8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

to

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 24, 2018

PriceSmart,Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-22793	33-0628530
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

9740 Scranton Road, San Diego, CA 92121

(Address of Principal Executive Offices, including Zip Code)

Registrant's telephone number, including area code: (858) 404-8800

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2)(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 5.02.  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b), (c)  On October 25, 2018, PriceSmart, Inc., a Delaware corporation (the “Company”) announced the resignation of the Company’s Chief Executive Officer and President, Jose Luis Laparte, effective November 16, 2018.  The Company also announced that Sherry S. Bahrambeygui, a member of the Company’s Board of Directors, will serve as Interim Chief Executive Officer while the Company conducts a search for a Chief Executive Officer, and Robert E. Price, Company Founder and our Chairman, will serve as Executive Chairman. 

The Company is filing this Amendment No. 1 to Form 8-K to describe the terms of the Separation Agreement and Waiver and Release of Claims between the Company and Mr. Laparte dated November 20, 2018 and the Employment Agreement between the Company and Ms. Bahrambeygui dated November 20, 2018, copies of which are included as exhibits to this Amendment No. 1 to Form 8-K.

Laparte Severance Agreement

Pursuant to the Separation Agreement, and in consideration of Mr. Laparte’s execution and non-revocation of a release of claims in favor of the Company and his agreement to certain restrictive covenants, Mr. Laparte will receive (i) severance equal to $768,304, payable pursuant to the Company’s regular payroll schedule over a period of one year; (ii) the waiver by the Company of forfeiture restrictions on 50,000 shares of restricted stock held by Mr. Laparte; (iii) contribution by the Company of the premium cost of Mr. Laparte’s participation and that of his eligible dependents in the Company’s group health plan for a period of twelve months following termination of his employment or until he has secured other employment, whichever occurs first; (iii) reimbursement of up to $8,000 for up to one year of outplacement services; (iv) reimbursement of up to $8,000 for attorneys’ fees associated with applications for naturalization for him and his family members; (v) a housing allowance in an amount equal to $50,000, less required withholdings, payable over one year; and (vi) an $8,000 family trip allowance payable in a lump sum.

Pursuant to the terms of the Separation Agreement, Mr. Laparte is subject to certain restrictive covenants, including obligations regarding confidential information and trade secrets and restrictions on his ability to solicit the employees and customers of the Company for a period of two years following his separation.  In addition, Mr. Laparte and the Company also have agreed to a mutual non-disparagement covenant.  Mr. Laparte also has agreed that he will remain available to the Company to perform such duties as the Board of Directors may reasonably request, as well as work towards the orderly transition of his responsibilities to other Company employees, including his successor. 

The foregoing summary of the Separation Agreement does not purport to be complete and is qualified in its entirety by reference to the Separation Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.

Bahrambeygui Employment Agreement

Ms. Bahrambeygui’s Employment Agreement relating to her service as Interim Chief Executive Officer provides for a term beginning on November 16, 2018 and continuing until terminated by either party on 60 days’ prior written notice or by the Company immediately for “cause” or upon Ms. Bahrambeygui’s death or “disability.”  The Employment Agreement specifies a base salary amount of $875,000 per year, which may be increased, but not decreased, at the Company’s discretion.  The Employment Agreement states that Ms. Bahrambeygui is entitled to reimbursement of business expenses and is eligible to receive all other benefits offered to senior executives of the Company under the Company’s benefit practices and plans. 

Ms. Bahrambeygui’s Employment Agreement contemplates the award of restricted stock and performance stock units having an aggregate target value equal to $2.175 million at the time of grant.  Such grants will be made concurrent with the commencement of her employment as Interim Chief Executive Officer.  The number of shares covered by such grants will be determined based on an average of the closing price for the 30 trading days prior to the date of grant.  Of such grants, two-thirds will be comprised of restricted stock awards with time-based vesting and one-third will be comprised of performance stock units.  The restricted stock will vest 12 months from the date of grant, provided that if Ms. Bahrambeygui’s employment is terminated by the Company without cause before the completion of the 12-month term, she will receive the greater of 50% vesting or pro rata vesting based on the number of days worked during the 12-month term.  Performance stock units will vest based on the Compensation Committee’s determination in October 2019 that the Company has achieved revenue or operating

income targets specified by the Compensation Committee for fiscal year 2019, provided that if one of the performance criteria is achieved but Ms. Bahrambeygui’s employment is terminated without cause before the Compensation Committee makes its determination, she will receive the greater of 50% vesting or pro rata vesting based on the number of days worked.  If Ms. Bahrambeygui’s employment is terminated due to her death or disability and such death or disability results from events or circumstances occurring while she is traveling for business inside or outside the United States, her restricted stock will vest in full and her performance stock units will vest in full, subject to the achievement of one of the performance criteria.

In the event that the Company terminates Ms. Bahrambeygui’s employment without “cause” or upon her “disability,” Ms. Bahrambeygui will be entitled to the following separation benefits:

· a success bonus, with at-target performance set at $437,500.  The final amount of such Success Bonus will be subject to the discretion of the Company’s Compensation Committee, taking into account a number of factors, including the length of Ms. Bahrambeygui’s tenure as Interim Chief Executive Officer and her success in achieving objectives relating to strategic plan and process, operating process, organizational process, compensation practices and management development; and

· continued contribution of the premium cost for Ms. Bahrambeygui’s and her eligible dependents’ participation in the Company’s group health plan for six months.

The foregoing separation benefits are the exclusive benefits that would be payable to Ms. Bahrambeygui under her Employment Agreement by reason of her termination.  Payment of the separation benefits is conditioned on Ms. Bahrambeygui’s continued compliance with her obligations with respect to confidentiality, non-solicitation of employees and non-interference with the Company’s customers and contracts and Ms. Bahrambeygui (or her estate) executing and delivering to the Company a full release of all claims in a form reasonably acceptable to the Company.

If the Ms. Bahrambeygui remains in the Interim Chief Executive Officer role into the eleventh month of service, the Compensation Committee will determine her compensation to take effect after completion of the first twelve months of the term of her Employment Agreement based on circumstances at that time.

This description of the Employment Agreement is qualified in its entirety by the terms set forth in the definitive agreement attached hereto as an exhibit.

Item 9.01. Exhibits.

(d)	The following exhibit is furnished herewith:
Exhibit No.		Description
10.1		Separation Agreement and Waiver and Release of Claims dated November 20, 2018 between Jose Luis Laparte and the Company
10.2		Employment Agreement dated November 20, 2018 between Sherry Bahrambeygui and the Company

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:November 26,2018	/S/FRANCISCO VELASCO
	Francisco Velasco
	ExecutiveVicePresident, General Counsel and Secretary

EX-10.1

Exhibit 10.1

SEPARATION AGREEMENT WITH WAIVER AND RELEASE OF CLAIMS

This Separation Agreement with Waiver and  Release of Claims (“Agreement”) is made by and between Jose Luis Laparte (“Executive”) and PriceSmart, Inc. (the “Company”) (collectively referred to as the “Parties” or individually referred to as a “Party”).

