment Agreement.

 

Signature page follows immediately hereafter.

 

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.

 

PC MALL, INC.         By: /s/ Frank Khulusi     Name: Frank Khulusi     Title:
Chairman, CEO and President         EMPLOYEE       /s/ Robert I. Newton   Name:
Robert I. Newton  

 

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