Document:

EX-10.(R) FORM EMPLOYEE DEFERRED STOCK UNIT AWARD

 

Exhibit (10)(r)

THIS DOCUMENT CONSTITUTES PART OF

A PROSPECTUS COVERING SECURITIES THAT

HAVE BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933

VULCAN MATERIALS COMPANY

DEFERRED STOCK UNIT AMENDED AGREEMENT

Granted under the 1996 Long-Term Incentive Plan

Terms and Conditions

As Amended October 12, 2006

THIS AMENDED AWARD AGREEMENT is between the Company and the Participant, as designated on page one
of each previous agreement for an award of Deferred Stock Units provided in 2001, 2002, 2003, 2004,
or 2005 (“Prior Agreement”). This Agreement amends and replaces each Prior Agreement (other than
page one of the Prior Agreement), effective with respect to each Prior Agreement as of the Grant
Date of the award in that Prior Agreement as if this Agreement were a separate agreement for each
such award.

RECITALS:

The Company adopted the 1996 Long-Term Incentive Plan (the “Plan”) in order to provide for
a wide array of stock-based incentives for its employees. The Compensation Committee of
the Company (the “Committee”) has granted Deferred Stock Units to certain employees,
including the Participant, in accordance with the requirements of the Plan to carry out the
purposes of the Plan. In consideration of being awarded the Deferred Stock Units, the
Participant agrees with the Company as follows:

	 	1.	 	Definitions. All defined terms contained in the Plan are hereby incorporated by
reference, except to the extent that any term is specifically defined in this Award
Agreement.
	 
	 	2.	 	Grant of Deferred Stock Units; Vesting; Dividend Equivalents; Withholding.

	 	(A)	 	Grant. Subject to the terms and conditions of the Plan, this
Award Agreement, and any applicable deferral election executed by the participant
under the Executive Deferred Compensation Plan, the Company hereby grants to the
Participant the number of Deferred Stock Units (“DSUs”) designated on page one of
the Prior Agreement. The DSUs represent an unfunded and unsecured promise of the
Company to issue the same number of Shares at the Payment Date (as defined below) as
DSUs granted pursuant to this Section 2(A), or accrued pursuant to Section 2(C),
under this Award Agreement. As of the Grant Date, a DSU account is established for
the Participant (“Account”), and is credited with the number of DSUs shown on page
one of the Prior Agreement. No Shares have been transferred or set aside, or will be
transferred or set aside, from the general creditors of the Company to fund this
Award. The Participant has no right to vote or receive dividends on the Shares
represented by the DSUs until the Shares have been paid on the Payment Date, as
explained below.

 

 

	 	(B)	 	Vesting. Except as otherwise provided in Section 4 or 5, and
subject to the Committee’s discretion set forth in Section 6, the Participant’s
right to receive the Shares represented by the DSUs will become non-forfeitable in
installments, as follows: One-fifth of the DSUs will become non-forfeitable on each
anniversary of the Grant Date beginning on the sixth anniversary and ending on the
tenth anniversary.
	 
	 	(C)	 	Dividend Equivalents. During the period from the Grant Date to
the Payment Date (“Vesting Period”), the Participant’s Account will be credited with
dividend equivalents equal to the dividends paid on the number of Shares represented
by the DSUs during the Vesting Period (“Dividend Equivalents”). The Dividend
Equivalents will be converted to additional DSUs, rounded to the nearest whole
number, and credited to the Participant’s Account. Dividend Equivalents will be
credited to the Participant’s Account once each year on the Payment Date for all
dividends paid during the previous 12 months. The amount of Dividend Equivalents
credited to the Participant’s Account will be divided by the Fair Market Value “FMV”
on the Payment Date of one Share of Vulcan Materials Company Stock, as defined
below. In the case of dividends paid in property, the amount credited will be based
on the FMV of the property on the Payment Date. The FMV of a Share means the average
of the reported high and low trading prices for a Share on the Payment Date on the
Composite Tape for New York Stock Exchange Listed Stocks. If the Payment Date falls
on a holiday or weekend, then the immediately preceding trading day shall be used.
If the Shares are no longer NYSE-listed, then it will be the FMV on the exchange on
which it is listed, or the average of the high and low bid quotations if the Shares
are listed on NASDAQ. If the Shares are not listed or traded on NASDAQ, the Company
will use another method to determine the FMV of a Share. Dividend Equivalents are
not considered earned and will not be paid upon termination of employment in
accordance with Section 4 or 5 below until they are credited to the Participant’s
Account on each Payment Date.
	 
	 	(D)	 	Withholding. The Company shall have the right to either (i)
require the Participant to remit to the Company, or any person or entity designated
by the Committee to administer the Plan, an amount sufficient to satisfy any
applicable federal, state, and local income and employment tax withholding
requirements, or (ii) to deduct from any payment made pursuant to the Plan amounts
sufficient to satisfy such withholding requirements.

	 	3.	 	Payment of Deferred Stock Units. The issuance of Shares in settlement of the
Participant’s rights under this Award Agreement will be made in a lump sum on the date
(“Payment Date”) as specified in this Section 3 or, if applicable, in accordance with a
deferral election under the Executive Deferred Compensation Plan.

