Exhibit (e)(8)
AGREEMENT
AMENDMENT AND RESTATEMENT dated as of May 3, 2000, of an Agreement dated as
of June 15, 1998, 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 May 3, 2000, under any of the circumstances described
herein following a Change in Control (as defined herein).
WITNESSETH
WHEREAS, the Executive has made and 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 on
the understanding that the Company will provide him with severance compensation,
as herein set forth, if his employment terminates on or after May 3, 2000, under
one of the circumstances described herein following a Change in Control (as
defined herein):
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration receipt of which is acknowledged, the parties agree as
follows:
1.
(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
in Control, of the Executive's employment with the Company by the Executive or
by the Company, at any time during the term of this Agreement, in the following
circumstances:
(i) the Executive's resignation; or
(ii) the termination by the Company of the Executive's employment,
other than for Cause (as defined in section 1(d)).
(b) 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. Except as provided in section 6 of this Agreement, no compensation
shall be payable under this Agreement unless and until (i) there shall have been
a 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 either of the circumstances described in section 1(a).
(c) 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, $1.00 par value per share ("Common Stock"), would be
converted into cash, securities or other property, other than a merger of the
Company in which the holders of the Common Stock immediately prior to the merger
have the same proportionate ownership of common stock of the surviving
corporation 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 has
occurred, 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 of the Company
(the "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 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.
(d) 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 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 effective 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 an "excess parachute payment" (as defined in
section 280G of the Internal Revenue Code of 1986 (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.)
(b) 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 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. 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. If the Executive shall be entitled to compensation pursuant to section 1
of this Agreement,
(a) The Company shall continue to provide the Executive with the benefits
specified on Exhibit A for a period of 24 months following his termination,
provided that if the Company is unable to provide any such benefit for said
24-month period to the Executive, the Company shall pay the Executive an amount
equal to the cost (on an after-tax basis) to the Executive of obtaining such
benefit for all or the remainder of such 24-month period. If the proviso in the
immediately preceding sentence shall be in effect,
such amount shall be payable to the Executive in one lump sum on the tenth
business day following the effective date of the termination of the Executive's
employment.
(b) The Company shall pay to the Executive, for the period commencing with
the first day of the first month following the effective date of termination of
the Executive and ending on the first to occur of (i) his "Normal Retirement
Date" (as defined in the Company's Employees' Pension Plan (the "Pension Plan"))
and (ii) the tenth anniversary of the effective date of termination of the
Executive (said period the "Severance Pension Period"), a level monthly amount
in which the actuarial present value of said amount is equal to the amount by
which the actuarial present value of the Executive's "Accrued Benefit" (as
defined in the Pension Plan) under the Pension Plan as of the date of the
Executive's termination is less than the actuarial present value of the "Accrued
Benefit"(as defined in the Pension Plan) under the Pension Plan which the
Executive would have accrued thereunder if he had remained in the Company's
employ for an additional period equal to the lesser of (A) 5 full years
following his date of termination or (B) the amount of time between his date of
termination and his "Normal Retirement Date" (as defined in the Pension Plan),
in either case, (1) including any early retirement subsidy applicable pursuant
to section 5.3(b) of the Pension Plan, and (2) at compensation equivalent to the
Executive's highest annual compensation during the three years preceding the
termination of his employment (the "Severance Pension"). If the Executive dies
during the Severance Pension Period, the actuarially equivalent value of any
unpaid portion of the Severance Pension shall be paid to his estate in a lump
sum as soon as reasonably practicable following the date of his death. For
purposes of determining actuarial equivalence under this paragraph, the
actuarial assumptions and methodologies in effect under the Pension Plan as of
the date of the Executive's termination shall be utilized.
(c) The Company's obligation to make the payments set forth in section 3(b)
above shall be secured by an irrevocable letter of credit in an amount equal to
the amount payable to the Executive pursuant to section 3(b) 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 3(b) are not made, the Executive shall have the
right to draw on the letter of credit in one lump sum.
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 the 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.
(b) 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
described 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.
(c) The provisions of this Agreement (other than section 3(a) and 3(b)),
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.
(d) 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) May 3, 2010, 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 (except as
provided in section 6 of this Agreement) 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 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 or
retirement.
(b) For purposes of section 5(a), (i) "disability" shall have the meaning
specified in the Company's Long-Term Disability Plan; and (ii) "retirement"
shall mean the termination of the Executive's employment upon the attainment of
the age set forth in the 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 Pension Plan as the
age and service requirement for "early retirement."
6. 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 in Control, but in contemplation of that Change
in Control, the Executive's employment with the Company is terminated by the
Company other than for Cause or by the Executive (regardless of whether the
Change in 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 in Control if, at the time of termination of 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 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 in Control of the Company.
7. 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.
9. 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 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.
10. 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.
11. 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 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.
12. 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.
13. 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
By:_________________________
PUERTO RICAN CEMENT COMPANY, INC.
By:_________________________
Name:
Title:
