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AGREEMENT
AMENDMENT AND RESTATEMENT dated as of June 15, 1998, of an Agreement
dated as of (original Agreement date) , between PUERTO RICAN CEMENT COMPANY,
INC. (the "Company"), and ________________ (the "Executive") (as amended and
restated, the "Agreement"). (The term "Company" shall include Ready Mix
Concrete, Inc. ("Ready Mix"), a wholly owned subsidiary of Puerto Rican Cement
Company, Inc., if the Executive is employed principally by Ready Mix).
This Agreement sets forth the severance compensation that the Company
agrees to pay to the Executive if the Executive's employment with the Company
terminates on or after June 15, 1998, under any of the circumstances described
herein following a Change in Control (as defined herein).
WITNESSETH
WHEREAS, the Executive has made an is expected to make a major
contribution to the profitability, growth and financial strength of the
Company;
WHEREAS, the Company considers the continued services of the Executive
to be in the best interests of the Company and its shareholders and desires to
encourage the continued services of the Executive without distraction or
concern over any possible change in the control of the Company; and
WHEREAS, the Executive is willing to remain in the employ of the
Company upon the understanding that the Company will provide him with severance
compensation, as herein set forth, if his employment terminates on or after
June 15, 1998, under one of the circumstances described herein following a
Change of Control (as defined herein):
NOW, THEREFORE, in consideration of the premises, and other good and
valuable
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consideration receipt of which is acknowledged, the parties agree as follows:
(a) If a Change in Control shall have occurred while the Executive is
still an employee of the Company, the Executive shall be entitled
to the compensation and benefits provided in this Agreement upon
the termination, after such Change of Control, of the Executive's
employment with the Company by the Executive or by the Company in
the following circumstances:
the Executive's resignation for Good Reason
(as defined in section 1(d)) at any time during the
term of this Agreement; or
the termination by the Company of the
Executive's employment at any time during the term
of this agreement, other than for Cause (as defined
in section 1(e)).
The date of the termination of the Executive's employment
shall be the effective date of such termination as specified in any resignation
tendered by the executive to the Company or in any notice of termination given
by the Company to the Executive. No compensation shall be payable under this
Agreement unless and until (i) there shall have been Change in Control while
the Executive is still an employee of the Company and (ii) the executive's
employment by the Company thereafter shall have terminated in any of the
circumstances described in section 1(a).
For purposes of this Agreement, a "Change in Control" shall
be deemed to have occurred if (i) there shall be consummated (A) any
consolidation or merger of the Company with or into any other corporation, in
which the Company is not the continuing or surviving corporation or pursuant to
which shares of the Company's common stock would be converted into cash,
securities or other property, other than a merger of the Company in which the
holders of the Company's common stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving corporation
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immediately after the consolidation or merger or (B) any sale, lease, exchange
or other transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of the Company, provided that there
shall be excluded any merger, consolidation or sale of assets in which the
surviving corporation or the purchaser is an entity controlled in its majority
by the present principal stockholders and their affiliates; (ii) the Company's
stockholders have approved any plan or proposal for the liquidation or
dissolution of the Company; (iii) any person (as such term is used in sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than the present principal stockholders and their
affiliates, becomes the beneficial owner, within the meaning of rule 13d-3
under the Exchange Act, of 20% or more of the Company's outstanding common
stock; or (iv) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Company's entire board of directors
cease for any reason to constitute a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of each new director
was approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of the period.
For purposes of this Agreement, "Good Reason" shall mean the
occurrence (without the Executive's express written consent) of any of the
following after a Change in Control has occurred:
any material reduction or adverse change in the
duties, position, authority or reporting responsibility of
the Executive from that in effect immediately prior to a
Change in Control;
a reduction by the Company in the executive's
aggregate compensation;
(iii) the Executive's relocation to any office
other than the principal
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executive office of the Company or the office at which the
Executive was located prior to a Change in Control, or any
material increase in the travel obligations imposed on the
Executive from those in effect prior to a Change in Control;
(iv) a reduction in the number of annual paid
vacation days to which the Executive was entitled prior to a
Change in Control;
any failure by the Company to continue to
provide the Executive with benefits substantially
equivalent to those in effect prior to a Change in
Control under the Company's pension and welfare
plans or any of the perquisites associated with his
position in effect or being provided prior to a
Change of Control (other than a reduction in
benefits or perquisites effected for all executives
ratably);
any failure of the Company to obtain from
any successor an assumption of the Company's
obligations to the Executive under this Agreement;
or
any purported termination by the Company
of the Executive's employment other than a
termination for Cause.
For purposes of this Agreement, "Cause" for termination of
the Executive's employment means, and is limited to, (i) the Executive's gross
willful misconduct which is demonstrably and substantially injurious to the
Company or (ii) the commission of a felony or misdemeanor which impairs the
Executive's ability substantially to perform his duties to the Company. Acts or
omissions by the executive in good faith and with a reasonable belief that such
actions or omissions are in the best interests of the Company shall not
constitute gross willful misconduct, unless such acts or omissions continue
after notice from the Company to desist therefrom. The Executive's employment
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the Company's board of directors at a meeting called and held for that
purpose (after reasonable notice to the Executive and an opportunity for the
Executive, together with the Executive's counsel, to be heard before the
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board of directors), finding that in the good faith opinion of the board of
directors, Cause, as herein defined, exists for such termination and specifying
the basis for such finding.
