EXECUTIVE EMPLOYMENT AGREEMENT
BY AND BETWEEN
KIEWIT MATERIALS COMPANY
AND
XXXXXXXXXXX X. XXXXXX
REVISED JULY 8, 2002
TABLE OF CONTENTS
1. Employment...............................................................................................1
2. Extent of Employment.....................................................................................1
3. Compensation.............................................................................................1
4. Term of Employment.......................................................................................2
5. Termination..............................................................................................2
6. Reimbursement of Expenses................................................................................5
7. Benefits.................................................................................................5
8. Agreements to Protect Company's Proprietary Information and Goodwill.....................................5
9. Defense of Claims........................................................................................8
10. Non-Disparagement........................................................................................8
11. Certain Other Definitions................................................................................8
12. Change in Control.......................................................................................11
13. Notice..................................................................................................12
14. Severability............................................................................................13
15. Breach; Waiver of Breach; Specific Performance..........................................................13
16. Assignment; Third Parties...............................................................................13
17. Amendment; Entire Agreement.............................................................................13
18. Choice of Law; Litigation...............................................................................14
19. Further Action..........................................................................................14
20. Intention of the Parties................................................................................14
21. Payment Obligations Absolute............................................................................14
22. Mutual Releases.........................................................................................15
23. Revision................................................................................................15
24. Reference Date..........................................................................................15
LIST OF DEFINITIONS
Annual Bonus......................................................................................................1
Appraised Value..................................................................................................10
Auditor...........................................................................................................4
base amount.......................................................................................................4
Base Salary.......................................................................................................1
Board of Directors................................................................................................1
Buyer.............................................................................................................8
Cause.............................................................................................................8
Change in Control.................................................................................................9
Company...........................................................................................................1
Confidential Information..........................................................................................9
Constructive Termination.........................................................................................10
Control Change Date..............................................................................................12
Death.............................................................................................................2
Disability........................................................................................................2
excess parachute payments.........................................................................................4
Excise Tax........................................................................................................3
Executive.........................................................................................................1
Gross-Up Payment..................................................................................................3
Indemnification Agreement.........................................................................................4
knowing..........................................................................................................11
knowledge........................................................................................................11
No Reason.........................................................................................................2
parachute payments................................................................................................4
Parent Incentive Program..........................................................................................1
Relevant Trigger Period..........................................................................................11
Remaining Trigger Period.........................................................................................11
Resignation.......................................................................................................2
Scheduled Term End Date..........................................................................................11
Security..........................................................................................................4
Tax Counsel.......................................................................................................4
Term of Employment................................................................................................2
Termination Date..................................................................................................2
Termination Payment..............................................................................................11
Total Payments....................................................................................................3
Trigger Period...................................................................................................11
EXECUTIVE EMPLOYMENT AGREEMENT
(REVISED JULY 8, 2002)
XXXXXXXXXXX X. XXXXXX ("Executive"), and KIEWIT MATERIALS COMPANY, a
Delaware corporation ("Company"), hereby agree as follows:
1. EMPLOYMENT. Executive is now, and has for some time served
as, an executive employee of Company. Company hereby agrees to continue the
employment of Executive as Chief Executive Officer of Company, and Executive
hereby agrees to so continue such employment, during the Term of Employment,
all pursuant to this Agreement. The principal place of such employment shall be
in Omaha, Nebraska, Executive's current home city of residence. The scope and
duties of Executive in such employment shall be those as have last
characterized his employment through the date hereof.
2. EXTENT OF EMPLOYMENT. Executive shall perform his duties and
obligations hereunder faithfully, and to the best of his ability, under the
lawful direction of the Board of Directors of Company (the "Board of
Directors"). Executive shall devote all of his business time, energy and skill
such as may be reasonably necessary for the performance of his duties and
obligations hereunder, consistent with the past practices and norms of Company
and shall abide by the reasonable rules, customs and usages from time to time
established by Company.
3. COMPENSATION. In consideration of services provided
hereunder, Company shall compensate Executive during the Term of Employment as
follows:
(a) Company shall pay to Executive, as base compensation during
the Term of Employment, in substantially equal monthly installments, an annual
base salary of $340,000 (the "Base Salary"). The Board of Directors shall
annually review and may increase or reduce the same in its sole discretion,
except that during the Trigger Period, the Board of Directors may not reduce
the Base Salary below $340,000.
(b) Company shall pay to Executive an annual bonus compensation
("Annual Bonus"), which is to be based on Executive's performance during and
respecting each calendar year during the Term of Employment. The payment and
amount of each year's Annual Bonus shall be at the sole discretion of the Board
of Directors, except that during and respecting the Trigger Period, the Board
of Directors must pay an Annual Bonus of no less than $450,000. Such Annual
Bonus shall be paid concurrently with other annual bonuses paid by Company to
other executives, unless earlier required by other provisions of this
Agreement.
