Exhibit 10.1
Employment Agreement
This Employment Agreement ("Agreement"), including the attached Exhibit
"A," which is incorporated herein by reference and made an integral part of this
Agreement, is entered into between U.S. Concrete, Inc., a Delaware corporation
(the "Company"), and Xxxxxxx X. Xxxxxxxx ("Executive"). This Agreement is
effective as of May 28, 2003 (the "Effective Date"). The Company and Executive
agree as follows:
1. Employment, Compensation and Benefits
1.1 Term and Position. The Company agrees to employ Executive, and
Executive agrees to be employed by the Company for the term described on Exhibit
"A" (the "Term"). Executive will serve in the position described on Exhibit "A"
(the "Position"). As such, Executive shall have such responsibilities, duties,
powers and authority for the Company and entities affiliated with the Company as
are commensurate and consistent with such Position. The Company may assign
Executive to a different position or modify Executive's duties and
responsibilities, subject to the restrictions set out in Section 2.2.a. below.
1.2 Compensation. Executive shall be paid a monthly base salary as set
forth on Exhibit "A" (the "Monthly Base Salary"). Executive's Monthly Base
Salary shall be paid in semi-monthly installments in accordance with the
Company's standard payroll practice, and (as with all other payments made to
Executive by the Company) is subject to withholding of all federal, state, city,
or other taxes as may be required by law. The Company may review or increase
Executive's Monthly Base Salary from time or time, but is not required to do so.
Executive's Monthly Base Salary may not be reduced once increased without the
prior written consent of Executive.
1.3 Benefits. Executive shall be allowed to participate, on the same basis
generally as other executive officers employed in the same or similar positions,
in all general employee benefit plans and programs that the Company has made
available to its employees on or after the Effective Date. Nothing in this
Agreement is to be construed to provide greater rights, participation, coverage,
or benefits than provided to similarly-situated executive officers pursuant to
the terms of such benefit plans and programs. The Company is not obligated to
institute, maintain, or refrain from changing, amending, or discontinuing any
such benefit program or plan, so long as such actions are similarly applicable
to executive officers generally. From time to time, the Company may enter into
compensation, incentive or other agreements or plans that are not made available
to all executives of the Company. Nothing in this Section 1.3 entitles Executive
to participate in any such agreements or plans that are not generally available
to all similarly-situated executives.
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1.4 Business Expense. Executive is authorized to incur, and will be
entitled to receive prompt reimbursement for, all reasonable expenses Executive
incurs in carrying out his responsibilities hereunder, including business meals
and entertainment and travel expenses and mileage reimbursement in accordance
with the Company's automobile expense reimbursement
policy.
1.5 Paid Vacation and Holidays. Executive will be entitled to not less
than the number of weeks of "Annual Paid Vacation" set forth on Exhibit A and
all legal holidays during which time his or her applicable compensation will be
paid in full.
1.6 Annual Bonuses. Executive will be entitled to participate in an annual
incentive compensation plan generally applicable to the employees of the Company
and its affiliated entities, on the same basis as other similarly-situated
executives.
1.7 Company Policies. Executive agrees to comply with the Company's
policies and practices as set out in the employee handbook (or similar document)
applicable to Executive's operational entity. To the extent of any conflict
between this Agreement and such policies and practices, this Agreement shall
control.
2. Termination
2.1 Termination By the Company. The Company may terminate this Agreement
and Executive's employment before the Term expires for any of the following
reasons:
a. Termination for Cause. For "Cause" upon the determination by the
Company that "Cause" exists to terminate Executive's employment. "Cause"
means (i) Executive's gross negligence, willful misconduct, or willful
neglect in the performance of the material duties and services of Executive
hereunder, uncorrected for thirty (30) days following the Company's written
notice to Executive of need to cure such performance; (ii) Executive's
final conviction of a felony by a trial court; (iii) any criminal
indictment of Executive relating to an event or occurrence for which
Executive was directly responsible which, in the business judgment of a
majority of the Company's board of directors, exposes the Company to
ridicule, shame or business or financial risk; or (iv) a material breach by
Executive of any material provision of this Agreement which remains
uncorrected for 30 days following the Company's written notice to Executive
of such breach. If the Company terminates Executive's employment for Cause,
Executive shall be entitled only to Executive's pro rata salary through the
date of such termination, and all future compensation and benefits, other
than benefits to which Executive is entitled under the terms of the
Company's compensation and/or benefit plans, shall cease. In the case of a
termination for Cause under subpart (i) above, (a) all stock options
previously granted by the Company to Executive that are vested on the date
of termination for Cause shall, notwithstanding any contrary provision of
any applicable plan or agreement covering any such stock option awards,
remain outstanding and continue to be exercisable for a period of 90 days
following the date of termination for Cause, (b) all
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stock options previously granted by the Company to Executive that are not
vested on the date of termination for Cause shall terminate immediately and
(c) all restricted stock, restricted stock units and other awards that have
not vested prior to the date of termination for Cause shall be cancelled to
the extent not then vested. In the case of a termination for Cause under
subparts (ii), (iii) or (iv) above, (y) all stock options previously
granted by the Company to Executive (whether or not vested) shall terminate
immediately and (z) all restricted stock, restricted stock units and other
awards that have not vested prior to the date of termination for Cause
shall be cancelled to the extent not then vested.
