Exhibit 10.46

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) effective as of January 28, 2019, by and
between Spanish Broadcasting System, Inc., a corporation existing under the laws
of Delaware with offices located at 7007 NW 77th Avenue, Miami, FL 33166 (the
“Company”) and Jose I. Molina (“Executive”), an individual whose principal place
of residence and current mailing address is
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RECITALS

WHEREAS, the Company is the owner and/or operator of certain Spanish-language
radio and television stations, throughout the United States and Puerto Rico
(collectively, the “Stations”); and

WHEREAS, the Company wishes to engage Executive and Executive wishes to become
engaged to perform services for the Company as Chief Financial Officer pursuant
to the terms and conditions set forth in this Agreement;

NOW THEREFORE, in consideration of the promises and the mutual covenants
contained herein, the parties agree as follows:

1.Employment.  Executive shall be employed to perform services as the Chief
Financial Officer during the Term (as defined herein).  Executive will render
such services solely and exclusively for the Company and devote Executive’s full
business time, energy and ability to the Company and faithfully and diligently
promote the business affairs and interests of the Company. Executive shall
report to and be directed by the Company’s President and Chief Executive
Officer.  Executive’s services will be rendered subject to and in accordance
with the policies, controls, rules and procedures of the Company.  During the
Term, Executive will be based in Miami, Florida. Executive will be required to
perform services in such other locations as directed by the Company or as
appropriate to performing his services for the Company.  

2.Specific Duties and Services. Executive shall perform his services to the best
of his ability and perform such managerial and operational services, as are
customarily rendered by persons engaged in the same or a similar capacity.
Further, Executive agrees to comply with the Company’s policies standards of
professional conduct.

3.Term.  On the terms and subject to the conditions set forth in this Agreement,
the Company hereby employs Executive and Executive hereby accepts such
employment for a period of three (3) years commencing on January 28, 2019 and
ending on January 27, 2022 (the “Term”) subject, however, to the prior
termination provisions as set forth below.

 

4.Exclusivity.

 

(a)Prohibited Activities.  Without the prior express written consent of the
Company, which consent may be withheld or rescinded at any time in the sole
discretion of the Company, Executive will not, directly or indirectly, either
individually or as an employee, agent, partner, joint venture shareholder,
consultant, officer, director or in any other capacity: (i) render services to
any other person or entity, except to a charitable organization for no
consideration and then only to the extent it does not interfere with the
business interests of the Company and the performance by Executive of his
obligations under this Agreement; or (ii) participate, engage in or have any
financial or other interest in any business which is competitive in any manner
whatsoever with any business in which the Company or any of its affiliates is
now or may hereafter become engaged.  The foregoing prohibition does not include
ownership by Executive of less than five percent (5%) of the outstanding shares
of any publicly-traded entity, provided that Executive does not otherwise
participate in such entity as a director, officer, employee or in any other
capacity.  

 

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(b)Agreement to Employ; No Conflicts.  Executive represents and warrants to the
Company that (i) he is entering into this Agreement voluntarily and that his
employment hereunder and compliance with the terms and conditions hereof will
not conflict with or result in the breach by him of any agreement to which he is
a party or by which he may be bound, (ii) he has not, and in connection with his
employment with the Company will not, violate any non-competition,
non-solicitation or other similar covenant or agreement by which he is or may be
bound, (iii) he has no outstanding commitments inconsistent with any of the
terms of this Agreement or the services to be rendered by Executive hereunder,
and (iv) in connection within his employment with the Company he will not use
any confidential or proprietary information he may have obtained in connection
with employment with any prior employer.

 

5.Compensation and Benefits.  

(a)Base Salary.  In consideration for the obligations of the Executive hereunder
and in consideration for Executive’s acceptance of the Restrictive Period, the
Company shall pay Executive a base salary (“Base Salary”) as set forth on the
Compensation Rider attached hereto as Exhibit A.  Executive’s Base Salary shall
be paid in accordance with the payroll policies of the Company from time to time
in effect, less such amounts as may be required to be withheld by applicable
federal, state and local law and regulations.  

(b)Bonus. Executive shall be eligible to earn a discretionary bonus for each
year of the Term, as set forth on the Compensation Rider attached hereto as
Exhibit A.  