(c) Within 60 days after the occurrence of a Change in Control,
Company shall provide Executive with a description of the incentive
compensation program in which comparable executives of Company's United States
parent participates (herein called the "Parent Incentive Program"). During the
14 days after Executive's receipt of such
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description, Executive shall the right to elect to participate in the Parent
Incentive Program by delivering written notice to Company in the manner set
forth in such description. If Executive so elects to so participate in the
Parent Incentive Program, then such participation shall be in lieu of
Executive's right to receive an Annual Bonus, and this Executive Employment
Agreement shall be amended so as to eliminate Executive's right to receive an
Annual Bonus (including as a component of a Termination Payment), and so as to
incorporate Executive's participation in the Parent Incentive Program.
4. TERM OF EMPLOYMENT. The "Term of Employment" shall commence
on the date hereof and shall end on the Scheduled Term End Date or as otherwise
provided in Section 5. The last day of the Term of Employment is herein called
the "Termination Date."
5. TERMINATION.
(a) Subject to Company's obligations to make the payments
contemplated by the following provisions of this Section 5, the Term of
Employment may be terminated at any time prior to the Scheduled Term End Date:
(i) upon the death of Executive ("Death"); or
(ii) upon the Board of Directors reasonable
determination, after consultation with a competent medical physician,
because of physical or mental disability, Executive is unable to
perform, and does not perform, his material duties hereunder for 120
days in any continuous 240-day period ("Disability"); or
(iii) by Company for Cause; or
(iv) by Company for any other reason ("No Reason"), or by
Company for no reason (also "No Reason"), or by Company by
Constructive Termination (also "No Reason"); or
(v) by Executive voluntarily and for no reason after 30
days' prior written notice to Company and the Board of Directors
("Resignation").
Executive acknowledges that nothing contained herein, or otherwise stated by or
on behalf of Company, modifies or amends the right of Company to terminate
Executive at any time, with or without Cause.
(b) Upon termination of the Term of Employment on account of
Death, Disability, No Reason, Cause or Resignation, then:
(i) within ten days following the Termination Date,
Company shall pay to Executive (1) all accrued and unpaid Base Salary
and benefits (including vacation pay and benefits under Section 7 with
respect to the period of the Term of Employment prior to termination,
(2) reimbursement for all expenses under Section 6 with respect to
such period, (3) any other benefits (including COBRA) required by law
to be provided after termination of employment under the
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circumstances and (4) customary severance pay, if any, as established
by Company pursuant to then current practice; and
(ii) all unvested equity interests (such as stock
options) in or respecting Company, if there are any, shall vest as of
such Termination Date; and
(iii) all 401(k) benefits and accounts shall vest as of
such Termination Date.
(c) In addition to the salary, benefits and reimbursements set
forth in subsection 5(b), and in lieu of severance pay provided for in clause
(4) thereof, in the event that Executive's employment is terminated during the
Trigger Period on account of Death, Disability or No Reason, then:
(i) during the Remaining Trigger Period, Company shall
also (1) maintain and provide at its sole expense, or reimburse
Executive for 100% of the premiums necessary to procure and maintain,
COBRA continuation coverage under, or equivalent coverage to that
provided under, the Company's then current group health insurance
plan, all benefiting Executive and any of his dependents who are
eligible therefor, and all as referenced in Section 4980B of the
Internal Revenue Code, and (2) provide to Executive reasonable (in
relation to Executive's circumstances and position) professional
outplacement services, excepting that the same shall only be so
provided during the first nine months of such period, but all of the
foregoing shall be so maintained and provided only to the extent not
otherwise to be maintained or provided under the provisions of
subsection 5(b) above; and
(ii) within ten days after the commencement of the
Remaining Trigger Period, Company shall also pay to Executive the
Termination Payment in a lump sum.
(d) (i) Whether or not Executive becomes entitled to the
Termination Payment, if any of the payments or benefits received or to be
received by Executive in connection with a Change in Control or Executive's
termination of employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with Company, with any person whose
actions result in a Change in Control or with any person affiliated with
Company or such person, (but not including any payments or benefits received by
Executive in connection with any Security (as defined in Section 5(d)(ii)) (all
such payments and benefits, excluding the Gross-Up Payment (as defined herein),
being hereinafter referred to as the "Total Payments") become subject to any
excise tax imposed under section 4999 of the Internal Revenue Code (the "Excise
Tax"), Company shall pay to Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by Executive, after deduction of
any Excise Tax on the Total Payments and any federal, state and local income
and employment taxes and Excise Tax upon the Gross-Up Payment, and after taking
into account the phase out of itemized deductions and personal exemptions
attributable to the Gross-Up Payment, shall be equal to the Total Payments.