b. Involuntary Termination. Without Cause at the Company's option
for any reason whatsoever, other than death, disability or for Cause, in
the sole discretion of the Company ("Involuntary Termination"). Upon an
Involuntary Termination before the Term expires, Executive shall receive
all of the following severance benefits:
(i) the Monthly Base Salary in effect on the date of
Involuntary Termination, which the Company shall continue to pay in
semi-monthly installments, as if Executive's employment (which ends on
the date of Involuntary Termination) had continued for the remainder
of the Term;
(ii) a lump sum payment in cash (payable on the date of
Involuntary Termination) equal to the greater of (a) the aggregate
amount of bonuses paid to Executive in the preceding three bonus years
divided by three or (b), if within 30 days of the date of Involuntary
Termination the Company is on target to pay bonuses to executive
officers of the Company for the bonus year during which the date of
Involuntary Termination occurs, the amount of Executive's target bonus
for such bonus year;
(iii) provided that Executive is eligible for and timely elects
to receive continuation coverage under COBRA, the Company will pay
100% of applicable continuation premiums for the benefit of Executive
under Executive's then-current plan election for the lesser of (x) the
remainder of the Term or (y) 18 months after termination; and
(iv) all stock options, restricted stock awards, restricted
stock units and similar awards granted to Executive by the Company
prior to the date of Involuntary Termination shall, notwithstanding
any contrary provision of any applicable plan or agreement covering
any such stock options, restricted stock awards, restricted stock
units or similar awards, fully vest and become exercisable in full on
the date of Involuntary Termination and shall remain outstanding and
in effect in accordance with their respective terms, and any
restrictions, deferral limitations, forfeiture conditions or other
conditions or criteria applicable to any such awards shall lapse on
the date of Involuntary Termination. Executive may
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exercise any such stock options or other exercisable awards at any
time before the expiration of their term.
However, if Executive accepts employment with a Competing Business as
described in Section 3.3, the Company's then continuing obligations, if
any, to provide Executive the severance benefits described in this section
shall cease as of the first day of such employment by Executive.
c. Death/Disability. Upon Executive's (i) death, or (ii) becoming
incapacitated or disabled so as to entitle Executive to benefits under the
Company's long-term disability plan, or (iii) becoming permanently and
totally unable to perform Executive's duties hereunder as a result of any
physical or mental impairment supported by a written opinion by a physician
selected by the Company who is reasonably acceptable to Executive.
Notwithstanding anything to the contrary contained in Section 2.1, upon
Executive's death or disability this Agreement and Executive's employment
shall terminate. Upon termination of employment due to such death or
disability, Executive or Executive's heirs shall be entitled to receive all
severance benefits described in Section 2.1.b. as if Executive's employment
ended due to an Involuntary Termination by the Company as of the date of
death, first payment of benefits under the Company's long-term disability
plan or permanent and total incapacity, as applicable, except that with
respect to severance benefits relating to stock options upon termination of
employment due to death or disability (a) all stock options previously
granted by the Company to Executive that are vested on the date of
termination shall, notwithstanding any contrary provision of any applicable
plan or agreement covering any such stock option awards, remain outstanding
and continue to be exercisable in accordance with their terms and (b) all
stock options previously granted by the Company to Executive that are not
vested on the date of termination shall terminate immediately.
2.2 Termination By Executive. Executive may terminate this Agreement and
Executive's employment before the Term expires for any of the following reasons:
a. Termination for Good Cause. For "Good Cause" upon determination
by Executive that Good Cause exists to terminate Executive's employment.
