DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.      )

 

 

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to §240.14a-12

U.S. CONCRETE, INC.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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LOGO

Notice of Annual Meeting

of Stockholders and

2021 Proxy Statement

 

 

The Annual Meeting of Stockholders

of U.S. Concrete, Inc. will be held:

Thursday, May 13, 2021 at 7:00 a.m. CT

Virtual meeting via Webcast


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LOGO

Ship Loader – Orca Quarry, Polaris Materials

Vancouver Island, British Columbia, Canada

U.S. Concrete is focused on delivering the highest quality products, services and solutions to our customers’ construction projects and their businesses, unlocking superior economic value across the entire lifecycle of our products, and improving sustainability for all.

Building a Stronger America

We provide solutions and products that are essential for every building and construction project.

Throughout 2020, we sold over 12.6 million tons of aggregates to our customers from our mining, processing, and transportation activities; and we poured 8.2 million cubic yards of ready-mixed concrete – 10 cubic yards at a time, serving over 17,000 projects with over 10,000 customers. On an average workday, the Company completes approximately 3,000 separate deliveries to our customers, each requiring precisely coordinated efforts across multiple functions.

Through these efforts, we have been on an important journey over the past several years to transform our business to align the needs of our customers and their projects with the needs of our planet.

We continue to transform our industry with new products and technologies that deliver outcomes to our customers that are more productive and sustainable, which include: early adopters of Environmental Product Declarations; proponents of supplementary cementitious materials; automation and optimization with our proprietary Where’s My Concrete?. These innovations help us create more value for all our stakeholders – our customers, our communities, our employees, our suppliers and you, our shareholder.

Building a Stronger Company

Re-engineering and Transformation: Ongoing re-examination of business processes, increasing development and adoption of technology, and a constant search for improvement are driving our results.

Values and Culture: The breadth, scale, and complexity of our business is led by our guiding principles called C3Courage, Compassion and Credibility. C3 guides everything that we do, including our stakeholder interactions, designing the appropriate solutions for our customers and their projects, to delivering products and results to be more effective, profitable, and sustainable.

 

 


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A LETTER FROM OUR CHAIRMAN OF THE BOARD AND PRESIDENT AND CHIEF EXECUTIVE OFFICER

 

 

March 31, 2021

Dear Fellow Stockholders:

As we prepare this year’s letter to stockholders, we continue to be confronted by what has proven to be one of the greatest health threats and economic disruptions in our generation.    Our thoughts remain with those most impacted by COVID-19 as we continue to manage through this challenging time.    We want to express our sincere appreciation to all of our employees who have kept our Company operating while they continued to work diligently and safely through these uncertain times to provide excellent service to our customers and their communities.

On behalf of the Board of Directors, we thank you for your investment in U.S. Concrete, Inc.    As fiduciaries of your trust and capital, we take seriously our stewardship of the Company’s resources and our responsibility to oversee the Company’s strategy to best deliver long-term sustainable value.

We remain vigilant on the details and fundamentals in every phase of operation of running our business as demonstrated by our results during 2020. We expect continuous improvement as we build towards Horizon 2025. The transformation we’ve undertaken over the past several years includes a relentless focus on operational excellence, cost containment efforts, optimizing our existing platform through centralization of our back-office and streamlining processes, and the empowerment of informed decisions using data. We have the same dedication to ESG, governance and being good stewards of our environment.

Over the past two years, we have refreshed our Board with the additions of Susan Ball and Rajan Penkar who bring significant financial, capital markets, logistics and information management experience to the Board.    We continue to secure the best talent that complements both our near- and long-term objectives and have been, and will continue to be, mindful of diversity and inclusion in our Board and leadership of our Company.

Even though the business environment remains unsettled due to COVID-19, we have made significant progress and we remain confident that progress will continue in 2021. And while we know there remains a lot of work ahead of us, we want to provide the following highlights from 2020:

 

   

We delivered revenue of $1.4 billion, and $193 million of Adjusted EBITDA* during the year with a 14.1% Adjusted EBITDA margin*, a 160 basis point improvement over 2019. Our business transformation is best highlighted by our growth in revenue and Adjusted EBITDA* since 2011, which were $428 million and $8 million, respectively, and are outlined in the table provided.

 

   

We generated record Adjusted Free Cash Flow* of $159 million, $54 million higher than 2019 and ended the year with over $420 million of liquidity.

 

*Please note that reconciliations of Non-GAAP measurements are provided in the Appendix to the Proxy.

 


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We closed and integrated our second largest acquisition with Coram Materials, a sand and gravel operation on Long Island, New York, which vertically integrates our New York City ready-mixed concrete operations and is the premier supplier to third parties. Further, we were able to complete this acquisition and maintain the same total leverage as 2019 due to the significant cash generation of our Company.

 

 

LOGO

 

  1)

Derived from yearly financial statements

 

  2)

Adjusted EBITDA is a non-GAAP financial measure. See appendix for a reconciliation to the comparable GAAP measure.

 

   

Improving our vertical integration strategy and reducing the cost profile of the aggregates we naturally consume in our ready-mix business segment, we have increased our aggregates facilities from 7 in 2011 to 20 at the end of 2020 providing quality aggregates both internally and to our third-party customers.    With this expansion of our aggregates platform in the past several years, our internal consumption of aggregates increased to 42% during 2020 compared to 30% as recently as 2018.    For 2020, our aggregates segment revenue and Adjusted EBITDA were $216 million and $81 million, respectively, both records for the Company.

 

   

Using our proprietary software, Where’s My Concrete?, we created and automated industry processes including contactless ticketing, digital tickets, electronic payments, and ready-mixed drivers clocking in at the cab. As we complete the roll-out of this system to our West region this Spring, we will expand our presence within the industry to market and license this system to other ready-mix concrete providers. During 2021, there will be more innovations under this platform as part of our continued improvement initiatives to transform our business, maximize our efficiency, and ensure we provide an unmatched customer experience.

 


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Our commitment to sustainability is one of the most significant ways we are investing in the future and invite you to review our supplementary materials focused on our ESG efforts:

 

   

We pioneered the adoption of the 2030 Challenge for Embodied Carbon to develop Environmental Product Declarations (“EPDs”) with over 15,000 EPDs nationwide and the integration of Climate Earth’s EPDs with our project bids. (EPDs quantify a product’s life-cycle environmental impact to enable comparisons between similar products that fulfill the same function.)

 

   

Through our innovation strategy, we aim to solve our customers’ challenges and continue to lead on behalf of our stakeholders with our National Research Laboratory in the San Francisco Bay Area. Every day, our employees and our four university partners use their expertise to support some of the strictest and advanced specifications for the biggest, most iconic construction projects in the United States.

 

   

We are investing to build out our Black Bear aggregates deposit, which will be an extension to the Polaris Materials’ Orca quarry. This will provide much needed aggregates products to West Coast markets, particularly those in both Northern and Southern California.    Polaris provide EPDs and LEED certification compliance in support of green construction projects.

 

   

We are the market leader on the West Coast for low-carbon concrete with our EF Technology®, harnessing the use of supplementary cementitious materials (SCMs) and our adoption of CarbonCure.

 

   

Across our footprint, we consistently use SCMs such as slag, fly ash and recycled glass, aiding in the reduction of CO2 emissions.

 

   

With a focus on the circular economy, we continue to utilize progressive processes with our returned concrete including its conversion to recycled aggregates.

 

   

We retired 126 ready-mixed concrete trucks and replaced them with new, environmentally friendly trucks with improved emissions and fuel economy.

 

   

We are focused on all of our employees, particularly their health and safety. We quickly adapted to protocols related to COVID-19 that allowed us to safely protect our employees, their families, our customers, and our communities as an essential service.

We are committed to reinforce and strengthen our existing footprint through the development of our operational assets and markets coupled with a thoughtful and disciplined evaluation of targeted strategic acquisitions. Our history, and our future, is very much defined by growth. In addition to progress on our long-term strategy, with a determined focus on our Horizon 2025 goal of achieving $300 million of EBITDA, we have continued our oversight of safety, product quality, ESG programs, cybersecurity, and legal/regulatory matters.

While we are mindful that we remain in a pandemic that has the potential to further disrupt our business, we are confident in the resilience of our team, our business segments, our markets, our communities, and our valued customers over the long-term.    We have and will continue to position U.S. Concrete for significant growth and advancement.

 


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We appreciate your investment in U.S. Concrete and hope that you will give us your voting support on the items outlined in this Proxy.    On behalf of our Board of Directors, thank you again for your trust and confidence.

Sincerely,

 

LOGO    LOGO
Michael D. Lundin    Ronnie Pruitt
Chairman of the Board    President and Chief Executive Officer

 

 

LOGO

 

 


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LOGO

March 31, 2021

Dear Stockholders,

On behalf of the Board of Directors of U.S. Concrete, Inc., which we refer to as our Company, we invite you to attend the 2021 Annual Meeting of Stockholders of our Company, which we refer to as our Annual Meeting. We will hold our Annual Meeting in a virtual meeting only format via Webcast at 7:00 a.m. CT, on Thursday, May 13, 2021.

We again are taking advantage of the rules of the Securities and Exchange Commission that allow issuers to provide electronic access to proxy materials over the Internet instead of mailing printed copies of those materials to each stockholder. We believe that furnishing these materials electronically allows us to more efficiently provide our stockholders with our proxy materials while reducing costs and reducing the impact of the Annual Meeting on the environment. However, if you would prefer to receive printed proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials referenced below. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials electronically, unless you elect otherwise.

On or about April 1, 2021, we will commence the mailing to our stockholders (other than those who previously requested electronic or paper delivery) of a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, the Notice of Annual Meeting of Stockholders, the proxy statement providing information concerning the matters to be acted on at the Annual Meeting, and our Annual Report to Stockholders describing our operations during the year ended December 31, 2020. If you requested printed versions of these materials, a proxy card for the Annual Meeting is also included.


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Whether or not you plan to attend the virtual Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting by following one of the methods described in this proxy statement. You may vote your shares via Internet or by telephone, as instructed in this proxy statement, or if you elected to receive printed versions of the materials, by signing, dating and returning the enclosed paper proxy card in the enclosed postage-paid envelope.

Please see the details below to participate in and/or vote at the virtual Annual Meeting:

In order to attend the Annual Meeting virtually via Webcast, stockholders must register in advance at www.proxydocs.com/USCR prior to the deadline of 3:00 a.m. CT on May 13, 2021. You will be required to enter the control number found on your proxy card, voting instruction form or Notice of Electronic Availability that you previously received. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you to access the meeting and will permit you to submit questions. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number provided.

Thank you for your interest in our Company.

Sincerely,

 

LOGO

Michael D. Lundin

Chairman of the Board

331 N. Main Street, Euless, Texas 76039

 

For further information about the 2021 Annual Meeting,

please call 1-817-835-4105


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LOGO    2021 PROXY STATEMENT

 

 

NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

 

To the Stockholders of U.S. Concrete, Inc.:

The 2021 Annual Meeting of Stockholders, which we refer to as the Annual Meeting, of U.S. Concrete, Inc., which we refer to as the Company, will be held on Thursday, May 13, 2021, at 7:00 a.m., CT, in a virtual meeting only format via Webcast. At the Annual Meeting, we will ask you to consider and take action on the following:

 

(1)

to elect seven directors to serve on the Board of Directors of the Company, until the 2022 Annual Meeting of Stockholders of the Company (Proposal No. 1);

 

(2)

to ratify the appointment of KPMG LLP, as the independent registered public accounting firm of the Company for the year ending December 31, 2021 (Proposal No. 2);

 

(3)

to cast a non-binding, advisory vote on the compensation of the Company’s named executive officers as disclosed in these materials (Proposal No. 3);

 

(4)

to approve an amendment to the U.S. Concrete, Inc. Long Term Incentive Plan (Proposal No. 4); and

 

(5)

to transact any other business that may properly come before the Annual Meeting or any adjournment or postponement thereof.

Our Board of Directors set the close of business on March 18, 2021 as the record date for determining stockholders entitled to receive notice of and to vote at the Annual Meeting or any adjournment or postponement thereof. Each stockholder is entitled to one vote for each share of common stock of the Company held by such stockholder at that time. A list of all stockholders entitled to vote is available for inspection during normal business hours at our principal executive offices at 331 N. Main Street, Euless, Texas 76039. In addition, if needed, we will announce an online location containing a list of all stockholders entitled to vote at the Annual Meeting available for inspection. This list also will be available during the Annual Meeting Webcast.

By Order of the Board of Directors,

 

 

LOGO

Paul M. Jolas

Senior Vice President, General Counsel and Corporate Secretary

Euless, Texas

March 31, 2021

MEETING INFORMATION

 

DATE:   Thursday, May 13, 2021
TIME:   7:00 a.m., CT
PLACE:   Virtual meeting only format via Webcast. In order to attend the Annual Meeting virtually via Webcast, stockholders must register in advance at www.proxydocs.com/USCR prior to the deadline of 3:00 a.m. CT on May 13, 2021. You will be required to enter the control number found on your proxy card, voting instruction form or Notice of Electronic Availability that you previously received. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you to access the meeting and will permit you to submit questions.

HOW TO VOTE

Your vote is very important. Whether or not you plan to attend the virtual Annual Meeting, we encourage you to read this proxy statement and submit your proxy so that your shares can be voted at the Annual Meeting and to help us ensure a quorum at the Annual Meeting. You may nonetheless vote in person if you attend the virtual Annual Meeting.

 

LOGO  

AT THE VIRTUAL MEETING

Follow instructions for stockholder voting.

LOGO  

BY PHONE

1-877-680-5400

LOGO  

BY INTERNET

www.proxypush.com/USCR

LOGO  

BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope

 

Important Notice Regarding the Availability of

Proxy Materials for the Stockholders

Meeting to be held on May 13, 2021:

The Notice of Annual Meeting of Stockholders,

Proxy Statement and the Annual Report to

Stockholders are available at:

www.proxydocs.com/USCR

 


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Proxy Summary

     1  

Proposal No. 1: Election of Directors

     4  

Nominees for Election at the Annual Meeting

     4  

Board Recommendation

     9  

Information Concerning the Board of Directors and Committees

     10  

Board of Directors

     10  

Director Independence

     10  

Board Committee and Meetings

     10  

Audit Committee

     11  

Compensation Committee

     13  

Nominating and Corporate Governance Committee

     14  

Compensation Committee Interlocks and Insider Participation

     15  

Communication with Board of Directors

     15  

Company Leadership Structure

     15  

Risk Oversight

     16  

Code of Ethics

     16  

Human Capital Management

     17  

Report of the Audit Committee

     18  

Director Compensation

     20  

2020 Director Compensation Table

     21  

Executive Officers

     23  

Compensation Discussion and Analysis

     26  

Report of the Compensation Committee

     40  

Executive Compensation Tables and Related Disclosure

     41  

2020, 2019 and 2018 Summary Compensation Table

     41  

2020 Grants of Plan-Based Awards Table

     42  

Outstanding Equity Awards at 2020 Fiscal Year-End Table

     43  

2020 Option Exercises and Stock Vested Table

     44  

Pension Benefits

     44  

Nonqualified Deferred Compensation Table

     45  

2020 Pay Ratio

     45  

Potential Payments upon Termination or Change in Control

     47  

 

U.S. Concrete, Inc.  |  2021 Proxy Statement    i


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Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters

    52  

Certain Relationships and Related Transactions

    53  

Proposal No.  2: Ratification of Appointment of Independent Registered Public Accounting Firm

    55  

Fees Incurred for Services by the Principal Accountant

    55  

Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors

    55  

Proposal No. 3: Advisory Vote on Executive Compensation

    56  

Proposal No.  4: Approval of an Amendment to the U.S. Concrete Inc. Long Term Incentive Plan

    57  

Expenses Relating to This Proxy Solicitation

    66  

Other Information

    66  

Equity Compensation Plan Information

    66  

Date for Submission of Stockholder Proposals

    66  

Householding of Annual Meeting Materials

    67  

Other Matters

    67  

Questions and Answers About the Meeting and Voting

    68  

Appendix A  — Reconciliation of Non-GAAP Financial Measures

    A-1  

Appendix B — U.S. Concrete, Inc. Long Term Incentive Plan

    B-1  

Appendix C — Amendment to U.S. Concrete, Inc. Long Term Incentive Plan

    C-1  

 

ii    U.S. Concrete, Inc.  |  2021 Proxy Statement


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Proxy Summary

 

PROXY SUMMARY

This summary highlights information contained elsewhere in the proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement before voting. For more complete information regarding the Company’s 2020 performance, please review the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”).

VOTING MATTERS AND BOARD RECOMMENDATIONS

 

PROPOSAL   BOARD VOTING
RECOMMENDATION
   PAGE
REFERENCE
1.   Election of directors  

FOR EACH

NOMINEE

   4
2.   Ratification of appointment of independent registered public accounting firm   FOR    55
3.   Advisory vote on executive compensation   FOR    56
4.   Approval of an amendment to the U.S. Concrete, Inc. Long Term Incentive Plan   FOR    57

2020 PERFORMANCE SUMMARY

 

 

CONSOLIDATED

REVENUE

$1.4

 

BILLION

 

 

 

 

NET

INCOME

$24.5

 

MILLION

 

 

 

TOTAL ADJUSTED

EBITDA1

$192.9

 

MILLION

 

 

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

$181.3

 

MILLION

 

Adjusted Free Cash Flow1

$158.6

 

MILLION

 

1.

Total Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP financial measures. Please refer to Appendix A for reconciliations and other information.

CORPORATE GOVERNANCE HIGHLIGHTS

We are committed to good corporate governance, which promotes the long-term interests of stockholders, strengthens Board and management accountability and helps build public trust in the Company. The section entitled “Information Concerning the Board of Directors and Committees” beginning on page 10 describes our corporate governance framework, which includes the following highlights:

 

+

Annual election of directors

 

+

Independent Chairman of the Board

 

+

6 of our 7 director nominees are independent

 

+

Comprehensive Code of Ethics and Business Conduct and Corporate Governance Guidelines

 

+

Frequent executive sessions of the Board without management

 

+

Compensation Committee participation in executive succession planning

 

+

Directors elected by majority vote

 

+

Regular Board, Committee and Director Evaluations

 

+

Board and Committee review of strategic, operational and compliance risks

 

+

Ethics and corporate compliance hotline

 

+

Ethics and corporate compliance program

 

+

Stock ownership guidelines for Directors and Officers

 

 

U.S. Concrete, Inc.  |  2021 Proxy Statement    1


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Proxy Summary

 

DIRECTOR NOMINEES

Information about each director nominee’s experience, qualifications, attributes and skills can be found beginning on page 5. The ages and positions listed below are as of March 15, 2021.

 

NOMINEE

  AGE     DIRECTOR
SINCE
  POSITION(S) HELD  

INDE-

PENDENT

    AC       CC       NCG  

 

Michael D. Lundin

 

 

 

 

 

 

61  

 

 

 

 

 

 

2010

 

 

 

Chairman of the Board

 

 

 

X

 

 

 

X

 

 

 

  

 

 

 

X

 

 

Susan M. Ball

 

 

 

 

 

 

57  

 

 

 

 

 

 

2018

 

 

 

Director

 

 

 

X

 

 

 

C

 

 

 

  

 

 

 

  

 

 

Kurt M. Cellar

 

 

 

 

 

 

51  

 

 

 

 

 

 

2010

 

 

 

Director

 

 

 

X

 

     

 

  

 

 

 

C

 

 

Rajan C. Penkar

 

 

 

 

 

 

65  

 

 

 

 

 

 

2020

 

 

 

Director

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

  

 

 

Ronnie Pruitt

 

 

 

 

 

 

50  

 

 

 

 

 

 

2020

 

 

 

President, Chief Executive Officer and Director

 

         

 

  

 

 

 

  

 

 

Theodore P. Rossi

 

 

 

 

 

 

70  

 

 

 

 

 

 

2011

 

 

 

Director

 

 

 

X

 

 

 

  

 

 

 

C

 

 

 

X

 

 

Colin M. Sutherland

 

 

 

 

 

 

65  

 

 

 

 

 

 

2010

 

 

 

Director

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

  

 

     

 

Number of Meetings in 2020        

 

 

 

9  

 

 

 

4  

 

 

 

4

 

AC    Audit Committee

 

 

CC    Compensation Committee

 

 

 

NCG    Nominating and Corporate Governance Committee

 

 

C    Chairperson

 

EXECUTIVE COMPENSATION HIGHLIGHTS

Set forth below is the 2020 compensation for each Named Executive Officer (as defined in Compensation Discussion and Analysis) as determined under Securities and Exchange Commission (“SEC”) rules. See the 2020, 2019 and 2018 Summary Compensation Table and the accompanying notes to the table beginning on page 41 for more information.

