EXHIBIT 10.1
THIS IS A FAIR AND ACCURATE ENGLISH TRANSLATION OF THE
ORIGINAL EMPLOYMENT CONTRACT BY AND BETWEEN XX. XXXXXXXXX
XXXXXX XXXXXXXX AND TRIPLE-S, INC. WHICH IS IN SPANISH
EMPLOYMENT CONTRACT
In the city of San Xxxx, Puerto Rico, today the 1st of July of 2005.
APPEAR
FOR THE FIRST PART: TRIPLE-S, INC., a corporation organized and engaged in
business in conformance with Commonwealth of Puerto Rico laws, represented here
by its Board of Director's Chairman, XX. XXXXX XXXXXXXXX XXXXX, and by its Chief
Executive Officer, CPA XXXXXXX XXXXX XXXXXXXXX, of legal age, married, the
latter a physician by trade, and residing in Guaynabo, Puerto Rico, and the
former an executive residing in San Xxxx, Puerto Rico, whose authorities and
duties they are repaired to justify as soon as it is required of them.
FOR THE SECOND PART: XXXXXXXXX XXXXXX PESQUERA, of legal age, married, a
physician by trade and a resident of Rio Piedras, Puerto Rico.
The undersigned, with the intention of entering into an employment contract and
with the legal capacity to execute this document, to that effect, freely and
voluntarily
EXPOSE
FIRST: For purposes of abbreviation and ease in understanding and analyzing this
agreement of intentions, the following terms shall have the meaning stated in
these definitions:
a. The "CEO"; The Chief Executive Officer of Triple-S, Inc., CPA
Xxxxxxx Xxxxx Xxxxxxxxx
b. The "BOARD"; The Board of Directors of Triple-S, Inc.
c. The "PBD"; President of the BOARD, Xx. Xxxxxx Xxxxxxxxx Xxxxx
d. The "VMDP"; The Senior Vice-president of the Medical, Dental and
Professional Matters Division, Xx. Xxxxxxxxx Xxxxxx Xxxxxxxx,
e. The "CONTRACT"; This Employment Contract.
SECOND: That Triple-S, Inc. is a company dedicated, among other activities, to
providing insurance coverage for the receipt of medical-hospital services
throughout the Commonwealth of Puerto Rico.
THIRD: That the VMDP is a vastly experienced professional in the Medical Field,
having obtained a Doctor of Medicine Degree from the University of Puerto Rico,
interning and specializing in internal medicine and Nephrology at the University
of Puerto Rico School of Medicine's University Hospital. Also, during the last
25 years the VMDP has performed as Professorial Chair at the University of
Puerto Rico, School of Medicine, and as its Xxxx during the last five and a half
years. He has been practicing in the medical private practice for the past 27
years.
FOURTH: For purposes of establishing the internal relationship between both
contracting parts as herein stated, they agree to the present CONTRACT subject
to the following Clauses and Conditions.
GENERAL PROVISIONS
1. EXCELLENCE IN PERFORMANCE: Through this CONTRACT, the VMDP is under
the obligation of dedicating and directing full time, intellect,
attention, energy, experience and knowledge towards the protection
of Triple-S, Inc.'s best interests, within the framework of
excellence his capacity and ability permit.
2. OFFICER AND TITLE: The VMDP will carry the Title of Senior
Vice-president of the Medical, Dental and Professional Matters of
Triple-S, Inc.
3. HIERARCHY: The VMDP will respond directly to Triple-S, Inc.'s CEO,
and will inform the Board of Directors about Triple-S, Inc.'s
medical, dental and professional problems.
4. FIDUCIARY NORMS AND OBLIGATIONS: The VMDP will be under the
obligation to conform loyally and fully with all administrative
guidelines, rules, regulations and norms established by Triple-S,
Inc., developing and establishing the operational controls necessary
to protect Triple-S, Inc.'s best interests. The VMDP will be loyal
to Triple-S, Inc. at all times, and will solemnly recognize the
obligation represented in his acceptance of the current title.
SPECIFIC PROVISIONS
5. PRINCIPAL FUNCTIONS. The functions the VMDP will undertake through
this contract will be all those related to Triple-S, Inc.'s medical,
dental and professional matters, and he will be the person the CEO
will turn to in dealing with these medical, dental and professional
matters. The VMDP's functions
will invariably be performed in Triple-S, Inc.'s best interests and
for its protection.