RECITALS

WHEREAS, Executive was employed by the Company pursuant to an Employment Agreement dated September 1, 2015 (the “Employment Agreement”);

WHEREAS, as of November 16, 2018 (the “Transition Date”), the Executive is no longer serving as the Company’s Chief Executive Officer/President;

WHEREAS, the Executive’s employment with the Company will terminate effective December 31, 2018 (the “Termination Date”); and

WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that the Executive may have against the Company and any of the Releasees as defined in the Waiver and Release of Claims, including, but not limited to, any and all claims arising out of or in any way related to Executive’s employment with or separation from the Company;

NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Executive hereby agree as follows:

1.    Transition Period.  During the period beginning on the Transition Date and ending on the Termination Date (the “Transition Period”), the Executive will remain available to the Company to perform such duties as the Board of Directors (the “Board”) may reasonably request, as well as work towards the orderly transition of Executive’s responsibilities to other Company employees, including Executive’s successor.  The Executive shall not have any executive authorities during the Transition Period and will not have any oversight or supervisory responsibilities with respect to any employee of the Company.  The Company will continue to pay Executive his current annual base salary during the Transition Period.  The Executive will report to the Company’s offices during the Transition Period or access the Company’s systems and facilities when requested by the Board or the Company’s Chief Executive Officer.   Executive agrees that he shall have resigned from all board and officer positions with the Company and its subsidiaries and affiliates as of the Transition Date, and shall execute all documents or notices requested by the Company or any of its subsidiaries or affiliates to effectuate such resignation. 

2.    Separation Benefits.  Provided Executive signs this Agreement, signs and does not revoke the Waiver and Release of Claims attached as Exhibit A in the time provided for therein, and Executive satisfactorily performs the transition responsibilities pursuant to Section 1, Executive will receive the following payments and benefits (the “Separation Benefits”):

a.    Severance Payment.  The Company agrees to pay Executive cash severance (the “Severance”) in an amount equal to $768,304, which is equivalent to Executive’s annual base salary as of the Execution Date, less applicable withholdings.  The Severance will be paid to the Executive pursuant

to the Company’s regular payroll schedule over a period of one (1) year commencing on the Company’s first practicable payroll period following the Release Effective Date (as defined in the Waiver and Release of Claims). 

b.    Healthcare Premium Payment.  Subject to Executive’s timely election of continuation coverage  pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) within the time period prescribed pursuant to COBRA, the Company shall continue to contribute the premium cost of Executive’s participation and that of his eligible dependents in the Company’s group health plan, which covers the Executive and his dependents for a period of twelve (12) months after the Termination Date, or until Executive has secured other employment, whichever occurs first, provided that Executive continues to pay his share of the premium for his and his dependents’ participation.  COBRA reimbursements shall be made by the Company to Executive consistent with the Company’s normal expense reimbursement policy, provided that Executive submits documentation to the Company substantiating his payments for COBRA coverage.

c.    Stock.  Pursuant to the terms of the Restricted Stock Grant Agreement dated November 3, 2015 (the “RSA”), 50,000 Shares (as such term is defined therein) are Unreleased Shares (as such term is defined herein) as of the Termination Date.  The Company shall waive the Forfeiture Restrictions (as such term is defined therein) as of the Release Effective Date, and the Shares shall no longer be Unreleased Shares as of such date.  Except as modified by this Agreement, the Shares will remain subject to and governed by the RSA and the PriceSmart, Inc. 2013 Equity Incentive Award Plan. 

d.    Outplacement Services.  The Company shall reimburse Executive for expenses incurred for outplacement services during the one (1) year period following the Termination Date, up to a maximum aggregate amount of $8,000, which services shall be provided by an outplacement agency selected by the Executive and be the type and nature of services provided to substantially similarly situated individuals. The Company shall reimburse Executive within fifteen (15) business days following the date on which the Company receives proof of payment of such expense, which proof must be submitted no later than thirty (30) days after the expense was incurred.  Notwithstanding the foregoing, Executive shall only be entitled to reimbursement for those outplacement service costs incurred by Executive on or prior to the last day of 2020.

e.    Reimbursement Attorneys’ Fees.  The Company shall reimburse the Executive for the attorneys’ fees incurred by Executive in connection with his submission of applications for naturalization in the United States for him and his family members, up to a maximum of $8,000.  The Company shall reimburse Executive within fifteen (15) business days following the date on which the Company receives proof of payment of such expense, which proof must be submitted no later than thirty (30) days after the expense was incurred.   

f.    Housing Allowance.  The Company shall pay to the Executive an amount equal to $50,000, less required withholdings (the “Housing Allowance”).  The Housing Allowance will be paid to the Executive in twenty-four (24) substantially equal installments pursuant to the Company’s regular payroll schedule over a period of one (1) year commencing on the Company’s first practicable payroll period following the Release Effective Date. 

g.    Family Trip Allowance. The Company shall pay to the Executive an amount equal to $8,000, less required withholdings (the “Family Trip Allowance”).  The Family Trip Allowance will be paid to the Executive in a single lump sum on the first practicable payroll period following the Release Effective Date. 

3.    Accrued Obligations and Benefits.  Executive’s health insurance benefits shall cease on the Termination Date, subject to Executive’s right to continue his health insurance under COBRA.  Except as otherwise provided for herein, Executive’s participation in all benefits and incidents of employment, including, but not limited to, vesting in equity-based awards, perquisites of employment, and the accrual of bonuses, vacation, and paid time off, ceased as of the Termination Date.  Executive will receive his earned but unpaid base salary, unpaid expense reimbursements, and any vested benefits accrued through the Termination Date on or before the time required by law, but in no event more than thirty (30) days following the Termination Date.

4.    Payment of Salary and Receipt of All Benefits.  Executive acknowledges and represents that, other than the consideration set forth in this Agreement, the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, reimbursable expenses, commissions, stock, restricted stock, restricted stock units, stock options, vesting, and any and all other benefits and compensation due to Executive, up to the date of Execution of this Agreement

5.    Nondisparagement.  Executive and the Company agree not to make any statements or representations, or otherwise communicate, directly or indirectly, in writing, orally, or otherwise, or take any action which may, directly or indirectly, disparage the Executive or the Company or any of its subsidiaries or affiliates or their respective current and former officers, directors, employees, advisors, businesses or reputations.  Notwithstanding the foregoing, nothing in this Agreement shall preclude Executive or the Company from making truthful statements that are required by applicable law, regulation or legal process.  Executive acknowledges that the only persons whose statements may be attributed to the Company for purposes of this Section 5 shall be the Company’s Chief Executive Officer, Chief Financial Officer and members of the Board.