 

             

Name and Principal Position

 

 

Year

 

   

Salary

 

   

Bonus

 

   

Stock
Awards
(1)

 

   

 

Non-Equity
Incentive Plan
Compensation

 

   

All Other
Compensation

 

   

Total

 

 
 

Ronnie Pruitt

 

             

President,

Chief Executive Officer and Director

    2020     $ 713,850       0     $ 1,197,844       $1,454,578       $25,354     $ 3,391,626  
 

William J. Sandbrook(2)

 

             

Director, former Chairman and Chief Executive Officer

    2020       235,227       0       0       0       1,729,536       1,964,763  
 

John E. Kunz

 

             

Senior Vice President and

Chief Financial Officer

    2020       455,400       0       627,442       582,770       10,592       1,676,204  
 

Paul M. Jolas

 

             

Senior Vice President, General Counsel and Corporate Secretary

    2020       404,875       0       374,836       414,491       9,750       1,203,952  
 

Jeffrey W. Roberts

 

             

Regional Vice President and General Manager — U.S. Concrete — Central

    2020       340,000       0       282,485       348,075       58,707       1,029,267  
 

Matthew Emmert

 

             

Regional Vice President and General Manager — U.S. Concrete — East

    2020       320,000       0       282,485       327,600       13,920       944,005  

 

2    U.S. Concrete, Inc.  |  2021 Proxy Statement


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Proxy Summary

 

 

1.

The amounts shown in the “Stock Awards” column represent the aggregate grant date fair value of awards of restricted stock determined in accordance with ASC 718. The values shown in this column do not represent the amounts that may eventually be realized by the Named Executive Officers, which are subject to achievement of the time- and performance-based vesting conditions applicable to the awards and the price of our common stock at the time of vesting. See “Note 13. Stock-Based Compensation” in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for 2020 for a discussion of our determination of the aggregate grant date fair value of these awards. The amounts reported do not include any reduction in the value of the awards for the possibility of forfeiture. As described in Compensation Discussion and Analysis, the Compensation Committee approved grants of equity awards effective March 1, 2020. Under ASC 718, the grant date of these equity awards, and thus the date the fair value of the equity awards was determined, was March 1, 2020 based on the 20-day average of the daily VWAP on February 28, 2020.

2.

Mr. Sandbrook retired as our Chief Executive Officer effective April 3, 2020. The amount reported for Mr. Sandbrook in the “All Other Compensation” column reflects accrued vacation and the incremental fair value, computed in accordance with ASC 718, associated with the accelerated vesting of his previously granted time-based restricted stock awards and the continuation of the original performance period in accordance with the 2019 performance award that would have otherwise been terminated upon his retirement as our Chief Executive Officer effective April 3, 2020, and does not represent any new grant for 2020. Compensation received by Mr. Sandbrook from April 3, 2020 through December 31, 2020 for his service as a director and for his consulting services is included in the “Director Compensation Table.” For more information about Mr. Sandbrook’s executive transition agreement and consulting arrangement, please see “Certain Relationships and Related Transactions.” Mr. Sandbrook is not standing for re-election at the Annual Meeting and will depart the Board upon the expiration of his current term at the Annual Meeting.

QUESTIONS AND ANSWERS AND OTHER INFORMATION

Please see “Other Information” beginning on page 66 and “Questions and Answers about the Meeting and Voting” beginning on page 68 for important information about the proxy materials, voting, the annual meeting, Company documents, communications and the deadlines to submit stockholder proposals and director nominees for the 2022 Annual Meeting of Stockholders. Additional questions may be directed by phone by calling the Company at (817) 835-4105.

LEARN MORE ABOUT OUR COMPANY

You can learn more about our Company, view our governance materials and much more by visiting our website at www.us-concrete.com under Investor Relations.

Please also visit www.proxydocs.com/USCR to access the Company’s Notice of Annual Meeting of Stockholders, Proxy Statement and 2020 Annual Report.

 

U.S. Concrete, Inc.  |  2021 Proxy Statement    3


Table of Contents

Proposal No. 1: Election of Directors

 

PROPOSAL NO. 1: ELECTION OF DIRECTORS

Our Board of Directors, which we refer to as our Board, currently consists of eight members. Each of our current directors (other than Mr. Sandbrook) will stand for re-election at the Annual Meeting. To be elected as a director, each director nominee must receive a majority of the votes cast at the Annual Meeting. A “majority of the votes cast” means that the number of shares voted “for” a director must exceed the number of votes cast “against” that director. Votes cast shall exclude abstentions with respect to that director’s election. A description of our policy regarding nominees who receive a majority against vote in an uncontested election is set forth in response to the question “What vote is required to approve of each of the proposals being considered at the Annual Meeting?” in “Questions and Answers about the Meeting and Voting” of this proxy statement. If you properly complete the voting instructions via mail, the Internet or telephone, the persons named as proxies will vote your shares “FOR” the election of the nominees listed below unless you vote against one or more nominees.

Should any director nominee become unable or unwilling to accept nomination or election, the proxy holders may vote the proxies for the election, in his stead, of any other person the Board may nominate or designate. Each director nominee has expressed his/her intention to serve the entire term.

Set forth below is information regarding the age, business experience and Board committee memberships concerning each nominee for election as a director of the Company, including a discussion of such nominee’s particular experience, qualifications, attributes or skills that lead our Nominating and Corporate Governance Committee to conclude that the nominee should serve as a director of our Company. The ages and positions listed below are as of March 15, 2021.

DIRECTOR NOMINEES

 

NOMINEE

  AGE     DIRECTOR
SINCE
  POSITION(S) HELD  

INDE-

PENDENT

    AC       CC       NCG  

 

Michael D. Lundin

 

 

 

 

 

 

61  

 

 

 

 

 

 

2010

 

 

 

Chairman of the Board

 

 

 

X

 

 

 

X

 

     

 

X

 

 

Susan M. Ball

 

 

 

 

 

 

57  

 

 

 

 

 

 

2018

 

 

 

Director

 

 

 

X

 

 

 

C

 

       

 

Kurt M. Cellar

 

 

 

 

 

 

51  

 

 

 

 

 

 

2010

 

 

 

Director

 

 

 

X

 

         

 

C

 

 

Rajan C. Penkar

 

 

 

 

 

 

65  

 

 

 

 

 

 

2020

 

 

 

Director

 

 

 

X

 

 

 

X

 

 

 

X

 

   

 

Ronnie Pruitt

 

 

 

 

 

 

50  

 

 

 

 

 

 

2020

 

 

 

President, Chief Executive Officer and Director

 

               

 

Theodore P. Rossi

 

 

 

 

 

 

70  

 

 

 

 

 

 

2011

 

 

 

Director

 

 

 

X

 

     

 

C

 

 

 

X

 

 

Colin M. Sutherland

 

 

 

 

 

 

65  

 

 

 

 

 

 

2010

 

 

 

Director

 

 

 

X

 

 

 

X

 

 

 

X

 

   
     

 

Number of Meetings in 2020        

 

 

 

9  

 

 

 

4  

 

 

 

4  

 

AC    Audit Committee

 

 

CC    Compensation Committee

 

 

 

NCG    Nominating and Corporate Governance Committee

 

 

C    Chairperson

 

There is no family relationship among any of the nominees, directors and/or any of the executive officers of the Company.

 

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Proposal No. 1: Election of Directors

 

SKILLS AND QUALIFICATIONS OF THE NOMINEES FOR BOARD OF DIRECTORS

 

 

LOGO

 

LOGO

 

LOGO

 

LOGO

 

LOGO

 

LOGO

 

LOGO

 

 

Current or Prior Chief Executive Officer or Chief Operating Officer Experience

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Executive Leadership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industry Experience

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Literacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Experience

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance and Capital Markets Transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mergers and Acquisitions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology

 

 

 

 

 

 

Risk Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Governance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

Michael D. Lundin

 

Age: 61

Director Since: 2010

 

 

Business Experience: Mr. Lundin has served as our Chairman of the Board since May 14, 2020. In January 2021, Mr. Lundin was named the Lead Independent Director of Constellis, a private company that specializes in a broad range of security and risk management services, after joining its Board in the Spring of 2020. In March 2019, Mr. Lundin was named Chairman of the Board of Directors of Tidewater Transportation & Terminals, a multi-commodity transportation and terminal company serving the Pacific Northwest. From June 2008 to July 2018, Mr. Lundin served as the Chairman of North Coast Minerals, a platform for mineral and logistics-related portfolio companies of Resilience Capital Partners, a private equity firm where Mr. Lundin was an Operating Executive and Partner. Previously, Mr. Lundin was the President and Chief Executive Officer of Oglebay Norton Company from December 2003 to 2008, where he also served as the Chief Operations Officer and the President of the Great Lakes Mineral Division. Prior to joining Oglebay Norton, he was the President and Partner of Michigan Limestone Operations for more than 10 years. During the past five years, Mr. Lundin served on the Board of Omni Max International and also served as a director of Rand Logistics and multiple portfolio companies of Resilience Capital Partners.

 

Education: Mr. Lundin has a BS from the University of Wisconsin-Stout and a Masters in Business Administration from Loyola Marymount University.

 

Current and Past Company Directorships: Mr. Lundin also serves as the non-executive Chairman of Tidewater Transportation and Terminals, the independent, non-executive Chairman of iGPS Logistics, Inc., and the Lead Independent Director of Constellis. Mr. Lundin served as the non-executive Chairman of Omni Max International, Inc. until 2020 and previously served as the non-executive Chairman of Rand Logistics, Inc.

 

Qualifications: Our Board of Directors concluded that Mr. Lundin’s experience as an executive officer in the minerals, logistics, and aggregates sector along with his board service with other public companies and financial expertise makes him well-qualified to serve as one of our directors and as Chairman of the Board.

 

 

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Table of Contents

Proposal No. 1: Election of Directors

 

 

Susan M. Ball

 

Age: 57

Director Since: 2018

 

 

Business Experience: Since December 2018, Ms. Ball has served as Chief Financial Officer, Executive Vice President and Treasurer of Team, Inc. (NYSE: TISI). Until May 2018, she served as Executive Vice President, Chief Financial Officer and Treasurer of CVR Energy, Inc. (NYSE: CVI), the general partner of CVR Refining, and the general partner of CVR Partners. She previously served as Chief Financial Officer and Treasurer of CVR Energy, Inc. and CVR Partners’ general partner from August 2012 to December 2017. She also previously served as Vice-President, Chief Accounting Officer and Assistant Treasurer of CVR Energy, Inc. and the general partner of CVR Partners from October 2007 to July 2012 and as Vice President, Chief Accounting Officer and Assistant Treasurer for Coffeyville Resources, LLC from May 2006 to September 2007.

 

In addition, Ms. Ball served as the Chief Financial Officer and Treasurer of CVR Refining’s general partner from September 2012 to December 2017. Ms. Ball has more than 35 years of experience in the accounting industry, with more than 12 years serving clients in the public accounting industry. Prior to joining CVR Energy, Inc., she served as a Tax Managing Director with KPMG LLP, where she was responsible for all aspects of federal and state income tax compliance and tax consulting, which included a significant amount of mergers and acquisitions work on behalf of her clients. Also, Ms. Ball holds a Certified Public Accountant certificate.

 

Education: Ms. Ball received a Bachelor of Science in Business Administration from Missouri Western State University.

 

Qualifications: Our Board of Directors concluded that Ms. Ball’s executive experience and strong finance, accounting and tax background qualified her to serve as one of the Company’s directors.

 

 

 

Kurt M. Cellar

 

Age: 51

Director Since: 2010

 

 

Business Experience: Since January 2008, Mr. Cellar has been a consultant and board member to companies in a variety of industries as well as a private investor. From 1999 to 2008, Mr. Cellar worked for the hedge fund Bay Harbour Management, L.C., where he was partner and portfolio manager until his departure.

 

Education: Mr. Cellar has a B.A. in Economics/Business from the University of California, Los Angeles and a Masters of Business Administration from the Wharton School of Business. Mr. Cellar is a former Chartered Financial Analyst.

 

Current Company Directorships: Mr. Cellar currently serves as the Lead Independent Director and Chairman of the Audit Committee of Hornbeck Offshore Services, Inc. Mr. Cellar is currently the Lead Independent Director of American Banknote Corporation where he is also Chairman of its Strategic Committee as well as Chairman of its Audit Committee. Mr. Cellar also currently serves as a director of Six Flags Entertainment (NYSE: SIX) as well as Chairman of its Audit Committee and as a member of its Nominating and Governance Committee.

 

Past Company Directorships: During the past five years, Mr. Cellar served as a director of Hawaiian Telecom, Inc. and Horizon Lines, Inc.

 

Qualifications: Our Board of Directors concluded that Mr. Cellar is well-qualified to serve as one of our directors based on his financial expertise and considerable board experience.

 

 

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Proposal No. 1: Election of Directors

 

 

Rajan C. Penkar

 

Age: 65

Director Since: 2020

 

 

Business Experience: Since June 2014, Mr. Penkar has served as the President and founder of Supply Chain Advisory Services, LLC, providing supply chain design and optimization services to retailers. From September 2011 to May 2014, Mr. Penkar served as Senior Vice President and President, Supply Chain for Sears Holding Corporation, an integrated retailer. In this position, Mr. Penkar was accountable for all aspects of the supply chain including global sourcing, distribution and fulfillment, global transportation, inventory management, and inside-the-home delivery and installation of appliances and big-ticket merchandise. Mr. Penkar led the acquisition and implementation of advanced cloud-based routing and scheduling technology for the home delivery operation, significantly improving the customer experience and operational performance. Based on these improvements, Mr. Penkar incubated and launched Innovel, a third-party logistics organization for big ticket home delivery for other retailers. From July 1987 to September 2011, Mr. Penkar held various positions of increasing responsibility with United Parcel Service, Inc. (“UPS”), most recently serving as President, UPS Customer Solutions. In this role, Mr. Penkar and his team engaged with UPS customers across all industries and geographies providing supply chain design and optimization services, and a key point of competitive differentiation for UPS. Mr. Penkar had P&L responsibility for UPS Professional Services, a consulting organization, and two UPS software subsidiaries, ConnectShip and iShip, providing cloud and server-based multi-carrier shipping systems for carrier compliant labels, documentation, electronic manifesting, and data analytics. At UPS, Mr. Penkar was a Senior Executive at UPS Supply Chain Solutions, leading substantial growth through acquisition integration and solutions development, building UPS capabilities in third-party logistics, air and ocean freight forwarding, and service parts logistics. Early in his UPS career, Mr. Penkar was a key contributor to the digitization of UPS services, leading the development of the Delivery Information Acquisition Device for delivery data capture, the two-dimensional MaxiCode for high speed automated sortation, and barcode readers for package tracking and visibility. Previously, Mr. Penkar served as a Senior Member - Technical Staff at Unimation, a robotics company, and Electronic Associates, Inc., a developer of power plant simulators.

 

Education: Mr. Penkar holds a Master of Science in mechanical engineering from Syracuse University, and a BTech in mechanical engineering from the Indian Institute of Technology, Bombay. Mr. Penkar also earned a graduate level certificate in Computer Engineering from the Stevens Institute of Technology. Mr. Penkar is the recipient of 14 patents in robotics, automation, and supply chain processes.

 

Current Company Directorships: Mr. Penkar serves on the board of TravelCenters of America (Nasdaq: TA) as an independent director and is a member of their audit, compensation, and nomination and governance committees. He also serves as a Class I Director on the Board of USA Truck, Inc. (NASDAQ: USAK).

 

Qualifications: Our Board of Directors concluded that Mr. Penkar is well-qualified to serve as one of our directors based on his experience as an executive officer, his financial and technology expertise and his extensive experience in supply chain design and optimization.

 

 

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Proposal No. 1: Election of Directors

 

 

Ronnie Pruitt

 

Age: 50

Director Since: 2020

 

 

Business Experience: Mr. Pruitt has served as our President and Chief Executive Officer since April 3, 2020. From April 2019 until April 2020, Mr. Pruitt served as our President and Chief Operating Officer and from October 2015 until April 2019, he served as our Senior Vice President and Chief Operating Officer. From July 2014 to October 2015, Mr. Pruitt served as the Vice President of Cement Sales of Martin Marietta Materials, Inc. (NYSE: MLM), and from January 1995 to July 2014 he was with Texas Industries, Inc. (which was acquired by Martin Marietta in 2014) in various positions, most recently as Vice President of Cement Operations. Mr. Pruitt has served as President of the Board of Directors of Cement Council of Texas and Chairman of the Paving Committee for the Portland Cement Association.

 

Education: Mr. Pruitt is a 1993 graduate of the University of Texas-Arlington.

 

Qualifications: Our Board of Directors concluded that Mr. Pruitt is well-qualified to serve as one of our directors based on his significant experience in the building materials industry and as an executive officer of the Company.

 

 

 

Theodore P. Rossi

 

Age: 70

Director Since: 2011

 

 

Business Experience: Mr. Rossi has over 45 years of experience in the manufacturing and marketing of hardwood products both domestically and internationally. From 2009 to the present, Mr. Rossi has served as Chairman and Chief Executive Officer of Rossi Group, LLC, a leading manufacturer and exporter of hardwood lumber. From 2006 to 2009, Mr. Rossi served as Chairman and Chief Executive Officer of American Hardwood Industries. Prior to that, he was Chairman and Chief Executive Officer of Rossi American Hardwoods from 1976 to 2005. Mr. Rossi served as President and is currently on the Board of Directors of the National Hardwood Lumber Association. He is the former Chairman of the American Hardwood Export Council and has been a member of its Board of Directors since 1988. Mr. Rossi previously served as the President and Chairman of the Hardwood Federation and currently serves as a member of its Executive Committee. Additionally, Mr. Rossi serves on the board of C.F. Furniture Group. Mr. Rossi is the past Chairman of the Mt. St. John Foundation and a former member of the Board of Trustees of the University of Connecticut.

 

Qualifications: Based on Mr. Rossi’s extensive experience in the building material products sector and extensive international experience, our Board of Directors concluded that he is well-qualified to serve as one of our directors.

 

 

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Proposal No. 1: Election of Directors

 

 

Colin M. Sutherland

 

Age: 65

Director Since: 2010

 

 

Business Experience: Mr. Sutherland currently leads SC Market Analytics, a firm offering market forecasting, decision support and strategic consulting services to clients in the North American aggregates, cement and concrete sector. From May 2012 to October 2013, he was Vice President Commercial Strategy for Votorantim Cement North America, a leading producer of cement, aggregates and ready-mixed concrete in the Great Lakes region and also served on the Board of Directors and Audit Committee of Pond Technologies Inc. From April 2011 to May 2012, he was Vice President Corporate Development of The Waterford Group, a privately-held company based in Ontario that operates in the aggregates, ready-mixed concrete and industrial services sectors. From July 2010 to March 2011, he served as Special Corporate Development Advisor to the Chief Executive Officer of Armtec Infrastructure Inc., one of North America’s largest producers of pre-cast and pre-stressed concrete components and structures. Previously Mr. Sutherland served as the Executive Vice President of Catawba Resources Inc. from March 2007 to April 2010, and as the Vice President of Business Development, Integration & Strategy at Holcim (US) Inc. from August 2003 to February 2007. From October 2001 to July 2003, he served as the Paris-based Vice President, Cementitious Materials with Lafarge S.A. following a period as Group Integration Director for Blue Circle Industries PLC. Prior to that, he held the position of Director of Corporate Development for Blue Circle North America from September 1995 to January 2001.

 

Education: Mr. Sutherland holds a Bachelor of Commerce degree from Queen’s University. He has also pursued graduate studies at the Wharton School of Business and lectured in Finance at Concordia University, Montreal in 1986-87.

 

Qualifications: Based on Mr. Sutherland’s almost four decades of experience devising and implementing growth strategies for leading global players in the aggregates, cement and concrete sector, combined with his deep knowledge of business valuation, postmerger integration and the Company’s geographic markets, our Board of Directors concluded that he is well-qualified to serve as one of the Company’s directors.

