5
EMPLOYMENT AGREEMENT
INDIVIDUAL EMPLOYMENT AGREEMENT FOR A FIXED TERM, EFFECTIVE AS OF MAY 19,
1998, ENTERED INTO BY AND BETWEEN ELECTRONICA PANTERA, S.A., DE C.V.
(HEREINAFTER THE "COMPANY"), REPRESENTED BY Xxxxxx Xxxxxxx, ITS
ATTORNEY-IN-FACT, AND XXXX X. XXXX XXXXXXX (HEREINAFTER THE "EXECUTIVE"),
PURSUANT TO THE FOLLOWING RECITALS AND CLAUSES:
RECITALS
I. COMPANY RECITES:
a) It is a Mexican corporation, duly incorporated under
the laws of the Mexican United States.
b) It is domiciled at Montemorelos #000
Xxxx Xxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx.
c) It has as its principal activities,
which are carried out with its own human and material resources the manufacture
and assembly of cable, harness assemblies and electronic sub-assemblies.
d) In
order to increase its market share worldwide and its activities in Mexico, the
Company requires the services of a General Manager with knowledge, skills,
capacity and experience in the business and activities referred to in paragraph
(c) of this Recital, and the market and the situation in Mexico for such
business and activities, as well as knowledge of and experience with the
Company.
II. EXECUTIVE RECITES:
a) His name is as set out in the introductory
paragraph of this Agreement.
b) He is a citizen of Mexico, 39 years of age
(birth date October 8, 1958), his civil status is married, and of male sex.
c)He is domiciled at Xxxxx xx Xxx Xxxxxx #000, Xx Xxxxxxx, Xxxxxxxxxx,Xxxxxxx,
Xxxxxx.
d) Due to his previous work and business activities, he has the
necessary capacity and experience to render his personal services to the Company
in the position for which he is hired.
e) He has knowledge of the Company, of
its business, and of the market for its products.
III. THE PARTIES RECITE:
a)They have agreed to enter into an employment agreement for an indefinite
period
of time. Based upon the foregoing recitals, the parties agree to the following:
CLAUSES 1) Validity and Term of the Agreement. On the basis of the Recitals of
the parties, and in accordance with the nature of the services herein agreed and
as provided in Article 37, Section I of the Federal Labor Law, this Agreement is
executed for an indefinite period of time, effective as of June 15, 1998.
Notwithstanding, the Company may terminate or rescind this Agreement for any of
the causes or justified grounds provided in the Mexican Federal Labor Law. This
Agreement cancels and supersedes any other written or verbal agreements the
parties may have entered into heretofore with respect to the employment
relationship set out in this Agreement, including but not limited to, conditions
of employment, compensation and fringe benefits to which the Executive may have
been entitled under any such prior Agreements, and services to be performed in
accordance with this Agreement.
2) Location for Rendering of Services. The
Executive shall principally render his services to the Company at the domicile
of the Company set out in Recital I(b) to this Agreement, which is hereby
incorporated by reference in its entirety. It is also agreed by the Executive
that he shall travel both within and outside Mexico, as necessary for the proper
discharge and fulfillment of his duties.
3) Full time and Effort. The Executive
agrees to dedicate his full time and effort to the Company, its business and
matters related thereto, and shall comply with the duties and responsibilities,
which are required for his position, and expressly, but without limitation, set
out in this Agreement, and shall carry out his duties and obligations with all
due diligence, care and attention pursuant to the terms and conditions set out
in this Agreement, subject to the supervision of the Company and subordinated to
it and its representatives in all matters related to the performance of his
services.
4) Scope of Services. The Executive shall be responsible for complying
with the obligations relating to General Manager, and shall have all other
responsibilities and authority commonly ascribed thereto, and to carry out such
other functions and activities as may be determined by the Board of Directors of
the Company or by those persons it may designate and to whom the Executive is
subordinated. In any event, the Executive shall keep the Company advised, in a
timely and proper manner, and any time at the request of the Company, as to the
performance and status of his activities.
