Document:

Document

Exhibit 10.1

ARCOSA, INC.

2022 CHANGE IN CONTROL SEVERANCE PLAN

The Arcosa, Inc. 2022 Change in Control Severance Plan, as it may be amended from time to time (the “Plan”) was adopted by the Board of Directors of Arcosa, Inc., a Delaware corporation (the “Company”), to be effective as of March 3, 2022 (the “Effective Date”).  

ARTICLE 1.
ESTABLISHMENT AND PURPOSE

1.1    The Company’s Board of Directors (the “Board”) has determined that it is appropriate to reinforce and encourage the continued attention and dedication of members of the Company’s management to their assigned duties without distraction under circumstances arising from the possibility of a Change in Control of the Company (as defined below).  Should a Change in Control occur, in addition to their regular duties, Employees (as defined below) may be called upon to assist in the assessment of any third-party or internal proposals, advise the Board as to whether such proposals would be in the best interests of the Company and its stockholders, participate in successfully completing such transactions and take such other actions as the Board might determine appropriate.

1.2    This Plan has been established for the purpose of assuring that the Company will have the continued dedication of the Employees who are Participants (as defined below) under this Plan, and the availability of their advice and counsel as to the best interests of the Company and its stockholders, notwithstanding the possibility, threat, or occurrence of a Change in Control, and to induce such Participants to remain in the employ of the Company through the provision of certain protections in the event of a qualifying Change in Control.  The Plan is intended to be an unfunded plan maintained primarily for the purpose of providing severance benefits for a select group of management or highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  This Plan document shall serve as both the plan document and summary plan description for the Plan. 

ARTICLE 2.
DEFINITIONS

2.1    “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

2.2    “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

2.3    “Board” means the Board of Directors of the Company.

2.4    “Cause” means: 

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(a)    the continued failure of the Participant to satisfactorily perform the Participant’s duties with the Company or a failure of the Participant to comply with the Company’s code of conduct or written policies or procedures, or willful failure of the Participant to follow directions of the Board or the Participant’s supervisor or manager, or any other willful act that likely will result in a materially negative effect to the Company, which, if curable, is not cured within thirty (30) days after notice thereof to the Participant by the Company); 

(b)     fraud, theft, misappropriation embezzlement, dishonesty or breach of fiduciary duty by the Participant; 

(c)    misappropriation of any corporate opportunity or otherwise obtaining personal profit from any transaction which is adverse to the interests of the Company or to the benefits of which the Company is entitled;

(d)     the conviction of a crime that has caused or may be reasonably expected to cause material injury to the Company or any of its Affiliates, or the conviction of a felony; or

(e)    the willful misconduct by the Participant which is injurious to the Company (monetarily or otherwise), which if curable, is not cured by the Participant within thirty (30) days after receipt by the Participant of a written notice from the Company. 

For purposes of this Section 2.4, no act or failure to act on the part of the Participant shall be considered “willful” unless done, or omitted to be done, by the Participant not in good faith or without reasonable belief that the action or omission of the Participant was in the best interest of the Company.  

2.5    “CEO” means the Chief Executive Officer of the Company.

2.6    “CFO” means the Chief Financial Officer of the Company.

2.7    “Change in Control” of the Company shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

(a)    any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company’s then-outstanding securities, unless the transaction resulting in a Person becoming the Beneficial Owner of thirty percent (30%) or more of the combined voting power of the Company’s then-outstanding securities is approved in advance by the Board, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (1) of paragraph (c) below; or

(b)    the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the Effective Date constitute the Board and any new director (other than a director whose initial assumption of office is 

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in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment, election or nomination for election by the Board or by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3rds) of the directors then still in office who either were directors on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended; or

(c)    there is consummated a merger or consolidation of the Company or any direct or indirect Subsidiary of the Company with any other corporation, other than (1) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least sixty percent (60%) of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates other than in connection with the acquisition by the Company or its Affiliates of a business) representing thirty percent (30%) or more of the combined voting power of the Company’s then outstanding securities; or

(d)    the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company, or a sale or disposition (whether by reorganization, merger, consolidation, split-up, spin-off, split-off, combination, subdivision, or other similar corporate transaction or event) by the Company of all or substantially all of the Company’s assets (in one transaction or a series of related transactions within any period of twenty-four (24) consecutive months) other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least sixty percent (60%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.  The sale or disposition of a Subsidiary or a division of the Company, or certain assets of the Company (or of a Subsidiary of the Company), shall not be a Change in Control unless any such transaction or series of related transactions results in a sale or disposition by the Company of all or substantially all of the Company’s assets as provided in this subparagraph (d).

Notwithstanding the foregoing provisions of this Section 2.7, to the extent required to comply with Section 409A of the Code, an event shall not constitute a Change in Control for purposes of this Plan unless such event also constitutes a change in the Company’s ownership, its effective control or the ownership of a substantial portion of its assets within the meaning of Section 409A of the Code and the regulations issues thereunder (the “409A Regulations”).  For purposes of the Plan, a Change in Control shall be effective and deemed to have occurred on the closing date of the first occurrence of the transactions described in Sections 2.7(a) – (d). 

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2.8    “Claim” means any claim, liability or obligation of any nature, arising out of or relating to this Plan or an alleged breach of this Plan.

2.9    “Code” means the Internal Revenue Code of 1986, as amended from time to time.  References to any Section of the Code shall include any successor provision thereto.

2.10    “Company” means Arcosa, Inc., a Delaware corporation, its successors and assigns and Subsidiaries of the Company.

2.11    “Committee” means the Human Resources Committee established and appointed by the Board.

2.12    “Confidential Information” means all trade secrets, inventions and confidential and proprietary information of the Company including, but not limited to, the following: all documents or information, in whatever form or medium, concerning or relating to any of the Company’s discoveries; designs; plans; strategies; models; processes; techniques; technical improvements; development tools or techniques; modifications; formulas; patterns; devices; data; product information; manufacturing and engineering processes, data and strategies; operations; products; services; business practices; policies; training manuals; principals; vendors and vendor lists; suppliers and supplier lists; customers and potential customers; contractual relationships; research; development; know-how; technical data; software; product construction and product specifications; project information and data; developmental or experimental work; plans for research or future products; improvements; interpretations, and analyses; database schemas or tables; infrastructure; marketing methods; finances and financial information and data; business plans; marketing and sales plans and strategies; budgets; pricing and pricing strategies; costs; customer and client lists and profiles; customer and client nonpublic personal information; business records; audits; management methods and information; reports, recommendations and conclusions; and other business information disclosed or made available to the Participant by the Company, either directly or indirectly, in writing, orally, or by drawings or observation.  “Confidential Information” does not include, and there shall be no obligation hereunder with respect to, information that (a) is generally available to the public on the Effective Date or (b) becomes generally available to the public other than as a result of a disclosure not otherwise permissible hereunder.  

2.13    “Date of Termination” shall mean (a) if the Participant’s employment is terminated by the Company for Disability, thirty (30) days after Notice of Termination is given to the Participant (provided that the Participant shall not have returned to the performance of the Participant’s duties on a full-time basis during such thirty (30) day period), (b) if the Participant’s employment is terminated by the Company for any other reason, the date on which a Notice of Termination is given (or the date set forth in the Notice of Termination), or (c) if the Participant terminates his or her employment for any reason, the date on which a Notice of Termination is given.

2.14    “Disability” means that a Participant has been determined to be disabled under the Company’s long-term disability plan (or any successor plans thereto); provided such disability definition complies with Section 409A of the Code and the 409A Regulations.  If, at any time during the term of this Plan, the Company does not maintain a long-term disability plan 

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or maintains a disability plan which has a definition that does not comply with the requirements of Section 409A of the Code and the 409A Regulations or the Participant is not eligible for the Company’s long-term disability plan, “Disability” shall mean that the individual has been determined to be totally disabled by the Social Security Administration.

2.15    “Employee” means any person paid through the payroll department of the Company (as opposed to the accounts payable department of the Company) and who receives from the Company an annual IRS Form W-2; provided, however, that the term “Employee” shall not include any person who has entered into an independent contractor agreement, consulting agreement, franchise agreement or any similar agreement with the Company, nor the employees of any such person, regardless of whether that person (including his or her employees) is later found to be an Employee by any court of law or regulatory authority.

2.16    “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.  References to any Section of ERISA shall include any successor provision thereto.

2.17    “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

2.18    “Good Reason” shall mean the occurrence of any of the following, unless the Participant has given his or her express prior written consent:

(a)    a material diminution in the Participant’s job title, responsibilities or duties;

(b)    after the occurrence of a Change in Control, a material adverse change in the nature or scope of the authorities, powers, functions, responsibilities, or duties attached to the position(s) with the Company that the Participant held immediately before the Change in Control;

(c)    a reduction by the Company in the Participant’s base salary (as it may be increased), unless the reduction is a proportionate reduction of the compensation of the Participant and all other senior officers of the Company as a part of a company-wide effort to enhance the Company’s financial condition; 

(d)    any action by the Company which would materially reduce the Participant’s benefits, in the aggregate, under the Benefit Plans, Incentive Plans, and Securities Plans; “Benefit Plans” include health and welfare benefit plans in which the Participant is participating at the time of a Change in Control of the Company (including, without limitation, the Company’s pension plans, group life insurance plan, and medical, dental, accident and disability plans); “Incentive Plans” include cash or bonus incentive compensation plans in which the Participant is participating at the time of a Change in Control of the Company; and “Securities Plans” include any plan or arrangement to receive securities of the Company in which the Participant is participating at the time of a Change in Control of the Company (including, without limitation, the Company’s stock option plan, and any other plan or arrangement to receive and exercise stock options, 

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stock appreciation rights, career shares, bridge shares, restricted stock, restricted stock units or grants thereof); 

(e)    change of the location where the Participant performs the majority of the Participant’s job duties immediately prior to the Change in Control (“Base Location”) to a location that is more than fifty (50) miles from the Base Location; or

(f)    any material breach by the Company of any provision of this Plan.

The Participant shall provide notice to the Company of the event alleged to constitute Good Reason within sixty (60) days after the initial occurrence of such event, and the Company shall have the opportunity to remedy the alleged Good Reason event within thirty (30) days from receipt of notice of such allegation.  If not remedied within that thirty (30) day period, the Participant may submit a Notice of Termination, provided that the Notice of Termination must be given no later than ninety (90) days after the expiration of such thirty (30) day period; otherwise, the Participant will be deemed to have accepted such event or the Company’s remedy of such event that may have given rise to the existence of Good Reason; provided, however, such acceptance shall be limited to the occurrence of such event and shall not waive the Participant’s right to claim Good Reason with respect to future similar events.

