New Jersey
(State or other jurisdiction of incorporation) |
001-33841
(Commission File Number) |
20-8579133
(IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02.
Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
(i)
acquisition by any person or group of more than 50 percent of the total
fair market value or voting power of the Companys stock. A transfer or
issuance of Company stock is counted only if the stock remains outstanding
after the transaction. An increase in stock ownership as a result of the
Companys acquisition of its own stock in exchange for property is counted for
purposes of the change in ownership standard.
(ii)
(a)
acquisition by a person or group during a 12-month period of
stock possessing
30 percent of the total voting power of the Companys stock, or
(b)
replacement of a majority of the Board of Directors
during any 12-month period by directors not endorsed by a majority of
the members of the Board prior to the date of the appointment or
election; or
(iii)
acquisition by a person or group during a 12-month period of Company
assets having a total gross fair market value of 40 percent of the total gross
fair market value of the Companys assets immediately prior to such
acquisition. An exception exists for a transfer of Company assets to a
shareholder controlled entity, including transfer to a person owning 50 percent
or more of the total value or voting power of the Companys shares.
Exhibit No.
Description
10.1
10.2
Exhibit No.
Description
10.3
10.4
10.5
10.6
10.7
10.8
10.9
Vulcan Materials Company
Date: December 17, 2008
By:
/s/ Robert A. Wason IV
Robert A. Wason IV
Article 1. Establishment and Purpose
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Article 2. Definitions
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Article 3. Administration
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Article 4. Eligibility and Participation
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Article 5. Deferral Opportunities
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Article 6. Individual Accounts and Crediting of Investment Returns
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Article 7. Rabbi Trust
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Article 8. Change in Control
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Article 9. Beneficiary Designation
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Article 10. Withholding of Taxes
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Article 11. Amendment and Termination
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Article 12. Miscellaneous
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VULCAN MATERIALS COMPANY | ||||||||||
ATTEST: | ||||||||||
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By:
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/s/ Jerry F. Perkins, Jr. | By: | /s/ Donald M. James | |||||||
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Jerry F. Perkins, Jr. | Donald M. James | ||||||||
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Corporate Secretary | Chairman and Chief Executive Officer |
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1. | Name and Purpose |
(a) | Vulcan Materials Company (Company) has established an incentive compensation plan known as the Vulcan Materials Company Executive Incentive Plan (Plan), as set forth herein and as it may be amended from time to time. The Plan is a successor to the Vulcan Materials Company Management Incentive Plan with respect to any senior executive of the Corporation who participates in the Plan. The purpose of the Plan is to promote the profitability of the Corporation by providing incentives and rewards for those senior executives of the Corporation who contribute to the operating progress and earning power of the Corporation, and who are potentially subject to the deduction limit in Section 162(m) of the Internal Revenue Code of 1986 (Code). | ||
(b) | The Plan became effective as of January 1, 2001. This amendment and restatement is effective as of December 11, 2008 (Effective Date). The Plan shall remain in effect until the Board amends or terminates the Plan pursuant to Section 15 below. |
2. | Definitions |
(a) | Award Percentage means the maximum percentage of the Incentive Reserve that a Covered Employee may receive for a Year in which the Covered Employee is eligible to participate in the Plan, as determined by the Committee. | ||
(b) | Balance Sheet means the consolidated statement of the Corporations financial position certified by the Public Accountants and published from year to year in the Corporations Annual Report to Shareholders. | ||
(c) | Board of Directors or Board means the Board of Directors of the Company. | ||
(d) | Change in Control means a change in control as defined in the Vulcan Materials Company Change in Control Severance Plan or any successor plan. | ||
(e) | Code means the Internal Revenue Code of 1986, as amended from time to time. Any references to a particular section of the Code shall be deemed to include any successor provision thereto. | ||
(f) | Committee means the Compensation Committee of the Board of Directors, which consists solely of two or more outside directors within the meaning of Section 162(m) of the Code. | ||
(g) | Common Stock means the common stock of the Company with a par value of $1.00 per share. | ||
(h) | Company means Vulcan Materials Company, a New Jersey corporation. | ||
(i) | Consolidated Net Earnings for any Year means the sum of (i) the amount of net earnings (before any deduction for dividends) as reported in the Statement of Earnings, except that items which are classified therein as extraordinary items shall be excluded in the computation of Consolidated Net Earnings and (ii) interest on long-term debt included in Net Capital, such interest to include charges or credits arising out of premium or discount paid or received with respect to such debt, and such interest to be adjusted for the provision for federal and state income taxes attributable thereto. | ||
(j) | Corporation means the Company and its Subsidiaries. |
(k) | Covered Employee means any individual who is a covered employee within the meaning of Section 162(m) of the Code on the last day of the Companys taxable year for which the individual is selected to participate in the Plan, and each other senior executive of the Corporation who is designated by the Committee as a Covered Employee for a particular Year. | ||
(l) | Incentive Award means the amount payable to a Covered Employee under the Plan, as determined by the Committee on or after the end of each Year for which the Covered Employee is eligible to participate in the Plan. | ||
(m) | Incentive Reserve means the amount determined under Section 5 below that is available for the payment of awards under the Plan for a Year; provided that such amount is established and maintained as a general ledger entry solely for the Companys convenience and is not intended to be a funding mechanism for awards under the Plan. | ||
(n) | Net Capital for any Year means the sum of (1) long-term debt (comprising bonds, debentures and promissory notes having a maturity at the time of creation of more than one year), (2) issued capital stock, (3) capital in excess of par value and (4) earnings retained in the business and reserves created by appropriations therefrom, less the cost of treasury stock, all as shown in the Balance Sheet as of the end of the preceding Year, with appropriate prorated adjustment, as approved by the Public Accountants in accordance with the Plan, for any change during the Year arising from increase or decrease of outstanding principal of long-term debt or from original issuance or redemption and retirement of capital stock. | ||
(o) | Public Accountants means the independent public accountants employed by the Company from year to year for the purpose of submitting an opinion on the Corporations Statement of Earnings. | ||
(p) | Statement of Earnings means the consolidated statement of the Corporations earnings certified by the Public Accountants and published from year to year in the Corporations Annual Report to Shareholders. | ||
(q) | Subsidiary means any corporation, the majority of the outstanding voting stock of which is owned, directly or indirectly, by the Company, and that is not itself a publicly-held corporation within the meaning of Section 162(m) of the Code. | ||
(r) | Target Award means a target annual bonus established by the Committee to be paid pursuant to Section 13 in the event of Change in Control. | ||
(s) | Year means a fiscal year or period covered by a Statement of Earnings and for which the Plan is in effect. |
3. | Regulations |
4. | The Committee and Its Functions |
(a) | Subject to the provisions of this Plan, full power and authority to interpret and administer the Plan are vested in the Committee. The Committee shall have the discretionary authority to act with respect to each Covered Employee. The Committee is authorized to conduct such consultations with officers and other executives of the Company as it shall deem necessary or appropriate in the performance of its duties and responsibilities with respect to the Plan. The Committees discretion in interpreting and administering the Plan with respect to Covered Employees is specifically subject to the terms and conditions of Section 7 below. |
