Exhibit 10(a)
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this 4th day of August, 2003, by and between ▇▇▇▇▇ Caribe, Inc., a Puerto Rico
corporation (which, together with any successor thereto, is hereinafter referred
to as the "Company") and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Employee").
WHEREAS, the Company believes that it is in the best interests of such
entity to enter into this Agreement with the Employee in order to assure the
services of an executive with the experience and abilities of the Employee, and
WHEREAS, the Employee desires to enter into this employment agreement
with the Company.
NOW THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is agreed as
follows:
1. Employment.
(a) The Employee is hereby employed as Senior Vice
President-Sales and Marketing with primary responsibility over the Company's
sales and marketing employees. The Employee shall have such other duties as may
from time to time be prescribed by the Board of Directors of the Company. In the
performance of such duties the Employee shall report to the President of the
Company. The Employee shall also carry out the directives of the senior officers
of ▇▇▇▇▇ Caribe, Inc. ("▇▇▇▇▇").
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(b) The Employee shall devote his best efforts and
substantially all business time and attention to the business and affairs of the
Company and its subsidiaries.
2. Competitive Activities.
(a) The Employee agrees that during the term of this Agreement
and for a period of one (1) year after the Employee ceases to be an employee of
the Company or of an affiliate of ▇▇▇▇▇ (the "Noncompete Period") that the
Employee will not, within the Commonwealth of Puerto Rico or any region in the
United States or Mexico in which ▇▇▇▇▇ or its affiliates engages in business
during the term of this Agreement (a) compete with ▇▇▇▇▇, its subsidiaries and
other affiliates, (b) engage in substantially the same business as ▇▇▇▇▇, its
subsidiaries and other affiliates or (c) provide comparable services as those
provided by ▇▇▇▇▇, its subsidiaries and other affiliates to the past or present
clients and customers of ▇▇▇▇▇, its subsidiaries and other affiliates. During
the Noncompete Period the Employee also agrees not (y) to interfere or attempt
to interfere with the relationships between ▇▇▇▇▇, its subsidiaries or other
affiliates and any of Margo's, its subsidiaries' or its other affiliates' then
current or potential customers, vendors or suppliers or (z) to employ, solicit
for employment or otherwise contract for the services of any employee of ▇▇▇▇▇,
its subsidiaries or other affiliates or who shall subsequently become an
employee of ▇▇▇▇▇, its subsidiaries or other affiliates during the Noncompete
Period. For purposes of this Agreement, the Employee will be deemed to be
engaged in such activities if he is a 1% or more shareholder, officer, director,
partner, agent, employee, member or representative of any person, firm,
corporation, partnership, limited liability company or other business entity
which is engaged in such activities.
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(b) The Employee agrees and acknowledges that, by virtue of
the Employee's employment hereunder, the Employee will maintain an intimate
knowledge of the activities and affairs of ▇▇▇▇▇ and its subsidiaries, including
trade secrets and other confidential matters. Such information is considered
secret and is disclosed to Employee in confidence. During and after his
employment by the Company, Employee shall not directly or indirectly disclose or
use any such information except as required in the course of his employment by
the Company.
(c) The Employee recognizes that the services to be rendered
under this Agreement are special, unique and extraordinary in character, and
that in the event of breach by the Employee of the terms and conditions of this
paragraph, the Company or ▇▇▇▇▇ shall be entitled, if it so elects, to institute
and prosecute proceedings, either in law or in equity, to obtain damages for any
breach of the terms or condition of this Agreement, or to enforce the specific
performance thereof by the Employee, or to enjoin the Employee from performing
services for any other person, firm, corporation, limited liability company,
partnership or other entity falling within the scope of this Agreement.
3. Compensation.
(a) Salary. During the term of this Agreement, the Employee
shall be entitled to an annual salary established by the Board of Directors. The
annual salary hereunder as of the Commencement Date (as defined in Section 5
hereof) shall be equal to $108,000 per year. The Employee's salary shall be
payable not less frequently than monthly. Any adjustments in salary or other
compensation shall in no way limit or reduce any other obligation
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of the Company hereunder. The Employee's salary in effect hereunder from time to
time shall not thereafter be reduced.
