Document:

exh10_2.htm

 

Exhibit 10.2

 

EXECUTIVE SEVERANCE AGREEMENT

 

This Executive Severance Agreement (“Agreement”), including the attached Exhibit “A,” which is incorporated herein by reference and made an integral part of this Agreement, is entered into between U.S. Concrete, Inc., a Delaware corporation (the “Company”), and William Matthew Brown (“Executive”) made as of August 8, 2012 and effective as of August 22, 2012 (the “Effective Date”). In consideration of the mutual agreements, provisions and covenants contained herein, and intending to be legally bound hereby, the Company and Executive agree as follows:

 

1. Termination

 

1.1 Termination By the Company.  The Company may terminate Executive’s employment for any of the following reasons:

 

a. Termination for Cause.  For “Cause” upon the determination by a majority of the Company’s Board of Directors that “Cause” exists to terminate Executive’s employment.  “Cause” means (i) Executive’s gross negligence, willful misconduct, or willful neglect in the performance of the material duties and services of Executive to the Company in his current Position (as set forth on Exhibit “A” or any Position to which Executive has been promoted (provided Executive has accepted such promotion)); (ii) Executive’s final conviction of a felony by a trial court, or Executive’s entry of a plea of nolo contendere to a felony charge; (iii) any criminal indictment of Executive relating to an event or occurrence for which Executive was directly responsible which, in the business judgment of a majority of the Company’s Board of Directors, exposes the Company to ridicule, shame or business or financial risk; or (iv) a material breach by Executive of any material provision of this Agreement.  If the Company terminates Executive’s employment for Cause, Executive shall be entitled only to Executive’s (a) pro rata Monthly Base Salary (as defined in Exhibit “A”) through the date of such termination, and (b) unused vacation days earned for the year prior to the year in which Executive’s termination occurs, plus pro rata vacation days earned for the year in which Executive’s termination occurs (collectively, the “Accrued Payments”).  All future compensation and benefits, other than benefits to which Executive is entitled under the terms of the Company’s compensation and/or benefit plans or applicable law, shall cease as of the date of such termination.  In the case of a termination for Cause under subpart (i) above, (a) all stock options previously granted by the Company to Executive that are vested on the date of termination for Cause shall, notwithstanding any contrary provision of any applicable plan or agreement covering any such stock option awards, remain outstanding and continue to be exercisable for a period of 30 days following the date of termination for Cause (or, if earlier, the expiration of their term), (b) all stock options previously granted by the Company to Executive that are not vested on the date of termination for Cause shall terminate immediately and (c) all restricted stock, restricted stock units and other awards that have not vested prior to the date of termination for Cause shall be cancelled immediately.  In the case of a termination for Cause under subparts (ii), (iii) or (iv) above, (y) all stock options previously granted by the Company to Executive (whether or not vested) shall terminate immediately and (z) all restricted stock, restricted stock units and other awards that have not vested prior to the date of termination for Cause shall be cancelled immediately.

 

 

  

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b. Involuntary Termination.  Without Cause at the Company’s option at any time, with or without notice and for any reason whatsoever, other than death, Disability or for Cause, in the sole discretion of the Company (“Involuntary Termination”).  Upon an Involuntary Termination, Executive shall receive all of the following severance benefits (provided, however, that, in the event of an Involuntary Termination in circumstances in which the provisions of Section 1.3 would be applicable, the provisions of Section 1.3 will instead apply):

 

(i) a lump sum payment in cash (in accordance with Section 4.11) equal to the Monthly Base Salary in effect on the date of Involuntary Termination multiplied by 12;

 

(ii) a lump-sum payment in cash (in accordance with Section 4.11) equal to the amount of (a) Executive’s target bonus for the bonus year in which Executive’s Involuntary Termination occurs, prorated based on the number of days in the bonus year that have elapsed prior to the date of Involuntary Termination, and (b) Executive’s Accrued Payments.

 

(iii) provided that Executive is eligible for and timely elects to receive group medical continuation coverage under COBRA, the Company will pay 100% of applicable medical continuation premiums for the benefit of Executive (and his covered dependents as of the date of his termination, if any) under Executive’s then-current plan election for 18 months after termination, with such coverage to be provided under the closest comparable plan as offered by the Company from time to time; and

 

(iv) fifty percent (50%) of all stock options, restricted stock awards, restricted stock units and similar equity awards granted to Executive by the Company prior to the date of termination (collectively, the “Outstanding Equity Awards”) that would otherwise have vested during the twelve month period following the date of Involuntary Termination if such termination had not occurred shall immediately vest and become exercisable on the date of termination.

 

(v) The remaining portion of all Outstanding Equity Awards, if any, which is unvested on the date of Involuntary Termination shall be forfeited and canceled in its entirety upon the date of Involuntary Termination.

 

(vi) Each Outstanding Equity Award which is or becomes vested and exercisable on the date of Involuntary Termination shall remain outstanding and exercisable until the earlier of (a) the expiration of the twelve month period which commences on the date of Involuntary Termination and (b) the expiration date of the original term of the Outstanding Equity Award.

 

 

  

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c. Death/Disability.  Upon Executive’s (i) death, or (ii) Disability.  For purposes of this Agreement, “Disability” means if Executive becomes physically or mentally incapacitated and is therefore unable for a period of one hundred twenty (120) consecutive days or one-hundred eighty (180) days during any one (1) year period to perform his duties with substantially the same level of quality as immediately prior to such incapacity.  Upon termination of employment due to such death or Disability, Executive or Executive’s heirs shall be entitled to receive all severance benefits described in Section 1.1.b. as if Executive’s employment ended due to an Involuntary Termination by the Company as of the date of death or Disability.  Additionally, each Outstanding Equity Award which is (i) vested and exercisable on the date of termination due to death or Disability shall remain outstanding and exercisable until the earlier of (a) the expiration of the twelve month period which commences on the date of such termination and (b) the expiration date of the original term of the Outstanding Equity Award, and (ii) unvested on the date of termination due to death or Disability shall be forfeited and canceled in its entirety upon the date of such termination.

 

1.2 Termination By Executive. Executive may terminate Executive’s employment for any of the following reasons:

 

a. Termination for Good Cause.  For “Good Cause”, which shall mean the occurrence of any of the following events, without Executive’s consent: (i) a material diminution in Executive’s then current Monthly Base Salary, (ii) a material change in the location of Executive’s principal place of employment by the Company from the “Location” set out on Exhibit “A,” (iii) any material diminution in Executive’s Position from that set out on Exhibit “A” or any title or Position to which Executive has been promoted, (iv) any material diminution of Executive’s authority, duties, or responsibilities from those commensurate and consistent with the character, status and dignity appropriate to Executive’s Position or any title or Position to which Executive has been promoted (provided, however, that if at any time Executive ceases to have such duties and responsibilities as are commensurate and consistent with his Position that are associated with a publicly traded company because the Company ceases to have any securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, or ceases to be required to file reports under Section 15(d) of the Securities Exchange Act of 1934, as amended, then Executive’s authority, duties and responsibilities will not be deemed to have been materially diminished solely due to the cessation of such publicly-traded company duties and responsibilities), or (v) any material breach by the Company of any material provision of this Agreement, which in the case of any of (i) through (v) above remains uncorrected by the Company for 30 days following Executive’s written notice to the Company of Good Cause.  Executive must provide such written notice to the Company of Good Cause within 60 days of the initial existence of such specified event alleged to constitute Good Cause.  Executive shall not be entitled to terminate his employment for Good Cause with respect to specified events unless Executive tenders resignation for Good Cause within 30 days of the Company’s failure to cure. Upon Executive’s termination of employment for Good Cause, Executive shall receive all severance benefits and equity treatment described in Section 1.1.b. as if Executive’s employment ended due to an Involuntary Termination by the Company (provided, however, that, in the event of a termination for Good Cause in circumstances in which the provisions of Section 1.3 would be applicable, the provisions of Section 1.3 will instead apply).

