Document:

EX-10.2

 

Exhibit 10.2

SHAREHOLDERS AGREEMENT

     This SHAREHOLDERS AGREEMENT (this “Agreement”), dated as of February 19, 2007 (this
“Agreement”), is by and among Vulcan Materials Company, a New Jersey corporation
(“Vulcan”), Virginia Holdco, Inc., a New Jersey corporation (“Holdco”), and Baker
Holdings, L.P. and the individual shareholders signatory hereto (the “Baker Shareholders”).

     WHEREAS, Holdco, Vulcan, Florida Rock Industries, Inc., a Florida corporation (“Florida
Rock”), Virginia Merger Sub, Inc., a New Jersey corporation, and Fresno Merger Sub, Inc., a
Florida corporation, have entered into an Agreement and Plan of Merger, of even date herewith (the
“Merger Agreement”);

     WHEREAS, as a condition to the consummation of Mergers and the other transactions contemplated
by the Merger Agreement, Vulcan and Holdco desire that the Baker Shareholders make certain
representations, warranties, covenants and agreements as set forth in this Agreement;

     WHEREAS, after giving effect to the Mergers and the other transactions contemplated by the
Merger Agreement, the Baker Shareholders will Beneficially own certain shares of Holdco Common
Stock (the shares of Common Stock acquired in the Mergers being the “Common Shares”);

     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and
in the Merger Agreement, and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

Definitions

     1.1. Definitions. Capitalized terms used and not defined herein shall have the
meanings ascribed to them in the Merger Agreement. The following terms, as used herein, have the
following meanings:

     “Beneficially own” has the meaning set forth in Rule 13d-3 under the Exchange Act.

     “Control” (including its correlative meanings, “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the power to direct or cause
the direction of management or policies (whether through ownership of securities or partnership or
other ownership interests, by contract or otherwise).

     “Effective Date” means the Closing Date.

     “Permitted Transferee” means, with respect to each Baker Shareholder, (a) Baker
Investment Holdings, Inc. or such Baker Shareholder’s spouse or lineal descendant (whether natural
or adopted), sibling, parent, heir, executor, administrator, testamentary trustee, legatee or
beneficiary, (b) in the case of Baker Holdings L.P., any other Baker Shareholder, Sally Porter, or
the spouse or lineal descendant (whether natural or adopted), sibling, parent, heir, executor,

 

 

administrator, testamentary trustee, legatee or beneficiary of any other Baker Shareholder or
Sally Porter, (c) any trust, the beneficiaries of which (or any corporation, limited liability
company or partnership, the stockholders, members or general or limited partners of which) include
only the Persons named in clauses (a) or (b), or (c) a foundation or similar entity established by
such Baker Shareholder for the purpose of serving charitable goals; provided that the Baker
Shareholder effecting such transfer retains control over the voting and disposition of such Common
Shares in the hands of such Person, and provided that such transferee has executed and delivered to
Holdco such documentation as is reasonably requested by Holdco to reflect that such transferee is
fully bound under this Agreement.

     “Person” means an individual, corporation, partnership, limited liability company,
association, trust and any other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.

     “Restrictive Period” means the period beginning on the Effective Date and ending on
the third anniversary of the Effective Date; provided that solely with respect to John D.
Baker II, “Restrictive Period” means the period beginning on the Effective Date and ending
on the later of (x) the third anniversary of the Effective Date and (y) the date that John Baker
ceases to be a member of the Board of Directors of Holdco; provided further that the Restrictive
Period shall terminate with respect to each Baker Shareholder upon the occurrence of a “change of
control” of Holdco (as such term is defined in the stock option plan of Holdco); provided,
further, that solely with respect to Edward L. Baker the Restrictive Period shall terminate
upon his death.

     “transfer” means any direct or indirect sale, assignment, gift, pledge, the imposition
of any other encumbrance or any other disposition or any agreement or obligation to do any of the
foregoing.

ARTICLE II

 

Transfer Restrictions; Other Covenants

     2.1. (a) During the Restrictive Period applicable to it, each Baker Shareholder will not
transfer any Common Shares, except for transfers to Permitted Transferees.