 

The Board of Directors recommends that you vote “FOR” the election of each of the director nominees.

 

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Table of Contents

Information Concerning the Board of Directors and Committees

 

INFORMATION CONCERNING THE BOARD OF DIRECTORS AND COMMITTEES

BOARD OF DIRECTORS

Our Board currently consists of eight directors. A majority of our Board constitutes a quorum for meetings of the Board of Directors. The convening of a special meeting is subject to advance written notice to all directors.

 

 

 

LOGO    LOGO

Director Independence

 

Our Board has determined that six of our current directors, Ms. Ball, and Messrs. Cellar, Lundin, Penkar, Rossi and Sutherland are “independent directors” in accordance with the applicable rules of the SEC and applicable corporate governance standards of the Nasdaq stock market and that no independent director has a material relationship with the Company that would impair his or her independence from management or otherwise compromise his or her ability to act as an independent director. There were no transactions, relationships or arrangements that were considered by our Board in determining the independence of such directors, other than the purchase of COVID-19 related masks from Rossi Group, LLC, for which Theodore P. Rossi, a member of our Board of Directors, serves as Chairman and Chief Executive Officer, as more fully described in “Certain Relationships and Related Transactions.” The Board considered the transaction with Rossi Group, LLC and determined it did not impair Mr. Rossi’s independence.

Accordingly, the majority of the Board is currently and, if all the director nominees are elected, will be comprised of independent directors.

Board Committee and Meetings

 

Our Board met 14 times during 2020. Our Board currently has standing audit, compensation and nominating and corporate governance committees. Committee designations are generally made by our Board following the election of directors at each annual meeting of stockholders, upon the formation of a new committee or upon the addition or resignation of directors between annual meetings, if needed.

During 2020, each of our directors attended at least 75% of the meetings of the Board and any committee of the Board on which such director served. Members of the Board are expected to use all reasonable efforts to attend each meeting of the Board and to attend the Company’s annual meeting of stockholders. A director who is unable to attend a meeting is expected to notify the Chairman of the Board or the chairperson of the appropriate Board

 

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Information Concerning the Board of Directors and Committees

 

committee in advance of such meeting. The Chairman of the Board or his designee may also request that members of management or other advisors attend all or any portion(s) of the meetings of the Board. Each of our directors attended our 2020 Annual Meeting of Stockholders (the “2020 Annual Meeting”), virtually.

 

Independent Directors

 

 

Board of

Directors

 

 

Audit Committee

 

 

Compensation
Committee

 

 

 

Nominating
and Corporate
Governance
Committee

 

 

Susan M. Ball

 

 

 

 

 

 

C

 

   

 

Kurt M. Cellar

 

 

 

 

         

 

C

 

 

Michael D. Lundin

 

 

 

C

 

 

 

 

     

 

 

 

Rajan C. Penkar

 

 

 

 

 

 

 

 

 

 

   

 

Theodore P. Rossi

 

 

 

 

     

 

C

 

 

 

 

 

Colin M. Sutherland

 

 

 

 

 

 

 

   

 

Number of 2020 Meetings

 

 

 

14

 

 

 

9

 

 

 

4

 

 

 

4

 

   

 

C    Chairperson

 

                                           

 

Audit Committee

The Audit Committee met nine times during 2020. From January 1, 2020 to May 14, 2020, the Audit Committee consisted of Messrs. Lundin (Chairman) and Sutherland and Ms. Ball. From May 14, 2020 to December 31, 2020, the Audit Committee consisted of Ms. Ball (Chairman) and Messrs. Lundin, Penkar and Sutherland. The Audit Committee is governed by a charter adopted by our Board, a copy of which is available on our website at www.us-concrete.com under Investor Relations — Corporate Governance. The Board has determined that each member of the Audit Committee is an “independent director” in accordance with the applicable rules of the SEC and applicable corporate governance standards of the Nasdaq stock market. The Board has also determined that Ms. Ball and Mr. Lundin are “audit committee financial experts,” as defined in the applicable rules of the SEC.

The Audit Committee assists our Board in fulfilling its oversight responsibility relating to:

 

    the integrity of our financial statements, accounting, auditing and financial reporting processes and internal control systems;  

 

    the qualifications, independence and performance of our independent registered public accounting firm;  

 

    the performance of our internal audit function;  

 

    our compliance with legal and regulatory requirements;  

 

    certain aspects of our compliance and ethics program relating to financial matters, books and records and accounting as required by applicable statutes, rules and regulations; and  
    the assessment of the major financial risks facing us.  

The Audit Committee’s purpose is to oversee our accounting and financial reporting processes, the audits of our financial statements, the qualifications of our independent registered public accounting firm and the performance of our internal auditors and outside firms providing internal audit services.

Our management is responsible for preparing our financial statements and for our internal controls, and our independent registered public accounting firm is responsible for auditing those financial statements and the related audit of internal control over financial reporting. The Audit Committee is not providing any expert or special assurance as to our financial statements or any professional certification as to the independent registered public accounting firm’s work. The following functions are among the key duties and responsibilities of the Audit Committee:

 

    reviewing and discussing with management and our independent registered public accounting firm our annual audited and interim unaudited financial statements and related disclosures included in our quarterly earnings releases and periodic reports filed with the SEC;

 

    recommending to the Board whether our audited financial statements should be included in our Annual Report on Form 10-K for that year;

 

    reviewing and discussing the scope and results of the independent registered public accounting firm’s annual audit and quarterly reviews of our financial statements, and any other matters required to be communicated to the Audit Committee by the independent registered public accounting firm;

 

 

 

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Information Concerning the Board of Directors and Committees

 

    reviewing and discussing with management, our senior internal audit executive, outside firms providing internal audit services and our independent registered public accounting firm the adequacy and effectiveness of our disclosure controls and procedures, our internal controls and procedures for financial reporting and our risk assessment and risk management policies (including those related to significant business risk exposures such as data privacy and network security);

 

    the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm, including overseeing their independence;

 

    reviewing and pre-approving all audit, review or attest services and permitted non-audit services that may be performed by our independent registered public accounting firm;

 

    establishing and maintaining guidelines relating to our hiring of employees and former employees of our independent registered public accounting firm, which guidelines shall meet the requirements of applicable law and listing standards;

 

    reviewing and assessing, on an annual basis, the adequacy of the Audit Committee’s charter, and recommending revisions to the Board;  

 

    reviewing the appointment of our senior internal audit executive, and reviewing and discussing with that individual, and any outside firms providing internal audit services, the scope and staffing of our internal audits, including any difficulties encountered by the internal audit function and any restrictions on scope of its work or access to required information, and reviewing all significant internal audit reports and management’s responses;  

 

    confirming the regular rotation of the audit partners with our independent auditor, as required by applicable law, and considering whether there should be regular rotation of our auditors;  

 

    preparing an annual Audit Committee report for inclusion in our proxy statement;  

 

    reviewing legal and regulatory matters that may have a material impact on our financial statements and reviewing our compliance policies and procedures, including meeting annually with the General Counsel regarding the implementation and effectiveness of our compliance programs;  
    reviewing the Company’s significant financing transactions and related documentation that may have a material impact on the Company’s ability to borrow to ensure the Company is able to finance its ongoing as well as future operations, and evaluating whether to recommend to the Board to approve or ratify any such financing transaction;  

 

    considering all of the relevant facts and circumstances available for related party transactions submitted to the Audit Committee in accordance with our policy regarding related party transactions;  

 

    establishing and maintaining procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls and auditing matters for the confidential, anonymous submission by our employees of concerns regarding questionable accounting, internal accounting controls and auditing matters;  

 

    reviewing and discussing all critical accounting policies and practices to be used, all alternative treatments of financial information within GAAP that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor, and other material written communications between the independent auditor and management;  

 

    reviewing and recommending to the Board director and officer indemnification and insurance policies and procedures;  

 

    evaluating its performance on an annual basis and periodically reviewing the criteria for such evaluation; and  

 

    performing such other functions the Audit Committee or the Board deems necessary or appropriate under applicable law, including those set forth in our Corporate Governance Guidelines.  

The Audit Committee meets separately with our internal auditors and the independent registered public accounting firm to provide an open avenue of communication.

For additional information regarding the Audit Committee see “Risk Oversight” and “Report of the Audit Committee.”

 

 

 

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Information Concerning the Board of Directors and Committees

 

Compensation Committee

 

The Compensation Committee met four times during 2020. From January 1, 2020 to May 14, 2020, the Compensation Committee consisted of Messrs. Rossi (Chairman) and Sutherland and Robert M. Rayner. From May 14, 2020 to December 31, 2020 the Compensation Committee consisted of Messrs. Rossi (Chairman), Penkar and Sutherland. Each member of the Compensation Committee is an “independent director” in accordance with the applicable rules of the SEC and applicable corporate governance standards of the Nasdaq stock market. The Compensation Committee is governed by a charter adopted by our Board, a copy of which is available on our website at www.us-concrete.com under Investor Relations — Corporate Governance.

There are three primary responsibilities of our Compensation Committee: (1) to discharge the Board’s responsibilities relating to compensation of our executives and directors; (2) to oversee the adoption of policies that govern our compensation programs, including stock and incentive plans; and (3) to produce the Compensation Discussion and Analysis for our annual meeting proxy statement. The Compensation Committee operates under a written charter adopted by our Board. Pursuant to the charter, the Compensation Committee has the resources

necessary to discharge its duties and responsibilities, including the authority to retain outside counsel or other experts or consultants as it deems necessary. The following are the key functions of the Compensation Committee, any of which may be delegated to one or more subcommittees, as the Compensation Committee may deem necessary or appropriate:

 

    review and approve annually the corporate goals and objectives relevant to the compensation of our executive officers, evaluate the performance of our executive officers in light of those goals and set the compensation levels of our executive officers based on the Compensation Committee’s evaluation;  

 

    review the competitiveness of our compensation programs for executive officers to (1) attract and retain executive officers, (2) motivate our executive officers to achieve our business objectives, and (3) align the interests of our executive officers and key employees with the long-term interests of our stockholders;  

 

    review trends in management compensation, oversee the development of new compensation plans and, when necessary, revise existing plans;  

 

    periodically review the compensation paid to non-employee directors through annual retainers and any other cash or equity components of compensation and perquisites, and make recommendations to the Board for any adjustments;  

 

    review and approve the employment agreements, salaries, bonuses, equity or equity-based awards and  
   

severance, termination, indemnification and change in control agreements for all our executive officers;

 

 

    review and approve compensation packages for new executive officers and termination packages for executive officers as may be suggested by management or the Board;  

 

    review and approve our policies and procedures with respect to expense accounts and perquisites for our executive officers;  

 

    review and discuss with the Board and our executive officers plans for executive officer development and corporate succession plans for the Chief Executive Officer and other executive officers;  

 

    review and make recommendations concerning long-term incentive compensation plans, including the use of stock options and other equity-based plans;  

 

    oversee our employee benefit plans;  

 

    review periodic reports from management on matters relating to personnel appointments and practices;  

 

    review and discuss with management our Compensation Discussion and Analysis for our annual meeting proxy statement in compliance with applicable SEC rules and regulations;  

 

    review and assess the Company’s policies and practices for compensating its employees, including its executive officers, as they relate to risk management practices, risk-taking incentives and identified major risk exposures to the Company;  

 

    make recommendations concerning policies to mitigate risks arising from compensation policies and practices, including policies providing for the recovery of incentive or equity-based compensation and limiting hedging activities related to Company stock;  

 

    review and make recommendations regarding the Company’s submissions to stockholders on executive compensation matters, including advisory votes on executive compensation and the frequency of such votes, incentive and other compensation plans, and engagement with proxy advisory firms;  

 

    retain and terminate any advisors to assist it in performing its duties, including the authority to approve fees and the other terms and conditions of the advisors’ retention; and  

 

    annually evaluate the Compensation Committee’s performance and charter.  

For additional information regarding the Compensation Committee, see “Risk Oversight,” “Compensation Committee Interlocks and Insider Participation” and “Compensation Discussion and Analysis.”

 

 

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Information Concerning the Board of Directors and Committees

 

Nominating and Corporate Governance Committee

 

The Nominating and Corporate Governance Committee met four times in 2020. From January 1, 2020 to May 14, 2020, the Nominating and Corporate Governance Committee consisted of Messrs. Cellar (Chairman), Lundin and Robert M. Rayner. From May 14, 2020 to December 31, 2020, the Nominating and Corporate Governance Committee consisted of Messrs. Cellar (Chairman), Lundin and Rossi. Each member of the Nominating and Corporate Governance Committee is an “independent director” in accordance with the applicable rules of the SEC and applicable corporate governance standards of the Nasdaq stock market. The Nominating and Corporate Governance Committee is governed by a charter adopted by our Board, a copy of which is available on our website at www.us-concrete.com under Investor Relations — Corporate Governance.

The Nominating and Corporate Governance Committee is responsible for the duties and functions related to corporate governance matters including ensuring that we operate in accordance with our Corporate Governance Guidelines, leading the Board in its annual assessment of the performance of the Board, its committees and each of the directors and reviewing, evaluating and recommending changes to our Corporate Governance Guidelines.

The following functions are among the key duties and responsibilities of the Nominating and Corporate Governance Committee:

 

    review and make recommendations regarding the size, composition and organization of the Board;  

 

    develop and recommend to the Board specific criteria for the selection of directors;  

 

    with respect to director nominees, (i) identify individuals qualified to become members of the Board (consistent with criteria approved by the Board), (ii) review the qualifications of any such person submitted to be considered as a member of the Board by any stockholder or otherwise, and (iii) select the director nominees for the next annual meeting of stockholders or to fill vacancies on the Board;  

 

    develop and periodically reassess policies and procedures with respect to the consideration of any director candidate recommended by stockholders or otherwise;  

 

    review and make recommendations to the Board with respect to the size, composition and organization of the committees of the Board (other than the Nominating and Corporate Governance Committee);  

 

    recommend procedures for the efficient functioning of the Board;  

 

    assist the Board in determining whether individual directors have material relationships with the Company  
   

that may interfere with their independence, as provided under applicable requirements and listing standards;

 

 

    oversee the Board’s annual self-evaluation process and report annually to the Board with an assessment of the Board’s performance;  

 

    develop and maintain the orientation program for new directors and continuing education programs for directors;  

 

    review and discuss as appropriate with management the Company’s public disclosures and its disclosures to stock exchanges relating to independence, governance and director nomination matters, including in the Company’s proxy statement;  

 

    review and assess the adequacy of its charter annually and recommend to the Board any changes deemed appropriate; and  

 

    review its own performance annually.  

In carrying out its function to evaluate nominees for election to the Board, the Nominating and Corporate Governance Committee considers a candidate’s mix of skills, experience, character, commitment and diversity of background, all in the context of the requirements of the Board at that time. Each candidate should be prepared to participate fully in Board activities, including attendance at, and active participation in, meetings of the Board, and not have other personal or professional commitments that would, in the Nominating and Corporate Governance Committee’s judgment, interfere with or limit such candidate’s ability to do so. Additionally, in determining whether to nominate a director for re-election, the Nominating and Corporate Governance Committee also considers the director’s past attendance at Board and committee meetings and participation in and contributions to the activities of the Board. The Nominating and Corporate Governance Committee has no stated specific minimum qualifications that must be met by a candidate for a position on our Board. The Nominating and Corporate Governance Committee does, however, believe it appropriate for at least one member of the Board to meet the criteria for an “audit committee financial expert” as defined by SEC rules, and for a majority of the members of the Board to meet the definition of “independent director” within the meaning of the applicable Nasdaq listing standards. Although the Board does not have a formal policy on diversity, the Nominating and Corporate Governance Committee gives due consideration to diversity in business experience, professional expertise, gender and nationality among the Board members because different points of view based on a variety of experiences contributes to effective decision making. In considering candidates, the Nominating and Corporate Governance Committee considers the entirety of each candidate’s credentials in the context of these standards.

 

 

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Information Concerning the Board of Directors and Committees

 

The Nominating and Corporate Governance Committee’s methods for identifying candidates for election to the Board (other than those proposed by the Company’s stockholders, as discussed below) include the solicitation of ideas for possible candidates from multiple sources, including members of the Board, our executives, individuals personally known to the members of the Board, our stockholders, and other research. The Nominating and Corporate Governance Committee also may select and compensate a third-party search firm to help identify potential candidates, if it deems it advisable to do so.

The Nominating and Corporate Governance Committee will consider nominees recommended by stockholders. Stockholders may submit nominations to the Nominating and Corporate Governance Committee in care of

Corporate Secretary, U.S. Concrete, Inc., 331 N. Main Street, Euless, Texas 76039. Any stockholder wishing to nominate a person for election to the Board must comply with the advance notice deadline and submission process for stockholder proposals contained in our bylaws.

The Nominating and Corporate Governance Committee will consider all candidates identified through the processes described above, whether identified by the Board or by a stockholder, and will evaluate each of them on the same basis.

As a part of its ongoing efforts, the Nominating and Governance Committee intends to continue to seek potential director nominees from a candidate pool that includes women and individuals from minority groups.

 

Compensation Committee Interlocks and Insider Participation

 

During 2020, the Compensation Committee was comprised of (i) Messrs. Rossi, Rayner, Sutherland from January 1, 2020 to May 14, 2020 and (ii) Messrs. Rossi, Penkar and Sutherland from May 14, 2020 to December 31, 2020. No member of the Compensation Committee has been an officer or employee of U.S. Concrete or any of its subsidiaries. During 2020, no member of the Compensation Committee had any material interest in a transaction involving the Company (except for the director compensation arrangements described below) or a material business relationship with, or any indebtedness to, the Company, other than the purchase of COVID-19 related masks from Rossi Group, LLC, for which Theodore P. Rossi, a member of our Board of Directors, serves as Chairman and Chief Executive Officer, as more fully described in “Certain Relationships and Related Transactions.” None of the Company’s executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, the executive officers of which served as a director of the Company or member of the Compensation Committee during 2020.

Communication with Board of Directors

 

Stockholders and other interested persons may communicate with our Board by sending their communication to U.S. Concrete, Inc. Board of Directors, c/o Corporate Secretary, 331 N. Main Street, Euless, Texas 76039. All such communications received by our Corporate Secretary will be delivered to the Chairman of the Board.

Company Leadership Structure

 

The Board of Directors is currently led by our Chairman, Michael D. Lundin. Non-management directors meet frequently in executive session without management before or following Board meetings. All members of the Board are elected annually.

Our Board believes it is in the best interests of the Company for one of our independent directors to serve as Chairman of the Board and therefore, we separate the roles of Chairman of the Board and Chief Executive Officer. Our Board believes that its optimal leadership structure may change over time to reflect our Company’s evolving needs, strategy and operating environment; changes in our Board’s composition and leadership needs; and other factors, including the perspectives of stockholders and other stakeholders. Our Board has the flexibility to determine the Board leadership structure best suited to the needs and circumstances of our Company and our Board.

 

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Information Concerning the Board of Directors and Committees

 

Our Board is composed of experienced and committed independent directors (with six of seven nominees being independent), and our Board committees have objective, experienced chairs and members. Our Board believes that these factors, taken together, provide for objective, independent Board leadership, and effective engagement with and oversight of management.

Our Board is committed to objective, independent leadership for our Board and each of its committees. Our Board views the objective, independent oversight of management as central to effective Board governance, to serving the best interests of our Company and our stockholders, and to executing our strategic objectives and creating long-term value. This commitment is reflected in our Company’s governing documents, our Bylaws, our Corporate Governance Guidelines, and the governing documents of each of the Board’s committees.

At least annually, our Board, in coordination with our Nominating and Corporate Governance Committee, deliberates on and discusses the appropriate Board leadership structure, including the considerations described above. Based on that assessment and on input from stockholders, for 2020 our Board believed that our current structure, with Mr. Pruitt as Chief Executive Officer and Mr. Lundin as Chairman of the Board, was the optimal leadership framework. We and our stockholders benefit from a Chief Executive Officer with deep experience in and knowledge of our industry, our Company, and its businesses, and a strong Chairman of the Board with robust, well-defined duties. Our Chairman of the Board, together with the other independent directors, instills objective independent Board leadership, and effectively engages and oversees management.