 

 

  

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b. Voluntary Termination.  For any other reason whatsoever, in Executive’s sole discretion, upon thirty (30) days advance written notice to the Company.  Upon such voluntary termination by Executive for any reason other than Good Cause (a “Voluntary Termination”), all of Executive’s future compensation and benefits, other than benefits to which Executive is entitled under the terms of the Company’s compensation and/or benefit plans or applicable law, shall cease as of the date of Voluntary Termination, and Executive shall be entitled only to the Accrued Payments.  In the case of a Voluntary Termination, (i) all stock options previously granted by the Company to Executive that are vested on the date of Voluntary Termination will remain outstanding and continue to be exercisable by Executive until 90 days after the date of Voluntary Termination (or, if earlier, the expiration of their term), and (ii) all Outstanding Equity Awards that have not vested prior to the date of Voluntary Termination shall be cancelled immediately.

 

1.3 Termination Following Change In Control.  In the event a Change in Control (as defined herein) occurs and within one year after the date of the Change in Control either (a) Executive terminates his employment for Good Cause or (b) the Company or any successor (whether direct or indirect and whether by purchase, merger, consolidation, share exchange or otherwise) to substantially all of the business, properties and/or assets of the Company makes an Involuntary Termination of Executive’s employment, then in either case the Company or its successor shall be required to provide Executive, and Executive shall receive, all of the following Change in Control benefits:

 

(i) a lump sum payment in cash equal to (a) the sum of (I) Executive’s Monthly Base Salary in effect on the termination date multiplied by 12, and (II) the amount of Executive’s full target bonus for the bonus year in which termination occurs, multiplied by (b) the Change in Control Multiplier described on Exhibit “A”, payable on the termination date (subject to Section 4.11);

 

(ii) a lump-sum payment in cash (in accordance with Section 4.11) equal to the Accrued Payments;

 

(iii) provided that Executive is eligible for and timely elects to receive group medical continuation coverage under COBRA, the Company will pay 100% of applicable medical continuation premiums for the benefit of Executive (and his covered dependents as of the date of his termination, if any) under Executive’s then-current plan election for 18 months after termination, with such coverage to be provided under the closest comparable plan as offered by the Company from time to time; and

 

 

  

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(iv) all stock options, restricted stock awards, restricted stock units and similar awards granted to Executive by the Company prior to the termination date shall be treated in accordance with Section 3.2.

 

1.4 Offset.  In all cases, the compensation and benefits payable to Executive under this Agreement upon termination of Executive’s employment shall be offset by any undisputed amounts that Executive then owes to the Company.  Notwithstanding the foregoing, an offset may apply to compensation or benefits under this Agreement only at the time when the compensation or benefits otherwise would have been paid under this Agreement.

 

1.5 One Recovery.  In the event of termination of Executive’s employment, Executive shall be entitled, if at all, to only one set of severance benefits or Change in Control benefits, as applicable, provided in this Agreement.

 

1.6 Certain Obligations Continue.  Upon termination of Executive’s employment, all rights and obligations of Executive and the Company or its successor under this Agreement shall cease as of the effective date of termination except that (i) Executive’s obligations under Article 2 and Sections 4.1 and 4.4 of this Agreement and the Company’s or its successor’s obligations under Article 3 and Sections 1.1, 1.2, 1.3, 2.6, 4.1 and 4.4 and the Company’s or its successor’s obligations to provide any severance benefits or Change in Control benefits to Executive shall survive such termination in accordance with their terms, and (ii) Executive shall be entitled to receive all compensation (including bonus) earned and benefits and reimbursements due through the effective date of termination as provided herein.

 

1.7 Notice of Termination.  Any termination of Executive’s employment shall be communicated by Notice of Termination to the non-terminating party, given in accordance with this Agreement.  For purposes of this Agreement, “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) specifies the termination date, if such date is other than the date of receipt of such notice.

 

2. Confidential Information; Post-Employment Obligations

 

2.1 Company Property.  All written materials, records, data, and other documents prepared by Executive during Executive’s employment by the Company are Company property.  All information, ideas, concepts, improvements, discoveries, and inventions that are conceived, made, developed, or acquired by Executive individually or in conjunction with others during Executive’s employment (whether during business hours and whether on the Company’s premises or otherwise) which relate to the Company’s business, products, or services are the Company’s sole and exclusive property.  All memoranda, notes, records, files, correspondence, drawings, manuals, models, specifications, computer programs, maps, and all other documents, data, or materials of any type embodying such information, ideas, concepts, improvements, discoveries, and inventions are the Company’s property.  At the termination of Executive’s employment with the Company for any reason, Executive shall return all of the Company’s documents, data, or other Company property, including all copies, to the Company.

 

 

  

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2.2 Confidential Information; Non-Disclosure.

 

a. Executive acknowledges that the business of the Company and its Affiliates is highly competitive and that the Company will provide Executive with access to Confidential Information relating to the business of the Company and its Affiliates.  “Confidential Information” means and includes the Company’s and its Affiliates’ confidential and/or proprietary information and/or trade secrets that have been developed or used and/or are reasonably planned to be developed and that cannot be obtained readily by third parties from outside sources.  Confidential Information includes, by way of example and without limitation, the following: information regarding customers, employees, contractors, and the industry not generally known to the public; strategies, methods, books, records, and documents; technical information concerning products, equipment, services, and processes, particularly mixing techniques, mix designs or chemical analyses of concrete products; procurement procedures and pricing techniques; the names of and other information concerning customers, investors, and business affiliates (such as contact name, service provided, pricing for that customer, type and amount of services used, credit and financial data, and/or other information relating to the Company’s relationship with that customer); pricing strategies and price curves; positions; plans and strategies for expansion or acquisitions; budgets; customer lists; research; financial and sales data; trading methodologies and terms; evaluations, opinions, and interpretations of information and data; marketing and merchandising techniques; prospective customers’ names and marks; grids and maps; electronic databases; models; specifications; computer programs; internal business records; contracts benefiting or obligating the Company or its Affiliates; bids or proposals submitted to any third party; technologies and methods; training methods and training processes; organizational structure; personnel information, including salaries of personnel; payment amounts or rates paid to consultants or other service providers; and other such confidential or proprietary information.  Executive acknowledges that this Confidential Information constitutes a valuable, special, and unique asset used by the Company and its Affiliates in its businesses to obtain a competitive advantage over its competitors.  Executive further acknowledges that protection of such Confidential Information against unauthorized disclosure and use is of critical importance to the Company in maintaining its competitive position.  Executive also will have access to, or knowledge of, Confidential Information of third parties, such as actual and potential customers, suppliers, partners, joint venturers, investors, financing sources and the like, of the Company.  The Company also agrees to provide Executive with access to Confidential Information and specialized training regarding the Company’s and its Affiliates’ methodologies and business strategies, which will enable Executive to perform his job at the Company.

 

 

  

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b. Executive agrees that Executive will not, at any time during or after Executive’s employment with the Company, make any disclosure of any Confidential Information or specialized training of the Company, or make any use thereof without the express advance written consent of the Company, except in carrying out his employment responsibilities hereunder.  Executive also agrees to preserve and protect the confidentiality of third party Confidential Information to the same extent, and on the same basis, as the Company’s Confidential Information.  Nothing in this Section 2.2 is intended to prohibit Executive from complying with any court order, lawful subpoena or governmental request for information, provided that Executive notifies the Company promptly upon the receipt of any such order, subpoena or request and before the date of required compliance.

 

2.3 Non-Competition Obligations.  The Company agrees to and shall provide Executive with immediate access to Confidential Information.  Ancillary to the rights and severance benefits provided to Executive, the Company’s provision of Confidential Information and specialized training to Executive, and Executive’s agreement not to disclose Confidential Information, and in order to protect the Confidential Information described above, the Company and Executive agree to the following non-competition provisions.  Executive agrees that during Executive’s employment with the Company and for the “Period of Post-Employment Non-Competition Obligations” set forth in Exhibit “A,” Executive will not, directly or indirectly, for Executive or for any other person or entity, in the “Geographic Region of Responsibility” described on Exhibit “A” (or, if Executive’s Geographic Region of Responsibility has changed, in any and all geographic regions in which Executive has devoted substantial attention at such location to the material business interest of the Company and its Affiliates during the 12-month period immediately preceding Executive’s termination of employment), engage in, assist, or have any active interest or involvement, whether as an employee, agent, consultant, creditor, advisor, officer, director, stockholder (excluding holdings of 2% or less of the stock of a public company), partner, proprietor, or any type of principal whatsoever in any person, firm, business or other entity that generates more than 10% of its annual revenue from the sale of any concrete-related products and services that the Company or its Affiliates offers, then has plans to offer, or has offered in the preceding 12-month period, including, but not limited to, ready-mixed concrete, pre-cast concrete or related building materials or services such as proportioned mix design services, concrete mold engineering or design services, rebar, mesh, color additives, curing compounds, grouts, wooden forms, or similar products or services, whether at wholesale or retail (a “Competing Business”).  Executive understands that the foregoing restrictions may limit Executive’s ability to engage in certain businesses in the geographic region and during the period provided for above, but acknowledges that these restrictions are necessary to protect the Confidential Information the Company has provided to Executive.

