EMPLOYMENT AGREEMENT
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This Employment Agreement ("Agreement") is made and entered into on this
14th day of December 2001, to be effective as of February 15, 2002, by and
between PANAMCO LLC, a limited liability company organized under the laws of
Delaware and d/b/a PANAMERICAN BEVERAGES COMPANY in Florida (the "Company"), a
wholly-owned subsidiary of Panamerican Beverages, Inc., a company organized
under the laws of the Republic of Panama ("Panamco") and Xxxxx Xxxxxxxx
Xxxxxxx (hereinafter called the "Employee").
AGREEMENT
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In consideration of the promises and mutual covenants set forth herein,
the parties agree as follows:
1. Employment.
1.1 Employment. Contingent on Employee being able to secure a U.S.
work visa, the Company hereby agrees to employ the Employee and the Employee
hereby agrees to serve the Company on the terms and conditions set forth
herein.
1.2 Duties of Employee. During the Term of Employment under this
Agreement, the Employee shall serve as the Chief Financial Officer of the
Company and Panamco based in Miami, Florida, shall diligently perform all
services as may be assigned to him by the Company and Panamco, and shall
exercise such power and authority as may from time to time be delegated to him
by the Company and Panamco. The Employee shall devote his full time and
attention to the business and affairs of the Company and Panamco, render such
services to the best of his ability, and use his best efforts to promote the
interests of the Company and Panamco. It shall not be a violation of this
Agreement for the Employee to (i) serve on corporate, civic or charitable
boards or committees, (ii) deliver lectures, fulfill speaking engagements or
teach at educational institutions, or (iii) manage personal investments, so
long as such activities do not significantly interfere with the performance of
the Employee's responsibilities to the Company and Panamco in accordance with
this Agreement.
2. Term.
2.1 The term of this Agreement, and the employment of the
Employee hereunder, shall commence on February 15, 2002 (the "Commencement
Date") and continue thereafter until the first to occur of the following:
a. Termination for cause by the Company under Section 5.1.
b. Disability under Section 5.2.
c. Death under Section 5.3.
d. Termination without cause by the Company under Section 5.4.
e. Termination by Employee under Section 5.5.
2.2 Term of Employment and Expiration Date. The period during which
the Employee shall be employed by the Company pursuant to the terms of this
Agreement is sometimes referred to in this Agreement as the "Term of
Employment", and the date on which the Term of Employment shall expire, is
sometimes referred to in this Agreement as the "Expiration Date".
3. Compensation.
3.1 Base Salary. The Employee shall receive a base salary at the
annual rate of $380,000.00 (Three Hundred Eighty Thousand Dollars) (the "Base
Salary") during the Term of Employment, with such Base Salary payable in
twelve monthly installments consistent with the Company's normal payroll
schedule, subject to applicable withholding and other taxes. The Base Salary
shall be inclusive of any Christmas Bonus and Vacation premium. The Base
Salary shall be reviewed, at least annually, for merit increases and may, by
action and in the discretion of the Company, be changed at any time or from
time to time including based upon market conditions.
3.2 Bonuses. During the Term of Employment, the Employee may be
eligible to receive bonuses pursuant to the terms and conditions of any
incentive plan in effect from time to time. As of the Commencement Date the
Employee will be eligible to participate in the Annual Incentive Plan in
effect with a Target Award of 50% of the Employee's annual Base Salary and an
Award opportunity of 150% of annual Base Salary in accordance with the Plan's
terms. Any bonuses payable pursuant to this Section 3.2 are sometimes
hereinafter referred to as "Incentive Compensation." Each period for which
Incentive Compensation is payable is sometimes hereinafter referred to as a
"Bonus Period." Unless otherwise specified by the Board of Directors of
Panamco or provided under the Incentive Plan, the Bonus Period shall be the
calendar year.
3.3 Automobile Allowance. During the Term of Employment, the
Employee shall receive an allowance from the Company for automobile
related-expenses, which allowance has been quantified by the Company to equal
$700.00 (Seven Hundred Dollars) per month, net of any applicable taxes, which
amount shall be payable at the same times and in the same manner as the
Employee's Base Salary, as described in Section 3.1 hereof.
