EXHIBIT 10.15
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered
into as of August 19, 1998, by and between PriceSmart, Inc., a Delaware
corporation ("Employer"), and Xxxx May ("Executive").
RECITALS
A. Employer desires to employ Executive as Executive Vice
President and Chief Operating Officer of Employer.
B. Executive desires to accept such position upon the terms and
subject to the conditions herein provided.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants and conditions hereinafter set forth, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
EMPLOYMENT AND DUTIES
1.1 POSITION AND DUTIES. Executive shall serve as Executive Vice
President and Chief Operating Officer of Employer. Executive shall have such
duties and authority as are customary for, and commensurate with, such
position, and such other related duties and authority as may from time to
time be delegated or assigned to him by the Chief Executive Officer or the
Board of Directors of Employer. Executive shall discharge his duties in a
diligent and professional manner.
1.2 OUTSIDE BUSINESS ACTIVITIES PRECLUDED. During his employment,
Executive shall devote his full energies, interest, abilities and productive
time to the performance of this Agreement. Executive shall not, without the
prior written consent of Employer, perform other services of any kind or
engage in any other business activity, with or without compensation, that
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would interfere with the performance of his duties under this Agreement.
Executive shall not, without the prior written consent of Employer, engage in
any activity adverse to Employer's interests.
1.3 PLACE OF EMPLOYMENT. Unless the parties agree otherwise in
writing, during the Employment Term (as defined in Section 3.1 below)
Executive shall perform the services he is required to perform under this
Agreement at Employer's offices located in San Diego, California; provided,
however, that Employer may from time to time require Executive to travel
temporarily to other locations on Employer's business.
ARTICLE II
COMPENSATION
2.1 SALARY. For Executive's services hereunder, Employer shall pay as
base salary to Executive the amount of two hundred thousand dollars
($200,000) during each year of the Employment Term. Said salary shall be
payable in equal installments in conformity with Employer's normal payroll
period.
2.2 BONUS. During the Employment Term Executive shall be entitled to
participate in Employer's Corporate Central Bonus Plan.
2.3 OTHER BENEFITS. Executive shall be entitled to participate in and
receive benefits under Employer's standard company benefits practices and
plans for officers of Employer, including medical insurance, long-term
disability, life insurance, profit sharing and retirement plan, and
Employer's other plans, subject to and on a basis consistent with the terms,
conditions and overall administration of such practices and plans. Executive
shall be entitled to a paid vacation of four (4) weeks in year one and five
(5) weeks in year two and thereafter, which will accrue and be paid out in
conformity with Employer's normal vacation pay practices. Employer may from
time to time in its sole discretion grant such additional compensation or
benefits to Executive as it deems proper and desirable.
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2.4 EXPENSES. During the term of his employment hereunder, Executive
shall be entitled to receive prompt reimbursement for all reasonable
business-related expenses incurred by him, in accordance with the policies
and procedures from time to time adopted by Employer, provided that Executive
properly accounts for such business expenses in accordance with Employer
policy.
2.5 STOCK OPTION PLANS. Employer has adopted The 1997 Stock Option
Plan of PriceSmart, Inc. (the "Stock Plan") and the 1998 Equity Participation
Plan of PriceSmart, Inc. (the "Equity Plan"). On the date the Employment
Term commences Executive will be granted options to purchase fifty five
thousand (55,000) shares of Employer's Common Stock, exercisable at the price
of $16.25 per share of Common Stock, with such options vesting at the rate of
twenty percent (20%) per year over a period of five (5) years and expiring
six (6) years from the date of grant. Such grant of options to purchase
fifty five thousand (55,000) shares of Common Stock shall be subject in all
respects to the sole discretion of the Compensation Committee of Employer's
Board of Directors, as set forth in the Stock Plans. In addition, such
options shall be granted in accordance with and subject to all other terms,
conditions and restrictions set forth in the applicable Plan.
