Prepared by MERRILL CORPORATION




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Exhibit 10.20  


 
 

EXECUTIVE EMPLOYMENT AGREEMENT    
  


    This EMPLOYMENT AGREEMENT ("Agreement") is executed as of the 1st day of July 2001, by and between MICHAEL SHABAZIAN, an individual ("Employee"), EN
POINTE TECHNOLOGIES, INC., a Delaware corporation ("Parent") and EN POINTE TECHNOLOGIES SALES, INC. (the "Subsidiary" and together with Parent, the "Company"), with reference to the
following facts: 


    A.
Employee is an individual possessing unique management and executive talents of value to the Company. 



    B.
The Company desires to continue the employment of Employee as the President and COO of the Parent and the President and CEO of the Subsidiary, and Employee desires to accept such
employment, all on the terms and conditions set forth in this Agreement. 


AGREEMENT  


    In consideration of the foregoing recitals and of the covenants and agreements herein, the parties agree as follows: 


    1.  Term.  The Company hereby engages Employee to perform the duties and render the services set forth in
Section 2 for a period commencing on July 1, 2001 (the "Effective Date") and ending on the first anniversary of such date, (the "Employment Period"), unless terminated earlier in
accordance with Section 4 hereof, and Employee hereby accepts said employment and agrees to perform such services during the Employment Period. 


    2.  Duties.  Performing executive work of major importance to the Company, with the primary focus being
the profitable management and profitable growth of the Company. During the Employment Period, Employee shall devote his business time and attention to performing his duties as an executive officer of
the Company. His duties shall include, but are not limited to: managing the overall direction, coordination and evaluation of all functions at the corporate level; formulating and administering
policies for the Company; developing long range goals and objectives for the Company; negotiation with established, third party and/or new vendors to achieve cost containment/reduction; and,
establishing or modifying operational systems to improve management and profitability. Additionally, he shall perform such duties as may reasonably be assigned to him by the Board of Directors of the
Company. Employee's primary office shall be at the Parent's headquarters location. 


    Parent
agrees to nominate Employee for election to the Parent's Board of Directors, as a member of the management slate at each annual meeting of stockholders held during the
Employment Period. Employee recognizes that the Parent's Board of Directors may be required under its fiduciary duty to Parent and to its stockholders to eliminate the position of President and COO of
Parent or to appoint a different person as such officer of Parent. The parties agree however, that any such elimination or replacement of Employee by Parent, other than pursuant to Section 6.1
or 6.2(a) or 6.3(b) hereof, shall constitute a termination of Employee's employment hereunder by the Company without cause. 


    3.  Change of Control.  Notwithstanding the terms of Section 2 above, if the Company or a
significant portion thereof is sold or merged or undergoes a change of control transaction (as defined in the form of Parent's Stock Option Agreement, a copy of which is attached hereto as  Exhibit A), Employee shall serve as an officer of the entity which succeeds to the business or a substantial portion of the business of the
Company, and in such case shall bear a suitable title and perform the duties and functions of such office of such publicly traded or privately held successor, consistent with those customarily
performed by an officer of such a unit, division or entity comparable to the then business 


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of the Company, unit, division or entity. Employee may be required to accept greater or lesser responsibility by any successor, and agrees to fully cooperate and assist in any resulting transition for
up to the remainder of the Employment Period; and any adjustments required of Employee to complete the transition to any successor, unit, division or entity, shall not violate this Agreement so long
as "good reason" does not arise under Sections 6.6(b)(ii) or (iii). This Agreement shall apply to the automatic modification in duties resulting from such transaction as set forth above,
however, notwithstanding the foregoing, Employee may exercise any "good reason" rights he may have under Section 6.6(b)(iv). 


    4.  Conflict of Interest.  Employee agrees that during the term of employment and for a period of
eighteen (18) months thereafter, employee will not, directly or indirectly, compete with the Company in any way, or usurp any Company opportunity in any way, nor will Employee act as an
officer, director, employee, consultant, stockholder, lender or agent of any entity which is engaged in any business in which the Company is now engaged or in which the Company becomes engaged during
the term of employment. The Company is now engaged in the business of reselling computer hardware, software and peripherals,
primarily to corporate and governmental accounts, and in the business of selling computer systems consulting, help and maintenance services, also primarily to corporate and governmental accounts. 