The VMDP will participate in meetings held by the Professional
Relations and in the Board of Directors, in the role of Advisor. His
presence will be required in the meetings held by this committee and
by the Board of Directors, unless the President of the Committee, or
the Board, excuse his presence.
6. INCIDENTAL OR ACCESSORY FUNCTIONS. The VMDP should also fulfill all
those functions, tasks and commissions, incidental or accessory,
which the CEO assigns him from time to time, including his presence
in other Board Committees.
7. ECONOMIC REMUNERATION. The VMDP will be economically remunerated in
the following manner for the services that, in keeping with this
CONTRACT, he is under the obligation to fulfill:
a. Salary. An annual salary of $175,000.00, equivalent to
$14,583.33 a month.
b. Christmas Bonus. A Special Christmas bonus equivalent to 5% of
his annual salary, plus half a month's salary, plus any bonus
Triple-S, Inc. is obligated by law provisions to pay. This
Christmas bonus will be paid in conformance to the Triple-S,
Inc.'s policies and norms applicable to their management
employees, and as modified from time to time.
c. Optional Additional Annual Bonus. The Board of Directors can
also, at their option, grant an optional additional annual
bonus that will be computed by the Board of Directors each
year, as is established in the following clause.
d. Attached as Attachment A of this contract, the document titled
Annual Compensation Statement which provides a detail of the
remuneration and marginal benefits. Attachment A is part of
this contract.
8. COMPUTING THE OPTIONAL ADDITIONAL ANNUAL BONUS. The Optional
Additional Annual Bonus (AAB) will be determined annually, at the
Board of Director's option, immediately after Triple-S, Inc.
receives its financial statements for the pertinent economic year,
certified by their external auditors. The AAB will be credited to
the VMDP as soon as the Board has determined it, and according to
the criteria it establishes for its payment. The Board of Directors
will compute the AAB at the time it considers the Vice Presidents'
AABs.
9. DEFERRED COMPENSATION. The VMDP will have the power to, from time to
time, defer payments for any of the before mentioned economic
remuneration concepts in keeping with his wishes, if and when such
action is in accordance to the applicable law provisions and to good
corporate practices.
10. ANNUAL SALARY REVISION. The VMDP's Salary will be reviewed annually,
effective July 1st of each year, beginning on January 1, 2007. Said
revision would take into account the percent of change in Puerto
Rico's general economic inflation rate, as determined by the
Planning Board for the previous year, and other factors regarding
compensation of other Officers of same or similar position and
responsibility within the local industry and commerce, and any other
relevant factor, for example, that Triple-S, Inc. has closed the
revision applicable year with positive financial results. The BOARD
shall do the computing of the salary change at the time it reviews
compensation to Vice-presidents.
11. FRINGE BENEFITS. The VMDP will have the right to all fringe benefits
such as: Retirement Plan, Health Plan, vacations, sick leave,
disability insurance and others, in conformance to Triple-S, Inc.'s
policies and norms as applicable to its management employees, and as
modified from time to time.
Triple-S, Inc. also will reimburse or pay the VMDP the following:
a. Representation, travel and miscellaneous expenses which are
reasonably and necessarily incurred in carrying out his
official duties;
b. Annual membership fees to two professional associations
such as the Puerto Rico College of Physicians and Surgeons,
and the Puerto Rico Medical Association, per prior approval
from the CEO, and
c. Any other related expenses that the CEO deems necessary in
carrying out his duties.
12. DEDUCTIONS. Triple-S, Inc. will make all deductions from the VMDP's
remuneration that the law requires, such as: social security,
retained income taxes, and his spouse's and any other optional
dependent's life and disability insurance portion. The VMDP is
authorized to acquire any life insurance coverage in addition to the
one currently held by Triple-S, Inc., at his own responsibility and
cost.
13. EXCLUSION FROM THE MINIMUM WAGE LAW. The VMDP recognizes that the
duties he will undertake are excluded from the Puerto Rico Minimum
Wage Law.
14. EFFECTIVENESS AND TERM OF CONTRACT. This contract's effective date
is established to be July 1, 2005 and its ending date is June 30,
2010. The Board of Directors can, at their option, renew this
contract. The Board of Directors must notify the VMDP no later than
one year before the ending date of this original contract term or of
its renovation, of their decision to renew or not renew it.