          (b) For a period of five years following the expiration of the Restrictive Period with
respect to a Baker Shareholder, no transfer of any Common Shares otherwise permitted under this
Agreement shall be made by such shareholder unless such transfer (i) complies with the Securities
Act and any other applicable securities laws and (ii) is an Approved Transfer; provided,
that such five year period shall terminate earlier at any time that the Baker Shareholders and
their affiliates own less than 1% of the outstanding shares of Holdco (or successor thereto).

     “Approved Transfer” means (i) a transfer to a Permitted Transferee, (ii) a sale of
Common Shares (x) made through a broker or bank in an open market transaction (subject to volume
restrictions (the “Volume Restrictions”) applicable to sales by an affiliate under Rule 144
under the Securities Act, whether or not such rule applies to the selling Baker Shareholder), and
(y) with respect to which the Baker Shareholder has complied with Section 2.3, or (iii) with

 

 

respect to Edward L. Baker or Baker Holdings, L.P., a transfer approved by Holdco following
such Baker Shareholder’s request, it being understood that Holdco may deny any such transfer
request in its sole discretion.

     2.2. From and after the Effective Time and until the end of the Restrictive Period applicable
to it, each Baker Shareholder irrevocably agrees, at every meeting of the shareholders of Holdco
called, and at every postponement or adjournment thereof, and with respect to any written consent
solicited, to vote its Common Shares consistent with the recommendations of Holdco’s Board of
Directors and (y) not tender its Common Shares to any Person if such tender is opposed by Holdco’s
Board of Directors.

     2.3. (a) From and after the end of the Restrictive Period applicable to it, each Baker
Shareholder (or transferee or successor thereof) (the “ROFR Offeror”) may sell all or any
portion of the Common Shares beneficially owned by such ROFR Offeror through a broker or bank in an
open market transaction, subject to the Volume Restrictions, provided, that the ROFR
Offeror shall first offer to sell such Common Shares and give prompt written notice (the “ROFR
Notice”) to Holdco (the “ROFR Offeree”), stating that it desires to make such sale,
referring to this Section 2.3, and specifying the number of Common Shares proposed to be sold (the
“ROFR Offer Shares”).

          (b) ROFR Election. The ROFR Offeree shall have three business days from the date of receipt
of the ROFR Notice to deliver to the ROFR Offeror a written notice (the “ROFR Election”)
stating whether the ROFR Offeree elects to purchase a portion of the ROFR Offer Shares. Within 10
business days of receipt of the ROFR Election and receipt of any approval required under, or
expiration of any waiting period pursuant to, applicable law, the ROFR Offeror shall sell to the
ROFR Offeree such ROFR Offer Shares for the ROFR Price.

          (c) In the event that the ROFR Offeree does not purchase all of the ROFR Offer Shares that are
the subject of a ROFR Notice pursuant to and in the time periods specified in the foregoing
paragraphs (a) and (b), then (i) the ROFR Offeror may then sell such ROFR Offer Shares through a
broker or bank in an open market transaction, subject to the Volume Limitations. In the event such
sale is not completed within the 10 Business Days provided in Section 2.3(b), then the ROFR Offeror
shall not sell any Common Shares pursuant to Section 2.1(b)(y) without re-complying anew with the
provisions of this Section 2.3, including delivery of a new ROFR Notice.

     “ROFR Price” means, with respect to the applicable ROFR Offer Shares, the mean of the
opening and closing prices of the Common Shares, in each case as quoted by the New York Stock
Exchange, on the date of delivery of the ROFR Notice.

ARTICLE III

Miscellaneous

     3.1. Authority. Each party hereto represents and warrants as follows: (a) such party has all
requisite corporate, trust or other applicable power and authority to enter into this Agreement and
to perform its agreements set forth herein, (b) the execution and delivery of this

 

 

Agreement and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate, trust or other applicable action on the part of such party,
and (c) this Agreement has been duly executed and delivered by such party and constitutes a valid
and binding obligation of such party, enforceable against such party in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors’ rights and to general equitable
principles.