6.    Breach.  Executive acknowledges and agrees that any material breach of this Agreement including, without limitation, the provisions of the Employment Agreement that remain in effect, shall entitle the Company immediately to recover and/or cease providing the consideration provided to Executive under this Agreement and to obtain damages.  In addition, the Company shall be awarded its attorneys’ fees incurred if it prevails in any action against the Executive to enforce this Agreement. 

7.    No Admission of Liability.  Executive understands and acknowledges that this Agreement constitutes a compromise and settlement of any and all actual or potential disputed claims by Executive.  No action taken by the Company hereto, either previously or in connection with this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to Executive or to any third party.

8.    Costs.  The Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this Agreement.

9.    Arbitration. 

a.    All disputes between Executive (and Executive’s attorneys, successors, and assigns) and the Company (and its affiliates, subsidiaries, shareholders, directors, officers, employees, agents, successors, attorneys, and assigns) relating in any manner to Executive’s employment or the termination of Executive’s employment, including, without limitation, all disputes arising under the Employment Agreement and this Agreement (“Arbitrable Claims”), shall be resolved by final and binding arbitration to the fullest extent permitted by law.  Arbitrable Claims shall include, but are not limited to, contract (express or implied) and tort claims of all kinds, as well as all claims based on any federal, state, or local law, statute, or regulation, excepting only claims under applicable workers’ compensation law and unemployment insurance claims.  By way of example and not in limitation of the foregoing, Arbitrable Claims shall include any claims arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Family Medical Leave Act, as well as all claims under any applicable state or federal statute, and any claims asserting wrongful termination, breach of contract, breach of the covenant of good faith and fair dealing, negligent or intentional infliction of emotional distress, harassment, discrimination, negligent or intentional misrepresentation, negligent or intentional interference with contract or prospective economic advantage, fraud, defamation, invasion of privacy, all claims related to disability and all wage or benefit claims, including but not limited to claims for salary, bonuses, profit participation, commissions, stock, stock options, vacation pay, fringe benefits or any form of compensation.  Arbitration shall be final and binding upon the Parties and shall be the exclusive remedy for all Arbitrable Claims, except that the Parties may seek interim injunctive relief and other provisional remedies in court as set forth in this Agreement.  The Parties hereby waive any rights they may have to trial by jury or any other form of administrative hearing or procedure in regard to the Arbitrable Claims.

b.    Claims shall be arbitrated in accordance with the then-existing National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA Employment Rules”), as augmented by this Agreement.  Arbitration shall be initiated as provided by the AAA Employment Rules, although the written notice to the other Party initiating arbitration shall also include a statement of the claims asserted and all the facts upon which the claims are based.  Either Party may bring an action in court to compel arbitration under this Agreement and to enforce an arbitration award.  Otherwise, neither Party shall initiate or prosecute any lawsuit or administrative action in any way related to any Arbitrable Claim.  All arbitration hearings under this Agreement shall be conducted at the AAA office located nearest to San Diego, California.  The Federal Arbitration Act shall govern the interpretation and enforcement of this Section.

c.    All disputes involving Arbitrable Claims shall be decided by a single arbitrator.  The arbitrator shall be selected by mutual agreement of the Parties within thirty (30) days of the effective date of the notice initiating the arbitration.  If the Parties cannot agree on an arbitrator, then the complaining Party shall notify the AAA and request selection of an arbitrator in accordance with the AAA Employment Rules.  The arbitrator shall have only such authority to award equitable relief, damages, costs, and fees as a court would have for the particular claims asserted and any action of the arbitrator in contravention of this limitation may be the subject of court appeal by the aggrieved Party.  No other aspect of any ruling by the arbitrator shall be appealable, and all other aspects of the arbitrator’s ruling shall be final and non-appealable.  The arbitrator shall have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law.  The arbitrator shall be required

to issue a written arbitration decision, including the arbitrator’s essential findings, conclusions and a statement of award.  The Company shall pay all arbitration fees in excess of what the Executive would have to pay if the dispute were decided in a court of law.  The arbitrator shall have exclusive authority to resolve all Arbitrable Claims, including, but not limited to, whether any particular claim is arbitrable and whether all or any part of this Agreement is void or unenforceable.

d.    Notwithstanding the foregoing, in order to provide for interim relief pending the finalization of arbitration proceedings hereunder, nothing in this Section 9 shall prohibit the Parties from pursuing, a claim for interim injunctive relief, for other applicable provisional remedies, and/or for related attorneys’ fees in a court of competent jurisdiction in order to prevent irreparable harm pending the conclusion of the arbitration.  In the event of any alleged breach or threatened breach of this Agreement, the Executive hereby consents and submits to jurisdiction in the State of California.

e.    If for any reason all or part of this arbitration provision is held to be invalid, illegal, or unenforceable in any respect under any applicable law or regulation in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other part of this arbitration provision or any other jurisdiction, but this provision shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable part or parts of this arbitration provision had never been contained herein, consistent with the general intent of the Parties, as evidenced herein, insofar as possible.

10.    Cooperation.  Executive agrees to cooperate with the Company, at reasonable times and places, with respect to all matters arising during or related to Executive’s continuing or past employment, including but not limited to all formal or informal matters in connection with any government investigation, internal investigation, litigation, regulatory or other proceeding which may have arisen or which may arise. The Company will reimburse Executive for all reasonable out-of-pocket expenses (not including lost time or opportunity or attorneys’ fees) incurred by Executive fulfilling his obligations under this Section 10. 

11.    Section 409A Compliance.  All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Executive during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year. Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.  Because the Executive is a “specified employee” (as that term is used in Section 409A of the Code and regulations and other guidance issued thereunder), any part of the Severance that constitutes non-qualified deferred compensation under Section 409A of the Code shall be delayed until the earlier of (A) the business day following the six-month anniversary of the date his separation from service becomes effective, and (B) the date of the Executive’s death, but only to the extent necessary to avoid such penalties under Section 409A of the Code. On the earlier of (A) the business day following the six-month anniversary of the date his separation from service becomes effective, and (B) the Executive’s death, the Company shall pay the Executive in a lump sum the aggregate value of the non-qualified deferred compensation that the Company otherwise would have paid the Executive prior to that date under this Agreement.  It is intended that each installment of the Severance shall be treated as a separate “payment” for purposes of Section 409A of the Code.

12.    Authority.  The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement.  Executive represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might claim through him to bind them to the terms and conditions of this Agreement.  Each Party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.

13.    Severability.  In the event that any provision or any portion of any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision or portion of provision.

14.    Acknowledgement.  The Executive acknowledges and agrees that he remains bound by and subject to the terms of the Employment Agreement that survive termination of his employment to the extent necessary to effectuate the terms contained therein including, without limitation, Executive’s covenants of confidentiality and non-solicitation, which covenants are reaffirmed herein.  Such covenants include, without limitation, Executive’s agreement not to use or disclose Confidential Information (as such term is defined in the Employment Agreement).  The Executive acknowledges and agrees he has returned all Company property and other tangible products and documents belonging to the Company pursuant to Section 8(c) of the Employment Agreement.  

