EXHIBIT 10.12
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered
into as of the 29th day of September, 1997, by and between PriceSmart, Inc.,
a Delaware corporation ("Employer"), and Xxxxx Xxxxxxxx ("Executive").
RECITALS
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A. Employer desires to employ Executive as Chief Financial
Officer and Executive Vice-President of Employer.
B. Executive desires to accept such position upon the terms and
subject to the conditions herein provided.
TERMS AND CONDITIONS
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NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants and conditions hereinafter set forth, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
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EMPLOYMENT AND DUTIES
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1.1 POSITION AND DUTIES. Executive shall serve as Chief Financial
Officer and Executive Vice-President of Employer. Executive shall have such
duties and authority as are customary for, and commensurate with, such
position, and such other related duties and authority as may from time to
time be delegated or assigned to her by the Chief Executive Officer or the
Board of Directors of Employer. Executive shall discharge her duties in a
diligent and professional manner.
1.2 OUTSIDE BUSINESS ACTIVITIES PRECLUDED. During her employment,
Executive shall devote her full energies, interest, abilities and productive
time to the performance of this Agreement. Executive shall not, without the
prior written consent of Employer, perform other services of any kind or
engage in any other business activity, with or without compensation, that
would interfere with the performance of her duties under this Agreement.
Executive shall not, without the prior written consent of Employer, engage in
any activity adverse to Employer's interests.
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1.3 PLACE OF EMPLOYMENT. Unless the parties agree otherwise in
writing, during the Employment Term (as defined in Section 3.1 below)
Executive shall perform the services she is required to perform under this
Agreement at Employer's offices located in San Diego, California; provided,
however, that Employer may from time to time require Executive to travel
temporarily to other locations on Employer's business.
ARTICLE II
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COMPENSATION
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2.1 SALARY. For Executive's services hereunder, Employer shall pay as
base salary to Executive the amount of $135,000 during each year of the
Employment Term. Said salary shall be payable in equal installments in
conformity with Employer's normal payroll period. Executive's salary shall
be reviewed by Employer's Board of Directors from time to time at its
discretion, and Executive shall receive such salary increases, if any, as
Employer's Board of Directors, in its sole discretion, shall determine.
2.2 BONUS. In addition to the salary set forth in Section 2.1 above,
during the Employment Term Executive shall participate in Employer's bonus
plan for executive management personnel. All decisions regarding said bonus
plan shall be made in the sole discretion of Employer's Board of Directors,
or the Compensation Committee thereof.
2.3 OTHER BENEFITS. Executive shall be entitled to participate in and
receive benefits under Employer's standard company benefits practices and
plans for officers of Employer, including medical insurance, long-term
disability, life insurance, profit sharing and retirement plan, and
Employer's other plans, subject to and on a basis consistent with the terms,
conditions and overall administration of such practices and plans. Executive
shall be entitled to a paid vacation of three (3) weeks each year, which will
be paid out in conformity with Employer's normal vacation pay practices.
Employer may in its sole discretion grant such
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additional compensation or benefits to Executive from time to time as
Employer deems proper and desirable.
2.4 EXPENSES. During the term of her employment hereunder, Executive
shall be entitled to receive prompt reimbursement for all reasonable
business-related expenses incurred by her, in accordance with the policies
and procedures from time to time adopted by Employer, provided that Executive
properly accounts for such business expenses in accordance with Employer
policy. Additionally, subject to Employer's prior approval (which shall not
be unreasonably withheld), Executive shall be reimbursed for reasonable
expenses incurred by Executive for ninety (90) days of interim lodging in San
Diego, CA. as well as for reasonable expenses incurred by Executive in moving
from Orange, CA. to San Diego.
2.5 STOCK OPTION PLAN. Employer has adopted The 1997 Stock Option Plan
of PriceSmart, Inc. (the "Stock Plan"). The parties anticipate that on or
about October 7, 1997 Executive will receive options to purchase 50,000
shares of Employer's Common Stock, exercisable at a price equal to the
average closing price of a share of the Common Stock for the period September
9, 1997 through October 6, 1997, with such options vesting at twenty percent
(20%) per year over a period of five (5) years and expiring six (6) years
from the date of grant. Such anticipated grant of options to purchase 50,000
shares of Common Stock shall be subject in all respects to the sole
discretion of the Compensation Committee of Employer's Board of Directors, as
set forth in the Stock Plan. In addition, such options shall be granted in
accordance with and subject to all other terms, conditions and restrictions
set forth in the Stock Plan.
