Exhibit (e)(9)
AGREEMENT
AGREEMENT dated as of June 15, 1998, between PUERTO RICAN CEMENT COMPANY,
INC. (the "Company"), and ________________ (the "Executive") (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 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
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 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
of Control, of the Executive's employment with the Company by the Executive or
by the Company in the following circumstances:
(i) the Executive's resignation for Good Reason (as defined in section
1(d)) at any time during the term of this Agreement; or
(ii) 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)).
(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. 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).
(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 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 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.
(d) 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:
(i) 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;
(ii) a reduction by the Company in the executive's aggregate
compensation;
(iii) the Executive's relocation to any office other than the
principal 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;
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(iv) a reduction in the number of annual paid vacation days to which
the Executive was entitled prior to a Change in Control;
(v) 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);
(vi) any failure of the Company to obtain from any successor an
assumption of the Company's obligations to the Executive under this
Agreement; or
(vii) any purported termination by the Company of the Executive's
employment other than a termination for Cause.
(e) 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 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
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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
proviso 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 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.
(b) The Company shall pay to the Executive, commencing on the Executive's
"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.
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(c) 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 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, 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) 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.
(b) 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" 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
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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.
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 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 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.
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
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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
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By:__________________________
Puerto Rican Cement Company, Inc.
By:__________________________
Xxxxxx X. Xxxxxxx
President
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Affidavit Number:
Sworn and subscribed to before me by_____________, of legal age, and resident of
______________, Puerto Rico and by Xxxxxx 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.
NOTARY PUBLIC
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