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(ii) This Agreement shall not apply to any payments or
benefits received by Executive in connection with any Security (as defined
herein) owned by Executive, which payments or benefits are subject to that
certain Indemnification Agreement executed by and between Executive and Company
of even date herewith (the "Indemnification Agreement"). For purposes of this
Section 5(d), the term "Security" shall mean any one or more of the convertible
debentures of Company issued as Series 2000A, 2000B, 2000C, 2000D and 2001.
(iii) For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(A) all of the Total Payments shall be treated as "parachute payments" (within
the meaning of section 280G(b)(2) of the Internal Revenue Code) unless, in the
opinion of tax counsel ("Tax Counsel") selected by Company and reasonably
acceptable to Executive, such Total Payments (in whole or in part) do not
constitute parachute payments, including by reason of section 280G(b)(4)(A) of
the Internal Revenue Code, (B) all "excess parachute payments" within the
meaning of section 280G(b)(1) of the Internal Revenue Code shall be treated as
subject to the Excise Tax unless, in the opinion of Tax Counsel, such excess
parachute payments (in whole or in part) represent reasonable compensation for
services actually rendered (within the meaning of section 280G(b)(4)(B) of the
Internal Revenue Code) in excess of the "base amount" allocable to such
reasonable compensation (within the meaning of section 280G(b)(3) of the
Internal Revenue Code), or are otherwise not subject to the Excise Tax, and (C)
the value of any noncash benefits or any deferred payment or benefit shall be
determined by the accounting firm which was, immediately prior to the Change in
Control, Company's independent auditor (the "Auditor") in accordance with the
principles of sections 280G(d)(3) and (4) of the Internal Revenue Code. For
purposes of determining the amount of the Gross-Up Payment, Executive shall be
deemed to pay federal income tax at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the
state and locality of Executive's residence on the Termination Date (or if
there is no Termination Date, then the date on which the Gross-Up Payment is
calculated for purposes of this Section 5(d)), net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes.
(iv) In the event that the Excise Tax is finally
determined to be less than the amount taken into account hereunder in
calculating the Gross-Up Payment, Executive shall repay to Company, within 5
business days following the time that the amount of such reduction in the
Excise Tax is finally determined, the portion of the Gross-Up Payment
attributable to such reduction (including that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and local income and
employment taxes imposed on the Gross-Up Payment being repaid by Executive),
plus in the event that such amount is not repaid within 5 business days after
Executive is notified of such determination interest on the amount of such
repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code. In
the event that the Excise Tax is determined to exceed the amount taken into
account hereunder in calculating the Gross-Up Payment
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(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), Company shall make a further
Gross-Up Payment in respect of such excess (plus any interest, penalties or
additions payable by Executive with respect to such excess) within 5 business
days following the time that the amount of such excess is finally determined.
Executive and Company shall each reasonably cooperate with the other in
connection with any administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with respect to the Total
Payments.
(v) The Gross-Up Payment shall be made not later than
the 30th day following the Termination Date (or if there is no Termination
Date, then the 30th day after the date on which the Gross-Up Payment is
calculated for purposes of this Section 5(d)). At the time the Gross-Up Payment
is made, Company shall provide Executive with a written statement setting forth
the manner in which such payment was calculated and the basis for such
calculations including, without limitation, any opinions or other advice
Company has received from Tax Counsel, the Auditor or other advisors or
consultants (and any such opinions or advice which are in writing shall be
attached to the statement).
6. REIMBURSEMENT OF EXPENSES. During the Term of Employment,
Company shall reimburse Executive for reasonably documented travel,
entertainment and other expenses reasonably incurred by Executive in connection
with the performance of his duties hereunder and, in each case, in accordance
with the rules, customs and usages promulgated by Company from time to time in
effect.
7. BENEFITS. Executive shall be entitled to participate in and
be covered by any insurance plan (including but not limited to life, medical,
dental, health, accident, hospitalization and disability), 401(k) plan or
pension plan, all as then in effect for and benefiting any executive employees
of Company, excepting only that Executive shall not be eligible to participate
in the Parent Incentive Program unless Executive has duly elected to so
participate as hereinabove provided. Executive shall also be entitled to paid
vacation in each twelve-month period in accordance with the current vacation
policy of Company, subject to the reasonable requirements of Company as to the
timing of the taking of such vacation.