4. Benefits.
4.1 Reimbursement of Expenses. Upon the submission of proper
substantiation by the Employee, and subject to such rules and guidelines as
the Company may from time to time adopt, the Company shall reimburse the
Employee for all reasonable expenses actually paid or incurred by the Employee
during the Term of Employment in the course of and pursuant to the business of
the Company. The Company shall also reimburse the Employee for all reasonable
pre-Commencement Date business travel expenses in accordance with the
Company's current travel policy. The Employee shall account to the Company in
writing for all expenses for which reimbursement is sought and shall supply to
the Company copies of all relevant invoices, receipts or other evidence
reasonably requested by the Company.
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4.2 Benefit Programs. During the Term of Employment, the Company may
provide to the Employee such fringe benefits as are accorded to other
similarly situated Company employees from time to time.
4.3 Stock Options and Restricted Stock. During the Term of
Employment, the Employee may be eligible to be granted both restricted stock
and options (the "Stock Options") to purchase common stock of Panamco under
(and therefore subject to all terms and conditions of) any stock option plan
in effect from time to time and all rules of regulation of the Securities and
Exchange Commission applicable to stock option plans then in effect. Employee
will be entitled to an award of 70,000 non- incentive stock options to be
granted on the Commencement Date at an exercise price equal to the closing
price of the stock on the NYSE on the Commencement Date in accordance with the
provisions of Panamco's Equity Incentive Plan.
4.4 Vacation Time. During the Term of Employment, the Employee shall
be entitled to 15 (fifteen) business days of vacation each calendar year, to
be taken at such times as the Employee and the Company shall mutually
determine and provided that no vacation time shall interfere with the duties
required to be rendered by the Employee hereunder. Any vacation time not taken
by the Employee during any calendar year may be carried forward into the
succeeding calendar year (the "Unused Vacation Time"); provided, however, that
in the event that the Employee fails to utilize the Unused Vacation Time by
the end of the succeeding year, such Unused Vacation Time shall be forfeited.
For these purposes, the Unused Vacation Time shall be considered utilized by
the Employee prior to the time that the vacation time for the subsequent year
shall be considered to be utilized by the Employee.
4.5 Relocation Assistance. The Company shall reimburse the Employee
for reasonable moving and relocation expenses from Mexico to Miami, Florida,
up to $50,000.00.
4.6 Children's Education Reimbursement. To the extent the Employee
remains employed by the Company, the Company shall reimburse the Employee for
tuition for private elementary and secondary school for Employee's Children
("Children's Education Reimbursement") adjusted as follows: (x) 100% of the
Children's Education Reimbursement for the first year after the Commencement
Date; (y) 67% of the Children's Education Reimbursement for the second year
after the Commencement Date; and (z) 33% of the Children's Education
Reimbursement for the third year after the Commencement Date.
5. Termination.
5.1 Termination for Cause. The Company shall at all times have the
right to terminate the Term of Employment for Cause. For purposes of this
Agreement, the term "Cause" shall mean the Employee's violation or failure to
satisfy any written or unwritten policy, standard, rule or expectation of the
Company; the Employee's commission of some act or omission adverse to the
Company's interests; the Employee's unsatisfactory job performance; and/or any
other reason which the Company, in its sole discretion, shall deem to be a
legitimate reason for discharge. Upon any termination pursuant to this Section
5.1, the Company shall (i) pay to the Employee his Base Salary to the date of
termination and (ii) pay to the Employee his accrued but unpaid Incentive
Compensation, if any, for any Bonus Period ending on or before the date of the
termination of the Employee's employment with the Company. The Company shall
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have no further liability hereunder (other than for (x) reimbursement for
reasonable business expenses incurred prior to the date of termination, and
(y) payment of compensation for unused vacation days including both the
vacation days that have accumulated during the year in which said termination
occurs and the unused carryover vacation days from the immediately preceding
year). Any determination of Cause by the Company shall be binding and
conclusive on all parties in the absence of fraud or gross negligence.
5.2 Disability. The Company shall at all times have the right to
terminate the Term of Employment, if the Employee shall become entitled to the
benefits under the Company's long-term disability plan as then in effect, or,
if the Employee shall as the result of mental or physical incapacity, illness
or disability, become unable to perform the essential functions of his
position, with or without reasonable accommodation, for a period of 180 days
in any 12-month period. The Company shall have sole discretion based upon
competent medical advice to determine whether the Employee continues to be
disabled. Upon any termination pursuant to this Section 5.2, the Company shall
(i) pay to the Employee any unpaid Base Salary through the effective date of
termination specified in such notice, and (ii) pay to the Employee his accrued
but unpaid Incentive Compensation, if any, for any Bonus Period ending on or
before the date of termination of the Employee's employment with the Company.
