Exhibit 10.61
EMPLOYMENT TERMINATION AGREEMENT
AND GENERAL RELEASE
WHEREAS XXXXXXXXX XXXXXXX ("XXXXXXX") has been employed by PANAMCO
LLC, a limited liability company organized under the laws of Delaware and
d/b/a PANAMERICAN BEVERAGES COMPANY in Florida (the "Company"), as Chief
Operating Officer, and also serves as President and Chief Operating Officer
and as a member of the Board of Directors of PANAMERICAN BEVERAGES, INC. (the
Company and Panamerican Beverages, Inc. shall be referred to collectively as
"PANAMCO"), and because the parties hereto desire to set forth their
agreements with respect to the termination of XXXXXXX' employment with PANAMCO
and XXXXXXX' Employment Agreement entered into on September 30, 1999
("Employment Agreement"), XXXXXXX and PANAMCO agree as follows:
1. Termination Date. XXXXXXX and PANAMCO agree that XXXXXXX'
employment by PANAMCO shall terminate effective 5:00 p.m. on December 28, 2001
(hereinafter "Termination Date"). Through the Termination Date, XXXXXXX agrees
to perform his assignments in a professional manner, in the best interest of
PANAMCO, and in accordance with Section 1.2 of the Employment Agreement. The
terms of this Agreement have been approved by the Compensation Committee of
the Board of Directors of PANAMCO.
2. Subject to XXXXXXX' performance of his obligations hereunder,
PANAMCO will provide XXXXXXX with the following:
(a) Unpaid Base Salary Through Date of Termination. PANAMCO promises
to pay XXXXXXX his regular base salary described in the Employment
Agreement, as it shall have been increased, up to and including his
Termination Date. Said payment shall be made according to PANAMCO's normal
payroll practices on or prior to December 31, 2001.
(b) Lump Sum Severance Payment. PANAMCO promises to pay XXXXXXX the
xxxxx amount of Two Million, Eight Hundred Nine Thousand, One Hundred Twenty
Five Dollars and No Cents ($2,809,125.00), less applicable tax deductions in
the amount of Two Hundred Five Thousand Nine Hundred Forty Eight Dollars and
Sixty Two Cents ($205,948.62). Said gross amount represents the equivalent of
two and one-half (2.5) multiplied by XXXXXXX' base salary, plus two and
one-half (2.5) multiplied by XXXXXXX' target bonus for year 2001, plus two (2)
days of accrued but unused vacation available at the Termination Date pursuant
to paragraph 2(h) hereof, plus unpaid vacation premium. From said gross amount
the following are deducted: (i) the Seventy Five Thousand Five Hundred Thirty
Dollars and Eighty Five Cents ($75,530.85) XXXXXXX owes the Company on his
housing loan as of the Termination Date; and (ii) the Sixty Five Thousand
Dollars and No Cents ($65,000.00) PANAMCO paid in membership fees in
connection with XXXXXXX' club membership in Xxxxxxx Bay Yacht and Country
Club. Such amount shall be paid in a single lump sum on or prior to December
31, 2001.
(c) Prorated Incentive Compensation Bonus for Bonus Period During
which the Termination Occurred. PANAMCO promises to pay XXXXXXX the amounts
that would otherwise be due to him as the President and Chief Operating
Officer under Panamerican Beverages, Inc.'s 2001 Annual Incentive Plan (the
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"Incentive Plan") if he had remained as President and Chief Operating Officer
through the end of the year, prorated based on the number of days of
participation under the Incentive Plan. Said payment shall be determined in
the manner and payable at the time and upon the terms and conditions set forth
in the Incentive Plan (except that Section IV E (Plan Administration -
Termination of Service) of the Incentive Plan shall not preclude XXXXXXX from
receiving any of such payment).
(d) Benefit Program. PANAMCO promises to continue to sponsor for
XXXXXXX the individual benefit programs described at Section 4.2 of the
Employment Agreement for the earlier of (1) eighteen (18) months following
XXXXXXX' Termination Date, or (2) the date XXXXXXX obtains a similar
individual benefit through other employment. In the event that PANAMCO is
unable to provide XXXXXXX with any individual benefit described at Section 4.2
of the Employment Agreement by reason of the termination of XXXXXXX'
employment, PANAMCO promises to pay XXXXXXX an amount of money equivalent to
PANAMCO's cost of providing the benefit to XXXXXXX. PANAMCO's good faith
determination of that cost shall be binding and conclusive on XXXXXXX. It is
expressly understood and agreed that after the Termination Date, other than as
set forth in this Agreement, XXXXXXX shall not be provided with automobile
allowance, vacation premium, working facilities, stock options and restricted
stock, club membership, financial planning, annual home leave or tax
protection pursuant to Sections 3.3 and 4.3-4.10 of the Employment Agreement.