Risk Oversight

 

The Board of Directors provides oversight with respect to the Company’s risk assessment and risk management activities, which are designed to identify, prioritize, assess, monitor and mitigate material risks to the Company, including strategic, operational, compliance, data security, financial and compensatory risks. The Board administers this oversight function at the Board level, and through the Audit Committee and the Compensation Committee. The entire Board oversees the strategic, operational and compliance risks. The Audit Committee focuses on financial risks, including reviewing with management, the Company’s internal auditors and the Company’s independent auditors, the Company’s major financial risk exposures, the adequacy and effectiveness of accounting and financial controls, and the steps management has taken to monitor and control financial risk exposures. The Audit Committee also oversees the Company’s data privacy and network security risks and strategy. The Compensation Committee considers risks presented by the Company’s compensation policies and practices, as well as those related to succession and management development. The Audit Committee and Compensation Committee each report directly to our Board.

Code of Ethics

 

Pursuant to our Code of Ethics and Business Conduct, all employees (including our Named Executive Officers) who have, or whose immediate family members have, any direct or indirect financial or other participation in any business that competes with, supplies goods or services to, or is a customer of the Company, are required to disclose such matters to our Chief Executive Officer or General Counsel prior to transacting such business. Our employees are expected to make reasoned and impartial decisions in the workplace. Our Board members are also responsible for complying with our Code of Ethics and Business Conduct, which is in writing and is available on our website at www.us-concrete.com under Investor Relations — Corporate Governance. You may also obtain a written copy by making a request to our Corporate Secretary by mail at U.S. Concrete, Inc., 331 N. Main Street, Euless, Texas 76039 or by phone by calling (817) 835-4105. In the event that we amend or waive any of the provisions of the Code of Ethics and Business Conduct applicable to our principal executive, financial and accounting officers, we intend to disclose that action on our website, as required by applicable law. The information on our website is not incorporated by reference or otherwise made a part of this Proxy Statement.

 

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Information Concerning the Board of Directors and Committees

 

Human Capital Management

 

We believe our employees are our most important asset and are critical to our continued success. Our commitment to teamwork is what sets us apart. As of December 31, 2020, we had approximately 3,000 employees in the United States and Canada.

Our human capital strategy is grounded by our values and our employees. The execution of this strategy is overseen at the highest levels of our organization, from our Board of Directors and its Compensation Committee, which considers risks presented by the Company’s compensation policies and practices, as well as risks related to succession for senior management and management development. The Board also routinely reviews safety metrics and performance of the Company.

We focus significant attention on attracting and retaining talented and experienced individuals to manage and support our operations, and our management team routinely reviews employee turnover rates at various levels of the organization. Management also reviews employee engagement and satisfaction surveys to monitor employee morale and receive feedback on a variety of issues. We pay our employees competitively and offer a broad range of Company-paid benefits, which we believe are comparable with others in our industry and in the markets we serve.

We are committed to recruiting, hiring, developing, and supporting a diverse and inclusive workplace. Our management teams and all of our employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace. Our business is led by our guiding principles called C3– Courage, Compassion and Credibility. C3 guides everything that we do. We believe our commitment to living out our core values, actively prioritizing concern for employees’ well-being, supporting our employees’ career goals, offering competitive wages, and providing valuable fringe benefits aid in retention of our top-performing employees.

During fiscal 2020, in response to the COVID-19 pandemic, we implemented safety protocols and new procedures to protect our employees, their families, our customers, and our communities as an essential service. These protocols include complying with social distancing and other health and safety standards as required by federal, state, and local government agencies, taking into consideration guidelines of the Centers for Disease Control and Prevention and other public health authorities. In addition, we modified the way we conduct many aspects of our business to reduce the number of in-person interactions, including investing in the development of new processes with our proprietary software, Where’s My Concrete?. For example, we created contactless tickets for the delivery of our concrete at job sites and rolled out the ability for our ready-mixed drivers to clock in at the cab.

For additional information on our Human Capital Management, please refer to our Environment, Social and Governance (ESG) presentation, which is available under the investor relations section of our website at www.us-concrete.com. The information on our website is not incorporated by reference or otherwise made a part of this Proxy Statement.

 

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Report of the Audit Committee

 

REPORT OF THE AUDIT COMMITTEE

The following report shall not be deemed to be “soliciting material” or to be “filed with the SEC” or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference in such filing.

Oversight Function

 

The role of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities related to the integrity of the Company’s financial statements, the Company’s internal control over financial reporting, the Company’s compliance with legal and regulatory requirements, the qualifications and independence of the Company’s independent registered public accounting firm, audit of the Company’s financial statements, and performance of the Company’s internal audit function and the Company’s independent registered public accounting firm. The Audit Committee has the sole authority and responsibility to select, evaluate and, when appropriate, replace the Company’s independent registered public accounting firm.

Management of the Company has the responsibility for the presentation and integrity of the Company’s consolidated financial statements, for the appropriateness of the accounting principles and reporting policies that are used by the Company and for the establishment and maintenance of systems of disclosure controls and procedures and internal control over financial reporting. The Company’s former independent registered public accounting firm, Ernst & Young LLP, was responsible for auditing the Company’s consolidated financial statements and expressing an opinion on the fair presentation of those financial statements in conformity with accounting principles generally accepted in the United States, performing reviews of the unaudited quarterly financial statements and auditing and expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. In performing its functions, the Audit Committee acts only in an oversight capacity and necessarily relies on the work and assurances of the Company’s management and internal audit group.

As discussed above, the Audit Committee is responsible for monitoring and reviewing the Company’s financial reporting process. It is not the duty or responsibility of the Audit Committee to conduct auditing or accounting reviews or procedures. Members of the Audit Committee are not employees of the Company. Therefore, the Audit Committee has relied, without independent verification, on management’s representation that the consolidated financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States and on the representations of the independent auditors included in their report on the Company’s consolidated financial statements. The Audit Committee’s review does not provide its members with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations.

Approval of 2020 Financial Statements

 

During the first quarter of 2021, the Audit Committee reviewed and discussed with management U.S. Concrete’s audited financial statements as of and for the year ended December 31, 2020. In addition, the Audit Committee discussed with Ernst & Young LLP the matters required to be discussed by Statement on Auditing Standards No. 1301 (Communications with Audit Committees) adopted by the Public Company Accounting Oversight Board. The Audit Committee received and reviewed the written disclosures and the letter from Ernst & Young LLP required by the applicable requirements of the Public Company Accounting Oversight Board, and discussed with that firm its independence from U.S. Concrete. In addition, the Audit Committee concluded that Ernst & Young LLP’s provision of services that are not related to the audit of U.S. Concrete’s financial statements was compatible with that firm’s independence from U.S. Concrete.

 

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Report of the Audit Committee

 

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors of U.S. Concrete that the audited financial statements referred to above be included in U.S. Concrete’s Annual Report on Form 10-K for the year ended December 31, 2020 for filing with the Securities and Exchange Commission.

The Audit Committee:

Susan M. Ball, Chairman

Michael D. Lundin

Rajan C. Penkar

Colin M. Sutherland

 

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Director Compensation

 

DIRECTOR COMPENSATION

Director Retainers and Meeting Fees

 

During 2020, we paid our non-employee directors the following annual retainers quarterly in advance. Non-employee directors do not receive per meeting fees.

 

   

an annual retainer of $25,000 to the Lead Director of the Board (prorated for January 1, 2020 — May 14, 2020);

 

   

an annual retainer of $50,000 to the non-executive Chairman of the Board (prorated for May 14, 2020 — December 31, 2020);

 

   

an annual retainer of $100,000 to each non-employee member of the Board;

 

   

an annual retainer of $15,000 for the Chairman of the Audit Committee;

 

   

an annual retainer of $15,000 for the Chairman of the Compensation Committee;

 

   

an annual retainer of $15,000 for the Chairman of the Nominating and Corporate Governance Committee; and

 

   

an annual retainer of $5,000 for each member (non-chair) of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

Director Equity Compensation

 

We generally grant annual equity awards to non-employee directors in October as part of their remuneration for services to us. In 2020, each non-employee director (other than the Chairman of the Board) received a grant of restricted stock units (“RSUs”) with a grant date fair value of approximately $78,120 for the period from October 1, 2020 to May 13, 2021; the Company is moving to a grant date for non-employee directors to occur immediately following the election of directors at the annual meeting of stockholders. Mr. Lundin (Chairman) received a grant of RSUs with a grant date fair value of approximately $124,992 for the period October 1, 2020 to May 13, 2021. As a result, on October 1, 2020, we granted 2,705 RSUs to each of Messrs. Cellar, Penkar, Rossi, Sandbrook and Sutherland and Ms. Ball and 4,328 RSUs to Mr. Lundin. The number of shares granted was based on the closing price of our common stock on the Nasdaq stock market on October 1, 2020. The awards vest in one installment the earlier of (i) the date of the Company’s 2021 annual meeting of stockholders or (ii) May 13, 2021, provided the award recipient remains a member of the Board through the applicable vesting date. In addition, on June 10, 2020, we granted 549, 915 and 915 RSUs to each of Messrs. Lundin, Penkar, and Sandbrook, respectively in consideration of their services as directors and, in the case of Mr. Lundin, as Chairman of our Board, for the period from May 14, 2020 through September 30, 2020. The number of shares granted was based on the closing price of our common stock on the Nasdaq stock market on October 1, 2019 with the number of shares granted prorated for the four and one half months of service. One-third of the June 10, 2020 awards vested on July 1, 2020 and two-thirds vested on October 1, 2020.

Director Stock Ownership Guidelines

 

In 2016, our Board of Directors adopted stock ownership guidelines that apply to our non-employee directors. Subject to transition periods and other provisions, the guidelines generally require that each non-employee director beneficially hold shares of our stock with a value at least equal to three times the annual cash retainer paid to non-employee directors. All non-employee directors were in compliance with the guidelines as of December 31, 2020, subject to transition periods. We also have stock ownership guidelines for our executive officers under Section 16, including each of our Named Executive Officers, as further described in “Compensation Discussion and Analysis — Stock Ownership Guidelines.”

 

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Director Compensation

 

Other Director Compensation

 

We do not pay any additional compensation to our employees for serving as directors. We reimburse all directors for out-of-pocket expenses they incur in connection with attending Board and committee meetings or otherwise in their capacity as directors.

The table below summarizes the compensation we paid to our non-employee directors during the year ended December 31, 2020.

2020 DIRECTOR COMPENSATION TABLE

 

  Name(1)

 

  

Fees Earned or
Paid in Cash ($)

 

    

RSU Awards
($)
(5)

 

    

 

RSU
Awards
Grant Date

 

    

All Other
Compensation ($)

 

    

Total ($)

 

 

Susan M. Ball

 

  

 

111,250      

 

  

 

78,120

(4) 

  

 

10/1/2020    

 

  

 

—            

 

  

 

189,370    

 

Kurt M. Cellar

 

  

 

115,000      

 

  

 

78,120

(4) 

  

 

10/1/2020    

 

  

 

—            

 

  

 

193,120    

 

Michael D. Lundin

 

  

 

154,375      

 

  

 

 

13,039

 

124,993

(3) 

 

(4) 

  

 

 

6/10/2020    

 

10/1/2020    

 

 

 

  

 

—            

 

  

 

292,407    

 

Rajan C. Penkar

 

  

 

68,750      

 

  

 

 

21,731

 

78,120

(3) 

 

(4) 

  

 

 

6/10/2020    

 

10/1/2020    

 

 

 

  

 

—            

 

  

 

168,601    

 

Theodore P. Rossi

 

  

 

118,125      

 

  

 

78,120

(4) 

  

 

10/1/2020    

 

  

 

—            

 

  

 

196,245    

 

William J. Sandbrook(2)

 

  

 

62,500      

 

  

 

 

21,731

 

78,120

(3) 

 

(4) 

  

 

 

6/10/2020    

 

10/1/2020    

 

 

 

  

 

337,500        

 

  

 

499,851    

 

Colin M. Sutherland

 

    

 

110,000      

 

  

 

78,120

(4) 

  

 

10/1/2020    

 

  

 

—            

 

  

 

188,120    

 

 

1.

Mr. Pruitt was a director and Named Executive Officer during 2020. Mr. Pruitt did not receive any compensation for services as a director.

2.

Mr. Sandbrook was a director, Named Executive Officer and consultant during 2020. Mr. Sandbrook did not receive any additional compensation for service as a director through April 3, 2020. The compensation received by Mr. Sandbrook for his service as director from April 3, 2020 through December 31, 2020 is included in the table above. The compensation received by Mr. Sandbrook for his consulting services from April 3, 2020 through December 31, 2020 following his retirement is included in the table above in the “All Other Compensation” column. For more information about Mr. Sandbrook’s consulting arrangement, please see “Certain Relationships and Related Transactions.” Information about his compensation received while serving as a Named Executive Officer through April 3, 2020 is included in the 2020, 2019 and 2018 Summary Compensation Table. Mr. Sandbrook is not standing for re-election at the Annual Meeting and will depart the Board upon the expiration of his current term at the Annual Meeting.

3.

The amounts represent the aggregate grant date fair value of RSUs computed in accordance with ASC 718. The aggregate grant date fair value of the June 10, 2020 RSUs was equal to the number of RSUs granted multiplied by the closing price of our common stock on the Nasdaq stock market on June 10, 2020, which was $23.75 per share.

4.

The amounts represent the aggregate grant date fair value of RSUs computed in accordance with ASC 718. The aggregate grant date fair value of the October 1, 2020 RSUs was equal to the number of RSUs granted multiplied by the closing price of our common stock on the Nadsaq stock market on October 1, 2020, which was $28.88 per share.

 

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Director Compensation

 

5.

The chart below shows the aggregate number of outstanding RSU awards held by each non-employee director as of December 31, 2020.

 

Director

 

 

Number of Shares of
Common Stock
Subject to
Outstanding RSU
Awards

 

 

Ball

2,705

 

Cellar

2,705

 

Lundin

4,328

 

Penkar

2,705

 

Rossi

2,705

 

Sandbrook

2,705

 

Sutherland

2,705

 

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Executive Officers

 

EXECUTIVE OFFICERS

The following table provides information about our executive officers as of March 15, 2021. Mr. Pruitt is a nominee to serve as a member of our Board of Directors, and his biography is set forth above under the heading “Proposal No. 1 Election of Directors.”

 

NAME

      AGE        POSITION(S) HELD

Herbert A. Burton

 

45 

   Regional Vice President and General Manager — U.S. Concrete — West

Gibson T. Dawson

 

55 

   Vice President, Corporate Controller and Chief Accounting Officer

Matthew Emmert

 

46 

   Regional Vice President and General Manager — U.S. Concrete — East

Paul M. Jolas

 

56 

   Senior Vice President, General Counsel and Corporate Secretary

John E. Kunz

 

56 

   Senior Vice President and Chief Financial Officer

Philip Daren Lesley

 

54 

   Vice President — U.S. Concrete Aggregates

Mark B. Peabody

 

63 

   Vice President — Human Resources

Ronnie Pruitt

 

50 

   President and Chief Executive Officer

Jeffrey W. Roberts

 

54 

   Regional Vice President and General Manager — U.S. Concrete — Central

 

 

Herbert A. Burton has served as the Vice President and General Manager for U.S. Concrete’s West Region since March 2017 with responsibility for five business units: Central Concrete Supply Co., NorCal Materials; Right Away Redy Mix; Rock Transport and Westside Concrete Materials. From 2015 to March 2017, Mr. Burton served as Vice President of Operations and Sustainability for Central Concrete and Right Away Redy Mix, responsible for the management of 16 ready-mix plants, fleet and plant maintenance, safety, environmental management, customer service, inside sales and purchasing. Prior to that, from 2011 to 2015, he served as Director of Project Management for Central Concrete. From 1999 to 2011, Mr. Burton held various positions for Central Concrete, including Project Manager, Sales Manager and Plant Manager. He started his career working in various operational positions including mixer driver, batch operator and dispatcher. Mr. Burton holds the position of Vice Chair on the executive board of Calcima and currently serves on the Board of Directors of the NRMCA. In June 2011, Mr. Burton filed a petition for personal bankruptcy under Chapter 7 of the federal bankruptcy laws, which was subsequently discharged in September 2011.

 

 

 

 

Gibson T. Dawson has served as Vice President, Corporate Controller and Chief Accounting Officer since February 2019. Mr. Dawson joined the Company in August 2017 as Corporate Controller. From May 2007 to August 2017, Mr. Dawson served as Vice President, Corporate Controller for PFSweb, Inc., a global commerce services company. Prior to assuming such role, Mr. Dawson served as Director, Corporate Controller for PFSweb from 1999 to 2007. From 1996 to 1998, Mr. Dawson was Controller for Independent National Distributors, Inc. Prior to that, Mr. Dawson spent almost nine years with the international public accounting firm of KPMG where he rose to the position of senior manager in the assurance practice. Mr. Dawson received his B.B.A. in Accounting from Baylor University and is a Certified Public Accountant.

 

 

 

 

Matthew Emmert has served as the Vice President and General Manager of U.S. Concrete’s East Region since February 2019, responsible for five business units: Colonial Concrete in New Jersey; Eastern Concrete Materials in New Jersey and Philadelphia; Ferrara West in New Jersey; U.S. Concrete New York and Superior Concrete Materials in Washington D.C. and Northern Virginia. From May 2016 to February 2019, Mr. Emmert served as Vice President and General Manager of the Company’s New Jersey and Philadelphia operations. Mr. Emmert first joined U.S. Concrete as Operations Manager in December 2015, overseeing the Company’s New Jersey operations. Prior to joining the Company, from March 2005 to November 2015, he served as General Manager at Ralph Clayton & Sons, overseeing 10 ready-mixed concrete facilities, three masonry block plants and a concrete recycling facility. Mr. Emmert also held various other concrete operation related jobs with Ralph Clayton & Sons from September 1999 to February 2005. Prior to joining the concrete industry, Mr. Emmert worked for Millington Quarry, Inc. from 1997 to 1999.

 

 

 

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Executive Officers

 

 

Paul M. Jolas has served as Senior Vice President, General Counsel and Corporate Secretary of U.S. Concrete, Inc. since February 2016. From August 2013 until February 2016, Mr. Jolas served as our Vice President, General Counsel and Corporate Secretary. Prior to joining U.S. Concrete, Inc., Mr. Jolas served as Executive Vice President, Chief Legal Officer and Corporate Secretary for Regency Energy Partners LP (NYSE: RGP) commencing in September 2009. Mr. Jolas has more than 31 years of legal experience, including extensive experience with corporate, securities, corporate governance, mergers and acquisitions, finance and transactional matters. Prior to joining Regency, he served in various legal roles at Dallas-based Trinity Industries, Inc. (NYSE: TRN) from June 2006 through September 2009, most recently as Vice President, Deputy General Counsel and Corporate Secretary. Prior to his work at Trinity, he served as Senior Regional Counsel for the Texas division of KB Home (NYSE: KBH) from 2004 to 2006; from 1996 to 2004, he served as General Counsel, Executive Vice President and Corporate Secretary for Radiologix, Inc. (AMEX: RGX); and from 1989 to 1996, as a member of the corporate securities group for Haynes and Boone, LLP. Mr. Jolas received his Bachelor of Arts degree in Economics from Northwestern University and a Juris Doctor degree from Duke University School of Law.

 

 

 

 

John E. Kunz has served as our Senior Vice President and Chief Financial Officer since October of 2017. From March 2015 to September 2017, Mr. Kunz served as Vice President-Controller & Principal Accounting Officer for Tenneco Inc. (“Tenneco”), an automotive parts company listed on the New York Stock Exchange. Prior to assuming such role, Mr. Kunz served as Vice President-Treasurer and Tax/President-Finance Subsidiaries for Tenneco, from 2006 to 2015, and Vice President and Treasurer for Tenneco, from 2004 to 2006. From 1999 to 2004, Mr. Kunz worked at Great Lakes Chemical Corporation (“Great Lakes”), where he rose through positions of increasing responsibility to become Vice President and Treasurer. Prior to joining Great Lakes in 1999, Mr. Kunz was director of corporate development at Weirton Steel Corporation, where he also held prior positions in capital planning, business development and financial analysis. Prior to that, Mr. Kunz spent four years with the international public accounting firm of KPMG. Since March 2011, Mr. Kunz has served as a director of Wabash National Corporation. Mr. Kunz received his B.B.A. from the University of Notre Dame and a Master of Management from the J.L. Kellogg Graduate School of Management at Northwestern University.