8. AGREEMENTS TO PROTECT COMPANY'S PROPRIETARY INFORMATION AND
GOODWILL. In consideration of Executive's employment and the compensation
payable in this Agreement, and in order to protect the confidential business
information and goodwill of Company's business that Executive has or will gain
from being unfairly used against Company, Executive agrees that, during
Executive's employment with Company and with respect to items (i) (A), (i) (B),
(ii) (A), (ii) (B), (ii) (C), (iii) (A), and (iii) (B) for the remainder of the
Trigger Period and with respect to items (i) (C), (i) (D), (ii) (D), (ii) (E),
(iii) (C) and (iii) (D) for a period of 36 months following the termination of
Executive's employment with Company for any reason, Executive will not,
directly or indirectly,
(i) with respect to Executive's activities in Nebraska,
engage in any of the following:
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(A) solicit or sell, either on behalf of
Executive or on behalf of any other person, firm, company or corporation,
products or services which compete with any of Company's or any of its
affiliates' products or services to those persons, companies, firms or
corporations who were or are customers of Company or any of its affiliates
during Executive's employment and with whom Executive has personal contact
during and as a result of Executive's employment with Company;
(B) interfere with Company's or any of its
affiliates' contractual business relationships with its suppliers;
(C) Solicit or in any manner encourage,
directly or indirectly, any employee of Company or any of its affiliates to
leave its employ;
(D) disclose to any person, or use or otherwise
exploit for Executive's own benefit or for the benefit of anyone other than
Company, any Confidential Information, whether prepared by Executive or not;
however, any Confidential Information may be disclosed (1) to officers,
representatives, employees and agents of Company who need to know such
Confidential Information in order to perform the services or conduct the
operations required or expected of them in the business, (2) in good faith by
Executive in connection with the performance of his duties hereunder or (3)
after prompt notice to Company, as may be required by law; (any trade secrets
will also be entitled to all of the protections and benefits under any
applicable law; if any information which Company deems to be a trade secret is
found by a court of competent jurisdiction not to be a trade secret for
purposes of this Section 8, then the Confidential Information will be
considered confidential information for purposes of this Section 8; in the case
of trade secrets, Executive hereby waives any requirement that Company submit
proof of the economic value of any trade secret or post any bond or other
security with respect to them); and
(ii) with respect to Executive's activities in any state
other than Nebraska or California, engage in any of the following:
(A) possess an ownership interest in, be
employed in a management position or hold a management consulting position
with, or otherwise have any material involvement with a concrete ready-mix,
asphalt, aggregate or related product business to the extent that it conducts
operations within a 100-mile radius of any facility owned by Company or its
affiliates on August 1, 2002, or within a 100-mile radius of any other location
at which Executive's employment by Company is based at any time during the 12
months prior to Executive's termination and as to which Company advises
Executive that it considers subject to this provision;
(B) solicit or sell, either on behalf of
Executive or on behalf of any person, firm, company or corporation, products or
services which compete with any of Company's or any of its affiliates' products
or services to those persons, companies, firms or corporations who were or are
customers of Company or any of its affiliates during Executive's employment;
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(C) interfere with Company's or any of its
affiliates' contractual business relationships with its suppliers;
(D) solicit or in any manner encourage,
directly or indirectly, any employee of Company or any of its affiliates to
leave its employ;
(E) disclose to any person, or use or otherwise
exploit for Executive's own benefit or for the benefit of anyone other than
Company, any Confidential Information, whether prepared by Executive or not.
However, any Confidential Information may be disclosed (1) to officers,
representatives, employees and agents of Company who need to know such
Confidential Information in order to perform the services or conduct the
operations required or expected of them in the business, (2) in good faith by
Executive in connection with the performance of his duties hereunder or (3)
after prompt notice to Company, as may be required by law; (any trade secrets
will also be entitled to all of the protections and benefits under any
applicable law; if any information which Company deems to be a trade secret is
found by a court of competent jurisdiction not to be a trade secret for
purposes of this Section 8, then the Confidential Information will be
considered confidential information for purposes of this Section 8; in the case
of trade secrets, Executive hereby waives any requirement that Company submit
proof of the economic value of any trade secret or post any bond or other
security with respect to them); and
(iii) with respect to Executive's activities in
California, engage in any of the following:
(A) solicit or sell, either on behalf of
Executive or on behalf of any person, firm, company or corporation, products or
services which compete with any of Company's or any of its affiliates' products
or services to the customers of Company and its affiliates listed on Exhibit A
attached hereto. Executive acknowledges and agrees that he has had and will
have personal contact with each such customer during and as a result of
Executive's employment with Company;
(B) interfere with Company's or any of its
affiliates' contractual business relationships with its suppliers;
(C) solicit or in any manner encourage,
directly or indirectly, any employee of Company or any of its affiliates to
leave its employ;
(D) disclose to any person, or use or otherwise
exploit for Executive's own benefit or for the benefit of anyone other than
Company, any Confidential Information, whether prepared by Executive or not.