On the date the Employment Term commences Executive will have the right
to purchase under the Equity Plan eight thousand seven hundred fifty (8,750)
shares of the Company's Common Stock. Executive must pay in cash a minimum
of 30% of the Fair Market Value of the stock on October 19, 1998. Executive
will have ten (10) days from that date to make the minimum cash payment. The
remaining 70% of the Fair Market Value of the stock will be financed by the
Employer in a 6%, interest-only note with the principal (and unpaid interest,
if any) due and payable in six years. For each share purchased, Executive
will automatically receive the non-qualified stock option for three shares of
the Employer's Common Stock at $16.25 per share. Such grant of options to
purchase shares of Common Stock shall be
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subject in all respects to the sole discretion of the Compensation Committee
of Employer's Board of Directors, as set forth in the Equity Plan. In
addition, such options shall be granted in accordance with and subject to all
other terms, conditions and restrictions set forth in the Equity Plan. The
1998 Equity Participation Plan of PriceSmart, Inc. is subject to Shareholder
approval at the Annual Shareholder Meeting, scheduled for January 12, 1999.
2.6 DEDUCTIONS AND WITHHOLDINGS. All amounts payable or which become
payable under any provision of this Agreement shall be subject to any
deductions authorized by Executive and any deductions and withholdings
required by law.
ARTICLE III
TERM OF EMPLOYMENT
3.1 TERM. The term of Executive's employment hereunder shall commence
on October 19, 1998 and shall continue until October 18, 2000 unless sooner
terminated or extended as hereinafter provided (the "Employment Term").
3.2 EXTENSION OF TERM. The Employment Term may be extended by written
amendment to this Agreement signed by both parties.
3.3 EARLY TERMINATION BY EXECUTIVE. Executive may terminate this
Agreement at any time by giving Employer written notice of his resignation
ninety (90) days in advance; provided, however, that the Employer may
determine upon receipt of such notice that the effective date of such
resignation shall be immediate or some time prior to the expiration of the
ninety day notice period. Executive's employment shall terminate as of the
effective date of his resignation as determined by Employer.
3.4 TERMINATION FOR CAUSE. Prior to the expiration of the Employment
Term, Executive's employment may be terminated for Cause by Employer,
immediately upon delivery of notice thereof. For these purposes, termination
for "Cause" shall mean termination because
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of Executive's (a) repeated and habitual failure to perform his duties or
obligations hereunder; (b) engaging in any act that has a direct, substantial
and adverse effect on Employer's interests; (c) personal dishonesty, willful
misconduct, or breach of fiduciary duty involving personal profit; (d)
intentional failure to perform his stated duties; (e) willful violation of
any law, rule or regulation which materially adversely affects his ability to
discharge his duties or has a direct, substantial and adverse effect on
Employer's interests; (f) any material breach of this contract by Executive;
or (g) conduct authorizing termination under Cal. Labor Code Section 2924.
3.5 TERMINATION DUE TO DEATH OR DISABILITY. Executive's employment
hereunder shall terminate immediately upon his death. In the event that by
reason of injury, illness or other physical or mental impairment Executive
shall be: (a) completely unable to perform his services hereunder for more
than three (3) consecutive months, or (b) unable to perform his services
hereunder for fifty percent (50%) or more of the normal working days
throughout six (6) consecutive months, then Employer may terminate
Executive's employment hereunder immediately upon delivery of notice thereof.
Executive's beneficiaries, estate, heirs, representatives, or assigns, as
appropriate, shall be entitled to the proceeds, if any, due under any
Employer-paid life insurance policy held by Executive, as determined by and
in accordance with the terms of any such policy, as well as any vested
benefits and accrued vacation benefits.
ARTICLE IV
BENEFITS AFTER TERMINATION OF EMPLOYMENT
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
continuation of Executive's base salary for one (1) year, payable in equal
installments in conformity with
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Employer's normal payroll period. 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,
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 cease
concurrently with Executive having commenced comparable employment with, or
Executive receiving comparable compensation from, another employer. 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 requested by Employer.
4.2 RIGHTS AGAINST EMPLOYER. The benefits payable under this Article
IV are exclusive, and no amount shall become payable to any person (including
the Executive) by reason of termination of employment for any reason, with or
without Cause, except as provided in this Article IV. Employer shall not be
obligated to segregate any of its assets or procure any investment in order
to fund the benefits payable under this Article IV.
