8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________

FORM 8-K/A

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 15, 2012

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.)

3505 Newpoint Place, Suite 450, Lawrenceville, Georgia	30043
(Address Of Principal Executive Office)	(Zip Code)

Registrant's telephone number, including area code: (770) 243-1200

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:

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

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

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

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

EXPLANATORY NOTE

This Form 8-K/A amends the Current Report on Form 8-K of SED International Holdings, Inc., (the “Company”) filed on October 16, 2012 (the “Report”) in connection with the election of Robert G. O’Malley as President and Chief Executive Officer of the Company to replace Jonathan Elster and his appointment to the Company’s Board. The purpose of this amendment is to provide a brief description of the employment arrangements between Mr. O’Malley and the Company.

Item 5.02. Departure of Directors or Certain Officers and Appointment of Certain Officers.

The response to Item 5.02 of the Report is incorporated herein by reference.

Effective October 15, 2012 (the “Effective Date”) the Company entered into employment arrangements with Robert G. O’Malley providing for his full time employment as its President and Chief Executive Officer for a three-year term beginning on the Effective Date pursuant to an Employment Agreement dated September 7, 2012 (the “Employment Agreement”).

Under the Employment Agreement Mr. O’Malley (i) earns an annual base salary of $350,000 (“Base Salary”); (ii) is entitled to a signing and relocation bonus in the amount of $75,000, payable on or before October 31, 2012; (iii) is entitled to receive an annual bonus of up to 100% of the Base Salary based on the achievement of specified performance targets; (iv) received a grant of: (a) stock options for 100,000 shares of Common Stock exercisable at $1.85 per share (the fair market value of a share of the Company’s common stock (“Common Stock”) on the Effective Date) and vesting in three tranches and (b) 100,000 shares of restricted Common Stock, both of which are subject to vesting upon achievement of specified performance targets; (v) is entitled to participate on the same terms as other executives in any present or future benefit plans or programs of the Company; and (vi) receive a severance payment equal to the lesser of 12- months Base Salary or Base Salary for the balance of his employment term. The performance criteria for purposes of the bonus, the vesting of each option tranche and the vesting of the restricted Common Stock will be based on the achievement of specified net income per share targets in excess of that achieved in fiscal 2012 and the achievement of specified return on invested capital targets (“ROIC”) ranging from an ROIC of 10% to an ROIC of 20%, which targets will be developed in consultation between the Company and Mr. O’Malley as soon as practicable after Mr. O’Malley completes his first 30 days of employment.

The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment 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	Employment Agreement between the Company and Robert G. O’Malley, effective as of October 15, 2012.

* * * * * *

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:  October 17, 2012	By:	/s/ Lyle Dickler
		Lyle Dickler,
		Chief Financial Officer

EX-10.1

 

September 7, 2012

Mr. Robert O’Malley

5434 E. Lincoln Drive #19

Paradise Valley, AZ 85253

Dear Bob:

It is our pleasure to formally extend to you this offer of employment with SED International. We firmly believe that with your help we can reverse recent negative financial trends experienced by SED and can build a mutually productive and lucrative relationship.

This offer is for full time employment at our Atlanta offices as the President and Chief Executive Officer of SED on the following terms:

· Annual base salary of $350,000;

· A bonus plan allowing you to earn an annual bonus of up to 100% of your base salary in any fiscal year (determined on a proportional basis in the first partial year of employment ending June 30, 2013) and payable based on the achievement of specific performance criteria;

· An equity stake in SED as follows:

§ Stock options to purchase 100,000 shares of Common Stock , exercisable at a price per share equal to the fair market value of a share of stock on the date of grant (the first day of employment) and becoming exercisable for 1/3 of the shares, an additional1/3 of the shares and finally the balance of the shares on achievement of specific performance criteria;

§ A grant of 100,000 shares of restricted Common Stock which will vest based on the achievement of specific performance criteria;

· The performance criteria for purposes of your bonus, the exercise of each option tranche and the vesting of increments of restricted stock will be based on the achievement of specified net income per share targets in excess of that achieved in fiscal 2012 and the achievement of specified return on invested capital targets ranging from an ROIC of 10% to an ROIC of 20%, which targets will be developed in consultation with you as soon as practicable after you complete your first 30 days of employment.

· A signing/relocation bonus of $75,000, payable on or before October 31, 2012, one half for relocation costs and expenses and one half as a signing bonus;

· You will develop a succession plan, acceptable to the Board of SED within the first twelve months of employment. This plan will include the identification and potential recruitment of several successors. It is the goal of the board that the next CEO be an internal promotion. The planned transition to a new CEO should begin not less than six months prior to June 30, 2015;

· Commencement date of employment – October 15, 2012;

· Term of employment – Three years from the commencement date, unless extended by the mutual consent of the parties;

· Severance -- A lump sum payment if dismissed other than for cause during the term, equal to the lesser of 12- months base salary or base salary for the balance of the term

· You will be eligible to participate in all employee benefits programs. Information on these programs is enclosed.

SED and its Board of Directors are prepared to provide you with all of the tools, resources and assistance necessary for you to be an effective leader of the SED team. It is our mutual hope and expectation that a significant turn-around in SED’s business and prospects will be effected during the next three years and that agreed upon turn-around targets will be achieved beginning this year. It is also our intent and my expectation that you will be offered a seat on SED’s Board of Directors.

If these terms are acceptable please print this document and sign below to acknowledge the acceptance of this offer. This agreement may be signed in counterparts and electronic signatures are binding. Please fax the signed letter to Steve Zelnick at 212-838-9190.

Very truly yours

/s/ Samuel A. Kidston

Samuel A. Kidston

Chairman

Acknowledgement of Acceptance: /s/Robert G. O’Malley

Signature Date:                     9-15-2012