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(e) Relocation Expense. PANAMCO promises to reimburse XXXXXXX for
his reasonable moving expenses in an amount not to exceed twenty five thousand
and 00/100 ($25,000), if he relocates back to his home country within one (1)
year following the Termination Date.
(f) Vested Stock Options and Extension of Exercise Date. XXXXXXX
will be vested on the Termination Date in any stock options granted to him
during the term of his Employment with PANAMCO. XXXXXXX agrees that, as of the
Termination Date, he has been granted options to purchase shares of
Panamerican Beverages, Inc. Class A common stock under Panamerican Beverages,
Inc.'s Equity Incentive Plan, as amended, and that all of such options are set
forth in Appendix A and incorporated herein by reference. XXXXXXX shall have
one (1) year after the Termination Date to exercise any or all of his stock
options.
(g) Reasonable Business Expense. In accordance with the provisions
of Section 4.1 of the Employment Agreement, PANAMCO promises to reimburse
XXXXXXX for reasonable expenses paid or incurred by him in the course of and
pursuant to the business of PANAMCO up to the Termination Date. Such
reimbursement shall occur as soon as practicable after XXXXXXX' Termination
Date.
(h) Accrued But Unused Vacation Day Compensation. Included in the
gross amount in paragraph 2(b) is the equivalent in cash of any unused
vacation days available at the Termination Date. The payment under this
paragraph is
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intended to compensate XXXXXXX for any accrued but unused vacation days as of
the Termination Date, as provided in Section 4.5 of the Employment Agreement.
Except as set forth in this Agreement, it is expressly agreed and
understood that PANAMCO and its parents, subsidiaries, and affiliates do not
have, and will not have, any obligation to provide XXXXXXX at any time in the
future with any payments, benefits or considerations other than those recited
in this paragraph 2.
3. XXXXXXX Release. In consideration of the promises of PANAMCO set
forth in this Agreement, XXXXXXX and his heirs, executors and administrators
intending to be legally bound, hereby permanently and irrevocably terminates
his employment with PANAMCO effective on the Termination Date and, other than
as set forth in this Agreement, releases and discharges PANAMCO and its
parents, subsidiaries, affiliates, and its and their current and former
owners, officers, directors, shareholders, employees, agents, successors,
assigns, heirs, executors, and administrators, and any individual or
organization related to PANAMCO and against whom or which XXXXXXX could claim
(hereinafter referred to collectively as "the Released Parties") from any and
all causes of action, suits, debts, claims and demands whatsoever, which he
had, has, or may have against the Released Parties up until the date set forth
at the end of this Agreement. Particularly, but without limitation, XXXXXXX,
other than as set forth in this Agreement, so releases any claims against the
Released Parties relating in any way to his employment or the termination of
his employment relationship with PANAMCO, including any claims under any U.S.,
Costa Rican, or Mexican federal, state or local laws, including the
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Florida Civil Rights Act of 1992, the Florida Private Whistleblower Act, the
Miami-Dade County Equal Opportunity Ordinance, Title VII of the Civil Rights
Act of 1964, as amended, the Americans With Disabilities Act, the Age
Discrimination in Employment Act, as amended, the Family and Medical Leave
Act, or any other labor or employment laws, any common law claims, such as
actions in tort and contract, and all claims for counsel fees and costs. As a
precondition of PANAMCO's obligations under this Agreement, including
paragraph 2, XXXXXXX shall also, as of the Termination Date, provide the
Released Parties with a release and discharge up to the Termination Date in
substantially the same form contained in this paragraph 3 and in paragraphs 14
through 18 of this Agreement and after providing it he will not revoke such
release and discharge.
4. PANAMCO Release. In consideration of the promises of XXXXXXX set
forth in this Agreement, PANAMCO and its current and former parents,
subsidiaries, affiliates, assigns, heirs, executors and administrators,
release and discharge XXXXXXX and his heirs, executors, and administrators
from any and all causes of action, suits, debts, claims, and demands
whatsoever, which it had, has, or may have against XXXXXXX and his heirs,
executors and administrators up until the date set forth on the last page of
this Agreement, except those relating to any illegal conduct by XXXXXXX. As a
precondition of XXXXXXX' obligations under this Agreement, PANAMCO shall also,
as of the Termination Date, provide XXXXXXX with a release and discharge up to
the Termination Date in substantially the same
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form contained in this paragraph 4 and in paragraphs 14 through 17 of this
Agreement.
