Exhibit 10.3
EXECUTIVE SEVERANCE AGREEMENT
This Executive Severance Agreement
(“Agreement”), including the attached Exhibit
“A,” which is incorporated herein by reference and made
an integral part of this Agreement, is entered into between U.S.
Concrete, Inc., a Delaware corporation (the “Company”),
and Gary J. Konnie (“Executive”). This
Agreement is effective as of July 31, 2007 (the “Effective
Date”). The Company and Executive agree as
follows:
1.1
Termination By the Company . The Company may
terminate Executive’s employment for any of the following
reasons:
a.
Termination for Cause . For “Cause”
upon the determination by a majority of the Company’s Board
of Directors that “Cause” exists to terminate
Executive’s employment. “Cause” means
(i) Executive’s gross negligence, willful misconduct, or
willful neglect in the performance of the material duties and
services of Executive to the Company in his current Position (as
set forth on Exhibit “A” or any Position to which
Executive has been promoted (provided Executive has accepted such
promotion); (ii) Executive’s final conviction of a felony by
a trial court, or Executive’s entry of a plea of nolo
contendere to a felony charge; (iii) any criminal indictment of
Executive relating to an event or occurrence for which Executive
was directly responsible which, in the business judgment of a
majority of the Company’s Board of Directors, exposes the
Company to ridicule, shame or business or financial risk; or (iv) a
material breach by Executive of any material provision of this
Agreement. If the Company terminates Executive’s
employment for Cause, Executive shall be entitled only to
Executive’s (a) pro rata Monthly Base Salary (as defined in
Exhibit “A”) through the date of such termination, and
(b) unused vacation days earned the year prior to the year in which
Executive’s termination for Cause occurs, plus pro rata
vacation days earned for the year in which Executive’s
termination for Cause occurs. 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, 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 90 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 to the extent not then
vested. 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 to the
extent not then vested.
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 4.10) equal to
the Monthly Base Salary in effect on the date of Involuntary
Termination multiplied by 12, together with a prorated amount of
Monthly Base Salary for any partial month in which such termination
occurs;
(ii) a
lump-sum payment in cash (in accordance with Section 4.10) equal to
the amount of Executive’s (a) 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 Involuntary Termination, and (b) unused vacation days
earned the year prior to the year in which Executive’s
Involuntary Termination occurs, plus pro rata vacation days earned
in the year in which Executive’s Involuntary Termination
occurs;
(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
date of Involuntary Termination 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 on the
date of Involuntary Termination and shall remain outstanding and in
effect in accordance with their respective terms, and any
restrictions, forfeiture conditions or other conditions or criteria
applicable to any such awards shall lapse on the date of
Involuntary Termination. Executive may exercise any such
stock options or other exercisable awards at any time before the
expiration of their term.
c.
Death/Disability . Upon Executive’s (i)
death, or (ii) becoming unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12
months, or (iii) termination of employment as a result of becoming
permanently and totally unable to perform Executive’s duties
hereunder as a result of any physical or mental impairment
supported by a written opinion by a physician selected by the
Company who is reasonably acceptable to Executive. Upon
termination of employment due to such death or disability,
Executive or Executive’s heirs shall be entitled to receive
all severance benefits described in Section 1.1.b. as if
Executive’s employment ended due to an Involuntary
Termination by the Company as of the date of death, date of
disability as described in (ii) above, or as of the date of
termination due to permanent and total incapacity as described in
(iii) above, except that with respect to severance benefits
relating to stock options upon termination of employment due to
death or disability, (a) all stock options previously
granted by the Company to Executive that are vested on the date of
termination shall, notwithstanding any contrary provision of any
applicable plan or agreement covering any such stock option awards,
remain outstanding and continue to be exercisable in accordance
with their terms and (b) all stock options previously granted by
the Company to Executive that are not vested on the date of
termination shall terminate immediately.