(c)Benefits. Executive shall be eligible to participate in the Company’s benefit
plans and/or benefit policies and, if eligible, to receive comparable health
care coverage, vacation, sick leave and other benefits extended to executives of
the Company (the “Benefits”); subject, however, to Executive’s eligibility to
participate as to such Benefits under the Company’s policies. The Company has
the right at any time in its sole discretion to change, modify, reduce, enlarge
and/or remove partially or in its entirely any Benefit.

(d)Vacation.  Executive shall be entitled to four weeks of vacation during each
year of the Term, with such vacation to be taken in consultation with the
Company’s President and Chief Executive Officer.

(e)Expenses.  Executive shall be reimbursed for all legitimate business expenses
upon submission to the Company of appropriate documentation of such expenses and
a description of the purpose of such expenses (an “Expense Report”), including
continuing professional education and license fee required to maintain Executive
Certified Public Accountant license.  Such Expense Report shall include the
level of detail that is required of other Company executives.  Such
reimbursement will be made within 15 days after the submission of such Expense
Report.

(f)Auto Allowance.  Executive shall be entitled to an automobile allowance of
$1,300.00 per month during the Term to be paid on the fifteenth (15th) day of
each month during the Term.

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6.Covenants.

(a)Restrictive Covenant.  During the Term and for any period of time thereafter
during which Executive is either continuing to receive compensation under this
Agreement or one year, whichever  period of time is longer (the “Restrictive
Period”), Executive shall not, in any capacity, whether for his own account or
on behalf of any other person or organization, directly or indirectly, with or
without compensation, (i) own, operate, manage, or control, (ii) serve as an
officer, director, partner, member, employee, agent, consultant, advisor or
developer or in any similar capacity to, (iii)  render services in any capacity,
or (iv) have any financial interest in, or aid or assist any person or
enterprise engaged in any Competitive Business located in any area in which the
Company owns, leases or programs a radio station, at any time during Executive’s
employment with the Company (the “Territory”).  A “Competitive Business” is a
person or entity that broadcasts or transmits its Radio Programming, on-air
content primarily in the Spanish-language and which competes with any Radio
service offered by the Company (including any parent, subsidiary or affiliate).
Competitive Business shall also include digital domains, satellite, and Internet
radio providers.  It is specifically understood by Executive that SBS, the SBS
Stations and SBS-affiliated radio facilities or stations, if any, within the
Territory (together, the “Company Entities”) are intended beneficiaries of the
restrictive covenants contained in this Section.  The parties agree that it will
be deemed a violation of this section for Executive to render services, directly
or indirectly, to any company that is in the business of owning, leasing or
programming radio stations that broadcast primarily in the Spanish language
during the Term or the Restrictive Period.  

(b)Non-Solicitation or Interference.  During the Term and the Restrictive
Period, Executive shall not, in any capacity, whether for his own account or on
behalf of any other person or organization, directly or indirectly, with or
without compensation interfere with the operation of the Company’s business,
including without limitation by: (i) soliciting, diverting, inducing or
encouraging any officers, directors, employees, agents, consultants, former
customer, representatives or any other person or concern, dealing with or in any
way, directly or indirectly, associated with the Company or the Company Entities
to terminate, his, her or its relationship with the Company or the Company
Entities, (ii) hiring any such officer, director, employee, agent, consultant,
former customer, representative or any other person or concern so solicited,
diverted, induced or encouraged, (iii) soliciting, diverting, inducing or
encouraging any officers, directors, employees, agents, consultants or
representatives of the Company or the Company Entities, to become officers,
directors, employees, agents, consultants, customers, representatives or any
other person or concern, of another business, enterprise or entity, (iv)
soliciting, diverting or appropriating any customers, clients, vendors or
distributors of the Company or the  Company Entities, or (v) influencing or
attempting to influence any of the customers, clients, vendors, distributors or
business partners of the Company or the Company Entities, to transfer her, his
or its business or patronage from the Company or the Company Entities to any
Competitive Business.

