AMENDED AND RESTATED EXECUTIVE SEVERANCE AGREEMENT
AMENDED
AND RESTATED EXECUTIVE SEVERANCE AGREEMENT
This
Amended and Restated 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”) effective
as of October 1, 2010 (the “Effective
Date”). This Agreement supersedes in its entirety the
executive severance agreement entered into between Executive and the Company
effective as of July 31, 2007, and amended effective December 31,
2008. In consideration of the mutual agreements, provisions and
covenants contained herein, and intending to be legally bound hereby, the
Company and Executive agree as follows:
1. Termination
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 for the year prior to the year in which Executive’s
termination occurs, plus pro rata vacation days earned for the year in which
Executive’s termination occurs (collectively, the “Accrued
Payments”). 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 or applicable law, 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 30 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 immediately. 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 immediately.
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 4.11) equal to the Monthly
Base Salary in effect on the date of Involuntary Termination multiplied by
24;
(ii) a
lump-sum payment in cash (in accordance with Section 4.11) equal to the amount
of (a) Executive’s 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 date of Involuntary Termination, and
(b) Executive’s Accrued Payments.
(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) a
pro-rata portion of all stock options, restricted stock awards, restricted stock
units and similar equity awards granted to Executive by the Company prior to the
date of termination (collectively, the “Outstanding Equity
Awards”) that would otherwise have vested during the six month period
following the date of Involuntary Termination if such termination had not
occurred shall immediately vest and become exercisable on the date of
termination.
(v) The
remaining portion of all Outstanding Equity Awards, if any, which is unvested on
the date of Involuntary Termination shall be forfeited and canceled in its
entirety upon the date of Involuntary Termination.
2
(vi) Each
Outstanding Equity Award which is or becomes vested and exercisable on the date
of Involuntary Termination shall remain outstanding and exercisable until the
earlier of (a) the expiration of the twelve month period which commences on the
date of Involuntary Termination and (b) the expiration date of the original term
of the Outstanding Equity Award.
c. Death/Disability. Upon
Executive’s (i) death, or (ii) Disability. For purposes of this
Agreement, “Disability” means if
Executive becomes physically or mentally incapacitated and is therefore unable
for a period of one hundred twenty (120) consecutive days or one-hundred eighty
(180) days during any one (1) year period to perform his duties with
substantially the same level of quality as immediately prior to such
incapacity. 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
or Disability. Additionally, each Outstanding Equity Award which is
(i) vested and exercisable on the date of termination due to death or Disability
shall remain outstanding and exercisable until the earlier of (a) the expiration
of the twelve month period which commences on the date of such termination and
(b) the expiration date of the original term of the Outstanding Equity Award,
and (ii) unvested on the date of termination due to death or Disability shall be
forfeited and canceled in its entirety upon the date of such
termination.
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”, which
shall mean the occurrence of any of the following events, without Executive’s
consent: (i) a material 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, which in the case of any of (i) through
(vi) above remains uncorrected by the Company 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 60 days of the initial
existence of such specified event alleged to constitute Good
Cause. Executive shall not be entitled to terminate his employment
for Good Cause with respect to specified events unless Executive tenders
resignation for Good Cause within 30 days of the Company’s failure to cure. Upon
Executive’s termination of employment for Good Cause, Executive shall receive
all severance benefits and equity treatment described in Section 1.1.b. as if
Executive’s employment ended due to an Involuntary Termination by the Company
(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).
3
b. Voluntary
Termination. For any other reason whatsoever, in Executive’s
sole discretion, upon thirty (30) days advance written notice to the
Company. 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 or applicable law, shall cease as of the date
of Voluntary Termination, and Executive shall be entitled only to the Accrued
Payments. 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 Outstanding Equity
Awards that have not vested prior to the date of Voluntary Termination shall be
cancelled immediately.
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 equal to (a) the sum of (I) Executive’s Monthly Base
Salary in effect on the termination date multiplied by 12, and (II) the amount
of Executive’s full target bonus for the bonus year in which termination occurs,
multiplied by (b) the Change in Control Multiplier described on Exhibit “A”,
payable on the termination date (subject to Section 4.11);
4
(ii) a
lump-sum payment in cash (in accordance with Section 4.11) equal to the Accrued
Payments;
(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
be treated 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. Notwithstanding the foregoing, an offset may apply to
compensation or benefits under this Agreement only at the time when the
compensation or benefits otherwise would have been paid under this
Agreement.
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.
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.
5
2. Confidential
Information; Post-Employment Obligations
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.
2.2 Confidential Information;
Non-Disclosure.
a. Executive
acknowledges that the business of the Company and its Affiliates is highly
competitive and that the Company will provide Executive with access to
Confidential Information relating to the business of the Company and its
Affiliates. “Confidential
Information” means and includes the Company’s and its Affiliates’
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
Affiliates; 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 Affiliates 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 Affiliates’ methodologies and business
strategies, which will enable Executive to perform his job at the
Company.
