<PAGE> 1
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
For the Fiscal Year Ended . . . . . . . . . . . . . . . . . . December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
For the Transition Period from ____________________ to ____________________
Commission File Number 0-11560
WESTERN MICRO TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
California 94-2414428
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
12900 Saratoga Avenue, Saratoga, CA 95070
(Address of principal executive offices) (Zip Code)
(408) 725-1660
(Registrant's telephone number,
including area code)
Securities registered under Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Without Par Value
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for at least the past 90 days.
YES [x] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy
<PAGE> 2
or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates
of the registrant was approximately $17,323,160 on February 28, 1995.
The aggregate number of outstanding shares of Common Stock, without
par value, of the registrant was 3,702,007 shares as of February 28, 1995.
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<PAGE> 3
The Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994, as set forth herein:
PART III
ITEM 11. EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid to the Company's Chief Executive Officer, each of the
Company's other executive officers and the Company's former Chief Executive
Officer (the "named executive officers"), for the fiscal years ended December
31, 1994, 1993 and 1992.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensa-
tion
Annual Compensation Awards
------------------------------------ ----------
Securities
Fiscal Other Annual Underlying All Other
Name and Principal Position Year Salary Bonus Compensation Options Compensation
- ----------------------------- ------ -------- ------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Ronald H. Mabry(1) 1994 $150,000 $75,000 $32,811(2) 300,000(3) -
Chairman of the Board,
Chief Executive Officer,
President and Secretary
P. Scott Munro 1994 $171,234 $75,550 100,000(3) $3,414(4)
President, Systems 1993 $146,853 $60,670 0 $4,199
Division 1992 $92,894 $54,001 35,000 $6,978
Nancy A. Angeli(5) 1994 $101,000 $4,857 50,000(3) $4,492(6)
Chief Financial Officer 1993 $91,000 $6,191 0 $1,450
and Sr. Vice President, 1992 $71,556 0 5,000 $33
Finance
John H. Ashbaugh(7) 1994 $86,140 $10,000 50,000 0
Senior Vice President -
Marketing
Marshall G. Cox(8) 1994 $278,219 0 0 $33,349(9)
Former Chief Executive 1993 $270,631 $25,000 -- 0 $36,415
Officer, President and 1992 $212,500 $15,000 -- 50,000 $11,544
Chief Operating Officer
</TABLE>
_____________
(1) Mr. Mabry was hired in April 1994.
(2) Includes costs of relocating Mr. Mabry from Southern California,
including a housing allowance, an allowance for weekly round trips to
Southern California and the costs associated with leasing and
maintaining a company car.
(3) Certain of the Company's executive officers received stock options in
1994, which options were subsequently repriced later in the year.
The rules of the Securities and Exchange Commission require that both
the original option
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<PAGE> 4
grant and the repriced option be reported as separate grants of stock
options. However, since the original options received in 1994 were
canceled at the time of repricing, the grantees were entitled only to
the amount of the shares covered by the repriced options.
(4) Consists of medical costs covered by the Company's medical
reimbursement plan.
(5) Effective February 16, 1995, Ms. Angeli resigned from the Company.
(6) Consists of medical costs covered by the Company's medical
reimbursement plan.
(7) Mr. Ashbaugh was hired in June 1994.
(8) Mr. Cox resigned as the Company's Chief Executive Officer, President
and Chief Operating Officer effective as of February 8, 1994.
Pursuant to the terms of his Employment Agreement, he is entitled to
$280,000 annually in the form of salary continuation. See
"Employment Agreements."
(9) (i) $32,140 for 1994 premium on a $1,000,000 split dollar life
insurance policy on Mr. Cox and (ii) $1,209 for medical costs covered
by the Company's executive medical reimbursement plan.
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<PAGE> 5
The following table sets forth certain information regarding options
granted during the fiscal year ended December 31, 1994 to the Company's named
executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Percent of Potential Realized Value at
Number of Total Assumed Annual Rates of Stock
Securities Options Price Appreciation for Option
Underlying Granted to Term
Options Employees in Exercise or Base Expiration
Granted Fiscal Year Price ($/Share) Date 5% 10%
------------- ------------ ---------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald H. Mabry 150,000(1)(2) 24.6% $8.50 4/4/2000- $658,148.21 $1,607,773.74
150,000(1) 24.6% $6.00 2003 $841,582.18 $2,377,225.37
6/10/2005-
2008
P. Scott Munro 25,000(1)(2) 4.1% $8.13 2/25/2000- $104,916.57 $256,298.05
50,000(1) 8.2% $6.00 2003 $280,527.39 $792,408.46
25,000(1) 4.1% $6.00 9/16/2005- $140,263.70 $396,204.23
2008
9/16/2005-
2008
Nancy A. Angeli 25,000(1)(2) 4.1% $8.13 2/25/2000- $104,916.57 $256,298.05
25,000(1) 4.1% $6.00 2003 $77,429.20 $189,149.85
6/10/2000-
2003
John H. Ashbaugh 50,000(1) 8.2% $6.00 9/16/2000- $154,858.40 $378,299.70
2003
Marshall G. Cox -- -- -- --
</TABLE>
_____________
(1) These options vest 25% over a four-year period.
(2) These options were repriced in October 1994. The rules of the
Securities and Exchange Commission require that both the original
option grant and the repriced option be reported as separate stock
option grants. However, since the original options received in 1994
were canceled at the time of repricing, the grantees were entitled
only to the amount of shares covered by the repriced options.
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<PAGE> 6
The following table shows the number of shares of Common Stock
represented by outstanding stock options held by each of the named executive
officers as of December 31, 1994. The Company's Common Stock price as at close
of business on December 30, 1994 was $6.38.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised Options In-the-Money
at FY-End Options at FY-End
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized Unexercisable Unexercisable
---- --------------- -------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Ronald H. Mabry 0 $0 0/150,000 $0/$57,000
P. Scott Munro 1,719 $11,818 11,718/90,000 $42,360/$78,888
Nancy A. Angeli 0 $0 5,731/27,500 $24,229/$19,825
John H. Ashbaugh 0 $0 0/50,000 $0/$19,000
Marshall G. Cox 0 $0 0/0 $0/0
</TABLE>
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<PAGE> 7
During the last fiscal year, the Company repriced stock options
previously awarded to the named executive officers. The following table
provides information concerning all options held by any executive officer that
have been repriced in the last 10 fiscal years.
