EXHIBIT 10.1

 

FORM CHANGE OF CONTROL EMPLOYMENT AGREEMENT FOR TOM HILL, JOHN McPHERSON,
MICHAEL MILLS AND STAN BASS

 

CHANGE OF CONTROL EMPLOYMENT AGREEMENT, dated as of the 1st day of January,
2016, (this “Agreement”), by and between, Vulcan Materials Company, a New Jersey
corporation (the “Company”), and [Name of Executive] (the “Executive”).

 

WHEREAS, the Company has previously entered into a Change of Control and
non-Competition Agreement with the Executive dated as of [Date of Previous
Agreement] (the “Prior Agreement”);

 

WHEREAS, the Board of Directors of the Company (the “Board”) continues to
believe that it is in the best interests of the Company and its shareholders to
assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined herein) and that it is imperative to diminish the inevitable distraction
of the Executive by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control, to encourage the Executive’s full
attention and dedication to the Company in the event of any threatened or
pending Change of Control, to provide the Executive with compensation and
benefits arrangements upon a Change of Control that ensure that the compensation
and benefits expectations of the Executive will be satisfied and provide the
Executive with compensation and benefits arrangements that are competitive with
those of other corporations

 

WHEREAS, in order to accomplish these objectives, the Board has determined to
enter into this Agreement, which shall supersede and replace the Prior Agreement
effective as of the day first written above.

 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

Section 1.          Certain Definitions.

 

(a)          “Effective Date” means the first date during the Change of Control
Period (as defined herein) on which a Change of Control occurs. Notwithstanding
anything in this Agreement to the contrary, if (A) the Executive’s employment
with the Company is terminated by the Company, (B) the Date of Termination is
prior to the date on which a Change of Control occurs, and (C) it is reasonably
demonstrated by the Executive that such termination of employment (i) was at the
request of a third party that has taken steps reasonably calculated to effect a
Change of Control or (ii) otherwise arose in connection with or anticipation of
a Change of Control, then for all purposes of this Agreement, the “Effective
Date” means the date immediately prior to such Date of Termination.

 

(b)          “Change of Control Period” means the period commencing on the date
hereof and ending on the third anniversary of the date hereof; provided,
however, that, commencing on the date one year after the date hereof, and on
each annual anniversary of such date (such date and each annual anniversary
thereof, the “Renewal Date”), unless previously terminated, the Change of
Control Period shall be automatically extended so as to terminate three years
from such Renewal Date, unless, at least 60 days prior to the Renewal Date, the
Company shall give notice to the Executive that the Change of Control Period
shall not be so extended.

 

 

 

 

(c)          “Affiliated Entity” means any entity controlled by, controlling or
under common control with the Company.

 

(d)          “Change of Control” means the first to occur of the following:

 

(1)         The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either (i) the then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (ii) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this Section 1(d)(1), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company; (ii) any acquisition by the Company; (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Affiliated Entity; or (iv) any acquisition by
any entity pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of Section 1(d)(3); or

 

(2)         Individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual was a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or

 

(3)         Consummation of a reorganization, merger or consolidation or similar
corporate transaction involving the Company or any of its subsidiaries, a sale
or other disposition of all or substantially all of the assets of the Company,
or the acquisition of assets or stock of another entity by the Company or any of
its subsidiaries (each, a “Business Combination”), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities that were the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then-outstanding shares of
common stock (or, for a noncorporate entity, equivalent securities) and the
combined voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors (or, for a noncorporate entity,
equivalent governing body), as the case may be, of the entity resulting from
such Business Combination (including, without limitation, an entity that, as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (ii) no Person
(excluding any entity resulting from such Business Combination or any employee
benefit plan (or related trust) of the Company or such entity resulting from
such Business Combination) beneficially owns, directly or indirectly, 30% or
more of, respectively, the then-outstanding shares of common stock (or, for a
noncorporate entity, equivalent securities) of the entity resulting from such
Business Combination or the combined voting power of the then-outstanding voting
securities of such entity except to the extent that such ownership existed prior
to the Business Combination, and (iii) at least a majority of the members of the
board of directors (or, for a noncorporate entity, equivalent governing body) of
the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or

 

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(4)         Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

 

Section 2.          Employment Period. The Company hereby agrees to continue the
Executive in its employ, subject to the terms and conditions of this Agreement,
for the period commencing on the Effective Date and ending on the second
anniversary of the Effective Date (the “Employment Period”). The Employment
Period shall terminate upon the Executive’s termination of employment for any
reason.