2. (a) If the Executive shall be entitled to compensation
pursuant to section 1 of this Agreement, then the Company shall pay to the
Executive as severance pay an amount equal to the sum of (i) two and one-half
times his annual base salary as of the time of the Change in Control or as of
the date of termination, whichever is greater; (ii) two and one-half times the
average of the Executive's annual bonus awards with respect to the three years
immediately preceding the Change in Control; and (iii) an amount sufficient to
permit the Executive to rent and operate for a 24-month period an automobile
comparable to the one provided by the Company at the time of termination;
provided, however, that if such amount either alone or together with other
payments that the Executive has the right to receive from the Company provided
for in this Agreement and any other payments that the Executive has the right
to receive from the Company, would constitute a "parachute payment" (as defined
in section 280G of the Internal Revenue Code of 1986, as in effect on the date
hereof (the "Code")), such severance payments shall be reduced to the largest
amount that could be payable to the Executive without any portion of the
severance payments under this Agreement being subject to the excise tax imposed
under section 4999 of the Code, as determined by the Company. (The limitation
contained in the foregoing provides shall be determined as if the Code and
section 280G of the Code were applicable in Puerto Rico, even if such is not
the case.)
The amount payable pursuant to section 2(a) shall be payable
at the Company's election in (i) equal monthly installments over a three-year
period following termination of the Executive's employment commencing the first
day of the month following
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the effective date of termination or (ii) in one lump sum payment payable the
first day of the month following the effective date of termination. If the
Company elects to pay the Executive in installments, the Company's obligation
to make those payments shall be secured by an irrevocable letter of credit in
an amount equal to the amount payable to the Executive pursuant to section 2(a)
issued by the Banco Popular de Puerto Rico or any other bank in Puerto Rico
selected by the Company and satisfactory to the Executive. The letter of credit
shall not expire earlier than 30 days after the date that the last installment
payment is due. If payments pursuant to section 2(a) are not made, the
Executive shall have the right to draw on the letter of credit in one lump sum
or in installments, at his election. If the Executive dies prior to the payment
in full of the amounts payable to the Executive pursuant to section 2(a), a
lump sum payment equal to the aggregate amount of the then unpaid payments
shall be made to the Executive's estate.
3. (a) If the Executive shall be entitled to compensation
pursuant to section 1 of this Agreement, the Company shall continue to provide
the Executive with health insurance, life insurance and other benefits to which
the Executive is entitled under plans in effect prior to the Change of Control
for a period of 24 months following his termination, provided that the Company
is unable to provide any such insurance and/or benefit to the Executive, the
Company shall pay the Executive an amount equal to the cost to the Executive of
obtaining such insurance an/or benefit for a period of 24 months. Such amount
shall be payable to the Executive in one lump sum the first business day of the
month following the effective date of the termination of the Executive's
employment.
The Company shall pay to the Executive, commencing on the
Executive's
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"normal retirement date" (as defined in the Company's Employees' Pension Plan),
the amounts by which the Executive's pension benefits under the Company's
Employees' Pension Plan are less than the pension benefits that would have been
accrued by the Executive under the Company's Employees' Pension Plan if the
Executive had remained in the Company's employ to the earlier of (i) his
"normal retirement date" (as defined in the company's Employees' Pension Plan)
or (ii) an additional five years after the Executive's date of termination, at
compensation equivalent to his highest annual compensation during the three
years preceding the termination of his employment.
Company's obligations to make payments pursuant to section
3(b) shall be unfunded and unsecured and the Company shall not be required to
segregate any assets that may at any time be required to provide the benefits
under section 3(b).
4. (a) The Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise, nor shall be amount of any payment
provided for under this Agreement be reduced by any compensation earned by the
Executive as the result of employment by another employer after the date of the
Executive's termination, or otherwise.
The payments described in sections 2 and 3 of this Agreement
shall be in addition to any termination payments prescribed by Law 80 of 1976,
29 LPRA Section 1B5. Should termination be made due to a "Change in Control",
the Company agrees to make the payments set forth under Law 80 of 1976. The
payments describe in sections 2 and 3 of this Agreement shall be in addition to
any remedy which may be available to the employees under any federal,
commonwealth, state or local law.
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The provisions of this Agreement, and any payment provided
hereunder, shall not reduce or increase any amounts otherwise payable, or
affect the Executive's rights under, any benefit plan of the Company or any
other compensation to which the Executive may be entitled apart from this
Agreement.
This Agreement does not constitute a contract of employment,
and nothing in this Agreement shall entitle the Executive to continuing
employment with the Company or to any rights other than the specific payments
provided for herein.