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
Length of
Original Option
No. of Term
Securities Market Price Exercise Remaining
Underlying No. of of Stock Price at New at Date of
Options Options at Time of Time of Exercise Repricing
Name and Position Date Repriced Granted Repricing Repricing Price (in years)
----------------- -------- ---------- ------- ------------ --------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ronald H. Mabry 4/4/94 37,500 37,500 $6.00 $8.50 $6.00 5.8
Chief Executive Officer 4/4/94 37,500 37,500 $6.00 $8.50 $6.00 6.8
and President 4/4/94 37,500 37,500 $6.00 $8.50 $6.00 7.8
4/4/94 37,500 37,500 $6.00 $8.50 $6.00 8.8
Nancy A. Angeli 2/25/94 6,250 6,250 $6.00 $8.13 $6.00 5.7
Chief Financial Officer 2/25/94 6,250 6,250 $6.00 $8.13 $6.00 6.7
and Sr. Vice President, 2/25/94 6,250 6,250 $6.00 $8.13 $6.00 7.7
Finance 2/25/94 6,250 6,250 $6.00 $8.13 $6.00 8.7
11/10/89 1,250 1,250 $2.13 $5.13 $2.13 4.9
11/10/89 1,250 625 $2.13 $5.13 $2.13 5.9
11/10/89 1,250 625 $2.13 $5.13 $2.13 6.9
11/10/89 1,250 625 $2.13 $5.13 $2.13 7.9
11/23/88 500 500 $2.13 $6.50 $2.13 3.9
11/23/88 500 500 $2.13 $6.50 $2.13 4.9
11/23/88 500 250 $2.13 $6.50 $2.13 5.9
11/23/88 500 250 $2.13 $6.50 $2.13 6.9
2/12/88 675 675 $2.13 $3.25 $2.13 2.2
2/12/88 675 675 $2.13 $3.25 $2.13 3.2
2/12/88 675 675 $2.13 $3.25 $2.13 4.2
2/12/88 675 338 $2.13 $3.25 $2.13 5.2
12/24/87 2,000 2,000 $2.13 $3.25 $2.13 5.2
12/24/87 1,000 1,000 $2.13 $3.25 $2.13 6.2
12/24/87 1,000 1,000 $2.13 $3.25 $2.13 7.2
12/24/87 5,600 5,600 $2.13 $3.25 $2.13 0.8
3/2/87 5,000 4,000 $3.25 $6.00 $3.25 7.2
10/2/85 10,000 6,800 $3.25 $6.00 $3.25 1.4
P. Scott Munro 2/25/94 6,250 6,250 $6.00 $8.13 $6.00 5.4
President, Systems 2/25/94 6,250 6,250 $6.00 $8.13 $6.00 6.4
Division 2/25/94 6,250 6,250 $6.00 $8.13 $6.00 7.4
2/25/94 6,250 6,250 $6.00 $8.13 $6.00 8.4
8/24/90 2,500 1,250 $2.13 $3.38 $2.13 5.7
8/24/90 2,500 1,250 $2.13 $3.38 $2.13 6.7
8/24/90 2,500 1,250 $2.13 $3.38 $2.13 7.7
8/24/90 2,500 1,250 $2.13 $3.38 $2.13 8.7
11/10/89 1,250 1,250 $2.13 $5.13 $2.13 4.9
11/10/89 1,250 625 $2.13 $5.13 $2.13 5.9
11/10/89 1,250 625 $2.13 $5.13 $2.13 6.9
11/10/89 1,250 625 $2.13 $5.13 $2.13 7.9
</TABLE>
-7-
<PAGE> 8
<TABLE>
<CAPTION>
Length of
Original Option
No. of Term
Securities Market Price Exercise Remaining
Underlying No. of of Stock Price at New at Date of
Options Options at Time of Time of Exercise Repricing
Name and Position Date Repriced Granted Repricing Repricing Price (in years)
----------------- -------- ---------- ------- ------------ --------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
George R. McGurn 7/24/90 3,750 1,875 $2.13 $4.00 $2.13 5.6
Vice President, Sales 7/24/90 3,750 1,875 $2.13 $4.00 $2.13 6.6
and Marketing, Eastern 7/24/90 3,750 1,875 $2.13 $4.00 $2.13 7.6
United States 7/24/90 3,750 1,875 $2.13 $4.00 $2.13 8.6
11/10/89 2,500 2,500 $2.13 $5.13 $2.13 4.9
11/10/89 2,500 1,250 $2.13 $5.13 $2.13 5.9
11/10/89 2,500 1,250 $2.13 $5.13 $2.13 6.9
11/10/89 2,500 1,250 $2.13 $5.13 $2.13 7.9
2/12/88 1,250 1,250 $2.13 $3.25 $2.13 2.2
2/12/88 1,250 1,250 $2.13 $3.25 $2.13 3.2
2/12/88 1,250 1,250 $2.13 $3.25 $2.13 4.2
2/12/88 1,250 625 $2.13 $3.25 $2.13 5.2
12/24/87 20,000 20,000 $2.13 $3.25 $2.13 0.5
6/10/86 25,000 20,000 $3.25 $7.50 $3.25 3.5
Former Executive
Officers
- ----------------
Paul A. Araquistain 11/10/89 2,500 2,500 $2.13 $5.13 $2.13 4.9
Chief Financial Officer 11/10/89 2,500 1,250 $2.13 $5.13 $2.13 5.9
and Sr. Vice President 11/10/89 2,500 1,250 $2.13 $5.13 $2.13 6.9
11/10/89 2,500 1,250 $2.13 $5.13 $2.13 7.9
2/12/88 7,000 7,000 $2.13 $3.25 $2.13 2.2
2/12/88 7,000 7,000 $2.13 $3.25 $2.13 3.2
2/12/88 7,000 7,000 $2.13 $3.25 $2.13 4.2
2/12/88 7,000 3,500 $2.13 $3.25 $2.13 5.2
12/24/87 1,000 1,000 $2.13 $3.25 $2.13 2.6
12/24/87 1,000 1,000 $2.13 $3.25 $2.13 3.6
12/24/87 1,000 1,000 $2.13 $3.25 $2.13 4.6
12/24/87 1,000 5,000 $2.13 $3.25 $2.13 5.6
7/26/87 1,250 1,000 $3.25 $6.50 $3.25 5.6
7/26/87 1,250 1,000 $3.25 $6.50 $3.25 6.6
7/26/87 1,250 1,000 $3.25 $6.50 $3.25 7.6
7/26/87 1,250 1,000 $3.25 $6.50 $3.25 8.6
Reiny C. Giesecke 11/10/89 3,750 3,750 $2.13 $5.13 $2.13 4.9
Vice President 11/10/89 3,750 1,875 $2.13 $5.13 $2.13 5.9