ARTICLE V
CONFIDENTIAL INFORMATION
5.1 Executive acknowledges that Employer holds as confidential, and
Executive may have access to during the Employment Term, certain information
and knowledge respecting the intimate and confidential affairs of Employer in
the various phases of its business, including, but not limited to, trade
secrets, data and know-how, improvements, inventions, techniques, marketing
plans, strategies, forecasts, pricing information, and customer lists.
During his employment by Employer and thereafter, Executive shall not
directly or indirectly disclose such information to any person or use any
such information, except as required in the course of his employment during
the Employment Term. All records, files, keys, documents, and the like
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relating to Employer's business, which Executive shall prepare, copy or use,
or come into contact with, shall be and remain Employer's sole property,
shall not be removed from Employer's premises without its written consent,
and shall be returned to Employer upon the termination of this Agreement.
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ARTICLE VI
GENERAL PROVISIONS
6.1 ENTIRE AGREEMENT. This Agreement contains the entire understanding
and sole and entire agreement between the parties with respect to the subject
matter hereof, and supersedes any and all prior agreements, negotiations and
discussions between the parties hereto with respect to the subject matter
covered hereby. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are
not embodied herein, and that no other agreement, statement or promise not
contained in this Agreement shall be valid or binding. This Agreement may
not be modified or amended by oral agreement, but rather only by an agreement
in writing signed by Employer and by Executive which specifically states the
intent of the parties to amend this Agreement.
6.2 ASSIGNMENT AND BINDING EFFECT. Neither this Agreement nor the
rights or obligations hereunder shall be assignable by the Executive.
Employer may assign this Agreement to any successor or affiliate of Employer,
and upon such assignment any such successor or affiliate shall be deemed
substituted for Employer upon the terms and subject to the conditions hereof.
In the event of any merger of Employer or the transfer of all (or
substantially all) of Employer's assets, the provisions of this Agreement
shall be binding upon, and inure to the benefit of, the surviving business
entity or the business entity to which such assets shall be transferred.
6.3 ARBITRATION. The parties hereto agree that any and all disputes
(contract, tort, or statutory, whether under federal, state or local law)
between Executive and Employer (including Employer's employees, officers,
directors, stockholders, members, managers and representatives) arising out
of Executive's employment with Employer, the termination of that employment,
or this Agreement, shall be submitted to final and binding arbitration. Such
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arbitration shall take place in the County of San Diego, and may be compelled
and enforced according to the California Arbitration Act (Code of Civil
Procedure Sections 1280 ET SEQ.). Unless the parties mutually agree
otherwise, such arbitration shall be conducted before the American
Arbitration Association, according to its Commercial Arbitration Rules.
Judgment on the award the arbitrator renders may be entered in any court
having jurisdiction over the parties. Arbitration shall be initiated in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association.
6.4 NO WAIVER. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances
shall be deemed or be construed as a further or continuing waiver of any such
term, provision or condition, or as a waiver of any other term, provision or
condition of this Agreement.
6.5 GOVERNING LAW; RULES OF CONSTRUCTION. This Agreement has been
negotiated and executed in, and shall be governed by and construed in
accordance with the laws of, the State of California. Captions of the
several Articles and Sections of this Agreement are for convenience of
reference only, and shall not be considered or referred to in resolving
questions of interpretation with respect to this Agreement.
6.6 NOTICES. Any notice, request, demand or other communication
required or permitted hereunder shall be deemed to be properly given when
personally served in writing, or when deposited in the United States mail,
postage pre-paid, addressed to Employer or Executive at his last known
address. Each party may change its address by written notice in accordance
with this Section.
Address for Employer:
PriceSmart, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxx, XX. 00000
Address for Executive:
________________________
________________________
________________________
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6.7 SEVERABILITY. The provisions of this Agreement are severable. If
any provision of this Agreement shall be held to be invalid or otherwise
unenforceable, in whole or in part, the remainder of the provisions or
enforceable parts hereof shall not be affected thereby and shall be enforced
to the fullest extent permitted by law.
6.8 ATTORNEYS' FEES. In the event of any arbitration or litigation
brought to enforce or interpret any part of this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees, as well as all
other litigation costs and expenses as an element of damages.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto as of the date first above written.
EMPLOYER EXECUTIVE
PRICESMART, INC. Name: ____________________
Xxxx May
By: _______________________
Name:______________________
Title: ____________________
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