15.    Indemnity.  The Company acknowledges and agrees that Executive’s Indemnity Agreement with the Company remains in full force and effect.  The foregoing shall not be interpreted to limit any rights of indemnification the Company may owe Executive under law.

16.    Entire Agreement.  This Agreement, together with the terms of the Employment Agreement that survive the termination of the Executive’s employment, the Indemnity Agreement, and the RSA, as modified herein, represents the entire Agreement and understanding between the Company and Executive concerning the subject matter of this Agreement and Executive’s employment with and separation from the Company and the events leading thereto and associated therewith, and supersedes and replaces any and all prior agreements and understandings concerning the subject matter of this Agreement and Executive’s relationship with the Company.  

17.    Amendment.  This Agreement may be amended or modified only by a written instrument signed by the Executive and a duly authorized representative of the Company.

18.    Governing Law.  This Agreement shall be governed by the laws of the State of California, without regard for choice-of-law provisions. 

19.    Counterparts.  This Agreement may be executed in counterparts and by facsimile or pdf, and each counterpart and facsimile or pdf shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

{signature page follows}

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

	Executive, an individual
Dated:  November 20, 2018	/s/ Jose Luis Laparte
	Jose Luis Laparte
	PriceSmart, Inc.
Dated:  November 20, 2018	By	/s/ Francisco Velasco
		Francisco Velasco
		Executive Vice President, General Counsel

Exhibit A

WAIVER AND RELEASE OF CLAIMS

1.    Executive agrees that the Separation Benefits represent settlement in full of all outstanding obligations owed to Executive by the Company and its current and former officers, directors, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries, and predecessor and successor corporations and assigns (collectively, the “Releasees”).  Executive, on his own behalf and on behalf of his respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, demand, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Executive may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Release Effective Date, including, without limitation:

a.    any and all claims relating to or arising from Executive’s employment relationship with the Company and the termination of that relationship;

b.    any and all claims relating to, or arising from, Executive’s right to purchase, or actual purchase of shares of stock of the Company or ownership of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

c.    any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

d.    any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967 (the “ADEA”); the Older Workers Benefit Protection Act;the Executive Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the Immigration Control and Reform Act; the California Family Rights Act; the California Labor Code; the California Workers’ Compensation Act; and the California Fair Employment and Housing Act;

e.    any and all claims for violation of the federal or any state constitution;

f.    any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

g.    any claim for any loss, cost, damage, or expense arising out of any dispute over the nonwithholding or other tax treatment of any of the proceeds received by Executive as a result of this Agreement; and

h.    any and all claims for attorneys’ fees and costs.

The releases described herein shall not be applicable to any claim(s) to enforce, or for breach of, the Agreement.  The releases described herein also shall not be applicable to future claims which do not yet exist.  Executive agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released.  This release does not release claims that cannot be released as a matter of law.

2.    California Civil Code Section 1542; Unknown Claims.

a.    California Civil Code Section 1542.  Executive acknowledges that he has been advised to consult with legal counsel and is familiar with the provisions of California Civil Code Section 1542, a statute that otherwise prohibits the release of unknown claims, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

Executive, being aware of said code section, agrees to expressly waive any rights he may have thereunder, as well as under any other statute or common law principles of similar effect.

b.    Unknown Claims.  Executive acknowledges that he has been advised to consult with legal counsel and that he is familiar with the principle that a general release does not extend to claims that the releaser does not know or suspect to exist in his favor at the time of executing the release, which, if known by him, must have materially affected his settlement with the releasee.  Executive, being aware of said principle, agrees to expressly waive any rights he may have to that effect, as well as under any other statute or common law principles of similar effect.

3.    No Pending or Future Lawsuits.  Executive represents that he has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any of the other Releasees.  Executive also represents that he does not intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company or any of the other Releasees.

4.    Limitations.  Nothing in the Agreement or this Waiver and Release of Claims prohibits Executive from reporting possible violations of federal law or regulation to any government agency or entity, including, but not limited to, the Securities and Exchange Commission, the Equal Employment Opportunity Commission (the “EEOC”), or any similar state agency, or making other disclosures that are protected under the whistleblower provisions of applicable law.  Executive does not need prior authorization of the Company to make any such reports or disclosures and Executive is not required to notify the Company that Executive has made such reports or disclosures.  Nothing in this Waiver and

Release of Claims shall affect the EEOC’s rights and responsibilities to enforce the Civil Rights Act of 1964, as amended, the ADEA, the National Labor Relations Act or any other applicable law, nor shall anything in this Waiver and Release of Claims be construed as a basis for interfering with Executive’s protected right to file a timely charge with, or participate in an investigation or proceeding conducted by, the EEOC, the National Labor Relations Board (the “NLRB”), or any other state, federal or local government entity; provided, however, if the EEOC, the NLRB, or any other state, federal or local government entity commences an investigation on Executive’s behalf, Executive specifically waives and releases his right, if any, to recover any monetary or other benefits of any sort whatsoever arising from any such investigation or otherwise, nor will you seek or accept reinstatement to Executive’s former position with the Company.

5.    Acknowledgements.  Executive acknowledges that he has carefully read and fully understand this Waiver and Release of Claims.  Executive acknowledges that he has not relied on any statement, written or oral, which is not set forth in the Agreement or this Waiver and Release of Claims.  Executive further acknowledges that he is hereby advised in writing to consult with an attorney prior to executing this Waiver and Release of Claims; that he is not waiving or releasing any rights or claims that may arise after the date of execution of this Waiver and Release of Claims; that he is releasing claims under the ADEA; that he executes this Waiver and Release of Claims in exchange for monies in addition to those to which he is already entitled; that the Company gave Executive a period of at least twenty-one (21) days within which to consider this Waiver and Release of Claims and a period of seven (7) days following his execution of this Waiver and Release of Claims to revoke his ADEA waiver as provided below; that if Executive voluntarily executes this Waiver and Release of Claims prior to the expiration of the 21st day, he will voluntarily waive the remainder of the twenty-one (21) day consideration period; that any changes to this Waiver and Release of Claims by Executive once it has been presented to Executive will not restart the 21 day consideration period; and Executive enters into this Waiver and Release of Claims knowingly, willingly and voluntarily in exchange for the Separation Benefits.  To receive the Separation Benefits provided in the Agreement, this Waiver and Release of Claims must be signed and returned to Francisco Velasco, at the Company, at 9740 Scranton Road Suite # 125, San Diego, California  92121 or at, if by email delivery, fvelasco@pricesmart.com, on, and not before,January 1, 2019.  Nothing in this Waiver and Release of Claims constitutes a waiver any rights Executive has under the Agreement.