(b) | Without limiting the generality of Section 4(a) above, and except as otherwise specifically provided in this Plan, the Committee shall have the exclusive authority to: (i) interpret and administer the Plan and any instrument or agreement relating to the Plan or an Incentive Award; (ii) establish, amend, suspend, or waive rules and regulations for the administration of the Plan; (iii) engage or employ from time to time such counsel, advisers, consultants, accountants, analysts and other persons as it may deem necessary or expedient for the performance of such functions; (iv) appoint such agents as it shall deem appropriate for the proper administration of the Plan; (v) determine the rights of Covered Employees in the event of death, disability, termination, Change in Control and the like; and (vi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. All designations, determinations, interpretations and other decisions by the Committee under or with respect to the Plan or any Incentive Award under the Plan shall be final, conclusive, and binding upon all persons and entities, including the Company, any Subsidiary, any employee of the Corporation, any beneficiary and any shareholder. No determination of the Committee shall be subject to de novo review if challenged in court. |
5. | Incentive Reserve; Annual Provision; Annual Review of Earnings Factor; Annual Awards |
(a) | The Corporation shall meet the performance target under the Plan for any Year if Consolidated Net Earnings exceed 6% of Net Capital for the Year. For any Year in which the Corporation meets the performance target, the Committee may establish an Incentive Reserve equal to 4% of Consolidated Net Earnings in excess of 6% of Net Capital. | ||
(b) | As promptly as practicable after the end of each Year, the Public Accountants shall determine and certify in a report to the Committee the maximum amount, as determined under Section 5(a) above, available for credit to the Incentive Reserve for the such Year. | ||
(c) | As promptly as practicable after its receipt of the report described in Section 5(b) above, the Committee shall certify in writing whether the performance target described in Section 5(a), above, was attained for the Year and, if so, shall certify in writing the Incentive Awards, if any, that will be made to Covered Employees for the Year, pursuant to Section 9 below. The Committee may, in its sole discretion, make no Incentive Awards for a particular Year. If the Committee determines that Incentive Awards shall be made under the Plan for a Year, the Committee shall make and allot such individual Incentive Awards to Covered Employees in accordance with the provisions of Section 9(a) below. |
6. | Change in Fiscal Year |
7. | Code Section 162(m) Compliance |
8. | Eligibility |
9. | Annual Awards and Time of Payment |
(a) | Subject to the provisions of Section 5, above, and the provisions of this Section 9(a), a Covered Employee may be granted an Incentive Award for a particular Year in such individual amount as the Committee, in accordance with the Plan, may in its discretion determine. In selecting Covered Employees, setting Award Percentages, and fixing the amount of any Incentive Awards thereunder, the Committee shall take into consideration the Award Percentage for each Covered Employee and the present and potential contribution of each Covered Employee to the operating progress and earning power of the Corporation. | ||
(b) | If the Committee determines that it will establish an Incentive Reserve for a Year, the Committee shall set forth in writing, during the first ninety days of the Year, (i) which senior executives shall participate in the Plan as Covered Employees for the Year, and (ii) the Award Percentage for each Covered Employee. In no event shall the sum of the Award Percentages of all Covered Employees for a Year exceed 100% of the Incentive Reserve for such Year. | ||
(c) | The Committee may exercise its discretion to reduce (but not to increase) the actual Incentive Award of any Covered Employee to an amount less than the Covered Employees Award Percentage for the Year. In no event shall a reduction in the amount awarded to one Covered Employee increase the amount that is available for awards to any other Covered Employee. | ||
(d) | Each Incentive Award payable under the Plan shall be paid no later than two and one-half months after the close of the Year for which such Incentive Award is payable. Incentive Awards shall be paid in accordance with such conditions as the Committee may in accordance with the Plan prescribe. | ||
(e) | The amount of each payment of an Incentive Award shall, when paid, be subject to a deduction for any and all taxes required by any government to be withheld by the Corporation and paid over to such government for the account of the Covered Employee to whom the award was made. The payment to any such government of an amount so withheld shall, for the purposes of the Plan, be deemed a payment thereof to the employee or his or her legal representatives. |
10. | Awards Payable in Cash |
(a) | Incentive Awards under the Plan for any Year shall be paid in cash. | ||
(b) | With respect to each Incentive Award under the Plan, the amount thereof shall be held or provided by the Company or the appropriate Subsidiary (without liability for interest) for payment to the Covered Employee or his or her legal representatives, as the case may be, as provided in Section 9 above. |
11. | Report of Awards |
12. | Administrative Expenses |
13. | Change in Control Payments |
(a) | In the event of a Change in Control, Covered Employees shall be entitled to receive payment of awards under the Plan in accordance with this Section 13. Awards under this Section 13 are not required to comply with Section 7 of the Plan or with the provisions of Section 162(m) of the Code. | ||
(b) | If a Change in Control occurs after Incentive Awards for a particular Year have been determined by the Committee in accordance with the Plan, but before the payment of such awards, then such Incentive Awards shall be paid as promptly as reasonably practicable, but not more than 30 days, after such Change in Control, and no later than two and one-half months after the close of the Year for which such Incentive Award is payable. | ||
(c) | If a Change in Control occurs before Incentive Awards for such Year have been determined by the Committee, | ||
(i) each individual who was a Covered Employee at the end of such Year shall be entitled to receive an award under this Section 13(c)(i) for such Year in an amount at least equal to the greater of (A) the average of such individuals bonuses under the Companys Management Incentive Plan and any comparable bonuses under any successor plan thereto (including the Plan) for each Year during the three preceding Years in which the individual participated in such plan, or (B) the Covered Employees Target Award, and | |||
(ii) each individual whose employment terminated during such Year as a result of retirement, disability, or death and who was a Covered Employee at the time of such termination shall be entitled to receive an award under this Section 13(c)(ii) for such partial Year in an amount at least equal to the greater of (A) the average of such individuals bonuses under the Companys Management Incentive Plan and any comparable bonuses under any successor plan thereto (including the Plan) for each Year during the three preceding Years in which the individual participated in such plan, or (B) the Covered Employees Target Award, multiplied in either case by a fraction the numerator of which is the number of months (whole or partial) in such Year through the date of such termination and the denominator of which is 12. | |||
(d) | If such Change in Control occurs before the designation of Covered Employees for such Year, the Covered Employees designated for the previous Year as in effect at the end of such previous Year shall be applicable and shall be used in calculating awards provided for under Section 13(c). | ||
(e) | If, after the occurrence of a Change in Control, the Plan is continued in effect without material amendment and the Board of Directors and the Committee confirm that the Plan will be interpreted and administered substantially in accordance with past practices, then payment of awards to which individuals may become entitled under subparagraph (c) of this Section 13 shall be made in accordance with Sections 9(d) and 10 above. If, however, the Plan is terminated, suspended or materially amended, or if the Board of Directors and the Committee do not so confirm after the occurrence of a Change in Control, then payment of awards to which individuals may become entitled under subparagraph (c) of this Section 13 shall be made as promptly as practicable, but not more than 30 days, after such Change in Control, and no later than two and one-half months after the close of the Year for which such Incentive Award is payable. |
(f) | In the event of a Change in Control, nothing in this Section 13 shall preclude the payment of Incentive Awards under the Plan or otherwise in an amount in excess of the amount required to be paid under this Section 13. | ||
