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EXHIBIT 10(L)
CONSULTING AGREEMENT
CONSULTING AGREEMENT dated as of January 6, 1999 between VULCAN
MATERIALS COMPANY, a New Jersey corporation (the "Parent"), and A. FREDERICK
GERSTELL (the "Consultant").
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of
November 14, 1998 among CALMAT CO., a Delaware corporation (the "Company"),
Parent and ALB Acquisition Corp., a Delaware corporation ("ALB") and a wholly
owned subsidiary of Parent (the "Merger Agreement"), Parent has agreed to
acquire all of the outstanding common stock of the Company through the merger
of ALB with and into the Company (the "Merger");
WHEREAS, the Consultant has been employed by the Company for 23 years
and employed in the construction materials industry for 37 years and possesses
an intimate knowledge of the Company's business and industry;
WHEREAS, Parent, the Company and the Consultant recognize that the
continued application of the Consultant's experience, abilities and services to
the business of the Company and its affiliates would be extremely beneficial to
the Company and to Parent;
WHEREAS, subject to the provisions hereof, Parent wishes to be assured
that for at least the 17-month period following the effective time of the
Merger (the "Effective Time"), the Consultant will be available to consult with
the Company and Parent and that the Consultant will be restricted from
disclosing certain information concerning the Company; and
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein set forth and for other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereto agree as follows:
1. Effectiveness. This Agreement shall only become effective at
such time as the Merger becomes effective (the "Effective Time").
2. Term. Subject to Section 1 hereof, the term of this Agreement
shall commence at the Effective Time and shall expire 17 months thereafter (the
"Initial Term"). The Initial Term shall automatically renew for consecutive
12-month periods unless, at least 90 days prior to the end of the Initial Term
(or prior to the end of any successive 12-month period, if applicable), either
party hereto notifies the other party in writing
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that it does not wish to renew this Agreement for another 12-month period (the
Initial Term and each successive 12-month period, if any, being collectively
referred to as the "Term").
3. Duties/Location. From time to time during the Term, as and
when requested by the person then serving as chief executive officer of Parent
(the "CEO") or by the Board of Directors of Parent (the "Board"), the
Consultant will make himself available to consult and cooperate with and advise
the CEO or the Board, as applicable, to the best of his ability, with respect
to post-Merger transition matters involving the business and affairs of the
Company, as well as, with respect to Parent and its affiliates, investor
relations and legislative matters (through Consultant's serving as Chairman of
the National Stone Association). The Consultant will perform such services on a
limited time basis, subject to his reasonable availability. The performance of
the Consultant's duties in his capacity as Chairman of the National Stone
Association shall be deemed to be consulting services by the Consultant on
behalf of Parent and the Company under this Agreement. Except for any required
travel, Consultant shall be principally based in the Los Angeles, California
metropolitan region.
4. Compensation.
(a) Monthly Retainer Fee. In consideration of the Consultant's
agreements herein and his services as a consultant during the Term, the Company
shall pay to the Consultant a monthly retainer fee equal to $10,600 per month,
payable in a lump sum in arrears. Nothing herein shall limit or impair the
Consultant's entitlement to receive his vested benefits under the Company's
applicable plans and arrangements which are accrued as of the Effective Time.
Parent acknowledges and agrees that the Consultant's rights under Section 3.2
(but only relating to the Consultant's purchase rights with respect to his
current Company-provided automobile), 3.5 (relating to excise tax payments),
4.5 (relating to indemnification for acts of the Consultant occurring prior to
the Effective Time), 4.6 (relating to dispute resolution) and 4.7 (relating to
attorneys' fees) of his employment agreement with the Company dated as of April
13, 1993, as amended (as amended, the "Employment Agreement"), shall continue
in effect notwithstanding the earlier payment by the Company to the Consultant
of the severance benefits to which the Consultant was entitled under the
Employment Agreement as of the effective time of the Merger.
