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Exhibit 10.4
AGREEMENT
THIS AGREEMENT ("Agreement"), made and entered into as of the 21st day
of May, 2001, by and among Lafarge Corporation, a Maryland corporation (the
"Company"), Lafarge Canada Inc., a subsidiary of the Company ("LCI"), and Xxxxxx
X. Xxxxx, an individual residing in Great Falls, Virginia (the "Executive"),
W I T N E S S E T H:
WHEREAS, the Executive has indicated his desire to retire as Executive
Vice President and President - Construction Materials of the Company effective
May 31, 2002 and the parties hereto desire to document herein their agreements
relating to the Executive's retirement; and
WHEREAS, the Company desires to ensure that the Executive will remain an
employee of the Company until May 31, 2002, on the terms and conditions herein
provided;
NOW, THEREFORE, for and in consideration of the premises and of the
mutual covenants and agreements contained herein, the Executive and the Company
hereby agree as follows:
1. Term and Duties. During the period commencing on the date hereof
and ending on May 31, 2002 (the "Term"), the Executive shall perform such
duties, functions and responsibilities required by his position as Executive
Vice President and President - Construction Materials and as are from time to
time delegated to him by the Chief Executive Officer of the Company. During the
Term, the Executive shall devote his skill, attention and best efforts to the
business of the Company to the extent necessary to discharge the
responsibilities assigned to him. Additionally, after the expiration of the
Term, the Company may consider, upon such terms and conditions as the Executive
and the Company may agree, utilizing the Executive for appropriate consulting
assignments at a reasonable emolument to be determined at the time such services
are requested. Upon the expiration of the Term, the Company will offer the
Executive the opportunity to be appointed to the Board of Directors of LCI, it
being understood and agreed that the Executive shall serve at the discretion of
the Company.
2. Compensation.
(i) Base Amount. The Company shall pay to the Executive
during the Term a base amount ("Base Amount") at the rate of U.S. $445,000 per
year, payable in semi-monthly installments, or otherwise in accordance with the
Company's usual payroll practices. In February 2002, the Board of Directors of
the Company shall determine if any adjustment should be made to the Base Amount
payable to the Executive for the remainder of the Term in accordance with
established Company guidelines. In addition, if and to the extent bonuses are
paid, in February 2002 the Board of Directors of the Company shall determine the
amount of bonus, if any, payable to the Executive for services rendered in 2001
in accordance with the Company's bonus plan. In addition, the Executive shall be
eligible to receive a bonus for services rendered in 2002 in accordance with
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the Company's bonus plan and subject to the recommendations of management and
the Board of Directors and based upon the Company's and the Executive's
performance. Such bonus, if any, shall be prorated for the number of months in
2002 during which the Executive was employed hereunder and paid to the Executive
on or before the effective date of his retirement.
(ii) Expenses. The Executive shall be entitled to receive
prompt reimbursement for all reasonable business expenses incurred by the
Executive, in accordance with the policies and procedures of the Company.
(iii) Benefit Plans. During the Term, the Executive shall be
entitled to continue to participate in or receive benefits under such of the
Company's and LCI's standard salaried employee benefit plans, executive benefit
plans, policies, practices, and arrangements in which he is presently eligible
to participate, on a basis consistent with the terms, conditions, and overall
administration of such benefit plans and arrangements. In addition, if at any
time prior to May 31, 2003, the Executive moves his principal residence to
Canada, the Executive shall be entitled to receive reimbursement for the
expenses of such move in accordance with the Company's presently existing
standard policy governing cross-border employee transfers; provided, however,
that if such move is made in connection with the acceptance by the Executive of
new employment, such reimbursement shall be reduced by an amount equal to the
moving expenses, if any, paid or reimbursed by the Executive's new employer.
(iv) Miscellaneous Pay and Benefits. Upon completion of
Executive's employment on May 31, 2002, the Executive shall be entitled to
receive standard retiree life and medical insurances in accordance with the
forms and coverage offered by the Company or LCI, whichever is applicable to the
Executive, and to receive a retirement allowance in accordance with the terms of
the LCI retirement allowance plan.
(v) Retirement Benefits and Special Retirement Supplement.