 

Section 3.          Terms of Employment. (a) Position and Duties. (1) During the
Employment Period, (A) the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall
be at least commensurate in all respects with the most significant of those
held, exercised and assigned at any time during the 120-day period immediately
preceding the Effective Date, (B) the Executive’s services shall be performed at
the office where the Executive was employed immediately preceding the Effective
Date or at any other location less than 35 miles from such office, and (C) the
Executive shall not be required to travel on Company business to a substantially
greater extent than required during the 120-day period immediately prior to the
Effective Date. During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive’s
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period, it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions, and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that, to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive’s
responsibilities to the Company.

 

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(b)          Compensation. (1) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary (the “Annual Base Salary”) at an
annual rate at least equal to 12 times the highest monthly base salary paid or
payable, including any base salary that has been earned but deferred, to the
Executive by the Company and the Affiliated Entities in respect of the one-year
period immediately preceding the month in which the Effective Date occurs. The
Annual Base Salary shall be paid at such intervals as the Company pays executive
salaries generally. During the Employment Period, the Annual Base Salary shall
be reviewed at least annually, beginning no more than 12 months after the last
salary increase awarded to the Executive prior to the Effective Date. Any
increase in the Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. The Annual Base Salary shall
not be reduced after any such increase and the term “Annual Base Salary” shall
refer to the Annual Base Salary as so increased.

 

(2)         Annual Bonus. In addition to Annual Base Salary, the Executive shall
be awarded, for each fiscal year ending during the Employment Period, an annual
bonus (the “Annual Bonus”) in cash at least equal to the greater of (A) the
average of the Executive’s bonuses under the Company’s Management Incentive
Plan, or any comparable bonus under any predecessor or successor plan (the
“Bonus Plan”), for the last three full fiscal years prior to the Effective Date
(or such shorter period of employment of the Executive) and (B) the Executive’s
annual bonus under the Bonus Plan, determined based on the target annual bonus
percentage in effect with respect to the Executive immediately prior to the
Change of Control for the fiscal year in which the Change of Control occurs or,
if no such target annual bonus percentage has been established for such year,
the target annual bonus percentage established for the fiscal year ending
immediately prior to the Effective Date (such higher amount, the “Recent Annual
Bonus”). For purposes of any determinations hereunder, any bonus amounts shall
be annualized in the event that the Executive was not employed by the Company
for the whole of any such fiscal year and, to the extent relevant to such
determination, shall be based on the Executive’s Annual Base Salary. Each such
Annual Bonus shall be paid no later than two and a half months after the end of
the fiscal year for which the Annual Bonus is awarded, unless the Executive
shall elect to defer the receipt of such Annual Bonus pursuant to an arrangement
that meets the requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”).

 

(3)         Long-Term Cash and Equity Incentives, Savings and Retirement Plans.
During the Employment Period, the Executive shall be entitled to participate in
all long-term cash incentive, equity incentive, savings and retirement plans,
practices, policies and programs applicable generally to other peer executives
of the Company and the Affiliated Entities, but in no event shall such plans,
practices, policies and programs provide the Executive with incentive
opportunities (measured with respect to both regular and special incentive
opportunities, to the extent, if any, that such distinction is applicable),
savings opportunities and retirement benefit opportunities, in each case, less
favorable, in the aggregate, than the most favorable of those provided by the
Company and the Affiliated Entities for the Executive under such plans,
practices, policies and programs as in effect at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and the Affiliated Entities.

 

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(4)         Welfare Benefit Plans. During the Employment Period, the Executive
and/or the Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and the Affiliated
Entities (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and the Affiliated Entities, but in no event shall
such plans, practices, policies and programs provide the Executive with benefits
that are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and the Affiliated
Entities.

 

(5)         Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the most favorable policies, practices and
procedures of the Company and the Affiliated Entities in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and the
Affiliated Entities.

 

(6)         Fringe Benefits. During the Employment Period, the Executive shall
be entitled to fringe benefits, including, without limitation, tax and financial
planning services, payment of club dues and, if applicable, use of an automobile
and payment of related expenses, in accordance with the most favorable plans,
practices, programs and policies of the Company and the Affiliated Entities in
effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and the Affiliated Entities.

 

(7)         Office and Support Staff. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to personal secretarial and other
assistance, at least equal to the most favorable of the foregoing provided to
the Executive by the Company and the Affiliated Entities at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to
the Executive, as provided generally at any time thereafter with respect to
other peer executives of the Company and the Affiliated Entities.

 

(8)         Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable plans, policies,
programs and practices of the Company and the Affiliated Entities as in effect
for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and the Affiliated Entities.