(g) | The Company shall promptly reimburse an individual entitled to an Incentive Award or other awards under this Section 13 for all legal fees and expenses reasonably incurred in successfully seeking to obtain or enforce any right or benefit provided under this Section 13. Any reimbursement of legal fees paid to an individual pursuant to this paragraph shall be paid no later than the end of the individuals taxable year next following the individuals taxable year of the individual in which the related expense is incurred, and, if paid on account of a termination of employment, no earlier than the seventh month following the individuals separation from service. |
14. | Unfunded Plan |
The Plan shall be an unfunded plan. Benefits under the Plan shall be paid from the general assets of the Corporation. |
15. | Termination, Suspension and Amendment |
(a) | The Board of Directors may at any time and from time to time alter, amend, suspend or terminate the Plan; provided, however, that no provision of the Plan relating to a Change in Control nor any definition of a term used in any such provision may be altered, amended, suspended, or terminated after the occurrence of a Change in Control and further provided that unless the Board of Directors specifically provides otherwise, any revision or amendment that would cause the Plan to fail to comply with the requirements of any applicable law, regulation or rule if such amendment were not approved by the shareholders of the Company shall not be effective unless and until such shareholder approval is obtained. | ||
(b) | No amendment, suspension, or termination of the Plan shall adversely affect any right or obligation with respect to an Incentive Award theretofore made, or required to be made after the occurrence of a Change in Control, including without limitation, the right to receive payment of Incentive Awards in accordance with Section 13 above. |
16. | No Right to Employment or Participation |
(a) | No provision of the Plan nor any action taken by the Committee or the Company pursuant to the Plan shall give or be construed as giving any salaried employee of the Corporation any right to be retained in the employ of the Company or of any Subsidiary, or affect or limit the right of the Company to terminate such employment. | ||
(b) | No employee of the Corporation shall have the right to be selected to participate in the Plan. |
17. | Legal Construction |
(a) | If any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. | ||
(b) | The Plan and all Incentive Awards or other awards under the Plan shall be construed in accordance with and governed by the laws of the State of New Jersey (without regard to legislative or judicial conflict of law rules of any state), except to the extent superseded by federal law. | ||
(c) | The Plan is intended, and shall be construed, to comply with the requirements of Section 409A of the Code. However, the Plan does not transfer to the Company or any entity or other individual liability for any tax or penalty that is the responsibility of the employee. |
VULCAN MATERIALS COMPANY | ||||||||||
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ATTEST: | ||||||||||
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By:
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/s/ Jerry F. Perkins, Jr. | By: | /s/ Donald M. James | |||||||
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Corporate Secretary | Chairman and Chief Executive Officer |
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VULCAN MATERIALS COMPANY | ||||||||||
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ATTEST: | ||||||||||
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By:
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/s/ Jerry F. Perkins, Jr. | By: | /s/ Donald M. James | |||||||
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Corporate Secretary | Chairman and Chief Executive Officer |
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Article 1. Establishment and Purpose
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Article 2. Definitions
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Article 3. Administration
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Article 4. Eligibility and Participation
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Article 5. Supplemental Thrift Benefits
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Article 6. Supplemental Retirement Benefits
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Article 7. Rabbi Trust
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Article 8. Change in Control
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Article 9. Beneficiary Designation Supplemental Thrift Benefits
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Article 10. Withholding Taxes
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Article 11. Amendment and Termination
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Article 12. Miscellaneous
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(a) | 401(k) Plan means the Vulcan Materials Company 401(k) and Profit-Sharing Retirement Plan. All references to the 401(k) Plan (including the term Alternate Profit-Sharing Contribution) shall be effective beginning July 15, 2007. | ||
(b) | Alternate Matching Contribution means, with respect to any Participant, an amount equal to (i) the Matching Contribution that would have been made to the Investment Account (as such term is defined in the Thrift Plan and in the 401(k) Plan) of the Participant for a given month were it not for the application of such Limitations, minus (ii) the Matching Contribution made to the Investment Account of such Participant for such month, after application of the Limitations. | ||
(c) | Alternate Profit-Sharing Contribution means, with respect to any Participant, an amount equal to (i) the Profit-Sharing Contribution that would have been made to the Investment Account (as such term is defined in the 401(k) Plan) of the Participant for a given month were it not for the application of such Limitations, minus (ii) the Profit-Sharing Contribution made to the Investment Account of such Participant for such month, after application of the Limitations. | ||
(d) | Board or Board of Directors means the Board of Directors of the Company. | ||
(e) | Change in Control means a change in control as defined in regulations or other guidance under Section 409A of the Code.: | ||
(f) | CEO means the Chief Executive Officer of the Company. |
(g) | Code means the Internal Revenue Code of 1986, as amended from time to time. | ||
(h) | Committee means the Compensation Committee of the Board (or any other committee designated by the Board that is eligible to administer the Plan in accordance with Rule 16b-3 under the Exchange Act). | ||
(i) | Company means Vulcan Materials Company and also includes any Employing Company (as such term is defined in the Retirement Plan). | ||
(j) | Company Stock means the common stock of the Company. | ||
(k) | Early Retirement shall have the same meaning as defined under the Retirement Plan. | ||
(l) | ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time. | ||
(m) | Exchange Act means the Securities Exchange Act of 1934, as amended. | ||
(n) | Limitations means: |
(o) | Matching Contribution shall have the same meaning as defined under the Thrift Plan. | ||
(p) | Normal Retirement Date shall have the same meaning as defined under the Retirement Plan. | ||
(q) | Participant means any key management employee of the Company who has been approved by the Committee for participation in the Plan under Section 4.1. | ||
(r) | PBGC means the Pension Benefit Guaranty Corporation. | ||
(s) | Plan Year means the period of 12 consecutive months beginning each January 1 and ending December 31. |
(t) | Rabbi Trust means a grantor trust, as described in Section 677 of the Code, that is established by the Company as provided in Article 7. | ||
(u) | Rabbi Trust Agreement means the instrument establishing the Rabbi Trust, as such instrument may be amended from time to time. | ||
(v) | Retirement Plan means the Retirement Income Plan for Salaried Employees of Vulcan Materials Company, as the same may be from time to time amended. | ||
(w) | Section 401(k) Limit means the dollar limit imposed by Section 401(a)(17) of the Code on the amount of compensation which may be taken into account under the Thrift Plan, the 401(k) Plan, and the Retirement Plan. | ||
(x) | Supplemental Retirement Benefits means the benefits that are payable under Sections 6.1 or 6.2 of the Plan. | ||
(y) | Supplemental Thrift Benefits means the benefits that are payable under Article 5 of the Plan. | ||
(z) | Termination of Employment Service shall have the same meaning as defined under the Retirement Plan (as in effect on December 31, 2008), provided that a Termination of Employment Service shall occur only upon a separation from service within the meaning of Section 409A of the Code. | ||
(aa) | Thrift Plan means the Vulcan Materials Company Thrift Plan for Salaried Employees, as the same may be from time to time amended. | ||
(bb) | Vested shall have the same meaning as defined under the Retirement Plan. | ||