The Company shall have no further liability hereunder (other than for (x)
reimbursement for reasonable business expenses incurred prior to the date of
termination, and (y) payment of compensation for unused vacation days
including both the vacation days that have accumulated during the year in
which such termination occurs and the unused carryover vacation days from the
immediately preceding year).
5.3 Death. Upon the death of the Employee during the Term of
Employment, the Company shall (i) pay to the estate of the deceased Employee
any unpaid Base Salary through the Employee's date of death, and (ii) pay to
the estate of the deceased Employee his accrued but unpaid Incentive
Compensation, if any, for any Bonus Period ending on or before the Employee's
date of death. The Company shall have no further liability hereunder (other
than for (x) reimbursement for reasonable business expenses incurred prior to
the date of the Employee's death, and (y) payment of compensation for unused
vacation days including both the vacation days that have accumulated during
the year in which such termination occurs and the unused carryover vacation
days from the immediately preceding year).
5.4 Termination Without Cause. At any time the Company shall have
the right to terminate the Term of Employment without cause. Upon any
termination pursuant to this Section 5.4 (that is not a termination under any
of Sections 5.1, 5.2, 5.3 or 5.5), the Company shall (i) pay to the Employee
any unpaid Base Salary through the effective date of termination specified in
such notice, (ii) pay to the Employee his accrued but unpaid Incentive
Compensation, if any, for any Bonus Period ending on or before the date of the
termination of the Employee's employment with the Company, (iii) pay to the
Employee, as a single lump sum payment within thirty (30) days of the date of
termination hereunder, one month of Base Salary per full year of service
during the Term of Employment, (iv) continue to provide the Employee with the
benefits he was receiving under Section 4.2 hereof (the "Benefits") for a
period of one year after the date of termination in the manner and at such
times as the Benefits otherwise would have been payable or provided to the
Employee, or, if earlier, until similar benefits are obtained by the Employee
through new employment, (v) only if termination occurs prior to the first
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anniversary of the Commencement Date, a third of the non-incentive stock
options to be granted on the Commencement Date, pursuant to Clause 4.3 above
will immediately vest and shall be exercisable in accordance with the
provisions of Panamco's Equity Incentive Plan and (vi) only if the termination
occurs prior to the third anniversary of the Commencement Date, reimburse the
Employee for reasonable moving expenses incurred as a result of the Employee's
relocation back to his home country. In the event that the Company is unable
to provide the Employee with any Benefits required hereunder by reason of the
termination of the Employee's employment pursuant to this Section 5.4, then
the Company shall pay the Employee cash equal to the value of the Benefit that
otherwise would have accrued for the Employee's benefit under the plan, for
the period during which such Benefits could not be provided under the plans,
said cash payments to be made within 45 days after the end of the year for
which such contributions would have been made or would have accrued. The
Company's good faith determination of the amount that would have been
contributed or the value of any Benefits that would have accrued under any
plan shall be binding and conclusive on the Employee. For this purpose, the
Company may use as the value of any Benefit the cost to the Company of
providing that Benefit to the Employee. Further, the Employee may exercise the
portion of his Stock Options that was vested as of the date of termination as
provided under the terms of any stock option plan in effect from time to time.
The Company shall have no further liability hereunder (other than for (x)
reimbursement for reasonable business expenses incurred prior to the date of
termination, and (y) payment of compensation for unused vacation days
including both the vacation days that have accumulated during the year in
which such termination occurs and the unused carryover vacation days from the
immediately preceding year).
5.5 Termination by Employee.
a. The Employee shall at all times have the right to terminate
the Term of Employment.
b. Upon termination of the Term of Employment pursuant to this
Section 5.5 by the Employee, the Company shall (i) pay to the Employee any
unpaid Base Salary through the effective date of termination specified in such
notice and (ii) pay to the Employee his accrued but unpaid Incentive
Compensation, if any, for any Bonus Period ending on or before the termination
of Employee's employment with the Company. In addition, the Employee may
exercise the portion of his Stock Options that was vested as of the date of
termination as provided under the terms of any stock option plan in effect
from time to time. The Company shall have no further liability hereunder
(other than for (1) reimbursement for reasonable business expenses incurred
prior to the date of termination, and (2) payment of compensation for unused
vacation days including both the vacation days that have accumulated during
the year in which such termination occurs and the unused carryover vacation
days from the immediately preceding year).