 

Section 4.          Termination of Employment. (a) Death or Disability. The
Executive’s employment shall terminate automatically if the Executive dies
during the Employment Period. If the Company determines in good faith that the
Disability (as defined herein) of the Executive has occurred during the
Employment Period (pursuant to the definition of “Disability”), it may give to
the Executive written notice, in accordance with Section 11(b), of its intention
to terminate the Executive’s employment. In such event, the Executive’s
employment with the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive (the “Disability Effective Date”);
provided that, within the 30 days after such receipt, the Executive shall not
have returned to full-time performance of the Executive’s duties. “Disability”
means the absence of the Executive from the Executive’s duties with the Company
on a full-time basis for 180 consecutive business days as a result of incapacity
due to mental or physical illness that is determined to be total and permanent
by a physician selected by the Company or its insurers and acceptable to the
Executive or the Executive’s legal representative.

 

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(b)          Cause. The Company may terminate the Executive’s employment during
the Employment Period with or without Cause. “Cause” means:

 

(1)         the willful and continued failure of the Executive to perform
substantially the Executive’s duties (as contemplated by Section 3(a)(1)(A))
with the Company or any Affiliated Entity (other than any such failure resulting
from incapacity due to physical or mental illness or following the Executive’s
delivery of a Notice of Termination for Good Reason), after a written demand for
substantial performance is delivered to the Executive by the Board, or if the
Company is not the ultimate parent corporation of the Affiliated Entities and is
not publicly traded, the board of directors of the ultimate parent of the
Company (the “Applicable Board”), which specifically identifies the manner in
which the Board believes that the Executive has not substantially performed the
Executive’s duties; or

 

(2)         the willful engaging by the Executive in illegal conduct which is
materially and demonstrably injurious to the Company.

 

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Company. Any
act, or failure to act, based upon (A) authority given pursuant to a resolution
duly adopted by the Applicable Board, (B) the instructions of the Chief
Executive Officer or another executive officer of the Company or (C) the advice
of counsel for the Company, shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company. The cessation of employment of the Executive shall not be deemed to
be for Cause unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Applicable Board (excluding the
Executive, if the Executive is a member of the Applicable Board) at a meeting of
the Applicable Board called and held for such purpose (after reasonable notice
is provided to the Executive and the Executive is given an opportunity, together
with counsel for the Executive, to be heard before the Applicable Board),
finding that, in the good faith opinion of the Applicable Board, the Executive
is guilty of the conduct described in Section 4(b)(1) or 4(b)(2), and specifying
the particulars thereof in detail.

 

(c)          Good Reason. The Executive’s employment may be terminated during
the Employment Period by the Executive for Good Reason or by the Executive
voluntarily without Good Reason. “Good Reason” means actions taken by the
Company resulting in a material negative change in the employment relationship.
For these purposes, a “material negative change in the employment relationship”
shall include, without limitation:

 

(1)         a reduction of the Executive’s Annual Base Salary;

 

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(2)         a material breach of Section 3(b) of this Agreement, which shall
include, without limitation, a material reduction in the Executive’s (i) Annual
Bonus from the Recent Annual Bonus, (ii) target or maximum Annual Bonus
opportunity, (iii) annual long-term incentive compensation (cash and equity
awards), including target or maximum incentive opportunity, or (iv) retirement,
welfare, fringe and other benefits provided or made available to the Executive,
in the case of each of clauses (ii) through (iv), from those contemplated by
Section 3(b) of this Agreement;

 

(3)         a material diminution in the Executive’s authority, duties or
responsibilities from those contemplated by Section 3(a) of this Agreement or a
material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to report from those in effect
immediately prior to the Effective Date, including, without limitation, and
where relevant, a requirement that the Executive report to an officer or
employee instead of reporting directly to the Board of the Company (or if the
Company is a subsidiary of another entity, its ultimate parent);

 

(4)         a change in the geographic location at which the Executive must
perform services of more than 35 miles from the location the Executive was
required to perform services immediately prior to the Effective Date;

 

(5)         a material diminution in the budget over which the Executive retains
authority from that in effect immediately prior to the Effective Date; or

 

(6)         any other action or inaction that constitutes a material breach by
the Company of this Agreement, including any failure by the Company to comply
with and satisfy Section 10(c).

 

In order to invoke a termination for Good Reason, the Executive shall provide
written notice to the Company of the existence of one or more of the conditions
described in clauses (1) through (6) within 90 days following the Executive’s
knowledge of the initial existence of such condition or conditions, specifying
in reasonable detail the conditions constituting Good Reason, and the Company
shall have 30 days following receipt of such written notice (the “Cure Period”)
during which it may remedy the condition. In the event that the Company fails to
remedy the condition constituting Good Reason during the applicable Cure Period,
the Executive’s “separation from service” (within the meaning of Section 409A of
the Code) must occur, if at all, within 180 days following such Cure Period in
order for such termination as a result of such condition to constitute a
termination for Good Reason. The Executive’s mental or physical incapacity
following the occurrence of an event described above in clauses (1) through (6)
shall not affect the Executive’s ability to terminate employment for Good Reason
and the Executive’s death following delivery of a Notice of Termination for Good
Reason shall not affect the Executive’s estate’s entitlement to severance
payments benefits provided hereunder upon a termination of employment for Good
Reason.