However, any Confidential Information may be disclosed (A) to officers,
representatives, employees and agents of Company who need to know such
Confidential Information in order to perform the services or conduct the
operations required or expected of them in the business, (B) in good faith by
Executive in connection with the performance of his duties
7
hereunder or (C) after prompt notice to Company, as may be required by law;
(any trade secrets will also be entitled to all of the protections and benefits
under any applicable law; if any information which Company deems to be a trade
secret is found by a court of competent jurisdiction not to be a trade secret
for purposes of this Section 8, then the Confidential Information will be
considered confidential information for purposes of this Section 8; in the case
of trade secrets, Executive hereby waives any requirement that Company submit
proof of the economic value of any trade secret or post any bond or other
security with respect to them).
Immediately after termination of employment with Company, Executive will
deliver to Company all materials in his possession involving Confidential
Information. Executive acknowledges and agrees that the foregoing restrictions
are reasonable, necessary and appropriate to protect Company's proprietary
information and its business goodwill.
9. DEFENSE OF CLAIMS. Executive agrees that, from the date
hereof, and continuing for a reasonable period after termination of the Term of
Employment, Executive will reasonably cooperate with Company in defense of any
claims that may be made against Company provided such defense does not
interfere with Executive's then current employment. Company agrees to reimburse
Executive for all of Executive's reasonable out-of-pocket expenses associated
with such cooperation, including travel expenses and the fees and expenses of
Executive's legal counsel.
10. NON-DISPARAGEMENT. During and after the Term of Employment,
Executive agrees that he shall not make any false, defamatory or disparaging
statements about Company, its business, or the officers or directors of
Company, and Company agrees that neither the officers nor the directors of
Company shall make any false, defamatory or disparaging statements about
Executive.
11. CERTAIN OTHER DEFINITIONS.
(a) "Buyer" means the acquirer of control in a Change in Control
transaction,
(b) "Cause" means any of the following:
(i) Executive's conviction of, or plea of guilty or nolo
contendere to, a serious felony or a crime involving embezzlement,
conversion of property or moral turpitude;
(ii) Executive's commission of fraud, embezzlement or
conversion of property, as reasonably determined by the Board of
Directors based upon credible evidence;
(iii) a reasonable and good faith finding by the Board of
Directors of Executive's knowing breach of any of his fiduciary duties
to Company or making of a misrepresentation or omission which breach,
misrepresentation or omission would reasonably be expected to
materially adversely affect the business, properties, assets,
condition (financial or other) or prospects of Company, provided that
Executive has been given written notice thereof and
8
within 30 days after such notice fails to cure the breach,
misrepresentation or omission;
(iv) Executive's willful and continual neglect or failure
(other than by reason of Death or Disability) to discharge his
material duties, responsibilities or obligations prescribed by this
Agreement or any other agreement between Executive and Company,
provided that Executive has been given written notice thereof and
within 30 days after such notice fails to cure the neglect or failure;
(v) Executive's alcohol or substance abuse, which
materially interferes with Executive's ability to discharge his
duties, responsibilities and obligations prescribed by this Agreement,
provided that Executive has been given notice and 30 days from such
notice fails to cure such abuse;
(vi) Executive's material violation, with the actual
knowledge of Executive, of any obligations under this Agreement to
Company, including without limitation, those set forth in Sections 8
through 10 of this Agreement, provided that Executive has been given
written notice thereof and within 30 days after such notice fails to
cure such material violation; or
(vii) Executive's personal (as opposed to Company's)
material and knowing failure to observe or comply with all material
and relevant laws and regulations, whether as an officer, stockholder
or otherwise, such that the same would reasonably be expected to have
a material adverse effect on Company's ongoing business, operations,
conditions, other business relationships or properties, provided, that
Executive has been given written notice thereof and within 30 days
after such notice fails to cure such failure.
(c) "Change in Control" means the consummation of a transaction
or series of transactions whereby there is a change "in the ownership or
effective control" of Company, or a change "in the ownership of a substantial
portion of the assets" of Company, as those terms are used in Section
280G(b)(2)(A) of the Internal Revenue Code, which consummation occurs (no
matter when) substantially in accordance with and pursuant to a definitive
agreement executed prior to April 19, 2003.
(d) "Confidential Information" means any confidential information
including, without limitation, any study, data, calculations, software storage
media or other compilation of information, patent, patent application,
copyright, "know-how", trade secrets, customer lists, details of client or
consultant contracts, pricing policies, operational methods, marketing plans or
strategies, product development techniques or plans, business acquisition plans
or any portion or phase of any scientific or technical information, ideas,
discoveries, designs, inventions, creative works, computer programs (including
source or object codes), processes, procedures, formulae, improvements or other
proprietary or intellectual property of Company, whether or not in written or
tangible form, and whether or not registered, and including all files, records,
manuals, books, catalogues, memoranda, notes, summaries, plans, reports,
records, documents and other evidence thereof. Notwithstanding the foregoing,
the term "Confidential
9
Information" does not include, and there shall be no obligation hereunder with
respect to, information that is or becomes generally available to the public
other than as a result of a disclosure by Executive not permissible hereunder.