11/10/89 3,750 1,875 $2.13 $5.13 $2.13 6.9
11/10/89 3,750 1,875 $2.13 $5.13 $2.13 7.9
2/12/88 4,000 4,000 $2.13 $3.25 $2.13 2.2
2/12/88 4,000 4,000 $2.13 $3.25 $2.13 3.2
2/12/88 4,000 4,000 $2.13 $3.25 $2.13 4.2
2/12/88 4,000 2,000 $2.13 $3.25 $2.13 5.2
12/24/87 24,000 24,000 $2.13 $3.25 $2.13 0.7
8/29/86 30,000 24,000 $3.25 $7.00 $3.25 3.3
Sherlene R. Pjesky 7/24/90 1,407 704 $2.13 $4.00 $2.13 5.6
Vice President, 7/24/90 1,406 704 $2.13 $4.00 $2.13 6.6
Operations 7/24/90 1,406 703 $2.13 $4.00 $2.13 7.6
7/24/90 1,406 702 $2.13 $4.00 $2.13 8.6
11/23/88 500 500 $2.13 $6.50 $2.13 3.9
11/23/88 500 500 $2.13 $6.50 $2.13 4.9
11/23/88 500 250 $2.13 $6.50 $2.13 5.9
11/23/88 500 250 $2.13 $6.50 $2.13 6.9
2/12/88 219 219 $2.13 $3.25 $2.13 2.2
2/12/88 219 219 $2.13 $3.25 $2.13 3.2
2/12/88 219 219 $2.13 $3.25 $2.13 4.2
2/12/88 218 218 $2.13 $3.25 $2.13 5.2
3/2/87 2,500 2,000 $3.25 $6.00 $3.25 7.2
10/2/85 2,500 1,500 $3.25 $6.00 $3.25 2.5
</TABLE>
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<PAGE> 9
<TABLE>
<CAPTION>
Length of
Original Option
No. of Term
Securities Market Price Exercise Remaining
Underlying No. of of Stock Price at New at Date of
Options Options at Time of Time of Exercise Repricing
Name and Position Date Repriced Granted Repricing Repricing Price (in years)
----------------- -------- ---------- ------- ------------ --------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Keith W. Steenland 11/10/89 2,500 2,500 $2.13 $5.13 $2.13 4.9
Executive Vice 11/10/89 2,500 1,250 $2.13 $5.13 $2.13 5.9
President, Distribution 11/10/89 2,500 1,250 $2.13 $5.13 $2.13 6.9
Group 11/10/89 2,500 1,250 $2.13 $5.13 $2.13 7.9
2/12/88 1,500 1,500 $2.13 $3.25 $2.13 2.2
2/12/88 1,500 1,500 $2.13 $3.25 $2.13 3.2
2/12/88 1,500 1,500 $2.13 $3.25 $2.13 4.2
2/12/88 1,500 750 $2.13 $3.25 $2.13 5.2
12/24/87 24,000 24,000 $2.13 $3.25 $2.13 0.7
8/29/86 30,000 24,000 $3.25 $7.00 $3.25 2.6
James R. Magri 7/24/90 3,750 1,875 $2.13 $4.00 $2.13 5.6
Vice President, Sales 7/24/90 3,750 1,875 $2.13 $4.00 $2.13 6.6
and Marketing, 7/24/90 3,750 1,875 $2.13 $4.00 $2.13 7.6
Northwest 7/24/90 3,750 1,875 $2.13 $4.00 $2.13 8.6
11/23/88 750 750 $2.13 $6.50 $2.13 3.9
11/23/88 750 750 $2.13 $6.50 $2.13 4.9
11/23/88 750 375 $2.13 $6.50 $2.13 5.9
11/23/88 750 375 $2.13 $6.50 $2.13 6.9
4/8/88 6,000 6,000 $2.13 $4.25 $2.13 3.3
4/8/88 3,000 3,000 $2.13 $4.25 $2.13 4.3
4/8/88 3,000 1,500 $2.13 $4.25 $2.13 5.3
Richard E. Hoff 11/10/89 2,500 2,500 $2.13 $5.13 $2.13 4.9
Vice President, 11/10/89 2,500 1,250 $2.13 $5.13 $2.13 5.9
Manufacturing Services 11/10/89 2,500 1,250 $2.13 $5.13 $2.13 6.9
11/10/89 2,500 1,250 $2.13 $5.13 $2.13 7.9
Michael J. Rohleder 3/2/87 6,000 4,800 $3.25 $6.00 $3.25 8.2
Vice President, 10/2/85 19,000 15,200 $3.25 $6.00 $3.25 2.5
Component Sales 10/2/85 6,000 4,800 $3.25 $6.00 $3.25 1.8
Raymond Woo 3/2/87 6,000 4,800 $3.25 $6.00 $3.25 8.2
Vice President, Systems 10/2/85 19,440 15,552 $3.25 $6.00 $3.25 2.5
Sales 10/2/85 6,660 5,328 $3.25 $6.00 $3.25 1.8
George M. Liu 11/10/89 2,500 2,500 $2.13 $5.13 $2.13 4.9
Vice President, 11/10/89 2,500 1,250 $2.13 $5.13 $2.13 5.9
Engineering and 11/10/89 2,500 1,250 $2.13 $5.13 $2.13 6.9
Technical Staff 11/10/89 2,500 1,250 $2.13 $5.13 $2.13 7.9
12/24/87 6,400 600 $2.13 $3.25 $2.13 5.5
12/24/87 4,800 600 $2.13 $3.25 $2.13 5.6
7/28/87 1,500 1,200 $3.25 $6.50 $3.25 5.6
7/28/87 1,500 1,200 $3.25 $6.50 $3.25 6.6
7/28/87 1,500 1,200 $3.25 $6.50 $3.25 7.6
7/28/87 1,500 1,200 $3.25 $6.50 $3.25 8.6
6/2/87 2,000 1,600 $3.25 $7.00 $3.25 5.4
6/2/87 2,000 1,600 $3.25 $7.00 $3.25 6.4
6/2/87 2,000 1,600 $3.25 $7.00 $3.25 7.4
6/2/87 2,000 1,600 $3.25 $7.00 $3.25 8.4
10/2/85 6,000 4,800 $3.25 $6.00 $3.25 1.8
Michael M. Rossen 3/2/87 10,000 8,000 $3.25 $6.00 $3.25 7.2
Vice President, Sales
Systems Division
Marshall G. Cox None
Chief Executive Repriced
Officer, President, and
Chief Operating Officer
</TABLE>
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<PAGE> 10
COMPENSATION OF DIRECTORS
Outside directors (i.e., those who are not employees of the Company)
receive an annual retainer of $20,000, plus $750 for each Board meeting
attended. The Company also pays for director's liability insurance.