     3.2. Governing Law; Jurisdiction; Waiver of Jury Trial.

          (a) This Agreement shall be governed in all respects by the Laws of the State of New Jersey.
Any disagreement, issue, dispute, claim, demand or controversy arising out of or relating to this
Agreement (each, a “Dispute”) shall be brought in the United States District Court for the
District of New Jersey in New Jersey or any court in the state of New Jersey, so long as one of
such courts shall have subject matter jurisdiction over such Dispute. Each of the parties hereby
irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such Dispute and irrevocably waives, to the fullest extent permitted by Law, any
objection that it may now or hereafter have to the laying of the venue of any such Dispute in any
such court and that any such Dispute which is brought in any such court has been brought in an
inconvenient forum. Process in any such Dispute may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section 3.7 shall be deemed
effective service of process on such party.

          (b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

     3.3. Binding Effect. This Agreement shall inure to the benefit of and be legally
binding upon all heirs, personal representatives, executors, legal representatives, successors and
assigns of the parties. This Agreement may not be assigned without the prior written consent of
the parties hereto and this Agreement is not made for the benefit of any person not a party hereto.
No assignment of this Agreement will relieve the assigning party of its obligations hereunder.

     3.4. Entire Agreement; Amendment. This Agreement constitutes the entire understanding
of the parties and supersedes all prior discussions, negotiations, agreements and understandings,
whether oral or written, with respect to its subject matter. This Agreement may be modified only
by a written instrument properly executed by all parties to this Agreement.

     3.5. Severability. If any one or more of the provisions of this Agreement is held
invalid, illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired,
and the invalid, illegal or unenforceable provision shall be replaced by a mutually acceptable
valid, legal and enforceable provision which comes closest to the intent of the parties.

 

 

     3.6. Waiver; Remedies. No failure or delay on the part of any party hereto in
exercising any right, power or privilege under this Agreement will operate as a waiver thereof, nor
will any waiver on the part any party hereto of any right, power or privilege under this Agreement
operate as a waiver of any other right, power or privilege under this Agreement, nor will any
single or partial exercise of any right, power or privilege thereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege under this
Agreement. The rights and remedies herein provided are cumulative and are not exclusive of any
rights or remedies which the parties may otherwise have at law or in equity.

     3.7. Notices. All notices, requests, claims, demands and other communications
required or permitted to be given under this Agreement will be in writing and will be delivered by
hand or telecopied, e-mailed or sent, postage prepaid, by registered, certified or express mail or
UPS or Federal Express next day air and will be deemed given when so delivered (if on a business
day before 5:00 P.M. or, if not, then on the next business day) by hand or telecopied, when e-mail
confirmation is received (delivery receipt) if delivered by e-mail (if on a business day before
5:00 P.M. or, if not, then on the next business day), or three business days after being so mailed
(one business day in the case of express mail or UPS or Federal Express next day air). All such
notices, requests, claims, demands and other communications will be addressed as set forth below,
or pursuant to such other instructions as may be designated in writing by the party to receive such
notice in accordance with this Agreement.

     Notices given under this Agreement shall be to those addresses set forth below:

If to Vulcan:

Vulcan Materials Company

1200 Urban Center Drive

Birmingham, Alabama 35242

Attn: General Counsel

Facsimile: (205) 298-2960

If to Holdco:

Virginia Holdco, Inc.

c/o Vulcan Materials Company

1200 Urban Center Drive

Birmingham, Alabama 35242

Attn: General Counsel

Facsimile: (205) 298-2960

If to a Baker Shareholder:

c/o Baker Holdings L.P.

155 East 21st Street

Jacksonville, Florida 32206

Attention: John D. Baker II

Facsimile: (904) 791-1810

 

 

with a copy (which shall not constitute notice) to:

Word & Word PLC

1802 Bayberry Court

Suite 410

Richmond, Virginia 23226

Attention: Thomas S. Word, Jr., Esq.