"Good Cause" means, without Executive's consent, (i) any reduction in
Executive's then current Monthly Base Salary, as set out on Exhibit "A" and
increased from time to time, (ii) any relocation of Executive's principal
place of employment by the Company from the "Location" set out on Exhibit
"A," (iii) any change in Executive's Position from that set out on Exhibit
"A" or any title or Position to which Executive has been promoted, (iv) any
material diminution of Executive's authority, duties or responsibilities
from those commensurate and consistent with the character, status and
dignity appropriate to Executive's Position set out on Exhibit "A" or any
title or Position to which Executive has been promoted (provided, however,
that (A) if after a Change in Control (as defined herein) the Company in
its entirety (as it was constituted immediately prior to the Change in
Control) becomes or is otherwise organized in its entirety (as it was
constituted
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immediately prior to the Change in Control) as a division of its then
Parent (as defined herein) or successor company and Executive retains the
same title and Position and substantially the same authority, duties and
responsibilities within such division, or (B) if at any time Executive
ceases to have such duties and responsibilities as are commensurate and
consistent with his Position that are associated with a publicly-traded
company because the Company ceases to have any securities registered under
section 12 of the Securities Exchange Act of 1934, as amended, or ceases to
be required to file reports under Section 15(d) of the Securities Exchange
Act of 1934, as amended, then in either case Executive's authority, duties
and responsibilities will not be deemed to have been materially
diminished), (v) any failure by the Company to pay any amount due under
this Agreement, or (vi) any material breach by the Company of any material
provision of this Agreement, any of which remain uncorrected for 30 days
following Executive's written notice to the Company of Good Cause. Upon
Executive's termination for Good Cause, Executive shall receive all of the
following severance benefits:
(I) the Monthly Base Salary in effect on the date of
termination for Good Cause, which the Company shall continue to pay in
semi-monthly installments, as if Executive's employment (which ends on
the date of termination for Good Cause) had continued for the
remainder of the Term;
(II) a lump sum payment in cash (payable on the date of
termination for Good Cause) equal to the greater of (a) the aggregate
amount of bonuses paid to Executive in the preceding three bonus years
divided by three or (b), if within 30 days of the date of termination
for Good Cause the Company is on target to pay bonuses to executive
officers of the Company for the bonus year during which the date of
termination for Good Cause occurs, the amount of Executive's target
bonus for such bonus year;
(III) provided that Executive is eligible for and timely elects
to receive continuation coverage under COBRA, the Company will pay
100% of applicable continuation premiums for the benefit of Executive
under Executive's then-current plan election for the lesser of (x) the
remainder of the Term or (y) 18 months after termination; and
(IV) all stock options, restricted stock awards, restricted stock
units and similar awards granted to Executive by the Company prior to
the date of termination for Good Cause shall, notwithstanding any
contrary provision of any applicable plan or agreement covering any
such stock options, restricted stock awards, restricted stock units or
similar awards, fully vest and become exercisable in full on the date
of termination for Good Cause and shall remain outstanding and in
effect in accordance with their respective terms, and any
restrictions, deferral limitations, forfeiture conditions or other
conditions or criteria applicable to any such awards shall lapse on
the date of termination for Good Cause.
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Executive may exercise any such stock options or other exercisable
awards at any time before the expiration of their term.
However, if Executive accepts employment with a Competing Business, the
Company's then continuing obligations, if any, to provide Executive the
severance benefits described in this section shall cease as of the first
day of such employment by Executive.
b. Voluntary Termination. For any other reason whatsoever, in
Executive's sole discretion. Upon such voluntary termination by Executive
for any reason other than Good Cause (a "Voluntary Termination") before the
Term expires, all of Executive's future compensation and benefits, other
than benefits to which Executive is entitled under the terms of the
Company's compensation and/or benefit plans, shall cease as of the date of
Voluntary Termination, and Executive shall be entitled only to pro rata
salary through such date. In the case of a Voluntary Termination, (i) all
stock options previously granted by the Company to Executive that are
vested on the date of Voluntary Termination will remain outstanding and
continue to be exercisable by Executive until ninety (90) days after the
date of Voluntary Termination, and (ii) all restricted stock, restricted
stock units or other awards that have not vested prior to the date of
Voluntary Termination shall be cancelled to the extent not then vested.
2.3 Termination Following Change In Control. In the event a Change in
Control (as defined herein) occurs and within one year after the date of the
Change in Control either (a) Executive terminates this Agreement and his
employment for Good Cause or (b) the Company or any successor (whether direct or
indirect and whether by purchase, merger, consolidation, share exchange or
otherwise) to substantially all of the business, properties and/or assets of the
Company makes an Involuntary Termination of this Agreement or Executive's
employment, then in either case the Company or its successor shall be required
to provide Executive, and Executive shall receive, all of the following Change
in Control benefits:
(i) a lump sum payment in cash (payable on the termination date)
equal to Executive's Monthly Base Salary in effect on the termination date
multiplied by twenty-four;
(ii) a lump sum payment in cash (payable on the termination date)
equal to the greater of (a) the aggregate amount of bonuses paid to
Executive in the preceding three bonus years divided by three or (b), if
within 30 days of the termination date the Company is on target to pay
bonuses to executive officers of the Company for the bonus year during
which the termination date occurs, the amount of Executive's target bonus
for such bonus year; and
(iii) provided that Executive is eligible for and timely elects to
receive continuation coverage under COBRA, the Company or its successor
will pay 100% of applicable continuation premiums for the benefit of
Executive under Executive's then-current plan election for 18 months after
termination.