 

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(d)          Notice of Termination. Any termination of employment by the Company
for Cause, or by the Executive for Good Reason, shall be communicated by a
Notice of Termination to the other party hereto given in accordance with Section
11(b). “Notice of Termination” means a written notice that (1) indicates the
specific termination provision in this Agreement relied upon, (2) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive’s employment under the
provision so indicated, and (3) if the Date of Termination (as defined herein)
is other than the date of receipt of such notice, specifies the Date of
Termination (which Date of Termination shall be not more than 30 days after the
giving of such notice except in the case of a termination for Good Reason,
notice shall be not more than 90 days before the termination date) (subject to
the Company’s right to cure in the case of a resignation for Good Reason). The
failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance that contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the Executive’s or the
Company’s respective rights hereunder.

 

(e)          Date of Termination. “Date of Termination” means (1) if the
Executive’s employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
such later date specified in the Notice of Termination, as the case may be, (2)
if the Executive’s employment is terminated by the Company other than for Cause
or Disability, the date on which the Company notifies the Executive of such
termination, (3) if the Executive resigns without Good Reason, the date on which
the Executive notifies the Company of such termination, and (4) if the
Executive’s employment is terminated by reason of death or Disability, the date
of death of the Executive or the Disability Effective Date, as the case may be.
In no event shall the Date of Termination occur until the Executive experiences
a “separation from service” within the meaning of Section 409A of the Code, and
the date on which such separation from service takes place shall be the “Date of
Termination.”

 

Section 5.          Obligations of the Company upon Termination. (a) By the
Executive for Good Reason; By the Company Other Than for Cause, Death or
Disability. If, during the Employment Period, the Company terminates the
Executive’s employment other than for Cause, Death or Disability or the
Executive terminates employment for Good Reason:

 

(1)         the Company shall pay to the Executive, in a lump sum payment in
cash within 30 days after the Date of Termination equal to the aggregate of the
following amounts:

 

(A)         the sum of (i) the Executive’s Annual Base Salary through the Date
of Termination, (ii) any Annual Bonus earned by the Executive for a prior award
period, (iii) any accrued and unused vacation pay or other paid time off, and
(iv) any business expenses incurred by the Executive that are unreimbursed as of
the Date of Termination, in each case to the extent not theretofore paid (the
sum of the amounts described in clauses (i), (ii), (iii) and (iv) shall be
hereinafter referred to as the “Accrued Obligations”); provided that,
notwithstanding the foregoing, in the case of clauses (i) and (ii), if the
Executive has made an irrevocable election under any deferred compensation
arrangement subject to Section 409A of the Code to defer any portion of the
Annual Base Salary or Annual Bonus described in clause (i) or (ii) above, then
for all purposes of this Section 5 (including, without limitation, Sections 5(b)
through 5(d)), such deferral election, and the terms of the applicable
arrangement shall apply to the same portion of the amount described in such
clauses (i) or (ii), and such portion shall not be considered as part of the
“Accrued Obligations” but shall instead be an “Other Benefit” (as defined
below);

 

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(B)         the product of (i) the higher of (a) the Annual Bonus under the
Bonus Plan for the full fiscal year in which the Date of Termination occurs,
determined based on actual individual and corporate performance through the Date
of Termination, and (b) the Recent Annual Bonus and (ii) a fraction, the
numerator of which is the number of days in the current fiscal year through the
Date of Termination, and the denominator of which is the total number of days in
the applicable fiscal year in which the Date of Termination occurs (the “Pro
Rata Bonus”), subject to any applicable deferral election on the same basis as
set forth in the proviso to Section 5(a)(1)(A);

 

(C)         the amount equal to the product of (i) three (3) and (ii) the sum of
(a) the Executive’s Annual Base Salary and (b) the higher of (x) the annual
bonus under the Bonus Plan for the full fiscal year in which the Date of
Termination occurs, determined based on actual individual and corporate
performance through the Date of Termination, and (y) the Recent Annual Bonus;
and

 

(D)         an amount equal to the additional Company contributions, including
matching contributions, profit sharing and discretionary contributions, that
would have been made on the Executive’s behalf to the Company’s 401(k) Plan or
any successor plan (the “401(k) Plan”) (assuming continued participation on the
same basis as immediately prior to the Effective Date), plus the additional
amount of any contributions the Executive would have received under the Unfunded
Supplemental Benefit Plan or its successor plan or any other excess or
supplemental retirement plan in which the Executive participates (together, the
“SERP”) as a result of contribution limitations in the 401(k) Plan, if the
Executive’s employment continued for three (3) years after the Date of
Termination (the “Benefit Continuation Period”), assuming for this purpose that
the Executive’s compensation during the Benefit Continuation Period is the
Executive’s Annual Base Salary and Recent Annual Bonus and that the Company’s
matching contributions are determined pursuant to the applicable provisions of
the 401(k) Plan and the SERP, as in effect during the 12-month period
immediately prior to the Effective Date.