2.6 DEDUCTIONS AND WITHHOLDINGS. All amounts payable or which become
payable under any provision of this Agreement shall be subject to any
deductions authorized by Executive and any deductions and withholdings
required by law.
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ARTICLE III
TERM OF EMPLOYMENT
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3.1 TERM. The term of Executive's employment hereunder shall commence
on September 29, 1997 and shall continue until September 28, 1999 unless
sooner terminated or extended as hereinafter provided (the "Employment Term").
3.2 EXTENSION OF TERM. The Employment Term may be extended by written
amendment to this Agreement signed by both parties.
3.3 EARLY TERMINATION BY EXECUTIVE. Executive may terminate this
Agreement at any time by giving Employer written notice of her resignation
ninety (90) days in advance; provided, however, that the Board of Directors
may determine upon receipt of such notice that the effective date of such
resignation shall be immediate or some time prior to the expiration of the
ninety-day notice period. Executive's employment shall terminate as of the
effective date of her resignation as determined by the Board of Directors.
3.4 TERMINATION FOR CAUSE. Prior to the expiration of the Employment
Term, Executive's employment may be terminated for Cause by the Board of
Directors of Employer, immediately upon delivery of notice thereof. For
these purposes, termination for "Cause" shall mean termination because of
Executive's (a) repeated and habitual failure to perform her duties or
obligations hereunder; (b) engaging in any act that has a direct, substantial
and adverse effect on Employer's interests; (c) personal dishonesty, willful
misconduct, or breach of fiduciary duty involving personal profit; (d)
intentional failure to perform her stated duties; (e) willful violation of
any law, rule or regulation which materially adversely affects her ability to
discharge her duties or has a direct, substantial and adverse effect on
Employer's interests; (f) any material breach of this contract by Executive;
or (g) conduct authorizing termination under Cal. Labor Code Section 2924.
3.5 TERMINATION DUE TO DEATH OR DISABILITY. Executive's employment
hereunder shall terminate immediately upon her death. In the event that by
reason of injury, illness or
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other physical or mental impairment Executive shall be: (a) completely unable
to perform her services hereunder for more than three (3) consecutive months,
or (b) unable to perform her services hereunder for fifty percent (50%) or
more of the normal working days throughout six (6) consecutive months, then
Employer may terminate Executive's employment hereunder immediately upon
delivery of notice thereof. Executive's beneficiaries, estate, heirs,
representatives, or assigns, as appropriate, shall be entitled to the
proceeds, if any, due under any Employer-paid life insurance policy held by
Executive, as determined by and in accordance with the terms of any such
policy, as well as any vested benefits and accrued vacation benefits.
ARTICLE IV
BENEFITS AFTER TERMINATION OF EMPLOYMENT
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4.1 BENEFITS UPON TERMINATION. Upon termination of this Agreement
under Section 3.3 (Early Termination by Executive), Section 3.4 (Termination
for Cause) or Section 3.5 (Termination Due to Death or Disability), all
salary and benefits of Executive hereunder shall cease immediately. Upon
termination of this Agreement by Employer (prior to the expiration of the
Employment term) for any reason other than those set forth in Section 3.4 or
Section 3.5, Executive shall be entitled to the continuation of Executive's
base salary for six (6) months or for the remainder of the Employment Term,
whichever is greater, payable in equal installments in conformity with
Employer's normal payroll period. If this Agreement is not terminated, then,
upon expiration of the Employment Term, and if Executive's employment by
Employer does not thereafter continue upon mutually agreeable terms,
Executive shall be entitled to continuation of Executive's base salary for
six (6) months, payable in equal installments in conformity with Employer's
normal payroll period. Notwithstanding any of the foregoing, should Executive
commence full-time employment as a financial officer with another company
prior to the payments under this Section 4.1 becoming payable to Executive,
any payments remaining payable to Executive shall then cease. During the
period of any severance pay,
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Executive shall cooperate with Employer in providing for the orderly
transition of Executive's duties and responsibilities to other individuals,
as reasonably requested by Employer.
4.2 RIGHTS AGAINST EMPLOYER. The benefits payable under this Article
IV are exclusive, and no amount shall become payable to any person (including
the Executive) by reason of termination of employment for any reason, with or
without Cause, except as provided in this Article IV. Employer shall not be
obligated to segregate any of its assets or procure any investment in order
to fund the benefits payable under this Article IV.
ARTICLE V
CONFIDENTIAL INFORMATION
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5.1 Executive acknowledges that Employer holds as confidential, and
Executive may have access to during the Employment Term, certain information
and knowledge respecting the intimate and confidential affairs of Employer in
the various phases of its business, including, but not limited to, trade
secrets, data and know-how, improvements, inventions, techniques, marketing
plans, strategies, forecasts, pricing information, and customer lists.
During her employment by Employer and thereafter, Executive shall not
directly or indirectly disclose such information to any person or use any
such information, except as required in the course of her employment during
the Employment Term. All records, files, keys, documents, and the like
relating to Employer's business, which Executive shall prepare, copy or use,
or come into contact with, shall be and remain Employer's sole property,
shall not be removed from Employer's premises without its written consent,
and shall be returned to Employer upon the termination of this Agreement.
ARTICLE VI
GENERAL PROVISIONS
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6.1 ENTIRE AGREEMENT. This Agreement contains the entire understanding
and sole and entire agreement between the parties with respect to the subject
matter hereof, and supersedes any and all prior agreements, negotiations and
discussions between the parties
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hereto with respect to the subject matter covered hereby. Each party to this
Agreement acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by any party, or anyone acting
on behalf of any party, which are not embodied herein, and that no other
agreement, statement or promise not contained in this Agreement shall be
valid or binding. This Agreement may not be modified or amended by oral
agreement, but rather only by an agreement in writing signed by Employer and
by Executive which specifically states the intent of the parties to amend
this Agreement.
6.2 ASSIGNMENT AND BINDING EFFECT. Neither this Agreement nor the
rights or obligations hereunder shall be assignable by the Executive.
Employer may assign this Agreement to any successor or affiliate of Employer,
and upon such assignment any such successor or affiliate shall be deemed
substituted for Employer upon the terms and subject to the conditions hereof.
In the event of any merger of Employer or the transfer of all (or
substantially all) of Employer's assets, the provisions of this Agreement
shall be binding upon, and inure to the benefit of, the surviving business
entity or the business entity to which such assets shall be transferred.
6.3 ARBITRATION. The parties hereto agree that any and all disputes
(contract, tort, or statutory, whether under federal, state or local law)
between Executive and Employer (including Employer's employees, officers,
directors, stockholders, members, managers and representatives) arising out
of Executive's employment with Employer, the termination of that employment,
or this Agreement, shall be submitted to final and binding arbitration. Such
arbitration shall take place in the County of San Diego, and may be compelled
and enforced according to the California Arbitration Act (Code of Civil
Procedure Sections 1280 ET SEQ.). Unless the parties mutually agree
otherwise, such arbitration shall be conducted before the American
Arbitration Association, according to its Commercial Arbitration Rules.
Judgment on the award the arbitrator renders may be entered in any court
having jurisdiction over the parties.
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Arbitration shall be initiated in accordance with the Commercial Arbitration
Rules of the American Arbitration Association.
6.4 NO WAIVER. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances
shall be deemed or be construed as a further or continuing waiver of any such
term, provision or condition, or as a waiver of any other term, provision or
condition of this Agreement.
6.5 GOVERNING LAW; RULES OF CONSTRUCTION. This Agreement has been
negotiated and executed in, and shall be governed by and construed in
accordance with the laws of, the State of California. Captions of the
several Articles and Sections of this Agreement are for convenience of
reference only, and shall not be considered or referred to in resolving
questions of interpretation with respect to this Agreement.
6.6 NOTICES. Any notice, request, demand or other communication
required or permitted hereunder shall be deemed to be properly given when
personally served in writing, or when deposited in the United States mail,
postage pre-paid, addressed to Employer or Executive at her last known
address. Each party may change its address by written notice in accordance
with this Section.
Address for Employer:
PriceSmart, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxx, XX. 00000
Address for Executive:
Xxxxx Xxxxxxxx
0000 Xxxxxx Xxxxxx Xx.
Xxxxxx, XX 00000
6.7 SEVERABILITY. The provisions of this Agreement are severable. If
any provision of this Agreement shall be held to be invalid or otherwise
unenforceable, in whole or in part, the remainder of the provisions or
enforceable parts hereof shall not be affected thereby and shall be enforced
to the fullest extent permitted by law.
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6.8 ATTORNEYS' FEES. In the event of any arbitration or litigation
brought to enforce or interpret any part of this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees, as well as all
other litigation costs and expenses as an element of damages.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto as of the date first above written.
EMPLOYER EXECUTIVE
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PRICESMART, INC.
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
Name: Xxxxxx X. Xxxxx
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Title: President
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