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EXHIBIT 10.43
EMPLOYMENT AGREEMENT
BETWEEN XXXXXXX X. XXXXXX (hereinafter referred to as the "Officer")
and FIRST FINANCIAL CARIBBEAN CORPORATION, A Puerto Rico corporation with
principal offices in San Xxxx, Puerto Rico, (hereinafter referred to as
"FFCC"), represented herein by its Chairman of the Board and Chief Executive
Officer.
In consideration of the mutual promises, covenants and agreements
herein contained, it is agreed as follows:
1. POSITION AND RESPONSIBILITIES
You will serve as Senior Executive Vice President of FFCC. By
your acceptance of this Agreement, you undertake to accept such employment and
to devote your full time and attention to FFCC, and to use your best efforts,
ability and fidelity in the performance of the duties attaching to such
employment. During the term of your employment hereunder, you shall not
perform any services for any other company, which services conflict in any way
with your obligations under the two preceding sentences of this Section 1,
whether or not such company is competitive with the businesses of FFCC,
provided, however, that nothing in this Agreement shall preclude you from
devoting reasonable periods required for
(i) serving as a director or member of a committee of any
organization involving no conflict or potential conflict of interest with the
interests of FFCC;
(ii) delivering lectures, fulfilling speaking engagements,
teaching at educational institutions;
(iii) engaging in charitable and community activities; and
(iv) managing your personal and family investments, provided
that such activities do not interfere with the regular performance of your
duties and responsibilities under this Agreement.
You shall, at all times during the term hereof, be subject to
the supervision and direction of the Chairman of the Board of Directors of FFCC
with respect to your duties, responsibilities and the exercise of your powers
which shall include, among other things, matters relating to financial, tax and
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employee benefit aspects of FFCC's operations and shareholder relations and
general administrative matters.
2. TERM. This Agreement shall be effective retroactive to
January 1, 1995, and shall remain in effect until June 30, 1997.
3. BASIC COMPENSATION. FFCC shall pay the Officer, and the
Officer shall accept from FFCC, as basic compensation for Officer's services
hereunder, the sum of TWO HUNDRED FORTY THOUSAND DOLLARS ($240,000) per year,
such sum to be payable at the rate of $20,000 per month on the last day of each
month.
FFCC shall reimburse Officer for those reasonable and
necessary expenses incurred by Officer in connection with the services provided
hereunder.
4. INCENTIVE FEES. (a) During the term of this Agreement, the
Officer shall also be entitled to receive an annual incentive bonus equal to
the sum of the following:
(i) $150,000 if FFCC earns $10.0 million of Adjusted
Net Income (as hereinafter defined);
(ii) 3% of Adjusted Net Income in excess of $10.0
million and up to $20.0 million to the extent such Adjusted Net Income exceeds
an amount equal to a 15% Return on Equity Capital (as hereinafter defined); and
(iii) 5% of Adjusted Net Income in excess of $20.0
million to the extent such Adjusted Net Income exceeds an amount equal to a 15%
Return on Equity Capital;
provided, however, that total consulting fees and incentive compensation
payable to the Officer in connection with services rendered hereunder shall not
exceed $1.2 million per annum.
(b) The incentive bonus shall be payable annually by FFCC
within 30 days following the date on which its Annual Report on Form 10-K for
the fiscal year ended the prior December 31 shall have been filed with the
United States Securities and Exchange Commission; provided that such amount
shall only be payable if you shall have served as a Officer pursuant to this
Agreement for the entire fiscal
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year to which such payments relate. As used in this Section 4, "Adjusted Net
Income" means the annual consolidated net income by FFCC and its subsidiaries
after all taxes (including net income from equity interests held by FFCC in any
other venture and net income of any successor of FFCC which may be formed by
merger, consolidation or sale of substantially all of the assets of FFCC)
during the calendar year preceding the payment as determined in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved and as shown by FFCC's published consolidated
financial statements audited by its independent accountants (hereinafter
referred to as "GAAP"), such net income to be adjusted (A) by reducing from
such net income any payments made pursuant to Section 4(a) hereof and payments
of similar incentive compensation to the Chairman of the Board and Chief
Executive Officer and President of FFCC, (B) by adding back to such net income
any extraordinary items of income and expense such as merger related expenses;
and (C) by reducing from such net income any reductions to FFCC net worth not
reflected in FFCC's consolidated income statement for such fiscal year or
period. As used in this Section 4, (1) "Equity Capital" means FFCC's
consolidated Stockholders Equity including preferred stock at the December 31
immediately preceding the beginning of the fiscal year for which the
calculation is being made, determined in accordance with GAAP and (2) "Return
on Equity Capital" for any fiscal year means the percentage determined by
dividing FFCC's consolidated net income after all taxes determined in
accordance with GAAP for such fiscal year by Equity Capital for such preceding
December 31; provided that such calculation shall be adjusted as set forth in
the immediately succeeding sentence. If FFCC sells its equity securities
during the fiscal year, Equity Capital shall be increased by the net proceeds
to FFCC (after expenses) of such sale multiplied by a fraction the numerator of
which shall be the number of days in such fiscal year which had elapsed on the
date of the closing of such sale and the denominator of which shall be 365.