 

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(2)         Healthcare Benefits. For the Benefit Continuation Period, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue to provide to the Executive
and/or the Executive’s eligible dependents healthcare benefits at least equal to
those that would have been provided to them if the Executive’s employment had
not been terminated, under and in accordance with the healthcare plans provided
by the Company and the Affiliated Entities prior to the Effective Date
(including, without limitation, medical, prescription, dental, vision plans and
programs) or, if more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company and the
Affiliated Entities and their eligible dependents; provided, however, that if
the Executive becomes reemployed with another employer and is eligible to
receive healthcare benefits under another employer-provided plan, the healthcare
benefits provided hereunder shall be secondary to those provided under such
other plan during such applicable period of eligibility. The Benefit
Continuation Period shall run concurrently with the period for providing
continuation coverage under the group health plans of the Company and the
Affiliated Entities, as described in Section 4980B of the Code. For purposes of
determining eligibility (but not the time of commencement of benefits) of the
Executive for retiree benefits pursuant to such plans, practices, programs and
policies, the Executive shall be considered to have remained employed during the
Benefit Continuation Period and to have retired on the last day of such period.

 

(3)         Automobile. Upon the Date of Termination, the Executive shall have
the right and option to purchase the automobile which the Company was providing
to the Executive immediately prior to the Date of Termination in accordance with
the Company’s practice for retiring employees as in effect immediately prior to
the Effective Date (provided that, to the extent such option results in a
benefit that is includable in the Executive’s gross income for federal income
tax purposes, such purchase must occur no later than the 15th day of the third
month following the end of the Executive’s taxable year in which the Date of
Termination occurs).

 

(4)         Outplacement Services. The Company shall, at its sole expense as
incurred, provide the Executive with outplacement services, the scope and
provider of which shall be selected by the Executive in the Executive’s sole
discretion; provided that the aggregate cost of such services shall not exceed
$50,000.

 

(5)         Other Benefits. Except as otherwise set forth in the last sentence
of Section 6, to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any Other Benefits (as defined in Section
6) in accordance with the terms of the underlying plans or agreements.

 

(b)          Death. If the Executive’s employment is terminated by reason of the
Executive’s death during the Employment Period, the Company shall provide the
Executive’s estate or beneficiaries with the Accrued Obligations, the Pro Rata
Bonus and the timely payment or delivery of the Other Benefits, and shall have
no other severance obligations under this Agreement. The Accrued Obligations and
the Pro Rata Bonus shall be paid to the Executive’s estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination,
subject to any applicable deferral election as contemplated by Sections
5(a)(1)(A) and (B). With respect to the provision of the Other Benefits, the
term “Other Benefits” as utilized in this Section 5(b) shall include, without
limitation, and the Executive’s estate and/or beneficiaries shall be entitled to
receive, benefits at least equal to the most favorable benefits provided by the
Company and the Affiliated Entities to the estates and beneficiaries of peer
executives of the Company and the Affiliated Entities under such plans,
programs, practices and policies relating to death benefits, if any, as in
effect with respect to other peer executives and their beneficiaries at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive’s estate and/or the Executive’s beneficiaries, as in
effect on the date of the Executive’s death with respect to other peer
executives of the Company and the Affiliated Entities and their beneficiaries.

 

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(c)          Disability. If the Executive’s employment is terminated by reason
of the Executive’s Disability during the Employment Period, the Company shall
provide the Executive with the Accrued Obligations, the Pro Rata Bonus and the
timely payment or delivery of the Other Benefits in accordance with the terms of
the underlying plans or agreements, and shall have no other severance
obligations under this Agreement. The Accrued Obligations and the Pro Rata Bonus
shall be paid to the Executive in a lump sum in cash within 30 days of the Date
of Termination, subject to any applicable deferral election as contemplated by
Sections 5(a)(1)(A) and (B). With respect to the provision of the Other
Benefits, the term “Other Benefits” as utilized in this Section 5(c) shall
include, and the Executive shall be entitled after the Disability Effective Date
to receive, disability and other benefits at least equal to the most favorable
of those generally provided by the Company and the Affiliated Entities to
disabled executives and/or their families in accordance with such plans,
programs, practices and policies relating to disability, if any, as in effect
generally with respect to other peer executives and their families at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive’s family, as in effect at any
time thereafter generally with respect to other peer executives of the Company
and the Affiliated Entities and their families.