6
b. Executive
agrees that Executive will not, at any time during or after Executive’s
employment with the Company, make any disclosure of any Confidential Information
or specialized training of the Company, or make any use thereof without the
express advance written consent of the Company, 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 any other person or entity, 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 Affiliates
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,
business or other entity that generates more than 10% of its annual revenue from
the sale of any concrete-related products and services that the Company or its
Affiliates 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.
7
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 2 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. Each party shall bear its own costs and expenses (including
reasonable attorneys’ fees and expenses) incurred in connection with any dispute
and/or arbitration arising out of or relating to this Agreement; provided,
however, that 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.
8
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.
3. Change
in Control
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;
9
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.
a. All
stock options, restricted stock awards, restricted stock units and similar
equity 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 upon the consummation of 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 upon the consummation of 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”) and the
Treasury Regulations promulgated thereunder (and such other Treasury or Internal
Revenue Service guidance) as in effect from time to time (“Section 409A”) 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. Subject to
Section 3.2(b) below, Executive may exercise any such stock options or other
exercisable awards at any time before the expiration of their
term.
10
b. Notwithstanding
anything in Section 3.2(a) to the contrary, in the event of a Change in Control,
the Company may, in its sole discretion, provide for the cancellation upon the
consummation of such Change in Control of all outstanding stock options,
restricted stock awards, restricted stock units and similar equity awards
granted to Executive by the Company prior to the date of such Change in Control,
whether or not vested and exercisable, and a payment in cash, property, or a
combination thereof, will be made to Executive within ten (10) days after the
consummation of the Change in Control in an amount equal to (a) in the case of
stock options and similar appreciation awards, the excess, if any, of (i) the
per share consideration received by a shareholder of the Company’s capital stock
in connection with the Change in Control (the “Change in Control
Price”) over (ii) the exercise price or purchase price per share, if any,
of the underlying award, multiplied by the number of unexercised shares subject
to such equity award, and (b) in the case of restricted stock awards, restricted
stock units and similar full-value equity awards, the Change in Control Price
multiplied by the number of shares subject to such equity award. If
the Change in Control Price is less than the exercise price or purchase price of
a stock option or similar equity award, such stock option or similar equity
award will be automatically cancelled with no payment therefor.
3.3 Section 280G
Cutback. 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 if
the aggregate of all Payments that would be subject to the Excise Tax, reduced
by all Federal, state and local taxes applicable thereto, including the Excise
Tax is less than the amount Executive would receive, after all such applicable
taxes, if Executive received Payments equal to an amount which is $1.00 less
than three times the Executive's “base amount”, as defined in and determined
under Section 280G of the Code, then, such Payments shall be reduced or
eliminated to the extent necessary so that the aggregate Payments received by
Executive will not be subject to the Excise Tax. If a reduction in
the Payments is necessary, reduction shall occur in the following order: first,
a reduction of cash payments not attributable to equity awards which vest in an
accelerated basis; second, a reduction in any other cash amount payable to
Executive; third, the reduction of any employee benefit valued as a “parachute
payment” (as defined in Section 280G of the Code); and fourth, the cancellation
of accelerated vesting of stock awards. If acceleration of vesting of
stock award compensation is to be reduced, such acceleration of vesting shall be
cancelled in the reverse order of the date of grant of Executive's stock
awards. All determinations made under this Section 3.3 and the
assumptions to be utilized in arriving at such determinations 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.
11
4. Miscellaneous
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 2, 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.
4.5 Governing
Law. This Agreement shall be deemed to be made in the State of
Delaware, and the validity, interpretation, construction, and performance of
this Agreement in all respects shall be governed by the laws of the State of
Delaware without regard to its principles of conflicts of law. No
provision of this Agreement or any related document will be construed against or
interpreted to the disadvantage of any party hereto by any court or other
governmental or judicial authority by reason of such party having or being
deemed to have structured or drafted such provision.
4.6 Consent to Jurisdiction;
Waiver of Jury Trial.
a. Except
as otherwise specifically provided herein, Executive and the Company each hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the District of Delaware (or, if subject matter jurisdiction in that
court is not available, in any state court located within Wilmington, Delaware)
over any dispute arising out of or relating to this Agreement. Except
as otherwise specifically provided in this Agreement, the parties undertake not
to commence any suit, action or proceeding arising out of or relating to this
Agreement in a forum other than a forum described in this Section 4.6; provided, however, that nothing
herein shall preclude the Company or Executive from bringing any suit, action or
proceeding in any other court for the purposes of enforcing the provisions of
this Section 4.6 or enforcing any judgment obtained by the
Company.