5. Cooperation. XXXXXXX agrees to cooperate with PANAMCO in
effecting a smooth transition of the duties and responsibilities which XXXXXXX
performed for PANAMCO. XXXXXXX agrees to make himself reasonably available in
connection with any request by PANAMCO regarding prior business arrangements
or pending litigation or litigation which may arise in the future concerning
matters of which XXXXXXX has personal knowledge or which were in the purview
of XXXXXXX' responsibilities and PANAMCO will reimburse XXXXXXX' reasonable
travel costs.
6. Board Resignation. Upon the Termination Date, XXXXXXX agrees to
immediately execute a letter to the Board of Directors of Panamerican
Beverages, Inc. resigning from his membership on that Board and any other
Board of any subsidiary or affiliate of PANAMCO on which he serves as of the
Termination Date.
7. Performance Contingent. The parties acknowledge that the
performance of the promises of each are expressly contingent upon the
fulfillment and satisfaction of the obligations of the other party as set
forth in this Agreement.
8. No Further Employment. XXXXXXX hereby agrees and recognizes that
as of the Termination Date his employment relationship with PANAMCO has been
permanently and irrevocably severed and that PANAMCO has no obligation to
re-employ him in the future.
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9. No Admission. Each party agrees and acknowledges that this
agreement is not and shall not be construed to be an admission of any
violation of any federal, state or local statute or regulation, or of any duty
owed by the other.
10. Confidentiality. XXXXXXX agrees, covenants and promises that he
shall not communicate or disclose the terms of this Agreement to any persons
with the exception of members of his immediate family, his accountant and his
attorney, who in turn shall keep them confidential, or as may be necessary to
make any tax filings or reports.
11. Nondisparagement. Each of XXXXXXX and PANAMCO and its officers
shall not issue any communication or statement, written or otherwise, that
disparages, criticizes or otherwise reflects adversely upon the other, except
if testifying truthfully in conjunction with legal proceedings. In the event
that either XXXXXXX or PANAMCO or its officers is compelled by subpoena
process to testify, he or it will provide, to the extent possible, written
notice to the other party in time to permit such party to seek an appropriate
protective order or such other relief as may be necessary to enforce his or
its rights under this Agreement. If XXXXXXX breaches this paragraph 11, he
agrees to pay back to PANAMCO, as liquidated damages, the sum of Two Hundred
Fifty Thousand Dollars ($250,000.00) in addition to any other remedies to
which PANAMCO may be entitled.
12. Restrictive Covenants.
(a) Non-Competition. For a two (2) year period after the Termination
Date, XXXXXXX shall not, directly or indirectly, engage in or have any
interest in
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any sole proprietorship, partnership, corporation or business or any other
person or entity (whether as an employee, officer, director, partner, agent,
security holder, creditor, consultant or otherwise) that engages in
competition with PANAMCO (for this purpose, any business that engages in
carbonated soft drink beverage distribution in the territories of PANAMCO
shall be deemed to be in competition with PANAMCO); provided that such
provision shall not apply to XXXXXXX' ownership of Common Stock of PANAMCO or
the acquisition by XXXXXXX, solely as an investment of securities of any
issuer that is registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended, and that are listed or admitted for trading
on any United States national securities exchange or that are quoted on the
National Association of Securities Dealers Automated Quotations System, or any
similar system or automated dissemination of quotations of securities prices
in common use, so long as XXXXXXX does not control, acquire a controlling
interest in or become a member of a group which exercises direct or indirect
control of, more than five percent of any class of capital stock of such
issuer.
(b) Nondisclosure. XXXXXXX shall not at any time divulge,
communicate, use to the detriment of PANAMCO or for the benefit of any other
person or persons, or misuse in any way, any Confidential Information (as
hereinafter defined) pertaining to the business of PANAMCO. Any Confidential
Information or data now or hereafter acquired by XXXXXXX with respect to the
business of PANAMCO (which shall include, but not be limited to, information
concerning PANAMCO's financial condition, prospects, technology, customers,
suppliers, sources of leads and
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methods of doing business) shall be deemed a valuable, special and unique
asset of PANAMCO that is received by XXXXXXX in confidence and as a fiduciary,
and XXXXXXX shall remain a fiduciary to PANAMCO with respect to all of such
information. For purposes of this Agreement, "Confidential Information" means
information disclosed to XXXXXXX or known by XXXXXXX as a consequence of or
through his employment by PANAMCO (including information conceived,
originated, discovered or developed by XXXXXXX) prior to or after the date
hereof, and not generally known, about PANAMCO or its business.