(c)Confidential Information. During and at all times after the Term, Executive
shall keep all non-public information, matters and materials of the Company or
the Company Entities, including, but not limited to, know-how, trade secrets,
mail order and customer lists, pricing policies, operational methods, any
information relating to the Company or the Company Entities, products or product
development, processes, product specifications and formulations, artwork,
designs, graphics, services, budgets, business and financial plans, marketing
and sales plans and techniques, employee lists and other business, financial,
commercial and technical information presently owned, or at any time in the
future developed by the Company or the Company Entities, its agents, or
consultants, actually or potentially used in the operation of the Company’s
business, or obtained from third parties under an agreement of confidentiality
(collectively, the “Confidential Information”), to which he has had or may have
access and shall not use or disclose such Confidential Information to any person
other than (i) the Company, its authorized employees and such other persons to
whom Executive has been instructed to make disclosure by the Company, in each
case only to the extent required in the course of Executive’s service to the
Company or as otherwise expressly required in connection with court process,
(ii) as may be required by law and then only after consultation with the Company
to the extent possible, or (iii) to Executive’s personal advisors for purposes
of enforcing or interpreting this Agreement, or to a court for the purpose of
enforcing or interpreting this Agreement, and who in each case have been
informed as to the confidential nature of such Confidential Information and, as
to advisors, their obligation to keep such Confidential Information
confidential. “Confidential Information” shall not include any information which
is in the public domain during the period of service of Executive, provided such
information is not in the public domain as a consequence of disclosure by
Executive in violation of this Agreement or by any other party in violation of a
confidentiality or non-disclosure agreement with the Company.  Upon termination
of Executive’s employment for any reason, or whenever requested by the Company,
Executive

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shall promptly deliver to the Company any and all Confidential Information, and
all copies thereof, including but not limited to, documents, data, papers and
records of any nature and in any medium (including, but not limited to,
electronic media) in his possession or subject to his control that (i) belong to
the Company or the Company Entities or (ii) contain or reflect any information
concerning the Company or the Company Entities.  Executive hereby acknowledges
that the sale or unauthorized use, duplication or disclosure of any Confidential
Information by any means whatsoever and any time before, during or after
employment with the Company shall constitute a material breach of this Agreement
and unfair competition; and Executive agrees not to engage in unfair competition
either during the time employed by the Company or at any time thereafter in
perpetuity.

(d)Non-Disparagement.  In consideration of Company’s obligations hereunder,
during and at all times after the Term, Executive shall not directly or
indirectly (i) engage in any conduct or make any statement, whether in
commercial or non-commercial speech, disparaging or criticizing in any way the
Company or the Company Entities, executive officers, directors or employees of
any of the foregoing entities, or any products or services offered by any of
these entities, or (ii) engage in any other conduct or make any other statement,
in each case, which could be reasonably expected to (x) impair the goodwill or
reputation of the foregoing entities or individuals or (y) the reputation of any
of the foregoing entity’s products or services or the marketing of any of the
foregoing entity’s products or services, except to the extent required by law
and then only after consultation with the Company to the extent possible.

(e)Executive Fidelity. Executive agrees that during the Term, Executive will
not, directly or through third-party intermediaries, initiate or invite contact
with, or solicit or entertain offers or proposals of employment from a
Competitive Business wherever located. Executive expressly acknowledges that (i)
he will immediately notify the Company of any such communications and (ii) a
breach of this covenant of fidelity shall constitute grounds for termination for
Cause under Section 8.

(f)Remedies for Breach; Injunctive Relief.  The Company and Executive agree that
the restrictive covenants contained in this Agreement are severable and
separate, and the unenforceability of any specific covenant herein shall not
affect the validity of any other covenant set forth herein. Executive
acknowledges that by virtue of his position with the Company, Executive will be
given access to the Company’s and the Company Entities’ trade secrets and
Confidential Information. Executive acknowledges that the Company will suffer
irreparable harm as a result of a breach of such restrictive covenant by
Executive for which an adequate monetary remedy does not exist and a remedy at
law may prove to be inadequate.  Accordingly, in the event of any actual or
threatened breach by Executive of any provision of this Agreement, the Company
shall, in addition to any other remedies permitted by law, be entitled to obtain
remedies in equity, including, but not limited to, specific performance,
injunctive relief, a temporary restraining order, and/or a preliminary and/or
permanent injunction in any court of competent jurisdiction, to prevent or
otherwise restrain a breach of this Section 6 without the necessity of proving
damages, posting a bond or other security, and to recover any and all costs and
expenses, including reasonable counsel fees, incurred in enforcing this
Agreement against Executive, and Executive hereby consents to the entry of such
relief against him and agrees not to contest such entry.  Such relief shall be
in addition to and not in substitution of any other remedies available to the
Company.  The existence of any claim or cause of action of Executive against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of said covenants.  Executive shall
not defend on the basis that there is an adequate remedy at law.  In addition to
and not in lieu of any other remedy that the Company may have under this Section
6 or otherwise, in the event of any breach of any provision of this Section 6
during the period during which Executive is entitled to receive payments and
Benefits pursuant to Section 8, such period shall terminate as of the date of
such breach and Executive shall not thereafter be entitled to receive any salary
or other payments or Benefits under this Agreement.

