8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): December 9, 2009

	SED International Holdings, Inc.
(Exact name of Registrant as specified in its charter)

Georgia	0-16345	22-2715444
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4916 North Royal Atlanta Drive, Tucker, Georgia	30084
(Address Of Principal Executive Office)	(Zip Code)

Registrant’s telephone number, including area code: (770) 491-8962

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02:  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

          On December 9, 2009, Jonathan Elster, President and COO of SED International Holdings, Inc. (the “Company”), was appointed Chief Executive Officer to succeed Jean A. Diamond, who had retired. Ms. Diamond remains with the Company as a director. A copy of the press release announcing Ms. Diamond’s retirement is attached as Exhibit 99.1 to this report.

          Jonathan Elster, age 37, has been with the Company for the last 14 years and has served as our President and Chief Operating Officer since June 2, 2009. Mr. Elster began his career with the Company as a sales representative in 1995. He has served as a Sales Manager from 1997 to 1999 and as Vice President-Sales from 1999 to 2000. In 2000, Mr. Elster was promoted to Senior Vice-President of Sales and Marketing and in 2004, Executive Vice President. He had been responsible for sales and marketing operations of the Company. Jonathan Elster is Jean Diamond’s son-in-law. Mr. Elster has not had any direct or indirect interest in any transactions with the Company that requires disclosure under Item 404(a) of Regulation S-K.

          In connection with her retirement, Ms. Diamond entered into a Settlement Agreement and Amendment to Employment Agreement with the Company (the “Settlement Agreement”) pursuant to which the Company agreed to: (i) provide her with continued use of her office and part-time use of its administrative staff and (ii) pay her, on June 21, 2010, $1.6 million as called for by her pre-existing employment agreement and Ms. Diamond agreed to: (i) provide assistance and consult with the new CEO until June 21, 2010 as requested by Company; (ii) amend her employment agreement to put into effect the changes necessitated by the Settlement Agreement and (iii) continue the terms and provisions of her employment agreement not changed by the Settlement Agreement including, the covenants not to compete, solicit customers or employees, or disclose confidential or proprietary information.

          The foregoing description of the Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement filed as Exhibit 10.1 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits

Exhibit No.		Description
10.1	Settlement Agreement and Amendment to Employment Agreement dated as of December 9, 2009.
99.1	Press release dated December 14, 2009.

* * * * * *

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SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SED International Holdings, Inc.
Dated: December 14, 2009	By:	/s/ Jonathan Elster
		Jonathan Elster,
		Chief Executive Officer

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EX-10.1

SETTLEMENT AGREEMENT AND AMENDMENT TO EMPLOYMENT AGREEMENT

             This Settlement Agreement and Amendment to Employment Agreement (the “Agreement”) is entered into as of December 9, 2009 between SED INTERNATIONAL HOLDINGS, INC., a Georgia corporation (“SED”) and Jean Diamond, an individual resident of the State of Georgia (the “Employee”). Defined terms used herein and not otherwise defined have the meanings ascribed to them in the Amended and Restated Employment Agreement, dated January 15, 2008, between SED and the Employee (the “Employment Agreement”).

             WHEREAS, SED and Employee are parties to the Employment Agreement which provides for the terms of Employee’s employment with SED; and

             WHEREAS, Employee desires to resign and, in connection with such resignation, to amend the Employment Agreement; and

             WHEREAS, SED and Employee wish to settle, compromise, and resolve any and all disputes relating to Employee’s resignation and her employment with SED and to amend the Employment Agreement correspondingly.

NOW, THEREFORE, in consideration of the above recitals and of the promises, agreements and conditions hereof, and further good and valuable consideration the receipt and legal sufficiency of which are hereby acknowledged, Employee and SED agree as follows:

1.          Employee hereby resigns as Chief Executive Officer of SED (including any applicable subsidiaries of SED) effective on December 9, 2009 (the “Effective Date”). However, Employee will provide services to SED as a senior management consultant until June 21, 2010 to assist and consult with Jonathan Elster, and/or such other person who is designated by the Board, who assumes the responsibilities of Chief Executive Officer of SED (the “New CEO”), all as requested by the Board of Directors of SED (the “Board”). During the period from December 9, 2009 to June 21, 2010, the New CEO will be responsible for and have full authority relating to SED’s operational decisions. SED and Employee anticipate that Employee’s non-director services performed for SED pursuant to this paragraph, if any, will be in an amount that is less than twenty percent of the average time that Employee devoted to performing non-director services for SED during the thirty-six months preceding the Effective Date.