Notwithstanding the foregoing, nothing herein shall be deemed to restrict
XXXXXXX from disclosing Confidential Information to the extent required by
law.
(c) Nonsolicitation of Employees and Clients. For a three (3) year
period after the Termination Date, XXXXXXX shall not, directly or indirectly,
for himself or for any other person, firm, corporation, partnership,
association or other entity (a) employ or attempt to employ or enter into any
contractual arrangement with any employee or former employee of PANAMCO,
unless such employee or former employee has not been employed by PANAMCO for a
period in excess of six months or was involuntarily terminated by PANAMCO,
and/or (b) call on or solicit any of the actual or targeted prospective
clients (as of the Termination Date) of PANAMCO on behalf of any person or
entity in connection with any business competitive (as defined in paragraph
12(a)) with the business of PANAMCO, nor shall XXXXXXX make known the names
and addresses of such clients or any information relating in any manner to
PANAMCO's trade or business relationships
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with such customers, other than in connection with the performance of XXXXXXX'
duties under this Agreement.
(d) Books and Records. All books, records, and accounts relating in
any manner to the customers or clients of PANAMCO, whether prepared by XXXXXXX
or otherwise coming into XXXXXXX' possession, shall be the exclusive property
of PANAMCO and shall be returned immediately to PANAMCO on the Termination
Date or on PANAMCO's request at any time.
(e) Definition of PANAMCO. For purposes of this paragraph 12, the
term "PANAMCO" also shall include any existing or future subsidiaries or
affiliates of PANAMCO that are operating during the time periods described
herein and any other entities that directly or indirectly, through one or more
intermediaries, control, are controlled by or are under common control with
PANAMCO during the periods described herein.
(f) Acknowledgement. XXXXXXX acknowledges and confirms that (a) the
restrictive covenants contained in this paragraph 12 (including, among others,
paragraph 12(c)) are reasonably necessary to protect the legitimate business
interests of PANAMCO, especially considering the fact that XXXXXXX has served
as the President and Chief Operating Officer of PANAMCO and as a result has
become intimately familiar with all aspects of PANAMCO's operations, and (b)
the restrictions contained in this paragraph 12 (including without limitation
the length of the term of the provisions of this paragraph 12) are not
overbroad, overlong, or unfair and are not the result of overreaching, duress
or coercion of any kind.
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XXXXXXX further acknowledges and confirms that his full, uninhibited and
faithful observance of each of the covenants contained in this paragraph 12
will not cause him any undue hardship, financial or otherwise, and that
enforcement of each of the covenants contained herein will not impair his
ability to obtain employment commensurate with his abilities and on terms
fully acceptable or otherwise to obtain income required for the comfortable
support of him and his family and the satisfaction of the needs of his
creditors. XXXXXXX acknowledges and confirms that his special knowledge of the
business of PANAMCO is such as would cause PANAMCO serious injury, or loss if
he were to use such ability and knowledge to the benefit of a competitor or
were to compete with PANAMCO in violation of the terms of this paragraph 12.
XXXXXXX further acknowledges that the restrictions contained in this paragraph
12 are intended to be, and shall be, for the benefit of and shall be
enforceable by, PANAMCO's successors and assigns.
(g) Reformation by Court. In the event that a court of competent
jurisdiction shall determine that any provision of this paragraph 12 is
invalid or more restrictive than permitted under the governing law of such
jurisdiction, then only as to enforcement of this paragraph 12 within the
jurisdiction of such court, such provision shall be interpreted and enforced
as if it provided for the maximum restriction permitted under such governing
law.
(h) Extension of Time. If XXXXXXX shall be in violation of any
provision of this paragraph 12, then the time limitation set forth in this
paragraph 12 for such provision shall be extended for a period of time equal
to the period of time
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during which such violation or violations occur. If PANAMCO successfully seeks
injunctive relief from such violation in any court, then the covenants set
forth in this paragraph 12 shall be extended for a period of time equal to the
pendency of such proceeding including all appeals by XXXXXXX.
13. Injunction. It is recognized and hereby acknowledged by the
parties hereto that a breach by XXXXXXX of any of the covenants contained in
paragraph 12 of this Agreement will cause irreparable harm and damage to
PANAMCO, the monetary amount of which may be virtually impossible to
ascertain. As a result, XXXXXXX recognizes and hereby acknowledges that
PANAMCO shall be entitled to an injunction from any court of competent
jurisdiction enjoining and restraining any violation of any or all of the
covenants contained in paragraph 12 of this Agreement by XXXXXXX or any of his
affiliates, associates, partners, or agents, either directly or indirectly,
and that such right to injunction shall be cumulative and in addition to
whatever other remedies PANAMCO may possess.