5.6 General Release Requirement. All payments or benefits to
Employee under this Article 5 (other than payments or benefits already accrued
and otherwise due under the Company's employee, executive or fringe benefit
plans or programs) will not be given unless Employee executes (and does not
rescind) a written employment termination agreement incorporating a general
release, in a form prescribed by the Company, of all claims against the
Company and related parties with respect to all matters occurring to the date
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of the release, including (but not limited to) employment matters or matters
in connection with Employee's termination, except for matters relating to
benefits or payments already accrued and otherwise due under the Company's
employee, executive or fringe benefit plans or programs.
5.7 Survival. The provisions of this Article 5 shall survive the
termination of this Agreement, as applicable.
6. Restrictive Covenants.
6.1 Non-competition. At all times while the Employee is employed by
the Company and for a two (2) year period after the termination of the
Employee's employment with the Company for any reason, the Employee shall not,
directly or indirectly, engage in or have any interest in 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 directly or indirectly (or
through any affiliated entity) engages in competition with the Company (for
this purpose, any business that engages in soft drink beverage distribution in
the territories of Panamco shall be deemed to be in competition with the
Company); provided that such provision shall not apply to the Employee's
ownership of Common Stock of Panamco or the acquisition by the Employee,
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 the Employee 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 corporation.
6.2 Nondisclosure. The Employee shall not at any time divulge,
communicate, use to the detriment of the Company 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 the Company. Any
Confidential Information or data now or hereafter acquired by the Employee
with respect to the business of the Company (which shall include, but not be
limited to, information concerning the Company's financial condition,
prospects, technology, customers, suppliers, sources of leads and methods of
doing business) shall be deemed a valuable, special and unique asset of the
Company that is received by the Employee in confidence and as a fiduciary, and
Employee shall remain a fiduciary to the Company with respect to all of such
information. For purposes of this Agreement, "Confidential Information" means
information disclosed to the Employee or known by the Employee as a
consequence of or through his employment by the Company (including information
conceived, originated, discovered or developed by the Employee) prior to or
after the date hereof, and not generally known, about the Company or its
business. Notwithstanding the foregoing, nothing herein shall be deemed to
restrict the Employee from disclosing Confidential Information to the extent
required by law.
6.3 Nonsolicitation of Employees and Clients. At all times while the
Employee is employed by the Company and for a two (2) year period after the
termination of the Employee's employment with the Company for any reason, the
Employee shall not, directly or indirectly, for himself or for any other
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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 the Company, unless such employee or former
employee has not been employed by the Company for a period in excess of six
months, and/or (b) call on or solicit any of the actual or targeted
prospective clients of the Company on behalf of any person or entity in
connection with any business competitive with the business of the Company, nor
shall the Employee make known the names and addresses of such clients or any
information relating in any manner to the Company's trade or business
relationships with such customers, other than in connection with the
performance of Employee's duties under this Agreement.
6.4 Books and Records. All books, records, and accounts relating in
any manner to the customers or clients of the Company, whether prepared by the
Employee or otherwise coming into the Employee's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company upon termination of the Employee's employment hereunder or on the
Company's request at any time.
6.5 Definition of Company. Solely for purposes of this Article 6,
the term "Company" also shall include any existing or future subsidiaries or
affiliates of the Company 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
the Company during the periods described herein.
6.6 Acknowledgment by Employee. The Employee acknowledges and
confirms that (a) the restrictive covenants contained in this Article 6 are
reasonably necessary to protect the legitimate business interests of the
Company, and (b) the restrictions contained in this Article 6 (including
without limitation the length of the term of the provisions of this Article 6)
are not overbroad, overlong, or unfair and are not the result of overreaching,
duress or coercion of any kind. The Employee further acknowledges and confirms
that his full, uninhibited and faithful observance of each of the covenants
contained in this Article 6 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 to him or otherwise to obtain income
required for the comfortable support of him and his family and the
satisfaction of the needs of his creditors. The Employee acknowledges and
confirms that his special knowledge of the business of the Company is such as
would cause the Company serious injury or loss if he were to use such ability
and knowledge to the benefit of a competitor or were to compete with the
Company in violation of the terms of this Article 6. The Employee further
acknowledges that the restrictions contained in this Article 6 are intended to
be, and shall be, for the benefit of and shall be enforceable by, the
Company's successors and assigns.