(e) "Constructive Termination" means such ongoing intentional or
negligent actions or inactions by, or permitted by, Company (including (1)
coercion, (2) physical or mental abuse, (3) material adverse change from now
current circumstances in the scope, nature, authority or duties of Executive's
employment, unless such change involves a transfer (without relocating from
either Omaha, Nebraska or Phoenix, Arizona) to a comparable position in a
division or a subsidiary of the United States parent of Company or any of its
affiliates and such division's or subsidiary's operations are comparable in
size to Company's operations as of the date of Change in Control, (4)
relocation from Omaha, Nebraska, except for relocation to Phoenix, Arizona, (5)
excessive (in relation to now current practice) required business travel,
unless such additional travel is required due to a change in the location of
Company's, or its United States parent's, corporate headquarters, and travel to
and from such headquarters is required of comparable executive employees of
Company or its United States parent, (6) failure to provide to Executive
compensation, authority, duties or benefits (including medical benefits, but
not including the Parent Incentive Program unless Executive has duly elected to
participate therein) which are comparable to those then provided to comparable
executive employees of Company, (7) other acts which could be deemed under
common law to be "constructive termination" of Executive's employment, or (8)
default by Company in performance of its obligations under this Agreement),
such that Executive reasonably and in good faith determines that he has
reasonable cause to, and he consequently does in fact, submit his resignation
hereunder, provided that Company has been given, prior to such resignation,
written notice thereof and within 30 days after such notice fails to cease and
cure such actions or inactions; however, no such notice shall be so required in
the event that one notice (relating to the same or different actions or
inactions) has been theretofore so given. Executive and Company acknowledge and
agree that, in the event of the occurrence of a Change in Control, the
provisions of the preceding sentence shall be liberally construed in favor of,
and so as to benefit to the maximum extent, Executive. A resignation by
Executive pursuant to the provisions of this subsection 11(e) shall not be
deemed to be a Resignation as defined in subsection 5(a)(v) above, but instead
the same shall be deemed to be a termination by Company by Constructive
Termination and thus to be a termination by Company for No Reason under
subsection 5(a)(iv) above. Notwithstanding the provisions of phrase 11e(4)
above, a Constructive Termination shall not be deemed to have occurred if,
subsequent to a Change in Control, Executive is both (1) required by Company to
relocate to any city within the continental United States, and (2) Company
reimburses Executive for all reasonable moving expenses and for the amount by
which the Appraised Value (as hereinafter defined) of Executive's Omaha,
Nebraska residence exceeds (if it does) the net sale proceeds received by
Executive from the sale thereof ("Appraised Value") means the average of the
appraised values of Executive's said residence as of the date of such Change in
Control determined by three licensed appraisers, one being selected by
Executive, one being selected by Company and the third being selected by the
first two appraisers, the cost of which shall be borne by Company).
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(f) "knowing" and "knowledge" means actual knowledge without any
duty of investigation.
(g) "Remaining Trigger Period" means that period during the
Trigger Period which (1) commences on the last to occur as between the
Termination Date and the Control Change Date, and (2) ends on the last day of
the Trigger Period.
(h) "Relevant Trigger Period" is that period during the Trigger
Period which (1) commences on the Termination Date and (2) ends on the last day
of the Trigger Period.
(i) "Scheduled Term End Date" means the date when Executive
ceases to be an employee of Company on account of Death, Disability, Cause, No
Reason or Resignation; however, if a Change in Control occurs, then the
"Scheduled Term End Date" means the third anniversary of the Control Change
Date.
(j) "Termination Payment" means that dollar amount which is equal
to the sum of
(i) the product obtained when 1/365th of Executive's
Base Salary in effect on the Termination Date is multiplied by the
number of days in the Relevant Trigger Period, plus
(ii) the sum of the minimum Annual Bonuses which would
have been due to Executive during or respecting the Relevant Trigger
Period.
Such Termination Payment shall not be reduced by any present value or similar
factor; Executive shall not be required to mitigate the amount of such
Termination Payment by securing other employment or otherwise; and such
Termination Payment shall not be reduced by reason of Executive's having
secured other employment or for any other reason.
(k) "Trigger Period" means that period which (1) commences on
April 19, 2002, and (2) ends on the third anniversary of the Control Change
Date. Without limiting the generality of the foregoing, if no Change in Control
occurs then no Trigger Period occurs.
12. CHANGE IN CONTROL. In the event of the occurrence of a Change
in Control:
(a) Company shall cause Buyer to thereafter continue the
employment of Executive under this Agreement and to otherwise assume and
perform all of Company's obligations under this Agreement in the place and
stead of Company; in other words, subsequent to a Change in Control, and as a
result thereof, Executive shall continue to be employed by Buyer under the
terms of this Agreement.