    5.  Compensation.  As compensation for his services to be performed hereunder, the Company shall provide
Employee with the following compensation and benefits: 



    5.1  Base Salary.  Employee's base salary shall be $450,000.00 per year, subject to an annual increase
(if any) in the sole discretion of the Board of Directors, payable in accordance with the Company's payroll practices as in effect from time to time, and subject to such withholding as is required by
law. 


    5.2  Quarterly Bonus.  Employee shall be entitled to the following quarterly bonus based on Company's
attainment of pre-tax net income during the following fiscal quarters: 



	Fiscal Quarter
	 	Pre-Tax Net Income Must Exceed
	 	Bonus

	4th Quarter of Fiscal Year 2001	 	$	500,000.00	 	$	50,000.00
	1st Quarter of Fiscal Year 2002	 	$	750,000.00	 	$	50,000.00
	2nd Quarter of Fiscal Year 2002	 	$	750,000.00	 	$	50,000.00
	3rd Quarter of Fiscal Year 2002	 	$	1,000,000.00	 	$	50,000.00
	 	Totals	 	$	3,000,000.00	 	$	200,000.00






If
cumulative pre-tax net income, inclusive of any bonus payments to anyone in the Company including the Employee, is $3,000,000 through the one-year period of the bonus
calculation, Employee receives the aggregate $200,000 bonus less any bonus previously received. Bonus is not prorated for less than 85 percent of any fiscal quarter of employment or
achievement, nor is it guaranteed but, if earned, shall be payable 60 days after the end of each such quarter, except for any bonus payable for the fourth quarter of fiscal 2001, which shall be
payable 90 days after the end of such quarter. Bonus applicable to subsequent quarters, if any, shall be in the sole discretion of the Board of Directors. If any bonus is declared or paid, it
shall be subject to such withholding as is required by law. "Pre-tax net income" as the term is used in this Section 5.2, shall mean pre-tax income from the core
business of the Company
including En Pointe Technologies Ventures, Inc.) and including any bonus payable under this Section 5.2 or to other Company executives, but excluding financial results from consolidation
with, or any revenue from, or investments in, firstsource corp., SupplyAccess, Inc., enRamp Inc., and other outside investments, and also excluding any "recaptures" resulting from any
settlements of litigation matters regarding which charges have been previously recorded, or any "recaptures" resulting from re-categorization of the Ontario facility, regarding which
charges have been previously recorded, all calculated in accordance with generally accepted accounting principals. 


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    5.3  Discretionary Bonus.  Subject to the sole discretion of the Board of Directors, the Employee may be
entitled to additional bonuses for accomplishment of selective business tasks (such as acquisitions). 


    5.4  Benefits.  



    (a)  Vacation.  Employee shall be entitled to four (4) weeks of paid vacation during each year of
the Employment Period consistent with the Company's then policy for senior executive employees. In the event Employee does not use such vacation, he shall receive, upon termination of the Employment
Period, vacation pay for all unused vacation calculated at the base salary rate set forth in Section 5.1 hereof. However, Employee shall endeavor to take vacation time in the year in which it
is allocated to him. 


    (b)  Business Expenses.  The Company shall reimburse Employee for all reasonable business expenses
incurred by Employee in the course of performing services for the Company and in compliance with procedures established from time to time by the Company 


    (c)  Monthly Living Expense.  Employee shall be reimbursed for normal reasonable monthly living expense,
inclusive of travel costs, not to exceed $50,000 annually. 


    (d)  Other Benefits.  Company shall provide Employee with such employment benefits as 401(k)
participation, automobile allowance, medical insurance and disability insurance, on the terms and to the extent generally provided by the Company to its senior executive employees. 401(k)
participation, medical insurance and disability insurance shall commence 90 days after the Effective Date. 


    (e)  Other Persons.  The parties understand that other officers and employees may be afforded payments
and benefits and employment agreements which differ from those of Employee in this Agreement; but Employee's compensation and benefits shall be governed solely by the terms of this Agreement, which
shall supersede all prior understandings or agreements between the parties concerning terms and benefits of employment of Employee with the Company. Other officers or employees shall not become
entitled to any benefits under this Agreement. 