2.19    “Group President” means a President of a business segment or group of businesses of the Company, as identified by the Company in its sole discretion.

2.20    “Notice of Termination” shall mean a written notice which shall indicate those specific termination provisions in this Plan relied upon, if any, and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Participant’s employment.  

2.21    “Participant” means an Employee chosen by the Committee to participate in this Plan as provided for in Article 3 herein.

2.22    “Participation Agreement” means a written agreement between a Participant and the Company which sets out the terms of the Participant’s participation in the Plan, including any specific terms and conditions applicable to such Participant.  Each Participant Agreement shall provide that, subject to Article 9, a Participant’s participation in the Plan shall expire upon (a) such Participant’s Separation from Service with the Company for any reason other than a Qualifying Termination, or (b) upon the date mutually agreed upon by the Participant and the Company.  

2.23    “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (a) the Company or any of its subsidiaries, (b) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (c) an underwriter temporarily holding securities pursuant to an offering of such securities, or (d) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

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2.24    “Plan” means the Arcosa, Inc. 2022 Change in Control Severance Plan, as set forth herein and as hereafter amended from time to time.

2.25    “Plan Administrator” means the Committee.

2.26    “Qualifying Termination” means either within six (6) months prior to and in connection with the Change in Control or within the two (2) year period following the effective date of such Change in Control: (a) the Participant incurs a Separation from Service by the Company without Cause, or (b) the Participant incurs a Separation from Service by the Participant for Good Reason.

2.27    “Release” shall have the meaning set forth in Section 5.7.

2.28    “Separation from Service” means a termination of services provided by a Participant to the Company whether voluntarily or involuntarily, other than for death or Disability, as determined in accordance with Treas. Reg. §1.409A-1(h).  

2.29    “Severance Multiple” means, with respect to any Employee who is selected to be a Participant in the Plan in accordance with Article 3, the number based on the Participant’s position with the Company as follows: (a) three (3), for a Participant who is the CEO, (b) two (2), for a Participant who is the CFO, (c) two (2), for any Participant who is a Group President, and (d) one point five (1.5) for all other Participants, other than as described in the immediately preceding clause (a), (b), or (c). 

2.30    “Specified Employee” means any Participant who meets the definition of “specified employee,” as defined in Section 409A of the Code and using the identification methodology selected by the Committee from time to time in accordance with Treas. Reg. §1.409A-1(i).  

2.31    “Subsidiary” means (a) any corporation in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing eighty percent (80%) of the total combined voting power of all classes of stock in one of the other corporations in the chain, (b) any limited partnership, if the Company or any corporation described in item (a) above owns eighty percent (80%) of the general partnership interest and a majority of the limited partnership interests entitled to vote on the removal and replacement of the general partner, and (c) any partnership or limited liability company, if the partners or members thereof are composed only of the Company, any corporation listed in item (a) above or any limited partnership listed in item (b) above.  “Subsidiaries” means more than one of any such corporations, limited partnerships, partnerships or limited liability companies.

ARTICLE 3.
ELIGIBILITY AND PARTICIPATION

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3.1    Only Employees who are part of a select group of management or highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA shall be eligible to participate in the Plan.  Independent contractors and employees of third parties who are performing work on behalf of the Company, whether part time, full time, or temporary, shall not be eligible to participate in this Plan.

3.2    The CEO, the CFO, and each Group President shall automatically be eligible to participate in the Plan, subject to the execution and return of a Participation Agreement.  The Committee, in its discretion, shall designate all other Employees who are eligible to participate in the Plan; provided that, on or after a Change in Control, the Committee may not exclude any Employee who was a Participant in the Plan immediately prior to the Change in Control from participation in this Plan.  Each Participant shall be notified of his or her participation in this Plan in writing, shall be provided with a copy of the Plan document, and enter into a Participation Agreement with the Company, as soon as is practicable following the Committee’s selection of such Employee as a Participant in the Plan.  If the Employee fails to return a signed copy of the Participation Agreement within the time period required by the Committee (which shall be no less than five (5) business days, but no greater than two (2) weeks), such Employee’s participation in the Plan may be revoked, and such Employee may no longer be eligible for the Plan.

3.3    No Employee shall at any time have a right to participate in the Plan, despite having previously participated in the Plan, except as otherwise provided by Section 3.2 on or after a Change in Control.

ARTICLE 4.
BENEFITS UPON THE OCCURRENCE OF A CHANGE IN CONTROL

4.1    Acceleration of Vesting Upon a Change in Control for Equity Compensation Granted Prior to December 6, 2018.  With respect to awards of equity-type compensation granted prior to December 6, 2018, in addition to any provisions concerning acceleration of vesting in any applicable plan or agreement relating to such equity-type compensation that may be outstanding between the Participant and the Company or any Subsidiary of the Company, and notwithstanding any provision to the contrary in any such plan or agreement, upon the effective date of a Change in Control, all units, stock options, incentive stock options, performance shares, performance awards, career shares, bridge shares, restricted shares, and stock appreciation rights then held by or for the benefit of the Participant shall immediately become one hundred percent (100%) vested and exercisable.

4.2    Conversion of Performance-Based Restricted Stock Unit Awards Granted on or after December 6, 2018 Upon a Change in Control.  With respect to “performance-based restricted stock unit” awards (“PBRSUs”) granted on or after December 6, 2018, upon the occurrence of a Change in Control, such PBRSUs that are unvested and outstanding as of the Change in Control shall convert into “time-based restricted stock units,” with the number of units subject to the award determined as if target performance had been achieved and with vesting to occur at the time or times set forth in the underlying award agreement. 

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ARTICLE 5.
BENEFITS UPON A QUALIFYING TERMINATION 

5.1    Compensation and Benefits Upon a Qualifying Termination.  Subject to Section 5.2 below, a Participant shall be entitled to the compensation provided in Section 5.4 and the benefits in Sections 5.5 and 5.6 hereof upon the occurrence of a Qualifying Termination, provided that the Participant executes and returns the Release (as set forth in Section 5.7) and continues to comply with Article 6 hereof.  The provisions of this Article 5 will not apply if the Participant’s Separation from Service is the result of the Participant’s death, the Participant’s Disability, the Participant’s termination by the Company for Cause or the Participant’s resignation for any reason other than for Good Reason, or if such Separation from Service occurs more than two (2) years following the effective date of a Change in Control.  

5.2    Separation from Service Prior to a Change in Control.  Notwithstanding the foregoing provisions of Section 5.1, if a Participant incurs a Separation from Service by the Company (other than for Cause or Disability) within the six (6) month period prior to a Change in Control, and it is reasonably demonstrated that such Separation from Service (x) was at the request of a third-party who has taken steps reasonably calculated to effect a Change in Control, or (y) otherwise arose in connection with a Change in Control, then for all purposes of this Plan, such Separation from Service shall be deemed to have occurred immediately following a Change in Control.  In addition, if a Participant incurs a Separation from Service by the Company other than for Cause or Disability within the ninety (90) days prior to a Change in Control, such Separation from Service shall conclusively be deemed to have occurred following a Change in Control.  However, the provisions of this Article 5 will not apply if such Participant voluntarily incurred a Separation from Service, whether or not for Good Reason, prior to a Change in Control (i.e, a Participant may terminate for Good Reason only after the effective date of a Change in Control of the Company).

5.3    Notice of Termination.  A Participant’s Separation from Service by the Company for Cause or Disability, or by a Participant for Good Reason, shall be communicated by a Notice of Termination to such Participant or the Company, as applicable.  For purposes of this Plan, no such purported termination by the Company or such Participant shall be effective without such Notice of Termination.

5.4    Severance Compensation upon a Qualifying Termination.  A Participant shall be entitled to receive the following severance benefits from the Company upon a Qualifying Termination of such Participant, subject to the conditions set forth herein:  

(a)    Except as otherwise provided by Section 12.8 below, the Company shall pay to such Participant, in a lump sum payment in cash, on or before the eighth (8th) day following the date the Participant returns the Release, an amount equal to:

(i)    (A) such Participant’s Severance Multiple, multiplied by (B) the sum of (1) such Participant’s base salary as in effect immediately prior to the Change in Control or, if higher, in effect immediately prior to the Date of Termination, and (2) the target annual incentive bonus (under all Company bonus plans for which such Participant is eligible) in effect for the fiscal year in which 

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the Change in Control occurs or, if higher, in effect for the fiscal year in which the Date of Termination occurs, or, if higher and the Change in Control or Date of Termination occurs more than six (6) months into a fiscal year, the annual incentive bonus payable based on actual performance (determined through the Change in Control or Date of Termination, as applicable); plus

(ii)    the Participant’s annual incentive bonus in effect for the fiscal year in which the Qualifying Termination occurs, calculated at target performance, and pro-rated based on the number of days employed in the performance period (under all Company bonus plans for which such Participant is eligible).

Notwithstanding the foregoing, in the event the time period for the execution and return of the Release (including any revocation period) begins in one taxable year and ends in a second taxable year, the payments provided by this Section 5.4(a) shall not be made until the later of (x) the first business day in the second (2nd) taxable year or (y) the eighth (8th) day following the date the Participant returns the Release. 

(b)    Except as otherwise provided by Section 12.8 below, for a period of twenty-four (24) months subsequent to such Participant’s Date of Termination, the Company shall at its expense continue on behalf of the Participant and his or her dependents and beneficiaries, all medical, dental, vision, health, and life insurance benefits, which were being provided to the Participant at the time of the Participant’s Date of Termination,  as such benefits may be amended from time to time.  The benefits provided in this Section 5.4(b) shall be no less favorable to the Participant, in terms of amounts and deductibles and costs to the Participant, than the coverage in effect immediately prior to the Change in Control (or, if more favorable to the Participant, immediately prior to the Notice of Termination).  The Company’s obligation hereunder to provide a benefit shall terminate if the Participant obtains comparable coverage under a subsequent employer’s benefit plan.  For purposes of the preceding sentence, benefits will not be comparable during any waiting period for eligibility, for such benefits or during any period during which there is a preexisting condition limitation on such benefits.  In the event that the Participant’s participation in any such coverage is barred under the general terms and provisions of the plans and programs under which such coverage is provided, or any such coverage is discontinued or the benefits thereunder are materially reduced, the Company shall provide or arrange to provide the Participant with benefits substantially similar to those which the Participant was entitled to receive under such coverage immediately prior to the Notice of Termination.  At the end of the period of coverage set forth above, the Participant shall have the option to have assigned to the Participant at no cost to the Participant and with no apportionment of prepaid premiums, any assignable insurance owned by the Company and relating specifically to the Participant, and the Participant shall be entitled to all health and similar benefits that are or would have been made available to the Participant under law (including continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985).  To the extent any benefits provided under this Section 5.4(b) are otherwise taxable to the Participant, such benefits shall be provided as separate monthly in-kind payments of those benefits, and, to the extent those benefits are subject to and not otherwise exempt 

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from Section 409A of the Code, the provision of the in-kind benefits during one calendar year shall not affect the in-kind benefits to be provided in any other calendar year.