6.7 Reformation by Court. In the event that a court of competent
jurisdiction shall determine that any provision of this Article 6 is invalid
or more restrictive than permitted under the governing law of such
jurisdiction, then only as to enforcement of this Article 6 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.
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6.8 Extension of Time. If the Employee shall be in violation of any
provision of this Article 6, then each time limitation set forth in this
Article 6 shall be extended for a period of time equal to the period of time
during which such violation or violations occur. If the Company seeks
injunctive relief from such violation in any court, then the covenants set
forth in this Article 6 shall be extended for a period of time equal to the
pendency of such proceeding including all appeals by the Employee.
6.9 Survival. The provisions of this Article 6 shall survive the
termination of this Agreement, as applicable.
7. Injunction. It is recognized and hereby acknowledged by the
parties hereto that a breach by the Employee of any of the covenants contained
in Article 6 of this Agreement will cause irreparable harm and damage to the
Company, the monetary amount of which may be virtually impossible to
ascertain. As a result, the Employee recognizes and hereby acknowledges that
the Company 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 Article 6 of this Agreement by the Employee 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 the Company may possess.
8. Mediation. Except to the extent the Company has the right to seek
an injunction under Section 7 hereof, in the event a dispute arises out of or
relates to this Agreement, or the breach thereof, and if the dispute cannot be
settled through negotiation, the parties hereby agree first to attempt in good
faith to settle the dispute by mediation administered by the American
Arbitration Association under its Employment Mediation Rules before resorting
to litigation or some other dispute resolution procedure.
9. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement 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 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.
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.
10. Assignment. Neither party shall have the right to assign or
delegate his rights or obligations hereunder, or any portion
thereof, to any other person.
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11. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida.
12. 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 arrangements, both oral and written, between the Employee
and the Company (or any of its affiliates) with respect to such subject
matter. This Agreement may not be modified in any way unless by a written
instrument signed by both the Company and the Employee.
13. Notices: All notices required or permitted to be given hereunder
shall be in writing and shall be personally delivered by courier, sent by
registered or certified mail, return receipt requested or sent by confirmed
facsimile transmission addressed as set forth herein. Notices personally
delivered, sent by facsimile or sent by overnight courier shall be deemed
given on the date of delivery and notices mailed in accordance with the
foregoing shall be deemed given upon the earlier of receipt by the addressee,
as evidenced by the return receipt thereof, or three (3) days after deposit in
the U.S. mail. Notice shall be sent (i) if to the Company, addressed to 000
Xxxxxxxxx, Xxxxxx Xxxxx, Xxxxx, XX 00000, Attention: Xxxxxx Xxxxxxxxx-Xxxxxxx,
General Counsel, and (ii) if to the Employee, to his address as reflected on
the payroll records of the Company, or to such other address as either party
hereto may from time to time give notice of to the other.
14. Benefits; Binding Effect. This Agreement shall be for the
benefit of and binding upon the parties hereto and their respective heirs,
personal representatives, legal representatives, successors and, where
applicable, assigns, including, without limitation, any successor to the
Company, whether by merger, consolidation, sale of stock, sale of assets or
otherwise.
15. Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared invalid,
this Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted. If such invalidity is caused by length of time or size of
area, or both, the otherwise invalid provision will be considered to be
reduced to a period or area which would cure such invalidity.
16. Waivers. The waiver by either party hereto of a breach or
violation of any term or provision of this Agreement shall not operate nor be
construed as a waiver of any subsequent breach or violation.
17. Damages. Nothing contained herein shall be construed to prevent
the Company or the Employee from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any
term or provision of this Agreement. In the event that either party hereto
brings any action for the collection of any damages resulting from, or the
injunction of any action constituting, a breach of any of the terms or
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provisions of this Agreement, then the party found to be at fault shall pay
all reasonable court costs and attorneys' fees of the other.
18. Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
19. No Third Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any
person other than the Company, the parties hereto and their respective heirs,
personal representatives, legal representatives, successors and assigns, any
rights or remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.
COMPANY:
PANAMCO LLC
By__________________________________
Name:
Title:
EMPLOYEE:
By: _______________________________
Xxxxx Xxxxxxxx Xxxxxxx