    6.  Termination.  



    6.1  Termination by Reason of Death or Disability.  The Employment Period shall terminate upon the death
or permanent disability (as defined below) of Employee. 



    6.2  Termination by Company.  



    (a)
The Company may terminate the Employment Period for "cause" by written notice to Employee. 


    (b)
The Company may terminate the Employment Period for any other reason, with or without cause, by written notice to Employee. 




    6.3  Termination by Employee.  



    (a)
Employee may terminate the Employment Period for "good reason" at any time by written notice to the Company. 


    (b)
Employee may terminate the Employment Period for any other reason by written notice to the Company. 




    6.4  Severance Pay  . 



    (a)
In the event the Employment Period is terminated by the Company for any reason other than pursuant to Section 6.2(a) or by Employee for any reason other than pursuant to 




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Section 6.3(b) hereof or if the Employment Period is terminated because of the death or disability of Employee pursuant to Section 6.1, upon the effectiveness of any such termination,
the Company shall be obligated to pay to Employee (or his executors, administrators or assigns, as the case may be) all unpaid salary, benefits and bonuses (if any, with bonus being applicable only to
full quarters of employment as outlined in Section 5.2) accrued through the date of effectiveness of such termination and, in addition, a cash severance payment equal to six months' total base
salary, at the rates set forth herein, and such other benefits as may be required by law. 


    (b)
In the event the Employment Period is terminated by the Company pursuant to Section 6.2(a) hereof, the Employment Period is terminated by Employee pursuant to
Section 6.3(b) hereof, the Company shall have no obligation to pay any severance pay to Employee. The Company shall, however, be obligated to pay to Employee (or his executors, administrators
or assigns, as the case may be) all unpaid salary, benefits and bonuses (if any) accrued through the date of termination and shall provide such other benefits as may be required by law. 




    6.5  Termination Benefits.  In the event of termination of the Employment Period pursuant to
Section 6.2 or 6.3(a), the Company shall provide Employee such normal medical insurance as is equal to the level of coverage elected by the employee and in effect at time of termination of
Employment Period, and on the terms and to the extent generally provided by the Company to its executive employees of the level comparable to Employee, for a period of six (6) full calendar
months from the date of the termination of the Employment Period. 


    6.6  Certain Definitions.  For purposes of this Agreement: 



    (a)
The term "cause" shall mean those acts identified in Section 2924 of the California Labor Code, as that section exists on the date of this Agreement, to wit, any willful
breach of duty by the Employee in the course of his employment, or in case of his habitual neglect of his duty or continued incapacity to perform it. Notwithstanding the generality of the foregoing,
this definition shall not cause any derogation of any rights relating to "permanent disability" as defined in 6.6(c) below. 


    (b)
The term "good reason" shall mean the occurrence of one or more of the following events: (i) removal of Employee from the position and responsibilities as set forth under
Section 2 above; (ii) a material reduction by the Company in the kind or level of employee benefits to which Employee is entitled immediately prior to such reduction with the result that
Employee's overall benefit package is significantly reduced; (iii) the relocation of Employee to a facility or a location outside of California. 



    (c)
The term "permanent disability" shall mean Employee's incapacity due to physical or mental illness, which results in Employee being absent from the performance of his duties with
the Company on a full-time basis for a period of six (6) consecutive months. The existence or cessation of a physical or mental illness which renders Employee absent from the
performance of his duties on a full-time basis shall, if disputed by the Company or Employee, be conclusively determined by written opinions rendered by two qualified physicians, one
selected by Employee and one selected by the Company.
During the period of absence, but not beyond the expiration of the Employment Period, Employee shall be deemed to be on disability leave of absence, with his compensation paid in full. During the
period of such disability leave of absence, the Board of Directors may designate an interim officer with the same title and responsibilities of Employee on such terms as it deems proper. 





    7.  Employee Benefit Plans.  Any employee benefit plans in which Employee may participate pursuant to the
terms of this Agreement shall be governed solely by the terms of the underlying plan 


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documents and by applicable law, and nothing in this Agreement shall impair the Company's right to amend, modify, replace, and terminate any and all such plans in its sole discretion as provided by
law. This Agreement is for the sole benefit of Employee and the Company, and is not intended to create an employee benefit plan or to modify the terms of any of the Company's existing plans. 


