VULCAN MATERIALS COMPANY
DEFERRED STOCK PLAN FOR
NONEMPLOYEE DIRECTORS
1. DEFINITIONS.
As used herein, the following terms shall have the meanings
hereinafter set forth:
(a) "Annual Meeting" means the Annual Meeting of the shareholders of
the Company.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Company" shall mean Vulcan Materials Company, a New Jersey
corporation.
(d) "Deferred Stock Unit" means the equivalent of one Share, as
established pursuant to this Plan.
(e) "Directors Emeriti Plan" means the Vulcan Materials Company Plan
for Directors Emeriti and Other Eligible Directors, as amended
or restated from time to time.
(f) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(g) "Fair Market Value Per Share" means the average of the daily
closing prices of a Share as reported on the New York Stock
Exchange for the twenty (20) trading days prior to the date of
determination, 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.
(h) "Nonemployee Director" means any person who is a member of the
Board and who is not, as of the date of an award under this
Plan, an employee of the Company or any of its subsidiaries.
(i) "Plan" means this Vulcan Materials Company Deferred Stock
Plan for Nonemployee Directors, as it may be amended from time
to time.
(j) "Share" means a share of the Company's Common Stock, $1.00
par value.
(k) "Stock Plan" means the Vulcan Materials Company Stock Plan
for Nonemployee Directors.
2. PURPOSE AND EFFECTIVE DATE.
The primary purpose of the Plan is to advance the interests of the
Company and its shareholders by providing for the payment of a greater portion
of the compensation of Nonemployee Directors in the form of equity by the
grant to such directors of Deferred Stock Units under the terms set forth
herein. By thus compensating Nonemployee Directors and increasing Nonemployee
Directors' equity position in the Company, the Company seeks to attract,
retain, compensate, and motivate those highly competent individuals upon whose
judgment, initiative, leadership, and continued efforts the success of the
Company in large measure depends and to align more closely the interests of
the Nonemployee Directors with those of the shareholders of the Company.
This Plan is designed to replace the Stock Plan and the Directors Emeriti
Plan. The Stock Plan shall be terminated upon the Effective Date of this Plan.
The Directors Emeriti Plan shall be phased out after adoption of this Plan as
set forth below. New Nonemployee Directors shall not be permitted to
participate in the Directors Emeriti Plan, and shall instead be permitted to
participate in this Plan. Furthermore, current Nonemployee Directors who
elect to terminate participation in the Directors Emeriti Plan after the
adoption of this Plan shall be entitled to a larger annual grant pursuant to
paragraph 6 below.
The Plan shall be deemed adopted and shall become effective as of the
date of its approval by the affirmative vote of the holders of a majority of
the Shares of the Company voted in person or by proxy at the next Annual
Meeting (the "Effective Date"). No grants of Deferred Stock Units shall be
made unless and until such shareholder approval is obtained.
3. ELIGIBILITY.
Each director who as of the date of any award made pursuant to the Plan
is not an employee of the Company or any of its subsidiaries shall be eligible
to participate in the Plan.
4. SHARES OF COMMON STOCK AVAILABLE.
The number of Shares that may be issued pursuant to the Plan shall not
exceed 100,000, subject to proportionate adjustment in the event of any stock
split, reverse stock split, reorganization or recapitalization.
5. DEFERRED STOCK ACCOUNT.
The Company shall establish a deferred stock account (an "Account") for
each Nonemployee Director participating in the Plan. On each Award Date (as
defined below) and on each Dividend Date (as defined below), as the case may
be, the Company shall credit the Account with the number of Deferred Stock
Units determined in accordance with paragraph 6 below. Distributions from a
Nonemployee Director's Account shall be made in Shares upon the retirement of
a Nonemployee Director, unless the distributions are accelerated in accordance
with paragraphs 8 or 9 below. The value of the Deferred Stock Units is
dependent upon the fair market value of the Shares on the date the Shares are
distributed to the Nonemployee Director, and is therefore subject to market
fluctuations in value until such distribution.