(c)    Except as otherwise provided by Section 12.8 below, the Participant shall receive, at the Company’s expense, executive level outplacement services at a customary and reasonable cost (up to a maximum of $15,000) during the two (2) year period following the Date of Termination, using a reputable provider selected by the Participant with the Company’s consent, which shall not be unreasonably withheld.

(d)    The payments under this Section 5.4 shall be subject to withholding of federal, state and local income, FICA and similar taxes, if required by law.  

5.5    Acceleration of Vesting and Extension of Exercise Rights Upon a Qualifying Termination for Equity Compensation Granted on or After December 6, 2018.

(a)    Subject to Section 5.5(b) below, with respect to awards of equity-type compensation granted on or after December 6, 2018, subject to any provisions concerning acceleration of vesting in any applicable plan or agreement relating to such equity-type compensation that may be outstanding between the Participant and the Company or any Subsidiary of the Company, upon the occurrence of a Qualifying Termination, all units, stock options, incentive stock options, performance shares, performance awards, career shares, bridge shares, restricted shares, and stock appreciation rights then held by or for the benefit the Participant shall immediately become one hundred percent (100%) vested and exercisable.

(b)    With respect to awards of equity-type compensation granted on or after December 6, 2018, subject to any provisions concerning extension of exercise rights in any applicable plan or agreement relating to such equity-type rights or compensation that may be outstanding between the Participant and the Company or any Subsidiary of the Company, upon the occurrence of a Qualifying Termination, the Participant’s right to exercise any previously unexercised options or other equity-type rights shall not terminate until the latest date on which the option or other right granted under such agreement would expire under the terms of such agreement but for the Participant’s Separation from Service; with respect to any incentive stock option held by the Participant, if not exercised within three (3) months after such Participant’s Date of Termination, such options shall immediately convert to non-qualified stock options.  

5.6    Acceleration of Vesting of Retirement and Deferred Compensation Benefits Upon a Qualifying Termination.  In addition to any provisions concerning acceleration of vesting in any applicable plan or agreement relating to retirement or deferred compensation-type benefits that may be outstanding between the Participant and the Company (including, without limitation, the Company’s 401(k) Plan and Deferred Compensation Plan), and notwithstanding any provision to the contrary in any such plan or agreement, upon a Qualifying Termination, all accounts, interests, rights, and benefits of the Participant in any such plan or agreement shall immediately become one hundred percent (100%) vested, to the extent permitted by applicable law.  Notwithstanding the foregoing, in no event shall any acceleration of vesting pursuant to this Section 5.6, to the extent required to comply with Section 409A the Code (to prevent an 

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impermissible payment or acceleration of nonqualified deferred compensation), change the time or form of payment of a benefit under any plan or program that is subject to Section 409A of the Code.

5.7    Release. Notwithstanding anything to the contrary contained herein, a Participant shall not be eligible to receive any payment or benefit provided for in Section 5.4,  Section 5.5, or Section 5.6,  unless the Participant shall have executed a general release of all claims against the Company and its Affiliates on or before the date that is thirty (30) days following the Date of Termination (or such longer period required by applicable law), in form and substance reasonably acceptable to the Company (the “Release”), effective as of the Participant’s Date of Termination or a date subsequent thereto and shall not have revoked the Release.  If the Participant has not properly executed the Release and returned it to the Company within the time period provided in the immediately preceding sentence or the Participant revokes the Release prior to the date the Release becomes fully effective and irrevocable, such Participant shall not be entitled at any time to any payment or benefit provided for in Section 5.4, Section 5.5, or Section 5.6.

5.8    No Obligation to Mitigate Damages; No Effect on Other Contracts.  No Participant shall be required to mitigate damages, or the amount of any payment provided for under this Plan by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Plan be reduced by any compensation earned by the Participant as the result of employment by another employer after the Date of Termination, or otherwise.  The provisions of this Plan, and any payment provided for hereunder, shall not reduce any amounts otherwise payable, or in any way diminish the Participant’s existing rights, or rights which would accrue solely as a result of the passage of time, under any other agreement, contract, plan or arrangement with the Company.

ARTICLE 6.
RESTRICTIVE COVENANTS

6.1    Non-Disclosure; Confidential Information.  

(a)    During the Participant’s employment with the Company, the Company shall grant the Participant otherwise prohibited access to the Company’s Confidential Information.  Throughout the Participant’s employment with the Company and thereafter: (x) the Participant shall hold all Confidential Information in the strictest confidence, take all reasonable precautions to prevent its inadvertent disclosure to any unauthorized person, and follow all policies of the Company protecting the Confidential Information; and (y) the Participant shall not, directly or indirectly, utilize, disclose or make available to any other person or entity, any of the Confidential Information, other than in the proper performance of the Participant’s duties.

(b)    If the Participant shares Confidential Information with outside persons, other than as required to comply with applicable laws and as necessary to manage the Participant’s personal finances or in accordance with the exceptions contained in this Section 6.1(b), the Participant’s rights under this Plan may be forfeited upon a determination by the Committee that the Participant has violated this Section 6.1(b).  

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Nothing in this Plan prohibits the Participant from reporting possible violations of U.S. federal or state law or regulations to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, making other disclosures that are protected under the whistleblower provisions of U.S. federal or state law or regulation, or participating in an investigation or proceeding conducted by any governmental or law enforcement agency or entity.  The Participant does not need the prior authorization of the Company to make any such reports or disclosures, and the Participant is not required to notify the Company that the Participant has made such reports or disclosures.  

(c)    This Plan also does not prohibit the disclosure of a trade secret (as that term is defined under applicable law) that: (i) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, where such disclosure is made solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  If the Participant files a lawsuit for reporting a suspected violation of the law, the Participant may disclose the trade secret to Participant’s attorney and use the trade secret in the court proceeding if the Participant files any document containing the trade secret under seal and does not disclose the trade secret except pursuant to court order.

6.2    Non-Competition.  In consideration for (a) a Participant’s participation in this Plan; (b) the Company’s promise to provide Confidential Information to the Participant, (c) the substantial economic investment made by the Company in the Confidential Information and the goodwill of the Company, (d) the Company’s employment of the Participant and (e) the compensation and other benefits provided by the Company to the Participant, to protect the Company’s Confidential Information and the business goodwill of the Company, the Participant agrees to the following restrictive covenants and the covenants set forth in Sections 6.3, 6.4, and 6.5.  For a twelve (12) month period (the “Restricted Period”) subsequent to the Participant’s Date of Termination, the Participant agrees he or she will not, directly or indirectly, absent the express, written consent of the CFO or the Chief Legal Officer of the Company, or either of their respective designees, become or serve as, directly or indirectly, a director, officer, employee, owner, partner, advisor, agent, or consultant with, or engage in, any business that manufactures, provides or sells infrastructure products, which includes but is not limited to, construction materials and equipment, transportation products, energy equipment, and any other products and services provided by the Company or its affiliates during the Participant’s employment (“Competing Business”), in any state, and other similar geographic territory, in which the Company or any of its affiliates operate as of the Date of Termination and for which Participant performed services, had responsibility or received Confidential Information (“Restricted Territory”).  Further, for a twelve (12) month period after the Participant’s Date of Termination, the Participant agrees not to serve as a consulting or testifying expert for any third party in any legal proceedings (including arbitration or mediation) or threatened legal proceedings involving the Company, unless called to do so by the Company or an Affiliate.  The Participant agrees to notify the CFO in writing, with a copy of such notice to the Chief Legal Officer of the Company, in the event the Participant accepts employment of any nature with any person, business, or entity during the Restricted Period.

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6.3    Non-Solicitation. During the Restricted Period, other than in connection with the Participant’s duties for the Company, the Participant shall not, and shall not use any Confidential Information to, directly or indirectly, either as a principal, manager, agent, employee, consultant, officer, director, stockholder, partner, investor or lender or in any other capacity, and whether personally or through other persons, solicit business from, interfere with, or induce to curtail or cancel any business or contracts with the Company, or attempt to solicit business with, interfere with, or induce to curtail or cancel any business or contracts with the Company, or do business with any actual or prospective customer or client of the Company with whom the Company did business or who the Company solicited within the preceding two (2) years, and who or which: (a) the Participant contacted, called on, serviced or did business with during the Participant’s employment with the Company; (b) the Participant learned of as a result of the Participant’s employment with the Company; or (c) about whom the Participant received Confidential Information.  This restriction applies only to business which is in the scope of services or products provided by the Company.

6.4    Non-Recruitment.  During the Restricted Period, other than in connection with the Participant’s duties for the Company, the Participant shall not, and shall not use any Confidential Information to, on behalf of the Participant or on behalf of any other person or entity, directly or indirectly, hire, solicit, induce, recruit, engage, go into business with, or attempt to hire, solicit, induce, recruit, engage, go into business with, or encourage to leave or otherwise cease his/her employment with the Company, any individual who is an Employee or independent contractor of the Company or who was an Employee or independent contractor of the Company within the twelve (12) month period prior to the Participant’s Date of Termination.

6.5    Non-Disparagement.  The Participant agrees that the Company’s goodwill and reputation are assets of great value to the Company which have been obtained and maintained through great costs, time and effort.  Therefore, during the Participant’s employment and after the Participant’s Separation from Service for any reason, the Participant shall not in any way disparage, libel or defame the Company, its business or business practices, its products or services, or its stockholders, managers, officers, directors, Employees, investors or Affiliates.  Nothing in this Section 6.5 is intended to interfere with the Participant’s right to engage in the conduct set forth in Section 6.1(b) or (c). 