    8.  Miscellaneous.  



    8.1  Arbitration/Governing Law.  To the fullest extent permitted by law, any dispute, claim or
controversy of any kind (including but not limited to tort, contract and statute) arising under, in connection with, or relating to this Agreement or Employee's employment, shall be resolved
exclusively by binding arbitration in Los Angeles County, California in accordance with the commercial rules of the American Arbitration Association then in effect. The Company and Employee agree to
waive any objection to personal jurisdiction or venue in any forum located in Los Angeles County, California. No claim, lawsuit or action of any kind may be filed by either party to this Agreement
except to compel arbitration or to enforce an arbitration award; arbitration is the exclusive dispute resolution mechanism between the parties hereto. Judgment may be entered on the arbitrator's award
in any court having Jurisdiction. The validity, interpretation, effect and enforcement of this Agreement shall be governed by the laws of the State of California. 



    8.2  Assignment.  This Agreement shall inure to the benefit of and shall be binding upon the successors
and the assigns of the Company, and all such successors and assigns shall specifically assume this Agreement. Since this Agreement is based upon the unique abilities of, and the Company's personal
confidence in Employee, Employee shall have no right to assign this Agreement or any of his rights hereunder without the prior written consent of the Company. 


    8.3  Severability.  If any provision of this Agreement shall be found invalid, such findings shall not
affect the validity of the other provisions hereof and the invalid provisions shall be deemed to have been severed herefrom. 



    8.4  Waiver of Breach.  The waiver by any party of the breach of any provision of this Agreement by the
other party or the failure of any party to exercise any right granted to it hereunder shall not operate or be construed as the waiver of any subsequent breach by such other party nor the waiver of the
right to exercise any such right. 


    8.5  Entire Agreement.  This instrument, together with the plans referred to in Section 5,
contains the entire agreement of the parties. It may not be changed orally but only by an agreement in writing signed by the parties. 



    8.6  Notices.  Any notice required or permitted to be given hereunder shall be in writing and may be
personally served or sent by United States mail, and shall be deemed to have been given when personally served or two days after having been deposited in the United States mail, registered or
certified mail, return receipt requested, with first-class postage prepaid and properly addressed as follows. For the purposes hereof, the addresses of the parties hereto (until notice of a change
thereof is given as provided in this Section 8.6) shall be as follows: 



	If to Employee:	 	Michael Shabazian

57 Checkema Path

PO Box 95J RR#3

Vineyard Haven, MA 02568
	

If to the Company:	
 	

En Pointe Technologies, Inc.

100 N. Sepulveda Blvd., 19th Floor

El Segundo, CA 90245

Attention: Vice President-HR





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    8.7  Headings.  The paragraph and subparagraph headings herein are for convenience only and shall not
affect the construction hereof. 


    8.8  Further Assurances.  Each of the parties hereto shall, from time to time, and without charge to the
other parties, take such additional actions and execute, deliver and file such additional instruments as may be reasonably required to give effect to the transactions contemplated hereby. 


    8.9  Attorneys' Fees.  In the event any party hereto commences arbitration or legal action in connection
with this Agreement, the prevailing party shall be entitled to its attorneys' fees, costs and expenses reasonably incurred in such action, and the amount thereof shall be included in any judgment or
award granted under Section 8.1. 



    8.10  Counterparts.  This Agreement may be executed simultaneously in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same instrument. 


    8.11  Separate Counsel.  The Company has been represented by counsel in the negotiation and execution of
this Agreement and has relied on such counsel with respect to any matter relating hereto. The Employee has been invited to have his own counsel review and negotiate this Agreement and Employee has
either obtained his own counsel or has elected not to obtain counsel. 




    IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the day and year first above written. 



	"EMPLOYEE"	 	"PARENT"
	

 	
 	

EN POINTE TECHNOLOGIES, INC.,

a Delaware corporation
	

 Michael Shabazian	
 	

By:	
 	

 Bob Din, Chief Executive Officer
	

 	
 	
"SUBSIDIARY"
	

 	
 	

EN POINTE TECHNOLOGIES SALES, INC.,

a Delaware corporation
	

 	
 	

By:	
 	

/s/ BOB DIN   
 Bob Din, Chief Executive Officer




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EXECUTIVE EMPLOYMENT AGREEMENT