5) Confidentiality. The Executive
expressly agrees and acknowledges that by virtue of the position for which he is
hired, he shall be privy to and shall have access to confidential information of
all kinds related to the business of the Company, its customers and suppliers,
including but not limited to, trade secrets, technology, whether or not
patented, administrative, accounting, financial, sales and marketing, personnel,
production and manufacturing policies, procedures and other secret and
confidential verbal or written information and documentation. Furthermore, the
Executive expressly agrees and acknowledges that any unauthorized disclosure to
any third party, or use by the Executive, directly or indirectly, for his own
benefit or for the benefit of any third party, of such information, whether or
not contained in any written material, as well as the employment of any employee
of the Company by the Executive or any such third party, as a result of an
inducement or offer of employment by the Executive or any such third party,
shall cause serious damage to the Company and its business. In view of the
foregoing, the Executive expressly agrees and undertakes not to disclose or in
any manner use such information and documentation for his own benefit or for the
benefit of any third party or to the detriment of the Company, at any time or
place even after termination of his employment relationship with the Company,
regardless of the reason therefor. Furthermore, the Executive expressly agrees
and undertakes not to, directly or indirectly, carry out any activities, perform
any services, act in any capacity or engage in any other business, for his own
benefit or for the benefit of any third party, which are, is or may be similar
to or competitive with the Company, at any time or place during his employment
by the Company and for two (2) years after termination of this Agreement.
Likewise, the Executive expressly agrees and undertakes not to, directly or
indirectly, possess, own, participate in, manage, operate, hold any position in
or provide services to any third party, whether or not incorporated as a legal
entity of any kind or nature, for his own benefit or for the benefit of any
third party, whether as a shareholder or partner, executive, principal or
alternate member of the Board of Directors, which is or may be engaged in a
business similar to or competitive with the Company, at any time or place during
his employment by the Company and for two (2) years after termination of this
Agreement. Upon termination of this Agreement and his employment relationship
with the Company for whatever reason, the Executive expressly agrees and
undertakes to immediately return and deliver to the Company, or subject and
pursuant to the direction of the Company, destroy any and all written material
and documentation which he holds in connection with the Company and its
business, as well as any other assets which he holds and that are the property
of the Company, and not to make or retain any copies thereof. Furthermore, for a
period of two (2) years after termination of this Agreement, the Executive
expressly agrees and undertakes not to induce or offer or to, directly or
indirectly, induce any third party to induce or offer to any employee of the
Company to enter establish or enter into an employment relationship or
agreement.
6) Work Schedule and Overtime. The Executive shall perform his
services to the Company within a daily work schedule, which in accordance with
his position and activities of the position for which he was hired, shall be
freely and independently distributed by him in accordance with the best
convenience of the work agreed and the interests of the Company. The parties
expressly agree the Executive cannot perform his services in a daily work
schedule in excess of the maximum ordinary work schedule provided in the Federal
Labor Law. In view of the foregoing, the parties expressly agree that the
Executive shall not perform services during overtime, and if required to do so,
it shall be necessary for the Executive to be authorized in writing to do so by
a representative of the Company of a higher position. Such written authorization
shall be the sole basis to approve the performance of work during overtime and
to be paid therefore.
7) Mandatory Days of Rest. The Executive shall be entitled
to enjoy as mandatory days of rest, those days listed in Article 74 of the
Federal Labor Law.
8) Weekly Day of Rest. The Executive in the terms agreed in
Clauses 6) and 7) shall freely determine the weekly days of rest, provided,
however, that he shall obtain prior written authorization from the Company to
work on Sunday or a legally mandated day of rest.
9) Annual Vacation. The
Executive shall be entitled to an annual vacation period of fifteen (15) working
days. The vacation period should be coordinated by the Executive with the
Company. Eligibility for vacation shall begin six months after employment date.
In addition, and in compliance with Article 80 of the Federal Labor Law, the
Executive shall be entitled to a vacation premium of 100%, calculated over the
working days of vacation actually taken by the Executive.
10) Base Compensation.
During the first year of this Agreement, the Executive shall be entitled to a
gross monthly salary in an amount equal to the Mexican currency equivalent of
US$10,500 (ten thousand five hundred dollars U.S.) During subsequent years the
salary shall be reviewed annually. The gross monthly salary shall be paid in
regular pay periods in pesos at the exchange rate on date of pay, less the
corresponding deduction for taxes and any other applicable deductions. It is
expressly agreed by the parties that by virtue of being a monthly salary, the
above mentioned salary includes the payment of mandatory and weekly days of
rest.
11) Annual Bonus. The Executive shall be entitled to receive an annual
bonus of up to thirty-five percent (35%) of base salary, payable after the close
of the fiscal year (September 30) and determination of the profits of the
preceding year. The bonus would be divided into two components: a) Bonus of 20%.