(b) Restricted Stock. At the Effective Time, Consultant shall
receive an initial grant of 2,500 shares of restricted common stock of Parent
("Restricted Stock"). On the first anniversary of the Effective
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Time (the "First Anniversary"), all restrictions on such shares of Restricted
Stock shall lapse. On the First Anniversary, the Consultant shall receive a new
grant of 1,042 shares of Restricted Stock, provided that the Consultant's
services hereunder have not been terminated prior to such date. The
restrictions on these 1,042 shares of Restricted Stock shall lapse on the date
which is five months following the First Anniversary. Notwithstanding the
foregoing, in the event that the Consultant is involuntarily terminated as a
consultant to Parent for Cause or terminates as a consultant for other than
Good Reason (as each such term is defined herein) prior to any date on which
the restrictions on the Restricted Stock granted hereunder have lapsed, the
Consultant shall forfeit his entitlement to receive any such shares which are
then still subject to restrictions. In the event, during the Term, of (i) the
Consultant's death or disability, (ii) his termination by Parent other than for
Cause or (iii) his termination for Good Reason, the restrictions on all shares
of Restricted Stock which have been granted to him shall lapse, and, if the
event described in clause (i), (ii) or (iii) above occurs prior to the First
Anniversary, the Consultant (or the Consultant's estate) shall also receive the
1,042 shares which would have been granted to him on the First Anniversary,
free and clear of all restrictions. The Consultant shall be entitled to receive
all dividends declared and paid on shares of Restricted Stock during the period
that such shares are subject to restrictions and such dividends, once paid,
shall not thereafter be subject to forfeiture.
(c) Perquisites. During the Term, Parent shall provide, or cause
the Company to continue to provide, the Consultant with the perquisites that he
is being provided by the Company immediately prior to the Effective Time,
excluding a Company-provided automobile (although Parent shall preserve his
purchase rights under his Employment Agreement with respect to his current
Company-provided automobile), and reimbursement of country club membership dues
and tax and financial planning fees. Parent shall provide, or cause the Company
to provide, post-retirement medical, dental and life insurance benefits to
Consultant (and his eligible dependents) on the same basis that the Company
provided such benefits to its eligible retirees immediately prior to the
Effective Time or on such other basis as may be in effect for such eligible
retirees from time to time.
(d) Extensions of the Term After the Initial Term. Unless
otherwise agreed to by the parties hereto in writing, if the Term is extended
beyond the Initial Term pursuant to Section 2 hereof, the Consultant will be
paid the $10,600 monthly consulting retainer fee and receive a 2,500 share
grant of Restricted Stock during each such 12-month period in accordance with
the terms and conditions of Sections 4(a) and 4(b) hereof,
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respectively, subject to a 10% increase (compounded for each 12-month period)
of the monthly consulting retainer fee and 2,500 share Restricted Stock grant
for each 12-month period that the Term is extended beyond the Initial Term. All
other provisions of this Agreement which are applicable during the Initial Term
shall continue to apply during any one-year extension thereof.
(e) Cause and Good Reason Definitions. For purposes hereof, (i)
"Cause" shall mean (A) the Consultant's conviction of, or plea of nolo
contendere to a charge of commission of, a felony or (B) the Consultant's
wilful and continued failure to substantially perform the consulting duties
required of him hereunder after receiving a written notice from the Company of
his failure to so perform and his failure to cure within 15 days after receipt
of such notice or (C) a violation in any material respect of Section 9 and (ii)
"Good Reason" shall mean (A) Parent's failure to pay or award the Consultant in
accordance with this Agreement any compensation or Restricted Stock (including
the release of restrictions thereon) after receipt of written notice from the
Consultant specifying such failure and Parent's failure to cure within 15 days
after Parent's receipt of such notice, (B) Parent's requiring the Consultant to
be principally based anywhere other than the Los Angeles metropolitan region,
or (C) any other breach by Parent of any other material provision of this
Agreement which is not cured by Parent within 15 days of Parent's receipt of
notice from the Consultant specifying such breach.
