EXHIBIT 10.41
[LETTERHEAD OF CREATIVE COMPUTERS]
January 21, 1999
Mr. S. Keating Rhoads
Dear Keating:
On behalf of Creative Computers, Inc. ("Creative," or the "Company"), it is
my pleasure to confirm our offer to you of the position of Executive Vice
President and Chief Operating Officer of Creative under the terms and conditions
outlined below. As we discussed, you will report directly to Creative's CEO.
Your responsibilities will be to act as Executive Vice President and Chief
Operating Officer of the Company. Your duties may change from time to time as
necessary. As we discussed, your position may involve and require travel and
time away from your residence.
You will start your new position as soon as possible and it will be
effective from the date of the signing of this letter. Your employment
relationship with Creative will remain "at will," and your employment may be
terminated by the Company without cause and without notice in the sole
discretion of the Company. If the Company terminates your employment (other than
for "cause" as defined below) you will be entitled to severance in the amount
equal to three months salary (as specified below), subject to your execution of
a separation agreement, satisfactory to the Company's Board of Directors,
containing customary mutual releases. For the purpose of this paragraph, "cause"
shall mean: (i) a material breach by you of your employment obligations with the
Company, which breach is not cured within fifteen (15) days after written notice
thereof from the Company; (ii) your commission of an act of personal dishonesty
or breach of fiduciary duty involving personal profit in connection with your
employment by the Company; (iii) your commission of an act involving willful
misconduct or gross negligence on your part in the conduct of your duties as an
officer of the Company; (iv) a material and willful violation of a federal or
state law or regulation by you applicable to the business of the Company; (v)
your conviction of, or pleading of nolo contendere to, a felony or a crime
involving moral turpitude; or (vi) a diagnosis of your addiction to illegal
drugs. No act, or failure to act, by you shall be considered
[LETTERHEAD OF CREATIVE COMPUTERS APPEARS HERE]
S. Keating Rhoads
January 21, 1999
Page Two
willful unless committed without good faith and without a reasonable belief that
the act or omission was in the Company's best interest.
You will be employed in the Company's Torrance, California facility and
accordingly need to commute to that facility.
As compensation for your services you will earn a base salary of $233,400
per annum ($4,488 per week) payable in accordance with Creative's standard
payroll practices. You will also be eligible to receive a bonus of up to $75,000
per annum in the sole discretion of Creative's Board of Directors or
Compensation Committee, based upon its evaluation of your performance each year.
Bonus performance goals will be set within the first ninety days of employment
and annually thereafter and may be changed by mutual agreement of the parties.
Your yearly salary may be increased or decreased, by mutual agreement.
In addition to the compensation set forth above, provided you are employed
by the company on the intended grant date described below, you will be granted
an option to purchase 150,000 shares of the Common Stock of Creative. The option
will be granted to you within ten days following the tax-free spin-off by
Creative to its stockholders of its remaining shares held in uBid, Inc. (the
"Distribution"), with a per share exercise price equal to the closing price of
Creative's stock on the Nasdaq National Market on the date of grant. Vesting of
your option will be at a rate of not less than 25% per year commencing on your
date of hire, and vesting of your option will be subject to the condition that
you are still employed by the Company. The option shall expire 90 days after you
are no longer with the Company. If the Distribution does not occur by 12/31/99,
Creative and you will negotiate in good faith on an alternative to the options
described in this paragraph, that does not create an accounting charge for
Creative.
You will be eligible for all benefits (excluding car allowance) generally
accorded a similarly situated executive officer of Creative associated with
employment as an executive at Creative Computers.
It is Company policy that all new employees pass a drug screen and
background check before employment. By signing this offer letter, you consent
for us to run the background check and agree to take the drug screen and have
the results released to the Company. Please call our Human Resources Department
at (310) 225-4072 to arrange for the drug test. We retain the right to terminate
this offer and agreement (or to terminate your employment if you begin before we
receive the results of the drug screen or background check) if either of these
screens is not acceptable.
[LETTERHEAD OF CREATIVE COMPUTERS]
S. Keating Rhoads
January 21, 1999
Page Three
In addition, you agree not to in any way jeopardize or expose Creative to
liability by using for Creative's benefit trade secrets of any former employer
or client. You further agree and represent that you have not entered into any
agreements with any former employer or client that would affect your ability to
give your full efforts to Creative, would expose Creative to any liability, or
would negatively impact Creative's ability to run its business and compete
effectively for personnel or for business on a go-forward basis. You further
agree to sign an employee proprietary information agreement. A copy of this
agreement is attached for your review and signature.
We look forward to you joining our organization. In order to confirm your
agreement with an acceptance of these terms, please sign a copy of this letter
and return it to us. This offer of employment is valid for three days from the
date of this letter. If there is any matter in this letter that you want to
discuss further, please do not hesitate to contact me.
Sincerely,
/s/ Frank F. Khulusi
Frank F. Khulusi
Chairman, President and Chief Executive Officer
Accepted and Agreed:
/s/ S. Keating Rhoads
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S. Keating Rhoads
January 21, 1999