 

(d)          Cause; Other Than for Good Reason. If the Executive’s employment is
terminated for Cause during the Employment Period, the Company shall provide the
Executive with the Accrued Obligations and the timely payment or delivery of the
Other Benefits and shall have no other severance obligations under this
Agreement. If the Executive voluntarily terminates employment during the
Employment Period, excluding a termination for Good Reason, the Company shall
provide to the Executive the Accrued Obligations, the Pro Rata Bonus and the
timely payment or delivery of the Other Benefits and shall have no other
severance obligations under this Agreement. In such case, all the Accrued
Obligations and, if applicable, the Pro Rata Bonus shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination,
subject to any applicable deferral election as contemplated by Sections
5(a)(1)(A) and (B).

 

Section 6.          Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive’s continuing or future participation in any plan,
program, policy or practice provided by the Company or the Affiliated Entities
and for which the Executive may qualify, or, subject to Section 11(f), shall
anything herein limit or otherwise affect such rights as the Executive may have
under any other contract or agreement with the Company or the Affiliated
Entities. Amounts that are vested benefits or that the Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any other
contract or agreement with the Company or the Affiliated Entities at or
subsequent to the Date of Termination, including amounts credited to the
Executive’s account under the Executive Deferred Compensation Plan or any
successor plan (“Other Benefits”), shall be payable in accordance with such
plan, policy, practice or program or contract or agreement, except as explicitly
modified by this Agreement. Without limiting the generality of the foregoing,
the Executive’s resignation under this Agreement with or without Good Reason,
shall in no way affect the Executive’s ability to terminate employment by reason
of the Executive’s “retirement” under, or to be eligible to receive benefits
under, any compensation and benefits plans, programs or arrangements of the
Company or the Affiliated Entities, including, without limitation, any
retirement or pension plans or arrangements or substitute plans adopted by the
Company, the Affiliated Entities or their respective successors, and any
termination which otherwise qualifies as Good Reason shall be treated as such
even if it is also a “retirement” for purposes of any such plan. Notwithstanding
the foregoing, if the Executive receives payments and benefits pursuant to
Section 5(a) of this Agreement, the Executive shall not be entitled to any
severance pay or benefits under any severance plan, program or policy of the
Company and the Affiliated Entities, unless otherwise specifically provided
therein in a specific reference to this Agreement.

 

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Section 7.          Full Settlement; Legal Fees. The Company’s obligation to
make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action that the Company may have
against the Executive or others. In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement,
and except as specifically provided in Section 5(a)(2), such amounts shall not
be reduced whether or not the Executive obtains other employment. The Company
agrees to pay as incurred (within 10 days following the Company’s receipt of an
invoice from the Executive), at any time from the Change of Control through the
Executive’s remaining lifetime (or, if longer, through the 20th anniversary of
the Change of Control) to the full extent permitted by law, all legal fees and
expenses that the Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to this
Agreement), plus, in each case, interest on any delayed payment at the
applicable federal rate provided for in Section 7872(f)(2)(A) of the Code
(“Interest”) based on the rate in effect for the month in which such legal fees
and expenses were incurred.

 

Section 8.          Certain Reduction of Payments.

 

(a)          Anything in this Agreement to the contrary notwithstanding, in the
event the Accounting Firm (as defined below) shall determine that receipt of all
Payments (as defined below) would subject the Executive to the excise tax under
Section 4999 of the Code, the Accounting Firm shall determine whether to reduce
any of the Payments paid or payable pursuant to this Agreement (the “Agreement
Payments”) so that the Parachute Value (as defined below) of all Payments, in
the aggregate, equals the Safe Harbor Amount (as defined below). The Agreement
Payments shall be so reduced only if the Accounting Firm determines that the
Executive would have a greater Net After-Tax Receipt (as defined below) of
aggregate Payments if the Agreement Payments were so reduced. If the Accounting
Firm determines that the Executive would not have a greater Net After-Tax
Receipt of aggregate Payments if the Agreement Payments were so reduced, the
Executive shall receive all Agreement Payments to which the Executive is
entitled hereunder.

 

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(b)          If the Accounting Firm determines that aggregate Agreement Payments
should be reduced so that the Parachute Value of all Payments, in the aggregate,
equals the Safe Harbor Amount, the Company shall promptly give the Executive
notice to that effect and a copy of the detailed calculation thereof. All
determinations made by the Accounting Firm under this Section 8 shall be binding
upon the Company and the Executive and shall be made as soon as reasonably
practicable and in no event later than 15 days following the Date of
Termination. For purposes of reducing the Agreement Payments so that the
Parachute Value of all Payments, in the aggregate, equals the Safe Harbor
Amount, only amounts payable under this Agreement (and no other Payments) shall
be reduced. The reduction of the amounts payable hereunder, if applicable, shall
be made by reducing the Agreement Payments and benefits that have a Parachute
Value as follows: Section 5(a)(4); Section 5(a)(1)(D); and Section 5(a)(1)(C),
in each case, beginning with payments or benefits that constitute deferred
compensation and reducing first those that are to be paid or provided the
farthest in time, based on the Accounting Firm’s determination. All reasonable
fees and expenses of the Accounting Firm shall be borne solely by the Company.