5. Office and Support Staff. Parent, at its own expense, (i)
shall provide the Consultant with suitable office space at the Company's
headquarters in Los Angeles or at such other location in the Los Angeles
metropolitan region as shall be reasonably acceptable to the Consultant during
the Term, and (ii) during the Initial Term only, shall continue to provide and
maintain for the Consultant the Consultant's office and parking space in
Beverly Hills, California. During the Term, the Consultant shall be provided
with secretarial assistance at the Company's headquarters in the Los Angeles,
California metropolitan area (including, if the Consultant so elects, the
services of the person serving as his secretary immediately prior to the
Effective Time if she is then in employment with the Company) commensurate with
his position as a consultant and past Company practice.
6. Travel. Consultant shall be entitled to travel on
business-related matters (and shall be reimbursed therefor by Parent (or Parent
shall cause Company to reimburse the Consultant) in accordance with Section 7
hereof) on a first-class basis on commercial airliners consistent with past
practice. The Consultant shall also be entitled to have his spouse accompany
him from time to time on business-related travel and be reimbursed
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by Parent (or Company, if applicable) therefor consistent with past Company
practice. Consultant shall travel on business-related matters only as
reasonably required in the performance of his consulting services.
7. Expenses. The Consultant shall be entitled to receive
reimbursement for all reasonable expenses incurred by the Consultant (in
accordance with policies and procedures substantially the same as those
established by the Board for its senior executive officers) in performing
services hereunder provided that the Consultant properly accounts therefor.
8. Termination of Agreement Prior to Expiration of the Term. If
the Consultant ceases to serve as a consultant to Parent prior to the
expiration of the Term, he shall be entitled to payment of all accrued but
unpaid monthly retainer fees under Section 4(a) through the date of termination
of the Consultant's services under this Agreement, including a prorated monthly
retainer for the month in which such date of termination occurs. If the
Consultant ceases to serve as a consultant to Parent prior to the expiration of
the Term due to (i) Good Reason, or (ii) his involuntary termination by Parent
without Cause, he shall receive, within five business days following his
ceasing to serve as a consultant, without any discounting, all of the monthly
retainer fees which would have been paid through the remainder of the Term. The
amounts payable in accordance with the two preceding sentences are in addition
to the Consultant's right to receive any shares of Restricted Stock to which he
is then entitled under Section 4(b) hereof. Nothing herein shall affect the
Consultant's rights under or pursuant to any Company benefit plan or
arrangement under which he has accrued vested benefits, including, without
limitation, his eligibility for retiree health benefits after the expiration of
the Term.
9. Confidential Information. The Consultant agrees that, during
the Term and thereafter, he will not, without the prior written consent of the
Board or unless otherwise required by law to be disclosed, use for his benefit
or disclose to any person, any information obtained or developed by him while
in the employ of the Company or while serving Parent hereunder (and, in each
case, information of their respective affiliates) with respect to any aspect of
the Company's, Parent's or their respective affiliates' business (including,
without limitation, information with respect to any customers, suppliers,
employees, financial affairs or methods of design, distribution, procurement or
production, of the Company, Parent or any of their subsidiaries or affiliates,
or any other confidential matter), except information which at the time is
available to others in the business or generally known to the public other than
as a result of disclosure by him not permitted hereunder.
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10. Specific Performance. The Consultant acknowledges that a
violation on his part of any of the covenants contained in Section 9 hereof
would cause immeasurable and irreparable damage to the Company and Parent. The
Consultant accordingly agrees, without limiting the remedies available to the
Company or Parent, that any violation of such covenants may be enjoined by any
court of competent jurisdiction.
11. Indemnification. In connection with his rendering of services
as a consultant to Parent in accordance with Section 3 of this Agreement,
Parent shall, or shall cause the Company to, indemnify the Consultant therefor
during the Term and thereafter to the fullest extent permitted by Parent's
by-laws in the same manner and following the same procedures as applicable to
senior executives of Parent (including reimbursement of all legal and other
fees and expenses). Parent's and Company's obligations under this provision
shall survive the expiration of the Term.