 

 

 

 

Philip Daren Lesley has served as Vice President of U.S. Concrete’s Aggregates Division, since April 2020. Mr. Lesley was instrumental in developing the Company’s Aggregates division, building the Company’s profile into a significant player of heavy building materials sector. Mr. Lesley joined the Company in December 2017 as General Manager of Aggregate Operations and Trucking at Ingram Concrete, LLC. Prior to joining the Company, he held the Vice President of Private Construction position with Mario Sinacola Companies. From 1996-2010, Mr. Lesley was General Sales Manager of Cement and Aggregates at Texas Industries, Inc. (TXI). Prior to his time at TXI, he held various positions with Gifford Hill & Co Inc. and Apac-Texas, Inc. Mr. Lesley holds a Bachelor of Science in Accounting from Northeastern State University. He has held positions with the Cement Council of Texas and Southwest Cement Shippers Group.

 

 

 

 

Mark B. Peabody has served as our Vice President — Human Resources since May 2012. Prior to joining the Company in 2012, Mr. Peabody served as Vice President of Human Resources and Risk Management for Mario Sinacola & Sons Excavating, Inc. since 2008. From 2006 through 2008, Mr. Peabody served as Senior Vice President, Corporate Human Resources for Hanson Building Materials North America, and from 2001 through 2006, he served as Chief Counsel, Labor & Employment for Hanson. From 1994 through 2001, Mr. Peabody served as Associate General Counsel and Senior Labor Attorney for PECO Energy Company. From 1992 through 1994, he served as an attorney for Reed Smith LLP. From 1987 through 1991, Mr. Peabody served in the United States Air Force Judge Advocate General’s Corp. He retired from the Air Force Reserve as a Lt. Colonel after serving for 25 years. Mr. Peabody received his Bachelor of Arts degree in Business from Rollins College and a Juris Doctor degree from The University of Pittsburgh School of Law. Mr. Peabody later earned his Master of Laws (LL.M.) degree in Labor Law from the Georgetown University Law Center.

 

 

 

 

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Executive Officers

 

 

Jeffrey W. Roberts has served as our Vice President and General Manager – Central Region since February 2019. From 2006 to February 2019, Mr. Roberts served as the Vice President and General Manager – Ingram Concrete, LLC, or Ingram. Mr. Roberts is a 1989 graduate of Oklahoma State University receiving a Bachelor of Business Administration Degree in Management/ Marketing and minor field of study in Statistics. From 1994 through 2006, Mr. Roberts held various positions for Ingram, including Vice President of Sales and Operations from 2003 through 2006, Sales and Operations Manager from 1997 through 2003, and Quality Control Manager from 1994 through 1997. From 1993 to 1994, he served as the Quality Control Manager for Campbell Concrete. From 1990 to 1993, Mr. Roberts served as Technical Sales Representative for Cormix Construction Chemicals (formerly Gifford Hill Chemical), with sales responsibility in southeast Texas. From 1989 to 1990, he served as Sales Representative and Quality Control Assistant for Gifford-Hill Concrete in Ft. Worth, Texas.

 

 

 

 

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Table of Contents

Compensation Discussion and Analysis

 

COMPENSATION DISCUSSION AND ANALYSIS

The following Compensation Discussion and Analysis describes the material elements of compensation for our executive officers identified in the Summary Compensation Table (the “Named Executive Officers” or “NEOs”). For 2020, the following individuals constituted our “Named Executive Officers”. The titles shown below were their titles as of December 31, 2020:

 

 

William J. Sandbrook(1)

  

 

Director, Former Chairman and Chief Executive Officer

 

Ronnie Pruitt

  

 

President, Chief Executive Officer and Director

 

John E. Kunz

  

 

Senior Vice President and Chief Financial Officer

 

Paul M. Jolas

  

 

Senior Vice President, General Counsel and Corporate Secretary

 

Jeffrey W. Roberts

  

 

Regional Vice President and General Manager — U.S. Concrete — Central

 

Matthew Emmert

  

 

Regional Vice President and General Manager — U.S. Concrete — East

 

  1.

Mr. Sandbrook retired as our Chief Executive Officer effective April 3, 2020. Mr. Sandbrook is not standing for re-election at the Annual Meeting and will depart the Board upon the expiration of his current term at the Annual Meeting.

OUR 2020 PERFORMANCE

Our 2020 consolidated revenue declined by $113.0 million, or 7.6%, year-over-year, primarily due to lower sales of ready-mixed concrete, partially offset by record sales of aggregate products. As our business is seasonal and subject to adverse weather, our results in both 2020 and 2019 were negatively impacted by inclement weather in various regions and during various periods of the year, while 2020 was also impacted by the regional effects of the COVID-19 pandemic. Consolidated revenue was $1.4 billion for 2020 and we generated net income of $24.5 million. In 2020 we reported Total Adjusted EBITDA of $192.9 million, and our diluted earnings per share was $1.53.

SUMMARY OF COMPENSATION PROGRAM AND ELEMENTS

OUR COMPENSATION-SETTING PROCESS

 

   

Reports on officers’ and key employees’ compensation

 

   

Financial reports on year-to-date performance versus budget and prior year performance

 

   

Calculations and reports on levels of achievement of individual and corporate annual performance objectives

 

   

Information regarding compensation levels at peer groups of companies

 

   

Management’s proposals for salary, bonus and long-term incentive compensation

OUR EXECUTIVE COMPENSATION PHILOSOPHY AND POLICIES

 

   

Competitiveness

 

   

Support Business Objectives, Strategy and Values

 

   

Pay-for-Performance

 

   

Emphasize Stock Ownership

 

   

Individual Performance

 

   

Integrated Approach

 

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Compensation Discussion and Analysis

 

THE ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

 

   

Annual Base Salaries

 

   

Annual Cash Bonuses

 

   

Long-Term Equity Incentives

 

   

Non-Qualified Deferred Compensation Plan

 

   

Matching Contributions under our 401(k) Plan

 

   

Health and Welfare Benefits

 

   

Severance Benefits

POST-EMPLOYMENT ARRANGEMENTS FOR OUR NAMED EXECUTIVE OFFICERS

Certain executive officers, including each of our NEOs, entered into executive severance agreements with the Company. Each executive severance agreement provides for severance payments and other benefits following termination of the applicable executive’s employment under various scenarios.

The Compensation-Setting Process

 

Overview

Our executive compensation program is administered by our Compensation Committee (“Compensation Committee” or “Committee”). The role of the Committee is to provide oversight and direction to ensure the establishment of executive compensation programs that are competitive in nature, enable us to attract top talent, and align the interests of our executive officers and our stockholders. The Committee is supported by our Vice President — Human Resources in the design, review and administration of our executive compensation programs and receives the input of our Chief Executive Officer regarding the compensation of our executive officers, other than himself. The Committee has engaged a third party compensation consulting firm, Willis Towers Watson, a nationally recognized executive compensation consulting firm, to advise on executive officer compensation, evaluate Company practices in relation to other companies, and provide associated recommendations.

The Compensation Committee meets as often as it determines is necessary to perform its duties and responsibilities related to (i) compensation of the Company’s executives and other key employees, (ii) the fees and retainers paid to non-management directors of the Company, and (iii) the Company’s employee benefit plans and practices. The Committee typically meets three to four times a year with our Chief Executive Officer, Vice President — Human Resources, and General Counsel, and when appropriate and as needed, outside compensation consultants. The Committee also meets as needed in executive sessions without management, including at least annually, to evaluate the performance of our Chief Executive Officer, to determine his bonus for the prior calendar year, to set his base salary for the then-current calendar year, and to consider and approve any grants to him of equity incentive compensation.

The Committee works with management to establish the agenda for each meeting and typically receives and reviews materials in advance of each meeting. These materials include information that our management believes will be helpful to the Committee, as well as materials that the Committee has specifically requested. Depending on the agenda for the particular meeting, this information may include:

 

   

reports on officers’ and key employees’ compensation;

 

   

financial reports on year-to-date performance versus budget and prior year performance;

 

   

calculations and reports on levels of achievement of individual and corporate annual performance objectives;

 

   

information regarding compensation levels at peer groups of companies; and

 

   

management’s proposals for salary, bonus and long-term incentive compensation, other than for the Chief Executive Officer.

 

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Compensation Discussion and Analysis

 

Management’s Role in the Compensation-Setting Process

Our management, especially our Chief Executive Officer and Vice President — Human Resources, plays a key role in the compensation-setting process for the executive officers, except with respect to the compensation of the Chief Executive Officer. The most significant aspects of management’s role are:

 

   

recommending salary adjustments and equity compensation awards;

 

   

recommending strategic objectives and business performance targets for approval by the Compensation Committee in connection with the annual incentive compensation plan; and

 

   

evaluating employee performance.

At the Committee’s request, our Chief Executive Officer participates in Committee meetings to provide:

 

   

information regarding our strategic objectives;

 

   

his evaluations of the performance of all executive officers; and

 

   

compensation recommendations as to all executive officers (excluding himself).

The Chief Executive Officer considers all relevant information and provides recommendations to the Committee regarding compensation for review, discussion and approval for all executive officers with the exception of himself. While the Committee considers the recommendation of our Chief Executive Officer, the Committee has the ultimate authority in making compensation decisions for the executive officers. The Committee reviews the performance and establishes appropriate compensation for the Chief Executive Officer in executive session without the Chief Executive Officer present.

The Compensation Committee has designated our Chief Executive Officer, Chief Financial Officer and Vice President — Human Resources, collectively, as the “Administrator” of our short-term incentive plan, which is our annual cash bonus plan. The Compensation Committee chose those individuals because of their access to financial information and individual performance criteria necessary to administer the plan. The Administrator has the authority to interpret the plan, to interpolate performance levels and award payouts outside of or between the designated benchmarks, as well as take all steps and make all determinations in connection with the short-term incentive plan and bonus payouts as it deems necessary. All incentive award payouts must ultimately be approved by the Committee.

Executive Compensation Philosophy and Policies

 

We are focused on building and maintaining a sustainable business model that consistently delivers superior returns to our stockholders. To be successful, we must attract, motivate, retain and reward key talent to provide the needed leadership capabilities to develop and execute our business strategy. Our compensation philosophy and approach are designed to support these objectives.

Our compensation philosophy is to provide competitive market compensation opportunities with an emphasis on performance-based variable pay. This “pay-for-performance” approach is reflected in the compensation package of all executive officers.

Our primary external market reference point for our market analysis is the 50th percentile. Our Compensation Committee uses the 50th percentile because it believes that is the appropriate level to attract and retain executive talent. Coupled with the opportunity to earn higher amounts commensurate with performance, the Committee believes high performing executives are given appropriate incentives and rewards for performance that result in improved stockholder value.

It is important to note that the external competitive market data serves as just one point of reference for the Committee. The total compensation packages for executives may vary materially from the benchmark data based on several factors, including individual performance, Company and business unit performance, tenure at the Company, retention needs, experience, strategic impact, and internal pay equity.

 

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Compensation Discussion and Analysis

 

All components of compensation for executive officers and key management are reviewed annually to ensure consistency with our compensation philosophy and to verify that the overall level of compensation is competitive. We use the following principles in the design and administration of our executive compensation program:

 

   

Competitiveness — Our compensation programs are designed to ensure we can attract, motivate and retain the talent needed to lead and grow the business. In 2020, targets for total cash compensation (base salary and short-term incentives) were generally set at the 50th percentile levels of our peer group.

 

   

Support Business Objectives, Strategy and Values — Ultimately our compensation program is designed to drive the achievement of short and long-term business objectives, support the creation of long-term value for our stockholders, and promote and encourage behavior consistent with our core values and guiding principles.

 

   

Pay-for-Performance — While we generally establish target long-term incentive award levels around the 50th and up to the 75th% (in limited circumstances) percentile levels of our peer group for target level performance, our plans provide the opportunity for significantly greater rewards for outstanding performance. At the same time, long-term incentive plan performance that does not meet performance targets is not rewarded.

 

   

Emphasize Stock Ownership — Our compensation programs encourage an ownership mentality and align the long-term financial interest of our executives with those of our stockholders. In addition, we have formal stock ownership guidelines for our NEOs and directors.

 

   

Individual Performance — In addition to Company-wide and business unit financial measures, our annual incentive program emphasizes individual performance and the achievement of personal objectives.

 

   

Integrated Approach — We look at compensation in total and strive to achieve an appropriate balance of immediate, annual and long-term compensation components, with the ultimate goal of aligning executive compensation with the creation of long-term stockholder value.

We believe that we offer a work environment in which executive employees are allowed to use their abilities to achieve personal and professional satisfaction. However, we also understand that our executive employees have a choice regarding where they pursue their careers, and the compensation we offer plays a significant role in their decisions to choose to remain with us. We believe that our compensation principles will reward and encourage our management to deliver increasing stockholder value over time and help us to attract and retain top executive talent.

Internal Pay Equity

In implementing our compensation philosophy, the Committee also compares our Chief Executive Officer’s total compensation to the total compensation of the other Named Executive Officers. However, the Committee has not established a targeted level of difference between the total compensation of the Chief Executive Officer and the median total compensation level for the next lower tier of management. The Committee also considers internal pay equity among the other Named Executive Officers, and in relation to the next lower tier of management, in order to maintain compensation levels that are consistent with the individual contributions and responsibilities of those officers.

Stockholder Say-on-Pay Votes

At our 2020 Annual Meeting, of those stockholders voting on the matter, 95.30% voted to approve our executive compensation on an advisory basis. The Compensation Committee believes this affirms stockholders’ support of our approach to executive compensation and, as a result, did not materially change its approach in fiscal 2020. The Compensation Committee will consider the outcome of the Company’s future say-on-pay votes when making future compensation decisions for the Named Executive Officers.

 

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Compensation Discussion and Analysis

 

Compensation Consultants and Competitive Benchmarking

Compensation Consultants. As in prior years, the Compensation Committee engaged Willis Towers Watson to analyze our current compensation program to ensure that the Company’s executive, key employee and director compensation programs were:

 

   

Performance-Based. Designed to be performance-based and maximize stockholder value creation.

 

   

Aligned with Strategy and Culture. Aligned with the Company’s business strategy and corporate culture.

 

   

Market Competitive. Competitive with the market in order to attract, engage, reward and retain executive and key talent.

In connection therewith, Willis Towers Watson:

 

   

had multiple conversations with the Chairman of our Compensation Committee, Chief Executive Officer and our Vice President — Human Resources regarding 2020 compensation;

 

   

advised the Compensation Committee with respect to the review and selection of our 2020 peer group; and

 

   

advised the Compensation Committee regarding the design, implementation and valuation of our long-term equity incentive awards and respective performance metrics for 2020.

The Compensation Committee assessed the independence of Willis Towers Watson pursuant to applicable SEC and Nasdaq rules and concluded that Willis Towers Watson’s work for the Compensation Committee does not raise any conflict of interest.

For 2020, we also subscribed to an on-line compensation service available through the Economic Research Institute (“ERI”). ERI compiles a robust database on job competencies, cost-of-living increases and executive compensation surveys. These three databases are used to help gauge the competitiveness of our 2020 salaries and executive compensation practices.

Competitive Benchmarking. Our compensation philosophy generally results in the establishment of total direct compensation (base annual salary, target bonus opportunity and long-term incentives) that target around the 50th percentile of market for executives in similar positions. The Committee does not employ a formulaic approach in setting any aspect of total compensation. The Committee has the flexibility to increase compensation when either hiring new executives who have significant industry experience or for existing executives who demonstrate outstanding performance.

We compete against companies in many industries for executive talent. Because we believe that our benchmark peer group does not necessarily represent all of the companies that may be direct competitors for executive talent, we also rely upon general industry national survey data of companies which are in similar industries and of similar revenue size. This general industry data is collected and prepared for us by Willis Towers Watson and excluded companies in the finance, health care and technology industries.

During 2020, the Committee did not make any changes to the Company’s peer group.

 

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Compensation Discussion and Analysis

 

The Committee agreed on the following peer group for 2020:

 

 

Company

 

  

 

Primary Industry

 

  

 

Primary Segment and GICS Code

 

   

Compass Minerals International, Inc.

 

  

Metals and Mining

 

  

Diversified Metals and Mining (15104020)

 

   

Vulcan Materials Company

 

  

Construction Materials

 

  

Stone Materials (15102010)

 

   

Martin Marietta Materials Inc.

 

  

Construction Materials

 

  

Stone Materials (15102010)

 

   

Gibraltar Industries, Inc.

 

  

Building Products

 

  

Building Products (20102010)

 

   

Great Lakes Dredge & Dock Corporation

 

  

Construction and Engineering

 

  

Heavy Construction (20103010)

 

   

Granite Construction Incorporated

 

  

Construction and Engineering

 

  

Heavy Construction (20103010)

 

   

Eagle Materials Inc.

 

  

Construction Materials

 

  

Concrete (15102010)

 

   

Cornerstone Building Brands, Inc. (formerly NCI Building Systems, Inc.)

 

  

Construction Materials

 

  

Heavy Construction (20103010)

 

   

U.S. Silica Holdings, Inc.

 

  

Oil and Gas Equipment and Services

 

  

Heavy Construction (20103010)

 

   

Aegion Corporation

 

  

Construction and Engineering

 

  

Heavy Construction (20103010)

 

   

Summit Materials, Inc.

 

  

Construction Materials

 

  

Stone Materials (15102010)

 

   

American Woodmark Corporation

 

  

Building Products

 

  

Building Products (20102010)

 

   

Simpson Manufacturing Co., Inc.

 

  

Construction and Engineering

 

  

Heavy Construction (20103010)

 

   
Armstrong World Industries, Inc.    Building Products    Building Products (20102010)

The Committee believes this group of companies is an appropriate peer group for compensation setting purposes because their revenues, industry and geographic markets are most similar to the Company and provide a reasonable point of reference for comparing like positions and scope of responsibility for purposes of executive compensation. It is the Committee’s view that (i) we compete for executive officers and employees from companies that are represented by this group, and (ii) investors consider the performance of these public companies when deciding to make an investment in the construction materials sector. Among this peer group, the Company ranked near the median in terms of revenue.

Given the changing nature of our industry and the construction industry, the Compensation Committee expects that the companies used in the benchmarking process and peer group may vary from year-to-year.

Components of Executive Compensation

 

The primary components of our executive compensation programs are as follows:

 

   

Annual Base Salaries. This fixed component of pay is based on an individual’s particular skills, responsibilities, experience and performance. The executive officers, as well as other salaried employees, are eligible for annual increases based on performance, experience and/or changes in job responsibilities.

 

   

Annual Cash Bonuses. This variable cash component of pay has historically been based on Company performance, business unit performance, and an individual’s achievement of specified goals measured over a performance period of one year. As disclosed below, our annual cash bonuses for 2020 were determined exclusively on Company performance as a result of the Compensation Committee’s desire to tie incentive compensation to Company profitability.

 

   

Long-Term Equity Incentives. This variable equity component of pay is based on an individual’s compensation grade level. For 2020, we granted awards of restricted stock to all executives and key employees with 60% of the awards vesting annually over a three-year period (time-based vesting) and the remaining 40% vesting upon attainment of specified performance measures (performance-based vesting). The performance-based vesting portion of the awards pay out at up to 200% of the number of performance shares originally granted.

 

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Compensation Discussion and Analysis

 

   

Non-Qualified Deferred Compensation Plan. All executive officers and certain key employees are eligible to participate in a non-qualified deferred compensation plan under which they may defer up to 75% of their base compensation and 75% of their annual incentive compensation. There is no Company match for contributions to the non-qualified deferred compensation plan.

 

   

Matching Contributions under our 401(k) Plan. The Company maintains a defined contribution 401(k) plan for employees, including executive officers, meeting various employment requirements. Eligible employees may contribute amounts up to the lesser of 60% of their annual compensation or the maximum amount Internal Revenue Service regulations permit. From January 1, 2020, through April 30, 2020, we matched 100% of the first 5% of employee contributions; effective May 1, 2020, due to the COVID-19 pandemic, the Committee elected to suspend the Company match for the remainder of 2020.

 

   

Health and Welfare Benefits. All executive officers are eligible to participate in health and welfare benefit programs that are available to substantially all non-union employees which provide for medical, dental, vision, basic life, and disability insurance needs. We do not offer any post-employment retiree health or welfare benefits.