(cc) | Vesting Date shall have the same meaning as defined under the Retirement Plan. |
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VULCAN MATERIALS COMPANY | |||||||||
ATTEST: | ||||||||||
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By:
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/s/ Jerry F. Perkins | By: | /s/ Donald M. James | |||||||
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Jerry F. Perkins, Jr. | Donald M. James | ||||||||
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Corporate Secretary | Chairman and Chief Executive Officer | ||||||||
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CORPORATE SEAL |
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VULCAN MATERIALS COMPANY | |||||||
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ATTEST:
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By:
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/s/ Jerry F. Perkins, Jr. | By: | /s/ Donald M. James | ||||
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Jerry F. Perkins, Jr. | Donald M. James | |||||
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Corporate Secretary | Chairman and Chief Executive Officer | |||||
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CORPORATE SEAL |
7
1. | Definitions. |
(a) | Beneficiary shall mean the individual or entity designated by the Nonemployee Director to receive, upon the death of the Nonemployee Director, undelivered Restricted Shares as to which the applicable restrictions have expired and the balance of the Nonemployee Directors Account attributable to Deferred Stock Units. If no such designation is made, or if the designated individual predeceases the Nonemployee Director or the entity no longer exists, then the Beneficiary shall be the Nonemployee Directors estate. | |
(b) | Board shall mean the Board of Directors of the Company. | |
(c) | Change in Control shall mean a change in control as defined in regulations or other guidance under Section 409A of the Code. | |
(d) | Code shall mean the Internal Revenue Code of 1986, as amended. | |
(e) | Company shall mean Vulcan Materials Company, a New Jersey corporation. | |
(f) | Deferred Stock Unit shall mean the equivalent of one Share, as established pursuant to this Plan. | |
(g) | Effective Date shall mean May 14, 2004, provided that the Plan is approved by the Companys shareholders as described in paragraph 2. | |
(h) | Exchange Act shall mean the Securities Exchange Act of 1934, as amended. | |
(i) | Fair Market Value Per Share shall mean the average of the daily closing prices of Shares as reported on the New York Stock Exchange for the twenty (20) trading days prior to the date of determination of the number of shares subject to the grant by the Board in accordance with Section 4 below, or if the Shares are not listed on such exchange, on the principal United States securities exchange registered under the Exchange Act on which the Shares are listed. |
(j) | Nonemployee Director shall mean any person who is a member of the Board who is not, as of the date of a grant of Restricted Shares under this Plan, an employee of the Company or any of its subsidiaries. | |
(k) | Plan shall mean this Vulcan Materials Company Restricted Stock Plan for Nonemployee Directors, as it may be amended from time to time. | |
(l) | Restricted Share shall mean a Share granted to a Nonemployee Director in accordance with paragraph 4 and subject to the restrictions set forth in paragraph 5. | |
(m) | Share shall mean a share of the Companys common stock, $1.00 par value, and such other stock and securities as may be substituted therefor in accordance with paragraph 6(b). |
2. | Purposes and Effective Date. |
3. | Eligibility and Shares of Common Stock Available. |
4. | Grants of Restricted Shares. |
5. | Terms and Conditions of Grants of Restricted Shares. |
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(a) | The terms and conditions set forth in this paragraph shall apply to each grant of Restricted Shares. If required by the Company, each such grant shall be evidenced by a written agreement that sets forth the specific terms of the grant in accordance with the Plan and that is duly executed by or on behalf of the Company and the Nonemployee Director. | |
(b) | At the time of each grant, a share certificate or certificates representing the number of Restricted Shares granted to a Nonemployee Director shall be registered in the Nonemployee Directors name but shall be held by or on behalf of the Company for the Nonemployee Directors account. As a condition to receipt of the first award of Restricted Shares, each Nonemployee Director shall execute and deliver to the Company a stock power in blank with respect to all Restricted Shares that may be awarded to such Nonemployee Director in the future. Such stock power shall be held in custody by the Secretary of the Company and shall be used only to effect a transfer of Restricted Shares to the Company in connection with a forfeiture of Restricted Shares by such Nonemployee Director. The Nonemployee Director shall have all the rights and privileges of a shareholder as to such Restricted Shares, including the right to receive dividends and the right to vote such Restricted Shares, subject to the restrictions set forth in subparagraph c and subject to deferrals of dividend payments as provided in paragraph 7. | |
(c) | The Restricted Shares granted to any Nonemployee Director under paragraph 4 shall be subject to the following restrictions: |
(d) | Except as otherwise provided in clause (ii) below or in paragraph 10, the restrictions applicable to Restricted Shares covered by any grant to any Nonemployee Director shall expire in accordance with the terms of the following clause (i): |
3
(e) | All of the Restricted Shares granted to any Nonemployee Director as to which the restrictions have not previously expired shall be forfeited immediately, and all rights of such Nonemployee Director to such Restricted Shares shall terminate without further obligation on the part of the Company, if the Nonemployee Director shall cease to be a director of the Company before age 70 for any reason other than as set forth in clause (ii) of subparagraph (d) above or in paragraph 10, or as provided in the following sentence. Upon recommendation of the Chief Executive Officer and unanimous approval by the Compensation Committee (except that if the Nonemployee Director whose Restricted Shares are at issue is a member of the Compensation Committee, then that Nonemployee Director will abstain from the decision), the Compensation Committee may waive such restrictions in whole or in part if such waiver would be in the best interest of the Company. | |
(f) | As soon as practicable after the expiration of the restrictions on any Restricted Shares as herein provided, a share certificate for such Restricted Shares shall be delivered, free of all such restrictions, to the Nonemployee Director (or to the Nonemployee Directors Beneficiary, if applicable) subject to the withholding requirements of paragraph 14(i) (if applicable). | |
6. | Delivery of Restricted Shares. | |
(a) | Shares granted or delivered under the Plan may be authorized but unissued Shares, Shares reacquired by the Company, or a combination of both, as the Board may from time to time determine. Shares granted under the Plan but subsequently forfeited shall continue to be otherwise available for the purposes of the Plan. | |
(b) | In the event of any change in the outstanding Shares upon which the stock equivalency hereunder is based, by reason of a merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, or any other change in corporate structure or in the event of any dividend that is paid in Shares or other property, the number and kind of Restricted Shares which may thereafter be granted under the Plan shall be adjusted and the number and kind of Shares then being held by the Company as Restricted Shares shall be adjusted in such a manner as a majority of the Board shall determine to be fair under the circumstances; provided, however, that if a Change in Control shall have occurred, then such determination shall be made by a majority of the Continuing Directors. Any new or additional Restricted Shares, or stock or other securities substituted therefor, to which an Nonemployee Director may be entitled under this subparagraph shall be subject to all of the terms and conditions of paragraph 5. | |
(c) | The Company shall not be required to deliver any fractional Share but shall pay, in lieu thereof, the fair market value (measured as of the date restrictions lapse) of such |
4
fractional Share to the Nonemployee Director (or the Nonemployee Directors Beneficiary, if applicable). | ||
7. | Deferred Stock Account. |
8. | Deferred Stock Units. | |
(a) | There shall be credited to the Account of each Nonemployee Director participating in the Plan Deferred Stock Units on each regular cash dividend payment date (a Dividend Date). The number of such Deferred Stock Units shall be determined by (i) multiplying the amount of the dividend by the sum of (x) the total number of Deferred Stock Units (including fractional Deferred Stock Units) credited to such Account immediately prior to the Dividend Date and (y) the total number of Restricted Shares granted to such Nonemployee Director upon which restrictions have not yet lapsed and (ii) dividing the product by the Fair Market Value Per Share as of the day preceding the Dividend Date. | |