(c) At the option of FFCC, up to 50% of the amount payable
under Section 4(a) may be in the form of shares of FFCC Common Stock. For
purposes of computing the number of shares to be issued, the shares of Common
Stock will be assigned a value equal to the average of last sales prices of the
Common Stock as reported on the NASDAQ National Market System for the five
trading dates immediately preceding the date of issuance;
5. PENSION PLAN. In lieu of participation in FFCC's pension
plan, FFCC agrees to establish an annuity contract for the benefit of Officer
in the amount of $30,000 per year.
6. PAYMENT OF MEDICAL INSURANCE. In lieu of participation in
FFCC's medical plan, FFCC agrees to pay for Officer's medical insurance.
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7. MEMBERSHIP IN BOARD OF DIRECTORS. The Officer will be
nominated for election to FFCC's Board of Directors.
8. INCIDENTAL EXPENSES. If the Officer is required to provide
services within Puerto Rico, his housing and other incidental expenses will be
paid by FFCC.
9. TERMINATION OF ENGAGEMENT. Officer's engagement hereunder may
be terminated by FFCC for dishonesty, failure or refusal to perform his
obligations hereunder, breach of fidelity to FFCC or its affiliates or for any
reason violative of law or public policy. Termination shall take effect by
giving 30 days written notice by Certified Mail, Return Receipt Requested, or
by delivery in person to Officer. All payments due under this Agreement will
cease as of the date of termination.
10. CONFIDENTIAL INFORMATION. All documents, date, plans,
processes, reports and information of any nature that are made available by
FFCC, or that become available to Officer by virtue of this Agreement or the
relationship created by this Agreement, shall be held in strict confidence by
Officer. Such confidential disclosures that are made or such confidential
information that becomes available to Officer is made in reliance on this
understanding.
11. CONFIDENTIAL INFORMATION AFTER TERMINATION OR AGREEMENT. All
of the terms of the preceding paragraph shall remain in full force and effect
for a period of three (3) years after the termination of this Agreement for any
reason, and during such 3 year period, Officer shall not make or permit the
making of any public announcement or statement of any kind that he was formally
connected with FFCC.
12. REGISTRATION RIGHTS
(a) Upon the written request or requests of the Officer
that FFCC effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the securities granted to you
pursuant to Section 4(b)(iii) hereof (the "Registrable Securities") and senior
executives of FFCC holding similar registration rights (individually a "Holder"
and collectively, the "Holders"), FFCC will:
(i) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other
Holders;
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(ii) as soon as practicable, effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Holder's or Holders' Registrable Securities as are specified in
such request, together with all or such portion of the Registrable Securities
of any other Holder or Holders joining in such request as are specified in a
written request given within 15 days after receipt of such written notice from
FFCC; provided, however, that FFCC shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 12: (1) if
Form S-3 is not available for such offering by the Holders; (2) if the Holders,
together with the holders of any other securities of FFCC entitled to inclusion
in such registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $250,000; (3) if FFCC
shall furnish to the Holders a certificate signed by an officer of FFCC stating
that in the good faith judgment of the Board of Directors of FFCC, it would be
seriously detrimental to FFCC and its shareholders for such Form S-3
registration statement, in which event FFCC shall have the right to defer the
filing of the Form S-3 Registration Statement for a period of not more than 120
days after receipt of the request of the Holder or Holders under this Section
12; (4) if FFCC has, within the 12-month period preceding the date of such
request, already effected two registrations on Form S-3 for the Holders
pursuant to this Section 12; (5) if FFCC shall have effected any registration
(other than on S-3 or any successor Form) within the six month period preceding
the date of such request; or (6) in any particular jurisdiction in which FFCC
would be required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or compliance;
and
(iii) Subject to the foregoing, FFCC shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All expenses incurred in connection with a
registration requested pursuant to this Section 12, including (without
limitation) all registration, filing, qualification, printer's and accounting
fees and the reasonable fees and disbursements of counsel for the selling
Holder or Holders and counsel for FFCC, but excluding any underwriters'
discounts or commissions associated with Registrable Securities, shall be borne
pro rata by the Holder or Holders selling securities pursuant to Form S-3
Registration.
(b) The rights to cause FFCC to register Registrable
Securities pursuant to this Section 12 may not be assigned or transferred in
any fashion.
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13. ASSIGNABILITY. Officer may not sub-contract or assign any of
his obligation hereunder without obtaining FFCC's prior written approval.
14. NO WAIVER. Failure on the part of FFCC to complain of any
action or non-action on the part of Officer, no matter how long the same may
continue shall never to be deemed to be a waiver by FFCC of any rights
hereunder.
15. MODIFICATION OF CONTRACT. No waiver or modification of this
Agreement or of any covenant, condition, or limitation herein contained shall
be valid unless in writing and duly executed by the parties hereto.
16. ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties, and no alterations, modifications or
qualifications hereof shall be binding or of any force or effect against FFCC
unless in writing and signed by FFCC.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement at
New York, New York, this 29th day of August, 1995.
FIRST FINANCIAL CARIBBEAN CORPORATION
By: /s/ Xxxxxxx Xxxxx
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Accepted and agreed to:
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