 

(c)          To the extent requested by the Executive, the Company shall
cooperate with the Executive in good faith in valuing, and the Accounting Firm
shall take into account the value of, services provided or to be provided by the
Executive (including, without limitation, the Executive’s agreeing to refrain
from performing services pursuant to a covenant not to compete or similar
covenant, before, on or after the date of a change in ownership or control of
the Company (within the meaning of Q&A-2(b) of the final regulations under
Section 280G of the Code), such that payments in respect of such services may be
considered reasonable compensation within the meaning of Q&A-9 and Q&A-40 to
Q&A-44 of the final regulations under Section 280G of the Code and/or exempt
from the definition of the term “parachute payment” within the meaning of
Q&A-2(a) of the final regulations under Section 280G of the Code in accordance
with Q&A-5(a) of the final regulations under Section 280G of the Code.

 

(d)          The following terms shall have the following meanings for purposes
of this Section 8:

 

(i)          “Accounting Firm” shall mean a nationally recognized certified
public accounting firm or other professional organization that is a certified
public accounting firm recognized as an expert in determinations and
calculations for purposes of Section 280G of the Code that is selected by the
Company prior to a Change of Control for purposes of making the applicable
determinations hereunder and is reasonably acceptable to the Executive, which
firm shall not, without the Executive’s consent, be a firm serving as accountant
or auditor for the individual, entity or group effecting the Change of Control.

 

(ii)         “Net After-Tax Receipt” shall mean the present value (as determined
in accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a
Payment net of all taxes imposed on the Executive with respect thereto under
Sections 1 and 4999 of the Code and under applicable state and local laws,
determined by applying the highest marginal rate under Section 1 of the Code and
under state and local laws which applied to the Executive’s taxable income for
the immediately preceding taxable year, or such other rate(s) as the Accounting
Firm determines to be likely to apply to the Executive in the relevant tax
year(s).

 

13 

 

 

(iii)        “Parachute Value” of a Payment shall mean the present value as of
the date of the change of control for purposes of Section 280G of the Code of
the portion of such Payment that constitutes a “parachute payment” under
Section 280G(b)(2) of the Code, as determined by the Accounting Firm for
purposes of determining whether and to what extent the excise tax under
Section 4999 of the Code will apply to such Payment.

 

(iv)        “Payment” shall mean any payment, benefit or distribution in the
nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to
or for the benefit of the Executive, whether paid, payable or provided pursuant
to this Agreement or otherwise.

 

(v)         “Safe Harbor Amount” shall mean 2.99 times the Executive’s “base
amount,” within the meaning of Section 280G(b)(3) of the Code.

 

Section 9.          Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or the Affiliated
Entities, and their respective businesses, which information, knowledge or data
shall have been obtained by the Executive during the Executive’s employment by
the Company or the Affiliated Entities and which information, knowledge or data
shall not be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After
termination of the Executive’s employment with the Company, the Executive shall
not, without the prior written consent of the Company or as may otherwise be
required by law or legal process (including in connection with any government
investigation), communicate or divulge any such information, knowledge or data
to anyone other than the Company and those persons designated by the Company. In
no event shall an asserted violation of the provisions of this Section 9
constitute a basis for deferring or withholding any amounts otherwise payable to
the Executive under this Agreement.

 

Section 10.         Successors.

 

(a)          This Agreement is personal to the Executive, and, without the prior
written consent of the Company, shall not be assignable by the Executive other
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Executive’s legal representatives.

 

(b)          This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns. Except as provided in Section 10(c),
without the prior written consent of the Executive, this Agreement shall not be
assignable by the Company.

 

(c)          The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
“Company” means the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid that assumes and agrees to perform this
Agreement by operation of law or otherwise.

 

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Section 11.         Miscellaneous.

 

(a)          This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified other than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

 

(b)          All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

 

if to the Executive:

 

At the most recent address on file at the Company.

 

if to the Company:

 

Vulcan Materials Company
P.O. Box 385014
Birmingham, Alabama 35238-5014
Attention: General Counsel

 

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

 

(c)          The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

 

(d)          The Company may withhold from any amounts payable under this
Agreement such United States federal, state or local or foreign taxes as shall
be required to be withheld pursuant to any applicable law or regulation.

 

(e)          The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Sections 4(c)(1) through 4(c)(6), shall not be deemed to be a waiver
of such provision or right or any other provision or right of this Agreement.