12
b. The
agreement of the parties to the forum described in Section 4.6(a) is independent
of the law that may be applied in any suit, action, or proceeding and the
parties agree to such forum even if such forum may under applicable law choose
to apply non-forum law. The parties hereby waive, to the fullest
extent permitted by applicable law, any objection which they now or hereafter
have to personal jurisdiction or to the laying of venue of any such suit, action
or proceeding brought in an applicable court described in Section 4.6(a), and
the parties agree that they shall not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such
court. The parties agree that, to the fullest extent permitted by
applicable law, a final and non-appealable judgment in any suit, action or
proceeding brought in any applicable court described in Section 4.6(a) shall be
conclusive and binding upon the parties and may be enforced in any other
jurisdiction.
c. The
parties hereto irrevocably consent to the service of any and all process in any
suit, action or proceeding arising out of or relating to this Agreement by the
mailing of copies of such process to such party at such party’s address
specified in Section 4.2.
d. Each
party hereto hereby waives, to the fullest extent permitted by applicable law,
any right it may have to a trial by jury in respect of any suit, action or
proceeding arising out of or relating to this Agreement. Each party
hereto (i) certifies that no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such party would not, in the
event of any action, suit or proceeding, seek to enforce the foregoing waiver
and (ii) acknowledges that it and the other party hereto has been induced to
enter into this Agreement by, among other things, the mutual waiver and
certifications in this Section 4.6(d).
e. Each
party shall bear its own costs and expenses (including reasonable attorneys’
fees and expenses) incurred in connection with any dispute arising out of or
relating to this Agreement.
4.7 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.
13
4.8 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 Affiliates relating to the terms of Executive’s
termination by the Company or any of its Affiliates. 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 August 31, 2010, 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.
4.9 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.
4.10 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.
4.11 Time of Payments and Section
409A.
a. All
amounts payable under Sections 1.1.b, 1.2.a and 1.3 of this Agreement shall be
paid only after Executive’s timely execution, without revocation, of a waiver
and general release of claims in favor of the Company, its subsidiaries and
Affiliates, and their respective predecessors and successors, and all of the
respective current or former directors, officers, employees, shareholders,
partners, members, agents or representatives of any of the foregoing, in a form
satisfactory to the Company. The Company shall provide the
aforementioned release to Executive within 10 days following the date of
Executive’s termination of employment. Executive’s execution of the
release shall be considered timely only if the release is executed and returned
to the Company by the deadline specified by the Company, which deadline shall
not be earlier than the 21st day following the date the release is provided to
Executive nor later than the 55th day following the date of termination of
Executive’s employment. If Executive has timely returned the executed
release and the revocation period has expired, the amounts payable under
Sections 1.1.b, 1.2.a and 1.3 of this Agreement, to the extent payable in a lump
sum, shall be paid on the 65th day following the date of Executive’s termination
of employment.
14
b. The
parties intend that any amounts payable hereunder that could constitute
“deferred compensation” within the meaning of Section 409A will be compliant
with Section 409A, and, accordingly, to the maximum extent permitted, this
Agreement shall be interpreted to be in compliance therewith. With
respect to the time of payments of any amounts under this Agreement that are
“deferred compensation” subject to Section 409A, references in this
Agreement to “termination of employment” (and substantially similar phrases)
shall mean “separation from service” within the meaning of
Section 409A. For purposes of Section 409A, each of the payments that
may be made under this Agreement are designated as
separate payments for purposes of Treasury Regulations Section
1.409A-1(b)(4)(i)(F), 1.409A-1(b)(9)(iii) and 1.409A-1(b)(9)(v)(B).
c. Notwithstanding
anything in this Agreement to the contrary, if Executive is deemed to be a
“specified employee” within the meaning of Section 409A(a)(2)(B)(i) and
Executive is not “disabled” within the meaning of Section 409A(a)(2)(C), no
payments hereunder to be made in connection with a “separation
from service” that are “deferred compensation” subject to Section 409A shall be
made to Executive prior to the date that is six (6) months after the date
of Executive’s “separation from service” (as defined in Section 409A)
or, if earlier, Executive’s date of death. This Section 4.11 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 in a
single lump sum on the earliest date permitted under Section 409A that is also a
business day. 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, if any. For purposes of determining the identity
of specified employees, the Company may establish procedures as it deems
appropriate in accordance with Section 409A.
d. For
the avoidance of doubt, it is intended that any indemnification payment or
expense reimbursement made hereunder shall be exempt from
Section 409A. Notwithstanding the foregoing, if any
indemnification payment or expense reimbursement made hereunder shall be
determined to be “deferred compensation” within the meaning of
Section 409A, then (i) the amount of the indemnification payment or
expense reimbursement during one taxable year shall not affect the amount of the
indemnification payments or expense reimbursement during any other taxable year,
(ii) the indemnification payments or expense reimbursement shall be made on
or before the last day of Executive’s taxable year following the year in which
the expense was incurred, and (iii) the right to indemnification payments
or expense reimbursement hereunder shall not be subject to liquidation or
exchange for another benefit.
15
4.12 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.
4.13 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.
16
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 | ||
Date: October 1, 2010 | Title: President & CEO | |
Date: October 1, 2010 |
17
EXHIBIT
“A” TO EXECUTIVE SEVERANCE 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:
|
If
Executive’s employment is terminated under Section 1.1 or 1.2, the Period
of Post-Employment Non-Competition Obligations shall be one year from the
date of termination. If Executive’s employment is terminated
under Section 1.3, the Period of Post-Employment Non-Competition
Obligations shall commence on the date of termination and continue for
period of time equal to (a) 12 months multiplied by (b) the Change in
Control Multiplier.
|
|
Monthly
Base Salary:
|
$22,917
or such higher rate as may be determined by the Company from time to
time
|
|
Annual
Paid Vacation:
|
|
Four
weeks
|
18