Item 1.01
Entry into a Material Definitive Agreement.
As previously announced, on November 6, 2016, the compensation committee of the board of directors of Datalink Corporation, a Minnesota corporation (
Datalink
), approved retention bonus arrangements with each of Paul F. Lidsky, Datalinks President and Chief Executive Officer, and Denise M. Westenfield, Chief Accounting Officer, Vice President, Corporate Controller and Assistant Secretary.
In order to evidence these arrangements, on or about November 16, 2016, Datalink entered into (i) a retention bonus agreement (the
Lidsky Agreement
) with Mr. Lidsky and (ii) a retention bonus agreement (the
Westenfield Agreement
) with Ms. Westenfield.
The Lidsky Agreement provides that, upon and subject to the closing of the previously announced merger (the
Merger
) of Reef Acquisition Co., a Minnesota corporation and a wholly owned subsidiary of Insight Enterprises, Inc., a Delaware corporation (
Insight
), with and into Datalink, with Datalink as the surviving corporation and a wholly owned subsidiary of Insight, Mr. Lidsky will be engaged by Datalink as a consultant for a period of 60 days after the date of the Merger (the
Lidsky Retention Date
). If Mr. Lidskys consulting relationship continues through the Lidsky Retention Date, then Mr. Lidsky will be eligible to receive a retention bonus payment in the amount of $200,000. If Mr. Lidskys consulting relationship is terminated by Datalink, Insight or any of their related subsidiaries without Cause (as defined in the Lidsky Agreement) before the Lidsky Retention Date, then Mr. Lidsky will be eligible to receive a consulting separation payment in the amount of $200,000, but will not be eligible to receive his retention bonus. Mr. Lidskys retention bonus or consulting separation payment, as applicable, is payable in a single lump sum cash payment no later than 65 days following the Lidsky Retention Date. Upon and subject to the closing of the Merger, Mr. Lidskys employment with Datalink will terminate effective as of the closing date of the Merger. As a result of such termination, Mr. Lidsky will be eligible to receive the existing severance benefits outlined in Mr. Lidskys employment agreement with Datalink, dated July 20, 2009 (as amended on January 17, 2011), which will be payable in accordance with the terms of such employment agreement. In order to receive his retention bonus or his consulting separation payment, Mr. Lidsky must not revoke the release set forth in the Lidsky Agreement.
If his employment is terminated either (a) by Mr. Lidsky for any reason or for no reason, with or without notice, or (b) by Datalink, Insight or any of their related subsidiaries, in accordance with its general employee discipline and termination policies, for Cause, then Mr. Lidsky will not be eligible for his retention bonus or his consulting separation payment.
The Westenfield Agreement provides that, upon and subject to the closing of the Merger, Ms. Westenfield will continue her employment through the fifth month anniversary of the closing of the Merger (the
Westenfield Retention Date
). Contingent upon her continued employment through the Westenfield Retention Date, Ms. Westenfield will be eligible to receive (i) a retention bonus payment in the amount of $90,000, and (ii) a severance payment in the amount of $90,000. Ms. Westenfields retention bonus is payable in a single lump sum cash payment no later than 65 days following the Westenfield Retention Date, and her severance payment is payable in a single lump sum cash payment no later than 65 days after her last day of employment with Insight, Datalink or any of their related subsidiaries. In order to receive her retention bonus and her severance payment, Ms. Westenfield must not revoke the release set forth in the Westenfield Agreement.
In the event that her employment is involuntarily terminated by Insight, Datalink or the surviving company prior to the Westenfield Retention Date, Ms. Westenfield will be entitled to receive her retention bonus and her severance payment. If her employment is terminated either (a) by Ms. Westenfield for any reason or for no reason, with or without notice, or (b) by Datalink, Insight or any of their related subsidiaries, in accordance with its general employee discipline and termination policies, for Cause (as defined in the Westenfield Agreement), then Ms. Westenfield will not be eligible for her retention bonus or her severance payment.
The foregoing descriptions of the Lidsky Agreement and the Westenfield Agreement are qualified in their entirety by reference to the full text of the Lidsky Agreement and the Westenfield Agreement, copies of which are filed as Exhibit 10.1 and Exhibit 10.2 hereto, respectively, and the terms of which are incorporated by reference herein.