 

   

Severance Benefits. We have entered into executive severance agreements with each of our NEOs, which provide the NEOs with varying severance compensation and benefits if their employment is terminated in a qualifying termination.

We use each element of compensation to satisfy one or more of our stated compensation objectives. The Compensation Committee’s goal is to achieve the appropriate balance between short-term cash rewards for achievement of annual financial performance targets and long-term incentives to promote the achievement of sustained value over the longer term. In establishing compensation for executives, the Compensation Committee considers a number of factors including:

 

   

The executive’s job responsibility;

 

   

Individual contributions and performance;

 

   

Level of experience;

 

   

Personal compensation history;

 

   

Criticality to the business; and

 

   

Peer company data.

Analysis of Our 2020 Executive Compensation Program

 

Base Salary

Our Compensation Committee’s general approach is to determine base salaries by evaluating (i) the levels of responsibility, prior experience and breadth of knowledge of the executive, (ii) internal pay equity issues, and (iii) external pay practices. The Committee reviews executive salaries annually based on a variety of factors, including individual scope of responsibility and accountability, individual performance, time with the Company and experience, strategic impact of the position, general levels of market salary increases, retention concerns, peer group data, and our overall financial results. The Committee generally grants salary increases within a pay-for-performance framework. The Committee assesses performance for base salary purposes based on goal accomplishments, with such goals being set by supervisors, or in the case of the Chief Executive Officer, by the Board.

 

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In 2020, we did not increase base salaries for any of our employees (other than in connection with promotions), including our Named Executive Officers, due to the impact of the COVID-19 pandemic, other than for Mr. Pruitt, whose salary increased to $775,000 in connection with his appointment as Chief Executive Officer on April 3, 2020. The 2020 base salaries for the NEOs were as follows:

 

 

  Name

 

  

 

2020 Base Salary ($)

 

    

 

Increase (%)

 

 

 

Ronnie Pruitt

  

 

 

 

775,000       

 

 

  

 

 

 

46.1       

 

 

 

William J. Sandbrook(1)

  

 

 

 

900,000       

 

 

  

 

 

 

0.0       

 

 

 

John E. Kunz

  

 

 

 

455,400       

 

 

  

 

 

 

0.0       

 

 

 

Paul M. Jolas

  

 

 

 

404,875       

 

 

  

 

 

 

0.0       

 

 

 

Jeffrey W. Roberts

  

 

 

 

340,000       

 

 

  

 

 

 

0.0       

 

 

 

Matthew Emmert

  

 

 

 

320,000       

 

 

  

 

 

 

0.0       

 

 

 

1.

Mr. Sandbrook retired as our Chief Executive Officer effective April 3, 2020.

Annual Cash Bonus — 2020 Annual Incentive Plan

Our Compensation Committee typically awards cash bonuses to executive officers on an annual basis. For 2020, the Committee adopted the 2020 Annual Incentive Plan (the “2020 Plan”), a short-term cash incentive plan for salaried employees, including all of our executive officers. The purpose of the 2020 Plan was to attract, retain, motivate and reward team members for successful Company, business unit and individual performance, with rewards that were commensurate with the level of performance attained. The cash bonus award is intended to be a significant part of an executive officer’s total compensation package.

Performance Metric Selected. Our Compensation Committee periodically reviews the appropriateness of the performance measures used in our incentive plans (including the 2020 Plan), the degree of difficulty in achieving the targets based on these measures, as well as certain strategic and nonfinancial objective criteria. In February 2020, the Compensation Committee again selected Total Adjusted EBITDA as the performance measure used for determining whether bonuses would be paid under the 2020 Plan. The Committee selected Total Adjusted EBITDA as the performance metric because it (i) is used by management to monitor and assess the Company’s financial performance and (ii) is widely used by investors for valuation and for comparing our performance against the performance of other building materials companies.

We define Total Adjusted EBITDA as our net income (loss), excluding the impact of income taxes, depreciation, depletion and amortization, net interest expense and certain other non-cash, non-recurring and/or unusual, non-operating items including, but not limited to: non-cash stock compensation expense, non-cash change in value of contingent consideration, impairment of assets, acquisition-related costs and officer transition expenses. Acquisition related costs consist of fees and expenses for accountants, lawyers and other professionals incurred during the negotiation and closing of strategic acquisitions and certain acquired entities’ management severance costs. Acquisition related costs do not include fees or expenses associated with post-closing integration of strategic acquisitions.

Total Adjusted EBITDA Thresholds. For 2020, the Compensation Committee set the Total Adjusted EBITDA target for the 2020 Plan at $209.25 million. The Committee determined that achieving 100% of the Total Adjusted EBITDA target warranted a payout of 100% of an employee’s individual target bonus award, which was consistent with the 2019 Annual Incentive Plan design. In 2020, the Committee established the threshold, target and maximum payout levels of Total Adjusted EBITDA at $175.77 million, $209.25 million and $251.1 million, respectively. Total Adjusted EBITDA below $175.77 million would result in no non-discretionary bonuses being paid under the 2020 Plan. Total Adjusted EBITDA performance between these thresholds would result in bonus payments being made on an interpolated basis.

 

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The Compensation Committee set the Total Adjusted EBITDA target at $209.25 million before bonus expense, which reflected approximately 6% growth in Adjusted EBITDA over our actual results for 2019. The Compensation Committee determined this Total Adjusted EBITDA target to be appropriate taking into consideration the fact that the economic forecast for our industry growth suggested growth in the range of only 1-3%, as well as the uncertainty of the overall economic outlook for 2020. To ensure that the Company achieved a minimum level of Total Adjusted EBITDA before achieving bonus eligibility, the Compensation Committee raised the Total Adjusted EBITDA threshold level from 50% to 60% of the Total Adjusted EBITDA target.

Increased Total Adjusted EBITDA Thresholds. The Total Adjusted EBITDA threshold target, and maximum levels above were set prior to the completion of the Company’s acquisition of Coram Materials Corp, which closed on February 24, 2020. After closing of the Coram acquisition, the Total Adjusted EBITDA levels were increased to account for the 2020 pro rata expected contribution from Coram. Accordingly, the final Total Adjusted EBITDA threshold, target and maximum levels were increased to $188.3 million, $224.1 million and $268.9 million, respectively. Total Adjusted EBITDA below $188.3 million would result in no non-discretionary bonuses being paid under the 2020 Plan.

Bonus Target and Maximum Percentages under the 2020 Plan. Each NEO, other than Mr. Sandbrook, and participant in the 2020 Plan had a target bonus percentage that was expressed as a percentage of their annual base salary, and could potentially earn amounts under the 2020 Plan that range from $0 (if the threshold Total Adjusted EBITDA performance level was not met) to a designated maximum level, based on performance actually achieved. The target and maximum percentages applicable to each of the NEOs for 2020 were as set forth in the chart below:

 

  Named Executive Officer(1)

 

 

Target % of    

Base Salary    

 

 

Maximum % of    

Base Salary    

 

 

Ronnie Pruitt

 

110%

 

220%

 

John E. Kunz

 

75%

 

150%

 

Paul M. Jolas

 

60%

 

120%

 

Jeffrey W. Roberts

 

60%

 

120%

 

Matthew Emmert

 

60%

 

120%

 

1.

Mr. Sandbrook retired as our Chief Executive Officer effective April 3, 2020 and was not eligible for an annual non-equity incentive award payout for 2020.

2020 Senior Leadership Plan

The onset of the COVID-19 pandemic brought with it an uncertain economic environment including stay in place orders in certain regions of the country. In light of the increased leverage the Company had taken on with the acquisition of Coram Materials Corp. and the uncertainty created by the pandemic, the Compensation Committee reacted swiftly on news of the first stay in place orders and began discussions on how best to address the novel economic challenges facing the Company. The Board and the Compensation Committee determined it was critical for the Company to generate cash and maintain profitability during the pandemic and concluded that the 2020 Plan did not effectively drive executive focus on those metrics. Accordingly, after a series of discussions the Compensation Committee determined that by implementing an Adjusted EBITDA Margin Plan, our NEOs and certain other members of senior management would be focused on ways to ensure the Company’s profitability and positive cash flow in a market of declining revenues. After discussions with management, the Compensation Committee implemented an Adjusted EBITDA Margin plan (the “2020 Senior Leadership Plan”) in the second quarter of 2020 to incentivize profitability.

To establish an Adjusted EBITDA Margin target, the Committee used 2019 actual revenue and Adjusted EBITDA margins as a starting point. For 2019, revenue was $1,478.7 million and Total Adjusted EBITDA was $184.1 million, resulting in an Adjusted EBITDA margin of 12.45%. To achieve a target bonus under the 2020 Senior Leadership Plan, participants would need to achieve margins similar to those achieved in 2019 despite the

 

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impact of the COVID-19 pandemic. The baseline Adjusted EBITDA margin was increased by 80 basis points to account for the Coram acquisition. The resulting Adjusted EBITDA Margin threshold, target and maximum levels for the 2020 Senior Leadership Plan based on $1.5 billion of revenue were 11.25%, 13.25% and 15.75%, respectively, subject to the adjustment factor set forth below.

Given the difficulty early in the pandemic of estimating revenue with any level of certainty, the formula under the 2020 Senior Leadership Plan incorporated an adjustment factor, under which the Adjusted EBITDA Margin target would be increased by 1 basis point for every $1 million that revenue exceeded $1.5 billion. Conversely, for every $1 million that revenue fell below $1.5 billion, the Adjusted EBITDA Margin target would be lowered by 1 basis point. The $1.5 billion revenue target was based on 2019 actual revenue of $1.479 billion plus revenue of $21 million from our acquired Coram operations.

The Committee implemented the 2020 Senior Leadership Plan for the period of April 1, 2020 through December 31, 2020, such that all relevant measurements were from the second, third and fourth quarters of 2020. In addition, the 2020 Senior Leadership Plan replaced the 2020 Plan for participants in the 2020 Senior Leadership Plan for that period, so that the 2020 Plan would be limited to the first quarter of 2020 for such participants.

Bonus Target and Maximum Percentages under the 2020 Senior Leadership Plan. As with the 2020 Plan, each NEO (other than Mr. Sandbrook, who retired as our Chief Executive Officer effective April 3, 2020) and participant in the 2020 Senior Leadership Plan had a target bonus percentage that was expressed as a percentage of their annual base salary, and could potentially earn amounts under the 2020 Senior Leadership Plan that range from $0 (if the threshold Adjusted EBITDA Margin performance level was not met) to a designated maximum level based on performance actually achieved. The target and maximum percentages applicable to each NEO for 2020 were the same as set forth in the chart above for the 2020 Plan.

2020 Bonus Awards to Named Executive Officers. The following summarizes the calculation of the 2020 bonus awards paid to the NEOs:

2020 Plan. Our actual Total Adjusted EBITDA performance for the year was $192.9 million, which exceeded the threshold, resulting in every participating NEO and member of senior management being eligible to receive a payout under the 2020 Plan.

2020 Senior Leadership Plan – Adjusted EBITDA Margin for Second through Fourth Quarters. Our actual Adjusted EBITDA Margin performance for the measurement period was 15.4% (compared to 12.45% in 2019). The Company’s annual revenue was $1.366 billion, which resulted in an Adjusted EBITDA Margin target of 11.96%, after applying the adjustment factor described above. Because our Adjusted EBITDA Margin achievement exceeded the payout maximum level, NEO bonus awards based on Adjusted EBITDA Margin under the 2020 Senior Leadership Plan for performance during the second through fourth quarters were paid out at 200% of their Adjusted EBITDA Margin target amount for that period.

The Compensation Committee met in the first quarter of 2021, and pursuant to the 2020 Plan and the 2020 Senior Leadership Plan, awarded an annual incentive bonus for each of the participating NEOs as set forth in the table below:

 

  Named Executive Officer(1)

 

 

Target
Percentage of
Base Salary

 

2020 Plan ($)

 

2020 Senior
Leadership Plan ($)

 

 

Total 2020
Annual
Bonus ($)

 

 

Ronnie Pruitt

 

 

 

110

 

%

 

 

 

$175,828

 

 

 

 

 

$1,278,750

 

 

 

 

 

$1,454,578

 

 

 

John E. Kunz

 

 

 

75

 

%

 

 

 

$  70,445

 

 

 

 

 

$   512,325

 

 

 

 

 

$   582,770

 

 

 

Paul M. Jolas

 

 

 

60

 

%

 

 

 

$  50,103

 

 

 

 

 

$   364,388

 

 

 

 

 

$   414,491

 

 

 

Jeffrey W. Roberts

 

 

 

60

 

%

 

 

 

$  42,075

 

 

 

 

 

$   306,000

 

 

 

 

 

$   348,075

 

 

 

Matthew Emmert

 

 

 

60

 

%

 

 

 

$  39,600

 

 

 

 

 

$   288,000

 

 

 

 

 

$   327,600

 

 

 

1.

Mr. Sandbrook retired as our Chief Executive Officer effective April 3, 2020 and was not eligible for an annual non-equity incentive award payout for 2020.

 

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Compensation Discussion and Analysis

 

Long-Term Incentive Compensation

We believe that long-term incentive awards help to create and maintain a long-term perspective among executive officers and provides a direct link to our long-term growth and profitability. However, we also understand that equity awards create dilution in our earnings per share and therefore believe that a portion of our long-term incentives should be tied directly to performance. The Committee believes that restricted stock awards (including restricted stock units) (“RSAs”) are the most appropriate forms of equity awards to achieve our stated objectives. RSAs strongly and directly link management and stockholder interests. As a full value award, RSAs are less dilutive to stockholders than stock options since we are able to issue fewer shares in order to attain the desired level of equity compensation for our executive officers and managers.

Under our LTIP, RSAs are granted on an annual basis in amounts that vary by salary grade and role for each executive officer and manager. Generally, the award grants are awarded in the first quarter of the year and are (i) 60% time-based with vesting to occur in equal annual installments over a three-year period beginning on the first anniversary of the date of grant; and (ii) 40% performance-based with performance hurdles that link the equity award to increases in stockholder value. The Committee believes that restricted shares with a combination of time and performance-based vesting criteria provide a motivating form of incentive compensation, help to align the interests of executives with those of our stockholders, foster employee stock ownership, and contribute to the focus of the management team on increasing value for our stockholders. In addition, the Committee believes the three year time-based vesting period, which is subject to the executive’s continued employment with us, encourages executive retention. Our equity awards are designed to enable the Company to be competitive in an industry and market in which there are very few similarly sized companies.

Based on the foregoing analysis and objectives, the Compensation Committee approved the following structure for the 2020 equity awards:

 

   

60% of the number of shares granted consisted of RSAs with time-based vesting. Vesting occurs in equal annual installments over a three-year period beginning on March 1, 2021.

 

   

40% of the number of shares granted consisted of RSAs with performance-based vesting (the “Performance Shares”). Half of the Performance Shares vest if the average of the daily volume-weighted average closing share price (the “VWAP”) of our common stock over any period of twenty consecutive trading days (the “VWAP Hurdle”) reaches $43.23 or more, within three years from the date of grant. The other half of the Performance Shares vest if the VWAP Hurdle reaches $47.01 or more, within three years of the date of grant. The $43.23 VWAP Hurdle and the $47.01 VWAP Hurdle represented an approximately 6% compound average growth rate over three years (“3 Year CAGR”) and a 9% 3 Year CAGR, respectively, to the 20-day VWAP of the Company’s common stock through and including February 28, 2020. In addition, if the Company’s common stock reaches a VWAP Hurdle of $51.00 (representing a 12% 3 Year CAGR) within three years of the date of grant, then the Performance Shares would vest at 150% of the original award amount, and if the Company’s common stock reaches a VWAP Hurdle of $55.21 (representing a 15% 3 Year CAGR) within three years of the date of grant, then the Performance Shares would vest at 200% of the original award amount.

In mid-February 2020, the Compensation Committee approved equity awards effective March 1, 2020 (the “Award Date”) for the NEOs based on the award dollar amounts shown in the table below and the 20-day VWAP of the Company’s common stock through and including, February 28, 2020, which was $36.30 per share. The actual number of shares awarded was rounded up to the nearest 100 shares. Mr. Sandbrook retired as our Chief Executive Officer effective April 3, 2020 and did not receive any equity award grants in connection with his service as an executive officer in 2020.

In addition, the value of the awards shown in the 2020 Grants of Plan Based Awards Table differ from the dollar amounts reported below because the number of shares awarded was based on the use of a 20-day VWAP to value the shares, whereas the 2020 Grants of Plan Based Awards Table reports the fair value calculated in accordance with ASC 718.

 

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  Name

 

  

 

2020 RSA Award ($)

    

 

2020 RSA Award (#)

 

 

 

William J. Sandbrook

 

  

 

 

 

 

0       

 

 

 

 

  

 

 

 

 

0       

 

 

 

 

 

Ronnie Pruitt

 

    

 

1,600,000       

 

 

 

    

 

44,100       

 

 

 

 

John E. Kunz

 

    

 

835,000       

 

 

 

    

 

23,100       

 

 

 

 

Paul M. Jolas

 

    

 

500,000       

 

 

 

    

 

13,800       

 

 

 

 

Jeffrey W. Roberts

 

    

 

375,000       

 

 

 

    

 

10,400       

 

 

 

 

Matthew Emmert

     375,000               10,400         

Perquisites and Other Benefits

Perquisites did not constitute a material portion of the compensation to the NEOs for 2020. However, we did provide payment for the premiums associated with additional term life insurance and whole life insurance for our former Chief Executive Officer until his retirement date of April 3, 2020, a vehicle allowance for Mr. Roberts and personal mileage reimbursement for Messrs. Pruitt and Emmert.

We provide our executive officers with the opportunity to participate in our other employee benefits programs. The employee benefits programs in which our executive officers participate (which provide benefits such as medical coverage and group term life insurance protection) are generally the same programs offered to all our salaried employees. These programs are intended to promote the health and financial security of our employees. The programs are provided at competitive market levels to attract, retain and reward employees.

Severance Benefits Pursuant to Executive Severance Agreements

Certain executive officers, including each of our NEOs, entered into executive severance agreements with the Company. Each executive severance agreement provides for severance payments and other benefits following termination of the applicable officer’s employment under various scenarios, as described below. We believe these severance benefits reflect the fact that it may be difficult for such executives to find comparable employment within a short period of time. Each such agreement also contains a confidentiality covenant, requiring the applicable officer to not disclose our confidential information at any time, as well as noncompetition and non-solicitation covenants, which prevent the executive from competing with us or soliciting our customers or employees during employment and for one year after the officer’s employment terminates (subject to extension in the event of a change in control, so that the noncompetition and non-solicitation covenants will extend to cover the number of months post-termination used to determine the severance benefits payable to him). These agreements are described in further detail below under “Potential Payments Upon Termination or Change in Control.”

Deferred Compensation Plan

All executive officers, including our current NEOs, are eligible to participate in our non-qualified deferred compensation plan, under which they may defer up to 75% of their base compensation and up to 75% of their incentive compensation. There is no Company match for contributions to the non-qualified deferred compensation plan.

Compensation Program and Risk Management

Our Compensation Committee has conducted a comprehensive review of our compensation structure from the perspective of enterprise risk management and the design and operation of our executive and employee compensation arrangements generally and has concluded that the risks arising from our compensation policies and overall actual compensation practices for employees are not reasonably likely to have a material adverse effect on our Company. Our compensation program as a whole does not encourage our executives or other

 

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Compensation Discussion and Analysis

 

employees to take unnecessary and excessive risks or engage in other activities and behavior that threaten the value of the Company or the investments of our stockholders, as evidenced by the following design features that we believe mitigate risk-taking:

 

   

Compensation Mix. To encourage appropriate decision making and facilitate the alignment of the interests of our employees with those of the Company and its stockholders, our compensation program is structured to provide an appropriate balance of “fixed” and “variable” or “at risk” compensation. We believe that the allocation of variable compensation between annual cash incentives and long-term equity incentive compensation along with fixed base salaries meets our objectives and affords us the ability to attract, retain and motivate executives by providing predictable fixed income to meet the current living requirements and significant variable compensation opportunities for long-term wealth accumulation.

 

   

Base Salaries. While base salary is the only fixed element of compensation that we provide to our executives and other employees, we believe that the amounts paid are sufficient to meet the essential financial needs of these executives and employees. Consequently, our incentive compensation arrangements are intended to reward their performance if, and only to the extent that, the Company and our stockholders also benefit financially from their stewardship.