5. (a) This Agreement shall terminate (except to the extent
that any obligation of the Company shall have accrued hereunder prior to
termination and remains unpaid as of such time) upon the earliest of (i) June
15, 2008, if a Change in Control has not occurred by that date; (ii) the
termination of the Executive's employment with the Company prior to a Change in
Control as a result of death, disability, or retirement or for any other
reason, whether resulting from the Executive's voluntary resignation or from
termination by the Company for any reason, without limitation; (iii) two years
after the first Change in Control to occur after the date of this Agreement if
the Executive has not terminated his employment for Good Reason within that
period; and (iv) after a Change in Control, if the Executive's employment with
the Company is terminated for Cause or as a result of death, disability,
retirement or otherwise than for Good Reason.
For purposes of section 5(a), (I) "disability" shall mean
the Executive's incapacity due to physical or mental
illness resulting in the Executive's failure to
perform his duties for a period of 360 consecutive
days, as determined by the Company's board of
directors; and (ii) "retirement"
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shall mean the termination of the Executive's
employment upon the attainment of the age set forth
in the Company's employees' Pension Plan as the age
required for "normal retirement" or the termination
of the Executive's employment at his election upon
the attainment of the age and after completion of
the number of years of service with the Company, in
each case as designated in the Company's Employees'
Pension Plan as the age and service requirement for
"early retirement", but shall not include the
Executive's election for early retirement following
a Change of Control if Good Reason existed for the
Executive's resignation.
Notwithstanding anything to the contrary contained in this Agreement,
the Executive shall be entitled to the compensation provided
for in this Agreement, if, prior to a Change of Control, but
in contemplation of that Change of Control, the Executive's
employment with the Company is terminated by the Company
other than for Cause or by the Executive for Good Reason
(regardless of whether the Change of Control shall have
actually occurred). For purposes of this Agreement, the
termination of the Executive's employment shall be deemed to
be in contemplation of a Change of Control, if, at the time
of termination for the Executive's employment the Company had
announced its intention to enter into, or had entered into,
an agreement with respect to one of the transactions
described in section 1(c)(i) and such transaction is
consummated within 180 days after the date of termination of
the Executive's employment. The compensation provided for in
sections 2 and 3 of this
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Agreement shall be paid to the Executive in accordance with
sections 2 and 3 as if the effective date of the termination
of the Executive's employment is the effective date of the
Change of Control of the Company.
1. This Agreement shall inure to the benefit of and be
enforceable by the Executive's heirs, distributees and
personal and legal representatives, and shall be binding on
the Company and its respective successors and assigns.
8. For purposes of this Agreement, all notices and other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States registered mail,
return receipt registered, postage prepaid, as follows:
If to the Company:
Puerto Rican Cement Company, Inc.
P. O. Xxx 000000
Xxx Xxxx, XX 00000-0000
Attention: Chief Executive Officer.
If to the Executive:
[ ]
or such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
Any claim or controversy arising between the parties hereto in
connection with the subject matter hereof that cannot be settled
by the mutual agreement of the parties shall be resolved by
binding arbitration held before a single arbitrator in a location
within San Xxxx, Puerto Rico. The arbitration proceedings shall
be
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in accordance with the rules of the American Arbitration
Association then in effect and the decision of the arbitrator
shall be final. Written notice of the demand for arbitration
shall be made within a reasonable time after the claim,
dispute or other matter in question has arisen, and shall be
made prior to the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in
question would be barred by the applicable statute of
limitations.
If the Executive incurs reasonable legal or other fees and expenses in
a reasonable effort to establish entitlement to benefits
under this Agreement, regardless of whether the Executive
ultimately prevails, the Company shall reimburse him for such
fees and expenses to the extent not reimbursed by the
Company's officers' and directors' insurance policy, if any.
Reimbursement of fees and expenses shall be made monthly
during the course of any action upon the written submission
of a request for reimbursement together with proof that the
fees and expenses are incurred.
This Agreement may not be amended except by a writing signed by the
Executive and the Company. No waiver shall be effective
unless in writing signed by the party to be charged, and no
waiver of any breach of any term or provision of this
Agreement shall constitute a waiver of any other breach or of
any other term or provision. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
This Agreement shall be governed by and construed in
accordance with the laws of
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Puerto Rico. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
If any claim shall be made that any provision of this agreement is
invalid or unenforceable under or by reason of any federal or
Commonwealth of Puerto Rico law, rule or regulation, such
provision shall, to the extent possible, be given effect in
such manner as will render the same valid and enforceable. If
any such provision, notwithstanding the preceding sentence,
be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect or render invalid or
unenforceable any other provision of this agreement. Should
any percentage of the payments and/or compensation received
by the Executive under this Agreement be illegal under any
federal or Commonwealth of Puerto Rico law, the Company shall
be obligated to make the percentage of the payment or
compensation that is not illegal.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
EXECUTIVE
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Puerto Rican Cement Company, Inc.
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By:
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Xxxxxx X. Xxxxxxx
President
Affidavit Number:
Sworn and subscribed to before me by_____________, of legal age, and
resident of ______________, Puerto Rico and by Xxxxxxx X. Xxxxxxx, in his
capacity of President of Puerto Rican Cement Company, Inc., of legal age, and
resident of San Xxxx, Puerto Rico, whom I personally know, at San Xxxx, Puerto
Rico, this ____day of _____, 1998.
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NOTARY PUBLIC
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