Upon the completion of the Executive's employment on May 31, 2002, the Executive
shall receive non-discounted pension benefits under the LCI pension plan, a copy
of which is attached as Exhibit A hereto, in accordance with the terms and
conditions of such plan. No amendment to the LCI pension plan occurring after
the date hereof, except amendments require by law, shall adversely affect or in
any way reduce the benefits payable to the Executive under such plan as provided
in this Section 2(v). In addition, in the event that the Executive shall remain
an employee of the Company until May 31, 2002, and shall not be terminated for
Cause (as defined below) prior to that date, the Executive shall be entitled to
receive from the Company a special retirement supplement equal to U.S. $800,000
as of June 1, 2002, which shall be paid, at the election of the Company, in a
single payment in cash or in the form of a pension enhancement payable in a
manner determined by the Company. For purposes of this Agreement, "Cause" shall
mean (i) the continued failure by the Executive to devote time and effort to the
performance of the Executive's duties as an employee consistent with his
performance prior to the date of this Agreement, after written demand for
improved performance has been delivered to the Executive by the Company which
specifically identifies how the Executive has not devoted such consistent time
and effort to the performance of
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his duties; or (ii) the willful engaging by the Executive in misconduct which is
materially injurious to the Company or LCI, monetarily or otherwise.
If the Company shall determine that the special retirement supplement
shall be paid as a pension enhancement, the Executive's beneficiary with respect
to the survivor benefits, if any, payable under this Section shall be the
Executive's spouse (if any) or other beneficiary who is entitled to survivor
annuity benefits under the LCI pension plan to the extend provided under the
payment form selected by the Company. In the event that the Executive does not
have a spouse or other beneficiary who is entitled to survivor annuity benefits
under the LCI pension plan, then the Executive's secondary beneficiary as
designated by the Executive in writing, or if none, his estate shall be his
beneficiary hereunder.
If the Executive shall become entitled to the special retirement
supplement pursuant to this Section and the Executive shall die prior to the
date on which benefits are to be paid or commence in payment pursuant to this
Section, then the Executive's beneficiary shall be entitled to receive: (i) if
the Company determines to pay such supplement in a single sum, a single payment
in cash, or (ii) if the Company determines to pay such supplement as a pension
enhancement, an amount equal to the monthly retirement income such beneficiary
would have been entitled to receive if the Executive had commenced receiving the
supplement on the first day of the month following the Executive's termination
of employment with the Company and then died.
The benefits provided under this Section shall be treated as being
provided under a retirement plan of the Company, the purpose of which is to
provide unfunded pension benefits for a select management or highly compensated
employee. The amounts payable pursuant to this Section are and for all purposes
shall continue to be a part of the general assets and liabilities of the
Company, and the Executive's (and any beneficiaries') right to receive a payment
from the Company pursuant to the Special Retirement Supplement shall be no
greater than the right of any unsecured general creditor of the Company.
(vi) Options. If and to the extent options are granted, in
February 2002 the Stock Option Committee of the Board of Directors shall
determine the number of options, if any, to be granted to the Executive in
accordance with the Company's stock option plans (the "Option Plans"). Options
granted to the Executive under the Option Plans shall continue to vest in
accordance with their terms as a result of the Executive's termination of
employment on May 31, 2002, by reason of retirement under the normal retirement
provisions of a pension or retirement plan maintained by the Company or LCI.
(vii) Insurance. The Company represents and warrants to the
Executive that during his term as Executive Vice President and President -
Construction Materials, it maintained, and currently maintains, primary
directors' and officers' liability insurance policies in an aggregate amount of
$25 million and excess liability insurance policies for an additional $35
million, subject to the terms and conditions set forth therein. The Company
further represents and warrants that no
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executive officer of the Company has actual knowledge of any existing claim to
be submitted for coverage under such insurance policies.
3. Termination. This Agreement shall terminate automatically upon
the death of the Executive. If this Agreement is terminated by reason of the
Executive's death, then except as otherwise provided herein or in the Company's
or LCI's benefit plans the Executive's estate shall receive those death benefits
payable under the Company's or LCI's benefit plans, policies and procedures in
which the Executive is as of the date hereof eligible to participate, including,
without limitation, the LCI pension plan.
4. Repayment of Indebtedness. All indebtedness owed by the
Executive to the Company relating to his residence at 000 Xxxxxxxxx Xxxxxx,
Xxxxx Xxxxx, Xxxxxxxx 00000, shall be repaid by the Executive on or before the
earlier to occur of the closing of the sale by the Executive of such residence
or May 31, 2003. The face amount of the note evidencing such indebtedness was
$132,500 as of March 31, 2001. All other indebtedness owed by the Executive to,
or advances to the Executive from, either the Company or LCI shall be repaid by
the Executive on or before August 31, 2002, or deducted from the special
retirement supplement payable to the Executive pursuant to Section 2(v) hereof.