(b) | In the event of any change in the outstanding Shares upon which the stock equivalency hereunder is based, by reason of a merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, or any other change in corporate structure or in the event of any dividend that is paid in Shares or other property, the number of Deferred Stock Units credited to the Account shall be adjusted in such a manner as a majority of the Board shall determine to be fair under the circumstances; provided, however, that if a Change in Control shall have occurred, then such determination shall be made by a majority of the Continuing Directors. In the case of dividends payable in property, the amount paid shall be based on the fair market value of the property at the time of distribution of the dividend, as determined by a majority of the Board, or, in the event of a Change in Control, by a majority of the Continuing Directors. | |
9. | Distribution Attributable to Deferred Stock Units. | |
(a) | Except as otherwise provided herein, the balance of each Nonemployee Directors Account shall be paid to the Nonemployee Director, in a lump sum, within ninety (90) days following the date that such director reaches age 72. | |
(b) | In the event of the death of the Nonemployee Director prior to such directors retirement or prior to the distribution of the entire balance in such directors Account, the entire |
5
balance in the Account as of the date of the Nonemployee Directors death shall be paid in Shares in a lump sum, to the directors Beneficiary within ninety (90) days following such directors death. | ||
(c) | If, while a director of the Company, a Nonemployee Director is determined to be disabled (within the meaning of section 409A(a)(2)(C) and the regulations and guidance thereunder, the entire balance in the Account as of the date of such disability shall be paid to such Nonemployee Director, or his or her personal representative, in a lump sum, within ninety (90) days following the date of such disability. | |
(d) | If a Nonemployee Director incurs a separation from service with the Company within the meaning of section 409A of the Code for any reason other than due to death or disability (as defined in subparagraph (c), above), including, without limitation, the failure of such person to be re-elected as a director of the Company by the shareholders of the Company, the balance of such directors Account as of the date such person ceases to be a director of the Company shall be paid in a lump sum, to such director within ninety (90) days of the date such person ceases to be a director of the Company. | |
(e) | All distributions of Deferred Stock Units made pursuant to this Plan shall be in an amount equal to the number of Deferred Stock Units held in the Account. On the date of any such distribution, the Company shall cause to be issued and delivered to such Nonemployee Director a stock certificate evidencing the Shares registered in the name of such Nonemployee Director, or such other person as the Nonemployee Director may designate. Deferred Stock Units representing fractional Shares shall be paid in cash. | |
10. | Effect of Change in Control. | |
(a) | Notwithstanding any other provision of the Plan, if a Change in Control occurs and at any time after the occurrence of such Change in Control either of the following events occurs: |
then the restrictions on all Restricted Shares shall expire. In addition, if the Plan is terminated following a Change in Control (and the requirements of Treasury Regulation § 1.409A-3(j)(4)(ix) are satisfied), the entire balance of the Deferred Stock Unit Account shall be payable in a lump sum to the director in Shares. Such payment shall be made by the Company as promptly as practicable, but not more than thirty (30) days following the date on which the Plan is terminated. | ||
(b) | The Company shall promptly reimburse the Nonemployee Director for all legal fees and expenses reasonably incurred in successfully seeking to obtain or enforce any right or benefit provided under this paragraph 10. To the extent that the right to legal fees under this Section 10 is subject to a substantial risk of forfeiture within the meaning of Treas. |
6
Reg. § 1.409A-1(d), any reimbursement of legal fees under this Section 10 shall be paid no later than 2-1/2 months following the end of the directors taxable year in which there is no longer a substantial risk of forfeiture; otherwise, any reimbursement of legal fees paid to the director pursuant to this Section 10 shall be paid no later than the end of the directors taxable year next following the taxable year of the director in which the related expense is incurred. | ||
(c) | This paragraph 10 may not be amended or modified after the occurrence of a Change in Control. | |
11. | Amendment and Termination. |
12. | Term. | |
The Plan shall continue in effect until May 13, 2009. | ||
13. | Compliance with SEC Regulations. |
14. | Miscellaneous. | |
(a) | Neither the establishment of the Plan nor the payment of any benefits hereunder nor any action taken hereunder shall be construed as giving any individual any right to continue to serve as a director of the Company or otherwise to be retained in the service of the Company. | |
(b) | No Shares shall be issued hereunder unless and until counsel for the Company shall be satisfied such issuance will be in compliance with applicable federal, state and other securities laws and regulations. | |
(c) | The expenses of the Plan shall be borne by the Company. | |
(d) | Neither the Nonemployee Director nor any other person shall have any interest in any fund or in any specific asset of the Company by reason of amounts credited to the Account of such director, nor the right to exercise any of the rights or privileges of a |
7
shareholder with respect to any Deferred Stock Unit credited to such Account, nor the right to receive distribution under the Plan except as expressly provided herein. Distributions hereunder shall be made from the general funds of the Company, and the rights of the directors shall be those of an unsecured general creditor of the Company. | ||
(e) | The Plan, the grant of Restricted Shares and Deferred Stock Units thereunder, and the obligation of the Company to deliver Shares, shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any governmental or regulatory agency or national securities exchange as may be required. The Company shall not be required to issue or deliver any certificates for Shares prior to the completion of any registration or qualification of such Shares under any federal or state law or any ruling or regulation of any governmental body or national securities exchange which the Company shall, in its sole discretion, determine to be necessary or advisable. | |
(f) | The Plan shall be administered by the Compensation Committee selected by the Board. The Compensation Committee shall have the power to interpret the Plan and, subject to its provisions, to make all determinations necessary or desirable for the Plans administration. The Compensation Committee shall have the full discretionary authority to adopt rules and regulations for carrying out the Plan, and to interpret, construe and implement the provisions of the Plan. The Compensation Committees determinations on these matters shall be conclusive, except in the event of a Change in Control, in which case such interpretation and determination shall be made by a majority of the Continuing Directors. | |
(g) | No rights or benefits under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, except by will or the laws of descent and distribution, and any attempt thereat shall be void. No such right or benefit shall, before receipt thereof, be in any manner liable for or subject to the recipients debts, contracts, liabilities, engagements, or torts. | |
(h) | The provisions of this Plan shall apply to and be binding upon the beneficiaries, distributees, and personal representatives, and any successors in interest of the Nonemployee Director. | |
(i) | The Company shall deduct from all distributions hereunder any taxes required to be withheld by the federal, state or local law. The Company may take any other action it deems necessary or advisable, to enable the Company to satisfy obligations for the payment of any withholding taxes or other tax liabilities that it reasonably determines to be due with respect to any award under the Plan, including requiring payment in cash by the Nonemployee Director of amounts required to be withheld or deducting such amounts from any other payment due to a Nonemployee Director. | |
(j) | The Plan shall be governed by, and construed in accordance with, the laws of the State of Alabama, excluding any choice of law provisions which may indicate the application of the laws of another jurisdiction. |
8
VULCAN MATERIALS COMPANY | ||||||||||
|
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ATTEST: | ||||||||||
|
||||||||||
By:
|
/s/ Jerry
F. Perkins, Jr.
|
By: |
/s/ Donald
M. James
|
|||||||
|
Corporate Secretary | Chairman and Chief Executive Officer |
9
1. | Definitions . All defined terms contained in the Plan are hereby incorporated by reference, except to the extent that any term is specifically defined in this Award Agreement. | ||
2. | Grant of Deferred Stock Units; Vesting; Dividend Equivalents; Withholding. |
(A) | Grant . Subject to the terms and conditions of the Plan, this Award Agreement, and any applicable deferral election executed by the participant under the Executive Deferred Compensation Plan, the Company hereby grants to the Participant the number of Deferred Stock Units (DSUs) designated on page one of the Prior Agreement. The DSUs represent an unfunded and unsecured promise of the Company to issue the same number of Shares at the Payment Date (as defined below) as DSUs granted pursuant to this Section 2(A), or accrued pursuant to Section 2(C), under this Award Agreement. As of the Grant Date, a DSU account is established for the Participant (Account), and is credited with the number of DSUs shown on page one of the Prior Agreement. No Shares have been transferred or set aside, or will be transferred or set aside, from the general creditors of the Company to fund this Award. The Participant has no right to vote or receive dividends on the Shares represented by the DSUs until the Shares have been paid on the Payment Date, as explained below. | ||
(B) | Vesting . Except as otherwise provided in Section 3, and subject to the Committees discretion set forth in Section 4, the Participants right to receive the Shares represented by the DSUs will vest (Vested Shares) in installments, as follows: One-fifth of the DSUs will vest on each anniversary of the Grant (an Anniversary Date) beginning on the sixth anniversary and ending on the tenth anniversary. | ||
(C) | Dividend Equivalents . Beginning on the 1 st Anniversary Date and ending on the Anniversary Date on or immediately before the date on which DSUs are fully paid, the Participants Account will be credited with dividend equivalents equal to the dividends paid during the preceding calendar year on the number of Shares represented by the DSUs. The Dividend Equivalents will be converted to |
2
additional DSUs, rounded to the nearest whole number, and credited to the Participants Account. The amount of Dividend Equivalents credited on an Anniversary Date to the Participants Account will be divided by the Fair Market Value (FMV) on the Anniversary Date of one Share of Vulcan Materials Company Stock, as defined below. In the case of dividends paid in property, the amount credited will be based on the FMV of the property on the Anniversary Date. The FMV of a Share means the average of the reported high and low trading prices for a Share on the Anniversary Date on the Composite Tape for New York Stock Exchange Listed Stocks. If the Anniversary Date falls on a holiday or weekend, then the immediately preceding trading day shall be used. If the Shares are no longer NYSE-listed, then it will be the FMV on the exchange on which it is listed, or the average of the high and low bid quotations if the Shares are listed on NASDAQ. If the Shares are not listed or traded on NASDAQ, the Company will use another method to determine the FMV of a Share. Dividend Equivalents are not considered earned and will not be paid upon termination of employment, in accordance with Section 3 or 4 below, until they are credited to the Participants Account on each Anniversary Date. | |||
(D) | Withholding . The Company shall have the right to either (i) require the Participant to remit to the Company, or any person or entity designated by the Committee to administer the Plan, an amount sufficient to satisfy any applicable federal, state, and local income and employment tax withholding requirements, or (ii) to deduct from any payment made pursuant to the Plan amounts sufficient to satisfy such withholding requirements. |
3. | Payment of Deferred Stock Units. The issuance of Shares in settlement of the Participants rights under this Award Agreement will be made in a lump sum on the Payment Date as specified in this Section 3. However, if the Participant has made a deferral election under the Executive Deferred Compensation Plan (the EDCP), the amount that otherwise would be paid under this Agreement will be credited to the Participants account under the EDCP at the time payment would otherwise be made (except, in the case of a payment on account of termination of employment, payment will be credited to Participants the EDCP account at the time of termination). |
(A) | Payments Made for Vested Shares (as defined in Section 2.(B)) . Vested DSUs, plus the dividend equivalents attributable to such vested DSUs, shall be paid to the Participant on the Anniversary Date on which they vest as determined in Section 2.(B). Accordingly, vested DSUs (plus the attributable dividend equivalents) shall be paid to the Participant beginning on the sixth Anniversary Date and ending on the tenth Anniversary Date, except as otherwise provided in this Section 3. | ||
(B) | Payments Made upon Retirement . If the Participant retires from employment pursuant to the Companys retirement income plan prior to reaching the age of 62, all DSUs granted under this Award Agreement that have not become vested as of the date of such retirement will be forfeited. If the Participant retires from employment pursuant to the Companys retirement income plan at age 62 or later, all DSUs which have been held by the Participant for at least one year prior to retirement, whether currently forfeitable or non-forfeitable, will be deemed to be non-forfeitable and will be paid to the Participant in the seventh month following the date of the Participants retirement. | ||
(C) | Death and Disability . If the Participant dies or if, prior to termination of employment, the Participant becomes Disabled, the remaining balance in the Participants Account (as defined in Section 2.(A)) will become non-forfeitable in accordance with the schedule below, and the non-forfeitable amount will (a) upon death, be paid to the Participants estate in a lump sum within 30 days of the death and (b) upon Disability, be paid to the Participant within 90 days after the date of the Disability. Disabled and Disability shall be determined under Section 409A(a)(2)(C) of the Internal Revenue Code of 1986, as amended (the Code) and the regulations thereunder. |
3
Date of Death or Disability | ||||
Occurs on or After the | Percentage of the Account | |||
Following Grant Date | That Becomes | |||
Anniversary | Non-Forfeitable | |||
1
st
Anniversary
|
10 | % | ||
2
nd
Anniversary
|
20 | % | ||
3
rd
Anniversary
|
30 | % | ||
4
th
Anniversary
|
40 | % | ||
5
th
Anniversary
|
50 | % | ||
6
th
Anniversary
|
60 | % | ||
7
th
Anniversary
|
70 | % | ||
8
th
Anniversary
|
80 | % | ||
9
th
Anniversary
|
90 | % | ||
10
th
Anniversary
|
100 | % |
(D) | Other Termination . Except as provided in (A), (B), or (C), above, upon termination of employment, all DSUs granted under this Award Agreement that have not become vested as of the date of such termination will be forfeited. | ||
(E) | Payments Made upon a Change in Control of the Company . Upon a Change in Control of the Company, as defined in regulations or other guidance under Section 409A of the Code, the balance in a Participants DSU Account will become non-forfeitable. All non-forfeitable DSUs will be paid in a lump sum to the Participant on the 90th day following a Change in Control of the Company. | ||
(F) | Section 162(m) Payments . If a Participant is a covered employee, within the meaning of Section 162(m)(3) of the Code, when a payment is scheduled to be made under the Plan, any portion of the payment that would be nondeductible under Section 162(m) of the Code (when considered with all other compensation that the Participant is expected to receive in the same taxable year) shall be deferred and shall be paid on the earliest date on which it would be deductible under Section 162(m), but no later than the calendar year in which the Participant separates from service, provided that if the payment is delayed until separation from service, payment shall be made in the seventh month following separation from service. |
4. | Committee Discretion. Notwithstanding any other provision of the Plan to the contrary, the Committee may, in its sole discretion, deem that any DSUs granted under this Award Agreement will become non-forfeitable, determine whether a Participant has been terminated for reasons other than death or Retirement, whether the Participant has become Disabled, and whether a payment is to be made upon an unforeseeable emergency as determined under Section 409A of the Code, provided that the Committees exercise of discretion shall not change the time and form of payment in a manner that does not comply with Section 409A of the Code. The Committees determination will be final and binding on all persons for purposes of the Plan. If the Committee deems that any DSUs become non-forfeitable and the Participant terminates employment for any reason other than death, payment of the non-forfeitable DSUs shall be made to the Participant in the in the seventh month following the date of the Participants termination of employment, subject to any deferral election the Participant has made under the EDCP. | ||
5. | Section 409A. This Agreement shall be interpreted to comply with Section 409A of the Code. Payments triggered by a termination of employment shall be triggered by a separation from service within the meaning of Section 409A of the Code. However, nothing in this Agreement transfers to the Company or any entity or other individual liability for any tax or penalty that is the responsibility of the Participant. |
4
1. | Definitions . As used in this Award Agreement the following terms shall have the meanings as follows: |
(a) | Award Agreement means this Performance Share Unit Award Agreement. | ||