 

   

Annual Incentives. Our annual short-term incentive plan applies to salaried employees at each of our business units. While our annual short-term incentive plan for salaried employees differs from year-to-year, cash bonuses are generally awarded under the plan based on some combination of Company and business unit financial results, and individual and business unit accomplishment of strategic goals, which may include strategic position in the market, improvement in operational efficiencies, development of new products, implementation and utilization of information technology, employee development, accomplishment of various safety goals, and completion of specific transactions or projects. We do not believe that the pursuit of these objectives will lead to behaviors that focus executives on their individual enrichment rather than our long-term welfare, and we believe that the annual bonus plan does not encourage excessive risk taking as the bonus amounts are based on multiple financial and non-financial goals and objectives.

 

   

Long-Term Equity Awards. In addition to the strategic focus of our short-term cash bonus plan, our equity compensation program is specifically intended to create a long-term link between the compensation provided to executive officers and other key management personnel and gains realized by our stockholders. Our Compensation Committee uses restricted shares with a combination of performance-based vesting criteria as long-term incentive compensation because, among other reasons, these awards provide a motivating form of incentive compensation, while contributing to the focus of our management team on increasing value for our stockholders. As these awards vest over multiple years, and the vesting of the awards is based generally on continued service with the Company, we believe the awards do not encourage executives to achieve short-term increases in stock price to the detriment of long-term growth.

Clawback and Hedging Policy

 

To date, our Board of Directors has not adopted a formal clawback policy to recoup incentive-based compensation upon the occurrence of a financial restatement, misconduct, or other specified events. However, restricted stock agreements covering grants to our NEOs do include language providing that the award may be canceled, and the award recipient may be required to reimburse us for any realized gains to the extent required by applicable law or any clawback policy that we adopt.

Hedging is an investment strategy used by investors to offset or reduce the risk of fluctuations in stock price. This, consequently, insulates the stockholder from the full risks and rewards of stock ownership. Because we believe fully in aligning our directors’ and officers’ interests with the interests of our stockholders, we have adopted a policy that prohibits our directors and officers from engaging in any hedging or monetization transactions, including, but not limited to, collars, prepaid variable forward sale contracts, equity swaps, and exchange funds. Our directors and officers may petition our general counsel for individualized exceptions to this policy on a case-by-case basis.

 

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Stock Ownership Guidelines

 

In 2016, our Board of Directors adopted stock ownership guidelines that apply to our Chief Executive Officer as well as each of our executive officers under Section 16, including each of our NEOs. Subject to transition periods and other provisions, the guidelines generally require that each officer beneficially hold shares of our stock with a value at least equal to the multiples of his base salary identified below:

 

 

  Position

  

 

Base Salary Multiple                 

 

Chief Executive Officer

  

 

Three Times                

 

Section 16 Officers

  

 

Two Times                

All NEOs were in compliance with the guidelines as of December 31, 2020, subject to transition periods. We also have stock ownership guidelines for our directors, as further described in “Director Compensation.”

Conclusion

 

Based upon its review of our overall executive compensation program, the Compensation Committee believes our executive compensation program, as applied to our executive officers, is appropriate and is necessary to retain the executive officers who are essential to our continued development and success, to compensate those executive officers for their contributions and to enhance stockholder value. The Committee believes that the total compensation opportunities provided to our executive officers create a commonality of interests and alignment of our long-term interests with those of our stockholders.

 

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Report of the Compensation Committee

 

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on the review and discussion with management, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s proxy statement.

The Compensation Committee:

Theodore P. Rossi, Chairman

Rajan C. Penkar

Colin M. Sutherland

Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that incorporate future filings, including this proxy statement, in whole or in part, the foregoing report of the Compensation Committee shall not be deemed to be filed with the SEC or incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference.

 

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Executive Compensation Tables and Related Disclosure

 

2020, 2019 AND 2018 SUMMARY COMPENSATION TABLE

The following table sets forth the compensation earned by our Named Executive Officers in 2020, 2019 and 2018. The titles shown below are their titles as of December 31, 2020.

 

             
Name and Principal Position   Year       Salary(1)     Bonus     Stock
Awards
(2)
    Non-Equity
Incentive Plan
Compensation
    All Other
Compensation
(3)
    Total  

 

William J. Sandbrook

 

 

Former Chairman and

Chief Executive Officer

  2020       $ 235,227     $         —       $         —       $ 0       $1,729,536     $ 1,964,763  
  2019         900,000       270,000       3,780,638       —         43,430       4,994,067  
  2018         887,500       270,000       2,078,340       —         43,345       3,279,185  

 

Ronnie Pruitt

 

 

President,

Chief Executive Officer and

Director

  2020         713,850       —         1,197,844       1,454,578       25,354       3,391,626  
  2019         525,300       125,000       1,206,449       —         19,891       1,876,640  
  2018         495,000       85,000       651,420       —         19,268       1,250,688  

 

John E. Kunz

 

 

Senior Vice President and

Chief Financial Officer

  2020         455,400       —         627,442       582,770       10,592       1,676,204  
  2019         451,550       60,000       1,051,611       —         14,000       1,577,161  
  2018         436,250       284,000 (4)      601,788       —         191,710       1,513,748  

 

Paul M. Jolas

 

 

Senior Vice President,
General Counsel and Corporate Secretary

  2020         404,875       —         374,836       414,491       9,750       1,203,952  
  2019         402,406       60,000       825,805       —         14,000       1,302,211  
  2018         390,000       59,000       471,504       —         13,750       934,254  

 

Jeffrey W. Roberts(5)

 

 

Regional Vice President and General Manager — U.S. Concrete — Central

  2020         340,000       —         282,485       348,075       58,707       1,029,267  
  2019         335,625       75,000       432,257       —         87,702       930,584  

 

Matthew Emmert(6)

 

Regional Vice President and General Manager — U.S. Concrete — East

  2020         320,000       —         282,485       327,600       13,920       944,005  

 

1.

The figures shown in the “Salary” column of this table reflect the amount actually received by the NEO as base salary during a specified year, not the NEO’s annual rate of pay for the applicable year. The rates of pay are most likely higher than amounts shown if an NEO began employment with us during a particular year or if an NEO received a salary increase during the year, or changed roles, as in the case of Mr. Pruitt. In 2020, we did not increase base salaries for any of our Named Executive Officers due to the impact of the COVID-19 pandemic, other than for Mr. Pruitt, whose salary increased to $775,000 in connection with his appointment as Chief Executive Officer.

2.

The amounts shown in the “Stock Awards” column represent the aggregate grant date fair value of awards of restricted stock determined in accordance with ASC 718. The values shown in this column do not represent the amounts that may eventually be realized by the Named Executive Officers, which are subject to achievement of the time- and performance-based vesting conditions applicable to the awards and the price of our common stock at the time of vesting. See “Note 13. Stock-Based Compensation” in the Notes to Consolidated Financial Statements in our 2020 Annual Report for a discussion of our determination of the aggregate grant date fair value of these awards. The amounts reported do not include any reduction in the value of the awards for the possibility of forfeiture. As described in Compensation Discussion and Analysis, the Compensation Committee approved grants of equity awards effective March 1, 2020. Under ASC 718, the grant date of these equity awards, and thus the date the fair value of the equity awards was determined, was March 1, 2020 based on the 20-day average of the daily VWAP on February 28, 2020.

3.

The amounts in the “All Other Compensation” column for 2020 reflect: (a) matching contributions under our 401(k) plan for each of the Named Executive Officers; (b) additional life insurance premiums paid by us for Mr. Sandbrook in the amount of $6,022; (c) a taxable personal mileage reimbursement for Messrs. Pruitt, Roberts and Emmert; (d) an auto allowance for Mr. Roberts; (e) $103,846 to Mr. Sandbrook for accrued vacation and $1,605,418 for Mr. Sandbrook reflecting the incremental fair value, computed in accordance with ASC 718, associated with the accelerated vesting of his previously granted time-based restricted stock awards and the continuation of the original performance period in accordance with the 2019 performance award that would have otherwise been terminated upon his retirement as our Chief Executive Officer effective April 3, 2020 pursuant to his executive transition agreement with the Company, and (f) $40,219 to Mr. Roberts for relocation expenses. Compensation received by Mr. Sandbrook from April 3, 2020 through December 31, 2020 for his service as a director and for his consulting services is included in the “Director Compensation Table.” For more information about Mr. Sandbrook’s executive transition agreement and consulting arrangement, please see “Certain Relationships and Related Transactions.”

4.

In connection with the hiring of Mr. Kunz in October 2017, Mr. Kunz received a bonus of $200,000 on March 31, 2018, subject to repayment by Mr. Kunz if he voluntarily left the Company prior to October 2, 2018.

5.

No information is reported for Mr. Roberts in 2018 because he was not a Named Executive Officer in 2018.

6.

No information is reported for Mr. Emmert in 2019 and 2018 because he was not a Named Executive Officer in 2019 and 2018.

 

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Table of Contents

Executive Compensation Tables and Related Disclosure

 

2020 GRANTS OF PLAN-BASED AWARDS TABLE

The following table summarizes the plan-based awards that our Named Executive Officers received or were eligible to receive during 2020. Our Named Executive Officers were eligible to receive all non-equity awards pursuant to the 2020 Plan and the 2020 Senior Leadership Plan. All equity awards were granted pursuant to the LTIP.

 

         
           

 

Estimated Future
Payouts Under Non-
Equity
Incentive Plan
Awards
(1)

 

    

 

Estimated Future
Payouts Under
Equity
Incentive Plan
Awards
(2)

 

    

 

All Other
Stock
Awards:
Number of
Shares of
Stock
(3)
(#)

 

    

Grant Date
Fair Value
of Stock and
Option
Awards
($)

 

 

  Name

 

  

Grant
Date

 

    

Target
($)

 

    

Maximum
($)

 

    

Target (#)

 

 
           

 

William J. Sandbrook(4)

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

23,440

 

 

 

 

  

 

 

 

 

0

 

 

 

 

  

 

 

 

 

1,605,418

 

 

 

 

           

 

Ronnie Pruitt

 

    

 

3/01/2020

 

 

 

  

 

 

 

 

852,000

 

 

 

 

  

 

 

 

 

1,705,000

 

 

 

 

  

 

 

 

 

35,280

 

 

 

 

  

 

 

 

 

26,460

 

 

 

 

  

 

 

 

 

1,197,844

 

 

 

 

           

 

John E. Kunz

 

  

 

 

 

 

3/01/2020

 

 

 

 

  

 

 

 

 

341,550

 

 

 

 

  

 

 

 

 

683,100

 

 

 

 

  

 

 

 

 

18,480

 

 

 

 

  

 

 

 

 

13,860

 

 

 

 

  

 

 

 

 

627,442

 

 

 

 

           

 

Paul M. Jolas

 

  

 

 

 

 

3/01/2020

 

 

 

 

  

 

 

 

 

242,925

 

 

 

 

  

 

 

 

 

485,850

 

 

 

 

  

 

 

 

 

11,040

 

 

 

 

  

 

 

 

 

8,280

 

 

 

 

  

 

 

 

 

374,836

 

 

 

 

           

 

Jeffrey W. Roberts

 

  

 

 

 

 

3/01/2020

 

 

 

 

  

 

 

 

 

204,000

 

 

 

 

  

 

 

 

 

408,000

 

 

 

 

  

 

 

 

 

8,320

 

 

 

 

  

 

 

 

 

6,240

 

 

 

 

  

 

 

 

 

282,485

 

 

 

 

           

 

Matthew Emmert

 

  

 

 

 

 

3/01/2020

 

 

 

 

  

 

 

 

 

192,000

 

 

 

 

  

 

 

 

 

384,000

 

 

 

 

  

 

 

 

 

8,320

 

 

 

 

  

 

 

 

 

6,240

 

 

 

 

  

 

 

 

 

282,485

 

 

 

 

 

1.

The Named Executive Officers were eligible to earn annual non-equity incentive compensation under the 2020 Plan based on achievement of certain performance measures, including levels of Total Adjusted EBITDA. Our actual Total Adjusted EBITDA performance for the year was $192.9 million, which exceeded the threshold, resulting in every participating NEO and member of senior management being eligible to receive a payout under the 2020 Plan. Because our Adjusted EBITDA Margin achievement exceeded the payout maximum level, NEO bonus awards based on Adjusted EBITDA Margin under the 2020 Senior Leadership Plan for performance during the second through fourth quarters were paid out at 200% of their Adjusted EBITDA Margin target amount for that period. The percentage of base pay for the Named Executive Officers for the target bonus was as follows: Mr. Pruitt (110%), Mr. Kunz (75%), Mr. Jolas (60%), Mr. Roberts (60%) and Mr. Emmert (60%). The percentage of base pay for the Named Executive Officers for the maximum bonus was as follows: Mr. Pruitt (220%), Mr. Kunz (150%), Mr. Jolas (120%), Mr. Roberts (120%) and Mr. Emmert (120%).

2.

The restricted stock awards reflected in this column were subject to performance-based vesting criteria, as described in Compensation Discussion and Analysis. The number of awards included in this column represents the maximum number of shares that may be earned by each participant based on the achievement of Company performance resulting in each participant’s Performance Shares vesting at 200% of the original award amount.

3.

The restricted stock awards reflected in this column were subject to time-based vesting criteria, as described above in Compensation Discussion and Analysis.

4.

Mr. Sandbrook retired as our Chief Executive Officer effective April 3, 2020 and was not eligible for an annual non-equity incentive award payout for 2020. The number reported for Mr. Sandbrook in the “Estimated Future Payouts Under Equity Incentive Plan Awards” column represents his 2019 performance award that, pursuant to his executive transition agreement, was not forfeited upon his retirement, and does not represent any new grant for 2020. The amount reported for Mr. Sandbrook in the “Grant Date Fair Value of Stock and Option Awards” column reflects the incremental fair value, computed in accordance with ASC 718, associated with the accelerated vesting of his previously granted time-based restricted stock awards and the continuation of the original performance period in accordance with the 2019 performance award that would have otherwise been terminated upon his retirement as our Chief Executive Officer effective April 3, 2020 pursuant to his executive transition agreement with the Company, and does not represent any new grant for 2020. For more information about Mr. Sandbrook’s executive transition agreement, please see “Certain Relationships and Related Transactions.”

Narrative to the Summary Compensation Table and Grants of Plan-Based Awards Table

 

Employment Terms

Although we have not entered into any employment agreements with our Named Executive Officers, certain employment terms are included in each of their executive severance agreements, the severance provisions of which are detailed below under “Potential Payments Upon Termination or Change in Control”. Each such agreement specifies the executive’s position, location of employment, monthly base salary and annual paid vacation entitlement.

Equity Compensation Awards

On January 23, 2013, we adopted the LTIP, and our stockholders approved the LTIP at our 2013 Annual Meeting. Under the LTIP, we can grant stock options, stock appreciation rights, restricted stock awards, RSUs, cash awards and performance awards to management, employees, and directors of the Company. In 2020, we granted awards to non-employee directors only under the LTIP. As of December 31, 2020, there were 63,372 shares remaining for future issuance under the LTIP.

 

42    U.S. Concrete, Inc.  |  2021 Proxy Statement


Table of Contents

Executive Compensation Tables and Related Disclosure

 

Restricted Stock Award Agreements

Pursuant to each restricted stock award agreement issued in accordance with the LTIP, 60% of such shares granted pursuant to an award will vest over three years in equal annual installments from the date of grant and 40% of the number of shares granted pursuant to an award will vest based on both the passage of time and the satisfaction of certain performance criteria, which are more fully described within the Compensation Discussion and Analysis section above. Any portion of the restricted stock awards that are unvested on the date of termination will be forfeited, except that in the case of our CEO, if his employment is terminated without “cause”, any portion of the restricted stock awards that would have become vested during the six-month period following termination will become vested on the date of termination, and in the case of our other Named Executive Officers, if the executive’s employment is terminated without “cause”, fifty percent of the restricted stock awards that would have become vested during the 12-month period following termination will become vested on the date of termination. Additionally, pursuant to the terms of each NEO’s executive severance agreement, upon a “change in control” all outstanding, unvested restricted stock awards will become fully vested. Each of these terms and conditions are described in greater detail in the “Potential Payments Upon Termination or Change in Control” section below.

OUTSTANDING EQUITY AWARDS AT 2020 FISCAL YEAR-END TABLE

The following table provides information about the number of outstanding equity awards held by our Named Executive Officers at fiscal year-end 2020. The table also includes, where applicable, the value of these awards based on the closing price of our common stock on the Nasdaq on December 31, 2020, which was $39.97 per share. Unless otherwise indicated, the restricted stock awards vest over three years following the grant date.

 

    

 

Stock Awards

 

 
  Name   

Number of
Shares of
Stock That
Have Not
Vested
(#)

 

    

Market Value
of Shares of
Stock That
Have Not
Vested
($)

 

    

Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
(#)

 

    

Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested
($)

 

 

 

William J. Sandbrook(8)

 

 

  

 

 

 

 

0

 

 

 

 

  

 

 

 

 

0

 

 

 

 

  

 

 

 

 

23,440(4)

 

 

 

 

  

 

 

 

 

936,897    

 

 

 

 

 

Ronnie Pruitt

 

 

  

 

 

 

 

2,100

 

 

(1) 

 

  

 

 

 

 

83,937

 

 

 

 

  

 

 

 

 

4,200(5)

 

 

 

 

  

 

 

 

 

167,874    

 

 

 

 

  

 

 

 

 

7,480

 

 

(2) 

 

  

 

 

 

 

298,976

 

 

 

 

  

 

 

 

 

7,480(6)

 

 

 

 

  

 

 

 

 

298,976    

 

 

 

 

  

 

 

 

 

26,460

 

 

(3) 

 

  

 

 

 

 

1,057,606

 

 

 

 

  

 

 

 

 

35,280(7)

 

 

 

 

  

 

 

 

 

1,410,142    

 

 

 

 

 

John E. Kunz

 

 

  

 

 

 

 

1,940

 

 

1) 

 

  

 

 

 

 

77,542

 

 

 

 

  

 

 

 

 

3,880(5)

 

 

 

 

  

 

 

 

 

155,084    

 

 

 

 

  

 

 

 

 

6,520

 

 

(2) 

 

  

 

 

 

 

260,604

 

 

 

 

  

 

 

 

 

6,520(6)

 

 

 

 

  

 

 

 

 

260,604    

 

 

 

 

  

 

 

 

 

13,860

 

 

(3) 

 

  

 

 

 

 

553,984

 

 

 

 

  

 

 

 

 

18,480(7)

 

 

 

 

  

 

 

 

 

738,646    

 

 

 

 

 

Paul M. Jolas

 

 

  

 

 

 

 

1,520

 

 

1) 

 

  

 

 

 

 

60,754

 

 

 

 

  

 

 

 

 

3,040(5)

 

 

 

 

  

 

 

 

 

121,509    

 

 

 

 

  

 

 

 

 

5,120

 

 

(2) 

 

  

 

 

 

 

204,646

 

 

 

 

  

 

 

 

 

5,120(6)

 

 

 

 

  

 

 

 

 

204,646    

 

 

 

 

  

 

 

 

 

8,280

 

 

(3) 

 

  

 

 

 

 

330,952

 

 

 

 

  

 

 

 

 

11,040(7)

 

 

 

 

  

 

 

 

 

441,269    

 

 

 

 

 

Jeffrey W. Roberts

 

 

  

 

 

 

 

760

 

 

1) 

 

  

 

 

 

 

30,377

 

 

 

 

  

 

 

 

 

1,520(5)

 

 

 

 

  

 

 

 

 

60,754    

 

 

 

 

  

 

 

 

 

2,680

 

 

(2) 

 

  

 

 

 

 

107,120

 

 

 

 

  

 

 

 

 

2,680(6)

 

 

 

 

  

 

 

 

 

107,120    

 

 

 

 

  

 

 

 

 

6,240

 

 

(3) 

 

  

 

 

 

 

249,413

 

 

 

 

  

 

 

 

 

8,320(7)

 

 

 

 

  

 

 

 

 

332,550    

 

 

 

 

 

Matthew Emmert

 

 

  

 

 

 

 

420

 

 

(1) 

 

  

 

 

 

 

16,787

 

 

 

 

  

 

 

 

 

840(5)

 

 

 

 

  

 

 

 

 

33,575    

 

 

 

 

  

 

 

 

 

2,000

 

 

(2) 

 

  

 

 

 

 

79,940

 

 

 

 

  

 

 

 

 

2,000(6)

 

 

 

 

  

 

 

 

 

79,940    

 

 

 

 

    

 

 

 

 

6,240

 

 

(3) 

 

  

 

 

 

 

249,413

 

 

 

 

  

 

 

 

 

8,320(7)

 

 

 

 

  

 

 

 

 

332,550    

 

 

 

 

 

U.S. Concrete, Inc.  |  2021 Proxy Statement    43


Table of Contents

Executive Compensation Tables and Related Disclosure

 

 

1.