(b) Company shall cause Buyer to provide adequate security or
assurance to Executive that Buyer will in fact perform, and that Buyer has and
will have sufficient resources to perform, Company's and Buyer's obligations
hereunder, all as determined by Executive reasonably and in good faith.
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(c) For all purposes under this Agreement, a Change in Control
shall be deemed to have "occurred" or been "consummated" when the transaction
(or series of transactions) effecting the same are consummated (that is,
closed), and the date of such occurrence or consummation shall be herein called
the "Control Change Date."
(d) Wherever relevant in this Agreement, references to Company
after a Change in Control shall be deemed to be references to Buyer, as the
context suggests and requires.
(e) If Executive was not an employee of Company on the Control
Change Date on account of a prior termination of the Term of Employment on
account of Death, Disability or No Reason, then as of such Control Change Date,
Company shall cause Employee to have the same rights, and to be in the same
financial position (respecting stock, options, debentures or other securities
issued, or to be issued, by Company), as he would have had or been in had such
termination not occurred, the same to be effected by Company's cash payment to
Executive, within ten days after the Control Change Date, of the appropriate
dollar amount required by this subsection.
(f) If Buyer is an acquisition subsidiary or other entity, the
net assets of which consist principally of Company's assets or stock in
Company, then
(i) the obligations of Buyer hereunder shall be
unconditionally guaranteed by the parent entity thereof, and
(ii) where the context is relevant (such as in
determining benefits of comparable executives after a Change in
Control), references to Buyer shall be deemed to be and include
references to such parent or to relevant affiliates thereof.
13. NOTICE. Any notice, request, demand or other communication
required or permitted to be given under this Agreement shall be given in
writing and if delivered personally, sent by certified or registered mail,
return receipt requested, sent by overnight courier or sent by facsimile
transmission (with confirmation and a copy sent by mail within one day) as
follows (or to such other addressee or address as shall be set forth in a
notice given in the same manner):
If to Executive: Xxxxxxxxxxx X. Xxxxxx
00000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
If to Company: Kiewit Materials Company
0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: President
Telefax: 000.000.0000
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Any such notices shall be deemed to be given on the date personally delivered
or sent by facsimile transmission or such return receipt is issued or the day
after if sent by overnight courier.
14. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law, in
any jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or any other jurisdiction, but this Agreement shall
be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein. If any
court determines that any provision of this Agreement is unenforceable and
therefore acts to reduce the scope or duration of such provision, the provision
in its reduced form, shall then be enforceable.
15. BREACH; WAIVER OF BREACH; SPECIFIC PERFORMANCE. If either
party hereto breaches its obligations under this Agreement, the non-breaching
party shall be entitled to pursue all remedies available at law or in equity
for such breach. The waiver by one party hereto of a breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any other breach of such other party. Each party (and intended third-party
beneficiaries) hereto shall be entitled to enforce its rights in relation to
any breach by the other party of any provision of this Agreement and to
exercise all other rights existing in its favor. The parties hereto agree and
acknowledge that Company would be irreparably injured by a violation of
Sections 8 through 10 of this Agreement, that the provisions of such sections
are reasonable, that Company could not adequately be compensated in monetary
damages, in light of the sensitivity of the non-public information of Company
to which Executive will be exposed, and that Company may apply to any court of
law or equity of competent jurisdiction for specific performance and/or
injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions in order to enforce or prevent any
violations of such provisions of this Agreement.
16. ASSIGNMENT; THIRD PARTIES. Subject to the provisions of
Section 12, neither Executive nor Company may assign, transfer, pledge,
hypothecate, encumber or otherwise dispose of this Agreement or any of his or
its respective rights or obligations hereunder, without the prior written
consent of the other, which shall not be unreasonably withheld. The personal
representative of Executive (after his Death) is an intended third-party
beneficiary of this Agreement, and may enforce the obligations of Company, and
exercise the rights of Executive, hereunder after the Death of Executive, all
of which obligations and rights (as relevant) shall survive. All payments which
are required to be paid to Executive under this Agreement and which accrue
after the date of his death shall be paid when due to the personal
representative of his estate.
17. AMENDMENT; ENTIRE AGREEMENT. This Agreement may be changed,
modified or amended only by a written document signed by both parties hereto
which refers specifically to this Section 17. Except with respect to the
Indemnification Agreement, this Agreement constitutes the entire agreement
between the parties hereto
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concerning the subject matter hereof and supersedes in its entirety all prior
and contemporaneous agreements, if any, between the parties thereto. The
enforceability of this Agreement shall not cease or otherwise be adversely
affected by the termination of Executive's employment with Company.
18. CHOICE OF LAW; LITIGATION. This Agreement shall be governed
by, construed, applied and enforced in accordance with, the laws of the State
of Arizona. In the event that any party to this Agreement commences any
litigation, proceeding or other legal action in connection with or relating to
this Agreement, any related agreement or any matters described or contemplated
herein or therein, the parties hereto hereby agree (1) under all circumstances
absolutely and irrevocably to institute any litigation, proceeding or other
legal action in a court of competent jurisdiction located within the State of
Arizona, whether a state or federal court; (2) that in the event of any such
litigation, proceeding or action, such parties will consent and submit to the
personal jurisdiction of any such court described in clause (1) of this Section
18 and to service of process upon them in accordance with the rules and
statutes governing service of process (it being understood that nothing in this
section shall be deemed to prevent any party from seeking to remove any action
to a federal court in the State of Arizona); (3) to waive to the full extent
permitted by law any objection that they may now or hereafter have to the venue
of any such litigation, proceeding or action in any such court or that any such
litigation, proceeding or action was brought in any inconvenient forum; (4) to
designate, appoint and direct an authorized agent to receive on its behalf
service of any and all process and documents in any legal proceeding in the
State of Arizona, or as an alternative method of service, to service of process
in any legal proceeding by mailing of copies thereof to such party at its
address set forth herein for communications to such party; (5) that any service
made as provided herein shall be effective and binding service in every
respect; (6) if Executive prevails in such litigation, and if and to the extent
that the same is permitted by law, then Executive shall be entitled to
reimbursement of his reasonable legal fees and expenses of litigation incurred
in connection therewith; and (7) that nothing herein shall affect the rights of
any party to effect service of process in any other manner permitted by law.
19. FURTHER ACTION. Executive and Company hereby agree to perform
any further acts, and to execute and deliver any additional documents, which
may be reasonably required so as to effect, memorialize or carry out the
provisions of this Agreement.
20. INTENTION OF THE PARTIES. This Agreement is being executed in
connection with a concurrent determination by the Board of Directors that
Company should pursue a Change in Control transaction. The Board of Directors
has also determined that Executive's continued employment with, and efforts on
behalf of, Company respecting continuing operations and pursuit of a Change in
Control transaction are essential and of significant value to the Company. To
assure the same, Company is executing this Agreement with Executive and similar
agreements with other executives whose retention and efforts are similarly
important. Accordingly, the parties hereto hereby acknowledge and agree that
the provisions of this Agreement shall be liberally construed in favor of
Executive and so as to benefit him, to the maximum extent and, without limiting
the
14
generality of the foregoing, so as to provide to him assured and significant
compensation, severance and other benefits in the event of the termination of
the Term of Employment hereunder prior to the end of the Trigger Period. All
provisions of this Agreement shall be construed in accordance with the
foregoing.
21. PAYMENT OBLIGATIONS ABSOLUTE. Company acknowledges that its
obligations during and after the Term of Employment to pay and provide to
Executive the compensation, severance and other benefits provided for herein
shall be absolute and unconditional and shall not be affected by any
circumstances whatsoever, including, without limitation, any set-off,
counterclaim, recoupment, defense or other right which Company may claim
against Executive or anyone else. All amounts payable by Company to Executive
hereunder shall be paid without notice or demand. Each and every payment made
hereunder by Company shall be final, and Company shall not seek to recover all
or any part of such payment from Executive, or from whomsoever may be entitled
thereto, for any reason whatsoever. If Company shall fail to pay when due any
payment (including the Termination Payment) required by the provisions of this
Agreement, then from and after the due date thereof, the unpaid amount of such
payment shall thereafter, and until paid, bear interest at an annual rate of
interest equal to 400 basis points in excess of the Prime Rate published each
day in the Money Rates section of The Wall Street Journal, adjusted daily (or
in the absence of such publication, then such rate shall be determined as last
provided for therein).
22. MUTUAL RELEASES. Except as set forth in the last sentence of
this Section, Executive hereby releases Company from any and all claims or
causes of action which Executive may now have or claim against Company arising
out of Executive's employment with Company. Except as set forth in the last
sentence of this Section, Company hereby releases Executive from any and all
claims or causes of action which Company may now have or claim against
Executive arising out of Executive's employment with Company. The preceding two
sentences shall not relate to, cover or release any claims or causes of action
which either Executive or Company may have or claim against the other which
arise under the provisions of this Agreement or the Indemnification Agreement.
23. REVISION. This Executive Employment Agreement Revised July 8,
2002, is a revision of, and replaces and supercedes in its entirety, the
certain Executive Employment Agreement executed by and between Executive and
Company dated for reference purposes April 19, 2002.
24. REFERENCE DATE. This Agreement shall be dated for reference
purposes July 8, 2002.
EXECUTIVE:
/s/ Xxxxxxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxxxxxx X. Xxxxxx
KIEWIT MATERIALS COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx, Chairman
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