Facsimile: (804) 673-1790

     3.8. Counterparts. This Agreement may be executed in separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts will together
constitute the same agreement.

     3.9. Specific Performance. In the event of any actual or threatened default in, or
breach of, any of the terms or provisions of this Agreement, the party who is or is to be thereby
aggrieved will have the right of specific performance and injunctive relief giving effect to its
rights under this Agreement, in addition to any and all other rights and remedies at law or in
equity, and all such rights and remedies will be cumulative. The parties agree that any such
default or breach or threatened default or breach would cause irreparable injury, that the remedies
at law for any such default or breach or threatened default or breach, including monetary damages,
are inadequate compensation for any loss and that any defense in any action for specific
performance that a remedy at law would be adequate is waived.

     3.10. Effective Date; Termination. This Agreement shall become effective immediately upon the
occurrence of the Effective Time. In the event that the Merger Agreement is terminated as set
forth in Article VII of the Merger Agreement, this Agreement shall automatically terminate and be
of no further force or effect. The term of this Agreement shall expire upon the expiration of the
term of the last of the covenants applicable to any Baker Shareholder.

[Remainder of Page Intentionally Left Blank. Signature Page Follows.]

 

 

     IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

	 	 	 	 	 
	 	 	VULCAN MATERIALS COMPANY
	 
	 	 	 	 
	 

	 	by:
	 	/s/ Donald M. James
	 

	 	 	 	 
	 

	 	 	 	Name: Donald M. James
	 

	 	 	 	Title: Chairman and Chief Executive Officer
	 
	 	 	 	 
	 	 	VIRGINIA HOLDCO, INC.
	 
	 	 	 	 
	 

	 	by:
	 	/s/ Daniel F. Sansone
	 

	 	 	 	 
	 

	 	 	 	Name: Daniel F. Sansone
	 

	 	 	 	Title: President and Treasurer
	 
	 	 	 	 
	 	 	BAKER HOLDINGS, L.P.,
	 
	 	 	 	 
	 

	 	by:
	 	BAKER INVESTMENT HOLDINGS, INC.,
	 

	 	 	 	as general partner
	 
	 	 	 	 
	 

	 	by:
	 	/s/ John D. Baker, II
	 

	 	 	 	 
	 

	 	 	 	John D. Baker, II, President
	 
	 	 	 	 
	 	 	EDWARD L. BAKER LIVING TRUST
	 
	 	 	 	 
	 

	 	by:
	 	/s/ Edward L. Baker
	 

	 	 	 	 
	 

	 	 	 	Edward L. Baker, as trustee
	 
	 	 	 	 
	 	 	EDWARD L. BAKER
	 
	 	 	 	 
	 

	 	by:
	 	/s/ Edward L. Baker
	 

	 	 	 	 
	 

	 	 	 	Edward L. Baker
	 
	 	 	 	 
	 	 	JOHN D. BAKER II LIVING TRUST
	 
	 	 	 	 
	 

	 	by:
	 	/s/ John D. Baker, II
	 

	 	 	 	 
	 

	 	 	 	John D. Baker II, as trustee
	 
	 	 	 	 
	 	 	ANNE D. BAKER LIVING TRUST
	 
	 	 	 	 
	 

	 	by:
	 	/s/ Anne D. Baker
	 

	 	 	 	 
	 

	 	 	 	Anne D. Baker, as trusteeexv10w1

 

Exhibit 10.1

2007 – 2009

EXECUTIVE PERFORMANCE PLAN

PLAN SUMMARY

Awards: The Performance Shares will be earned on the Vesting Date (as defined below)
only to the extent that the performance goal thresholds for the Performance Period are exceeded,
with any unearned Performance Shares being forfeited without notice on the Vesting Date. The
performance measure is cumulative cash flow (“Cumulative Cash Flow”) as described in the 2007-2009
Executive Performance Plan Overview (the “Overview”).

Performance Period: The Company’s 2007-2009 fiscal years.