 

(f)          The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is “at will”
and, subject to Section 1(a), the Executive’s employment may be terminated by
either the Executive or the Company at any time prior to the Effective Date, in
which case the Executive shall have no further rights under this Agreement. From
and after the Effective Date, this Agreement shall supersede the Prior
Agreement.

 

15 

 

 

(g)          Grantor Trust. The Company may establish a trust with a bank
trustee, for the purpose of paying benefits under this Agreement. If so
established, the trust shall be a grantor trust subject to the claims of the
Company’s creditors and may, immediately prior to a Change of Control, be funded
in cash, common stock of the Company or such other assets as the Company deems
appropriate with an amount equal to 100 percent of the aggregate benefits
payable under this Agreement, assuming that the Executive incurred a termination
of employment entitling such Executive to the benefits under Section 5, or such
lesser amount as the Company shall determine prior to the Change of Control;
provided, however, that the trust shall not be funded with respect to the
Executive if the funding thereof would result in taxable income to the Executive
by reason of Section 409A(b) of the Code; and provided, further, that in no
event shall any trust assets at any time be located or transferred outside of
the United States, within the meaning of Section 409A(b) of the Code.
Notwithstanding the establishment of any such trust, the Executive’s rights
hereunder will be solely those of a general unsecured creditor.

 

Section 12.         Section 409A of the Code.

 

(a)          General. The obligations under this Agreement are intended to
comply with the requirements of Section 409A of the Code or an exemption or
exclusion therefrom and shall in all respects be administered in accordance with
Section 409A of the Code. Any payments that qualify for the “short-term
deferral” exception, the separation pay exception or another exception under
Section 409A of the Code shall be paid under the applicable exception to the
maximum extent permissible. For purposes of the limitations on nonqualified
deferred compensation under Section 409A of the Code, each payment of
compensation under this Agreement shall be treated as a separate payment of
compensation for purposes of applying the exclusion under Section 409A of the
Code for short-term deferral amounts, the separation pay exception or any other
exception or exclusion under Section 409A of the Code. In no event may the
Executive, directly or indirectly, designate the calendar year of any payment
under this Agreement. All payments to be made upon a termination of employment
under this Agreement may only be made upon a “separation from service” under
Section 409A of the Code to the extent necessary in order to avoid the
imposition of penalty taxes on the Executive pursuant to Section 409A of the
Code.

 

(b)          Reimbursements and In-Kind Benefits. Notwithstanding anything to
the contrary in this Agreement, all reimbursements and in-kind benefits provided
under this Agreement that constitute nonqualified deferred compensation subject
to Section 409A of the Code shall be made in accordance with the requirements of
Section 409A of the Code, including, without limitation, where applicable, the
requirement that (i) in no event shall the Company’s obligations to make such
reimbursements or to provide such in-kind benefits apply later than the
Executive’s remaining lifetime (or if longer, through the 20th anniversary of
the date hereof; (ii) the amount of expenses eligible for reimbursement, or
in-kind benefits provided, during a calendar year may not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other
calendar year; (iii) the reimbursement of an eligible fees and expenses shall be
made no later than the last day of the calendar year following the year in which
the applicable fees and expenses were incurred; provided that the Executive
shall have submitted an invoice for such fees and expenses at least 10 days
before the end of the calendar year next following the calendar year in which
such fees and expenses were incurred; and (iv) the right to reimbursement or
in-kind benefits is not subject to liquidation or exchange for another benefit.

 

16 

 

 

(c)          Delay of Payments. Notwithstanding anything herein to the contrary,
if the Executive is considered a “specified employee” for purposes of Section
409A of the Code (as determined in accordance with the methodology established
by the Company as in effect on the Date of Termination), any payment or benefit
that constitutes nonqualified deferred compensation within the meaning of
Section 409A of the Code that is otherwise due to the Executive under this
Agreement during the six-month period immediately following such Executive’s
separation from service (as determined in accordance with Section 409A of the
Code) on account of such Executive’s separation from service shall be
accumulated and paid to such Executive with Interest (based on the rate in
effect for the month in which the Executive’s separation from service occurs) on
the first business day of the seventh month following the Executive’s separation
from service (the “Delayed Payment Date”), to the extent necessary to avoid
penalty taxes or accelerated taxation pursuant to Section 409A of the Code. If
the Executive dies during the postponement period, the amounts and entitlements
delayed on account of Section 409A of the Code shall be paid to the personal
representative of the Executive’s estate on the first to occur of the Delayed
Payment Date or 30 calendar days after the date of the Executive’s death.

 

Section 13.         Survivorship. Upon the expiration or other termination of
this Agreement or the Executive’s employment, the respective rights and
obligations of the parties hereto shall survive to the extent necessary to carry
out the intentions of the parties under this Agreement.

 

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from the Board, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.

 

  [SIGNATURES]

 

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