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2.4 Non-Renewal. The Company may terminate this Agreement by terminating
the continually renewing (on a daily basis) one-year Term at any time after the
third anniversary of the Effective Date by providing one-year's advance written
notice (which notice may not be provided prior to end of the 30/th/ month after
the Effective Date) of its intent to so terminate the Agreement. Executive
acknowledges that this Agreement may be terminated pursuant to this Section 2.4
with or without a corresponding termination of Executive's employment with the
Company. If this Agreement is terminated pursuant to this Section 2.4 and
Executive remains employed by the Company thereafter, then Executive shall be an
"at will" employee of the Company following such termination. Notwithstanding
anything to the contrary contained in this Section 2.4, (a) neither the Company
nor any successor to the Company may terminate this Agreement by terminating the
continually renewing (on a daily basis) one-year Term at any time after a Change
in Control (as defined herein) has occurred, and (b) if the Company provides
written notice to terminate the continually renewing (on a daily basis) one-year
Term at any time within one year prior to the date of a Change in Control, then
upon the Change of Control this Agreement and the Term of Executive's employment
shall be automatically extended for a continually renewing (on a daily basis)
term of one year without any further action by Executive or the Company or its
successor.
2.5 Offset. In all cases, the compensation and benefits payable to
Executive under this Agreement upon termination of Executive's employment shall
be offset by any undisputed amounts that Executive then owes to the Company.
2.6 One Recovery. In the event of termination of Executive's employment,
Executive shall be entitled, if at all, to only one set of severance benefits or
Change in Control benefits, as applicable, provided in this Agreement.
2.7 Certain Obligations Continue. Upon termination of this Agreement, all
rights and obligations of Executive and the Company or its successor under this
Agreement shall cease as of the effective date of termination except that (i)
Executive's obligations under Article 3 and Sections 5.1 and 5.4 of this
Agreement and the Company's or its successor's obligations under Article 4 and
Sections 2.1, 2.2, 2.3, 3.6, 5.1 and 5.4 and the Company's or its successor's
obligations to provide any severance benefits or Change in Control benefits to
Executive shall survive such termination in accordance with their terms, and
(ii) Executive shall be entitled to receive all compensation (including bonus)
earned and benefits and reimbursements due through the effective date of
termination.
2.8 Notice of Termination. Any termination of this Agreement shall be
communicated by Notice of Termination to the non-terminating party, given in
accordance with this Agreement. For purposes of this Agreement, "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Agreement under the provision so indicated, and (iii) specifies the termination
date, if such date is other than the date of receipt of such notice.
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3. Confidential Information; Post-Employment Obligations
3.1 Company Property. All written materials, records, data, and other
documents prepared by Executive during Executive's employment by the Company are
Company property. All information, ideas, concepts, improvements, discoveries,
and inventions that are conceived, made, developed, or acquired by Executive
individually or in conjunction with others during Executive's employment
(whether during business hours and whether on the Company's premises or
otherwise) which relate to the Company's business, products, or services are the
Company's sole and exclusive property. All memoranda, notes, records, files,
correspondence, drawings, manuals, models, specifications, computer programs,
maps, and all other documents, data, or materials of any type embodying such
information, ideas, concepts, improvements, discoveries, and inventions are the
Company's property. At the termination of Executive's employment with the
Company for any reason, Executive shall return all of the Company's documents,
data, or other Company property, including all copies, to the Company.