6.6    Remedies.  By participating in this Plan, the Participant acknowledges that the geographic scope and duration of the restrictions and covenants contained in Sections 6.1, 6.2, 6.3, 6.4 and 6.5 are fair and reasonable in light of (a) the nature and wide geographic scope of the operations of the Company’s business; (b) the Participant’s level of control over and contact with the business in the Restricted Territory; and (c) the amount of compensation and Confidential Information that the Participant is receiving in connection with the Participant’s employment with the Company.  If the Participant violates any of the restrictions contained in Sections 6.1, 6.2, 6.3, 6.4 or 6.5, the Restricted Period shall be suspended and shall not run in favor of the Participant until such time that the Participant cures the violation to the satisfaction of the Company and the period of time in which the Participant is in breach shall be added to the Restricted Period applicable to such covenant(s).  Further, by participating in this Plan, the Participant acknowledges that the restrictions contained in Sections 6.1, 6.2, 6.3, 6.4 and 6.5, in view of the nature of the Company’s businesses, are reasonable and necessary to protect their legitimate business interests, business goodwill and reputation, and that any violation of these 

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restrictions would result in irreparable injury and continuing damage to the Company.  Accordingly, by participating in this Plan, the Participant acknowledges and agrees that the Participant, in the event of the Participant’s breach or threatened breach of the provisions in Sections 6.1, 6.2, 6.3, 6.4 and 6.5, the Company shall be entitled to a temporary restraining order and injunctive relief restraining the Participant from the commission of such breach or threatened breach, without the necessity of establishing irreparable harm or the posting of a bond, and to recover from the Participant damages incurred by the Company as a result of the breach, as well as the Company’s attorneys’ fees, costs and expenses related to such breach or threatened breach.  In addition, in the event the Participant violates any of the restrictions contained in Sections 6.1, 6.2, 6.3, 6.4 and 6.5, all payments under Section 5.4 and the benefits under Sections 5.5 and 5.6 shall immediately cease, no additional payments will be due to the Participant pursuant to the Plan and any equity awards or benefits that vested in accordance with Section 5.5 or 5.6 shall be forfeited, and, to the extent the Participant has previously received payments pursuant to the Plan, upon written demand by the Company, the Participant must immediately pay the Company the full amount of such prior payments.  Nothing contained in this Plan shall be construed as prohibiting the Company from pursuing any other remedies available to it for any breach or threatened breach, including, without limitation, the recovery of money damages, attorneys’ fees, and costs.  The existence of any claim or cause of action by the Participant against the Company, whether predicated on the Plan or otherwise, shall not constitute a defense to the enforcement by the Company of the restrictive covenants contained in Sections 6.1, 6.2, 6.3, 6.4 or 6.5, or preclude injunctive relief.

6.7    Survival. The provisions of  this Article 6 creating obligations extending beyond the term of this Plan and the Participation Agreement and the Participant’s termination of employment (collectively, the “Surviving Provisions”) shall survive the expiration or termination of this Plan.

ARTICLE 7.
EFFECT OF SECTION 280G AND LIMIT ON GOLDEN PARACHUTE PAYMENTS

7.1    Payments.  In the event that any severance and other benefits provided to or for the benefit of the Participant or his or her legal representatives and dependents pursuant to this Plan and any other agreement, benefit, plan, or policy of the Company (this Plan and such other agreements, benefits, plans, and policies collectively being referred to herein as the “Change in Control Arrangements”) constitute “parachute payments” within the meaning of Section 280G(b)(2)(A)(i) of the Code (such severance and other benefits being referred to herein as the “Payments”), the Company will provide the Participant with a computation of (a) the maximum amount of Payments due to the Participant under the Change in Control Arrangements that could be made without the imposition of the excise tax under Section 4999 of the Code (said maximum amount being referred to as the “Capped Amount”); (b) the value of all Payments that could be made pursuant to the terms of the Change in Control Arrangements (all said payments, distributions and benefits being referred to as the “Uncapped Payments”); (c) the dollar amount of excise tax (if any) which the Participant would become obligated to pay pursuant to Section 4999 of the Code as a result of receipt of the Uncapped Payments (the “Excise Tax Amount”); and (d) the net value of the Uncapped Payments after reduction by (i) the Excise Tax Amount, (ii) the estimated income taxes payable by the Participant on the difference between the 

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Uncapped Payments and the Capped Amount, assuming that the Participant is paying the highest marginal tax rate for state, local and federal income taxes, and (iii) the estimated hospital insurance taxes payable by the Participant on the difference between the Uncapped Payments and the Capped Amount based on the hospital insurance tax rate under Section 3101(b)(1) of the Code and the additional tax for income in excess of $200,000 under Section 3101(b)(2) of the Code (the “Net Uncapped Amount”).  If the Capped Amount is greater than the Net Uncapped Amount, the Participant shall be entitled to receive or commence to receive Payments equal to the Capped Amount; or if the Net Uncapped Amount is greater than the Capped Amount, the Participant shall be entitled to receive or commence to receive Payments equal to the Uncapped Payments.  If the Participant receives the Uncapped Payments, then the Participant shall be solely responsible for the payment of all income and excise taxes due from the Participant and attributable to such Uncapped Payments, with no right of additional payment from the Company as reimbursement for any taxes.  If the Participant receives the Capped Amount, he or she shall be entitled to select which Payments shall be paid and which shall be forfeited.

7.2    Determination by Accountant.  Any determination required under this Article 7 shall be made in writing by independent public accountants selected by the Company (the “Accountants”), whose determination shall be conclusive and binding upon the Participant and the Company for all purposes.  For purposes of making the calculations required by this Article 7, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and the Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Article 7.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Article 7.

7.3    Company Obligation.  If the computations and valuations required to be provided by the Company to the Participant pursuant to this Article 7 are on audit challenged by the Internal Revenue Service as having been performed in a manner inconsistent with the requirements of Sections 280G and 4999 of the Code and as a result of such audit or determination, (a) the amount of cash and the benefits provided for in Article 7 remaining to Participant after completion of such audit or determination is less than (b) the amount of cash and the benefits which were paid or provided to Participant on the basis of the calculations provided for in Article 7 (the difference between (a) and (b) being referred to as the “Short Fall Amount”), then the Participant shall be entitled to receive an additional payment (an “Indemnification Payment”) in an amount such that, after payment by the Participant of all taxes (including additional excise taxes under said Section 4999 of the Code and any interest, and penalties imposed with respect to any taxes) imposed upon the Indemnification Payment and all reasonable attorneys’ and accountants’ fees incurred by the Participant in connection with such audit or determination, the Participant retains an amount of the Indemnification Payment equal to the Short Fall Amount.  The Company shall pay the Indemnification Payment to the Participant in a lump sum cash payment within ten (10) days of the completion of such audit or determination.

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ARTICLE 8.
ADMINISTRATION OF THE PLAN

8.1    Committee; Authority.  The Committee shall be responsible for the general administration and interpretation of this Plan and the proper execution of its provisions and shall have full discretion to carry out its duties.  In addition to the powers of the Committee specified elsewhere in this Plan, the Committee shall have all discretionary powers necessary to discharge its duties under this Plan. The Committee, in its discretion, shall (a) interpret or construe the Plan, and resolve ambiguities, inconsistencies and omissions, (b) prescribe, amend, and rescind any rules and regulations, as necessary or appropriate for the administration of the Plan, and prescribe the use of such forms as it deems necessary or appropriate for the efficient administration of this Plan, (c) select Employees for participation in the Plan in accordance with Article 3, and (d) make such other determinations or certifications and take such other action as it deems necessary or advisable in the administration of the Plan, including, deciding the eligibility of any person to participate in this Plan and all questions on appeal concerning this Plan.  Any interpretation, determination, or other action made or taken by the Committee shall be final, binding, and conclusive on all interested parties.  The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the Company or a Subsidiary, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of this Plan.  

8.2    Delegation.  The Committee may delegate to officers of the Company, pursuant to a written delegation, the authority to perform specified functions under the Plan.  Any actions taken by any officers of the Company pursuant to such written delegation of authority shall be deemed to have been taken by the Committee.  

ARTICLE 9.
TERM AND AMENDMENT OF THE PLAN

9.1    Term.  The Plan shall be effective from the Effective Date through the third (3rd) anniversary of the Effective Date (the “Initial Term”); provided that, the term of the Plan automatically shall be renewed for an additional one (1) year period (each, a “Renewal Term”, collectively with the Initial Term referred to herein as the “Term”) unless the Company, by action of the Board or the Committee, elects not to renew the Term at least six (6) months before the end of the Initial Term or the then-current Renewal Term, as applicable and if the Company elects not to renew the Term, then each Participant’s participation in the Plan shall expire at the end of the Initial Term or the then-current Renewal Term, as applicable, but, if a Change in Control occurs prior to the end of the Term, then in no event shall the expiration date be earlier than the date that is two (2) years and one (1) day after the effective date of a Change in Control.

9.2    Amendment.  The Company reserves the right, by action of the Board or the Committee, to amend the Plan in whole or in part at any time and from time to time on a prospective basis.  The foregoing sentence to the contrary notwithstanding, for a period of two (2) years and one (1) day after the date of a Change in Control, neither the Board nor the Committee may amend this Plan in a manner that is detrimental to the rights of any Participant without the Participant’s written consent.  

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ARTICLE 10.
LIABILITY AND INDEMNIFICATION; FINANCIAL PROVISIONS; 

10.1    No Liability; Indemnification.  No member of the Board or the Committee, nor any officer or Employee of the Company acting on behalf of the Board or the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board and the Committee, each officer of the Company, and each Employee of the Company acting on behalf of the Board or the Committee shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination, or interpretation to the fullest extent provided by law.  Except to the extent required by any unwaiveable requirement under applicable law, no member of the Board or the Committee (and no Subsidiary) shall have any duties or liabilities, including without limitation any fiduciary duties, to any Participant (or any Person claiming by and through any Participant) as a result of this Plan, or any Claim arising hereunder and, to the fullest extent permitted under applicable law, each Participant (as consideration for receiving and accepting participation in the Plan) irrevocably waives and releases any right or opportunity such Participant might have to assert (or participate or cooperate in) any Claim against any member of the Board or the Committee and any Subsidiary arising out of this Plan.  The termination of any such civil or criminal action or proceeding or the disposition of any such claim or demand, by judgment, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not in itself create a presumption that any such member of the Board or Committee did not act (1) in good faith and (2) for a purpose which he or she reasonably believed to be in accordance with the intent of this Plan.  Nothing herein shall be deemed to supersede or conflict with any agreement between a member of the Board and the Company regarding the Company’s obligations to indemnify such member from and against certain liabilities arising from the performance of the member’s duties.  Any such agreement shall govern any inconsistencies with this Section 10.1.

10.2    Financial Provisions.  All benefits payable under this Plan shall be payable and provided for solely from the general assets of the Company in accordance with this Plan, at the time such benefits are payable, unless otherwise determined by the Company.  The Company shall not be required to, but may in its discretion, establish any special or separate fund or make any other segregation of assets to assure the payment of any benefits under this Plan.  The expenses of establishment and administration of this Plan shall be paid by the Company.  Any expenses paid by the Company pursuant to this Section 10.2 and indemnification under Section 10.1 shall be subject to reimbursement by Subsidiaries of the Company of their proportionate shares of such expenses and indemnification, as determined by the Committee in its sole discretion.