 

 

  

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2.4 Non-Solicitation of Customers.  During Executive’s employment with the Company and for the Period of Post-Employment Non-Competition Obligations, Executive will not call on, service, or solicit Competing Business from clients or customers of the Company or its affiliated entities whom that Executive, within the previous 24 months, (i) provided services to, worked with, solicited or had or made contact with, or (ii) had access to information and files concerning.

 

2.5 Non-Solicitation of Employees.  During Executive’s employment with the Company, and for the Period of Post-Employment Non-Competition Obligations, Executive will not, either directly or indirectly, call on, solicit, or induce any other employee or officer of the Company or its affiliated entities whom Executive had contact with, knowledge of, or association with in the course of employment with the Company to terminate his employment, and will not assist any other person or entity in such a solicitation.

 

2.6 Early Resolution Conference/Arbitration.  The parties are entering into this Agreement with the express understanding that this Agreement is clear and fully enforceable as written.  If Executive ever decides to contend that any restriction on activities imposed by Article 2 of this Agreement is no longer enforceable as written or does not apply to an activity in which Executive intends to engage, Executive first will notify the Company’s President and its Secretary in writing and meet with a Company representative at least 14 days before engaging in any activity that foreseeably could fall within the questioned restriction to discuss resolution of such claims (an “Early Resolution Conference”).  Should the parties not be able to resolve disputes at the Early Resolution Conference, the parties agree to use confidential, binding arbitration to resolve the disputes.  The arbitration shall be conducted in Houston, Texas, in accordance with the then-current employment arbitration rules of the American Arbitration Association, before an arbitrator licensed to practice law in Texas.  Each party shall bear its own costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with any dispute and/or arbitration arising out of or relating to this Agreement; provided, however, that the parties agree that the arbitrator, in the arbitrator’s discretion, may award a prevailing party, a reasonable attorney’s fee, including arbitration expenses and costs.  Either party may seek a temporary restraining order, injunction, specific performance, or other equitable relief regarding the provisions of this Section if the other party fails to comply with obligations stated herein.  The parties’ agreement to arbitrate applies only to the matters subject to an Early Resolution Conference.

 

2.7 Warranty and Indemnification.  Executive warrants that Executive is not a party to any restrictive agreement limiting Executive’s activities in his employment by the Company.  Executive further warrants that at the time of the signing of this Agreement, Executive knows of no written or oral contract or of any other impediment that would inhibit or prohibit employment with the Company, and that Executive will not knowingly use any trade secret, confidential information, or other intellectual property right of any other party in the performance of Executive’s duties hereunder.  Executive shall hold the Company harmless from any and all suits and claims arising out of any breach of such restrictive agreement or contracts.

 

 

  

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2.8 Modification.  Executive and the Company agree that if the scope or enforceability of a restrictive covenant described in this Article 2 is disputed, the arbitrator or court with competent jurisdiction may modify and enforce the covenant to the extent that it determines the covenant to be reasonable.

 

3. Change in Control

 

3.1 Definitions.

 

a. For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred on the earliest of any of the following dates:

 

(i) the date the Company merges or consolidates with any other person or entity, and the voting securities of the Company outstanding immediately prior to such merger or consolidation do not continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the total voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation;

 

(ii) the date the Company sells all or substantially all of its assets to any other person or entity;

 

(iii) the date the Company is dissolved;

 

(iv) the date any person or entity together with its Affiliates (as defined herein) becomes, directly or indirectly, the Beneficial Owner (as defined herein) of voting securities representing more than 50% of the total voting power of all then outstanding voting securities of the Company; or

 

(v) the date the individuals who constituted the non-employee members of the Company’s Board of Directors (“Incumbent Board”) as of the Effective Date cease for any reason to constitute at least a majority of the non-employee members of the Board, provided that for purposes of this clause (v) any person becoming a director of the Company whose election or nomination for election by the Company’s stockholders was approved by a vote of at least 80% of the directors comprising the Incumbent Board then still in office (or whose election or nomination was previously so approved) shall be, for purposes of this clause (v), considered as though such person were a member of the Incumbent Board;

 

provided, however, that notwithstanding anything to the contrary contained in clauses (i) - (v), a Change in Control shall not be deemed to have occurred in connection with any bankruptcy or insolvency of the Company, or any transaction in connection therewith.

 

 

  

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b. As used in this Agreement, the following terms are defined as follows:

 

(i) “Affiliate” shall mean, with respect to any person or entity, any person or entity that, directly or indirectly, Controls, is Controlled by, or is under common Control with such person or entity in question.  For the purposes of the definition of Affiliate, “Control” (including, with correlative meaning, the terms “Controlled by” and “under common Control with”) as used with respect to any person or entity, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity whether through the ownership of voting securities or by contract or otherwise;

 

(ii) “Beneficial Owner” has the meaning ascribed to it pursuant to Rule 13d-3 under the Securities Exchange Act of 1934; and

 

(iii) “Parent” means a corporation, partnership, trust, limited liability company or other entity that is the ultimate Beneficial Owner of more than 50% of the Company’s or its successor’s outstanding voting securities.

 

3.2 Vesting of Awards.

 

a. All stock options, restricted stock awards, restricted stock units and similar equity awards granted to Executive by the Company prior to the date of a Change in Control shall, notwithstanding any contrary provision of any applicable plan or agreement covering any such stock options, restricted stock awards, restricted stock units or similar awards, fully vest and become exercisable in full upon the consummation of such Change in Control and shall remain outstanding and in effect in accordance with their terms, and any restrictions, forfeiture conditions or other conditions or criteria applicable to any such awards shall lapse immediately upon the consummation of such Change in Control.  Notwithstanding the foregoing, any such award that is subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations promulgated thereunder (and such other Treasury or Internal Revenue Service guidance) as in effect from time to time (“Section 409A”) shall only fully vest and become exercisable in full immediately upon a “change in ownership or effective control” as defined in Section 409A that also constitutes a Change in Control as defined in Section 3.1 above.  Subject to Section 3.2(b) below, Executive may exercise any such stock options or other exercisable awards at any time before the expiration of their term.

 

 

  

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b. Notwithstanding anything in Section 3.2(a) to the contrary, in the event of a Change in Control, the Company may, in its sole discretion, provide for the cancellation upon the consummation of such Change in Control of all outstanding stock options, restricted stock awards, restricted stock units and similar equity awards granted to Executive by the Company prior to the date of such Change in Control, whether or not vested and exercisable, and a payment in cash, property, or a combination thereof, will be made to Executive within ten (10) days after the consummation of the Change in Control in an amount equal to (a) in the case of stock options and similar appreciation awards, the excess, if any, of (i) the per share consideration received by a shareholder of the Company’s capital stock in connection with the Change in Control (the “Change in Control Price”) over (ii) the exercise price or purchase price per share, if any, of the underlying award, multiplied by the number of unexercised shares subject to such equity award, and (b) in the case of restricted stock awards, restricted stock units and similar full-value equity awards, the Change in Control Price multiplied by the number of shares subject to such equity award.  If the Change in Control Price is less than the exercise price or purchase price of a stock option or similar equity award, such stock option or similar equity award will be automatically cancelled with no payment therefor.