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(g)Modification and Survival.  The parties agree and acknowledge that the
duration, scope and geographic area of the covenants described in this Section 6
are fair, reasonable and necessary in order to protect the Confidential
Information, goodwill and other legitimate interests of the Company and that
adequate consideration has been received by Executive for such
obligations.  Executive further acknowledges that after termination of his
employment with the Company for any reason, he will be able to earn a livelihood
without violating the covenants described in this Section 6 and Executive’s
ability to earn a livelihood without violating such covenants is a material
condition to his employment with the Company.  If, however, for any reason any
court of competent jurisdiction determines that the restrictions in this Section
6 are not reasonable, that consideration is inadequate or that Executive has
been prevented unlawfully from earning a livelihood, such restrictions shall be
interpreted, modified or rewritten to include the maximum duration, scope and
geographic area identified in this Section 6 as will render such restrictions
valid and enforceable. It is the intent of the parties that this section be
enforced to the greatest extent allowable in law or equity.  The terms of this
Section 6, shall survive the termination or expiration of Executive’s employment
Agreement, but only to the extent of the time limitations as set forth herein.

7.Proprietary Rights.   All data, copy, written and recorded materials, as well
as all recordings, documents, notes, projections, forecasts and presentations
and other financial information, created by Executive at any time during the
Term or any extension thereof, including without limitation the Executive’s work
product, are works for hire and shall be the exclusive property of the Company,
and the Company Entities throughout the Universe, in perpetuity (the “Property
Rights”).  The Company and the Company Entities own or shall own all right,
title and interest throughout the Universe, in any of Executive’s and the
Company’s and the Company Entities’ work product and all copyright, trademark
and other intellectual property rights in and related thereto throughout the
Universe, in perpetuity (“Intellectual Property”).  Executive must return all
such documents and tangible property to the Company on termination of this
Agreement for any reason or at such earlier time as the Company may request in
writing.

8.Termination.    This Agreement and Executive’s employment by the Company will
terminate on the earlier of (i) the expiration of the Term or (ii) the first to
occur of any of the following:

(a)Death. Upon the death of Executive.

(b)Failure to Render Service.  In the event Executive fails for a period of five
(5) consecutive weeks or for a total of eight (8) weeks in any one-year period,
as a result of illness, incapacity, injury, disability from a physical or mental
condition, or by reason of any statute, law, ordinance, regulation, order,
judgment or decree.

(c)For Cause.  The Company may terminate Executive’s employment hereunder at any
time, effective immediately for Cause (as defined below).  For purposes of this
Agreement the term “Cause” includes, but is not limited to:  (i) refusal or
unwillingness to perform duties; (ii) habitual neglect of duties which Executive
is required to perform; (iii) willful misconduct or gross negligence; (iv)
theft, fraud or other illegal conduct; (v) sexual or other unlawful harassment;
(vi) making derogatory statements, disparaging remarks or personal attacks
against the Company or the Company Entities, including but not limited to, its
or their officers and directors, management, employees, advertisers or any of
its policies or procedures; (vii) arrest for or conviction of a crime involving
moral turpitude; (viii) insubordination; (ix) any willful act that is likely to
or does in fact have the effect of injuring the reputation, business or a
business relationship of the Company, Company Entity, or any officer, director
or board of directors of any of them; (x) failure to perform any reasonable
duties assigned to Executive by the President and Chief Executive Officer or his
designees; (xi) failure to follow any the Company operating or personnel
policies and practices (Executive acknowledges having read and understood the
employee handbook); (xii) knowlingly failing to comply with any rule,
regulation, guideline or policy of the FCC or other governmental agency with
jurisdiction over the Company; (xiii) use of illegal drugs or alcohol at any
time on any property owned or leased by the Company or any Company Entity; or
(xiv) failure to comply with any of the terms and conditions of this Agreement.
Termination of Executive’s employment under this Section 8 will not limit the
Company’s rights and remedies against Executive under this Agreement, at law or
in equity.

