FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT

 

THIS FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT is made this 29th day of December,
2000, effective as of January 1, 2000, between SED INTERNATIONAL, INC., a
Georgia corporation (the "Subsidiary") and a wholly-owned subsidiary of SED
INTERNATIONAL HOLDINGS, INC., a Georgia corporation, and Gerald Diamond, an
individual resident of the State of Georgia (the "Employee").

W I T N E S S E T H:

WHEREAS, on November 7, 1989, Employee and the Subsidiary entered into an
Employment Agreement (the "Agreement") setting forth the terms and conditions of
Employee's employment with the Subsidiary; and

WHEREAS, effective July 1, 1991, Employee and the Subsidiary entered into the
First Amendment to the Employment Agreement, modifying certain terms and
conditions of Employee's employment with the Subsidiary; and

WHEREAS, effective July 1, 1998, Employee and the Subsidiary entered into the
Second Amendment to the Employment Agreement, modifying certain terms and
conditions of Employee's employment with the Subsidiary; and

WHEREAS, effective July 1, 1999, Employee and Subsidiary entered into the Third
Amendment to the Employment Agreement, modifying certain terms and conditions of
Employee's employment with the Subsidiary;

WHEREAS, the Subsidiary and Employee agree that it is in the best interest of
both parties to make certain further modifications to the terms and conditions
of Employee's employment with the Subsidiary.

NOW, THEREFORE, in consideration of the foregoing, the continued employment of
the Employee, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows :

1. Amendment to Section 3(h) of the Agreement . Pursuant to Section 15(d) of the
Agreement, Section 3(h), as subsequently amended, is hereby deleted in its
entirety and replaced by the following paragraphs:

(h) If a Change of Control occurs while the Employee is employed by the
Subsidiary during the term of this Agreement, or during any extension thereof,
and:

(1) the Employee's employment is terminated involuntarily, or voluntarily by the
Employee based on (i) material changes in the nature or scope of the Employee's
duties or employment, (ii) a reduction in compensation of the Employee made
without the Employee's consent, (iii) a relocation of the Subsidiary's executive
offices other than in compliance with the provisions of Section 2(b) of this
Agreement, or (iv) a good faith determination made by the Employee, upon
consultation with the Board of Directors of the Subsidiary, that it is necessary
or appropriate for the Employee to relocate from the Atlanta, Georgia
Metropolitan Area to enable Employee to perform his duties hereunder, the
Employee may, in his sole discretion, give written notice within thirty (30)
days after the date of termination of employment to the Secretary or Assistant
Secretary of the Subsidiary that he is exercising his rights hereunder and
requests payment of the amounts provided for under this Section 3(h); or

(2) the Employee 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
Secretary or Assistant Secretary of the Subsidiary, he may exercise his rights
hereunder and request payment of the amounts provided for under this Section
3(h) (the notice provided pursuant to Subsection 3(h)(1) or Subsection 3(h)(2)
is referred to as the "Notice of Exercise").

If the Employee gives a Notice of Exercise to receive the payments provided for
hereunder, the Subsidiary shall pay to or for the benefit of the Employee,
immediately upon the Subsidiary's receipt of the Notice of Exercise, a single
cash payment for damages suffered by the Employee by reason of the Change in
Control in an amount equal to three times the "Executive Payment." The term
"Executive Payment" as used herein shall mean the sum of all annual salary,
Bonuses and other benefits owing to Employee (as determined in accordance with
Section 280G(d)(4) of the Code) for the period from Employee's date of
termination hereunder through the remainder of the Initial Term of this
Agreement, as may be extended. In the event the period from the date of
Employee's termination hereunder through the remainder of the Initial Term of
this Agreement, as may be extended, is less than twelve (12) months, then the
Employee shall receive three times the "Executive Payment" computed as follows:
(i) the current annual salary and the value of all other benefits payable to the
Employee annualized for a twelve (12) month period, and (ii) an amount equal to
any Bonus that would have been paid for such period of less than twelve (12)
months based on an extrapolation of SEC's Pretax Adjusted Annual Income for the
full quarterly periods from the end of the most recent fiscal year to the date
of termination (all as determined in accordance with Section 280G(d)(4) of the
Code), provided, however, that if Employee's termination of employment hereunder
occurs in the first fiscal quarter of a fiscal year, then the Bonus shall be
based on SEC's Pretax Adjusted Annual Income for the immediately preceding
fiscal year.

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 Employee or his beneficiaries, but
have not been paid by SEC or the Subsidiary at the time the Employee 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 Employee
pursuant to the provisions of SEC's and the Subsidiary's Articles of
Incorporation, Bylaws or similar policies, plans or agreements relating to
indemnification of directors and officers of SEC and the Subsidiary under
certain circumstances. The Executive Payment shall not be reduced by any present
value calculations.

In the event the Employee dies during the term of this Agreement, the Employee's
legal representative shall be entitled to receive the Executive Payment,
provided that the Notice of Exercise has been or is given either by the Employee
or his legal representative, as the case may be.

2. Other Provisions of the Agreement. Capitalized terms shall have the same
meaning as defined in the Agreement, and except as otherwise provided herein,
all other provisions of the Agreement shall remain in full force and effect and
Employee's employment thereunder shall continue on the terms described therein
throughout the term of the Agreement, as amended hereby.

IN WITNESS WHEREOF, the parties have duly executed and delivered this Fourth
Amendment to Employment Agreement as of the day and year first indicated above.

SED INTERNATIONAL, INC.

 

 

By: /s/ Mark Diamond

Name: Mark Diamond

Title: President

 

 

/s/ Gerald Diamond (SEAL)

Gerald Diamond (Employee)