	 	(A)	 	Payment Date. The Payment Date is March 1 and is the date on
which the FMV will be determined for any payments (including dividend equivalents)
made during the twelve month period following the Payment Date. Subject to
paragraphs (B) and (C), below, payment will be made as follows. Except as provided
in the next sentence, a lump sum payment will be made on the Payment Date following
each vesting date specified in Section 2(B) of the DSUs that are scheduled to vest
on such vesting date (where vesting is determined without regard to whether any DSUs
are otherwise non-forfeitable). Notwithstanding the previous sentence, a lump sum
payment will be made on the earlier of: (i) the first Payment Date following the
date of (a) death, (b) separation from service on account of Disability, or (c)
Retirement (provided such Retirement constitutes a separation from service); and
(ii) the 90th day following a Change in Control of the Company.

 

 

	 	(B)	 	Section 162(m) Payments. Notwithstanding the provisions of
Section 3(A), if a Participant is a “covered employee” (within the meaning of
Section 162(m)(3) of the Internal Revenue Code of 1986, as amended (the “Code”) when
a payment is scheduled to be made under the Plan, any portion of the payment that
would be nondeductible under Section 162(m) of the Code (when considered with all
other compensation that the Participant is expected to receive in the same taxable
year) shall be deferred, and shall be paid on the earliest date on which it would be
deductible under Section 162(m), but no later than the calendar year in which the
Participant separates from service.
	 
	 	(C)	 	Payments to Specified Employees. Notwithstanding the provisions
of Section 3(A), any payment that is made on account of a separation from service by
a “specified employee” and that would otherwise be made within the first six months
following such individual’s separation will, instead, be made in the seventh month
following the month in which such individual separates from service, provided that
this paragraph will not delay payment later than the month following the
Participant’s death. For purposes of the preceding sentence, a “specified employee”
is a Participant who is, at the time of his or her separation, a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code.

	4.	 	Termination Provisions

	 	(A)	 	Retirement.

	 	(i)	 	If the Participant retires from employment pursuant to the
Company’s retirement income plan at age 62 or later, all DSUs which have been
held by the Participant for at least one (1) year prior to retirement, whether
currently forfeitable or non-forfeitable, will be deemed to be
non-forfeitable.
	 
	 	(ii)	 	If the Participant retires from employment prior to reaching
the age of 62, all DSUs granted under this Award Agreement that have not
become non-forfeitable as of the date of such retirement will be forfeited.

	 	(B)	 	Disability. Upon determination of permanent and total disability
(“Disability”) that entitles the Participant to long-term disability benefits under
the applicable long-term disability plan of the Company or a Subsidiary, or, to the
extent not eligible to participate in any Company-sponsored plan, under the
guidelines of the Social Security Administration, all DSUs granted under this Award
Agreement whether then forfeitable or non-forfeitable will become non-forfeitable in
accordance with the schedule below. All non-forfeitable DSUs will be paid in
accordance with Section 3(A) unless accelerated by the Committee due to an
unforeseeable emergency (as determined under Section 409A of the Code).
	 
	 	(C)	 	Death. Upon the death of the Participant under age 62, all DSUs
granted under this Award Agreement whether then forfeitable or non-forfeitable will
become non-forfeitable in accordance with the schedule below. Upon death of the
participant at age 62 or later, all DSUs which have been held by the Participant for
at least one (1) year prior to death, whether currently forfeitable or
non-forfeitable, will be deemed to be non-forfeitable. All non-forfeitable DSUs
will be paid to the Participant’s estate in accordance with Section 3(A) unless
accelerated by the Committee due to an unforeseeable emergency (as determined under
Section 409A of the Code).

 

 

	 	 	 	 	 
	Date of Death or Disability	 	 
	Occurs on or After the	 	 
	Following Grant Date	 	Percentage of DSUs
	Anniversary	 	That Become Non-Forfeitable
	1st Anniversary
	 	 	10	%
	2nd Anniversary
	 	 	20	%
	3rd Anniversary
	 	 	30	%
	4th Anniversary
	 	 	40	%
	5th Anniversary
	 	 	50	%
	6th Anniversary
	 	 	60	%
	7th Anniversary
	 	 	70	%
	8th Anniversary
	 	 	80	%
	9th Anniversary
	 	 	90	%
	10th Anniversary
	 	 	100	%

	 	(D)	 	Other Termination. Upon voluntary termination for reasons other
than retirement, or upon involuntary termination for reasons other than death or
Disability, including for cause, all DSUs granted under this Award Agreement that
have not become non-forfeitable as of the date of such termination will be
forfeited.

	5.	 	Change in Control of the Company. Upon a Change in Control of the Company, as defined
in the Vulcan Materials Company Change in Control Severance Plan, all DSUs granted under
this Award Agreement (whether then forfeitable or non-forfeitable) will be deemed to be
non-forfeitable. All DSUs will be paid to the Participant on the 90th day following a
Change in Control in a lump sum.
	 