3.2 Confidential Information; Non-Disclosure. Executive acknowledges that
the business of the Company and its affiliated entities is highly competitive
and that the Company has agreed to provide and immediately will provide
Executive with access to Confidential Information relating to the business of
the Company and its affiliated entities. "Confidential Information" means and
includes the Company's and its affiliated entities' confidential and/or
proprietary information and/or trade secrets that have been developed or used
and/or are reasonably planned to be developed and that cannot be obtained
readily by third parties from outside sources. Confidential Information
includes, by way of example and without limitation, the following: information
regarding customers, employees, contractors, and the industry not generally
known to the public; strategies, methods, books, records, and documents;
technical information concerning products, equipment, services, and processes,
particularly mixing techniques, mix designs or chemical analyses of concrete
products; procurement procedures and pricing techniques; the names of and other
information concerning customers, investors, and business affiliates (such as
contact name, service provided, pricing for that customer, type and amount of
services used, credit and financial data, and/or other information relating to
the Company's relationship with that customer); pricing strategies and price
curves; positions; plans and strategies for expansion or acquisitions; budgets;
customer lists; research; financial and sales data; trading methodologies and
terms; evaluations, opinions, and interpretations of information and data;
marketing and merchandising techniques; prospective customers' names and marks;
grids and maps; electronic databases; models; specifications; computer programs;
internal business records; contracts benefiting or obligating the Company or its
affiliated entities; bids or proposals submitted to any third party;
technologies and methods; training methods and training processes;
organizational structure; personnel information, including salaries of
personnel; payment amounts or rates paid to consultants or other service
providers; and other such confidential or proprietary information. Executive
acknowledges that this Confidential Information constitutes a valuable, special,
and unique asset used by the Company and its affiliated entities in its
businesses to obtain a competitive advantage over its competitors. Executive
further acknowledges that protection of such Confidential Information against
unauthorized disclosure and use is of critical importance to the Company in
maintaining its
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competitive position. Executive also will have access to, or knowledge of,
Confidential Information of third parties, such as actual and potential
customers, suppliers, partners, joint venturers, investors, financing sources
and the like, of the Company. The Company also agrees to provide Executive with
immediate access to Confidential Information and specialized training regarding
the Company's and its affiliated entities' methodologies and business
strategies, which will enable Executive to perform his job at the Company.
Executive agrees that Executive will not, at any time during or after
Executive's employment with the Company, make any unauthorized disclosure of any
Confidential Information or specialized training of the Company, or make any use
thereof, except in carrying out his employment responsibilities hereunder.
Executive also agrees to preserve and protect the confidentiality of third party
Confidential Information to the same extent, and on the same basis, as the
Company's Confidential Information. Nothing in this Section 3.2 is intended to
prohibit Executive from complying with any court order, lawful subpoena or
governmental request for information, provided that Executive notifies the
Company promptly upon the receipt of any such order, subpoena or request and
before the date of required compliance.
3.3 Non-Competition Obligations. The Company agrees to and shall provide
Executive with immediate access to Confidential Information. Ancillary to the
rights and severance benefits provided to Executive, the Company's provision of
Confidential Information and specialized training to Executive, and Executive's
agreement not to disclose Confidential Information, and in order to protect the
Confidential Information described above, the Company and Executive agree to the
following non-competition provisions. Executive agrees that during Executive's
employment with the Company and for the "Period of Post-Employment
Non-Competition Obligations" set forth in Exhibit "A," Executive will not,
directly or indirectly, for Executive or for others, in the "Geographic Region
of Responsibility" described on Exhibit "A" (or, if Executive's Geographic
Region of Responsibility has changed, in any and all geographic regions in which
Executive has devoted substantial attention at such location to the material
business interest of the Company and its affiliated entities during the 12-month
period immediately preceding Executive's termination of employment), engage in,
assist, or have any active interest or involvement, whether as an employee,
agent, consultant, creditor, advisor, officer, director, stockholder (excluding
holdings of 2% or less of the stock of a public company), partner, proprietor,
or any type of principal whatsoever in any person, firm or business that
generates more than 10% of its annual revenue from the sale of any
concrete-related products and services that the Company or its affiliated
entities offers, then has plans to offer, or has offered in the preceding
12-month period, including, but not limited to, ready-mixed concrete, pre-cast
concrete or related building materials or services such as proportioned mix
design services, concrete mold engineering or design services, rebar, mesh,
color additives, curing compounds, grouts, wooden forms, or similar products or
services, whether at wholesale or retail (a "Competing Business"). Executive
understands that the foregoing restrictions may limit Executive's ability to
engage in certain businesses in the geographic region and during the period
provided for above, but acknowledges that these restrictions are necessary to
protect the Confidential Information the Company has provided to Executive.
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3.4 Non-Solicitation of Customers. During Executive's employment with the
Company and for the Period of Post-Employment Non-Competition Obligations set
forth on Exhibit "A," Executive will not call on, service, or solicit competing
business from clients or customers of the Company or its affiliated entities
whom that Executive, within the previous twenty-four (24) months, (i) provided
services to, worked with, solicited or had or made contact with, or (ii) had
access to information and files about.
3.5 Non-Solicitation of Employees. During Executive's employment with the
Company, and for the Period of Post-Employment Non-Competition Obligations set
forth on Exhibit "A," Executive will not, either directly or indirectly, call
on, solicit, or induce any other employee or officer of the Company or its
affiliated entities whom Executive had contact with, knowledge of, or
association with in the course of employment with the Company to terminate his
or her employment, and will not assist any other person or entity in such a
solicitation.