ARTICLE 11.
CLAIMS PROCEDURES

11.1    Benefit Claims.  Any Participant or his or her authorized representative (collectively, the “Claimant”) must file a claim for a benefit to which he or she believes that he or she is entitled.    All claims must be in writing and delivered to the Plan Administrator by postage-prepaid certified mail.  Within ninety (90) days after receipt of a claim, the Plan Administrator shall send the claimant by certified mail, postage prepaid, notice of the granting or denying, in whole or in part, of the claim, unless special circumstances require an extension of 

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time for processing the claim.  If such extension is necessary, the Plan Administrator will give the Claimant a written notice to this effect prior to the expiration of the initial ninety (90) day period.  In no event shall such extension exceed a period of ninety (90) days from the end of the initial ninety (90) day period.  The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the benefit determination.  The Plan Administrator shall have full discretion to deny or grant a claim in whole or in part.  If notice of the denial of a claim is not furnished, the claim shall be deemed denied and the Claimant shall be permitted to exercise his or her right to review as discussed below.

11.2    Denials.  If the Plan Administrator denies a claim for benefits in whole or in part, then the Plan Administrator shall provide the Claimant with written notice setting forth: (a) the specific reason or reasons for the denial; (b) specific reference to pertinent Plan provisions on which the denial is based; (c) a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material is necessary; and (d) a description of this Plan’s claims review procedure and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following a denial of the claim on review.

11.3    Appeal.  If a Claimant receives written notification of the denial in whole or in part of his or her claim, or if a Claimant is not otherwise eligible for benefits under this Plan, within sixty (60) days of his or her receipt of claim denial or the date a Claimant becomes aware that he or she is not eligible for benefits under this Plan, if a Claimant disagrees with such action, the Claimant must file a written request with the Plan Administrator that it conduct a full and fair review of the denial of the claim for benefits.  In connection with any request for a review of the denial of a claim for benefits, a Claimant shall have the opportunity to submit written comments, documents, records, and other information relating to the claim for benefits.  The Plan Administrator shall provide a Claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to his or her claim for benefits.  A document, record, or other information shall be considered “relevant” to a Claimant’s claim for benefits if that document, record or other information: (a) was relied upon in making the benefit determination; (b) was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record or other information was relied upon in making the benefit determination; or (c) demonstrates compliance with the administrative process and safeguards required by ERISA in making the benefit determination.  The review of a denial shall take into account all comments, documents, records, and other information submitted by the Claimant, without regard to whether such information was submitted or considered in the initial benefit determination.

11.4    Review of Appeal.  Upon receipt of the request for review, the Plan Administrator shall review the claim and shall deliver to a Claimant a written decision on the claim for benefits within sixty (60) days after the receipt of his or her request for review, except that if there are special circumstances (such as the need to hold a hearing, if necessary) that require an extension of time for processing, the sixty (60) day period shall be extended to one hundred twenty (120) days and a Claimant will be given written notice of the extension prior to the expiration of the initial sixty (60) day period.  In no event shall such extension exceed a period of sixty (60) days from the end of the initial sixty (60) day period.  The extension notice shall indicate the 

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special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the determination on review.  If notice of the denial of a claim on review is not furnished, the claim shall be deemed denied and a Claimant shall be permitted to exercise a Claimant’s right to review as discussed below.

11.5    Subsequent Denial.  If the Plan Administrator denies a Claimant’s claim for benefits on review, in whole or in part, then the Plan Administrator shall provide a Claimant with written notice setting forth: (a) the specific reason or reasons for the denial; (b) specific reference to pertinent Plan provisions on which the denial is based; (c) a statement that a Claimant are entitled to receive, upon request and free of charge reasonable access to, and copies of all records and other information relevant to a Claimant’s claim for benefits; and (d) a statement describing any voluntary appeal procedures offered by the Plan Administrator and a Claimant’s right to obtain information about such procedures, and a statement of a Claimant’s right to bring a civil action under Section 502(a) of ERISA.  

ARTICLE 12.
MISCELLANEOUS

12.1    No Limit on the Company’s Authority.  Prior to a Change in Control, nothing contained in this Plan shall be deemed to qualify, limit or alter in any manner the Company’s sole and complete authority and discretion to establish, regulate, determine or modify at any time, the terms and conditions of employment, including, but not limited to, levels of employment, hours of work, the extent of hiring and employment termination, when and where work shall be done, or any other matter related to the conduct of its business or the manner in which its business is to be maintained or carried on, in the same manner and to the same extent as if this Plan were not in existence.

12.2    Successor to the Company.  

(a)    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 by written agreement in form and substance satisfactory to the Participant, expressly, absolutely and unconditionally to assume and agree to perform this Plan 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. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 12.2 or which otherwise becomes bound by all the terms and provisions of this Plan by operation of law.

(b)    This Plan (and any Participation Agreement) shall inure to the benefit of and be enforceable by the Participant’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If the Participant should die while any amounts are still payable to the Participant hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to the Participant’s devisee, legatee, or other designee or, if there be no such devisee, legatee or other designee, to executor or administrator of the Participant’s estate.

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12.3    No Right to Continued Service.  Nothing in this Plan shall be construed as giving any Participant the right to be retained in the employ of the Company or any right to any payment whatsoever, except to the extent of the benefits provided for by this Plan.  Except as otherwise provided for herein, the Company expressly reserves the right prior to a Change in Control to dismiss any Participant at any time and for any reason without liability for the effect which such dismissal might have upon him or her as a Participant of the Plan.

12.4    Subsidiaries.  In this Plan, there are numerous references to the Participant’s employment by and duties with the Company, payment of benefits and compensation by the Company, and termination of employment with the Company.  The Participant may be employed, currently or at some time in the future, by a Subsidiary of the Company.  Any transfer of a Participant’s employment from the Company to a Subsidiary or from one Subsidiary to another Subsidiary will not constitute a termination of employment with the Company for any reason hereunder unless otherwise specifically provided herein.  In addition, unless otherwise specifically provided herein, “termination of employment with the Company” shall mean termination of employment with the Company and all of its Subsidiaries, and “termination of employment by Company” shall mean termination of employment by the entity which actually employs the Participant.  Other references to employment by the Company, duties with the Company, and salary and benefits shall include employment, duties, salary, and benefits with respect to the entity which actually employs the Participant.  However, with respect to the definition of Change in Control of the Company, except as otherwise specifically provided herein, references to the Company shall mean only the Company, and the obligations under Sections 4 and 5 herein shall be obligations of the Company.

12.5    Governing Law.  To the extent not preempted by ERISA, this Plan shall be governed by, construed, and enforced in accordance with the laws of the State of Texas (excluding any conflict of laws, rule or principle of Texas law that might refer the governance, construction, or interpretation of this Plan to the laws of another state).  A Participant’s sole remedy for any Claim shall be against the Company, and no Participant shall have any claim or right of any nature against any Subsidiary or any stockholder or existing or former director, officer or Employee of the Company or any Subsidiary.  The individuals and entities described above in this Section 12.5 (other than the Company) shall be third-party beneficiaries of this Plan for purposes of enforcing the terms of this Section 12.5.

12.6    Validity.  In the event any provision of this Plan shall be held illegal or invalid for any reason, the illegality or invalidity of such provision shall not affect the remaining parts of this Plan, and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included herein.

12.7    Notices.  For purposes of this Plan, notices and all other communications provided for in the Plan shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, as follows:

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(a)    If to the Company:

Arcosa, Inc.
500 North Akard St., Suite 400
Dallas, TX 75201
Attention: Chief Legal Officer

(b)    If to the Participant, to the address set forth on the books and records of the Company (as updated by the Participant from time to time).  

12.8    Section 409A.  

(a)    This Plan is intended to be interpreted and applied so that the payments and benefits set forth herein shall either be exempt from the requirements of Section 409A of the Code, or shall comply with the requirements of Section 409A of the Code.  In no event may a Participant, directly or indirectly, designate the calendar year of any payment to be made under this Plan to the extent such payments constitute a “deferral of compensation” within the meaning of Section 409A of the Code.  Notwithstanding anything in this Plan or elsewhere to the contrary, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of any amounts or benefits that constitute “non-qualified deferred compensation” within the meaning of Section 409A of the Code upon or following a termination of the Participant’s employment unless such termination is also a Separation from Service and, for purposes of any such provision of this Plan, references to a “termination,” “termination of employment” or like terms shall mean a Separation from Service.  Each payment under this Plan to a Participant (including any installment payments) shall be deemed a separate payment.

(b)    To the extent (i) any payment or payments to which a Participant becomes entitled under this Plan, or any agreement or plan referenced herein, in connection with the Participant’s Separation from Service with the Company constitute deferred compensation subject to Section 409A of the Code, and (ii) the Participant is deemed at the time of such Separation from Service to be a Specified Employee, then such payment or payments shall not be made or commence until the earliest of (A) the expiration of the six (6) month period measured from the date of the Participant’s Date of Termination; or (B) the date of the Participant’s death following such Separation from Service.  Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this Section 12.8 shall be paid to the Participant or the Participant’s beneficiary in one lump sum. 

(c)    The Participant has reviewed with the Participant’s own tax advisors the tax consequences of this Plan and the transactions contemplated hereby.  The Participant is relying solely on his or her tax advisors and not on any statements or representations of the Company or any of its agents and understands that the Participant (and not the Company) shall be responsible for the Participant’s own tax liability that may arise as a 

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result of this Plan or the transactions contemplated hereby, except as otherwise specifically provided in this Plan.

ARTICLE 13.
ERISA RIGHTS STATEMENT

As a Participant in this Plan, the Participant (for purposes of Article 13, “you” or “your” as applicable) is entitled to certain rights and protections under ERISA.  ERISA provides that all Participants shall be entitled to:  

Receive Information About Your Plan and Benefits  

Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites and union halls, all documents governing this Plan, including insurance contracts and collective bargaining agreements, and a copy of the latest annual report (Form 5500 Series) filed by this plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.  

Obtain, upon written request to the Company’s Chief Legal Officer, copies of documents governing the operation of this Plan, including insurance contracts and collective bargaining agreements, and, to the extent applicable, copies of the latest annual report (Form 5500 Series) and updated summary plan description.  The Plan Administrator may make a reasonable charge for the copies.  

Receive a summary of this Plan’s annual financial report, to the extent applicable.  The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.  

Prudent Actions by Plan Fiduciaries  

In addition to creating rights for plan participants ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan.  The people who operate your plan, called “fiduciaries” of this Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries.  No one, including your employer, your union, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA.  

Enforce Your Rights  

If your claim for a benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.  