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” upon determination by Executive that Good Cause exists
to terminate Executive’s employment. “Good
Cause” means, without Executive’s consent, (i) a
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), (v) any
material breach by the Company of any material provision of this
Agreement, or (vi) any restructuring of Executive’s direct
reporting relationship such that Executive does not report to the
Company’s Chief Executive Officer, any of which remain
uncorrected 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 90 days of
the existence of such condition. Upon Executive’s
termination for Good Cause, Executive shall receive all of the
following severance benefits (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):
(i) a
lump-sum payment in cash (in accordance with Section 4.10) equal to
the Monthly Base Salary in effect on the date of termination for
Good Cause multiplied by 12, together with a prorated amount of
Monthly Base Salary for any partial month in which such termination
occurs;
(ii) a
lump-sum payment in cash (in accordance with Section 4.10) equal to
the amount of Executive’s (a) target bonus for such bonus
year, prorated based on the number of days in the bonus year that
have elapsed prior to the termination for Good Cause; and (b)
unused vacation days earned the year prior to the year in which
Executive’s termination for Good Cause occurs, plus pro rata
vacation days earned in the year in which Executive’s
termination for Good Cause occurs;
(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
date of termination for Good Cause 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 on the
date of termination for Good Cause and shall remain outstanding and
in effect in accordance with their respective terms, and any
restrictions, forfeiture conditions or other conditions or criteria
applicable to any such awards shall lapse on the date of
termination for Good Cause. Executive may exercise any
such stock options or other exercisable awards at any time before
the expiration of their term.
b.
Voluntary Termination . For any other reason
whatsoever, in Executive’s sole discretion. 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, shall cease as
of the date of Voluntary Termination, and Executive shall be
entitled only to (a) pro rata Monthly Base Salary through such date
of Voluntary Termination; and (b) unused vacation days earned the
year prior to the year in which Executive’s Voluntary
Termination occurs, plus pro rata vacation days earned for the year
in which Executive’s Voluntary Termination
occurs. In the case of a Voluntary Termination, (i) all
stock options previously granted by the Company to Executive that
are vested on the date of Voluntary Termination will remain
outstanding and continue to be exercisable by Executive until 90
days after the date of Voluntary Termination (or, if earlier, the
expiration of their term), and (ii) all restricted stock,
restricted stock units or other awards that have not vested prior
to the date of Voluntary Termination shall be cancelled to the
extent not then vested.
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 (payable on the termination date) equal
to the sum of (a) Executive’s Monthly Base Salary in effect
on the termination date multiplied by 12, and (b) the amount of
Executive’s full target bonus for such bonus year, and
multiplying the sum of (a) and (b) by the Change in control
multiplier described on Exhibit “A”;
(ii) a
lump-sum payment in cash (payable on the termination date) equal to
the unused vacation days earned the year prior to the year in which
Executive’s employment is terminated, plus pro rata vacation
days earned in the year in which Executive’s employment is
terminated;
(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 vest 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.
1.5
One Recovery . In the event of termination of
Executive’s employment, Executive shall be entitled, if at
all, to only one set of severance benefits or Change in Control
benefits, as applicable, provided in this Agreement.
1.6
Certain Obligations Continue . Upon termination
of Executive’s employment, all rights and obligations of
Executive and the Company or its successor under this Agreement
shall cease as of the effective date of termination except that (i)
Executive’s obligations under Article 2 and Sections 4.1 and
4.4 of this Agreement and the Company’s or its
successor’s obligations under Article 3 and Sections 1.1,
1.2, 1.3, 2.6, 4.1 and 4.4 and the Company’s or its
successor’s obligations to provide any severance benefits or
Change in Control benefits to Executive shall survive such
termination in accordance with their terms, and (ii) Executive
shall be entitled to receive all compensation (including bonus)
earned and benefits and reimbursements due through the effective
date of termination as provided herein.
1.7
Notice of Termination . Any termination of
Executive’s employment shall be communicated by Notice of
Termination to the non-terminating party, given in accordance with
this Agreement. For purposes of this Agreement,
“Notice of Termination” means a written notice which
(i) indicates the specific termination provision in this Agreement
relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated, and
(iii) specifies the termination date, if such date is other than
the date of receipt of such notice.
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2.
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Confidential
Information; Post-Employment Obligations
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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
. Executive acknowledges that the business of the
Company and its affiliated entities is highly competitive and that
the Company will provide Execut
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