5. Confidential Information. The Executive shall hold in strictest
confidence and shall not directly or indirectly use for his own personal benefit
or for the benefit of anyone else or disclose to anyone else (including, without
limitation, any natural person, corporation, partnership or any other form of
entity or person) any of the Company's or LCI's confidential and proprietary
information except with the prior written consent of the Company or to the
extent necessary in connection with the Executive's duties hereunder or unless
required by a court of law. Except as required by law (including, without
limitation, disclosure under applicable securities law and disclosure to
auditors), or as necessary to enforce the terms of this Agreement, the Company,
LCI and the Executive shall hold in strictest confidence the terms of this
Agreement and the Executive shall not disclose to or discuss with any employee
of the Company or LCI the terms of this Agreement. In the event the Executive is
required or requested to disclose confidential information, he will provide
prompt notice to the Company in order that the Company may prepare the
appropriate protective order and/or waive the Executive's compliance with the
provisions of this Agreement. The terms of this Section 5 shall continue in
effect notwithstanding the termination of this Agreement.
6. No Conflicting Agreements. The Executive represents and warrants
to the Company and LCI that he is not a party to any agreement, contract, or
understanding, whether employment or otherwise, that would in any way restrict
or prohibit him from undertaking or performing his duties and obligations under
this Agreement.
7. Withholding Taxes. The Company and LCI shall withhold from any
payments to be made to the Executive hereunder such amounts as shall be required
by federal, state, and local withholding tax laws. The Executive (and/or his
beneficiary) shall bear all taxes on amounts paid under this Agreement to the
extent that no taxes are withheld, irrespective of whether withholding
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is required. The Executive will be required to pay to the Company the amount of
any federal, state or local taxes required by law to be withheld in connection
with the Agreement in the event that the Executive is not being paid by the
Company or amounts being paid by the Company to the Executive are insufficient
to satisfy any such withholding obligation.
8. Covenant Not to Compete. Without the prior written consent of
the Company, which consent shall not be unreasonably withheld, the Executive
shall not, for a period commencing on the date hereof and ending on May 31,
2003, directly or indirectly, engage or participate in any manner whatsoever,
either personally or in any status or capacity, including but not limited to as
an employer, employee, associate, member, officer, director, owner (excluding an
owner of less than 5% of the equity of any business), salesman, representative,
principal, agent, trustee, servant or consultant or by means of any corporation,
partnership, proprietorship or other legal entity or device, in any business or
activity which is in direct or indirect competition with either the Company, LCI
or their respective affiliates in the United States or Canada (a "Competitor").
In the event that the Executive believes that the prior written consent
contemplated by this Section 8 has been unreasonably withheld by the Company,
the Executive shall have the right to have such decision reviewed independently
by the Management Development and Compensation Committee of the Board of
Directors of the Company. In the event that the terms of this Section 8 should
ever be deemed to exceed the time or geographic limitation permitted by
applicable law, then such terms shall be reformed to the maximum time or
geographic limitation permitted by applicable law. In the event of a breach by
the Executive of the terms of this Section 8, the Company shall be entitled to
an injunction restraining him from engaging or participating in such business or
activity. However, nothing in this Section 8 shall be construed as prohibiting
(a) the Company from pursuing any other remedies available to the Company for
the breach by the Executive of the terms of this Section 8, or any other terms
of this Agreement, including the recovery of damages from the Executive or (b)
the Executive from continuing his employment with another employer which, after
his employment by such employer, is acquired or controlled by an entity or
device considered to be a Competitor, provided the Executive had no prior
knowledge of such acquisition or control relationship at the time he commenced
employment with such employer. The term of this Section 8 shall continue in
effect notwithstanding the termination of this Agreement. The restrictive
covenants upon the Executive set forth in this Section 8 are the essence of this
Agreement; they shall be construed as independent of any other provision of this
Agreement, and the existence of any claim or cause of action against the
Company, whether predicated on this Agreement or not shall not constitute a
defense to the enforcement by the Company of the restrictive covenants contained
herein.
9. Assignment. This Agreement is personal in nature and none of the
parties hereto shall assign or transfer this Agreement or any rights or
obligations hereunder without the prior written consent of the other parties;
provided, however, that in the event of any consolidation or merger of the
Company or LCI with or into any other corporation or any sale or transfer of all
or substantially all of the assets of either the Company or LCI, this Agreement
shall inure to the benefit of and be binding on the successor to the Company's
or LCI's, as the case may be, business and assets.
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10. Notices. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or mailed by certified
or registered mail, return receipt requested, postage prepaid:
if to the Executive, to: Xx. Xxxxxx X. Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
If to the Company, to: Lafarge Corporation
00000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: President and
Chief Executive Officer
If to LCI, to: Lafarge Canada Inc.
000 Xxxxxxxx
Xxxxxxxx, Xxxxxx
XXXXXX X0X 0X0
Attention: President and
Chief Executive Officer
or to 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.