 

3.3 Section 280G Cutback.  Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company or its successor to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (such excise tax, together with any interest thereon, any penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being collectively referred herein to as the “Excise Tax”), then if the aggregate of all Payments that would be subject to the Excise Tax, reduced by all Federal, state and local taxes applicable thereto, including the Excise Tax is less than the amount Executive would receive, after all such applicable taxes, if Executive received Payments equal to an amount which is $1.00 less than three times the Executive's “base amount”, as defined in and determined under Section 280G of the Code, then, such Payments shall be reduced or eliminated to the extent necessary so that the aggregate Payments received by Executive will not be subject to the Excise Tax.  If a reduction in the Payments is necessary, reduction shall occur in the following order: first, a reduction of cash payments not attributable to equity awards which vest in an accelerated basis; second, a reduction in any other cash amount payable to Executive; third, the reduction of any employee benefit valued as a “parachute payment” (as defined in Section 280G of the Code); and fourth, the cancellation of accelerated vesting of stock awards.  If acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Executive's stock awards.  All determinations made under this Section 3.3 and the assumptions to be utilized in arriving at such determinations shall be made by a registered public accounting firm designated by Executive and reasonably acceptable to the Company (the “Accounting Firm”).  All fees and expenses of the Accounting Firm shall be borne solely by the Company or its successor.

 

4. Miscellaneous

 

4.1 Statements About the Company or Executive.  Except as may be required to comply with a court order, lawful subpoena or governmental request for information, Executive and the Company shall refrain, both during and after Executive’s employment, from publishing any oral or written statements about the other that are disparaging, slanderous, libelous, or defamatory, or that disclose private or confidential information about their business affairs.

 

 

  

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4.2 Notices.  Notices and all other communications hereunder shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail.  Notices to the Company shall be sent to its President and its Secretary at: U.S. Concrete, Inc., 331 N. Main Street, Euless, Texas 76039.  Notices and communications to Executive shall be sent to the address Executive most recently provided in writing to the Company.

 

4.3 No Waiver.  No failure by either party at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of any provisions or conditions of this Agreement.

 

4.4 Mediation.  If a dispute arises out of or relates to Executive’s termination, other than a dispute regarding Executive’s obligations under Article 2, and if the dispute cannot be settled through direct discussions, then the Company and Executive agree to try to settle the dispute in an amicable manner by confidential mediation before having recourse to any other proceeding or forum.

 

4.5 Governing Law.  This Agreement shall be deemed to be made in the State of Delaware, and the validity, interpretation, construction, and performance of this Agreement in all respects shall be governed by the laws of the State of Delaware without regard to its principles of conflicts of law.  No provision of this Agreement or any related document will be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or drafted such provision.

 

4.6 Consent to Jurisdiction; Waiver of Jury Trial.

 

a. Except as otherwise specifically provided herein, Executive and the Company each hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the District of Delaware (or, if subject matter jurisdiction in that court is not available, in any state court located within Wilmington, Delaware) over any dispute arising out of or relating to this Agreement.  Except as otherwise specifically provided in this Agreement, the parties undertake not to commence any suit, action or proceeding arising out of or relating to this Agreement in a forum other than a forum described in this Section 4.6; provided, however, that nothing herein shall preclude the Company or Executive from bringing any suit, action or proceeding in any other court for the purposes of enforcing the provisions of this Section 4.6 or enforcing any judgment obtained by the Company.

 

 

  

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b. The agreement of the parties to the forum described in Section 4.6(a) is independent of the law that may be applied in any suit, action, or proceeding and the parties agree to such forum even if such forum may under applicable law choose to apply non-forum law.  The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter have to personal jurisdiction or to the laying of venue of any such suit, action or proceeding brought in an applicable court described in Section 4.6(a), and the parties agree that they shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court.  The parties agree that, to the fullest extent permitted by applicable law, a final and non-appealable judgment in any suit, action or proceeding brought in any applicable court described in Section 4.6(a) shall be conclusive and binding upon the parties and may be enforced in any other jurisdiction.

 

c. The parties hereto irrevocably consent to the service of any and all process in any suit, action or proceeding arising out of or relating to this Agreement by the mailing of copies of such process to such party at such party’s address specified in Section 4.2.

 

d. Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding arising out of or relating to this Agreement.  Each party hereto (i) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such party would not, in the event of any action, suit or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party hereto has been induced to enter into this Agreement by, among other things, the mutual waiver and certifications in this Section 4.6(d).

 

e. Each party shall bear its own costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with any dispute arising out of or relating to this Agreement.

 

4.7 Assignment.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and permitted assigns.  The Company may assign this Agreement to any affiliated entity.  Executive’s rights and obligations under this Agreement are personal, and they shall not be assigned or transferred without the Company’s prior written consent otherwise than by will or the laws of descent and distribution.  The Company will require any successor (direct or indirect and whether by purchase, merger, consolidation, share exchange or otherwise) to substantially all of the business, properties and assets of the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would have been required to perform it had no succession taken place.

 

 

  

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4.8 Other Agreements/Entire Agreement.  This Agreement shall supersede any and all existing oral or written agreements, representations or warranties between Executive and the Company or any of its Affiliates relating to the terms of Executive’s termination by the Company or any of its Affiliates.  This Agreement (including Exhibit “A” attached hereto, which is incorporated herein by reference and made an integral part of this Agreement) constitutes the entire agreement of the parties with respect to the subject matters of this Agreement.  Any modification of this Agreement (including without limitation to Exhibit “A”) will be effective only if it is in writing and signed by each party.  Executive is also a party to that certain Indemnification Agreement, made as of August 8, 2012 and effective as of August 22, 2012, between Executive and the Company (the “Indemnification Agreement”).  Nothing in this Agreement is intended to alter or amend the terms or effect of the Indemnification Agreement, which shall remain in effect in accordance with its terms, notwithstanding the execution or termination of this Agreement.

 

4.9 Invalidity.  Should any provision(s) in this Agreement be held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall be unaffected and shall continue in full force and effect, and the invalid, void or unenforceable provision(s) shall be deemed not to be part of this Agreement.

 

4.10 Withholding.  All payments required to be made to Executive pursuant to this Agreement shall be subject to the withholding of amounts relating to income and employment taxes and other customary employee deductions in conformity with the Company’s payroll policies in effect from time to time.

 

4.11 Time of Payments and Section 409A.

 

a. All amounts payable under Sections 1.1.b, 1.2.a and 1.3 of this Agreement shall be paid only after Executive’s timely execution, without revocation, of a waiver and general release of claims in favor of the Company, its subsidiaries and Affiliates, and their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing, in a form satisfactory to the Company.  The Company shall provide the aforementioned release to Executive within 10 days following the date of Executive’s termination of employment.  Executive’s execution of the release shall be considered timely only if the release is executed and returned to the Company by the deadline specified by the Company, which deadline shall not be earlier than the 21st day following the date the release is provided to Executive nor later than the 55th day following the date of termination of Executive’s employment.  If Executive has timely returned the executed release and the revocation period has expired, the amounts payable under Sections 1.1.b, 1.2.a and 1.3 of this Agreement, to the extent payable in a lump sum, shall be paid on the 65th day following the date of Executive’s termination of employment.

 

 

  

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b. The parties intend that any amounts payable hereunder that could constitute “deferred compensation” within the meaning of Section 409A will be compliant with Section 409A, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  With respect to the time of payments of any amounts under this Agreement that are “deferred compensation” subject to Section 409A, references in this Agreement to “termination of employment” (and substantially similar phrases) shall mean “separation from service” within the meaning of Section 409A.  For purposes of Section 409A, each of the payments that may be made under this Agreement are designated as separate payments for purposes of Treasury Regulations Section 1.409A-1(b)(4)(i)(F), 1.409A-1(b)(9)(iii) and 1.409A-1(b)(9)(v)(B).

 

c. Notwithstanding anything in this Agreement to the contrary, if Executive is deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) and Executive is not “disabled” within the meaning of Section 409A(a)(2)(C), no payments hereunder to be made in connection with a separation from service” that are “deferred compensation” subject to Section 409A shall be made to Executive prior to the date that is six (6) months after the date of  Executive’s “separation from service” (as defined in Section 409A) or, if earlier, Executive’s date of death.  This Section 4.11 shall be applied by accumulating all payments that otherwise would have been paid within six months of Executive’s termination and paying such accumulated amounts in a single lump sum on the earliest date permitted under Section 409A that is also a business day.  Executive shall be a “specified employee” for the twelve-month period beginning on April 1 of a year if Executive is a “key employee” as defined in Section 416(i) of the Code (without regard to Section 416(i)(5)) as of December 31 of the preceding year or using such dates as designated by the Company in accordance with Section 409A and in a manner that is consistent with respect to all of the Company’s nonqualified deferred compensation plans, if any.  For purposes of determining the identity of specified employees, the Company may establish procedures as it deems appropriate in accordance with Section 409A.