(d)Without Cause. The Company and the Executive, may terminate Executive’s
employment at any time without Cause (as defined below) for any reason and with
no less than 30 days’ notice.  

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(e)Severance Allowance for Termination Without Cause. Notwithstanding anything
contained to the contrary herein, in the event the Company terminates
Executive’s employment pursuant to clause (d) above or if Executive elects to
terminate his employment after a Change of Control has occurred prior to the end
of the Term, Executive shall be paid a severance allowance equal to one year of
his then Base Salary.  A Change of Control shall be deemed to have occured if at
any time Raul Alarcon, together and members of his family, no longer control
more than 50% of the voting control of the Company.  Such payments shall
continue to be made over the same time frame as if no termination had occurred.

(f)Termination for Reasons Other Than Without Cause.  If the Company terminates
Executive for any reason other than pursuant to clause (d) above, or if
Executive terminates his employment for any reason other than after a Change of
Control has occurred, the Company’s only obligation will be to pay Executive any
accrued but unpaid Base Salary earned prior to the date of termination, any
expenses incurred prior to the date of termination that have not been reimbursed
and any benefits then payable under the Company’s benefit plans.

(g)Post Termination Conditions. Upon termination of Executive’s employment for
any reason, Executive agrees that, subject to Executive’s then current
professional availability, he will cooperate with and assist the Company with
any litigation, contract negotiation or other matter in which the benefit of
Executive’s knowledge or expertise may be requested by the Company, including
without limitation, assisting the Company, at the Company’s expense and sole
reasonable request, in the preparation of litigation (including testifying).

9.Customers, Suppliers.  Executive does not have, and at any time during the
Term shall not have, any employment with or any direct or indirect interest in
(as owner, partner, shareholder, employee, director, officer, agent, consultant
or otherwise) any customer of or supplier to the Company or the Company
Entities.

 

10.Certain Activities.  During the Term, Executive shall not (i) give or agree
to give, any gift or similar benefit of more than nominal value to any customer,
supplier, or governmental employee or official or any other person who is or may
be in a position to assist or hinder the Company or the Company Entities in
connection with any proposed transaction, which gift or similar benefit, if not
given or continued in the future, might adversely affect the business or
prospects of the Company or the Company Entities, (ii) use any corporate or
other funds for unlawful contributions, payments, gifts or entertainment, (iii)
make any unlawful expenditures relating to political activity to government
officials or others, (iv) establish or maintain any unlawful or unrecorded funds
in violation of Section 30A of the Securities Exchange Act of 1934, as amended,
and (v) accept or receive any unlawful contributions, payments, gifts, or
expenditures.

11.Miscellaneous.

(a)Withholding.  All compensation payable hereunder shall be subject to
applicable taxes, withholding, premium charges, co-payment of Benefits,
self-insured retentions and other normal deductions.

(b) Notice. Any notice or other communications hereunder shall be in writing and
shall be deemed to have been duly given (i) when delivered personally, (ii) upon
confirmation of receipt when such notice or other communication is sent by
facsimile, (iii) one day after delivery to an overnight delivery courier (i.e.,
Federal Express), or (iv) on the fifth day following the date of deposit in the
United States mail if sent first class, postage prepaid, by registered or
certified mail. The addresses for such notices shall be as follows (or any other
such address as one party may specify by notice to the other):

 

As to the Company:

 

Spanish Broadcasting System, Inc.

 

 

 

 

c/o 7007 NW 77th Avenue

 

 

 

 

Miami,

FL 33166

 

 

 

 

Attn:

Legal Department

 

 

 

 

Facsimile:

(305) 883-3373

 

 

 

 

 

 

 

 

As to Executive:

            Jose I. Molina

 

 

 

 

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(c)Severability.  If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative.

(d) Headings.  The headings used in this Agreement are for the convenience of
the parties and for reference purposes only and shall not form a part of or
affect the interpretation of this Agreement.

(e) Construction. This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Agreement to be drafted, since the attorneys for the respective parties have
submitted revisions to the text hereof.

(f) Entire Agreement. This Agreement shall constitute the entire agreement
concerning the subject matter hereof between the parties, superseding all
previous agreements, memoranda of understanding, negotiations, and
representations made prior to the effective date of this Agreement.