Vesting: Performance Shares are earned and vest on the third anniversary of the grant date
(the “Vesting Date”). Upon the death, Disability or Retirement of a Participant (each, as defined
in the 2003 Long-Term Incentive Plan (the “Plan”)) prior to the Vesting Date, Performance Shares
will continue to vest and such Participant will be eligible for a full un-prorated award upon
vesting. Recipients will forfeit, without further notice and effective as of their date of
termination any unvested Performance Shares if their employment terminates prior to the Vesting
Date for any reason other than death, Disability or Retirement.

Change of Control: Notwithstanding the above, in the event of a Change of Control (as
defined in the Plan), all Performance Shares will be considered fully earned and will be payable at
target promptly as practicable following the Change of Control. The Compensation Committee may
adjust the Performance Shares earned to the extent the actual Cumulative Cash Flow to that date
exceeds the target specified in the Overview, but in no case will the Performance Shares earned be
less than the target.

Dividends: Dividends are not paid on Performance Shares. After the Performance Shares are
vested and shares of the Company’s Common Stock are deposited in a Wells Fargo account for the
Participant (net of taxes) soon after the Vesting Date, dividends will be paid
prospectively on all shares of the Company’s common stock if and when declared by the Board
of Directors.

Voting: Performance Shares are not entitled to any voting rights. After the Performance
Shares are vested and shares of the Company’s common stock are deposited in a Wells Fargo account
for the Participant (net of taxes) soon after the Vesting Date, the Participant will be entitled to
voting rights on the shares of the Company’s common stock.

Taxes: Taxes will be due when the Performance Shares vest based on the Fair Market
Value (as defined in the Plan) of the shares on the Vesting Date. In the year of vesting, taxes
will be reported on the appropriate tax reporting forms (W2 in the U.S., T4 in Canada).
Participants will be deemed to have elected to pay the withholding taxes owed by allowing the
Company to withhold shares on the Vesting Date (and delivering to the Participant the net shares of
the Company’s common stock) at the statutory minimum. To the extent a Participant’s taxes on the
vesting of Performance Shares exceeds the amount so withheld (i.e., because the Participant’s tax
rate exceeds the withholding rate), the Participant is responsible for paying the difference. Taxes include Federal
taxes, social insurance or FICA taxes, and state and local taxes, if applicable.

Administration: Soon after the Vesting Date, the number of net shares of the Company’s
common stock earned will be deposited into a Wells Fargo account. After the shares of common stock
are deposited following the Vesting Date, Participants can contact Wells Fargo at 1-877-910-5385
for customer service.

1

 

Communication: Target awards will be communicated to Participants during the salary
planning communication in late February and early March, when other pay decisions such as merit
increase, bonus and stock option award are communicated. Participants will receive confirmation of
the actual number of Performance Shares earned during the first quarter of the 2010 calendar year.

Registration: Upon the depositing of the shares in the Wells Fargo account, shares of the
Company’s common stock will be registered in the Participant’s name. Participants can change the
registration of the shares by calling Wells Fargo.

Disposition at Vesting: After the shares of the Company’s common stock are deposited,
Participants can leave the shares with Wells Fargo, ask Wells Fargo to sell the shares, have a
certificate issued to the Participant or have the shares electronically transferred to another
broker.

Benefits: Income from the 2007-2009 Executive Performance Plan will not be included in
earnings for the purposes of determining benefits, including pension, S&I, disability, life
insurance and other survivor benefits.

Insiders: After the Performance Shares vest and the net shares of common stock are
deposited, insiders cannot dispose of the shares of common stock without prior approval of the
Legal Department.

Other Plan Provisions: The 2007-2009 Executive Performance Plan was adopted under the Plan
and is subject to all the provisions of the Plan, including those related to the ability of the
Board of Directors to amend the Plan, the Executive Performance Plan or any awards thereunder.
Nothing in this summary or the 2007-2009 Executive Performance Plan or the Plan shall confer upon
the Participant any right of continued employment.

This plan summary is subject to the actual plan document and any additional terms and
conditions as determined by the Compensation Committee of the Board of Directors.

2

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