 

d. For the avoidance of doubt, it is intended that any indemnification payment or expense reimbursement made hereunder shall be exempt from Section 409A.    Notwithstanding the foregoing, if any indemnification payment or expense reimbursement made hereunder shall be determined to be “deferred compensation” within the meaning of Section 409A, then (i) the amount of the indemnification payment or expense reimbursement during one taxable year shall not affect the amount of the indemnification payments or expense reimbursement during any other taxable year, (ii) the indemnification payments or expense reimbursement shall be made on or before the last day of Executive’s taxable year following the year in which the expense was incurred, and (iii) the right to indemnification payments or expense reimbursement hereunder shall not be subject to liquidation or exchange for another benefit.

 

4.12 Headings.  The Article and Section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

 

  

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4.13 Counterparts.  This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

 

  

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IN WITNESS WHEREOF, the Company and Executive have executed this Agreement in multiple originals to be effective on the Effective Date.

 

 

	
William Matthew Brown (“Executive”)

 

	
U.S. Concrete, Inc. (the “Company”)

	
By:  /s/ William Matthew Brown

Date:  August 8, 2012                   

 

	
By:  /s/ Katherine I. Hargis                          

Printed Name: Katherine I. Hargis              

Title: Vice President and General Counsel

Date:  August 8, 2012                                    

	  	  

 

 

  

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EXHIBIT “A” TO EXECUTIVE SEVERANCE AGREEMENT BETWEEN

 

THE COMPANY AND WILLIAM MATTHEW BROWN

 

	
Position:

	
Senior Vice President and Chief Financial Officer

 

	
Location:

	
Euless, Texas

 

	
Geographic Region of Responsibility:

	
During Executive’s employment with the Company, within 75 miles of any plant or other operating facility in which the Company is then engaged in business.  Upon termination of Executive’s employment with the Company, within 75 miles of any plant or other operating facility in which the Company was engaged in business on the date immediately prior to Executive’s termination.

 

	
Change in Control Multiplier:

	
2

 

	
Period of Post-Employment

Non-Competition Obligations:

	
If Executive’s employment is terminated under Section 1.1 or 1.2, the Period of Post-Employment Non-Competition Obligations shall be one year from the date of termination.  If Executive’s employment is terminated under Section 1.3, the Period of Post-Employment Non-Competition Obligations shall commence on the date of termination and continue for period of time equal to (a) 12 months multiplied by (b) the Change in Control Multiplier.

 

	
Monthly Base Salary:

	
$23,333 or such higher rate as may be determined by the Company from time to time

 

	
Annual Paid Vacation:

	
Four weeks

 

18exh10_3.htm

 

Exhibit 10.3

 

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of August 8, 2012 and effective as of August 22, 2012 by and between U.S. Concrete, Inc., a Delaware corporation (the “Company”), and William Matthew Brown (“Indemnitee”).

 

PRELIMINARY STATEMENT

Highly competent persons have become more reluctant to serve corporations as directors or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of corporations.

The Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities.  Although the furnishing of that insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Board believes that, given current market conditions and trends, that insurance may be available to it in the future only at higher premiums and with more exclusions.  At the same time, directors, officers and other persons in service to corporations or business enterprises increasingly are being subjected to expensive and time-consuming litigation relating to, among other matters, matters that traditionally would have been brought only against the corporation or business enterprise itself.  The uncertainties relating to liability insurance and to indemnification have increased the difficulty of attracting and retaining those persons, and the Board has determined that (i) this increased difficulty is detrimental to the best interests of the Company’s stockholders and that the Company  should act to assure those persons that there will be increased certainty of such protection in the future and (ii) it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify those persons to the fullest extent applicable law permits so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified.

The Third Amended and Restated Bylaws (“Bylaws”) of the Company require indemnification of the officers and directors of the Company.  Indemnitee may also be entitled to indemnification pursuant to the Delaware General Corporation Law (“DGCL”).  The Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification.

This Agreement is a supplement to and in furtherance of the Bylaws of the Company and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

The Indemnitee may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity.  Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that she be so indemnified.

 

 

  

  

  

 

 

NOW, THEREFORE, in consideration of the premises and the covenants herein, the parties to this Agreement agree as follows:

Section 1.                      Services by Indemnitee.  Indemnitee agrees to serve as an officer of the Company and, as mutually agreed by Indemnitee and the Company, as a director, officer, trustee, general partner, managing member, employee, agent or fiduciary of other corporations, limited liability companies, partnerships, joint ventures, trusts or other enterprises (including, without limitation, employee benefit plans) (each, an “Enterprise”).  Indemnitee may at any time and for any reason resign from any such position (subject to any other contractual obligation or any obligation applicable law imposes), in which event the Company will have no obligation under this Agreement to continue Indemnitee in that position.  This Agreement is not and is not to be construed as an employment contract between the Company (or any of its subsidiaries) and Indemnitee.  Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries), other applicable formal severance policies duly adopted by the Board or, with respect to service as a director of the Company, by the Company’s Amended and Restated Certificate of Incorporation, Bylaws  and the DGCL.  The foregoing notwithstanding, subject to Section 12, this Agreement will continue in force after Indemnitee has ceased to serve as an officer or director of the Company and no longer serves at the request of the Company as a director, officer, employee, agent or fiduciary of any other Enterprise.

Section 2.                      Indemnification—General.  The Company will indemnify, and advance Expenses (as hereinafter defined) to, Indemnitee (i) as this Agreement permits and (ii) (subject to the provisions hereof) to the fullest extent applicable law in effect on the date hereof and as amended from time to time permits.  The rights the preceding sentence provide to Indemnitee will include, but will not be limited to, the rights the other Sections hereof set forth.

Section 3.                      Proceedings Other Than by or in the Right of the Company.  Indemnitee will be entitled to the rights of indemnification this Section 3 provides if, by reason of her Corporate Status, she is, or is threatened to be made, a party to or a participant in any threatened, pending or completed Proceeding (as hereinafter defined), other than a Proceeding by or in the right of the Company.  Pursuant to this Section 3, the Company will indemnify Indemnitee against, and will hold Indemnitee harmless from and in respect of, all Expenses, judgments, penalties, fines (including excise taxes) and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of those Expenses, judgments, fines, penalties or amounts paid in settlement) actually and reasonably incurred by her or on her behalf in connection with that Proceeding or any claim, issue or matter therein, if she acted in good faith and in a manner she reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe her conduct was unlawful.

Section 4.                      Proceedings by or in the Right of the Company.  Indemnitee will be entitled to the rights of indemnification this Section 4 provides if, by reason of her Corporate Status, she is, or is threatened to be made, a party to or a participant (as a witness or otherwise) in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor.  Pursuant to this Section 4, the Company will indemnify Indemnitee against, and will hold Indemnitee harmless from and in respect of, all Expenses actually and reasonably incurred by her or on her behalf in connection with that Proceeding if she acted in good faith and in a manner she reasonably believed to be in or not opposed to the best interests of the Company; provided, however, that no indemnification against those Expenses will be made in respect of any claim, issue or matter in that Proceeding as to which Indemnitee has been adjudged to be liable to the Company unless and to the extent that the Court of Chancery, or the court in which that Proceeding has been brought or is pending, determines that despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

 

 

  

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Section 5.                      Indemnification for Expenses of a Party Who Is Wholly or Partly Successful.  Notwithstanding any other provision hereof, to the extent that Indemnitee is, by reason of her Corporate Status, a party to (or a participant in) and is successful, on the merits or otherwise, in defense of any Proceeding, the Company will indemnify her against all Expenses actually and reasonably incurred by her or on her behalf in connection therewith. If Indemnitee is not wholly successful in defense of any Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in that Proceeding, the Company will indemnify Indemnitee against all Expenses actually and reasonably incurred by her or on her behalf in connection with each successfully resolved claim, issue or matter.  For purposes of this Section 5 and without limitation, the termination of any claim, issue or matter in any Proceeding by dismissal, with or without prejudice, will be deemed to be a successful result as to that claim, issue or matter.

Section 6.                      Indemnification for Expenses as a Witness. Notwithstanding any other provision hereof, to the extent that Indemnitee is, by reason of her Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, the Company will indemnify her against all Expenses actually and reasonably incurred by her or on her behalf in connection therewith.