At the 1994 Annual Meeting, however, the Company approved the adoption
of the Company's 1994 Stock Option Plan. Among many other benefits, the 1994
Stock Option Plan provides for the grant of an option of 10,000 shares of the
Company's Common Stock to certain directors who are not employees following
their initial election and at every fourth regular annual meeting thereafter
while they serve on the Board of Directors. Current non-employee directors will
receive an option for 10,000 shares at the annual meeting following the full
vesting of any option they currently hold if they are elected at such annual
meeting and at every fourth regular annual meeting thereafter at which they are
elected. The exercise price will be the fair market value of the shares on the
date of each respective grant.
CHANGE IN CONTROL
Certain stock options outstanding under the Company's Amended and
Restated Incentive and Non-Incentive Stock Option Plan, including options held
by the named executive officers, will become fully vested and exercisable if the
optionee's employment terminates within 12 months following a change in control
of the Company. A change in control means the occurrence of any of the
following events: (1) shareholder approval of a merger or consolidation of the
Company with any other corporation, which results in a change in 50% or more of
the total voting power of the Company, (2) shareholder approval of a plan of
complete liquidation of the Company or an agreement for the sale or disposition
of all or substantially all of the Company's assets, or (3) any person becomes
the beneficial owner or more than 50% of the Company's total outstanding
securities.
EMPLOYMENT AGREEMENTS
The Company entered into a two-year Employment Agreement with Ronald H.
Mabry dated April 1, 1994. Pursuant to the terms of the Agreement, Mr. Mabry
is paid a base salary of $200,000 per year and is eligible to receive a bonus of
up to $100,000 a year ($50,000 of which is guaranteed and the other $50,000 of
which is subject to the achievement of certain performance goals). If Mr. Mabry
is terminated without cause at any time during the term of the Agreement, he is
entitled to receive for a period of 12 months after his termination his base
salary, the employee benefits made available to the Company's executive officers
and salaried employees generally, and a bonus. The bonus is calculated at a rate
equal to that of the bonus received by Mr. Mabry during the six months preceding
his termination. For example, if in the six months prior to his termination Mr.
Mabry received $50,000 in bonuses, he would receive a $100,000 bonus during the
12-month period. In the event that Mr. Mabry's responsibilities are reduced
following a change in control and such reduction in responsibilities is not for
cause, any resignation of employment by Mr. Mabry as a consequence of such
reduction in responsibilities is treated as a termination of employment
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<PAGE> 11
without cause. The Company has also agreed to pay for relocation expenses and
for the use of an automobile. See Footnote (2) of the Summary Compensation
Table.
In March 1994, prior to his becoming an officer of the Company, the
Company loaned Mr. Mabry $50,000 as an inducement to Mr. Mabry to accept the
position of Chief Executive Officer and President. The promissory note in
connection with such loan has a five-year term and provides for no interest. The
note becomes immediately payable at the Company's option if Mr. Mabry resigns or
is terminated for cause. In addition, if he exercises any stock option granted
to him by the Company, sells any or all of such shares and recognizes a gain on
such sale, all such gain shall be used to pay any outstanding balance due on the
note.
The Company entered into a two-year Employment Agreement with P. Scott
Munro dated June 1, 1994. Pursuant to the terms of the Agreement, Mr. Munro is
paid a base salary of $175,000 per year and is eligible to receive a bonus of up
to $75,000 a year ($18,750 of which is guaranteed and the other $56,250 is
subject to the achievement of certain performance goals.) If, during the term
of the Agreement, Mr. Munro is terminated without cause, he is entitled to
continue to receive his base salary and employee benefits in effect immediately
prior to such termination, plus his bonus (payable at a rate equal to that of
the bonuses received during the six months prior to such termination) for a
period of 12 months following his termination. In the event that Mr. Munro's
responsibilities are reduced following a change in control and such reduction in
responsibilities is not for cause, any resignation of employment by Mr. Munro as
a consequence of such reduction in responsibilities is treated as a termination
of employment without cause.
The Company entered into a one-year Employment Agreement with John
Ashbaugh dated July 29, 1994. Pursuant to the terms of the Agreement, Mr.
Ashbaugh is paid a base salary of $160,000 per year and is eligible to receive a
bonus of up to $40,000 a year ($20,000 of which is guaranteed and the other
$20,000 is subject to the achievement of certain performance goals.) Mr.
Ashbaugh was also granted an option to purchase 50,000 shares, which vests at
the rate of 25% per year (subject to cliff-vesting in the first year) and is
entitled to a company car. If, during the term of the Agreement, Mr. Ashbaugh
is terminated without cause, he is entitled to continue to receive his base
salary and employee benefits in effect immediately prior to such termination,
plus his bonus (payable at a rate equal to that of the bonuses received during
the six months prior to such termination) for a period ending upon the earlier
of: (i) 12 months following his termination, (ii) the date he accepts employment
elsewhere, or (iii) the end of the term of this Agreement. In the event that
Mr. Ashbaugh's responsibilities are reduced following a change in control and
such reduction in responsibilities is not for cause, any resignation of
employment by Mr. Ashbaugh as a consequence of such reduction in
responsibilities is treated as a termination of employment without cause.
The Company entered into an Employment Agreement with Marshall G. Cox
as part of a Settlement Agreement dated April 26, 1993. The Settlement
Agreement was the result of a proxy dispute that began in March 1993 over the
composition of the Board of Directors. Effective February 8, 1994, Mr. Cox
resigned as the Company's President and Chief Executive Officer. However, the
Employment Agreement contains a provision which provides for the payment to Mr.
Cox of $280,000 annually in the form of salary continuation. He is also
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<PAGE> 12
entitled to continue to participate in all insurance or similar plans maintained
by the Company that do not require vesting. In addition, the Company agreed to
continue to pay premiums on Mr. Cox's life insurance policy and to pay for Mr.
Cox's use of an automobile. During the continuation period, Mr. Cox is, as a
condition to receiving payments and benefits, to perform consulting services on
an as-needed basis to an extent not exceeding 20 hours in any calendar month.
This continuation period commenced October 1, 1993 and will expire September 30,
1995, unless Mr. Cox's consulting services are terminated for cause. The costs
associated with this were expensed in the fiscal year ended December 31, 1993.