6. ANNUAL AWARDS.
(a) On or prior to the Effective Date of the Plan, each Nonemployee
Director shall make an irrevocable election to continue or
discontinue participation in the Company's Directors Emeriti
Plan. On the date that is six (6) months after the Effective
Date and on June 1 of each year thereafter (an "Award Date"), the
Company shall credit to the Account of (i) each Nonemployee
Director who on or prior to the Effective Date has made an
irrevocable election not to continue to participate in
the Director's Emeriti Plan and (ii) each person who becomes a
Nonemployee Director after the Effective Date, the number of
Deferred Stock Units calculated by dividing an amount equal to
forty percent (40%) of the annual retainer payable to Nonemployee
Directors then in effect by the Fair Market Value Per Share as of
the applicable Award Date. The Account of each Nonemployee
Director who does not irrevocably elect on or prior to the
Effective Date to discontinue his or her participation
in the Directors Emeriti Plan shall be credited
on each Award Date with the number of Deferred Stock Units
calculated by dividing an amount equal to fifteen percent (15%) of
the annual retainer payable to Nonemployee Directors then in
effect by the Fair Market Value Per Share as of the Award Date.
(b) At any time a balance is maintained in a Nonemployee Director's
Account, there shall be credited to the Account of such
Nonemployee Director additional Deferred Stock Units on each
regular cash dividend payment date (a "Dividend Date"). The
number of such additional Deferred Stock Units shall be determined
by (i) multiplying the total number of Deferred Stock Units
(including fractional Deferred Stock Units) credited to the
Account immediately prior to the Dividend Date by the amount of
the dividend and (ii) dividing the product by the Fair Market
Value Per Share as of the day preceding the Dividend Date.
(c) 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.
7. DISTRIBUTION.
(a) Except as otherwise provided herein, the balance of each
Nonemployee Director's Account shall be paid to the Nonemployee
Director, in a lump sum or in installments, as determined by the
Nonemployee Director in accordance with paragraph 7(f) below,
commencing at the beginning of the first quarter after the first
Annual Meeting following the date that such director reaches the
mandatory retirement age then in effect.
(b) In the event of the death of the Nonemployee Director prior to
such director's retirement or prior to the distribution of the
entire balance in such director's Account, the entire balance in
the Account as of the date of the Nonemployee Director's death
shall be paid in Shares in a lump sum or in installments, as
determined by the Nonemployee Director in accordance with
paragraph 7(f) below, to the surviving beneficiary or
beneficiaries as the Nonemployee Director may have designated by
notice in writing to the Company or by will, or, if no
beneficiaries are so designated, the legal representative of such
director's estate.
(c) If a Nonemployee Director shall become totally and permanently
disabled, as determined by a majority of the Board, while he or
she is a director of the Company, the entire balance in the
Account as of the date of such total and permanent disability
shall be paid to such Nonemployee Director, or his or her personal
representative, in a lump sum or in installments, as determined by
the Nonemployee Director in accordance with paragraph 7(f) below,
within one hundred twenty (120) days of the date of such total and
permanent disability.
(d) If a Nonemployee Director ceases to be a director of the Company
for any reason other than due to death or total and permanent
disability, 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 director's
Account as of the date such person ceases to be a director of the
Company shall be paid in a lump sum or in installments, as
determined by the Nonemployee Director in accordance with
paragraph 7(f) below, to such director within one hundred twenty
(120) 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 Shares in an amount equal to the number of
Deferred Stock Units held in the Account and to be distributed.
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.
(f) All distributions of Shares in accordance with this paragraph 7
shall be made, at such director's election, either in a lump sum
or in monthly, quarterly, semiannual or annual installments,
provided, however, that such director shall have delivered to the
Secretary of the Company a form specifying the director's election
at least six (6) months prior to the date payments are to
commence. In the event that such director fails to make a timely
election, the distribution of Shares shall be made in a lump sum.
Deferred Stock Units representing fractional Shares shall be
paid in cash.
(g) The provisions of this Plan shall apply to and be binding upon the
beneficiaries, distributees, and personal representatives, and any
other successors in interest of the Nonemployee Director.
(h) The Company shall deduct from all distributions hereunder any
taxes required to be withheld by the federal, state or local law.
