TWELFTH AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit
10.5
TWELFTH
AMENDMENT TO EMPLOYMENT AGREEMENT
This
Twelfth Amendment to Employment Agreement is made and entered into as of
November 13, 2008 (the “Effective Date”), by and between PriceSmart, Inc., a
Delaware Corporation (“Employer”) and A. ▇▇▇▇▇▇ ▇▇▇▇ (“Executive”).
Recitals
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A)
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On
January 11, 2000, an Employment Agreement was made and entered into by and
between Employer and Executive;
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B)
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Said
Employment Agreement has been amended on eleven prior occasions;
and
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C)
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Employer
and Executive now desire to amend the Employment Agreement, as set forth
herein, effective as of the Effective
Date:
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Agreement
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1.
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Section
4.1 of the Employment Agreement is hereby amended in its entirety to
provide as follows:
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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 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 one (1) year following the date of such termination, payable in
equal installments in conformity with Employer’s normal payroll period, provided
that such termination of employment constitutes a “separation from service” for
purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) and the regulations and guidance promulgated thereunder (a “Separation
from Service”). 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 and such termination
constitutes a Separation from Service, Executive shall be entitled to
continuation of Executive’s base salary for one (1) year, payable in equal
installments in conformity with Employer's normal payroll period; provided,
however, that Employer's obligation to pay such installments after expiration of
the Employment Term shall be reduced by the amount of employment compensation
(if any) received by Executive from a subsequent employer of Executive during
said one (1) year. During the period of this severance pay, Executive shall
cooperate with Employer in providing for the orderly transition of Executive’s
duties and responsibilities to other individuals, as reasonably request by
Employer.”
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2.
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Effective
as of the Effective Date, new Section 6.2 is incorporated into the
Employment Agreement, with subsequent Sections renumbered accordingly, to
read in its entirety as follows:
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“6.2 Section 409A. This
Agreement is intended to be interpreted and construed in a manner that does not
cause Executive to incur federal tax liability under Section 409A of the
Code. Notwithstanding any provision to the contrary in the Agreement,
if Executive is deemed by Employer at the time of Executive’s Separation
from Service to be a “specified employee” for purposes of Section
409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion
of the benefits to which Executive is entitled under this Agreement is required
in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of
the Code, such portion of Executive’s benefits shall not be provided to
Executive prior to the earlier of (a) the expiration of the six-month period
measured from the date of Executive’s Separation from Service or (b) the
date of Executive’s death. Upon the first business day following the
expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments
deferred pursuant to this Section 6.2 shall be paid in a lump sum to Executive,
and any remaining payments due under the Agreement shall be paid as otherwise
provided herein. To the extent that any reimbursements payable
pursuant to this Agreement are subject to the provisions of Section 409A of the
Code, any reimbursements payable to Executive shall be paid to Executive no
later than December 31 of the year following the year in which the cost was
incurred, the amount of expenses reimbursed in one year shall not affect the
amount eligible for reimbursement in any subsequent year,
and Executive’s right to reimbursement under this Agreement will not
be subject to liquidation or exchange for another benefit. For purposes of
Section 409A of the Code, Executive’s right to receive each payment of
compensation pursuant to the Agreement shall at all times be considered separate
and distinct from other payments.”
[Signature
page follows]
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3.
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All
other terms of the Employment Agreement shall remain unaltered and fully
effective.
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Executed
in San Diego, California, as of the date first written above.
EXECUTIVE EMPLOYER
PRICESMART, INC.
_______________________ _______________________
A. ▇▇▇▇▇▇
▇▇▇▇ By:
Its:
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