12. Severability. If for any reason any provision of this
Agreement shall be held invalid, such invalidity shall not affect any other
provision of this Agreement not so held invalid, and all other such provisions
shall to the full extent consistent with law continue in full force and effect.
If any such provision shall be held invalid in part, such invalidity shall in
no way affect the rest of such provision which, together with all other
provisions of this Agreement, shall likewise to the fullest extent consistent
with law continue in full force and effect.
13. Termination of Agreement. The Consultant acknowledges that in
the event that, prior to the end of the Term, he should die, terminate due to
disability, terminate voluntarily other than for Good Reason or be terminated
by Parent for Cause, Parent's obligations to make monthly retainer fees
pursuant to Section 4(a) hereof and any additional grants of Restricted Stock
(except upon certain terminations prior to the First Anniversary as described
in Section 4(b) hereof) shall cease as of such time and Parent shall be under
no further obligation to pay any such additional monthly payments under this
Agreement other than a prorated monthly consulting retainer fee for the month
in which the Consultant's death or other cessation of service occurs or grant
any additional shares of Restricted Stock. Nothing under this Section 13 shall
be construed as affecting the Consultant's right to receive shares of
Restricted Stock to which the Consultant (or his estate) is then entitled under
Section 4(b) hereof.
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14. Successors and Assigns. The provisions of this Agreement
shall be binding upon the heirs, executors and administrators of the Consultant
and upon the successors and assigns of the Company and Parent. Parent and the
Company shall require any successor to them to expressly assume in writing
their respective obligations hereunder.
15. Notice. Any notice or other communication hereunder to either
party shall be in writing and shall be deemed to have been duly given when
delivered personally or mailed by registered mail, return receipt requested,
postage prepaid, addressed as follows:
if to the Consultant:
A. Frederick Gerstell
CalMat Co.
3200 San Fernando Road
Los Angeles, California 90065
if to Parent:
Vulcan Materials Company
One Metroplex Drive
Birmingham, Alabama 35209
Attention: General Counsel
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16. Miscellaneous. Except as provided in Section 4(a) hereof,
this Agreement constitutes the entire agreement between the parties concerning
the employment and consulting relationship between the Consultant and Parent
following the Effective Time and supersedes all prior agreements, commitments
and understandings between the parties relating to such subject matter,
including without limitation, the Employment Agreement (except as provided in
Section 4(a) hereof). No provision of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is agreed to in
writing and is signed by the parties hereto. No waiver by either party hereto
at any time of any breach by the other party hereto of, or compliance with, any
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions at the same or at any prior or
subsequent time.
17. Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed to be an original, but each of which together will
constitute one and the same agreement.
18. Dispute Resolution. The Consultant and Parent shall have the
right, in addition to all other rights and remedies provided by law, at either
party's election, to seek arbitration in Los Angeles County, California, under
the rules of the American Arbitration Association, in the event of any dispute
concerning the Consultant's Services as a consultant under this Agreement.
Parent shall bear all costs of any dispute resolution, including all legal fees
and expenses.
19. Independent Contractor. The Consultant acknowledges that his
services hereunder are to be rendered as an independent contractor and that he
is solely responsible for the payment of all Federal, state, local and foreign
taxes that are required by applicable laws or regulations to be paid by the
Consultant with respect to all compensation hereunder and that neither Parent
nor Company shall withhold any such taxes on behalf of the Consultant.
20. Governing Law. This Agreement shall be governed by the laws
of the State of Delaware without regard to its principles of conflicts of law.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the Company and Parent and by the
Consultant on the date first above written.
VULCAN MATERIALS COMPANY
by /s/ Donald M. James
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/s/ A. Frederick Gerstell
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A. FREDERICK GERSTELL
Acknowledged and
Agreed to:
CALMAT CO.
by /s/ Wm. F. Denson III
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