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<PAGE> 13
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
3. Exhibits
The exhibits listed under Item 14(c) are filed or incorporated by
reference herein.
(c) Exhibits
The Exhibits listed below are filed or incorporated by reference herein.
INDEX TO EXHIBITS
Number Description
- ------ -----------
3.1(a) Articles of Incorporation for Silicon Valley Services, Inc.
filed with the California Secretary of State on December 30,
1975, filed as Exhibit 3-A to the Company's Form S-1,
Registration No. 2-86846, is hereby incorporated by reference.
3.1(b) Certificate of Amendment of Articles of Incorporation of
Silicon Valley Services, Inc. (part of which changed the name
of the Company to Western Micro Technology, Inc.) filed with
the California Secretary of State on April 1, 1977, filed as
Exhibit 4.2 to the Company's Form S-8, Registration No.
33-60778, is hereby incorporated by reference.
3.1(c) Certificate of Amendment of Articles of Incorporation filed
with the California Secretary of State on August 30, 1983,
filed as Exhibit 4.3 to the Company's Form S-8, Registration
No. 33-60778, is hereby incorporated by reference.
3.1(d) Certificate of Amendment of Articles of Incorporation filed
with the California Secretary of State on April 5, 1988, filed
as Exhibit 3.1 to the Company's Form 10-K for the year ended
March 31, 1988, is hereby incorporated by reference.
3.2* Amended Bylaws dated June 15, 1994.
10.1 Amended and Restated Incentive and Non-Incentive Stock Option
Plan filed as Exhibit 10.1 with Form 10-K for the year ending
December 31, 1990 is hereby incorporated by reference.
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<PAGE> 14
Number Description
- ------ -----------
10.2 Lease for Saratoga, California facility filed as Exhibit 10.5
with Form 10-K for the year ending March 31, 1987 is hereby
incorporated by reference.
10.3 Amended lease for Saratoga, California facility dated January
21, 1992, filed as Exhibit 10.3 with Form 10-K for the year
ending December 31, 1991, is hereby incorporated by reference.
10.4 Master Lease Commitment dated September 25, 1989 and
Supplements 8.01 and 8.02 thereto, filed as Exhibit 10.5 with
Form 10-K for the year ending March 31, 1990 is hereby
incorporated by reference.
10.5 Lease for Campbell, California facility dated March 16, 1988
filed as Exhibit 10.13 with Form 10-K for the year ending
March 31, 1988 is hereby incorporated by reference.
10.6 Amended lease for Campbell, California facility dated January
30, 1992, filed as Exhibit 10.6 with Form 10-K for the year
ending December 31, 1991, is hereby incorporated by reference.
10.7 Credit Agreement with Security Pacific Equipment Leasing, Inc.
dated June 16, 1988 filed as Exhibit 10.14 with Form 10-K for
the year ending March 31, 1988 is hereby incorporated by
reference.
10.8 Equipment Financing Commitment with New England Capital
Corporation dated September 22, 1988 filed as Exhibit 10.16
with Form 10-K for the year ending March 31, 1989 is hereby
incorporated by reference.
10.9 Loan and security agreement with Coastfed Business Credit
Corporation of California dated January 29, 1992, filed as
Exhibit 10.9 with Form 10-K for the year ending December 31,
1991, is hereby incorporated by reference.
10.10 Equipment Financing Commitment with Bell Atlantic-TriCon dated
August 29, 1990 filed as Exhibit 10.10 with Form 10-K for the
period ending December 31, 1990 is hereby incorporated by
reference.
10.11 Equipment Financing Commitment with Pitney Bowes Credit
Corporation dated May 3, 1990 filed as Exhibit 10.11 with Form
10-K for the period ending December 31, 1990 is hereby
incorporated by reference.
10.12 Equipment Financing Commitment with Amplicon Financial,
Schedules OL-3606 dated October 31, 1989 and OL-4022 dated
February 8, 1990 filed as Exhibit 10.12 with Form 10-K for the
period ending December 31, 1990 is hereby incorporated by
reference.
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<PAGE> 15
Number Description
- ------ -----------
10.13 Equipment Financing Commitment with Northern Telecom dated
January 31, 1991, filed as Exhibit 10.13 with Form 10-K for
the period ending December 31, 1991, is hereby incorporated by
reference.
10.14 Lease for Durham, North Carolina facility dated February 25,
1991 for a three-year period from April 1, 1991 through March
31, 1994 is filed as Exhibit 10.15 with Form 10-K for the
period ending December 31, 1990 is hereby incorporated by
reference.
10.15 Lease for Kirkland, Washington facility dated January 3, 1992,
filed as Exhibit 10.15 with Form 10-K for the period ending
December 31, 1991, is hereby incorporated by reference.
10.16 Equipment Financing Commitment with Pitney Bowes dated June 6,
1991, filed as Exhibit 10.16 with Form 10-K for the period
ending December 31, 1991, is hereby incorporated by reference.
10.17 Equipment Financing Commitment with GE Capital dated April 30,
1991, filed as Exhibit 10.17 with Form 10-K for the period
ending December 31, 1991, is hereby incorporated by reference.
10.18 Lease for Irvine, California facility dated October 29, 1993,
filed as Exhibit 10.18 with Form 10-K for the period ending
December 31, 1993, is hereby incorporated by reference.
10.19 Lease for additional Campbell, California facility dated
November 19, 1993, filed as Exhibit 10.19 with Form 10-K for
the period ending December 31, 1993, is hereby incorporated by
reference.
10.20 Settlement Agreement dated as of April 26, 1993 by and among
the Company, Marshall G. Cox, Bernard T. Marren, Venture
Growth Associates, BW Partners, William H. Welling and Robert
G. Todd, Jr., including Marshall G. Cox's Employment Agreement
filed as Exhibit B thereto, filed as Exhibit 19.1 to the
Company's Current Report on Form 8-K filed with the Commission
on April 29, 1993, is hereby incorporated by reference.
10.21 Promissory Note from Ronald H. Mabry dated March 31, 1994,
filed as Exhibit 10.21 with Form 10-Q for the period ending
March 31, 1994, is hereby incorporated by reference.
10.22 Employment Agreement between the Company and Ronald H. Mabry
dated April 1, 1994, filed as Exhibit 10.21 with Form 10-Q for
the period ending March 31, 1994, is hereby incorporated by
reference.
-15-
<PAGE> 16
Number Description
- ------ -----------
10.23 Line of Credit Agreement between the Company and Coast
Business Credit and Silicon Valley Bank dated April 27, 1994,
filed as Exhibit 10.21 with Form 10-Q for the period ending
June 30, 1994, is hereby incorporated by reference.