(b) | Award Period means the three-year period shown on Schedule A of this Award Agreement, except that in the Event of the Participants death or a change in control (as defined in regulations or other guidance under Section 409A of the Internal Revenue Code of 1986, as amended (the Code)), the Award Period will be the period covered by the Award Agreement ending on December 31 st of the calendar year in which the Event occurred. | ||
(c) | Company means Vulcan Materials Company, a New Jersey corporation. | ||
(d) | Committee means the Compensation Committee of the Board of Directors. | ||
(e) | Disability means Permanent and Total Disability whereby the Participant is entitled to long-term disability benefits under the applicable group long-term disability plan of the Company or a Subsidiary, or, to the extent not eligible to participate in any Company-sponsored plan, under the guidelines of the Social Security Administration. | ||
(f) | Fair Market Value or FMV means the closing stock price for a Share on the business day that immediately precedes the Payment Date as reported on a national securities exchange if the Shares are then being traded on such an exchange or as determined by the Committee if Shares are not so traded. | ||
(g) | Grant Date means the date of this Award Agreement. | ||
(h) | Participant means the name of the employee of the Company or its subsidiaries or affiliates appearing on the first page of this Award Agreement. | ||
(i) | Payment Date means the date on which payment is made under this Award Agreement. | ||
(j) | Performance Share Unit or PSU means the equivalent of one share of Common Stock. | ||
(k) | Plan means the Vulcan Materials Company 2006 Omnibus Long-Term Incentive Plan, as amended, or any successor plan, as amended. | ||
(l) | Retirement means a participant who retires or who is eligible to elect to retire in accordance with the Companys Retirement Income Plan for Salaried Employees of Vulcan Materials Company or any successor plan. |
(m) | Share means a share of Common Stock, par value $1.00 per share, of the Company. |
2. | Grant and Vesting of PSUs |
(a) | Grant . The Participant is awarded the number of PSUs designated on the first page of this Award Agreement. | ||
(b) | Vesting . Except as otherwise provided in Section 4, and subject to the Committees discretion set forth in Section 6, the PSUs will become vested on December 31, at the end of the Award Period. |
3. | Payment of Performance Share Units |
(a) | Percentage of Awards Payable. Utilizing the Performance Share Award Unit Payment Table, Schedule A, the Committee establishes the Percentage of Awards Payable (Percentage) for the Award Period. The Percentage is based on Economic Profit (EP) and Total Shareholder Return (TSR) versus a Comparison Group during the Award Period. The maximum Percentage, as set forth in Schedule A, may be decreased but not increased by the Committee. | ||
(b) | Performance Share Units Payable. The number of PSUs payable will be determined by multiplying the number of PSUs granted pursuant to this Award Agreement by the Percentage as determined in Section 3(a). Payment will be made in stock. | ||
(c) | The Value of the Stock Issued as Payment for PSUs Earned. The FMV will be used to determine the basis of the stock payable. | ||
(d) | Withholding . The Company shall withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory amount for federal, state, local, and employment taxes (Total Tax) which could be withheld on the transaction, with respect to any taxable event arising as a result of this Award Agreement. | ||
(e) | Timing of Payment . Payment will be made to a Participant between January 1 and March 15 of the calendar year after the calendar year in which the Award Period [as defined in Section 1(b)] ends. | ||
(f) | Payment Determination . The Committee may exercise its discretion to reduce or eliminate payments if the Award Period average TSR is less than or equal to the 25th percentile or the average EP is less than or equal to 25% of Target. For performance levels falling between the values shown on the Payment Table (Schedule A), the Percentages will be determined by interpolation. |
Vulcan Materials Company | PERFORMANCE SHARE UNIT AWARD | |||||||||||||||
3-Year Average Economic | PAYMENT TABLE | |||||||||||||||
Profit (As a percent of | Percentage of Award Payable | |||||||||||||||
Target) | Award Period January 1, 2008 December 31, 2010 | |||||||||||||||
175% or > |
|
100 | 150 | 200 | ||||||||||||
150 | % |
|
75 | 125 | 175 | |||||||||||
100 | % |
|
50 | 100 | 150 | |||||||||||
50 | % |
|
25 | 75 | 125 | |||||||||||
25% or < |
|
0 | 50 | 100 | ||||||||||||
|
25 th or < | 50 th | 75 th or > |
4. | Termination of Employment. |
(a) | Retirement, as defined in Section 1(l). |
(i) | If a Participant retires from employment at age 62 or later, the PSUs which have been held by the Participant until January 1 st of the calendar year following the year of grant, will be deemed to be non-forfeitable and will be paid in accordance with Section 3; provided however, that the Participant executes a reasonable non-competition covenant with the Company restricting the Participant from competing with the Company in a specified territory for a specified period of time; otherwise, if such covenant is not executed by the Participant, unvested PSUs will be forfeited and vested PSUs not yet paid as of the date of such termination will be paid in accordance with Section 3. | ||
(ii) | If a Participant retires from employment prior to reaching the age of 62, the PSUs will become non-forfeitable in accordance with Schedule B and will be paid in accordance with Section 3; provided however, that the Participant executes a reasonable non-competition covenant with the Company restricting the Participant from competing with the Company in a specified territory for a specified period of time otherwise, if such covenant is not executed by the Participant, unvested PSUs will be forfeited and vested PSUs not yet paid as of the date of such termination will be paid in accordance with Section 3. |
If the prior to age 62 retirement occurs on or | The percentage of PSUs | |||
after January 1 st of the: | that will become Non-forfeitable is: | |||
1
st
Calendar year following the Grant Date
|
33 | % | ||
2
nd
Calendar year following the Grant Date
|
67 | % | ||
3
rd
Calendar year following the Grant Date
|
100 | % |
(b) | Disability . Upon determination of Disability, as defined in Section 1(e), the PSUs granted under this Award Agreement will become non-forfeitable. All non-forfeitable PSUs will be paid in accordance with Section 3. | ||
(c) | Death . Upon the death of the Participant, the PSUs granted under this Award Agreement will become non-forfeitable. All non-forfeitable PSUs will be paid to the Participants estate in accordance with Section 3. | ||
(d) | Other Termination . Upon voluntary termination for reasons other than retirement, or upon involuntary termination for reasons other than death, Disability, or cause as determined under Section 4(e), unvested PSUs will be forfeited and vested PSUs not yet paid as of the date of such termination will be paid in accordance with Section 3. | ||
(e) | Termination for Cause . If a Participants employment is terminated for cause, the PSUs will immediately be forfeited, even with respect to vested PSUs which were otherwise non-forfeitable but not yet paid. The Committee shall have complete discretion to determine whether a Participant has been terminated for cause. The Committees determination shall be final and binding on all persons for purposes of the Plan and this Award Agreement. | ||
(f) | Change in Control of the Company . Upon a Change in Control of the Company, as defined in regulations or other guidance under Section 409A of the Code, the PSUs granted under this Award Agreement will be deemed to be non-forfeitable. All non-forfeitable PSUs will be paid in accordance with Section 3. |
5. | Section 16(b) Participants . Any Participant subject to Section 16(b) reporting shall be governed by same with respect to PSUs. |
6. | Committee Discretion. The Committee may, in its sole discretion, amend this Award Agreement to the extent necessary to comply with any statute, regulation, or other administrative guidance. Notwithstanding any other provision of the Plan or this Award Agreement, the Committee may amend the Plan or this Award Agreement to the extent permitted by their terms deem any units granted under this Agreement non-forfeitable for the events described in Sections 4(a) and 4(d). The Committee shall not make any amendment pursuant to this Section 6 that would cause this Award Agreement, if it is subject to or becomes subject to Section 409A of the Internal Revenue Code, to fail to satisfy the requirements of such Section 409A. The Committee has sole discretion to establish the Comparison Group to be used in evaluating the performance of the Company in accordance with Section 3(a), and may change the Comparison Group from time to time. |
7. | Entire Agreement; Amendment . This Award Agreement, The Memorandum, and the Plan are incorporated herewith and represent the entire understanding and agreement between the Company and the Participant, and shall supersede any prior agreement and understanding between the parties. Except as provided in |
Section 6 of this Agreement and subject to any Plan provision, this Award may not be amended or modified except by a written instrument executed by the parties hereto. |
8. | Non-Solicitation. In consideration for this Agreement and notwithstanding any other provision in this Agreement, the Participant agrees to comply with the non-solicitation covenants set forth below: |