	6.	 	Committee Discretion. Notwithstanding any other provision of the Plan to the contrary,
the Committee may, in its sole discretion, deem that any DSUs granted under this Award
Agreement will become non-forfeitable and to determine whether a Participant has been
terminated for reasons other than death, Disability, or Retirement. The Committee’s
determination will be final and binding on all persons for purposes of the Plan.EX-10.(S) 2007 COMPENSATION ARRANGEMENTS

 

Exhibit (10)(s)

2007 Compensation Arrangements

On February 8, 2007, the Compensation Committee of the Board of Directors of Vulcan Materials
Company (the “Company”) determined the following for the Named Executive Officers to be included in
the Company’s 2007 proxy statement (the “NEOs”):

	 	(a)	 	new annual base salaries effective March 1, 2007;
	 
	 	(b)	 	short term cash incentive awards (bonus) for 2006 performance, payable in March
2007; and
	 
	 	(c)	 	short term target bonus percentages for the 2007 fiscal year.

The compensation for the CEO was ratified by the Board of Directors.

Salary and Cash Bonus

Each of the NEOs participates in the Vulcan Materials Company Executive Incentive Plan (“EIP”) or
the Management Incentive Plan (“MIP”). No executive may participate in both plans concurrently.
Under these plans, participating executives are entitled to earn an annual cash incentive award to
the extent established financial objectives are achieved. Total incentive payments to executive
officers participating in the EIP in any year cannot exceed 4% of consolidated net earnings in
excess of 6% of net capital for the prior year. For annual bonuses payable for the Company’s
fiscal year 2007, 40% of the maximum amount available for payment has been allocated to the Chief
Executive Officer and 15% of the maximum amount available for payment has been allocated to each of
the other participants (“Bonus Caps”). Total payments under the MIP in any year cannot exceed 10%
of consolidated net earnings in excess of 6% of net capital for the prior year.

The Compensation Committee has selected Economic Profit (“EP”), which is defined as operating
income after current taxes less a charge for capital employed, as the financial performance
objective for determining awards under the EIP and MIP. A target EP is established by the
Compensation Committee annually at its February meeting based on the average of last year’s actual
EP and last year’s target EP for the Company as well as each of its divisions, subject to certain
adjustments, including the effects of certain long-term investment projects. The target EP
represents the amount of EP that must be earned in order for a “target bonus” to be paid. The
“target bonus” is expressed as a percentage of base salary and established for each named executive
officer based on market surveys of similar-sized industrial companies. An executive can earn from
zero up to an amount equal to his Bonus Cap, depending on the actual EP results for the year.

If the EP performance relative to the EP target (for the Company or its business units as
applicable for the particular executive officer) is not met, then the executive’s bonus would be
reduced in accordance with a predetermined schedule. In the case of the NEOs other than the Chief
Executive Officer, the Chief Executive Officer can adjust the actual bonus to be paid to the NEOs
subject to the EIP individual Bonus Caps, based on:

	 	•	 	the individual performance of the executive
	 
	 	•	 	the safety, health and environmental performance record of the Company and its
Divisions
	 
	 	•	 	consistent above target performance for 3 or more years
	 
	 	•	 	successful implementation of Vulcan strategic objectives

The Compensation Committee likewise determines the actual bonus payable to the Chief Executive
Officer based on his performance, subject to the restraints and caps set forth above.

 

 

For each NEO, the following table sets forth the executives’ (i) 2007 base salary effective March
1st, (ii) cash bonus to be paid in March 2007 based on 2006 performance, and (iii) target bonus
opportunity for the 2007 fiscal year.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	New Base	 	 	 	 
	 	 	 	 	Salary	 	Target 2007	 	 
	 	 	 	 	Effective	 	Annual Bonus	 	 
	 	 	 	 	March 1,	 	Opportunity as	 	2006
	 	 	 	 	2007	 	A Percentage of	 	Bonus
	Named Executive	 	Title	 	($)	 	Base Salary	 	($)
	Donald M. James

	 	Chairman and Chief 

Executive Officer
	 	 	1,200,000	 	 	 	100	%	 	 	3,100,000	 
	Guy M. Badgett, III

	 	Senior Vice
President,

Construction
Materials
	 	 	475,000	 	 	 	60	%	 	 	725,000	 
	James W. Smack

	 	Senior Vice
President,

Construction
Materials
	 	N/A(1)
	 	N/A(1)
	 	 	720,000	 
	Daniel F. Sansone.

	 	Senior Vice
President, Chief

Financial Officer
	 	 	475,000	 	 	 	60	%	 	 	690,000	 
	Ronald G. McAbee

	 	Senior Vice
President,

Construction
Materials — West
	 	 	350,000	(2)	 	 	60	%	 	 	645,000	 

 

			
	(1)	 	Mr. Smack will retire from the Company effective March 1, 2007.
	 

	(2)	 	In addition to this amount, Mr. McAbee’s salary
also includes a $100,000 cost of living adjustment that will remain
in force for as long as he continues to reside in California.

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