If Triple-S, Inc. decides not to renew the Contract, it is under the
obligation to pay the VMDP one year's salary. Triple-S, Inc. must
also have fulfilled all obligations to the VMDP which correspond to
his contract's terms, including those regarding compensation and
fringe benefits. Disbursement of this amount shall occur no later
than the last effective date of this contract. In case this contract
is renewed and then terminated by Triple-S Inc. before the
renovation's ending date, Triple-S, Inc. is under the obligation of
providing the VMDP with the same compensation.
15. UNILATERAL RESOLUTION- JUST CAUSE. It is understood that Triple-S,
Inc. is assisted by just cause for unilaterally dissolving this
CONTRACT when the VMDP incurs in any of the following behaviors:
a. Negligence in carrying out his duties, or their late,
inadequate or inept performance;
b. Conviction of a felony or misdemeanor involving moral
depravation;
c. Insubordination;
d. Material non-conformance to corporate norms, rules and
agreements, or those of this CONTRACT;
e. Improper or disorderly conduct;
f. Existence of a conflict of interests;
g. Total, temporary or partial closing of Triple-S, Inc.'s
operations;
h. Employment reductions that result from Triple-S, Inc.'s
diminishing business volume.
In such case, the compensations described in clause 15 and 16
will not be applicable.
16. UNILATERAL RESOLUTION. The parties agree that Triple-S, Inc. has the
right to dissolve unilaterally this contract at any time before the
agreed ending
date. To exercise this right, the PBD and the CEO will jointly
notify the VMDP thirty days before the effective date of said
unilateral dissolution. As a condition for Triple-S, Inc. to
exercise this right, it must proceed immediately with the total cash
liquidation of the balance of this professional employment contract,
in addition to the one year salary specified in paragraph 14,
including the fringe benefits, and subtracting the discounts
applicable by law. Triple-S, Inc. will have the option of continuing
monthly payments until the contract is completed.
The VMDP will be able to resolve this contract unilaterally in any
moment, notifying the PBD and the CEO thirty (30) days prior to
being effective said unilateral resolution. In said case, the
compensations discussed before will not be applicable.
17. PREMATURE TERMINATION- DEATH, DISABILITY OR BANKRUPTCY. If the VMDP
should die during this CONTRACT term, Triple-S, Inc. will liquidate
his wages through payment to the heirs. Besides the life insurance
the VMDP is entitled to as specified, and the liquidation of his
wages, the VMDP's heirs are not entitled to any additional
compensation.
If the VMDP should suffer a significant mental or physical
disability, or if Triple-S, Inc. should be brought, voluntarily or
involuntarily, to a bankruptcy process, Triple-S, Inc. can, at its
option entirely, dissolve this contract unilaterally. This without
the assumption that the VMDP's rights are violated in case of a
physical disability, due to the disability insurance stated before.
For purposes of the last paragraph, it will be understood that the
VMDP suffers from significant physical or mental disability when he
absents himself from his employment for SIX (6) consecutive months,
or he is absent in excess of NINETY PERCENT (90%) of said SIX
consecutive month period. In termination for any of the before
mentioned reasons, the payment of one year's salary will not apply.
18. PRIVILEGED MATERIAL- CONFIDENTIALITY. Except as formerly stated, all
the information Triple-S, Inc. shares with the VMDP, or that he is
privy to as a consequence of his employee relationship with
Triple-S, Inc., in the guise of any chores, relationships, contacts,
businesses, clients and duties, will constitute privileged and
confidential material.
Consequently, the VMDP will not divulge said information to third
parties, including Triple-S, Inc. employees, functionaries or
officers who do not have a legitimate reason to know this
information. The confidentiality and privilege obligation discussed
here shall survive the conclusion, unilateral resolution or
termination of this CONTRACT.
19. DOCUMENTS. At the end of this contract, the VMDP will keep or return
all documents, objects, materials and the rest of the information he
has obtained through Triple-S, Inc. business, in the Triple-S, Inc.
offices, recognizing at the same time that said documents, objects,
materials and related information are the exclusive property of
Triple-S, Inc.
20. LIMITATION- OTHER EMPLOYMENT OR DUTIES. The VMDP is not to count on
third parties for supplying any service, independent of whether
economic compensation is involved or not, unless the CEO and PBD
have previously given their express consent.
21. TRIPLE-S, INC. PERSONNEL. The VMDP will not solicit or encourage the
Triple-S, Inc. personnel to quit their jobs and join him or a third
party in other activities that are not to Triple-S, Inc.'s benefit.