Under ERISA, there are steps you can take to enforce the above rights.  For instance, if you request a copy of Plan documents or the latest annual report from this Plan and do not receive them within thirty (30) days, you may file suit in a Federal court.  In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you 

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receive the materials, unless the materials were not sent because of reasons beyond the control of the administrator.  If you have a claim for benefits which is denied or ignored, in whole or in part, and you disagree with that denial, you must file an appeal of that denial in accordance with the claims procedures described in Article 11 above.  After your appeal is denied in accordance with the claims procedures, you may file suit in a state or Federal court.  In addition, if you disagree with this Plan’s decision or lack thereof concerning the qualified status of a domestic relations order or a medical child support order, you may file suit in Federal court.  If it should happen that Plan fiduciaries misuse this Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court.  The court will decide who should pay court costs and legal fees.  If you are successful, the court may order the person you have sued to pay these costs and fees.  If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.  

Assistance with Your Questions  

If you have any questions about your plan, you should contact the Company’s Chief Legal Officer.  If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Company’s Chief Legal Officer, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.  You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.  

IMPORTANT INFORMATION ABOUT THIS PLAN

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	Name of the Plan	Arcosa, Inc. 2022 Change in Control Severance Plan
	Name and Address of the Plan Sponsor	Arcosa, Inc.
500 North Akard St., Suite 400
Dallas, TX 75201

	Plan Sponsor Identification Number	82-5339416
	Plan Number	502
	Type of Plan	Change in Control Severance Plan
	Name, Address, and Telephone Number of the Plan Administrator	Human Resources Committee of the Board of Directors of Arcosa, Inc.
c/o Chief Legal Officer
500 North Akard St., Suite 400
Dallas, TX 75201
(972) 942-6500

	Agent for Service of Legal Process	Plan Administrator
	12-Month period on which the Plan records are kept	Begins January 1 and ends on December 31 each calendar year; provided that the first period shall be a short period beginning on March 3, 2022 and ending on December 31, 2022.
	Plan’s Effective Date	March 3, 2022

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IN WITNESS WHEREOF, the Company has caused this instrument to be executed as of March 3, 2022.

                            ARCOSA, INC.

By:    /s/ Gail M. Peck                    
Name:    Gail M. Peck
Title:    Chief Financial Officer
    

    Signature Page to the 
    Arcosa, Inc. 2022 Change in Control Severance Planex_343806.htm

 

Exhibit 10.1

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (this “Agreement”) is dated as of March 1, 2022, by and among American National Bankshares Inc., a Virginia corporation (the “Company”), American National Bank and Trust Company, a national banking association (the “Bank”), and Jeffrey V. Haley (“you”).

 

The parties, intending to be legally bound, agree as follows:

 

1.         Employment and Acceptance. You shall be employed as President and Chief Executive Officer of the Company and the Bank. You shall have the duties and responsibilities that are commensurate with your position and shall also render such other services and duties as may be reasonably assigned you from time to time by the Board of Directors of the Company, consistent with your position with the Company, including serving in a senior executive capacity with any one or more of the Company’s Affiliates (as defined below). You hereby accept and agree to such employment and agree to carry-out your duties and responsibilities to the best of your ability in a competent, efficient and businesslike manner. You further agree to comply with all the policies, standards and codes of conduct of the Company now or hereafter adopted.

 

Unless the context otherwise requires, references in this Agreement to the “Company” also shall mean and refer to the Bank, and any other business entity that, directly or indirectly through one or more intermediaries, is controlled by, or is under common control with the Company (each, an “Affiliate”).

 

2.         Term. This Agreement is effective as of January 1, 2022 and will expire on December 31, 2024 (the “Initial Three Year Term”); provided that on and after January 1, 2023, the Initial Three Year Term shall be automatically extended by one (1) day on each day that passes while you are employed pursuant to this Agreement (including any day after the end of the Initial Three Year Term) so that there will always be two (2) years remaining in the term of this Agreement (the Initial Three Year Term and any extended term of this Agreement is referred to as the “Employment Period”). In the event of the termination of your employment for any reason after January 1, 2023 when the automatic one-day extensions begin, the automatic one-day extensions shall cease as of your last day of employment pursuant to this Agreement. At any time on or after January 1, 2023, the Company may give you written notice that the Employment Period will not be extended on a daily basis (“Nonrenewal Notice”), in which case this Agreement will terminate two (2) years after the date of the Nonrenewal Notice, but not before the completion of the Initial Three Year Term, or such later date as may be specified in the Nonrenewal Notice. Notwithstanding anything in this Agreement to the contrary, this Agreement and the Employment Period will automatically terminate on the first day of the month immediately following the month in which you turn sixty-seven (67). The last day of the Employment Period is sometimes referred to in this Agreement as the “Expiration Date.”

 

3.         Compensation.

 

(a)         Base Salary. During the Employment Period, you shall receive for your services an annual base salary (the “Base Salary”) in an amount to be determined by the Company in accordance with the salary administration program of the Company as it may from time to time be in effect. The Base Salary will be reviewed annually and may be adjusted upward or downward in the sole discretion of the Human Resources and Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) or a majority of the independent members of the Board of Directors of the Company. The initial Base Salary will be $575,000. In no event will the Base Salary be less than $575,000 during the Employment Period.

 

(b)         Short-Term and Long-Term Incentives. During the Employment Period and beginning for the 2022 calendar year, you may participate in such short-term and/or long-term cash and/or equity incentive plan(s) in such manner and subject to such terms and conditions as the Compensation Committee or the Board of Directors of the Company, in its sole discretion, may determine. An annual bonus, if any, will be paid within two and a half months after the end of the applicable year. To be eligible to receive any bonus, you must be employed by the Company on the date such bonus is paid, unless you have retired in accordance with the Company’s retirement policy after the date on which you were deemed to have earned any bonus under the applicable bonus or incentive plan.

 

4.         Benefits; Business Expenses.

 

(a)         Benefits. You will eligible to participate in any plans, programs, or forms of compensation or benefits that the Company provides to the class of employees that includes you, on a basis not less favorable than that provided to such class of employees, including without limitation, group medical, disability and life insurance, vacation and sick leave, and retirement. It is understood that the Board of Directors of the Company may, in its sole discretion, establish, modify or terminate such plans, programs or benefits.

 

(b)         Business Expenses. The Company will pay on your behalf (or promptly reimburse you for) reasonable expenses incurred by you at the request of, or on behalf of, the Company in the performance of your duties pursuant to this Agreement and in accordance with the Company’s policies.

 

(c)         Paid Time-Off. You will be entitled to paid time-off based upon your position and years of service, as established by the Company, to be taken at such times and intervals as shall be determined by you with the approval of the Company, which approval shall not be unreasonably withheld.

 

(d)         Automobile. The Company will provide you with an appropriate automobile or automobile allowance in accordance with the Company’s policies and will cover such expenses as provided for in the Company’s policies.

 

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5.         Termination and Termination Benefits. The Employment Period and your employment may be terminated by either the Company or you at any time or for any reason. Upon termination of your employment during the Employment Period, you shall be entitled to the compensation and benefits described in this Section 5 and shall have no further rights to any compensation or other benefits from the Company or any of its Affiliates, provided that Section 6 shall govern the compensation and other benefits payable to you in connection with the termination of your employment following a Change in Control (as defined in Section 6(b)) of the Company.

 

(a)         Termination as a Consequence of Death or Incapacity. If you die while employed by the Company, in addition to all other benefits accruing upon your death the Company will pay your beneficiary designated in writing (provided such writing is executed and dated by you and delivered to the Company in a form acceptable to the Company prior to your death) and surviving you or, if none, your estate an amount equal to three (3) months of your Base Salary in effect at your death. Such amount will be payable over the three (3) month period beginning the month following the month in which your death occurs in accordance with the established payroll practices of the Company.

 

If the Company determines that the Incapacity (as defined below) of you has occurred, it may terminate your employment and this Agreement upon thirty (30) days’ written notice, provided that, within thirty (30) days after receipt of such notice you shall not have returned to full-time performance of your assigned duties. Incapacity shall mean either: (i) your failure to perform your assigned duties and responsibilities with the Company on a full-time basis as a result of mental or physical illness or injury as determined by a physician selected by the Company for ninety (90) consecutive calendar days; or (ii) incapacity or disability as defined in the long-term disability insurance policy maintained by the Company for your benefit, whichever definition is more favorable to you. You will not be entitled to any additional benefits under this Agreement as a result of a termination due to your Incapacity.

 

(b)         Termination for Cause. Your employment may be terminated by the Company for Cause (as defined below). If your employment is terminated by the Company for Cause, you will be entitled to receive:

 

(i)         Any accrued but unpaid Base Salary which shall be paid on the payroll date immediately following the date of termination in accordance with the Company’s customary payroll procedures;

 

(ii)         Reimbursement for unreimbursed expenses properly incurred by you, which shall be subject to and paid in accordance with the Company’s expense reimbursement policy; and

 

(iii)         Such employee benefits (including equity compensation), if any, to which you may be entitled under the Company’s employee benefit plans and programs as of the date of termination (items (i) through (iii) are referred to collectively as the “Accrued Amounts”).

 

(c)         Definition of Cause.         For purposes of this Agreement, Cause shall mean:

 

(i)         your willful failure to perform any of your material duties and responsibilities required of your position (other than by reason of Incapacity), or your willful failure to follow reasonable instructions or policies of the Company, in either case after being advised in writing of such failure and being given a reasonable opportunity and period (as determined by the Company) to remedy such failure;

 

(ii)         your breach of fiduciary duties owed to the Company or an Affiliate;

 

(iii)         your conviction of or plea of guilty or no contest to a crime that constitutes a felony under federal or state law or a crime that constitutes a misdemeanor involving moral turpitude or any other crime with respect to which imprisonment is a possible punishment, or your misappropriation or embezzlement of funds or property of the Company or an Affiliate;

 

(iv)         your fraud or dishonesty with respect to the Company or its Affiliates;

 

(v)         the breach by you of a material term of this Agreement or violation in any material respect of any code or standard of behavior generally applicable to employees of the Company, in either case after being advised in writing of such breach or violation and being given a reasonable opportunity and period (as determined by the Company) to remedy such breach or violation; or

 

(vi)         the willful engaging by you in conduct that, if it became known by any regulatory or governmental agency or the public, is reasonably likely to result in material injury to the Company, monetarily or otherwise.

 

(d)         Termination by You Without Good Reason. You may terminate your employment under this Agreement without Good Reason (as defined below) by written notice to the Company effective thirty (30) days after receipt of such notice by the Company or at any time upon mutual agreement in writing. If you terminate your employment without Good Reason, you will be entitled to receive the Accrued Amounts as provided in Section 5(b). It shall not constitute a breach of this Agreement for the Company to suspend your duties and to place you on paid leave during the notice period.