Section 7.                       Advancement of Expenses. The Company will advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding within 10 business days after the Company receives a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of that Proceeding.  Each such statement must reasonably evidence the Expenses incurred by or on behalf of Indemnitee and include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it ultimately is determined that Indemnitee is not entitled to be indemnified by the Company against those Expenses.  The Company will accept any such undertaking and advance such Expenses without reference to the financial ability of Indemnitee to make repayment, and without regard to Indemnitee’s ultimate entitlement to indemnification under other provisions of this Agreement.

Section 8.                      Procedure for Determination of Entitlement to Indemnification.  (a)  Within thirty (30) days after the actual receipt by Indemnitee of notice that she is a party to or a participant (as a witness or otherwise) in any Proceeding, Indemnitee shall submit to the Company a written notice identifying the Proceeding.  The omission by the Indemnitee to notify the Company will not relieve the Company from any liability which it may have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this Agreement only to the extent the Company can establish that such omission to notify resulted in actual prejudice to the Company.

 

 

  

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(b)           Indemnitee shall thereafter deliver to the Company a written application to indemnify Indemnitee in accordance with this Agreement.  Such application(s) may be delivered from time to time and at such time(s) as Indemnitee deems appropriate in her sole discretion.  Following such a written application for indemnification by Indemnitee, the Indemnitee's entitlement to indemnification shall be determined according to Section 8(c) of this Agreement.

(c)           On written request by Indemnitee for indemnification pursuant to Section 8(b), a determination, if applicable law requires, with respect to Indemnitee’s entitlement thereto will be made in the specific case: (i) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, or (ii) if so requested by the Indemnitee in her sole discretion by an Independent Counsel in a written opinion to the Board, a copy of which will be delivered to Indemnitee.  If it is so determined that Indemnitee is entitled to indemnification hereunder, the Company will:  (i) within 10 business days after that determination pay to Indemnitee all amounts theretofore incurred by or on behalf of Indemnitee in respect of which Indemnitee is entitled to that indemnification by reason of that determination; and (ii) thereafter on written request by Indemnitee, pay to Indemnitee within 10 business days after that request such additional amounts theretofore incurred by or on behalf of Indemnitee in respect of which Indemnitee is entitled to that indemnification by reason of that determination.  Indemnitee will cooperate with the person, persons or entity making the determination with respect to Indemnitee’s entitlement to indemnification under this Agreement, including providing to such person, persons or entity on reasonable advance request any documentation or information which is (i) not privileged or otherwise protected from disclosure, (ii) reasonably available to Indemnitee and (iii) reasonably necessary to that determination.  The Company will bear all costs and expenses (including attorneys’ fees and disbursements) Indemnitee incurs in so cooperating (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(d)           If an Independent Counsel is to make the determination of entitlement to indemnification pursuant to Section 8(c), the Independent Counsel will be selected as this Section 8(d) provides.  If a Change of Control has not occurred, the Board will select the Independent Counsel, and the Company will give written notice to Indemnitee advising her of the identity of the Independent Counsel so selected.  If a Change of Control has occurred, Indemnitee will select the Independent Counsel (unless Indemnitee requests that the Board make the selection, in which event the preceding sentence will apply), and Indemnitee will give written notice to the Company advising it of the identity of the Independent Counsel so selected.  In either event, Indemnitee or the Company, as the case may be, may, within 10 business days after the written notice of selection has been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to the selection; provided, however, that any such objection may be asserted only on the ground that the Independent Counsel so selected is not an “Independent Counsel” as Section 21 defines that term, and the objection must set forth with particularity the factual basis for that assertion.  Absent a proper and timely objection, the person so selected shall act as Independent Counsel.  If any such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until that objection is withdrawn or a court of competent jurisdiction has determined that objection is without merit.  If (i) an Independent Counsel is to make the determination of entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 8(a), no Independent Counsel has been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery or other court of competent jurisdiction for resolution of any objection that has been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the petitioned court or by such other person as the petitioned court designates, and the person with respect to whom all objections are so resolved or the person so appointed will act as the Independent Counsel under Section 8(c).  The Company will pay any and all reasonable and documented fees and expenses the Independent Counsel incurs in connection with acting pursuant to Section 8(c), and the Company will pay all reasonable and documented fees and expenses incident to the procedures this Section 8(d) sets forth, regardless of the manner in which the Independent Counsel is selected or appointed.  If (i) the Independent Counsel selected or appointed pursuant to this Section 8(d) does not make any determination respecting Indemnitee’s entitlement to indemnification hereunder within 45 days after the Company receives a written request therefor and (ii) any judicial proceeding or arbitration pursuant to Section 10(a) is then commenced, that Independent Counsel will be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

 

  

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Section 9.                      Presumptions and Effect of Certain Proceedings.  (a)  In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making that determination must presume that Indemnitee is entitled to indemnification hereunder if Indemnitee has submitted a request for indemnification in accordance with Section 8(a), and the Company will have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.  Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(b)           The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or on a plea of nolo contendere or its equivalent, will not (except as this Agreement otherwise expressly provides) of itself adversely affect the right of Indemnitee to indemnification hereunder or create a presumption that Indemnitee did not act in good faith and in a manner she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that her conduct was unlawful.

(c)           Any action Indemnitee takes or omits to take in connection with any employee benefit plan will, if taken or omitted in good faith by Indemnitee and in a manner Indemnitee reasonably believed to be in the interest of the participants in or beneficiaries of that plan, be deemed to have been taken or omitted in a manner “not opposed to the best interests of the Company” for all purposes hereof.

 

  

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(d)           Reliance as Safe Harbor.  For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee's action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected by  the Enterprise.  The provisions of this Section 9(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.

(e)           Actions of Others.  The knowledge and/or actions, or failure to act, of any other director, trustee, partner, managing member, fiduciary, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

Section 10.                      Remedies of Indemnitee.  (a)  In the event that (i) a determination is made pursuant to Section 8 that Indemnitee is not entitled to indemnification hereunder, (ii) advancement of Expenses is not timely made pursuant to Section 7, (iii) no determination as to Indemnitee’s entitlement to indemnification shall have been made pursuant to Section 8(c) of this Agreement hereunder, or that determination shall not have been made within 45 days after receipt by the Company of the request for that indemnification, (iv) payment of indemnification is not made pursuant to Section 5 or 6 within 10 business days after receipt by the Company of a written request therefor or (v) payment of indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be entitled to an adjudication from the Court of Chancery of her entitlement to that indemnification or advancement of Expenses.  Alternatively, Indemnitee, at her option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association.  Indemnitee must commence any such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence that proceeding pursuant to this Section 10(a); provided, however, that this sentence will not apply in respect of a proceeding brought by Indemnitee to enforce her rights under Section 5.

(b)           If a determination has been made pursuant to Section 8(c) that Indemnitee is not entitled to indemnification hereunder, any judicial proceeding or arbitration commenced pursuant to this Section 10 will be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee will not be prejudiced by reason of that adverse determination.  In any judicial proceeding or arbitration commenced pursuant to this Section 10, the Company will have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be and the Company may not refer to or introduce into evidence any determination pursuant to Section 8(c) of this Agreement adverse to Indemnitee for any purpose.  If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 10, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 7 until a final determination is made with respect to Indemnitee's entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).

(c)           If a determination has been made pursuant to Section 8(c) that Indemnitee is entitled to indemnification hereunder, the Company will be bound by that determination in any judicial proceeding or arbitration commenced pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a material fact, or an omission by Indemnitee of a material fact necessary to make Indemnitee’s statements not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

 

  

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(d)           If Indemnitee, pursuant to this Section 10, seeks a judicial adjudication of or an award in arbitration to enforce her rights under, or to recover damages for breach of, this Agreement, Indemnitee will be entitled to recover from the Company, and will be indemnified by the Company against, any and all expenses (of the types described in the definition of Expenses in Section 21) actually and reasonably incurred by her in that judicial adjudication or arbitration, but only if he prevails therein.  If it is determined in that judicial adjudication or arbitration that Indemnitee is entitled to receive part of, but not all, the indemnification or advancement of expenses sought, the Expenses incurred by Indemnitee in connection with that judicial adjudication or arbitration will be appropriately prorated between those in respect of which this Section 10(d) entitles Indemnitee to indemnification and those Indemnitee must bear.

(e)           The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 10 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.