THIS CONTRACT IS AGREED UPON BY THE UNDERSIGNED IN CONSIDERATION OF THE
FOLLOWING:
MISCELLANEOUS PROVISIONS
22. CONTRACT CONSTRUCTION. Triple-S, Inc. and their legal representative
wrote this contract, therefore its intellectual property and
author's rights are theirs. At the same time, the contract is a
product of negotiations between both parties, so no assumption or
inference should be made in favor of any of them.
23. CEDING. The VMDP may not totally or partially cede the obligations
and responsibilities assumed through this CONTRACT to a third party.
24. PACT TOTALITY. This document constitutes the total and complete pact
agreed to by the contracting parts. No other former agreement,
contract or pact should be considered valid or effective.
25. AMENDMENTS. In case the undersigned wish to amend the content of any
clause in this CONTRACT, this should be done in writing, clearly
stating which clause is being amended and what the amendment
consists of.
26. HEADINGS. The headings included in this CONTRACT have been added to
aid in reading and analyzing it. At no time should these headings be
interpreted as the pact agreed upon by the undersigned, or that they
amend the content of the clauses each one heads.
27. LIMITED INVALIDITY. In case any clause in this CONTRACT is declared
null or illegal, the rest of the clauses will continue with full
effectiveness and force.
28. INTERPRETATION. This CONTRACT will be interpreted according to the
prevailing judicial order in the Commonwealth of Puerto Rico.
29. JURISDICTION AND COMPETENCE. If it were necessary to judicially
annul any controversy related to this CONTRACT, the parties will
submit voluntarily to the jurisdiction of the Puerto Rico Court of
First Instance and would choose the San Xxxx Halls of the Superior
or District Court, as were the case, to void it.
SUCH IS THE PACT agreed upon by contracting parties, which they recognize
and sign in San Xxxx, Puerto Rico on the date stated above.
/s/ Xx. Xxxxxx Xxxxxxxxx Xxxxx /s/ Xx. Xxxxxxxxx Xxxxxx Pesquera
----------------------------------------- -----------------------------------
By: Xx. Xxxxxx Xxxxxxxxx Xxxxx By: Xx. Xxxxxxxxx Xxxxxx Pesquera
Chairman of the Board of Directors
/s/ Xxxxxxx Xxxxx Xxxxxxxxx
------------------------------------------
By: Xxxxxxx Xxxxx Xxxxxxxxx
President and CEO Triple-S, Inc.
ATTACHMENT A
ANNUAL COMPENSATION STATEMENT
Name: _________________________
Department: _________________________
Division: _________________________
Basic Monthly Salary: $14,583.33
Basic Annual Salary: $ 175,000.00
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Marginal Benefits:
Vacations (18 days) A $ 12,115.38
Legal Christmas Bonus (Maximum) B $ 200.00
Additional Christmas Bonus (c) $ 16,041.67
Sick Leave (15 Days) D $ 10,096.15 $ 38,453.21
Health Plan (Familiar) $ 7,495.20
Pension Plan $ 11,025.00
Life Insurance (Maximum $100,000) $ 261.30
Long Term Disability $ 245.00 $ 19,026.50
Social Security $ 9,246.01
Unemployment (State) $ 175.00
Unemployment (Federal) $ 56.00
Disability Insurance $ 45.00 $ 9,522.01
Performance Bonus (E) $ 52,500.00 $ 52,500.00
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Total Marginal Benefits $ 119,501.71
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Total Compensation $ 294,501.71
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A Effective at the completion of the probative period. The accumulation, the
benefit and the marginal benefits are directed by corporate policies.
B If worked 700 hours or more before September 30th
C If worked 700 hours or more before September 30th and is a active regular
management employee to the date in which the additional Christmas bonus is
paid.
D We pay 90% of the net accumulated license.
E We pay a maximum of 30% of the basic salary depending on the performance
of the officer, and the benefits of the Corporation. It will be
discretional of the Board of Directors.
The Pension Plan contributions start after the person has been employed a
year.
THE CORPORATION RESERVES THE RIGHT TO AMEND, MODIFY, SUSPEND OR FINISH THE
BENEFITS HERE DETAILED, IN ALL OR IN PART, IN ANY MOMENT AT ITS SOLE DISCRETION,
EXCEPT FOR THOSE GIVEN BY DISPOSITION OF LAW, MANDATORY DECREE OR COLLECTIVE
AGREEMENT.