10.24* Distributor Agreement between the Company and Toshiba America,
Inc. Electronic Components Business Sector dated May 1, 1987.
10.25* Distributor Agreement between the Company and Toshiba America,
Inc. Semiconductor Products Division dated November 3, 1987.
10.26* Non-Exclusive Distributor Agreement between the Company and
the Disk Products Division of Toshiba America, Inc. dated
February 15, 1989.
10.27* Business Partner (Redistributor) Agreement between the Company
and International Business Machines Corporation dated October
1, 1992.
10.28* Business Partner (Redistributor) Agreement between the Company
and International Business Machines Corporation dated February
28, 1994.
10.29 Employment Agreement between the Company and P. Scott Munro
dated June 1, 1994.
10.30 Employment Agreement between the Company and John Ashbaugh
dated July 29, 1994.
11.1* Statement regarding Computation of Income (Loss) Per Share.
21.0* Subsidiaries of the Registrant.
23.1* Consent of Coopers & Lybrand L.L.P.
__________
* Previously filed.
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<PAGE> 17
Pursuant to the requirements of the Securities Exchange of 1934, the Registrant
has duly caused this amendment to be signed on its behalf by the undersigned,
thereunto duly authorized.
WESTERN MICRO TECHNOLOGY, INC.
By /s/ James W. Dorst
-------------------------
James W. Dorst
Chief Financial Officer
Dated: May 1, 1995
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<PAGE> 1
EXHIBIT 10.29
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made by and between WESTERN MICRO
TECHNOLOGY, INC. a California corporation (the "Company"), and P. SCOTT MUNRO
(the "Executive"). This Agreement is effective June 1, 1994.
In consideration of the promises and of the mutual covenants set forth
herein and for other good and valuable consideration, the Company and the
Executive hereby agree as follows:
1. EMPLOYMENT.
The Company hereby employs the Executive, and the Executive
hereby accepts employment with the Company, for the term of this Agreement set
forth in Section 2, below, in the positions and with the duties and
responsibilities set forth in Section 3, below, and upon such other terms and
conditions as are hereinafter stated.
2. TERM.
The term of this Agreement shall be effective as of the date
set forth above and shall continue, subject to the terms and conditions set
forth in this Agreement, for a period of two years thereafter or such later
date as is agreed to, in writing, by Executive and the Board of Directors.
3. POSITION, RESPONSIBILITIES AND AUTHORITIES.
The Executive shall be employed as President - Systems Division
and Senior Vice President, Sales
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<PAGE> 2
Operations. The Executive shall be given such duties, responsibilities and
authority as are appropriate to his position. Throughout the term of this
Agreement, the Executive shall devote such business time and energies to the
business and affairs of the Company as needed to carry out his duties and
responsibilities hereunder, subject to the overall supervision and direction of
the board of directors of the Company (the "Board").
4. SALARY.
For services rendered by the Executive as the President -
Systems Division and Senior Vice President, Sales Operations, the Executive
shall be paid a base salary, payable twice monthly, an annualized rate of one
hundred and seventy five thousand dollars ($175,000) per year.
5. BONUS.
The Executive and the Board shall establish a performance
bonus program under which the Executive shall be eligible to receive an annual
bonus of up to $75,000 if the goals of the program are achieved. The terms of
such program shall be finalized within ninety days following the effective date
of this Agreement. With respect to the initial ninety days of this Agreement,
the Executive is guaranteed a bonus of $18,750 to be paid in installments of
$6,250.00 ($18,750 divided by three) each month after the effective date of
this Agreement. This $18,750 guaranteed bonus shall be applied against the
$75,000 bonus which
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<PAGE> 3
Executive is eligible to receive in his first year of employment.
6. EMPLOYEE BENEFIT PROGRAMS.
During the term of his employment, the Executive shall be
entitled to participate in all employee benefit programs of the Company now or
hereafter made available to the Company's executives or salaried employees
generally, as such programs may be in effect from time to time, including,
without limitation, pension and other retirement plans, profit sharing plans,
group life insurance, accidental death and dismemberment insurance,
hospitalization, surgical, major medical and dental coverage, sick leave
(including salary continuation arrangements), long-term disability, vacations,
holidays and other employee benefit programs sponsored by the Company.
7. CONSEQUENCES OF TERMINATION OF EMPLOYMENT.
7.1 FOR CAUSE.
The Company may terminate the Executive's employment for
"Cause." "Cause" shall mean: (i) the Executive is convicted of a felony, or
(ii) the Executive, in carrying out his duties, is guilty of (A) gross
negligence, or (B) gross misconduct resulting, in either case, in material harm
to the Company. In the event the Executive's employment is terminated for
Cause the Executive shall be entitled to any unpaid salary and bonus due him
pursuant to Sections 4 and 5 above through the date of
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<PAGE> 4
termination and shall be entitled to no other compensation from the Company.
7.2 WITHOUT CAUSE.
The Company may terminate the Executive's employment without
Cause. In the event of a termination without Cause, the Executive shall be
entitled to continue to receive his base salary and employee benefits
(described in paragraph 6) in effect immediately prior to such termination,
plus his bonus (payable at a rate equal to that of the bonuses received during
the six months prior to such termination), for a period of twelve (12) months
following his termination. For example, if in the six months prior to a
termination without Cause, Executive received $35,000 in bonuses, he would
receive $70,000 during the twelve month continuation period.
7.3 CHANGE IN RESPONSIBILITIES FOLLOWING A CHANGE IN CONTROL.
In the event the Executive's responsibilities are
substantially reduced following a "change in control" of the Company (as such
term is defined in the Option), and such reduction in responsibilities is not
for Cause, any resignation of employment by Executive as a consequence of such
reduction in responsibilities shall be treated as a termination of employment
by the Company without Cause under Section 7.2.
7.4 VOLUNTARY TERMINATION. In the event the Executive
terminates his employment of his own volition with
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<PAGE> 5
the Company, such termination shall have the same consequences as a termination
for Cause under Section 7.1.
7.5 TERMINATION ON EXPIRATION OF THE TERM OF THIS AGREEMENT.
A termination of the Executive's employment upon the expiration of this
Agreement shall not be deemed a breach of this Agreement and shall not
constitute a termination under any other section of this Section 7. Any
benefits to which the Executive may be entitled upon such a termination shall be
determined pursuant to this Agreement and the applicable plans, policies and
practices of the Company.