 

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(e)         Termination by the Company Without Cause. Your employment may be terminated by the Company without Cause at any time upon written notice to you, which termination will be effective immediately or on such later date as specified in the written notice. In the event your employment is terminated without Cause, you shall receive the Accrued Amounts and, provided you sign a release and waiver of claims in favor of the Company and its Affiliates and their respective officers and directors in a form provided by the Company (the “Release”) and the Release has become effective not later than the 30th day following the date your employment terminates, you shall receive the following payments and benefits:

 

(i)         Any earned but unpaid annual bonus with respect to any completed calendar year immediately preceding the date of termination, which shall be paid on the applicable payment date for such bonus; and

 

(ii)         The Company shall pay you a severance benefit (the “Severance Benefit”) in an amount equal to the product of (x) your Total Annual Compensation (as defined below) divided by twelve (12) times (y) the number of months remaining between the date of termination of your employment and the Expiration Date, including pro-rated credit for any partial month. For purposes of this Agreement, Total Annual Compensation means the sum of (1) your Base Salary in effect at the date of termination of your employment or, if higher and applicable under Section 6 hereof, immediately prior to the date of a Change in Control, (2) the greater of the maximum annual bonus opportunity for the year in which your employment terminates and the annual bonus earned for the most recently completed calendar year, (3) the grant date value of any equity awards granted to you over the twelve (12) months immediately prior to your termination of employment or, if higher and applicable under Section 6 hereof, immediately prior to the date of a Change in Control (the applicable period, the “prior 12 months”), (4) any tax-qualified or non-tax qualified plan contributions or allocations made on your behalf over the prior 12 months, and (5) the value of your Company or Affiliate perquisites and any other benefits, including the employer portion of benefit premiums, paid or made available to you or on your behalf over the prior 12 months. The Severance Benefit will be paid to you in a lump sum cash payment not later than the 30th day following the date your employment terminates, subject to compliance with Section 9(i) of this Agreement regarding the requirements of Section 409A of the Internal Revenue Code of 1986 (the “Code”).

 

(f)         Termination by You for Good Reason. You may voluntarily terminate your employment under this Agreement at any time for Good Reason and be entitled to receive the compensation and other benefits set forth in Section 5(e) relating to a termination without Cause, provided you sign a Release and it becomes effective not later than the 30th day following the date your employment terminates and you comply with the notice provisions of Section 5(g). You must provide written notice to the Company of the existence of the event or condition constituting such Good Reason within ninety (90) days of the initial occurrence of the event or condition alleged to constitute Good Reason. Upon delivery of such notice by you, the Company shall have a period of thirty (30) days during which it may remedy in good faith the event or condition constituting Good Reason, and your employment shall continue in effect during such time so long as the Company is making diligent efforts to cure. In the event the Company shall remedy in good faith the event or condition constituting Good Reason, then such notice of termination shall be null and void, and the Company shall not be required to pay the amount due to you under this Section 5(f). If the Company has not remedied the event or condition constituting Good Reason during the thirty (30) day cure period and you do not terminate your employment for Good Reason within ninety (90) days thereafter, then you will deemed to have waived your right to terminate for Good Reason with respect to such grounds.

 

For purposes of this Agreement, Good Reason shall mean:

 

(i)         the assignment to you, without your written consent, of duties inconsistent with your position, authority, duties or responsibilities as contemplated by Section 1 hereof;

 

(ii)         any action taken by the Company that results in a substantial reduction in your status, including a diminution in your position, authority, duties or responsibilities;

 

(iii)         the requirement by the Company that you be based at any office that is greater than thirty-five (35) miles from where your office is located as of the date of this Agreement, unless you are asked to move your primary office to the principal executive offices of the Company; or

 

(iv)         the failure of the Company to comply with the provisions of Section 3 or a material breach by the Company of any other provision of this Agreement.

 

Notwithstanding the above, Good Reason shall not include any resignation by you where Cause for your termination by the Company exists.

 

(g)         Requirements Relating to Prospective Employers. During the twelve (12) month period following the date of termination of your employment, you shall provide the Company with at least ten (10) days written notice before the starting date of any employment, identifying the prospective employer and its affiliated companies and the job description, including a description of the proposed geographic market area associated with the new position. You shall notify in writing any new employer of the existence of the restrictive covenants set forth in Section 7 of this Agreement.

 

(h)         Resignation of All Other Positions. Effective upon the termination of your employment for any reason, you shall be deemed to have resigned from all positions that you hold as an officer or member of the Board of Directors (or a committee thereof) of the Company or any of its Affiliates.

 

(i)         Regulatory Requirement. The Company shall not be required to make payment of, or provide any benefit under, this Section 5 to the extent such payment or benefit is prohibited by the regulations presently found at 12 C.F.R. Part 359, as amended, or to the extent that any other governmental approval for the payment or benefit that is required by law is not received.

 

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6.         Change in Control Termination.

 

(a)         Change in Control Payments and Benefits. Notwithstanding any other provision in this Agreement, if your employment is terminated by you for Good Reason or by the Company on account of its failure to renew the Agreement in accordance with Section 2 or without Cause (other than on account of your death or Incapacity), in each case within twenty-four (24) months following a Change in Control, you shall be entitled to receive the Accrued Amounts and, provided you sign a Release and it becomes effective not later than the 30th day following the date your employment terminates, the following payments and benefits:

 

(i)         The sum of: (A) the amount, if any, of any earned but unpaid incentive or bonus compensation with respect to any completed calendar year immediately preceding the date of termination; (B) the product of the annual cash bonus paid or payable, including by reason of deferral, for the most recently completed year and a fraction, the numerator of which is the number of days in the current year through the date of termination and the denominator of which is 365; and (C) any benefits or awards (including both the cash and stock components) which pursuant to the terms of any plans, policies or programs have been earned or become payable, but which have not been paid to you (to the extent not Accrued Amounts). These amounts will be paid to you in a lump sum cash (or, for stock-based benefits or awards, stock) payment not later than the 30th day after the date your employment terminates, unless a different payment date is required by Section 409A of the Code; and

 

(ii)         An amount equal to either (A) 2.99 times your Total Annual Compensation; or (B) if employment terminates between your 65th birthday and the date you attain your U.S. Social Security Administration normal retirement age, the product of (x) your Total Annual Compensation divided by twelve (12) times (y) the number of months remaining between the date of termination of your employment and the date you attain your U.S. Social Security Administration normal retirement age, including pro-rated credit for any partial month. The applicable amount will be paid to you in a lump sum cash payment not later than the 30th day after the date your employment terminates, subject to compliance with Section 9(i) of this Agreement regarding the requirements of Section 409A of the Code.

 

(b)         For purposes of this Agreement, Change in Control means the occurrence of any of the following:

 

(i)         The acquisition by any Person (as defined below) of beneficial ownership of 25% or more of the then outstanding shares of common stock of the Company, provided that an acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege) shall not constitute a Change in Control;

 

(ii)         individuals who constitute the Board of Directors of the Company on the effective date of this Agreement (the “Incumbent Board”) cease to constitute a majority of the Board of Directors, provided that any director whose nomination was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board, but excluding any such individual whose assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Company;

 

(iii)         consummation by the Company of a reorganization, merger, share exchange or consolidation (a “Reorganization”), provided that the consummation of a Reorganization will not constitute a Change in Control if, upon consummation of the Reorganization, each of the following conditions is satisfied:

 

(A)         more than 50% of the then outstanding shares of common stock of the corporation resulting from the Reorganization is beneficially owned by all or substantially all of the former shareholders of the Company in substantially the same proportions as their ownership existed in the Company immediately prior to the Reorganization; and

 

(B)         at least a majority of the members of the board of directors of the corporation resulting from the Reorganization were members of the Incumbent Board at the time of the execution of the initial agreement providing for the Reorganization; or

 

(iv)         the complete liquidation or dissolution of the Company, or the sale or other disposition of all or substantially all of the assets of the Company.

 

For purposes of this Agreement, “Person” means any individual, entity or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”), other than any employee benefit plan (or related trust) sponsored or maintained by the Company or any affiliated company, and “beneficial ownership” has the meaning given the term in Rule 13d-3 under the Exchange Act.

 

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(c)         Potential Limitation of Benefits Under Certain Circumstances. Notwithstanding any other provision of this Agreement, in the event that:

 

(i)         the aggregate value of the payments and benefits to which you may be entitled under this Agreement or any other agreement, plan, program or arrangement in connection with a Change in Control that are deemed to be “parachute payments,” as defined in Section 280G of the Code or any successor thereof (the “Change in Control Termination Benefits”), would be deemed to include an “excess parachute payment” under Section 280G of the Code;

 

(ii)         if such Change in Control Termination Benefits were reduced to an amount (the “Non-Triggering Amount”), the value of which is one hundred dollars ($100.00) less than an amount equal to three (3) times your “base amount,” as determined in accordance with Section 280G of the Code, and

 

(iii)         the Non-Triggering Amount as reduced by the product of the Non-Triggering Amount and the highest marginal rate of any applicable state and federal income taxes, would represent 95% or more of the value of the Change in Control Termination Benefits (without such reduction), as reduced by (x) the amount of tax required to be paid by you thereon pursuant to Section 4999 of the Code and (y) the product of the Change in Control Termination Benefits and the highest marginal rate of any applicable state and federal income taxes, then the total Change in Control Termination Benefits shall be reduced to the Non-Triggering Amount. The allocation of the reduction in the Change in Control Termination Benefits to the extent required hereby shall be determined by the Company in its reasonable discretion and in a manner that is consistent with the requirements of Section 409A of the Code until no amount or benefit payable to you will be an “excess parachute payment” under Section 280G of the Code. All calculations and determinations under this Section 6(c) shall be made by an independent accounting firm or independent tax counsel appointed by the Company (the “Tax Advisor”) whose determinations shall be conclusive and binding on the Company and you for all purposes. The Tax Advisor may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Company shall bear all costs of the Tax Advisor.

 

7.         Covenants.

 

(a)         Noncompetition. In consideration of your key position within the Company and the compensation, benefits and access to Confidential Information (as defined below) provided to you by the Company, you agree that during your employment with the Company or its Affiliates and for a twelve (12) month period following the cessation of your employment, for any reason, you will not perform the same or substantially same duties or services for any Competitive Business anywhere in the Market Area (as such terms are defined below) as you performed while you were employed with the Company or any of its Affiliates. Notwithstanding the foregoing, you may purchase or otherwise acquire up to (but not more than) 10% of any class of securities of any business enterprise (but without otherwise participating in the activities of such enterprise) that engages in a Competitive Business in the Market Area.