2.          Employee shall have the use of her current office from the Effective Date through and including June 21, 2010. On a part-time basis (a maximum of 10 hours weekly), Employee shall be entitled to utilize the secretarial and administrative services of Barbara Gay from the Effective Date through June 21, 2010, subject to Ms. Gay’s other corporate duties. If Ms. Gay departs SED during that time period, Employee shall be entitled to utilize the secretarial and administrative services of another suitable SED employee. SED will not deny to Employee the use of her office or Barbara Gay until June 21, 2010 for any reason except if the Board and the New CEO determine that Employee is disrupting the day-to-day operations of SED. Notwithstanding anything to the contrary herein, SED’s obligations under this paragraph 2 shall be subject to the Employee’s continued and binding obligation under the Agreement and General Release, dated an even date, attached as Exhibit B hereto (the “Agreement and General Release”).

3.          On June 21, 2010, SED shall pay to Employee the lump sum payment required by Section 4(c) of the Employment Agreement in the amount of U.S. One Million Six Hundred Thousand dollars and no cents ($1,600,000.00)(the “Termination Amount”), subject to a reduction in the amount of U.S. Sixty Four Thousand Eight Hundred dollars ($64,800.00) pursuant to paragraph 5 of this Agreement. SED may not avoid paying the Termination Amount to Employee for “Cause” as that term is defined in the Employment Agreement, or for any other reason. The Termination Amount is not subject to forfeiture, and Employee shall not have any obligation to re-pay any portion of the Termination Amount to SED with respect to director’s compensation, in whatever form received, earned by her subsequent to the Effective Date.

4.          Employee will remain a member of the Board through her current term which expires at the annual

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meeting of stockholders for the fiscal year ending June 30, 2011. Beginning on the Effective Date, SED shall pay a director’s fee to the Employee in a pro-rated amount equivalent to the annual fees and benefits that SED provides to its other outside directors. For subsequent years that Employee remains on the Board, SED shall pay a director’s fee to Employee that is equal to the annual fees and benefits that SED pays to its other outside directors.

5.          SED shall allow Employee to have continued use of the 2008 Mercedes-Benz S550 automobile provided to Employee pursuant to Section 3(c) of the Employment Agreement until such time that it transfers title to such vehicle, on June 21, 2010, to Employee. The Kelly Bluebook value of such vehicle as of the Effective Date, using the private party pricing report and assuming that the vehicle is in “good condition,” as indicated in the latest edition of the Kelly Bluebook prior to such date, shall be deducted from the Termination Amount when paid in accordance with paragraph 3 of this Agreement.

6.          SED shall continue to lease the building located at 4916 North Royal Atlanta Drive, Tucker, Georgia 30084 through its current term expiring on September 30, 2011 pursuant to the terms of the existing lease.

7.          On June 21, 2010, SED shall pay all legal fees in connection with the preparation of this Agreement, the Agreement and General Release and related documents including, a fee to Caldwell & Watson, LLP, up to a maximum of $15,000.

8.          Employee shall take any and all actions necessary or requested by SED to convey her shares of SED International de Colombia Ltda and Intermaco S.R.L. without receiving any additional consideration.

9.          Except as may be required by law, neither Employee nor SED, including its officers, directors, affiliated entities, successors or assigns, shall make any untruthful, derogatory, disparaging or defamatory statement about the other party, or about SED’s products or services, to any third party; provided, however, that SED shall neither be prohibited from disclosing the fact of Employee’s resignation so long as such disclosure is factual and not materially beyond, or materially inconsistent with, the disclosure in the press release, in the form attached hereto as Exhibit A, nor shall SED be prohibited from providing factually accurate information to its employees that in good faith is necessary for the proper conduct of operations. On or after December 11, 2009, SED will issue a press release in the form attached hereto as Exhibit A.

10.          (a) Subject to the terms of this Agreement, SED, on behalf of itself and on behalf of its agents, officers, directors, employees, shareholders, successors, assigns, and other legal representatives, releases and forever discharges Employee (individually and in any other capacity), as well as her agents, attorneys, assigns, and other legal representatives (collectively the “SED Releasees”), from any and all debts, claims, demands, liabilities, assessments, actions or causes of action, whether in law or in equity, whether direct or indirect, whether presently known or unknown, which SED had, now has, may have had, or may claim to have against the SED Releasees, prior to and as of the Effective Date of this Agreement.

               (b) Subject to the terms of this Agreement, Employee, on behalf of herself and on behalf of her agents, assigns, and other legal representatives, releases and forever discharges SED, as well as its directors, officers, affiliated entities, agents, attorneys, successors, assigns, and other legal representatives (collectively the “Employee Releasees”), from any and all debts, claims, demands, liabilities, assessments, actions or causes of action, whether in law or in equity, whether direct or indirect, whether presently known or unknown, which Employee had, now has, may have had, or may claim to have against the Employee Releasees, prior to and as of the Effective Date of this Agreement.