8. ASSIGNABILITY; BINDING NATURE.
This Agreement is binding upon the parties hereto and their
respective successors, heirs, and assigns. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
except that his rights to compensation and benefits hereunder, which rights
shall remain subject to the limitations of this Agreement, may be transferred
by will or operation of law. No rights or obligations of the Company under
this Agreement may be assigned or transferred except that such rights or
obligations may be assigned or transferred by operation of law in the event of
a merger or consolidation in which the Company is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the
Company provided that the assignee or transferee is the successor to all or
substantially all of the assets of the
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<PAGE> 6
Company and such assignee or transferee assumes the liabilities, obligations
and duties of the Company, as contained in this Agreement, either contractually
or as a matter of law. The Company further agrees that in the event of a
merger, consolidation, sale of assets, or liquidation as described in the
preceding sentence, it shall use its best efforts to cause such assignee or
transferee to assume the liabilities, obligations, and duties of the Company
hereunder.
9. GOVERNING LAW.
This Agreement shall be deemed a contract made under, and for
all purposes shall be construed in accordance with, the laws of California,
without reference to the principles of conflict of laws.
10. ARBITRATION.
Any controversy or claim arising out of or relating to this
Agreement, or any breach thereof, shall be settled solely and finally by
arbitration in accordance with the rules of the American Arbitration
Association then in effect in the State of California, and judgment upon such
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The arbitration shall be held in such place as the
parties may agree in accordance with the rules of the American Arbitration
Association. The arbitrator, in his discretion may provide that the cost of
the arbitration including, but not limited to, any reasonable legal fees or
other expenses incident thereto
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<PAGE> 7
incurred by the parties thereto shall be borne by the non-prevailing party in
such arbitration.
11. ENTIRE AGREEMENT.
Except as otherwise specifically provided in this Agreement,
this Agreement contains all the legally binding understandings and
representations between the parties pertaining to the subject matter of this
Agreement and supersedes all legally binding undertakings and agreements, if
any, whether oral or in writing, previously entered into between the parties.
12. AMENDMENT OR MODIFICATION; WAIVER.
No provision of this Agreement may be amended or waived unless
such amendment is agreed to by the Executive and the Board and is evidenced in
writing. Except as otherwise may be specifically provided in this Agreement,
no waiver by either party of any breach by the other party of any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of a similar or dissimilar provision or condition at the same or any
prior or subsequent time.
13. SEVERABILITY.
In the event that any provision or portion of this Agreement,
shall be determined to be invalid or unenforceable for any reason, the
remaining provisions or portions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
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<PAGE> 8
14. WITHHOLDING.
Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the Executive or his estate or
beneficiaries shall be subject to withholding of such amounts relating to taxes
as the Company may reasonably determine it is required to withhold pursuant to
any applicable laws or regulations. In lieu of withholding such amounts, in
whole or in part, the Company may, in its sole discretion, accept other
provision for payment of taxes as required by law, provided it is satisfied
that all requirements of law affecting its responsibilities to withhold such
taxes have been satisfied.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
WESTERN MICRO TECHNOLOGY, INC.:
By: /s/ RONALD H. MABRY
-----------------------------
Ronald H. Mabry
President and Chief
Executive Officer
P. SCOTT MUNRO
/s/ P. SCOTT MUNRO
---------------------------------
-8-
<PAGE> 1
EXHIBIT 10.30
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made by and between WESTERN MICRO
TECHNOLOGY, INC. a California corporation (the "Company"), and JOHN ASHBAUGH
(the "Executive"). This Agreement is effective as of the date set forth below.
W I T N E S S E T H:
Whereas the Company desires to employ the Executive and to
enter into an agreement embodying the terms of such employment (this
"Agreement"); and
Whereas the Executive desires to accept such employment and
to enter into this Agreement,
N o w, T h e r e f o r e, in consideration of the promises
and of the mutual covenants set forth herein and for other good and valuable
consideration, the Company and the Executive hereby agree as follows:
1. EMPLOYMENT.
The Company hereby employs the Executive, and the Executive
hereby accepts employment with the Company, for the term of this Agreement set
forth in Section 2, below, in the positions and with the duties and
responsibilities set forth in Section 3, below, and upon such other terms and
conditions as are hereinafter stated.
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<PAGE> 2
2. TERM.
The term of this Agreement shall be effective as of the date
set forth above and shall continue, subject to the terms and conditions set
forth in this Agreement, for a period of one year thereafter or such later date
as is agreed to, in writing, by Executive and the Board of Directors.
3. POSITION, RESPONSIBILITIES AND AUTHORITIES.
The Executive shall be employed as the Senior Vice-President
- -- Marketing and Value Add of the Company. The Executive shall be given such
duties, responsibilities and authority as are appropriate to his position.
Throughout the term of this Agreement, the Executive shall devote such business
time and energies to the business and affairs of the Company as needed to carry
out his duties and responsibilities hereunder, subject to the overall
supervision and direction of the Chief Executive Officer and President of the
Company.
4. SALARY.
For services rendered by the Executive, the Executive shall be
paid a base salary, payable at the end of each month of employment, at an
annualized rate of one hundred and sixty thousand dollars ($160,000) per year.
5. RELOCATION EXPENSES; BONUS; OPTIONS; CAR.
5.1 RELOCATION EXPENSES. The Executive shall be entitled to
be reimbursed for his reasonable costs of
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<PAGE> 3
relocation incurred in order to work for the Company approved in advance by the
Chief Executive Officer.
5.2 ANNUAL BONUS OPPORTUNITY. The Executive and the Board
shall establish a performance bonus program under which the Executive shall
receive an annual bonus of $40,000 if the goals of the program are achieved.
The terms of such program shall be finalized within six months following the
effective date of this Agreement. With respect to the initial six months of
this Agreement, the Executive is guaranteed a bonus of $20,000 to be paid in
installments of $3,333.33 ($20,000 divided by six) each month after the
effective date of this Agreement. This $20,000 guaranteed bonus shall be
applied against the $40,000 bonus which Executive is eligible to receive in his
first year of employment.
5.3 OPTIONS. The Executive shall, subject to execution of the
Incentive Stock Option Agreement in the form attached hereto as Exhibit A (the
"Option"), be granted an option to purchase 50,000 shares of the Company's
stock which option shall vest at the rate of 25% per year (subject to
cliff-vesting in the first year).
5.4 CAR. The Company shall lease a car for Executive,
suitable to Executive's position and shall reimburse Executive for the
reasonable expenses of maintaining the car. The monthly expenses for leasing
said vehicle shall not exceed $ 700, without the consent of the Chief Executive
Officer.