 

(b)         Non-solicitation. You further agree that during your employment with the Company or its Affiliates and for a twelve (12) month period following the cessation of your employment, for any reason, you will not directly, or instruct or encourage anyone else on your behalf to: (i) solicit, or assist any other Person in soliciting, any Customers to make deposits in, borrow money from, or become customers of any other business conducting a Competitive Business in the Market Area; (ii) induce or encourage any Customers to terminate their relationship with the Company or its Affiliates; (iii) contact, solicit, assist in the solicitation, or otherwise encourage any employee of the Company to terminate his or her employment with the Company or any of its Affiliates for the benefit of a Competitive Business; or (iv) offer employment or participate in the recruiting or hiring of any current employee of the Company or any former employee who was employed by the Company in the six (6) months preceding the proposed hire for the benefit of any Competitive Business.

 

(c)         Definitions. As used in this Agreement, the term “Competitive Business” means the financial services business, which includes one or more of the following businesses: depository accounts, consumer and commercial lending, residential and commercial mortgage lending, and any other business in which the Company or any of its Affiliates are engaged and in which you are significantly engaged at the time of termination of your employment; the term “Market Area” means the area within a fifteen (15) mile radius of any full-service banking office established by the Company at the time of the cessation of your employment and in which you performed any services or for which any employee under your direct supervision was employed or performed services. “Customer” means any customer or depositor of the Company or its Affiliates who you were aware was a customer of the Company or its Affiliates during your employment or for whom you or anyone you directly supervised had direct contact or provided services on behalf of the Company or its Affiliates during your employment; and the term “Confidential Information” shall include, but not be limited to, all financial and personnel data, computer software and all data base technologies, capital plans, customer lists and requirements, customer account information, market studies, know-how, processes, trade secrets, and any other information concerning the non-public business and affairs of the Company.

 

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(d)         Confidentiality. During the Employment Period and for a period of ten (10) years following the cessation of your employment, for whatever reason, or for however long the information constitutes a trade secret under applicable federal or state law, and except as required by any court, supervisory authority or administrative agency or as may be otherwise required by applicable law, you shall not, without the written consent of a person duly authorized by the Company, disclose to any person (other than your personal attorney, or an employee of the Company or an Affiliate, or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by you of your duties as an employee of the Company) or utilize any Confidential Information obtained by you while in the employ of the Company, unless such information has become a matter of public knowledge at the time of such disclosure.

 

(e)         Acknowledgment. The covenants contained in this Section 7 shall be construed and interpreted in any proceeding to permit their enforcement to the maximum extent permitted by law. You agree that the restrictions imposed herein are necessary for the reasonable and proper protection of the Company and its Affiliates, and that each and every one of the restrictions is reasonable in respect to length of time, geographic area and scope of prohibited activities, and that the restrictions are neither overly restrictive on your post-employment activity nor overly burdensome for you to abide by. You covenant that you will not make any contention contrary to any of the foregoing representations in the future and agree that you will be estopped to deny or contradict the truth or accuracy of these representations. If, however, the time, geographic and/or scope of activity restrictions set forth in this Section 7 are found by a court to exceed the standards deemed enforceable, the court is empowered and directed to modify the restriction(s) to the extent necessary to make them enforceable. Notwithstanding anything to the contrary herein, nothing in this Agreement shall be construed to prohibit any activity that cannot reasonably be construed to further in any meaningful way any actual or potential competition against the Company or an Affiliate.

 

(f)         Enforcement. You acknowledge that damages at law would not be a measurable or adequate remedy for breach of the covenants contained in this Section 7 and, accordingly, you agree to submit to the equitable jurisdiction of any court of competent jurisdiction in connection with any action to enjoin you from violating any such covenants. If the Company is successful in whole or in part in any legal or equitable action against you in connection with the enforcement of the covenants included in this Section 7, the Company shall be entitled to payment of all costs, including reasonable attorney’s fees, from you. If, on the other hand, it is finally determined by a court of competent jurisdiction that a breach or threatened breach did not occur under this Section 7, the Company shall reimburse you for reasonable legal fees incurred to defend the claim. In the event legal action is commenced with respect to the provisions of this Section 7 and you have not strictly observed the restrictions set forth in this Section 7, then the restricted periods described in Paragraphs (a) and (b) shall begin to run anew from the date of any Final Determination (as defined below) of such legal action. For the purposes of this Agreement, Final Determination shall mean the expiration of time to file any possible appeal from a final judgment in such legal action or, if an appeal be taken, the final determination of the final appellate proceeding. All the provisions of this Section 7 will survive termination and expiration of this Agreement.

 

(g)         Notice. The U.S. Defense of Trade Secrets Act provides civil and criminal immunity to certain whistleblowers for the confidential disclosure of trade secrets (i) to relevant federal government officials or an engaged attorney, when such disclosure is made solely for the purpose of reporting or investigating a suspected violation of law or (ii) in a document filed under seal in a lawsuit or other proceeding.

 

(h)         Change in Control. Notwithstanding anything to the contrary contained in this Agreement, in the event of a Change in Control, the restrictions imposed by Paragraphs (a) and (b) of this Section 7 shall not apply to you after you cease to be employed by the Company if you are not entitled to receive the severance benefits described in Section 6(a).

 

8.         Dispute Resolution.

 

(a)         Except as provided in Section 8(c) below, any dispute or controversy arising out of, relating to, or in connection with this Agreement, your employment or the interpretation, validity, construction, performance, breach, or termination of this Agreement, shall be settled by binding arbitration. The party initiating arbitration may use the American Arbitration Association, JAMS, the McCammon Group or other firms providing arbitrators for resolution of disputes, or the parties may agree on the selection of a person to arbitrate the matter who is not associated with an arbitration firm. The arbitration will be conducted by a single arbitrator in Danville, Virginia. The arbitration should be conducted in a manner that facilitates an efficient and cost effective means of resolving the dispute. The arbitrator may allow for depositions and document requests, as well as subpoenas to third parties, but other forms of discovery, such as interrogatories and requests for admissions, are not permitted, absent good cause. The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The party against whom the arbitrator shall render an award shall pay the other party’s reasonable attorneys’ fees and other reasonable costs and expenses in connection with the enforcement of its rights under this Agreement (including the enforcement of any arbitration award in court), unless and to the extent the arbitrator shall determine that under the circumstances recovery by the prevailing party of all or a part of any such fees and costs and expenses would be unjust.

 

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(b)         The arbitrator shall apply Virginia law to the merits of any dispute or claim, without reference to rules of conflicts of law.

 

(c)         The parties may apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other interim or conservatory relief, as necessary, without breach of this arbitration agreement and without abridgment of the powers of the arbitrator. You hereby consent to the exclusive jurisdiction of the state and federal courts located in Virginia for any action or proceeding arising from or relating to this Agreement or relating to any arbitration in which the parties are participants. The prevailing party in any court proceeding shall be awarded the party’s reasonable attorneys’ fees and costs.

 

(d)         YOU HEREBY CONFIRM YOU HAVE READ AND UNDERSTAND THIS SECTION 8, WHICH DISCUSSES ARBITRATION, AND UNDERSTAND THAT BY SIGNING THIS AGREEMENT, YOU AGREE, EXCEPT AS PROVIDED IN SECTION 8(c), TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, UNLESS OTHERWISE REQUIRED BY LAW, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF YOUR RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF YOUR RELATIONSHIP WITH THE COMPANY.

 

9.          Miscellaneous.

 

(a)         Severability. If any clause or provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, then the remainder of this Agreement shall not be affected thereby, and in lieu of each clause or provision of this Agreement which is illegal, invalid or unenforceable, there shall be added, as part of this Agreement, a clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and as may be legal, valid and enforceable.

 

(b)         Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without regard to its conflicts of law principles.

 

(c)         Entire Agreement; Amendments. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, between the parties with respect to the subject matter hereof, including that certain Employment Agreement, dated March 2, 2015, by and between American National Bankshares Inc. and you, which is of no further effect as of the date of this Agreement first written above. This Agreement may be amended only by an agreement signed by the parties hereto.

 

(d)         Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by either party in exercising, in whole or in part, any right, power or privilege under this Agreement will operate as a waiver of such right, power or privilege.

 

(e)         Binding Effect; Successors; Survival. This Agreement is binding upon and shall inure to the benefit of the parties and their respective successors, heirs and assigns, provided that no part of this Agreement is assignable by you. 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 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. Except as otherwise expressly provided herein, upon the termination or expiration of this Agreement the respective rights and obligations of the parties hereto shall survive such termination or expiration to the extent necessary to carry out the intentions of the parties set forth in this Agreement. If the Company elects not to renew this Agreement as provided in Section 2, this Agreement will no longer govern the terms of your employment following the Expiration Date, except for the provisions of Section 7 which will survive the termination and expiration of this Agreement, and your employment thereafter will be on an at-will employment basis.

 

(f)         No Construction Against Any Party. This Agreement is the product of informed negotiations between parties. If any part of this Agreement is deemed to be unclear or ambiguous, it shall be construed as if it were drafted jointly by all parties. The parties agree neither party was in a superior bargaining position regarding the substantive terms of this Agreement.

 

(g)         Clawback. You agree that any incentive based compensation or award that you receive, or have received, from the Company or any Affiliate under this Agreement or otherwise, will be subject to clawback by the Company as may be required by applicable law or, if applicable, any stock exchange listing requirement and on such basis as the Board of Directors of the Company determines.

 

(h)         Documents. All documents, records, tapes and other media of any kind or description relating to the business of the Company or its Affiliates (the “Documents”), whether or not prepared by you, shall be the sole and exclusive property of the Company. The Documents, and any copies thereof, shall be returned to the Company upon your termination of employment for any reason or at such earlier time as the Board of Directors of the Company or its designees may specify.

 

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(i)         Section 409A Compliance. This Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under this Agreement upon a termination of employment shall only be made upon a “separation from service” under Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by you on account of non-compliance with Section 409A.

 

Notwithstanding any other provision of this Agreement, if any payment or benefit provided to you in connection with your termination of employment is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and you are determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of the date of termination (the “Specified Employee Payment Date”). The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date shall be paid to you in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.

 

(j)         Stock Ownership Requirements. During the Employment Period, you will be expected to maintain ownership of Company common stock in accordance with the guidelines established by the Board of Directors of the Company from time to time.

 

 

(Signatures appear on the following page)

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the day and year first above written.

 

 

AMERICAN NATIONAL BANKSHARES, INC.

 

 

 

By: /s/ Charles H. Majors                                    

Charles H. Majors

Chairman of the Board

 

 

AMERICAN NATIONAL BANK AND TRUST COMPANY

 

 

 

By: /s/ Charles H. Majors                                    

Charles H. Majors

Chairman of the Board

 

 

 

 

/s/ Jeffrey V. Haley                                    

Jeffrey V. Haley

 

 

 

 

 

 

 

 

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