(b) Performance Bonus. During the term of this Agreement, the
Employee shall also be entitled to receive an annual incentive bonus (the
"Performance Bonus"). The Performance Bonus for any calendar year (or portion
thereof) shall be computed according to the criteria established by the Board of
Directors of the Company or Margo's senior officers.
(c) Restricted Stock Options. Upon the execution of this
Agreement, the Employee shall be entitled to receive an award of 10,000 shares
of Margo's Common Stock pursuant to Margo's 2003 Restricted Stock Plan. The
restrictions on 20% of such restricted stock award shall lapse on each
anniversary of the execution of this Agreement, and further provided that any
unvested portion of the restricted stock award shall not be forfeited upon the
termination of the Employee's employment whether for cause or not unless
otherwise required under the terms of the 2003 Restricted Stock Plan.
(d) Expenses. During the term of the Employee's employment
hereunder, the Employee shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by him in performing services hereunder,
provided that the Employee properly accounts therefor in accordance with the
then existing policy of ▇▇▇▇▇. The Company will also reimburse the Employee in
the amount of $700 per month for car allowance. Nothing contained herein shall
authorize the Employee to make any political contributions, including but not
limited to payments for dinners and advertising in any political party program
or any other payment to any person, which might be deemed a bribe, kick- back or
otherwise an improper payment or contribution under
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existing law or under Margo's policy or practice and no portion of the
compensation payable hereunder is for such purpose.
(e) Withholding. Payments of any compensation under this
Agreement shall be subject to reduction by the amount of any applicable federal,
Commonwealth of Puerto Rico, state or municipal income withholding, social
security, state disability insurance or similar or other taxes or other items
which may be required or authorized to be deducted by law or custom.
(f) No Additional Compensation. No additional compensation
shall be due to Employee for services performed to the Company or any subsidiary
or affiliate of the Company.
4. Benefits.
During the term of this Agreement, the Employee shall be
entitled to participate in those benefit plans generally available to other
officers of the Company. Nothing herein shall obligate the Company to continue
any existing benefit plan or to establish any replacement benefit plan.
5. Term.
The term of employment under this Agreement shall be a period
of twelve (12) months commencing on the date hereof (the "Commencement Date")
and ending on July 31, 2004 (such period, the "Initial Term"), subject to
earlier termination as provided herein. This Agreement will automatically renew
itself on a year to year basis after the end of the Initial Term unless the
Company notifies the Employee, or the Employee notifies the Company, as the case
may be, with at least thirty (30) days prior
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written notice to the day of termination of this Agreement or any automatic
renewal thereof.
6. Vacations.
The Employee shall be entitled, without loss of pay, to absent
himself voluntarily from the performance of his employment under this Agreement,
all such voluntary absences to count as vacation time, provided that:
(a) During the term of employment under this Agreement, the
Employee shall be entitled to paid vacation at least equivalent to fifteen (15)
working days per year to be taken in accordance with the plans, policies,
programs or practices of ▇▇▇▇▇ as in effect from time to time; and,
(b) The timing of vacations shall be scheduled in a
reasonable manner by the Employee subject to approval by the
President of the Company.
7. Termination of Employment; Death.
(a) The Company may terminate the Employee's employment at any
time. If the employment of the Employee is involuntarily terminated, other than
for "cause" as provided in this Section 7(a) the Company shall have no further
obligation to the Employee under this Agreement, except that the company shall
pay the Employee his salary throughout the remainder of the then applicable
twelve-month period. The terms "termination" or "involuntarily terminated" in
this Agreement shall refer to the termination of the employment of Employee
without the Employee's express written consent.
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In case of termination of the Employee's employment for cause or by
resignation, the Company shall pay the Employee his salary through and including
the date of termination or resignation, and the Company shall have no further
obligation to the Employee under this Agreement. The term "cause" shall include
termination for personal dishonesty, incompetence, willful misconduct, breach of
a fiduciary duty, insubordination, failure to perform stated duties, failure to
comply with Company politics and procedures, willful violation of any law, rule,
or regulation (other than traffic violations or similar minor offenses) or final
cease-and-desist order, or material breach of any provision of this Agreement.