The first component of the bonus would be determined by the same objectives as
are applied to all similarly situate executives of the Company, as measured by
financial and non-financial objectives and as divided between corporate and
plant objectives; b) Bonus of 15%. The second component of the bonus would be
based solely on the Company profit targets. The Executive would receive a bonus
of 1% of base salary for each 1% of Company profits in excess of Company profit
targets. c) 1998 Special Provisions. In 1998, the bonus will be prorated based
upon months of service compared to months in the Company's fiscal year. The
first component of the bonus (up to 20% annualized) would be based upon
attainment of corporate profit targets (one-third of bonus) and plant profit
targets (two-thirds of bonus). The second component of the bonus (up to 15%
annualized) would be based upon the same formula as set forth in paragraph (b)
above.
12) Signing Bonus. The Executive shall receive a signing bonus, payable
within six weeks of the commencement of work, in the amount of US$20,000. Such
amount shall be paid in pesos or dollars, as elected by the Executive. Such
amount shall be net of taxes to Executive.
13) Christmas Bonus. The Executive
shall be entitled to an annual Christmas bonus of one month's base salary, to be
paid in December of each year.
14) Stock Option. Simultaneous with the execution
of this agreement, the Executive shall be extended an agreement under which The
JPM Company, which holds a commercial relationship with the Company, shall grant
15,000 stock options to the Executive under The JPM Employee Stock Option Plan
of 1995, which options shall be priced at the market price on date of contract,
and which options shall vest one-fourth annually on each anniversary date if the
Executive remains employed with the Company. Such options shall be subject to
the terms and conditions of the Employee Stock Option Plan of 1995 and the
agreement between the Executive and The JPM Company.
15) Life and Medical
Insurance. The Executive shall be entitled to the life and medical group
insurance of the company, subject to the conditions and requirements of the
policies contracted by the Company. The Executive shall be entitled to
additional coverage for life insurance, such that the company policy and
additional policy provide life insurance coverage of no less than US$500,000
(accidental death: US$1,000,000), provided that such coverage is available at
standard rates. The additional coverage shall be by term policy for a term no
less than ten years. In the event the Executive leaves the employ of the Company
in less than ten years, and the policy is assignable, the Executive shall have
the option of transferring the policy to himself upon termination. The Company
shall have the option but no obligation to continue such additional coverage
beyond the original ten-year term. The Executive shall be entitled to non-major
medical insurance coverage, premiums to be paid by the Company. The Company
shall purchase dependent medical insurance, major and non-major, for the
Executive.
16) Other Fringe Benefits. The Executive shall be entitled to
participate in all social and fringe benefits established or which may be
enacted in future by the Company. The Company shall specifically provide: a)
Xxxxx. Xxxxx allowance of US$165.00 per month. b) Athletic Club Membership.
Allowance of up to US$412 per month, to be reviewed annually. c) Cellular Phone.
To be provided at company expense. d) Annual Physical. To be provided at company
expense. e) Savings Fund. Per Company policy applicable to other employees - up
to eight percent subject to cap. f) Automobile. The Company shall provide the
Executive with an automobile, as a working tool, together with directly paying
or reimbursing Executive for costs of ownership and use - fuel, maintenance,
insurance, registration and fees. After three years, the Executive shall have
the option of purchasing the automobile from the Company at the book value (if
the automobile was purchased by the Company) or the turn-in purchase price (if
the vehicle was leased by the Company).
17) Medical Examinations. Pursuant to
Article 134 of the Federal Labor Law, the Executive is obligated to submit to
medical examinations in accordance with the rules established by the Company.
18) Work Equipment and Materials. The Company shall provide the Executive with
all necessary materials and equipment necessary for the performance of the
Executive's duties and obligations set out in this Agreement. The Executive is
obligated to properly care for an use the materials and equipment provided to
him by the Company.
19) Training Courses. Pursuant to the provisions of Chapter
III Bis, Section 4 of the Federal Labor Law, the Executive is obligated to
attend any and all training courses offered by the Company.
20) Survival of
Termination. It is agreed by the parties that the provisions of Clause 5) shall
survive the termination of this Agreement.
21) Effective Date. The parties
hereby agree that, notwithstanding the execution date hereof, the effective date
of this Agreement shall be June 15, 1998.
22) Governing Law. The employment
relationship between the Executive and the Company shall be governed by this
Agreement and, to the extent not provided for herein, by the Federal Labor Law
and other applicable precepts.
Both parties, having read this Agreement and fully understanding its
contents and the extent of the obligations contained herein, sign it on this
19th day of May, 1998.
Electronica Pantera S.A. de C.V.
Attest:
/s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, Director General
(Corporate Seal)
Witness: Employee:
________________________________ /s/ Xxxx X. Xxxx Xxxxxxx
Xxxx X. Xxxx Xxxxxxx