3.6 Early Resolution Conference/Arbitration. The parties are entering into
this Agreement with the express understanding that this Agreement is clear and
fully enforceable as written. If Executive ever decides to contend that any
restriction on activities imposed by this Agreement is no longer enforceable as
written or does not apply to an activity in which Executive intends to engage,
Executive first will notify the Company's President and its Secretary in writing
and meet with a Company representative at least fourteen (14) days before
engaging in any activity that foreseeably could fall within the questioned
restriction to discuss resolution of such claims (an "Early Resolution
Conference"). Should the parties not be able to resolve disputes at the Early
Resolution Conference, the parties agree to use confidential, binding
arbitration to resolve the disputes. The arbitration shall be conducted in
Houston, Texas, in accordance with the then-current employment arbitration rules
of the American Arbitration Association, before an arbitrator licensed to
practice law in Texas. The parties agree that the arbitrator, in the
arbitrator's discretion, may award a prevailing party, other than the Company, a
reasonable attorney's fee, including arbitration expenses and costs. Either
party may seek a temporary restraining order, injunction, specific performance,
or other equitable relief regarding the provisions of this section if the other
party fails to comply with obligations stated herein. The parties' agreement to
arbitrate applies only to the matters subject to an Early Resolution Conference.
3.7 Warranty and Indemnification. Executive warrants that Executive is not
a party to any restrictive agreement limiting Executive's activities in his
employment by the Company. Executive further warrants that at the time of the
signing of this Agreement, Executive knows of no written or oral contract or of
any other impediment that would inhibit or prohibit employment with the Company,
and that Executive will not knowingly use any trade secret, confidential
information, or other intellectual property right of any other party in the
performance of Executive's duties hereunder. Executive shall hold the Company
harmless from any and all suits and claims arising out of any breach of such
restrictive agreement or contracts.
4. Change in Control
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4.1 Definitions.
a. For purposes of this Agreement, a "Change in Control" shall be deemed
to have occurred on the earliest of any of the following dates:
(i) the date the Company merges or consolidates with any other
person or entity, and the voting securities of the Company outstanding
immediately prior to such merger or consolidation do not continue to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the total
voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation;
(ii) the date the Company sells all or substantially all of its
assets to any other person or entity;
(iii) the date the Company is dissolved;
(iv) the date any person or entity together with its Affiliates (as
defined herein) becomes, directly or indirectly, the Beneficial Owner (as
defined herein) of voting securities representing more than 50% of the
total voting power of all then outstanding voting securities of the
Company; or
(v) the date the individuals who constituted the members of the
Company's Board of Directors ("Incumbent Board") as of the Effective Date
cease for any reason to constitute at least a majority thereof, provided
that for purposes of this clause (v) any person becoming a director of the
Company whose election or nomination for election by the Company's
stockholders was approved by a vote of at least eighty percent (80%) of the
directors comprising the Incumbent Board shall be, for purposes of this
clause (v), considered as through such person were a member of the
Incumbent Board;
provided, however, that notwithstanding anything to the contrary contained in
clauses (i) - (v), a Change in Control shall not be deemed to have occurred in
connection with any bankruptcy or insolvency of the Company, or any transaction
in connection therewith.
b. As used in this Agreement, the following terms are defined as follows:
(i) "Affiliate" shall mean, with respect to any person or entity,
any person or entity that, directly or indirectly, Controls, is Controlled
by, or is under common Control with such person or entity in question. For
the purposes of the definition of Affiliate, "Control" (including, with
correlative meaning, the terms "Controlled by" and "under common Control
with") as used with respect to any person or entity, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person or
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entity whether through the ownership of voting securities or by contract or
otherwise;
(ii) "Beneficial Owner" has the meaning ascribed to it pursuant to
Rule 13d-3 of the Securities Exchange Act of 1934; and
(iii) "Parent" means a corporation, partnership, trust, limited
liability company or other entity that is the ultimate Beneficial Owner of
more than 50% of the Company's or its successor's outstanding voting
securities.
4.2 Vesting of Awards. All stock options, restricted stock awards,
restricted stock units and similar awards granted to Executive by the Company
prior to the date of a Change in Control shall, notwithstanding any contrary
provision of any applicable plan or agreement covering any such stock options,
restricted stock awards, restricted stock units or similar awards, fully vest
and become exercisable in full immediately prior to such Change in Control and
shall remain outstanding and in effect in accordance with their terms, and any
restrictions, deferral limitations, forfeiture conditions or other conditions or
criteria applicable to any such awards shall lapse immediately prior to such
Change in Control. Executive may exercise any such stock options or other
exercisable awards at any time before the expiration of their term.