6.    Revocation Right.  Executive may revoke his release of his ADEA claims up to seven (7) days following his signing this Waiver and Release of Claims.  Notice of revocation must be received in writing by Francisco Velasco, at the Company, at 9740 Scranton Road Suite # 125, San Diego, California  92121, or at, if by email delivery, fvelasco@pricesmart.com, no later than the seventh day (excluding the date of execution) following the execution of this Waiver and Release of Claims.  The ADEA release is not effective or enforceable until expiration of the seven day period.  However, the ADEA release becomes fully effective, valid and irrevocable if it has not been revoked within the seven day period immediately following Executive’s execution of this Waiver and Release of Claims.  The Parties agree that if Executive exercises his right to revoke this Waiver and Release of Claims, then he is not entitled to any of the Separation Benefits set forth in the Agreement.  This Waiver and Release of Claims shall become effective eight (8) days after Executive’s execution if he has not revoked his signature as herein provided (such date, the “Release Effective Date”).

{signature page follows}

I hereby provide this Waiver and Release of Claims as of the date indicated below and acknowledge that the execution of this Waiver and Release of Claims is in further consideration of the Separation Benefits set forth in the Agreement, to which I acknowledge I would not be entitled if I did not sign this Waiver and Release of Claims.  I intend that this Waiver and Release of Claims become a binding agreement by and between me and the Company if I do not revoke my acceptance within seven (7) days.

___/s/ Jose Luis Laparte_________

Jose Luis Laparte

Dated:  January 1, 2019

EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made as of November 20, 2018, between PriceSmart, Inc., a Delaware corporation (the “Company”), and Sherry Bahrambeygui (the “Executive”).

WHEREAS, the Company desires to retain and employ the Executive and the Executive desires to be retained and employed by the Company on the terms contained in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.    Position and Duties.

(a)    The Executive shall serve as the Company’s Interim Chief Executive Officer (the “Interim CEO”), reporting to the Company’s Board of Directors (the “Board”).

(b)    The Executive shall perform those services customary to this office and such other lawful duties that the Board may reasonably assign.  The Executive shall devote all of her business time and best efforts to the performance of her duties under this Agreement and shall be subject to, and shall comply with the Company’s policies, practices and procedures and all codes of ethics or business conduct applicable to her position, as in effect from time to time.  Notwithstanding the foregoing, the Executive shall be entitled to (i) serve as a member of the board of directors of a reasonable number of other companies, subject to the advance approval of the Board, which approval shall not be unreasonably withheld, (ii) serve on civic, charitable, educational, religious, public interest or public service boards, subject to the advance approval of the Board, which approval shall not be unreasonably withheld, and (iii) manage the Executive’s personal and family investments, in each case, to the extent such activities do not materially interfere, as determined by the Board in good faith, with the performance of the Executive’s duties and responsibilities hereunder.

2.    Term.  This Agreement and the Executive’s employment pursuant to this Agreement shall begin on November 16, 2018 (the “Effective Date”) and continue until terminated pursuant to this Section 2 (the “Term”).  This Agreement may be terminated by either party on sixty (60) days prior written notice; provided, however, that the Company may terminate this Agreement immediately for Cause, death, or Disability.

3.    Compensation and Related Matters.

(a)    Base Salary.  During the Term, the Executive’s annual base salary shall be $875,000 (the “Base Salary”).  The Base Salary shall be payable in accordance with the Company’s normal payroll procedures in effect from time to time and may be increased, but not decreased, at the discretion of the Company.

(b)    Equity. Subject to the approval of the Compensation Committee of the Board, the Company shall award Executive a number of shares of restricted stock and performance stock units of the Company with an aggregate value of $2,175,000 based on the average closing price per share for the thirty (30) day trading period prior to the Effective Date (the “Restricted Shares”).  The Restricted Shares shall be granted pursuant to the Company’s 2013 Equity Incentive Award Plan (the “Plan”) as soon as practicable following the Effective Date. The Restricted Shares shall be governed by and shall be subject to the terms and conditions set forth in the Plan and an award agreement to be provided by the Company.

(i)    67% of the Restricted Shares (the “Time-Based Shares”) shall vest as follows:

a.    if Executive’s employment with the Company is terminated by the Company without Cause on or prior to the six (6) month anniversary of the Effective Date, then the Executive shall be vested in fifty percent (50%) of Time-Based Shares.

b.    if Executive’s employment with the Company is terminated by the Company without Cause following the six (6) month anniversary of the Effective Date, but prior to the twelve (12) month anniversary of the Effective Date, then the Executive shall be vested in a pro-rata portion of the Time-Based Shares based on the number of days employed from the Effective Date to the twelve (12) month anniversary of the date of grant.

c.    if Executive’s employment with the Company continues through the twelve (12) month anniversary of the Effective Date, or if the Executive is terminated due to her death or Disability and such death or Disability results from events or circumstances occurring while Executive is traveling for business inside or outside the United States, then the Executive shall be vested in all of the Time-Based Shares.

(ii)    33% of the Restricted Shares (the “Performance-Based Shares”) shall vest as follows:

a.    if Executive’s employment with the Company is terminated by the Company without Cause on or prior to the six (6) month anniversary of the Effective Date, then the Executive shall be vested in fifty percent (50%) of the Performance-Based Shares as of October 26, 2019, based on actual performance and subject to confirmation by the Compensation Committee of achievement of the Performance Metrics;

b.    if Executive’s employment with the Company is terminated by the Company without Cause following the six (6) month anniversary of the Effective Date, but prior to the twelve (12) month anniversary of the Effective Date, then the Executive shall be vested in a pro-rata portion of the Performance-Based Shares based on the number of days employed from the Effective Date to October 26, 2019, based on actual performance and subject to confirmation by the Compensation Committee of achievement of the Performance Metrics; and

c.    if Executive’s employment with the Company continues through the twelve October 26, 2019, or if the Executive is terminated due to her death or Disability and such death or Disability results from events or circumstances occurring while Executive is traveling for business inside or outside the United States, then the Executive shall be vested in all of the Performance-Based Shares, based on actual performance and subject to confirmation by the Compensation Committee of achievement of the Performance Metrics.

Vesting of the Performance-Based Shares shall be subject to the Company’s achievement of one of the performance metrics applicable to awards of performance stock units made to executive

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officers of the Company in October 2018.  If no Performance Metric is achieved during the Performance Period, all of the Performance-Based Shares shall be forfeited. 

(c)    Business Expenses.  During the Term, the Executive shall be entitled to receive prompt reimbursement for all reasonable business expenses incurred by her in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company for its senior executive officers.

(d)    COBRA Reimbursement.  If Executive’s participation in the healthcare plan (the “Current Plan”) in which the Executive participates as of immediately prior to the Effective Date is terminated, and Executive is unable to obtain healthcare coverage under the Company’s healthcare plan, the Company will reimburse the Executive for the premiums required to be paid for her continued participation in the Current Plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), until such time that she is eligible to participate in the Company’s healthcare plan. 