14. Arbitration. Any dispute or controversy arising under or in
connection with this Employment Termination Agreement and General Release
shall be settled exclusively by arbitration in Miami-Dade County, Florida, in
accordance with the Rules of the American Arbitration Association then in
effect (except to the extent that the procedures outlined below differ from
such rules). Within thirty (30) days after written notice by either party has
been given that a dispute exists and that arbitration is required, each party
must select an arbitrator and those two arbitrators shall promptly, but in no
event later than thirty (30) days after their
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selection, select a third arbitrator. The parties agree to act as
expeditiously as possible to select arbitrators and conclude the dispute. The
selected arbitrators must render their decision in writing. The cost and
expenses of the arbitration and of enforcement of any award in any court shall
be borne equally by both parties. If advances are required, each party will
advance one-half of the estimated fees and expenses of the arbitrators. The
parties agree that if they break any of the promises they have made in this
Agreement, the prevailing party will be entitled to recover its reasonable
attorney's fees and costs in any litigation or arbitration initiated to
enforce this Agreement. Judgment may be entered on the arbitrators' award in
any court having jurisdiction. Although arbitration is contemplated to resolve
disputes hereunder, either party may proceed to court to obtain an injunction
to protect its rights hereunder, the parties agreeing that either could suffer
irreparable harm by reason of any breach of this Agreement. Pursuit of an
injunction shall not impair arbitration on all remaining issues.
15. Governing Law; Interpretation. This Agreement shall be governed
by and construed in accordance with the laws of the State of Florida. Its
language shall be construed as a whole, according to its fair meaning, and not
strictly for or against either party. The language of this Agreement shall not
be construed against the drafter.
16. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and, upon its effectiveness, shall supersede all prior agreements,
understandings and
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arrangements, both oral and written, between XXXXXXX and PANAMCO with respect
to such subject matter, including but not limited to the Employment Agreement.
This Agreement may not be modified in any way unless by a written instrument
signed by both PANAMCO and XXXXXXX.
17. Certification. XXXXXXX hereby certifies that he has read the
terms of this Employment Termination Agreement and General Release, that he
has been advised by PANAMCO to consult with an attorney of his own choice
prior to executing this Agreement, that he has had an opportunity to do so,
and that he understands this Agreement's terms and effects. XXXXXXX further
certifies that PANAMCO has not made any representations to XXXXXXX concerning
this Employment Termination Agreement and General Release other than those
contained herein.
18. Time to Consider Signing Agreement; Right to Revoke. XXXXXXX
acknowledges that he has been informed that he has the right to consider this
Employment Termination Agreement and General Release for a period of at least
21 days prior to entering into this Agreement. He also understands that he has
the right to revoke this Agreement for a period of 7 days following his
execution of this Agreement by giving written notice by facsimile or hand
delivery to PANAMCO at 000 Xxxxxxxxx Xxx, Xxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000,
Attention: Xxxxxx Xxxxxxxxx-Xxxxxxx, General Counsel.
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19. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and shall be deemed effective upon
the signing of the last counterpart by the parties.
20. Invalidity. If any provision of this Employment Termination
Agreement and General Release is deemed invalid, the remaining provisions
shall not be affected.
21. Headings. Paragraph headings are used herein for convenience of
reference only and shall not affect the meaning of any provision of this
Agreement.
22. Indemnification. PANAMCO agrees to continue to indemnify,
defend, and hold XXXXXXX harmless from any claims asserted against XXXXXXX
regarding acts or omissions made by XXXXXXX while performing his duties for
PANAMCO, but only to the extent provided under the terms of PANAMCO's
Directors and Officers Liability Insurance Policies and any applicable
provisions of PANAMCO's Articles of Incorporation, Bylaws and Operating
Agreement. The parties acknowledge that after the Termination Date XXXXXXX
will continue as a named insured under such policies by virtue of his former
status as a director and officer of PANAMCO.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties have executed the foregoing Employment Termination Agreement and
General Release this 6th day of December, 2001.
WITNESS___________________ _______________________________________
XXXXXXXXX XXXXXXX
PANAMCO LLC d/b/a PANAMERICAN
BEVERAGES COMPANY and PANAMERICAN
BEVERAGES, INC.
WITNESS:__________________ By:____________________________________
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