(b) In the event of the death of the Employee during the term
of employment under this Agreement and prior to the termination of Employee's
employment hereunder for any other reason, the Employee's estate, or such person
as the Employee may have previously designated in writing, shall be entitled to
receive from the Company the salary of the Employee through and including the
last day of the calendar month in which the Employee's death occurs.
(c) The provisions of Section 2 shall survive any termination
of this Agreement.
8. Permanent Disability.
(a) If the Employee shall become disabled permanently (as
defined in Margo's then current disability plan) during the term of employment
under this Agreement and prior to the termination of Employee's employment
hereunder for any other reason, the Company shall have no further obligation to
the Employee under this Agreement except that the Company shall pay
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the Employee his salary and Performance Bonus through and including the last day
of the calendar month in which the Employee is determined to be disabled
permanently.
9. No Assignments.
(a) This Agreement is personal to each of the parties hereof,
and neither party may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other party;
provided, however, that if the Company merges or consolidates into another
entity controlled by it or any affiliate of the Company, or enters into a
reorganization transaction in which the shareholders of the Company immediately
prior to any such transaction become the shareholders or members of the
resulting entity, then this Agreement shall be transferred to such resulting
entity.
(b) This Agreement and all rights of the Employee hereunder
shall inure to the benefit of and be enforceable by the Employee's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should die while any
amounts would still be payable to the Employee hereunder if the Employee had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Employee's devisee,
legatee or other designee or if there is no such designee, to the Employee's
estate.
10. Notice.
For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when
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personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the last known respective address of the party
hereto (provided that all notices to the Company shall be directed to the
attention of the Chief Executive Officer of the Company with a copy to the
Secretary of such entity and provided further that a copy of any such notice
shall be delivered or sent to ▇▇▇▇▇ Caribe, Inc. Call ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇-▇▇▇▇ Attn: J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, or to such other address as either
party may have furnished to the other in writing in accordance herewith.
11. Amendments.
No amendments or additions to this Agreement shall be binding
unless in writing and signed by both parties, except as herein otherwise
provided.
12. Paragraph Headings.
The paragraph headings used in this Agreement are included
solely for convenience of reference and shall not affect, or be used in
connection with, the interpretation of this Agreement.
13. Severability.
The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or unenforceability of the other provisions hereof.
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14. Governing Law.
This Agreement shall be governed by the laws of the
Commonwealth of Puerto Rico.
15. Other Matters.
(a) Except as provided in Section 9(b), any amounts payable
hereunder are personal to the Employee and are not transferable or assignable
either by the Employee's act or by operation of law, and no assignee, trustee in
bankruptcy, receiver or other party whomsoever shall have any right to demand
any such amounts or any other right with respect thereto.
(b) The Employee understands that payment of any amounts
hereunder, including any bonus, is not held or set aside in trust and that (1)
the Company may seek to retain, offset, attach or similarly place a lien on such
funds in circumstances where the Employee has been discharged for cause and, in
addition, shall be entitled to do so for (x) malfeasance damaging to the
Company, (y) conversion by the Employee of an opportunity of the Company, or (z)
a violation of the Company's conflict of interest policy, in each case as
determined by arbitration as provided hereinafter, and (2) in the event the
Company is unable to make any payment under this Agreement because of
receivership, insolvency, bankruptcy or similar status or proceedings, the
Employee will be treated as a general unsecured creditor of the Company and may
be entitled to no priority under applicable law with respect to such payments.
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16. Arbitration.
Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in San ▇▇▇▇, Puerto
Rico, in accordance with the rules of the American Arbitration Association then
in effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
17. Execution in Counterparts.
This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
SECTION 16 OF THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION
WHICH MAY BE ENFORCED BY THE PARTIES.
▇▇▇▇▇ Caribe, Inc.
By: /s/ J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
President and Chief Operating
Officer
EMPLOYEE
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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