(e)    Other Benefits.  During the Term and subject to any contribution therefor required of employees of the Company, the Executive shall be eligible to participate in all equity, pension, savings and retirement plans, welfare and insurance plans, practices, policies, programs and perquisites of employment applicable generally to other senior executives of the Company, except to the extent any employee benefit plan provides for benefits otherwise provided to the Executive hereunder.  Such participation shall be subject to (i) requirements of applicable law, (ii) the terms of the applicable plan documents, (iii) generally applicable Company policies, and (iv) the discretion of the Board or any administrative or other committee provided for under or contemplated by such plan.  The Executive shall have no recourse against the Company under this Agreement in the event that the Company should alter, modify, add to or eliminate any or all of its employee benefit plans.

(f)    Vacation; Holidays.  During the Term, the Executive shall be entitled to take vacation and other holiday time in accordance with the policies applicable to senior executives of the Company generally. 

(g)    Revaluation. In the event that the Executive remains the Interim CEO through the eleven (11) month anniversary of the Effective Date, the Board shall review the Executive’s compensation hereunder at which time the Board, in its sole discretion, may elect to adjust the Executive’s compensation for any service following the twelve (12) month anniversary of the Effective Date.

4.    Success Bonus and Other Benefits following Termination of Employment.

(a)    Separation Benefits. Subject to Sections 4(b) and 4(c), if Executive’s employment with the Company is terminated by the Company without Cause or by the Company due to her death or Disability prior to the twelve (12) month anniversary of the Effective Date, then the Company shall pay or provide the following (the “Separation Benefits”):

(i)    A success bonus (a “Success Bonus”), with at-target performance set at $437,500.  The final amount of such Success Bonus shall be subject to the discretion of the Company’s Compensation Committee, taking into account a number of factors, including the length of Executive’s tenure in such role and Executive’s success in achieving objectives relating to strategic plan and process, operating process, organizational process, compensation practices and management development; and

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(ii)    Subject to the timely election of continuation coverage under COBRA, the Company shall continue to contribute to the premium cost of the Executive’s participation and that of her eligible dependents in the Company’s group health plan (to the extent permitted under applicable law and the terms of such plan) which covers the Executive (and the Executive’s eligible dependents) for a period of six (6) months, provided (x) the Executive pay the remainder of the premium cost of such participation by payroll deduction (if any); (y) the Executive is eligible and remains eligible for COBRA coverage; and (z) the Executive reports to the Company on a monthly basis any health care premium payments received from another employer during such twelve-month period, as such amounts shall be deducted from any Company-paid COBRA premium contribution.  If the reimbursement of any COBRA premiums would violate the nondiscrimination rules or cause the reimbursement of claims to be taxable under the Patient Protection and Affordable Care Act of 2010, together with the Health Care and Education Reconciliation Act of 2010 (collectively, the “Act”) or Section 105(h) of the Code, the Company paid premiums shall be treated as taxable payments and be subject to imputed income tax treatment to the extent, necessary to eliminate any discriminatory treatment or taxation under the Act or Section 105(h) of the Code.  If the Executive’s participation or that of her eligible dependents would give rise to penalties or taxes against the Company under the Act, as determined by the Company in its sole discretion, the Company shall instead make cash payments to the Executive over the same period in monthly installments in an amount equal to the Company’s portion of the monthly cost of providing such benefits under its group health plan for such period.

(b)    Release; Payment.  Payment of the Severance Benefits shall be conditioned on (i) the Executive’s continued compliance with the obligations of the Executive under Sections 5 and 6; and (ii) the Executive (or Executive’s estate) executing and delivering to the Company a full release of all claims that the Executive and Executive’s heirs and assigns may have against the Company, its affiliates and subsidiaries and each of their respective directors, officers, employees and agents, in a form reasonably acceptable to the Company, which shall include an affirmation by Executive that Executive shall fully comply with Sections 5 and 6 of this Agreement (the “Release”).  The Release must become enforceable and irrevocable on or before the sixtieth (60th) day following the Termination Date.  If the Executive fails to execute without revocation the Release, the Executive shall not be entitled to the Severance Benefits.  The installments of Severance provided under Section 4(a) shall commence in the calendar month following the month in which the Release becomes enforceable and irrevocable.  If, however, the sixty (60) day period in which the Release must become enforceable and irrevocable begins in one year and ends in the following year, the Company shall commence payment of the Severance installments in the second year in the later of January and the first calendar month following the month in which the Release becomes effective and irrevocable.  The first installment shall include, however, all amounts that would otherwise have been paid to the Executive between the Termination Date and the Executive’s receipt of the first installment, assuming the first installment would otherwise have been paid in the month following the month in which the Termination Date occurs. 

(c)    409A. To the extent that any of the payments or benefits provided for in this Section 4 are deemed to constitute non-qualified deferred compensation benefits subject to Section 409A of the United States Internal Revenue Code (the “Code”), the following interpretations apply:

(i)    Any termination of the Executive’s employment triggering payment of benefits under Section 4 must constitute a “separation from service” under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. § 1.409A-l(h) before distribution of such benefits can commence.  To the extent that the termination of the Executive’s employment does not constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by the Executive to the Company or any of its parents, subsidiaries or affiliates at the time the Executive’s

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employment terminates), any benefits payable under Section 4 that constitute deferred compensation under Section 409A of the Code shall be delayed until after the date of a subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h).  For purposes of clarification, this Section 4(d)(i) shall not cause any forfeiture of benefits on the Executive’s part, but shall only act as a delay until such time as a “separation from service” occurs.

(ii)    Because the Executive is a “specified employee” (as that term is used in Section 409A of the Code and regulations and other guidance issued thereunder) on the date her separation from service becomes effective, any benefits payable under Section 4 that constitute non-qualified deferred compensation under Section 409A of the Code shall be delayed until the earlier of (A) the business day following the six-month anniversary of the date her separation from service becomes effective, and (B) the date of the Executive’s death, but only to the extent necessary to avoid such penalties under Section 409A of the Code.  On the earlier of (A) the business day following the six-month anniversary of the date her separation from service becomes effective, and (B) the Executive’s death, the Company shall pay the Executive in a lump sum the aggregate value of the non-qualified deferred compensation that the Company otherwise would have paid the Executive prior to that date under Section 4 of this Agreement.

(iii)    It is intended that each installment of the payments and benefits provided under Section 4 of this Agreement shall be treated as a separate “payment” for purposes of Section 409A of the Code.  In particular, the installment Severance payments set forth in Section 4(a) of this Agreement shall be divided into two portions.  That number of installments commencing on the first payment date set forth in Section 4 of this Agreement that are in the aggregate less than two times the applicable compensation limit under Section 401(a)(17) of the Code for the year in which the Termination Date occurs (provided the termination of the Executive’s employment is also a separation from service) shall be payable in accordance with Treas. Reg. § 1.409A-l(b)(9)(iii) as an involuntary separation plan.  The remainder of the installments shall be paid in accordance with Sections 4(d)(i) and (ii) above.

(d)    Definitions.