(f)           The Company shall indemnify Indemnitee to the fullest extent permitted by law against all Expenses and, if requested by Indemnitee, shall (within ten (10) business days after the Company's receipt of such written request) advance such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any judicial proceeding or arbitration brought by Indemnitee for (i) indemnification or advances of Expenses by the Company under this Agreement or any other agreement or provision of the Company's Amended and Restated Certificate of Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances under any insurance policy maintained by the Company or any of its subsidiaries for the benefit of Indemnitee, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance or insurance recovery, as the case may be.

Section 11.                      Non-exclusivity; Survival of Rights; Insurance; Subrogation.  (a)  The rights to indemnification and advancement of Expenses this Agreement provides are not and will not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Company’s Amended and Restated Certificate of Incorporation, the Company’s Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise.  No amendment, alteration or termination of this Agreement or any provision hereof will limit or restrict any right of Indemnitee hereunder in respect of any action Indemnitee has taken or omitted in her Corporate Status prior to that amendment, alteration or termination.  To the extent that a change in Delaware law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under this Agreement, it is the intent and agreement of the parties hereto that Indemnitee will enjoy by this Agreement the greater benefits that change affords.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

 

  

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(b)           The Company will maintain in effect during the entire period for which the Company is obligated to indemnify Indemnitee under this Agreement (subject to appropriate cost considerations), an insurance policy or policies providing liability insurance for directors, officers and employees of the Company or of any other Enterprise that any such person serves at the request of the Company.  Indemnitee will be covered by any such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such person under such policy or policies.  If, at the time the Company receives notice from any source of a Proceeding as to which Indemnitee is a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(c)           The Company will not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received that payment or obtained the entire benefit therefrom under any insurance policy, contract, agreement or otherwise.

(d)           If the Company makes any payment hereunder, it will be subrogated to the extent of that payment to all the rights of recovery of Indemnitee, who will execute all papers required and take all action necessary to secure those rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce those rights.

(e)           The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee with respect to Indemnitee’s service at the request of the Company as a director, officer, employee, agent or fiduciary of any other Enterprise will be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from that other Enterprise.

Section 12.                      Duration of Agreement.  This Agreement will continue until and terminate on the later of:  (i) 10 years after the date that Indemnitee has ceased to serve as a director or officer of the Company or as a director, officer, trustee, partner, managing partner, employee, agent or fiduciary of any other Enterprise that Indemnitee served on behalf of the Company at the request of the Company; or (ii) one year after the final termination of any Proceeding (including any rights of appeal thereto) then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 10 relating thereto including any rights of appeal of any Section 10 Proceeding.  This Agreement will be binding on the Company and its successors and assigns and will inure to the benefit of Indemnitee and her spouse (if Indemnitee resides in Texas or another community property state), heirs, executors and administrators.

 

 

  

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Section 13.                      Severability.  If any provision or provisions of this Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:  (i) the validity, legality and enforceability of the remaining provisions hereof (including, without limitation, each portion of any Section containing any such invalid, illegal or unenforceable provision which is not itself invalid, illegal or unenforceable) will not in any way be affected or impaired thereby; (ii) such provision or provisions will be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (iii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section containing any such invalid, illegal or unenforceable provision which is not itself invalid, illegal or unenforceable) will be construed so as to give effect to the intent manifested thereby.

Section 14.                      Exception to Right of Indemnification or Advancement of Expenses.  Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

(a)           for which payment has actually been received by or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount actually received under any insurance policy or other indemnity provision; or

(b)           for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law;

(c)           except as otherwise provided in Sections 10(d) - (f) hereof, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law;

(d)           for reimbursement to the Company of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company, in each case as required under the Exchange Act; or

(e)           in connection with proceedings or claims involving the enforcement of non-compete and/or non-disclosure agreements or the non-compete and/or non-disclosure provisions of employment, severance, consulting or similar agreements the Indemnitee may be a party to with the Company, or any subsidiary of the Company.

Section 15.                      Enforcement and Binding Effect.

(a)           The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

 

 

  

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(b)           This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

Section 16.                      Settlement.  Notwithstanding any other provision of this Agreement, the Company shall have no obligation to indemnify Indemnitee under the Agreement for amounts paid in settlement of any action, suit or proceeding without the Company’s written consent, which shall not be unreasonably withheld.

Section 17.                      Joint Liability.

(a)           The Company shall not, without Indemnitee’s prior written consent, enter into any settlement of any Proceeding in which the Company is or is alleged to be jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

(b)           The Company hereby agrees to fully indemnify, hold harmless and exonerate Indemnitee from any claims for contribution which may be brought by officers, directors or employees of the Company (other than Indemnitee) who may be jointly liable with Indemnitee.

Section 18.                      Identical Counterparts.  This Agreement may be executed in one or more counterparts, each of which will for all purposes be deemed to be an original but all of which together will constitute one and the same agreement.  Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Section 19.                      Headings.  The headings of the Sections hereof are inserted for convenience only and do not and will not be deemed to constitute part of this Agreement or to affect the construction thereof.

Section 20.                      Security.  To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral.

Section 21.                      Definitions.  For purposes of this Agreement:

“Acquiring Person” means any Person who or which, together with all its Affiliates and Associates, is or are the Beneficial Owner of 50% or more of the shares of Common Stock then outstanding, but does not include any Exempt Person; provided, however, that a Person will not be or become an Acquiring Person if that Person, together with its Affiliates and Associates, becomes the Beneficial Owner of 50% or more of the shares of Common Stock then outstanding solely as a result of a reduction in the number of shares of Common Stock outstanding which results from the Company’s direct or indirect repurchase of Common Stock, unless and until such time as that Person or any Affiliate or Associate of that Person purchases or otherwise becomes the Beneficial Owner of additional shares of Common Stock constituting 1% or more of the then outstanding shares of Common Stock or any other Person (or Persons) who is (or collectively are) the Beneficial Owner of shares of Common Stock constituting 1% or more of the then outstanding shares of Common Stock becomes an Affiliate or Associate of that Person, unless, in either such case, that Person, together with all its Affiliates and Associates, is not then the Beneficial Owner of 50% or more of the shares of Common Stock then outstanding.

 

 

  

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“Affiliate” has the meaning Exchange Act Rule 12b-2 specifies.

“Associate” means, with reference to any Person, (i) any corporation, firm, partnership, limited liability company, association, unincorporated organization or other entity (other than the Company or a subsidiary of the Company) of which that Person is an officer or general partner (or officer or general partner of a general partner) or is, directly or indirectly, the Beneficial Owner of 10% or more of any class of its equity securities or interests, (ii) any trust or other estate in which that Person has a substantial beneficial interest or for or of which that Person serves as trustee or in a similar fiduciary capacity and (iii) any relative or spouse of that Person, or any relative of that spouse, who has the same home as that Person.

A specified Person is deemed the “Beneficial Owner” of, and is deemed to “beneficially own,” any securities:

(i)           of which that Person or any of that Person’s Affiliates or Associates, directly or indirectly, is the “beneficial owner” (as determined pursuant to Exchange Act Rule 13d-3) or otherwise has the right to vote or dispose of, including pursuant to any agreement, arrangement or understanding (whether or not in writing); provided, however, that a Person will not be deemed the “Beneficial Owner” of, or to “beneficially own,” any security under this subparagraph (i) as a result of an agreement, arrangement or understanding to vote that security if that agreement, arrangement or understanding:  (A) arises solely from a revocable proxy or consent given in response to a public (that is, not including a solicitation exempted by Exchange Act Rule 14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the Exchange Act; and (B) is not then reportable by that Person on Exchange Act Schedule 13D (or any comparable or successor report);

(ii)           which that Person or any of  that Person’s Affiliates or Associates, directly or indirectly, has the right or obligation to acquire (whether that right or obligation is exercisable or effective immediately or only after the passage of time or the occurrence of an event) pursuant to any agreement, arrangement or understanding (whether or not in writing) or on the exercise of conversion rights, exchange rights, other rights, warrants or options, or otherwise; provided, however, that a Person will not be deemed the “Beneficial Owner” of, or to “beneficially own,” securities tendered pursuant to a tender or exchange offer made by that Person or any of that Person’s Affiliates or Associates until those tendered securities are accepted for purchase or exchange; or

 

 

  

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(iii)           which are beneficially owned, directly or indirectly, by (A) any other Person (or any Affiliate or Associate thereof) with which the specified Person or any of the specified Person’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy or consent as described in the proviso to subparagraph (i) of this definition) or disposing of any voting securities of the Company or (B) any group (as Exchange Act Rule 13d-5(b) uses that term) of which that specified Person is a member;

provided, however, that nothing in this definition will cause a Person engaged in business as an underwriter of securities to be the “Beneficial Owner” of, or to “beneficially own,” any securities that Person acquires through its participation in good faith in a firm commitment underwriting (including, without limitation, securities acquired pursuant to stabilizing transactions to facilitate a public offering in accordance with Exchange Act Regulation M or to cover overallotments created in connection with a public offering) until the expiration of 40 days after the date of that acquisition.  For purposes of this definition, “voting” a security includes voting, granting a proxy, acting by consent, making a request or demand relating to corporate action (including, without limitation, calling a stockholder meeting) or otherwise giving an authorization (within the meaning of Section 14(a) of the Exchange Act) in respect of that security.