11. Miscellaneous. No provision of this Agreement may be amended,
modified, waived, or discharged unless such amendment, modification, waiver, or
discharge is in writing and signed by the party against whom the amendment,
modification, waiver, or discharge is sought to be enforced. No waiver by either
party at any time of any breach or default in the performance of any provision
of this Agreement to be performed by the other party shall be deemed a waiver of
any similar or dissimilar provision at the same time or at any prior or
subsequent time. The validity, interpretation, construction, and performance of
this Agreement shall be governed by the laws of the State of Virginia.
12. Severability; Validity. Every provision in this Agreement is
intended to be severable. 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 provision of this Agreement is deemed or
held to be invalid or unenforceable, there shall be added automatically to this
Agreement in lieu thereof a provision as similar in terms to such invalid or
unenforceable provision as may be possible and be valid and enforceable.
13. Headings. The headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
any provision of this Agreement.
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14. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto relating to the subject matter hereof, and there
are no written or oral terms or representations made by any party other than
those contained herein.
15. General Release. In consideration of the monetary payments and
other benefits provided by the Company and LCI to the Executive described above,
the Executive acknowledges and agrees that, except with respect to claims made
under this Agreement or under any of the benefit plans, policies or procedures
contemplated hereby, for which this release shall not apply, he has and will
make no claim of any kind against: (i) the Company, (ii) LCI, (iii) any of the
Company's or LCI's parent companies, subsidiaries, and affiliated companies, or
(iii) any of the officers, directors, agents, employees, representatives,
attorneys, or any successors and assigns of such entities. This includes but is
not limited to any claim based on any state or federal statutory or common law
that applies or is asserted to apply, directly or indirectly, to the Executive's
employment relationship or the termination of the Executive's employment
relationship with either the Company or LCI. Thus, the Executive agrees not to
make any claims such as for wrongful discharge, unlawful discrimination on the
basis of age or other form of unlawful employment discrimination, retaliation,
breach of contract (express or implied), intentional or negligent infliction of
emotional distress, defamation, duress, fraud or misrepresentation, or any
violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act of 1967, the Employee Retirement Income Security Act of 1974,
or similar state or federal laws.
The effect of this Agreement is to waive and release any and all claims,
demands, actions, or causes of action that the Executive may now or hereafter
have against the entities and individuals named above for any liability, whether
vicarious, derivative, or direct. This includes any claims for damages (actual
or punitive), back wages, future wages, bonuses, reinstatement, accrued vacation
leave benefits, past and future employee benefits (except to which there is
vested entitlement) including contributions to the Executive's employee benefit
plans, compensatory damages, penalties, equitable relief, attorney's fees, costs
of court, interest, and any and all other loss, expense, or detriment of
whatever kind, resulting from, growing out of, connected with, or related in any
way to the Executive's employment relationship or the termination of the
Executive's employment relationship with either the Company or LCI.
Notwithstanding the foregoing provisions of this Section 15, this general
release does not apply to any rights or claims that may arise after the date
this Agreement is executed and does not affect the coverage referenced in
Section 2(vii) and will terminate contemporaneously with any termination or
expiration of this Agreement if the special retirement supplement contemplated
by Section 2(v) is not paid.
Neither the Company nor LCI hereby waives or releases any claim, demand
or cause of action that it may now or hereafter have against the Executive for
any liability whatsoever. The Company and LCI represent and warrant that none of
their respective executive officers has actual knowledge of any existing claim
or cause of action of the Company or LCI against the Executive or any present
intention of either the Company or LCI to bring a claim or cause of action
against the Executive. Upon default by any party hereto of any obligation
contemplated by this Agreement, the defaulting party shall be liable for
damages, including without limitation all costs and attorneys' fees incurred by
the non-defaulting party in any suit precipitated by the default.
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16. Term of Offer. The Executive acknowledges that he had no fewer
than twenty-one days to consider the terms of this Agreement prior to its
execution.
17. Effective Date. This Agreement will become effective and
enforceable seven days after the Executive's execution of this Agreement. At any
time before such date, the Executive understands that he may revoke this
Agreement.
18. Consultation With an Attorney. The Executive acknowledges that
he has been advised that he had the right to consult an attorney before
executing this Agreement.
19. Voluntary Agreement. The Executive acknowledges that his
execution of this Agreement was knowing and voluntary and that he had a
reasonable time to deliberate regarding its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first written above.
LAFARGE CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx III
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Title: Senior Vice President - Human Resources
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LAFARGE CANADA INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx III
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Title: Senior Vice President - Human Resources
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/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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