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EXECUTIVE SEVERANCE AGREEMENT
FOR
JOHN E. KUNZ
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 John E. Kunz
(“Executive”) effective as of October 2, 2017 (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 for the year in which Executive’s termination occurs (the “Accrued
Payment”). 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 Payment.
(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.
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
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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).
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 Payment. In the case of a Voluntary Termination, (i) all stock
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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
(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
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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.
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
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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.
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
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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.
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 Chief Executive Officer
and its General Counsel 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 Dallas, 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.
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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.
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;
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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.
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.
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
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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.
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
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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.
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.
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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.
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, dated October 26, 2015, 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
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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.
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
14
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.
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.
IN WITNESS WHEREOF, the Company and Executive have executed this Agreement in
multiple originals to be effective on the Effective Date.
John E. Kunz (“Executive”)
U.S. Concrete, Inc. (the “Company”)
By: /s/ John E. Kunz
Date: October 2, 2017
By: /s/ Mark B. Peabody
Printed Name: Mark B. Peabody
Title: Vice President, Human Resources
Date: October 2, 2017
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EXHIBIT “A”
TO EXECUTIVE SEVERANCE AGREEMENT BETWEEN
U.S. CONCRETE AND JOHN E. KUNZ
Position:
Sr. Vice President & 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.
Annual Base Salary: $425,000 or such higher rate as may be
determined by the Company from time to time
Annual Paid Vacation: Four weeks