(a) | Non-Solicitation of Customers. The Participant acknowledges that while employed by the Company, the Participant will occupy a position of trust and confidence and will acquire confidential information about the Company, its subsidiaries and affiliates, and their clients and customers that is not disclosed by the Company or any of its subsidiaries or affiliates in the ordinary course of business, including trade secrets, data, formulae, information concerning customers and other information which is of value to the Company because it is not generally known. The Participant agrees that during the period of employment with the Company and for a period of two years after the date of termination of employment with the Company, regardless of the reason for termination, the Participant will not, either individually or as an officer, director, stockholder, member, partner, agent, consultant or principal of another business firm, directly or indirectly solicit any customer of the Company or of its affiliates or subsidiaries. | ||
(b) | Non-Solicitation of Employees . The Participant recognizes that while employed by the Company, the Participant will possess confidential information about other employees of the Company and its subsidiaries or affiliates relating to their education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with suppliers to and customers of the Company and its subsidiaries or affiliates. The Participant recognizes that this information is not generally known, is of substantial value to the Company and its subsidiaries or affiliates in developing their respective businesses and in securing and retaining customers, and will be acquired by the Participant because of the Participants business position with the Company. The Participant agrees that during the period of employment with the Company and for two years after the date of termination of employment with the Company, regardless of the reason for termination, the Participant will not, directly or indirectly, solicit or recruit any employee of the Company or any of its subsidiaries or affiliates for the purpose of being employed by the Participant or by any business, individual, partnership, firm, corporation or other entity on whose behalf the Participant is acting as an agent, representative or employee and that the Participant will not convey any such confidential information or trade secrets about other employees of the Company or any of its subsidiaries or affiliates to any other person except within the scope of the Participants duties as an employee of the Company. | ||
(c) | Remedies . If any dispute arises concerning the violation by the Participant of the covenants described in this Section, an injunction may be issued restraining such violation pending the determination of such controversy, and no bond or other security shall be required in connection therewith. If the Participant violates any of the obligations in this Section, this Award Agreement will terminate, if it is outstanding, and, in addition, the Company will be entitled to any appropriate relief, including money damages, equitable relief, and attorneys fees. |
1. | Definitions . All defined terms contained in the Plan are hereby incorporated by reference, except to the extent that any term is specifically defined in this Agreement. | ||
2. | Grant of Deferred Stock Units; Vesting; Dividend Equivalents. |
(A) | Grant . Subject to the terms and conditions of the Plan, this Agreement, and any applicable deferral election form executed by the Participant, the Committee hereby grants to the Participant the number of DSUs designated on page one of this Agreement. The DSUs represent an unfunded and unsecured obligation of the Company to issue the same number of Shares in accordance with Section 3 as DSUs granted pursuant to this Section 2(A), or accrued pursuant to Section 2(C), under this Agreement. As of the Grant Date, an account is established for the Participant (Deferral Account), and is credited with the number of DSUs shown on page one. No Shares have been transferred or set aside, or will be transferred or set aside, from the general creditors of the Company to fund this award. The Participant has no right to vote or receive dividends on the Shares represented by the DSUs until the Shares have been paid, as explained below. | ||
(B) | Vesting . Except as otherwise provided in Section 4 or 6, the Participants right to receive the Shares represented by the DSUs will become non-forfeitable on the third anniversary of the Grant Date. | ||
(C) | Dividend Equivalents . During the period from the Grant Date to the issuance of Shares in accordance with Section 3 (Deferral Period), the Participants Deferral Account will be credited with dividend equivalents equal to the dividends paid on the number of Shares represented by the DSUs during the Deferral Period (Dividend Equivalents). The Dividend Equivalents will be converted to additional DSUs, rounded to the nearest whole number, by dividing the Dividend Equivalents by the Fair Market Value of one Share on the date the dividend is paid. In the case of |
(D) | dividends paid in property, the amount credited will be based on the fair market value of the property on the date the dividend is paid. Any such DSUs credited to the Deferral Account under this Section 2(C) will be subject to the same vesting restrictions, if any, and other terms of this Agreement as the DSUs giving rise to the Dividend Equivalents. |
3. | Payment of Deferred Stock Units. The issuance of Shares in settlement of the Participants rights under this Agreement will be made in a lump sum payment during whichever of the following periods ends first: |
(A) | the month of March following the calendar year of the Participants cessation of Board service, unless the Participant has elected to defer settlement in accordance with the deferral election provisions in Section 5; | ||
(B) | within 90 days of the date of the Participants death or disability, as defined under Section 409A of the Code (Disability), provided that the Participant does not have the right to designate the taxable year of the payment; and | ||
(C) | within 90 days of the date of a change in control of the Company, as defined in regulations or other guidance under Section 409A of the Code, provided that the Participant does not have the right to designate the taxable year of the payment. |
4. | Acceleration of Vesting |
(A) | Retirement . Upon attaining the mandatory retirement age (Retirement), all DSUs under this Agreement whether then forfeitable or non-forfeitable will become non-forfeitable. All non-forfeitable DSUs will be paid in accordance with Section 3. | ||
(B) | Disability . Upon Disability of the Participant, all DSUs granted under this Agreement whether then forfeitable or non-forfeitable will become non-forfeitable. All non-forfeitable DSUs will be paid in accordance with Section 3. | ||
(C) | Death . Upon the death of the Participant, all DSUs granted under this Agreement whether then forfeitable or non-forfeitable will become non-forfeitable. All non-forfeitable DSUs will be paid to the Participants estate in accordance with Section 3. | ||
(D) | Other Cessation . Upon a cessation of service for reasons other than Retirement, Disability, or death, all DSUs granted under this Agreement that have not become non-forfeitable as of the date of such cessation will be forfeited, unless otherwise determined by the Committee in its discretion. |
5. | Deferral Elections. |
(A) | Prior Year Elections . In a calendar year prior to the year of the Grant Date, the Participant may elect to defer the issuance of Shares in settlement of the Participants rights under this Agreement beyond the period established in Section 3(A) in accordance with Subsection (C). | ||
(B) | Special Elections for 2008 . The Participant may elect before January 1, 2009, to defer the issuance of Shares in settlement of DSUs that would not otherwise be paid before January 1, 2009, beyond the period established in Section 3(A) in accordance with Subsection (C). | ||
(C) | Deferral Options . Pursuant to an election under subsection (A) or (B), the Participant may elect to receive settlement in 5 or 10 approximately equal annual installments beginning during the period established in Section 3(A), provided payment is not made under Section 3(B) or 3(C) and subject to subsection (D). The amount of each installment payment will be determined by dividing the number of DSUs in the Participants Deferral Account on the payment date by the number of |
installments remaining (for example, the number of shares in the first of five installment payments will equal the number of DSUs on the payment date divided by five, and the number of shares in the second of five installments will equal the number of DSUs on the second payment date divided by four). An election made under this Section 5 shall be irrevocable and must be made by executing and submitting the appropriate election form to the Committee. | |||
(D) | Death, Disability, or Change in Control During Settlement Period . Upon the Participants death or Disability or upon a change in control of the Company, as defined in regulations or other guidance under Section 409A of the Code, during the settlement period, issuance of any remaining Shares in settlement of the Participants rights under this Agreement will made in a lump sum payment during the period specified in Section 3(B), in the case of death or Disability, or during the period specified in Section 3(C), in the case of a change in control. |
6. | Change in Control of the Company. |
Upon a change in control of the Company, as defined in regulations or other guidance under Section 409A of the Code, all DSUs granted under this Agreement whether then forfeitable or non-forfeitable will be deemed to be non-forfeitable. All DSUs will be paid to the Participant in accordance with Section 3. |
7. | Effect of Change in Stock Subject to the DSU . |
The Committee shall make appropriate adjustments in the number or class of shares subject to the award in order to prevent dilution or enlargement of benefits to the Participant hereunder in the event of a stock or extraordinary cash dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights or similar corporate transaction or event. |