(i)    For purposes of this Agreement, “Cause” means the Executive’s: (i) repeated and habitual failure to perform her duties or obligations hereunder; (ii) engaging in any act that has a direct, substantial and adverse effect on the Company’s interests; (iii) personal dishonesty, willful misconduct, or breach of fiduciary duty involving personal profit; (iv) intentional failure to perform her stated duties; (v) willful violation or reckless disregard of any law, rule or regulation which materially adversely affects her ability to discharge her duties or has a direct, substantial and adverse effect on the Company’s interests; (vi) any material breach of contract by Executive; or (vii) conduct authorizing termination under Cal. Labor Code § 2924.

(ii)    For purposes of this Agreement, “Disability” means the Executive is unable to perform the essential functions of her position, with or without a reasonable accommodation, for a period of 90 consecutive calendar days or 180 non-consecutive calendar days within any rolling 12 month period.

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5.    Confidentiality and Restrictive Covenants.

(a)    The Executive acknowledges that:

(i)    the Company (which, for purposes of this Section 5 shall include the Company and each of its subsidiaries and affiliates) operates membership warehouse clubs in Central America, Colombia and the Caribbean (the “Business”);

(ii)    the Company is dependent on the efforts of a certain limited number of persons who have developed, or will be responsible for developing the Company’s Business;

(iii)    the Company’s Business is international in scope;

(iv)    the Business in which the Company is engaged is intensely competitive and that Executive’s employment by the Company will require that she have access to and knowledge of nonpublic confidential information of the Company and the Company’s Business, including, but not limited to, certain/all of the Company’s products, plans for creation, acquisition or disposition of products or publications, strategic and expansion plans, formulas, research results, marketing plans, financial status and plans, budgets, forecasts, profit or loss figures, distributors and distribution strategies, pricing strategies, improvements, sales figures, contracts, agreements, then existing or then prospective suppliers and sources of supply and customer lists, undertakings with or with respect to the Company’s customers or prospective customers, and patient information, product development plans, rules and regulations, personnel information and trade secrets of the Company, all of which are of vital importance to the success of the Company’s business (collectively, “Confidential Information”);

(v)    the direct or indirect disclosure of any Confidential Information would place the Company at a serious competitive disadvantage and would do serious damage, financial and otherwise, to the Company’s business;

(vi)    by her training, experience and expertise, the Executive’s services to the Company are special and unique;

(vii)    the covenants and agreements of the Executive contained in this Section 5 are essential to the business and goodwill of the Company; and

(viii)    if the Executive leaves the Company’s employ to work for a competitive business, in any capacity, it would cause the Company irreparable harm.

(b)    Covenant Against Disclosure.  All Confidential Information relating to the Business is, shall be and shall remain the sole property and confidential business information of the Company, free of any rights of the Executive.  The Executive shall not make any use of the Confidential Information except in the performance of her duties hereunder and shall not disclose any Confidential Information to third parties, without the prior written consent of the Company.

(c)    Return of Company Documents.  On the Termination Date or on any prior date upon the Company’s written demand, the Executive will return all memoranda, notes, lists, records, property and other tangible product and documents concerning the Business, including all Confidential Information, in her possession, directly or indirectly, that is in written or other tangible form (together with all duplicates thereof) and that she will not retain or furnish any such Confidential Information to any third party, either

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by sample, facsimile, film, audio or video cassette, electronic data, verbal communication or any other means of communication.

(d)    Further Covenant.  During the Term and through the second (2nd) anniversary of the Termination Date, the Executive shall not, directly or indirectly, take any of the following actions, and, to the extent the Executive owns, manages, operates, controls, is employed by or participates in the ownership, management, operation or control of, or is connected in any manner with, any business, the Executive will use her best efforts to ensure that such business does not take any of the following actions:

(i)    Persuade or attempt to persuade any customer of the Company to cease doing business with the Company, or to reduce the amount of business any customer does with the Company;

(ii)    Take any action that interferes with the Company’s contracts or prospective contracts with its customers;  or

(iii)    Persuade or attempt to persuade any employee or independent contractor of the Company to leave the service of the Company.

(e)    Enforcement.  The Executive acknowledges and agrees that any breach by her of any of the provisions of this Section 5 (the “Restrictive Covenants”) would result in irreparable injury and damage for which money damages would not provide an adequate remedy. Therefore, if the Executive breaches or threatens to commit a breach of any of the provisions of Section 5, the Company shall have the ability to seek the following rights and remedies, each of which rights and remedies shall be independent of the other and severally enforceable, and all of which rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity (including, without limitation, the recovery of damages): (i) the right and remedy to have the Restrictive Covenants specifically enforced (without posting bond and without the need to prove damages) by any court having equity jurisdiction, including, without limitation, the right to an entry against the Executive of restraining orders and injunctions (preliminary, mandatory, temporary and permanent) against violations, threatened or actual, and whether or not then continuing, of such covenants; and (ii) the right and remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits (collectively, “Benefits”) derived or received by her as the result of any transactions constituting a breach of the Restrictive Covenants, and the Executive shall account for and pay over such Benefits to the Company and, if applicable, its affected subsidiaries and/or affiliates.  The Executive agrees that in any action seeking specific performance or other equitable relief, she will not assert or contend that any of the provisions of this Section 5 are unreasonable or otherwise unenforceable. Other than a material breach of this Agreement, the existence of any claim or cause of action by the Executive, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement of the Restrictive Covenants.

(f)    Defend Trade Secrets Act of 2016. Under the Defend Trade Secrets Act of 2016, the Company hereby provides notice and Executive hereby acknowledges that Executive may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (B) is solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  

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6.    Intellectual Property.

(a)    Works for Hire.  All creations, inventions, ideas, designs, software, copyrightable materials, trademarks, and other technology and rights (and any related improvements or modifications), whether or not subject to patent or copyright protection (collectively, “Creations”), relating to any activities of the Company which were, are, or will be conceived by the Executive or developed by the Executive in the course of her employment or other services with the Company, whether conceived alone or with others and whether or not conceived or developed during regular business hours, and if based on Confidential Information, after the termination of the Executive’s employment, shall be the sole property of the Company and, to the maximum extent permitted by applicable law, shall be deemed “works made for hire” as that term is used in the United States Copyright Act.  The Executive agrees to assign and hereby does assign to the Company all Creations conceived or developed from the start of this employment with the Company through to the Termination Date, and after the Termination Date if the Creation incorporates or is based on any Confidential Information.

(b)    Assignment.  To the extent, if any, that the Executive retains any right, title or interest with respect to any Creations delivered to the Company or related to her employment with the Company, the Executive hereby grants to the Company an irrevocable, paid-up, transferable, sub-licensable, worldwide right and license: (i) to modify all or any portion of such Creations, including, without limitation, the making of additions to or deletions from such Creations, regardless of the medium (now or hereafter known) into which such Creations may be modified and regardless of the effect of such modifications on the integrity of such Creations; and (ii) to identify the Executive, or not to identify her, as one or more authors of or contributors to such Creations or any portion thereof, whether or not such Creations or any portion thereof have been modified.  The Executive further waives any “moral” rights, or other rights with respect to attribution of authorship or integrity of such Creations that she may have under any applicable law, whether under copyright, trademark, unfair competition, defamation, right of privacy, contract, tort or other legal theory.