11.          Neither SED, nor any of its officers or directors, nor Employee shall (a) be plaintiffs in any class or derivative actions against the other party, or pay for or otherwise support the bringing of any such litigation arising out of any action, inaction, or event occurring on or before the Effective Date, or (b) cause the U.S. Securities & Exchange Commission or other administrative agency to take any action against the Employee, SED, or any of its other directors or affiliates arising out of any action, inaction, or event occurring on or before the Effective Date.

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12.          This Agreement shall be governed in all respects, including as to validity, interpretation and effect, by the laws of the State of Georgia.

13.          Except as amended by this Agreement, the terms and provisions of the Employment Agreement shall continue in full force and effect.

14.          On the Effective Date, Employee shall deliver to SED an executed copy of the Agreement and General Release.

15.          This Agreement contains a release of claims for damages which may not be known by the parties. Each party hereto is represented by counsel, has fully read and understands this Agreement, and consents to it. By executing this Agreement, each party acknowledges that it fully understands and voluntarily accepts the benefits, risks, and obligations of this Agreement and waives any future claim based on an assertion that it has not fully read or completely understood this Agreement.

               IN WITNESS WHEREOF, the Agreement has been executed by the parties on the dates set forth below.

Dated: as of December 9, 2009	SED INTERNATIONAL HOLDINGS, INC.
	By:	/s/ Jonathan Elster
		Jonathan Elster, President
Dated: as of December 9, 2009	EMPLOYEE:
	/s/ Jean A. Diamond
	Jean A. Diamond

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EX-99.1

EXHIBIT 99.1

SED INTERNATIONAL CO-FOUNDER JEANIE DIAMOND RETIRES
AS CHIEF EXECUTIVE OFFICER

Jonathan Elster, SED’s President and Chief Operating Officer, Named New CEO

          Tucker, Georgia, December 14, 2009 – SED International Holdings, Inc. (OTCBB:SECX) today announced that company co-founder Jeanie Diamond has retired as Chief Executive Officer effective December 9, 2009, and that Jonathan Elster, SED’s President and Chief Operating Officer, has been promoted to succeed her. Ms. Diamond remains a member of SED’s Board of Directors.

          “For the past 30 years, I have devoted my professional life to building and growing SED, and developing the wonderful relationships the company has with its vendors, employees and customers. Those relationships have been instrumental in the company’s success,” Ms. Diamond said. “I am very proud of my achievements as SED’s CEO, and I am optimistic about the future and confident the company has the necessary leadership to implement its long-term business objectives with Jonathan at the helm. Jonathan has been groomed for this position, dedicating the last 14 years of his professional life to SED. During that time, he has earned the respect and admiration of SED’s employees, business partners, and customers with his proven knowledge of the industry,” she added.

          “We are grateful for the leadership and guidance that Jeanie Diamond has provided to SED over the past 30 years,” stated Jonathan Elster. “Through her hard work and dedicated service we have developed and maintained a strong reputation in the industry as a provider of superior service and attention to our customers and vendors, and I look forward to continuing in her footsteps,” Mr. Elster continued. “It’s a great honor to become SED’s next CEO, and I’m very excited about the opportunities presented in leading SED towards the future,” further stated Mr. Elster.

ABOUT SED INTERNATIONAL HOLDINGS, INC.
Founded in 1980, SED International Holdings, Inc. is a multinational, preferred distributor of leading computer technology, wireless communications, consumer electronics and small appliances. The Company also offers custom-tailored supply chain management services ideally suited to meet the priorities and distribution requirements of the e-commerce, Business-to-Business and Business-to-Consumer markets. Headquartered near Atlanta, Georgia with business operations in California; Florida; Georgia; Texas; Bogota, Colombia and Buenos Aires, Argentina, SED serves a customer base of over 10,000 channel partners and retailers in the U.S. and Latin America. To learn more, please visit www.SEDonline.com; or follow us on Twitter @SEDIntl.

Statements made in this Press Release that are not historical or current facts are "forward-looking statements.” These statements often can be identified by the use of terms such as "may," "will," "expect," "believes," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond the control of the Company that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. These factors include adverse economic conditions, entry of new and stronger competitors, inadequate capital, unexpected costs, failure to gain product approval in foreign countries and failure to capitalize upon access to new markets. The Company disclaims any obligation to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events. These factors and others are discussed in the "Management's Discussion and Analysis" section of the Company's Report on Form 10-K for the fiscal year ended June 30, 2009 and Form 10-Q for the quarterly reporting period ended September 30, 2009.

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