8. ACCELERATION OF DISTRIBUTION.
(a) "Change in Control" means:
i) The acquisition by any person, entity or "group," within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act (excluding any employee benefit plan of the Company or
any of its subsidiaries which acquires beneficial ownership
of voting securities of the Company), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of either the then
outstanding Shares or the combined voting power of the
Company's then outstanding voting securities, in one
transaction or a series of transactions; provided, however,
that, if prior to such an acquisition, a majority of the
Continuing Directors determines that such acquisition shall
not, for purposes of the Plan, be deemed a Change in
Control, such acquisition shall not constitute a Change in
Control hereunder;
ii) Individuals who, as of the date of a Change in Control,
constitute the Board (the "Continuing Directors") cease for
any reason to constitute at least a majority of the Board,
provided that any person becoming a director of the Company
subsequent to the Change in Control Date whose election, or
nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the Continuing
Directors (other than an election or nomination of an
individual whose initial assumption of office is in
connection with an actual or threatened solicitation with
respect to the election or removal of directors of the
Company, as such terms are used in Rule 14a-11 promulgated
under the Exchange Act) shall be, for purposes of the Plan,
considered as though such person were a Continuing
Director; or
iii) Approval by the Board of (i) a merger, consolidation or
reorganization of the Company in which, as a consequence of
the transaction, either the Continuing Directors do not
constitute a majority of the directors of the continuing or
surviving corporation or any person, entity or "group,"
within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, controls 25% or more of the combined voting
power of the continuing or surviving corporation; (ii) any
sale, lease or other transfer, in one transaction, or a
series of related transactions, of all or substantially all
of the assets of the Company; or (iii) any plan or proposal
for the liquidation or dissolution of the Company;
provided, however, that, if at the time of such approval, a
majority of the Continuing Directors determines that such
merger, consolidation, reorganization, sale, lease, other
transfer, liquidation or dissolution shall not, for
purposes of the Plan, be deemed a Change in Control, such
transaction shall not constitute a Change in Control
hereunder, and, provided further, that, if a majority of
the Continuing Directors so determines, a Change in Control
shall not be deemed to occur until the consummation of any
such transaction.
(b) 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:
i) the Nonemployee Director ceases for any reason to be a
director of the Company; or
ii) the Plan is terminated;
then the entire balance of the 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 right to such payment
arose.
(c) The Company shall promptly reimburse the director for all legal
fees and expenses reasonably incurred in successfully seeking to
obtain or enforce any right or benefit provided under this
paragraph 8.
(d) This paragraph 8 may not be amended or modified after the
occurrence of a Change in Control.
9. NONTRANSFERABILITY OF DEFERRED STOCK UNITS.
No Deferred Stock Units shall be transferred by a Nonemployee Director
other than by will or the laws of descent and distribution, or, to the extent
permitted by Rule 16b-3 under the Exchange Act, pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of 1986, as
amended (the "Code").
10. AMENDMENT AND TERMINATION.
Unless approved by the shareholders of the Company, no amendment of the
Plan shall be effective which would (i) materially increase the maximum number
of Shares that may be issued under the Plan, (ii) materially increase the
benefits accruing to participants under the Plan, or (iii) materially modify
the requirements as to eligibility for participation in the Plan. No
amendment to the Plan shall materially and adversely affect any right of any
Nonemployee Director with respect to any Deferred Stock Units theretofore
credited without such Nonemployee Director's written consent.
11. TERM.
The Plan shall continue in effect without limit unless and until the
Board otherwise determines.
12. COMPLIANCE WITH SEC REGULATIONS.
It is the Company's intent that the Plan comply with the provisions of
Section 16 of the Exchange Act and the rules promulgated thereunder. To the
extent that any provision of the Plan is later found not to be in compliance
with Section 16 or such rules, such provision shall be deemed to be null and
void.
13. MISCELLANEOUS.
(a) Neither the Plan nor any action taken hereunder shall be
construed as giving any Nonemployee Director 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
shareholder with respect to any Deferred Stock Unit credited to
such Account, nor the right to receive any 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 director shall be those of an unsecured
general creditor of the Company.
(e) The Plan, the grant of 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) This Plan shall be interpreted by and all questions arising in
connection therewith shall be determined by a majority of the
Board, whose interpretation or determination, when made in good
faith, shall be conclusive and binding, 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.