After a Change in Control, if any option (the "Terminated Option") relating
to the Company's capital stock does not remain outstanding, the successor to the
Company or its then Parent shall, at the Executive's option and in his sole
discretion, either:
(a) issue an option (the "Successor Option"), to purchase common stock of
such successor or Parent in an amount such that on exercise of the Successor
Option the Executive would receive the same number of shares of the
successor's/Parent's common stock as the Executive would have received had the
Executive exercised the Terminated Option immediately prior to the transaction
resulting in the Change in Control and received shares of such successor/Parent
in such transaction. The aggregate exercise price for all of the shares covered
by such Successor Option shall equal the aggregate exercise price of the
Terminated Option. The term of such Successor Option shall equal the remainder
of the term of the Terminated Option (as if the Terminated Option had remained
outstanding) and such Successor Option shall be fully vested and exercisable in
full on the date of its grant; or
(b) pay the Executive a bonus within ten (10) days after the consummation
of the Change in Control, in an amount agreed to by the Company and the
Executive. Such amount shall be at least equivalent on an after-tax basis to the
net after-tax gain that the Executive would have realized if he had been issued
a Successor Option under clause (a) above and had immediately exercised such
Successor Option and sold the underlying stock, taking into account the
different tax rates that apply to such bonus and to such gain, and such amount
shall also reflect other differences to the Executive between receiving a bonus
under this clause (b) and receiving a Successor Option under clause (a) above.
-Page 12-
4.3 Certain Additional Payments. Anything in this Agreement to the
contrary notwithstanding, in the event it shall be determined that any payment
or distribution by the Company or its successor to or for the benefit of
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (a "Payment"), would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (such excise tax, together with any interest thereon, any penalties,
additions to tax, or additional amounts with respect to such excise tax, and any
interest in respect of such penalties, additions to tax or additional amounts,
being collectively referred herein to as the "Excise Tax"), then Executive shall
be entitled to receive and the Company or its successor shall make an additional
payment (a "Gross-Up Payment") in an amount such that after payment by Executive
of all taxes (as defined herein) imposed upon the Gross-Up Payment, Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments. The Gross-Up Payment shall be made to Executive within 10 days
after written request for payment is submitted to the Company or its successor.
For purposes of this Section 4.3, the terms "tax" and "taxes" mean any and all
taxes of any kind whatsoever (including, but not limited to, any and all Excise
Taxes, income taxes, and employment taxes), together with any interest thereon,
any penalties, additions to tax, or additional amounts with respect to such
taxes and any interest in respect of such penalties, additions to tax, or
additional amounts. All determinations made under this Section 4.3, including
whether a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall be
made by a certified public accounting firm designated by Executive and
reasonably acceptable to the Company (the "Accounting Firm"). All fees and
expenses of the Accounting Firm shall be borne solely by the Company or its
successor. Notwithstanding anything to the contrary in this Section 4.3, if any
tax authority determines that a greater Excise Tax should be imposed upon the
Payments than is determined by the Accounting Firm pursuant to this Section 4.3,
Executive shall be entitled to receive the full Gross-Up Payment calculated on
the basis of the amount of Excise Tax determined to be payable by such tax
authority from the Company or its successor within 10 days of such
determination.
5. Miscellaneous
5.1 Statements About the Company. Executive and the Company shall refrain,
both during and after Executive's employment, from publishing any oral or
written statements about the other that are disparaging, slanderous, libelous,
or defamatory; or that disclose private or confidential information about their
business affairs.
5.2 Notices. Notices and all other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered or
when mailed by United States registered or certified mail. Notices to the
Company shall be sent to its President and its Secretary at: U.S. Concrete,
Inc., 0000 Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000. Notices and
communications to Executive shall be sent to the address Executive most recently
provided to the Company.
-Page 13-
5.3 No Waiver. No failure by either party at any time to give notice of
any breach by the other party of, or to require compliance with, any condition
or provision of this Agreement shall be deemed a waiver of any provisions or
conditions of this Agreement.
5.4 Mediation. If a dispute arises out of or related to Executive's
employment, other than a dispute regarding Executive's obligations under
Articles 3, and if the dispute cannot be settled through direct discussions,
then the Company and Executive agree to try to settle the dispute in an amicable
manner by confidential mediation before having recourse to any other proceeding
or forum. The Company agrees to pay any pre-suit mediation fee charged by the
mediator for two full days of mediation.
5.5 Venue/Jurisdiction. This Agreement shall be governed by Texas law. Any
litigation that may be brought by either party involving the enforcement of this
Agreement or the rights, duties, or obligations under this Agreement, shall be
brought exclusively in the State or federal courts sitting in Houston, Xxxxxx
County, Texas.