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<PAGE> 4
6. EMPLOYEE BENEFIT PROGRAMS.
During the term of his employment, the Executive shall be
entitled to participate in all employee benefit programs of the Company now or
hereafter made available to the Company's executives or salaried employees
generally, as such programs may be in effect from time to time, including,
without limitation, pension and other retirement plans, profit sharing plans,
group life insurance, accidental death and dismemberment insurance,
hospitalization, surgical, major medical and dental coverage, sick leave
(including salary continuation arrangements), long-term disability, vacations,
holidays and other employee benefit programs sponsored by the Company.
7. CONSEQUENCES OF TERMINATION OF EMPLOYMENT.
7.1 FOR CAUSE.
The Company may terminate the Executive's employment for
"Cause." "Cause" shall mean: (i) the Executive is convicted of a felony, or
(ii) the Executive, in carrying out his duties, is guilty of (A) negligence, or
(B) intentional misconduct or (C) failure to follow the instructions of the
Chief Executive Officer or company policies (iii) Executive materially breaches
this Agreement or fails to effectively carry out his duties as an officer of
the Company. In the event the Executive's employment is terminated for Cause
the Executive shall be entitled to any unpaid salary and bonus due him pursuant
to Sections 4 and 5
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<PAGE> 5
above through the date of termination and shall be entitled to no other
compensation from the Company.
7.2 WITHOUT CAUSE.
The Company may terminate the Executive's employment without
Cause. In the event of a termination without Cause, the Executive shall be
entitled to continue to receive his base salary and employee benefits
(described in paragraph 6) in effect immediately prior to such termination,
plus his bonus (payable at a rate equal to that of the bonuses received during
the six months prior to such termination), for a period ending upon the earlier
of : (i) twelve (12) months following his termination (ii) the date Executive
accepts employment elsewhere, or (iii) the end of the term of this Agreement.
For example, if in the six months prior to a termination without Cause,
Executive received $20,000 in bonuses, he would receive $40,000 during the
twelve month continuation period. If the termination without Cause occurs
within Executive's first six months of employment, Executive shall be entitled
to $40,000 in bonuses during the continuation period.
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<PAGE> 6
7.3 CHANGE IN RESPONSIBILITIES FOLLOWING A CHANGE IN CONTROL.
In the event the Executive's responsibilities are
substantially reduced following a "change in control" of the Company (as such
term is defined in the Option), and such reduction in responsibilities is not
for Cause, any resignation of employment by Executive as a consequence of such
reduction in responsibilities shall be treated as a termination of employment
by the Company without Cause under Section 7.2.
7.4 VOLUNTARY TERMINATION. In the event the Executive
terminates his employment of his own volition with the Company, such
termination shall have the same consequences as a termination for Cause under
Section 7.1.
7.5 TERMINATION ON EXPIRATION OF THE TERM OF THIS AGREEMENT.
A termination of the Executive's employment upon the expiration of this
Agreement shall not be deemed a breach of this Agreement and shall not
constitute a termination under any other section of this Section 7. Any
benefits to which the Executive may be entitled upon such a termination shall be
determined pursuant to this Agreement and the applicable plans, policies and
practices of the Company.
8. ASSIGNABILITY; BINDING NATURE.
This Agreement is binding upon the parties hereto and their
respective successors, heirs, and assigns. No rights or obligations of the
Executive under this Agreement
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<PAGE> 7
may be assigned or transferred by the Executive except that his rights to
compensation and benefits hereunder, which rights shall remain subject to the
limitations of this Agreement, may be transferred by will or operation of law.
No rights or obligations of the Company under this Agreement may be assigned or
transferred except that such rights or obligations may be assigned or
transferred by operation of law in the event of a merger or consolidation in
which the Company is not the continuing entity, or the sale or liquidation of
all or substantially all of the assets of the Company provided that the
assignee or transferee is the successor to all or substantially all of the
assets of the Company and such assignee or transferee assumes the liabilities,
obligations and duties of the Company, as contained in this Agreement, either
contractually or as a matter of law. The Company further agrees that in the
event of a merger, consolidation, sale of assets, or liquidation as described
in the preceding sentence, it shall use its best efforts to cause such assignee
or transferee to assume the liabilities, obligations, and duties of the Company
hereunder.
9. GOVERNING LAW.
This Agreement shall be deemed a contract made under, and for
all purposes shall be construed in accordance with, the laws of California,
without reference to the principles of conflict of laws.
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<PAGE> 8
10. ARBITRATION.
Any controversy or claim arising out of or relating to this
Agreement, or any breach thereof, shall be settled solely and finally by
arbitration in accordance with the rules of the American Arbitration
Association then in effect in the State of California, and judgment upon such
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The arbitration shall be held in such place as the
parties may agree in accordance with the rules of the American Arbitration
Association. The arbitrator, in his discretion may provide that the cost of
the arbitration including, but not limited to, any reasonable legal fees or
other expenses incident thereto incurred by the parties thereto shall be borne
by the non-prevailing party in such arbitration.
11. ENTIRE AGREEMENT.
Except as otherwise specifically provided in this Agreement,
this Agreement contains all the legally binding understandings and
representations between the parties pertaining to the subject matter of this
Agreement and supersedes all legally binding undertakings and agreements, if
any, whether oral or in writing, previously entered into between the parties.
12. AMENDMENT OR MODIFICATION; WAIVER.
No provision of this Agreement may be amended or waived unless
such amendment is agreed to by the Executive and the Board and is evidenced in
writing. Except as
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<PAGE> 9
otherwise may be specifically provided in this Agreement, no waiver by either
party of any breach by the other party of any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar provision or condition at the same or any prior or
subsequent time.
13. SEVERABILITY.
In the event that any provision or portion of this Agreement,
shall be determined to be invalid or unenforceable for any reason, the
remaining provisions or portions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
14. WITHHOLDING.
Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the Executive or his estate or
beneficiaries shall be subject to withholding of such amounts relating to taxes
as the Company may reasonably determine it is required to withhold pursuant to
any applicable laws or regulations. In lieu of withholding such amounts, in
whole or in part, the Company may, in its sole discretion, accept other
provision for payment of taxes as required by law, provided it is satisfied
that all requirements of law affecting its responsibilities to withhold such
taxes have been satisfied.
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<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the ___ day of June, 1994.
WESTERN MICRO TECHNOLOGY, INC.:
Dated: July 29, 1994 By: /s/ RONALD H. MABRY
---------------------------
Ronald H. Mabry,
Chief Executive Officer
JOHN ASHBAUGH:
/s/ JOHN ASHBAUGH
-------------------------------
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