“Change of Control” means the occurrence of any of the following events that occurs after the date of this Agreement:  (i) any Person becomes an Acquiring Person; (ii) at any time the then Continuing Directors cease to constitute a majority of the members of the Board; (iii) a merger of the Company with or into, or a sale by the Company of its properties and assets substantially as an entirety to, another Person occurs and, immediately after that occurrence, any Person, other than an Exempt Person, together with all Affiliates and Associates of that Person (other than Exempt Persons), will be the Beneficial Owner of 50% or more of the total voting power of the then outstanding Voting Shares of the Person surviving that transaction (in the case or a merger or consolidation) or the Person acquiring those properties and assets substantially as an entirety unless that Person, together with all its Affiliates and Associates, was the Beneficial Owner of 50% or more of the shares of Common Stock outstanding prior to that transaction; (iv) the approval by the stockholders of the Company of a complete liquidation of the Company or an agreement or series of agreements for the sale or disposition by the Company of all or substantially all of the Company's assets; or (v) occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

“Common Stock” means (i) the common stock, par value $.001 per share, of the Company and (ii) any other class of capital stock of the Company which is (A) except for less voting rights, identical to the common stock clause (i) of this definition describes and (B) convertible into that common stock on a share for share basis on the occurrence of a Change of Control.

 

 

  

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“Continuing Director” means at any time any individual who then (i) is a member of the Board and was a member of the Board as of September 1, 2010 or whose nomination for her first election, or that first election, to the Board following that date was recommended or approved by a majority of the then Continuing Directors (acting separately or as a part of any action taken by the Board or any committee thereof) and (ii) is not an Acquiring Person, an Affiliate or Associate of an Acquiring Person or a nominee or representative of an Acquiring Person or of any such Affiliate or Associate.

“Corporate Status” describes the status of a natural person who is or was a director, officer, trustee, general partner, managing member, employee or agent of the Company or of any other Enterprise, provided that person is or was serving in that capacity at the request of the Company.  For purposes of this Agreement, “serving at the request of the Company” includes any service by Indemnitee which imposes duties on, or involves services by, Indemnitee with respect to any employee benefit plan or its participants or beneficiaries.

“Court of Chancery” means the Court of Chancery of the State of Delaware.

“Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee hereunder.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exempt Person” means: (i)(A) the Company, any subsidiary of the Company, any employee benefit plan of the Company or of any subsidiary of the Company and (B) any Person organized, appointed or established by the Company for or pursuant to the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the Company or any subsidiary of the Company; and (ii) Indemnitee, any Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule 13d-5(b) uses that term) of which Indemnitee or any Affiliate or Associate of Indemnitee is a member.

“Expenses” include all attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding and all interest or finance charges attributable to any thereof.  Should any payments by the Company under this Agreement be determined to be subject to any federal, state or local income or excise tax, “Expenses” also will include such amounts as are necessary to place Indemnitee in the same after-tax position (after giving effect to all applicable taxes) he would have been in had no such tax been determined to apply to those payments.  Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent.  Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

 

  

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“Independent Counsel” means a law firm, or a member of a law firm, that or who is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent:  (i) the Company, its affiliates or Indemnitee in any matter material to any such party; or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” does not include at any time any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

“Person” means any natural person, sole proprietorship, corporation, partnership of any kind having a separate legal status, limited liability company, business trust, unincorporated organization or association, mutual company, joint stock company, joint venture, estate, trust, union or employee organization or governmental authority.

“Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by her or of any action on her part while acting as director or officer of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent of any other Enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement.

“Voting Shares” means:  (i) in the case of any corporation, stock of that corporation of the class or classes having general voting power under ordinary circumstances to elect a majority of that corporation’s board of directors; and (ii) in the case of any other entity, equity interests of the class or classes having general voting power under ordinary circumstances equivalent to the Voting Shares of a corporation.

Section 22.                      Modification and Waiver.  No supplement to or modification or amendment of this Agreement will be binding unless executed in writing by both parties hereto.  No waiver of any of the provisions of this Agreement will be deemed or will constitute a waiver of any other provisions hereof (whether or not similar), nor will any such waiver constitute a continuing waiver.

Section 23.                      Notice by Indemnitee.  Indemnitee agrees promptly to notify the Company in writing on being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses hereunder; provided, however, a failure to give that notice will not deprive Indemnitee of her rights to indemnification and advancement of Expenses hereunder unless the Company is actually and materially prejudiced thereby.

 

 

  

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Section 24.                      Notices.  All notices, requests, demands and other communications  hereunder must be in writing and will be deemed delivered and received (i) if personally delivered or if delivered by telex, telegram, facsimile or courier service, when actually received by the party to whom the notice or communication is sent or (ii) if delivered by mail (whether actually received or not), at the close of business on the third business day in the city in which the Company’s principal executive office is located next following the day when placed in the mail, postage prepaid, certified or registered, addressed to the appropriate party at the address of that party set forth below (or at such other address as that party may designate by written notice to the other party in accordance herewith):

 

	 	
(a)

	
If to Indemnitee, to:

	
William Matthew Brown

	 	 	 	1149 Lake Colony Lane
	 	 	 	Birmingham, AL 35242

 

 

	 	
with a copy (which will not constitute notice for the purposes of this Agreement) to such legal counsel, if any, as the Indemnitee may designate in writing; and

 

	 	
(b) 

	
If to the Company, to:  

	
U.S. Concrete, Inc.

	 	 	 	331 N. Main Street
	 	 	 	Euless, Texas  76039
	 	 	 	Attention: President

 

Section 25.                      Contribution.  To the fullest extent applicable law permits, if the indemnification provided for in this Agreement is held by a court of competent jurisdiction to be unavailable to Indemnitee in whole or in part, the Company, in lieu of indemnifying Indemnitee, will contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all the circumstances of that Proceeding in order to reflect:  (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving rise to that Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s); provided, that, without limiting the generality of the foregoing, such contribution shall not be required where such holding by the court is due to the failure of the Indemnitee to meet the standard of conduct set forth in Sections 3 or 4 hereof or any limitation on indemnification set forth in Sections 14 or 16 hereof.

Section 26.                      Governing Law; Submission to Jurisdiction.  This Agreement and the legal relations among the parties will be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules.  Except with respect to any arbitration Indemnitee commences pursuant to Section 10(a), the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement will be brought only in the Court of Chancery and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Court of Chancery for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Court of Chancery and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Court of Chancery has been brought in an improper or otherwise inconvenient forum.

 

 

  

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Section 27.                      Miscellaneous.  Use of one gender herein includes usage of each other gender where appropriate.  This Agreement uses the words “herein,” “hereof” and words of similar import to refer to this Agreement as a whole and not to any provision of this Agreement, and the word “Section” refers to a Section of this Agreement, unless otherwise specified.

 

 

  

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

 

 

	ATTEST: 	U.S. CONCRETE, INC.
	 	 
	 	 
	By: /s/ Patricia Fulenwider                                             	By: /s/ Katherine I. Hargis
	Print Name: Patricia Fulenwider                                   	Name: Katherine I. Hargis
	 	Title: Vice President and General Counsel
	 	 
	ATTEST:    	INDEMNITEE:
	 	 
	 	 
	By: /s/ Scott O. Stanfield                                            	By: /s/ William Matthew Brown                                              
	Print Name: Scott O. Stanfield                                   	Print Name: William Matthew Brown

 

 

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