5.6 Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns. The Company may assign
this Agreement to any affiliated entity. Executive's rights and obligations
under this Agreement are personal, and they shall not be assigned or transferred
without the Company's prior written consent otherwise than by will or the laws
of descent and distribution. The Company will require any successor (direct or
indirect and whether by purchase, merger, consolidation, share exchange or
otherwise) to substantially all of the business, properties and assets of the
Company expressly to assume and agree to perform this Agreement in the same
manner and to the same extent the Company would have been required to perform it
had no succession taken place.
5.7 Other Agreements/Entire Agreement. This Agreement shall supersede any
and all existing oral or written agreements, representations or warranties
between executive and the Company or any of its affiliated entities relating to
the terms of Executive's employment by the Company or any of its affiliated
entities, including that certain Employment Agreement, dated effective May 28,
1999, between the Company and Executive (the "Initial Agreement"), and the
Initial Agreement is hereby terminated as of the Effective Date hereof. This
Agreement (including Exhibit "A" attached hereto, which is incorporated herein
by reference and made an integral part of this Agreement) constitutes the entire
agreement of the parties with respect to the subject matters of this Agreement.
Any modification of this Agreement (including without limitation to Exhibit "A")
will be effective only if it is in writing and signed by each party. Executive
is also a party to that certain Amended and Restated Indemnification Agreement,
dated August 17, 2000, between Executive and the Company (the "Indemnification
Agreement). Nothing in this Agreement is intended to alter or amend the terms or
effect of the Indemnification Agreement, which shall remain in effect in
accordance with its terms, notwithstanding the execution or termination of this
Agreement.
-Page 14-
5.8 Invalidity. Should any provision(s) in this Agreement be held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall be unaffected and shall continue in full force and
effect, and the invalid, void or unenforceable provision(s) shall be deemed not
to be part of this Agreement.
IN WITNESS WHEREOF, the Company and Executive have executed this Agreement
in multiple originals to be effective on the Effective Date.
U.S. Concrete, Inc. (the "Company")
Xxxxxxx X. Xxxxxxxx ("Executive")
By:/s/ Xxxxxxx X. Xxxxxxxx By:/s/ Xxxxxx X. Xxxxxxxxx
------------------------------ -------------------------------------
Printed Name:Xxxxxx X. Xxxxxxxxx
---------------------------
Title:President and CEO
----------------------------------
Date:May 28, 2003 Date:May 27, 2003
---------------------------- -----------------------------------
-Page 15-
Exhibit "A" to Employment Agreement Between
Company And Xxxxxxx X. Xxxxxxxx
Term: The Term of Executive's employment shall
be for an initial term of two years
commencing on the Effective Date,
provided that beginning on the first
anniversary of the Effective Date,
the Term of Executive's employment will
be for a continually renewing (on a
daily basis) term of one year without
any further action by Executive or the
Company.
Position: President - Bay Area Region
Location: San Jose, California
Geographic Region of Responsibility: During Executive's employment with the
Company, within 75 miles of any plant or
other operating facility in which the
Company is then engaged in business.
Upon termination of Executive's
employment with the Company,within 75
miles of any plant or other operating
facility in which the Company was
engaged in business on the date
immediately prior to Executive's
termination.
Period of Post-Employment Two years from the date of termination
Non-Competition Obligations: if Executive's employment is terminated
for Cause under Section 2.1.a. If
Executive's employment is terminated
under Sections 2.1.b., 2.1.c., 2.2.a. or
2.3 and Executive receives any severance
benefits or Change in Control benefits,
then the Period of Post-Employment
Non-Competition Obligations shall be
the period of time for which Executive
receives any such severance benefits or
Change in Control benefits. If
Executive's employment is terminated
under Section 2.2.b., then the Period of
Post-Employment Non-Competition
Obligations shall be two years from the
date of termination. If Executive is
terminated under any other section of
this Agreement, there shall be no Period
of Post-Employment Non-Competition
Obligations.
Monthly Base Salary: $20,833.33 or such higher rate as may be
determined by the Company from time to
time.
Annual Paid Vacation: five weeks
-Page 16-
U.S. Concrete, Inc. (the "Company")
Xxxxxxx X. Xxxxxxxx ("Executive")
By:/s/ Xxxxxxx X. Xxxxxxxx By:/s/ Xxxxxx X. Xxxxxxxxx
------------------------------ -------------------------------------
Printed Name:Xxxxxx X. Xxxxxxxxx
---------------------------
Title:President and CEO
----------------------------------
Date:May 28, 2003 Date: May 27, 2003
---------------------------- -----------------------------------
-Page 17-