(g)Amendment; Waiver.  This Agreement may be amended, modified, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument executed by the parties hereto or, in the case of a waiver,
by the party waiving compliance.  The failure of either party at any time or
times to require performance of any provision hereof shall in no manner affect
the right at a later time to enforce the same.  No waiver by either party of the
breach of any term or covenant contained in this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such breach, or a waiver of the breach
of any other term or covenant contained in this Agreement.

(h)Successors and Assigns.  This Agreement shall be binding upon Executive,
without regard to the duration of his employment by the Company or reasons for
the cessation of such employment, and inure to the benefit of his
administrators, executors, heirs and assigns, although the obligations of
Executive are personal and may be performed only by him. The Company may assign
this Agreement and its rights, together with its obligations, hereunder.  This
Agreement shall also be binding upon and inure to the benefit of the Company and
its subsidiaries, successors and assigns.

(i) Governing Law.  The validity of this Agreement, its interpretation and any
disputes arising from, or relating in any way to, this Agreement or the
relationship of the parties, shall be governed by the law of the State of
Florida without regard to conflicts of law principles.

(j)Mediation.  The Executive and the Company agree that any action or proceeding
seeking to enforce any provision of, or based on any right arising out of this
Agreement, shall first be settled by good faith mediation. In the event that
during the course of mediation a full settlement is not entered into, Executive
and the Company agree that any dispute, action or proceeding seeking to enforce
any provision of, or based on any right arising out of this Agreement shall then
be settled exclusively by bench trial.

(k)Jury Trial Waiver/Bench Trial.  COMPANY and Executive shall and hereby do
waive a trial by jury in any action, proceeding or counter-claim brought or
asserted by either of the parties hereto against the other on any matters
whatsoever arising out of this Agreement.  NOTWITHSTANDING THE FOREGOING,
NOTHING CONTAINED HEREIN SHALL LIMIT THE COMPANY FROM ANY REMEDIES IN SECTION
6(F) HEREIN.

 

(l) Counterparts. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed to be an original copy of this
Agreement and all of which together shall constitute one and the same
instrument.

 

(m)Translation of Agreement. In the event that this Agreement is translated into
any language other than the English language, the original English-language
version of this Agreement, in both form and substance, will govern this
transaction in all respects, notwithstanding that the English-language version
of this Agreement is not executed by either or both of the respective parties.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first written above.

 

SPANISH BROADCASTING SYSTEM , INC.

 

 

 

 

 

 

By:

/s/ Richard D. Lara

 

Name:

Richard D. Lara

 

Title:

EVP and General Counsel

 

 

 

EXECUTIVE

 

 

 

 

/s/ Jose I. Molina

 

 

Jose I. Molina

 

 

 

 

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EXHIBIT A

 

COMPENSATION RIDER

 

Jose Molina

 

(a)Base Salary:  During the Term, the Company shall pay Executive an annual base
salary pursuant to the schedule below, payable bi-weekly (“Base Salary”), in
accordance with the payroll policies of the Company from time to time in effect,
less such amounts as may be required to be withheld by applicable federal, state
and local law and regulations and any applicable deductions under the Company
Benefit plans.  

 

(i)  During the first year of the Term of this Agreement:

U.S. $400,000.00

(ii)  During the second year of the Term of this Agreement:

U.S. $450,000.00

(iii)  During the third year of the Term of this Agreement:

U.S. $475,000.00

(b)Stock Options.  Provided that Executive remains employed by the Company and
is not in material breach of this Agreement, and subject to approval by the
Company’s Compensation Committee and Board of Directors, Executive shall receive
seventy-five thousand (75,000) stock options, which shall vest pursuant to the
following schedule: (i) thirty-three percent (33%) (or 25,000 options) upon the
conclusion of the sixth month of this Agreement; (ii) an additional thirty-three
percent (33%) (or 25,000 additional options) upon the conclusion of the
eighteenth month of this Agreement; and (iii) the remaining thirty-four percent
(34%) of the options upon the conclusion of the thirtieth month of this
Agreement.

 

(c)Annual Discretionary Bonus.

 

For each year during the Employment Term, Executive shall be eligible to receive
a discretionary bonus in an amount recommended by the Chief Executive Officer
and approved by the Compensation Committee (the “Discretionary Bonus”).  It is
expected that any such annual Discretionary Bonus will take into account all
relevant factors including the annual contributions and achievements of the
Executive and the performance of the Company.

 

Company Initials:

 

 

 

 

 

Executive Initials: