EXECUTIVE SEVERANCE AGREEMENT
Exhibit
10.1
This
Executive Severance 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 Xxxx X. Xxxxxxxx (“Executive”). This Agreement
is effective as of July 31, 2007 (the “Effective Date”). The Company
and Executive agree as follows:
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1.
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Termination
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1.1 Termination By the
Company. The Company may terminate Executive’s employment for
any of the following reasons:
a. Termination for
Cause. For “Cause” upon the determination by a majority of the
Company’s Board of Directors 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 to the Company in his current Position (as set forth on
Exhibit “A” or any Position to which Executive has been promoted (provided
Executive has accepted such promotion); (ii) Executive’s final conviction of a
felony by a trial court, or Executive’s entry of a plea of nolo contendere to a felony
charge; (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. If the Company
terminates Executive’s employment for Cause, Executive shall be entitled only to
Executive’s (a) pro rata Monthly Base Salary (as defined in Exhibit “A”) through
the date of such termination, and (b) unused vacation days earned the year prior
to the year in which Executive’s termination for Cause occurs, plus pro rata
vacation days earned for the year in which Executive’s termination for Cause
occurs. 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 as of the date of such termination. 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 (or, if earlier, the expiration of their term),
(b) all 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.
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Execution Version
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Exhibit
10.1
b. Involuntary
Termination. Without Cause at the Company’s option at any
time, with or without notice and for any reason whatsoever, other than death,
disability or for Cause, in the sole discretion of the Company (“Involuntary
Termination”). Upon an Involuntary Termination, Executive shall
receive all of the following severance benefits (provided, however, that, in the
event of an Involuntary Termination in circumstances in which the provisions of
Section 1.3 would be applicable, the provisions of Section 1.3 will instead
apply):
(i) a
lump-sum payment in cash (in accordance with Section 4.10) equal to the Monthly
Base Salary in effect on the date of Involuntary Termination multiplied by 12,
together with a prorated amount of Monthly Base Salary for any partial month in
which such termination occurs;
(ii) a
lump-sum payment in cash (in accordance with Section 4.10) equal to the amount
of Executive’s (a) target bonus for the bonus year in which Executive’s
Involuntary Termination occurs, prorated based on the number of days in the
bonus year that have elapsed prior to the Involuntary Termination, and (b)
unused vacation days earned the year prior to the year in which Executive’s
Involuntary Termination occurs, plus pro rata vacation days earned in the year
in which Executive’s Involuntary Termination occurs;
(iii) provided
that Executive is eligible for and timely elects to receive group medical
continuation coverage under COBRA, the Company will pay 100% of applicable
medical continuation premiums for the benefit of Executive (and his covered
dependents as of the date of his termination, if any) under Executive’s
then-current plan election for 18 months after termination, with such coverage
to be provided under the closest comparable plan as offered by the Company from
time to time; 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,
forfeiture conditions or other conditions or criteria applicable to any such
awards shall lapse on the date of Involuntary Termination. Executive
may exercise any such stock options or other exercisable awards at any time
before the expiration of their term.
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Execution Version
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Exhibit
10.1
c. Death/Disability. Upon
Executive’s (i) death, or (ii) becoming unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (iii) termination of
employment as a result of 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. 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 1.1.b. as if
Executive’s employment ended due to an Involuntary Termination by the Company as
of the date of death, date of disability as described in (ii) above, or as of
the date of termination due to permanent and total incapacity as described in
(iii) above, 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.
1.2 Termination By
Executive. Executive may terminate Executive’s employment 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) a diminution in Executive’s then current
Monthly Base Salary, (ii) a material change in the location of Executive’s
principal place of employment by the Company from the “Location” set out on
Exhibit “A,” (iii) any material diminution 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 or any title or Position
to which Executive has been promoted (provided, however, that 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 Executive’s authority, duties and responsibilities will
not be deemed to have been materially diminished solely due to the cessation of
such publicly-traded company duties and responsibilities), (v) any material
breach by the Company of any material provision of this Agreement, or (vi) any
restructuring of Executive’s direct reporting relationship such that Executive
does not report to the Company’s Chief Executive Officer, any of which remain
uncorrected for 30 days following Executive’s written notice to the Company of
Good Cause. Executive must provide such written notice to the Company
of Good Cause within 90 days of the existence of such condition. Upon
Executive’s termination for Good Cause, Executive shall receive all of the
following severance benefits (provided, however, that, in the event of a
termination for Good Cause in circumstances in which the provisions of Section
1.3 would be applicable, the provisions of Section 1.3 will instead
apply):
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Execution Version
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Exhibit
10.1
(i) a
lump-sum payment in cash (in accordance with Section 4.10) equal to the Monthly
Base Salary in effect on the date of termination for Good Cause multiplied by
12, together with a prorated amount of Monthly Base Salary for any partial month
in which such termination occurs;
(ii) a
lump-sum payment in cash (in accordance with Section 4.10) equal to the amount
of Executive’s (a) target bonus for such bonus year, prorated based on the
number of days in the bonus year that have elapsed prior to the termination for
Good Cause; and (b) unused vacation days earned the year prior to the year in
which Executive’s termination for Good Cause occurs, plus pro rata vacation days
earned in the year in which Executive’s termination for Good Cause
occurs;
(iii) provided
that Executive is eligible for and timely elects to receive group medical
continuation coverage under COBRA, the Company will pay 100% of applicable
medical continuation premiums for the benefit of Executive (and his covered
dependents as of the date of his termination, if any) under Executive’s
then-current plan election for 18 months after termination, with such coverage
to be provided under the closest comparable plan as offered by the Company from
time to time; 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,
forfeiture conditions or other conditions or criteria applicable to any such
awards shall lapse on the date of termination for Good
Cause. Executive may exercise any such stock options or other
exercisable awards at any time before the expiration of their term.
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”), 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 (a) pro rata Monthly Base Salary through such date of Voluntary
Termination; and (b) unused vacation days earned the year prior to the year in
which Executive’s Voluntary Termination occurs, plus pro rata vacation days
earned for the year in which Executive’s Voluntary Termination
occurs. 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 90 days after the date of Voluntary Termination (or, if earlier,
the expiration of their term), 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.
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Exhibit
10.1
1.3 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 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 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 the sum of
(a) Executive’s Monthly Base Salary in effect on the termination date multiplied
by 12, and (b) the amount of Executive’s full target bonus for such bonus year,
and multiplying the sum of (a) and (b) by the Change in control multiplier
described on Exhibit “A”;
(ii) a
lump-sum payment in cash (payable on the termination date) equal to the unused
vacation days earned the year prior to the year in which Executive’s employment
is terminated, plus pro rata vacation days earned in the year in which
Executive’s employment is terminated;
(iii)
provided that Executive is eligible for and timely elects to receive group
medical continuation coverage under COBRA, the Company will pay 100% of
applicable medical continuation premiums for the benefit of Executive (and his
covered dependents as of the date of his termination, if any) under Executive’s
then-current plan election for 18 months after termination, with such coverage
to be provided under the closest comparable plan as offered by the Company from
time to time; and
(iv)
all stock options, restricted stock awards, restricted
stock units and similar awards granted to Executive by the Company prior to the
termination date shall vest in accordance with Section 3.2.
1.4 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.
1.5 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.
1.6 Certain Obligations
Continue. Upon termination of Executive’s employment, 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 2 and Sections 4.1 and 4.4 of this
Agreement and the Company’s or its successor’s obligations under Article 3 and
Sections 1.1, 1.2, 1.3, 2.6, 4.1 and 4.4 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 as provided herein.
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Execution Version
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Exhibit
10.1
1.7 Notice of
Termination. Any termination of Executive’s employment 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 Executive’s employment 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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2.
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Confidential
Information; Post-Employment
Obligations
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2.1 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.
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Exhibit
10.1
2.2 Confidential Information;
Non-Disclosure. Executive acknowledges that the business of
the Company and its affiliated entities is highly competitive and that the
Company 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 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 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 2.2 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.
2.3 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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Exhibit
10.1
2.4 Non-Solicitation of
Customers. During Executive’s employment with the Company and
for the Period of Post-Employment Non-Competition Obligations, 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
24 months, (i) provided services to, worked with, solicited or had or made
contact with, or (ii) had access to information and files
concerning.
2.5 Non-Solicitation of
Employees. During Executive’s employment with the Company, and
for the Period of Post-Employment Non-Competition Obligations, 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 employment, and will not assist any other person or
entity in such a solicitation.
2.6 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 Article 3 of 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 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, 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.
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Exhibit
10.1
2.7 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.
2.8 Modification. Executive
and the Company agree that if the scope or enforceability of a restrictive
covenant described in this Article 2 is disputed, the arbitrator or court with
competent jurisdiction may modify and enforce the covenant to the extent that it
determines the covenant to be reasonable.
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3.
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Change
in Control
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3.1 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
non-employee 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 of
the non-employee members of the Board, 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
80% of the directors comprising the Incumbent Board then still in office (or
whose election or nomination was previously so approved) shall be, for purposes
of this clause (v), considered as though such person were a member of the
Incumbent Board;
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Exhibit
10.1
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 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 under 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.
3.2 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, forfeiture
conditions or other conditions or criteria applicable to any such awards shall
lapse immediately prior to such Change in Control. Notwithstanding
the foregoing, any such award that is subject to Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) shall only fully vest and become
exercisable in full immediately upon a “change in ownership or effective
control” as defined in Section 409A that also constitutes a Change in Control as
defined in Section 3.1 above. 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 either:
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Exhibit
10.1
(a) issue
an option (the “Successor Option”), to purchase common stock of such successor
or Parent in an amount such that if Executive exercised the Successor Option
immediately after the Change in Control, he would be in the same economic
position as if he had exercised the Terminated Option immediately before the
Change in Control, with such substitution to be made in accordance with the
requirements of Section 409A of the Code. 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 cash amount within 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 cash amount and to such gain,
and such amount shall also reflect other differences to the Executive between
receiving a cash amount under this clause (b) and receiving a Successor Option
under clause (a) above.
3.3 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 Code (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 Payment. The Gross-Up
Payment shall be made to Executive as soon as practicable after written request
for payment is submitted by Executive to the Company or its successor, but in no
event later than the end of the calendar year next following the year in which
Executive remits the related taxes. For purposes of this Section 3.3,
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 3.3, 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 registered 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 3.3, if any tax authority determines that a greater Excise Tax should be
imposed upon a Payment than is determined by the Accounting Firm pursuant to
this Section 3.3, 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 the Company receiving written notice of such determination.
Xxxxxxxx
Execution Version
11
Exhibit
10.1
|
4.
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Miscellaneous
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4.1 Statements About the Company
or Executive. Except as may be required to comply with a court
order, lawful subpoena or governmental request for information, 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.
4.2 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 0000, Xxxxxxx, Xxxxx 00000. Notices and
communications to Executive shall be sent to the address Executive most recently
provided in writing to the Company.
4.3 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.
4.4 Mediation. If
a dispute arises out of or relates to Executive’s termination, other than a
dispute regarding Executive’s obligations under Article 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.
4.5 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.
4.6 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.
Xxxxxxxx
Execution Version
12
Exhibit
10.1
4.7 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 termination by the Company or any of its affiliated
entities. 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
Indemnification Agreement, dated May 15, 2007, 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.
4.8 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.
4.9 Withholding. All
payments required to be made to Executive pursuant to this Agreement shall be
subject to the withholding of amounts relating to income and employment taxes
and other customary employee deductions in conformity with the Company’s payroll
policies in effect from time to time.
4.10 Time of
Payments. All amounts payable under Sections 1.1.b and 1.2 of
this Agreement shall be paid within 10 days after Executive’s execution without
revocation of a release in a form satisfactory to the Company and within the
time period prescribed by the Company (which may not be less than 21 days after
the date of termination of employment). If Executive is a “specified
employee,” as such term is defined in Section 409A and determined as described
below in this Section 4.10, any payments payable as a result of Executive’s
termination (other than death) shall not be payable before the earliest of (i)
the date that is six months after Executive’s termination, (ii) the date of
Executive’s death, or (iii) the date that otherwise complies with the
requirements of Section 409A. This Section 4.10 shall be applied by
accumulating all payments that otherwise would have been paid within six months
of Executive’s termination and paying such accumulated amounts at the earliest
date which complies with the requirements of Section 409A. Executive
shall be a “specified employee” for the twelve-month period beginning on April 1
of a year if Executive is a “key employee” as defined in Section 416(i) of the
Code (without regard to Section 416(i)(5)) as of December 31 of the preceding
year or using such dates as designated by the Company in accordance with Section
409A and in a manner that is consistent with respect to all of the Company’s
nonqualified deferred compensation plans. For purposes of determining
the identity of specified employees, the Company may establish procedures as it
deems appropriate in accordance with Section 409A.
4.11 Headings. The
Article and Section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
4.12 Counterparts. This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.
Xxxxxxxx
Execution Version
13
Exhibit
10.1
IN
WITNESS WHEREOF, the Company and Executive have executed this Agreement in
multiple originals to be effective on the Effective Date.
|
Xxxx X. Xxxxxxxx
(“Executive”)
|
U.S. Concrete, Inc. (the
“Company”)
|
|
By:
|
/s/
Xxxx X. Xxxxxxxx
|
By:
|
/s/
Xxxxxxx X. Xxxxxx
|
|
Printed
Name:
|
Xxxxxxx
X. Xxxxxx
|
|
Title:
|
President
and CEO
|
|
Date:
|
July
31, 2007
|
|
Date:
|
July
31, 2007
|
Xxxxxxxx
Execution Version
14
Exhibit
10.1
Exhibit
“A” to Employment Agreement Between
The
Company And Xxxx X. Xxxxxxxx
|
Position:
|
Vice
President, General Counsel and Corporate Secretary
|
|
|
Location:
|
Houston,
Texas
|
|
|
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.
|
|
|
Change
in control multiplier:
|
2.5
|
|
|
Period
of Post-Employment
Non-Competition
Obligations:
|
One
year from the date of termination if Executive’s employment is terminated
for Cause under Section 1.1.a. If Executive’s employment is
terminated under Sections 1.1.b., 1.1.c., 1.2.a. or 1.3 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 equal to the number of months of Monthly Base Salary upon which
severance benefits or Change in Control benefits were
determined. If Executive’s employment is terminated under
Section 1.2.b., then the Period of Post-Employment Non-Competition
Obligations shall be one year from the date of termination. If
Executive’s employment is terminated under any other section of this
Agreement, there shall be no Period of Post-Employment Non-Competition
Obligations.
|
|
|
Monthly
Base Salary:
|
$16,667
or such higher rate as may be determined by the Company from time to
time
|
|
|
Annual
Paid Vacation:
|
|
Four
weeks
|
Xxxxxxxx
Execution Version
15
Exhibit
10.1
|
Xxxx X. Xxxxxxxx
(“Executive”)
|
U.S. Concrete, Inc. (the
“Company”)
|
|
By:
|
/s/
Xxxx X. Xxxxxxxx
|
By:
|
/s/
Xxxxxxx X. Xxxxxx
|
|
Printed
Name:
|
Xxxxxxx
X. Xxxxxx
|
|
Title:
|
President
and CEO
|
|
Date:
|
July
31, 2007
|
|
Date:
|
July
31, 2007
|
Xxxxxxxx
Execution Version
16
