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Exhibit 10.3
AGREEMENT
THIS AGREEMENT ("Agreement"), made and entered into as of the 25th day
of April, 2001, by and between Lafarge Corporation, a Maryland corporation (the
"Company"), and Xxxx X. Xxxxxxx, an individual residing in Fairfax, Virginia
(the "Executive"),
W I T N E S S E T H:
WHEREAS, the Executive has agreed to resign as President and Chief
Executive Officer and director of the Company effective as of May 8, 2001 and
the parties hereto desire to document herein their agreements relating to the
Executive's resignation; and
WHEREAS, the Company desires to employ the Executive until July 31,
2001, on the terms 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. The Executive agrees to resign as President and
Chief Executive Officer and director of the Company effective as of May 8, 2001,
and as an employee of the Company effective as of July 31, 2001. During the
period commencing on the date hereof and ending on July 31, 2001 (the "Term"),
the Executive shall perform such duties, functions and responsibilities as are
from time to time delegated to him by the Chairman of the Board of the Company,
it being understood and agreed that the Executive shall be entitled to utilize
his accrued vacation time (totaling eight (8) weeks) commencing June 1, 2001.
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, but shall not be required to devote all of his
time and attention to the business of the Company. 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.
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.
$570,000 per year, payable in monthly installments, or otherwise in
accordance with the Company's usual payroll practices.
(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 all of
the Company's standard salaried employee benefit plans, executive
benefit plans, policies, practices, and arrangements in
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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, in lieu of receiving reimbursement
of relocation expenses under the Company's existing policy, the
Executive shall receive on June 1, 2002 the sum of $150,000 less the sum
of any indebtedness owed by the Executive to the Corporation on such
date pursuant to Section 4 hereof. The Executive shall also be entitled
to purchase his Company automobile at a price equal to its book value on
or before July 31, 2001.
(iv) Miscellaneous Pay and Benefits. Upon completion of
Executive's employment on July 31, 2001, the Executive shall be entitled
to receive standard retiree life and medical insurances in accordance
with the forms and coverage offered by the Company.
(v) Special Retirement Supplement. The Executive shall be
entitled to receive from the Company a special retirement supplement
equal to $2,850,000 as of August 1, 2001 (the "Special Retirement
Supplement"), which shall be paid in a manner that will provide the
Executive and his beneficiary additional retirement benefits such that,
when combined with benefits provided under the Lafarge Corporation
Retirement Plan (the "Retirement Plan") and the Lafarge Corporation
Supplemental Executive Retirement Plan (the "SERP"), the Executive
receives a level pension starting on August 1, 2001, in the form of a
life annuity with 60 monthly payments guaranteed and a 50% survivor
annuity thereafter. The amount of the Executive's (and his
beneficiary's) monthly retirement income to be paid pursuant to this
Section is set forth on the attached Appendix A.
The Executive's beneficiary with respect to the survivor
benefits payable under this Section shall be the Executive's spouse (if
any) who is entitled to survivor annuity benefits under the Retirement
Plan. In the event that the Executive does not have a spouse who is
entitled to survivor annuity benefits under the Retirement Plan, then
the Executive's secondary beneficiary as designated by the Executive in
writing, or if none, his estate shall be his beneficiary hereunder, but
only with respect to the portion, if any, of the 60 months of guaranteed
payments remaining as of the date of the Executive's death.
If the Executive shall die prior to August 1, 2001, then the
Executive's beneficiary shall be entitled to receive commencing on
August 1, 2001, an amount equal to the monthly retirement income such
beneficiary would have been entitled to receive had the Executive
commenced receiving the Special Retirement Supplement in the form of a
life annuity with 60 monthly guaranteed payments and a 50% spousal
survivor annuity thereafter on August 1, 2001, and then died.
The monthly retirement income payable to the Executive pursuant
to this Section has been determined assuming the Executive will begin
receiving his retirement benefits under the Retirement Plan as of June
1, 2003.
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All actuarial conversions under this Section shall be determined
using a 7.75% rate of interest and the 1983 Group Annuity Mortality
Table (with a blend of 50% male and 50% female rates).
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 beneficiary's) 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. Except as otherwise provided in this Section,
options granted to the Executive under the Company's option plans (the
"Option Plans") shall continue to vest in accordance with their terms as
a result of the Executive's termination of employment on July 31, 2001
by reason of retirement under the normal or early retirement provisions
of a pension or retirement plan maintained by the Company. In the event
that the Executive shall have complied with all the terms and conditions
of this Agreement, all outstanding options granted to the Executive
under the Option Plans shall be fully vested as of December 31, 2003 and
such options shall be exercisable until May 31, 2004, at which time such
options shall terminate unless they are terminated earlier in accordance
with the terms of the Option Plans or any option agreement. All options
agreements between the Company and the Executive are hereby amended to
be consistent with the terms of this Section.
(vii) Insurance; Indemnification. The Company represents and
warrants to the Executive that during his term as Chief Executive
Officer, 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 executive officer of the
Company has actual knowledge of any existing claim to be submitted for
coverage under such insurance policies. The Executive shall be entitled
to indemnification by the Company for liabilities arising from the
performance of his duties as an executive officer and/or director of the
Company to the extent such indemnification was available to the
Executive during his employment with the Company and is not otherwise
prohibited by applicable law.
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
benefit plans, the Executive's estate shall receive those death benefits payable
under the Company's benefit plans, policies and procedures in which the
Executive is as of the date hereof eligible to participate.
4. Repayment of Indebtedness. All indebtedness owed by the
Executive to the Company relating to his residence at 0000 Xxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxx 00000, shall be
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repaid by the Executive on the earlier to occur of the closing of the sale by
the Executive of such residence or June 1, 2002 or deducted from any payment
payable to the Executive pursuant to Section 2(iii) hereof. The face amount of
the note evidencing such indebtedness is expected to be $75,833.62 as of July
31, 2001. All other indebtedness owed by the Executive to, or advances to the
Executive from, the Company shall be repaid by the Executive on or before June
1, 2002 or deducted from any payment payable to the Executive pursuant to
Section 2(iii) 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 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 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 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 and shall be in addition to the Executive's common law obligations to
the Company as an employee, officer and director (or as a former employee,
officer and director).
6. No Conflicting Agreements. The Executive represents and warrants
to the Company 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. There shall be deducted from all amounts paid
under this Agreement any taxes required to be withheld by any federal, state,
local or other government. 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 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,
2004, 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
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or other legal entity or device, in any business or activity which is in direct
or indirect competition with either the Company or its 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 with or into any other corporation or any sale or transfer of all or
substantially all of the assets of the Company, this Agreement shall inure to
the benefit of and be binding on the successor to the Company's business and
assets.
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. Xxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
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If to the Company, to: Lafarge Corporation
00000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
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.
14. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto relating to the subject matter hereof (it being
understood that this Agreement is not intended to cover the terms of the
Executive's relationship with the Company as a member of its Board of
Directors), 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 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) any of the Company'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
the Company. 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
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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 the Company. 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).
The Company does not hereby waive or release any claim, demand or cause
of action that it may now or hereafter have against the Executive for any
liability whatsoever. The Company represents and warrants that none of its
executive officers has actual knowledge of any existing claim or cause of action
of the Company against the Executive or any present intention of the Company 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.
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.
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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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/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
County of Fairfax
State of Virginia
The foregoing instrument was acknowledged before me this 27th day of April,
2001.
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Notary Public
My commission expires: 1-31-04
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