Notwithstanding the foregoing, pursuant to California Labor Code Section 2870, the foregoing shall not apply to an invention that Executive developed entirely on her own time without using the Company’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

· Relate at the time of conception or reduction to practice of the invention to the Company’s business, or actual or demonstrably anticipated research or development of the Company; or

· esult from any work performed by the Executive for the Company.

(c)    Disclosure.  The Executive will promptly inform the Company of any Creations she conceives or develops during the Term.  The Executive shall (whether during her employment or after the termination of her employment) execute such written instruments and do other such acts as may be necessary in the opinion of the Company or its counsel to secure the Company’s rights in the Creations, including obtaining a patent, registering a copyright, or otherwise (and the Executive hereby irrevocably appoints the Company and any of its officers as her attorney in fact to undertake such acts in her name).  The Executive’s obligation to execute written instruments and otherwise assist the Company in securing its rights in the Creations will continue after the termination of her employment for any reason, the Company shall reimburse the Executive for any out-of-pocket expenses (but not attorneys’ fees) she incurs in connection with her compliance with this Section 6(c).

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7.    Arbitration.  

(a)    All disputes between Executive (and Executive’s attorneys, successors, and assigns) and the Company (and its affiliates, subsidiaries, shareholders, directors, officers, employees, agents, successors, attorneys, and assigns) relating in any manner to Executive’s employment or the termination of Executive’s employment, including, without limitation, all disputes arising under this Agreement (“Arbitrable Claims”), shall be resolved by final and binding arbitration to the fullest extent permitted by law.  Arbitrable Claims shall include, but are not limited to, contract (express or implied) and tort claims of all kinds, as well as all claims based on any federal, state, or local law, statute, or regulation, excepting only claims under applicable workers’ compensation law and unemployment insurance claims.  By way of example and not in limitation of the foregoing, Arbitrable Claims shall include any claims arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the California Fair Employment and Housing Act, the Family Medical Leave Act as well as all claims under any applicable state or federal statute including but not limited to the California Labor Code, and any claims asserting wrongful termination, breach of contract, breach of the covenant of good faith and fair dealing, negligent or intentional infliction of emotional distress, harassment, discrimination, negligent or intentional misrepresentation, negligent or intentional interference with contract or prospective economic advantage, fraud, defamation, invasion of privacy, all claims related to disability and all wage or benefit claims, including but not limited to claims for salary, bonuses, profit participation, commissions, stock, stock options, vacation pay, fringe benefits or any form of compensation.  Arbitration shall be final and binding upon the Parties and shall be the exclusive remedy for all Arbitrable Claims, except that the Parties may seek interim injunctive relief and other provisional remedies in court as set forth in this Agreement.  The Parties hereby waive any rights they may have to trial by jury or any other form of administrative hearing or procedure in regard to the Arbitrable Claims.

(b)    Claims shall be arbitrated in accordance with the then-existing National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA Employment Rules”), as augmented by this Agreement.  Arbitration shall be initiated as provided by the AAA Employment Rules, although the written notice to the other Party initiating arbitration shall also include a statement of the claims asserted and all the facts upon which the claims are based.  Either Party may bring an action in court to compel arbitration under this Agreement and to enforce an arbitration award.  Otherwise, neither Party shall initiate or prosecute any lawsuit or administrative action in any way related to any Arbitrable Claim.  All arbitration hearings under this Agreement shall be conducted at the AAA office located nearest to San Diego, California.  The Federal Arbitration Act shall govern the interpretation and enforcement of this Section.

(c)    All disputes involving Arbitrable Claims shall be decided by a single arbitrator.  The arbitrator shall be selected by mutual agreement of the Parties within 30 days of the effective date of the notice initiating the arbitration.  If the Parties cannot agree on an arbitrator, then the complaining Party shall notify the AAA and request selection of an arbitrator in accordance with the AAA Employment Rules.  The arbitrator shall have only such authority to award equitable relief, damages, costs, and fees as a court would have for the particular claims asserted and any action of the arbitrator in contravention of this limitation may be the subject of court appeal by the aggrieved Party.  No other aspect of any ruling by the arbitrator shall be appealable, and all other aspects of the arbitrator’s ruling shall be final and non-appealable.  The arbitrator shall have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law.  The arbitrator shall be required to issue a written arbitration decision including the arbitrator’s essential findings, conclusions and a statement of award.  The Company shall pay all arbitration fees in excess of what the Executive would have to pay if the dispute were decided in a court of law.  The arbitrator shall have exclusive authority to resolve all Arbitrable Claims, including, but not limited to, whether any particular claim is arbitrable and whether all or any part of this Agreement is void or unenforceable.

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(d)    Notwithstanding the foregoing, in order to provide for interim relief pending the finalization of arbitration proceedings hereunder, nothing in this Section 7 shall prohibit the Parties from pursuing, a claim for interim injunctive relief, for other applicable provisional remedies, and/or for related attorneys’ fees in a court of competent jurisdiction in order to prevent irreparable harm pending the conclusion of the arbitration.

(e)    If for any reason all or part of this arbitration provision is held to be invalid, illegal, or unenforceable in any respect under any applicable law or regulation in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other part of this arbitration provision or any other jurisdiction, but this provision shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable part or parts of this arbitration provision had never been contained herein, consistent with the general intent of the Parties, as evidenced herein, insofar as possible.

8.    Indemnification.  This Agreement incorporates, but does not supersede, Executive’s Indemnity Agreement with the Company, which survives the execution of this Agreement in all respects.

9.    Integration.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties concerning such subject matter.

10.    Successors.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal representatives, executors, administrators, heirs, distributees, devisees and legatees.  In the event of the Executive’s death after her termination of employment but prior to the completion by the Company of all payments due her under this Agreement, the Company shall continue such payments to the Executive’s beneficiary designated in writing to the Company prior to her death (or to her estate, if the Executive fails to make such designation).  The Company shall require any successor to the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

11.    Enforceability.  If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

12.    Survival.  The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of the Executive’s employment to the extent necessary to effectuate the terms contained herein.

13.    Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

14.    Notices.  Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Board.

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15.    Amendment.  This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.

16.    Governing Law.  This is a California contract and shall be construed under and be governed in all respects by the laws of California for contracts to be performed in that State and without giving effect to the conflict of laws principles of California or any other State.  In the event of any alleged breach or threatened breach of this Agreement, the Executive hereby consents and submits to jurisdiction in the State of California.

17.    Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year first above written.

PriceSmart, Inc.
By:	/s/ Francisco Velasco
Name:	Francisco Velasco
Title:	Executive Vice President, General Counsel
/s/ Sherry Bahrambeygui
Sherry Bahrambeygui

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