These RSAs were granted on March 1, 2018 pursuant to the LTIP. The shares shown vest on March 1, 2021.

2.

These RSAs were granted on March 1, 2019 pursuant to the LTIP. The shares shown vest in two equal, annual installments on March 1, 2021 and 2022.

3.

These RSAs were granted on March 1, 2020 pursuant to the LTIP. The shares shown vest in three equal, annual installments over a three-year period beginning on the first anniversary of the date of grant.

4.

These RSAs were granted on March 1, 2019 pursuant to the LTIP. Per Mr. Sandbrook’s executive transition agreement dated February 12, 2020, these shares were not forfeited at termination but allowed the opportunity to potentially vest during the term of Mr. Sandbrook’s executive transition agreement or within three years from the date of grant, whichever occurs first. Half of the shares shown would vest if the average daily volume-weighted average share price of our common stock over any period of 20 consecutive trading days reaches $54.10 or more within three years from the date of grant, and the remaining half would vest if the average daily volume-weighted average share price of our common stock over any period of 20 consecutive trading days reaches $58.60 or more within three years from the date of grant.

5.

These RSAs were granted on March 1, 2018 pursuant to the LTIP. Half of the shares shown would vest if the average daily volume-weighted average share price of our common stock over any period of 20 consecutive trading days reaches $91.10 or more, within three years from the date of grant, and the remaining half would vest if the average daily volume-weighted average share price of our common stock over any period of 20 consecutive trading days reaches $99.10 or more within three years from the date of grant.

6.

These RSAs were granted on March 1, 2019 pursuant to the LTIP. Half of the shares shown vested when the average daily volume-weighted average share price of our common stock over a period of 20 consecutive trading days reached $45.90 on May 16, 2019, and the remaining half vested when the average daily volume-weighted average share price of our common stock over a period of 20 consecutive trading days reached $49.90 on October 14, 2019. The 2019 RSAs could potentially vest into additional shares should the average daily volume-weighted average share price of our common stock over a period of 20 consecutive trading days reach $54.10 and $58.60 within three years from the date of grant.

7.

These RSAs were granted on March 1, 2020 pursuant to the LTIP. Half of the shares shown would vest if the average daily volume-weighted average share price of our common stock over a period of 20 consecutive trading days reaches $43.23 or more within three years from the date of grant, and the remaining half would vest if the average daily volume-weighted average share price of our common stock over a period of 20 consecutive trading days reaches $49.90 within three years from the date of grant. The 2020 RSAs could potentially vest into additional shares should the average daily volume-weighted average share price of our common stock over a period of 20 consecutive trading days reach $51.00 and $55.21 within three years from the date of grant.

8.

Mr. Sandbrook retired as our Chief Executive Officer effective April 3, 2020. Pursuant to his executive transition agreement, Mr. Sandbrook’s time-based RSAs accelerated and vested as of April 3, 2020. Mr. Sandbrook’s performance-based RSAs granted on March 1, 2017 and 2018 were forfeited as of April 3, 2020, and his performance-based RSAs granted on March 1, 2019 remain outstanding. For more information about Mr. Sandbrook’s executive transition agreement, please see “Certain Relationships and Related Transactions.”

2020 OPTION EXERCISES AND STOCK VESTED TABLE

The following table summarizes the vesting of stock awards held by our Named Executive Officers during 2020. There were no outstanding stock options during 2020 and none of our Named Executive Officers exercised stock options in 2020.

 

    

Stock Awards

 

 
   

 

  Name

 

  

Number of Shares
Acquired on Vesting
(#)

 

    

Value Realized
on Vesting
($)

 

 
   

 

William J. Sandbrook

 

  

 

 

 

 

55,120

 

 

 

 

  

 

 

 

 

2,203,146

 

 

 

 

   

 

Ronnie Pruitt

 

  

 

 

 

 

7,740

 

 

 

 

  

 

 

 

 

309,368

 

 

 

 

   

 

John E. Kunz

 

  

 

 

 

 

6,085

 

 

 

 

  

 

 

 

 

243,217

 

 

 

 

   

 

Paul M. Jolas

 

  

 

 

 

 

5,540

 

 

 

 

  

 

 

 

 

221,434

 

 

 

 

   

 

Jeffrey W. Roberts

 

  

 

 

 

 

2,940

 

 

 

 

  

 

 

 

 

117,512

 

 

 

 

   

 

Matthew Emmert

 

  

 

 

 

 

1,680

 

 

 

 

  

 

 

 

 

67,150

 

 

 

 

PENSION BENEFITS

We do not maintain any defined benefit pension plans that provide for payments or other benefits at, following, or in connection with the retirement of any of our Named Executive Officers.

 

44    U.S. Concrete, Inc.  |  2021 Proxy Statement


Table of Contents

Executive Compensation Tables and Related Disclosure

 

NONQUALIFIED DEFERRED COMPENSATION TABLE

The following table sets forth contributions by the Named Executive Officers to the U.S. Concrete, Inc. Deferred Compensation Plan (the “Plan”) during 2020.

 

 

  Name

 

  

 

Executive
Contributions
in Last FY
($)

 

    

 

Aggregate
Earnings
(Losses)
in Last FY
($)
(1)

 

    

 

Aggregate
Withdrawals/
Distributions
($)

 

    

 

Aggregate
Balance at
Last FYE
($)

 

 
       

 

William J. Sandbrook

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

18,444

 

 

 

 

  

 

 

 

 

291,416

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

       

 

Ronnie Pruitt

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

—  

 

 

       

 

John E. Kunz

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

       

 

Paul M. Jolas

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

       

 

Jeffrey W. Roberts

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

       

 

Matthew Emmert

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

7,722

 

 

 

 

  

 

 

 

 

—  

 

 

 

 

  

 

 

 

 

40,610

 

 

 

 

 

1.

Amounts included in this column do not include above-market or preferential earnings (of which there were none) and, accordingly, these amounts are not included in the 2020, 2019 and 2018 Summary Compensation Table above.

The Plan is unfunded and our obligations are general unsecured obligations. Under the Plan, we are obligated to pay deferred compensation in the future to eligible participants from our general assets, although we may establish a trust to hold amounts which we may use to satisfy Plan distributions from time to time.

Pursuant to the Plan, a select group of management employees at a Grade 16 or higher, including each of the Named Executive Officers, are eligible to participate by making an irrevocable election to defer up to 75% of the participant’s annual base salary, as well as 75% of any annual bonus award. Participants are 100% vested at all times in their account within the Plan. We do not provide any matching or discretionary contributions to the Plan on any participant’s behalf.

Payment of Plan accounts may occur in lump sum payments upon a participant’s separation from service for any reason. We require a six month delay in the payment of Plan benefits if the participant is a “specified employee” pursuant to Section 409A of the Internal Revenue Code of 1986 (the “Code”), as amended, at the time of his or her separation from service, and an earlier payment would result in the imposition of an excise tax on the participant if the amounts were received at the time of his or her separation. Earlier withdrawals may occur if the participant incurs an unforeseeable emergency, which is generally defined as a severe financial hardship of the participant that results from an illness or an accident of the participant or a participant’s spouse or dependent, a loss of property, or a similar extraordinary and unforeseeable circumstance that is beyond the participant’s control.

The participant will choose how his or her Plan accounts are deemed to be invested from a list of investment options provided to him or her by the Plan administrator. For 2020, the investment options were identical to those under our 401(k) plan, except for one investment option in our 401(k) plan that is not permitted in a nonqualified deferred compensation plan and one investment option in the deferred compensation plan that is similar to an investment option in the 401(k) plan.

2020 PAY RATIO

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Pruitt, our Chief Executive Officer:

For 2020, our last completed fiscal year:

 

   

the median of the annual total compensation of all our employees (other than our Chief Executive Officer) was $68,609; and

 

   

the annualized total compensation of our Chief Executive Officer, who became CEO on April 3, 2020, was $3,452,776.

 

U.S. Concrete, Inc.  |  2021 Proxy Statement    45


Table of Contents

Executive Compensation Tables and Related Disclosure

 

Based on this information, for 2020, the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all employees was 50 to 1.

Due to various organizational changes, we identified a new “median employee” for purposes of our pay ratio disclosure. We selected December 31, 2020 (the “determination date”), which is within the last three months of 2020, as the date upon which we would identify the median employee.

We identified the median employee by examining the total earnings, as reported on the Form W-2 for the year ended December 31, 2020, of each individual other than the CEO who was employed by us on the determination date. We included all employees, whether employed on a full-time, part-time, on a leave of absence, or seasonal basis, with the exception of independent contractors/leased employees whose compensation is determined by unaffiliated third parties, 91 employees employed in Canada (which account for less than 5% of the Company’s total workforce), and all of the employees (approximately 24) of certain businesses acquired by us in 2020. While not included in previous determinations, for purposes of this determination, we included 67 employees located in the U.S. Virgin Islands. As a result, the employee population that we used for purposes of determining the compensation of our median employee was 2,893 employees.

With respect to employees who were either hired during the year or worked less than a full year, we annualized salaries of salaried employees and annualized the compensation of hourly employees based on their hourly compensation rate and 2,080 hours worked with no overtime. Other than the foregoing, we did not make any assumptions, adjustments, or estimates with respect to total W-2 earnings. We believe the use of total W-2 earnings for all employees is a consistently applied compensation measure because we do not widely distribute annual equity awards to employees.

Once we identified our median employee, we combined all of the elements of such employee’s compensation for 2020 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $68,609. The median employee’s annual total compensation during 2020 consisted of his gross annual wages and the matching contribution we made on his behalf under the 401(k) plan in 2020.

With respect to the annual total compensation of our CEO, in accordance with Item 402(u) of Regulation S-K, we adjusted the amount reported for Mr. Pruitt in the “Total” column for 2020 in the Summary Compensation Table included in this proxy statement, by annualizing his base salary and certain components of “all other compensation” to account for the fact that he was appointed as our CEO on April 3, 2020, resulting in an adjusted total amount of $3,452,776.

 

46    U.S. Concrete, Inc.  |  2021 Proxy Statement


Table of Contents

Potential Payments upon Termination or Change in Control

 

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

Severance Benefits Pursuant to Executive Severance Agreements

Certain executive officers, including each of our Named Executive Officers, entered into executive severance agreements with us. Each executive severance agreement provides for severance payments and other benefits following termination of the applicable officer’s employment under various scenarios, as described below. We believe these severance benefits reflect the fact that it may be difficult for such employees to find comparable employment within a short period of time. Each such agreement also contains a confidentiality covenant, requiring the applicable officer to not disclose our confidential information at any time, as well as noncompetition and non-solicitation covenants, which prevent the executive from competing with us or soliciting our customers or employees during the executive officer’s employment and for one year after the officer’s employment terminates (subject to extension in the event of a change in control, so that the noncompetition and non-solicitation covenants will extend to cover the number of months post-termination used to determine the severance benefits payable (as described below)).

In the case of a termination of the applicable officer’s employment (that is not in connection with a “change in control”) either by us without “cause” or by the officer for “good cause” (each term as defined below), the officer would generally be entitled to the following severance benefits:

 

   

a lump-sum payment in cash equal to the officer’s monthly base salary in effect on the date of termination multiplied by 24 in the case of Mr. Pruitt and multiplied by 12 in the case of all other applicable officers, including Messrs. Kunz, Jolas, Roberts and Emmert;

 

   

a lump-sum payment in cash equal to the amount of the officer’s target bonus for the bonus year in which the termination occurs, prorated based on the number of days in the bonus year that have elapsed prior to the termination;

 

   

payment of all applicable medical continuation premiums for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act, or COBRA, for the benefit of the officer (and his covered dependents as of the date of his termination, if any) under his then-current plan election for 18 months after termination;

 

   

a lump-sum payment in cash equal to the value of the officer’s accrued but unpaid salary through the date of such termination, plus the officer’s unused vacation days earned for the year prior to the year in which the termination occurs and a pro rata portion of the vacation days earned for the year in which the termination occurs; and

 

   

(a) in the case of Mr. Pruitt, a pro rata portion of all outstanding and previously unvested stock options, restricted stock awards, restricted stock units and similar awards granted to the officer by us prior to the date of termination (the “Unvested Awards”) that would otherwise have vested during the six-month period following the date of termination if such termination had not occurred will become vested and exercisable (as applicable), and vested stock options will remain exercisable until the earlier of (1) the expiration of the 12-month period following termination, and (2) the expiration date of the original term of the applicable stock option; and (b) in the case of certain officers, including Messrs. Kunz, Jolas, Roberts and Emmert, fifty percent of all Unvested Awards that would otherwise have vested during the 12-month period following the date of involuntary termination shall immediately vest upon the date of termination.

Our senior management and other employees have made significant contributions to us over the past several years, and we believe that it is important to protect them in the event of a change in control. Further, it is our belief that the interests of our senior management should be aligned with our stockholders, and providing change in control benefits should eliminate, or at least reduce, the reluctance of senior management to pursue potential change in control transactions that may be in the best interests of our stockholders generally, but that may result in loss of employment for an individual Named Executive Officer.

 

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Table of Contents

Potential Payments upon Termination or Change in Control

 

In the event there is a change in control and within one year thereafter the officer’s employment (two years in the case of Mr. Pruitt) is terminated by us without cause or by the officer for good cause, the officer would generally be entitled to the following severance benefits:

 

   

a lump sum payment in cash equal to: (a) the sum of (1) the officer’s monthly base salary in effect on the termination date multiplied by 12, and (2) the amount of the officer’s full target bonus for the bonus year in which termination occurs, multiplied by (b) in the case of Mr. Pruitt, 2.5, and in the case of Messrs. Kunz, Jolas, Roberts and Emmert, 2.0;

 

   

a lump-sum payment in cash equal to the value of the officer’s accrued but unpaid salary through the date of such termination, plus the officer’s unused vacation days earned for the year prior to the year in which the termination occurs and a pro rata portion of the vacation days earned for the year in which the termination occurs;

 

   

payment of all applicable medical continuation premiums for continuation coverage under COBRA for the benefit of the officer (and his covered dependents as of the date of his termination, if any) under his then-current plan election for 18 months after termination; and

 

   

all Unvested Awards shall become fully vested.

In the case of termination by reason of the officer’s death or long-term/permanent disability, the officer or his heirs would be entitled to substantially the same benefits as outlined above for a termination by us without cause or by the officer for good cause in the absence of a change in control, except that any Unvested Awards would not become vested, but instead would terminate immediately, with the exception of any unvested restricted stock units which would immediately vest.

In the case of a termination of the applicable officer’s employment either by us for cause or by the officer without good cause, the officer would be entitled to payments for his accrued but unpaid pro rata monthly base salary and unused vacation, in each case through the date of termination, but all Unvested Awards would be canceled. Also, in the case of a termination by us for cause, all vested stock options held by the officer would remain exercisable for a period of up to 90 days, after which they would expire.

We may be required to reduce the amount of the payments due to Messrs. Pruitt, Kunz, Jolas, Roberts and Emmert in certain situations. Their executive severance agreements provide that in the event that any payment or distribution to such individual would be subject to the excise tax imposed by Section 4999 of the Code, and the aggregate amount 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 such individual would receive, after all such applicable taxes, if such individual received payments equal to an amount which is $1.00 less than three times such individual’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 such individual will not be subject to the excise tax. In no event, however, will we provide them with a tax gross-up payment or other tax assistance payment in the event that an excise tax is imposed upon the executive officer under Section 4999 of the Code. Under each executive severance agreement, we would have “cause” to terminate the applicable officer’s employment in the event of:

 

   

the officer’s gross negligence, willful misconduct or willful neglect in the performance of his material duties and services to us;

 

   

the officer’s final conviction of a felony by a trial court, or his entry of a plea of nolo contendere to a felony charge;

 

   

any criminal indictment of the officer relating to an event or occurrence for which he was directly responsible which, in the business judgment of a majority of our Board of Directors, exposes us to ridicule, shame or business or financial risk; or

 

   

a material breach by the officer of any material provision of the executive severance agreement.

 

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Potential Payments upon Termination or Change in Control

 

On the other hand, the officer generally would have “good cause” to terminate his employment if there is:

 

   

a material diminution in his then-current monthly base salary;

 

   

a material change in the location of his principal place of employment by us;

 

   

any material diminution in his current position or any title or position to which he has been promoted;

 

   

any material diminution of his authority, duties or responsibilities from those commensurate and consistent with the character, status and dignity appropriate to his current position or any title or position to which he has been promoted (provided, however, that if at any time he ceases to have such duties and responsibilities because we cease to have any securities registered under Section 12 of the Exchange Act or cease to be required to file reports under Section 15(d) of the Exchange Act, then the officer’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);

 

   

any material breach by us of any material provision of the executive severance agreement, including any failure by us to pay any amount due under the executive severance agreement; or

 

   

with respect to Mr. Pruitt, any restructuring of his direct reporting relationship within our Company.

Under each executive severance agreement, a “change in control” will be deemed to have occurred on the earliest of any of the following dates:

 

   

the date we merge or consolidate with any other person or entity, and our voting securities 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 our voting securities or such surviving entity outstanding immediately after such merger or consolidation;

 

   

the date we sell all or substantially all of our assets to any other person or entity;

 

   

the date we dissolve;

 

   

the date any person or entity together with its affiliates becomes, directly or indirectly, the beneficial owner of voting securities representing more than 50% of the total voting power of all of our then outstanding voting securities; or

 

   

the date the individuals who constituted the non-employee members of our Board of Directors (the “Incumbent Board”) as of the effective date of the agreement cease for any reason to constitute at least a majority of the non-employee members of our Board, provided that, for purposes of this clause, any person becoming a director whose election or nomination for election by our 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) will be considered as though such person were a member of the Incumbent Board;

provided, however, a “change in control” shall not be deemed to have occurred in connection with our bankruptcy or insolvency or any transaction in connection therewith.

Based on a hypothetical termination date of December 31, 2020, for each of our Named Executive Officers who were employed by us on December 31, 2020, the severance benefits for those Named Executive Officers due to

 

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Table of Contents

Potential Payments upon Termination or Change in Control

 

a termination either by us without “cause” or by the officer for “good cause” in the absence of a change in control pursuant to the terms of the executive severance agreements would have been as follows:

 

         
Name    Total Base
Salary
(1)
     Target Bonus      Healthcare and
Insurance
Benefits
(2)
     FMV of
Accelerated
Vesting
     Total(3)  

 

Ronnie Pruitt

 

  

 

$

 

 

1,550,000

 

 

 

 

  

 

$

 

 

852,500

 

 

 

 

  

 

$

 

 

34,573

 

 

 

 

  

 

$

 

 

585,960

 

 

 

 

  

 

$

 

 

3,023,033

 

 

 

 

 

John E. Kunz

 

  

 

 

 

 

455,400

 

 

 

 

  

 

 

 

 

341,550

 

 

 

 

  

 

 

 

 

30,107

 

 

 

 

  

 

 

 

 

196,253

 

 

 

 

  

 

 

 

 

1,023,310

 

 

 

 

 

Paul M. Jolas

 

  

 

 

 

 

404,875

 

 

 

 

  

 

 

 

 

242,925

 

 

 

 

  

 

 

 

 

21,691

 

 

 

 

  

 

 

 

 

136,697

 

 

 

 

  

 

 

 

 

806,189

 

 

 

 

 

Jeffrey W. Roberts

 

  

 

 

 

 

340,000

 

 

 

 

  

 

 

 

 

204,000

 

 

 

 

  

 

 

 

 

39,330

 

 

 

 

  

 

 

 

 

83,537

 

 

 

 

  

 

 

 

 

666,867

 

 

 

 

 

Matthew Emmert

 

  

 

 

 

 

320,000

 

 

 

 

  

 

 

 

 

192,000

 

 

 

 

  

 

 

 

 

39,330

 

 

 

 

  

 

 

 

 

69,948

 

 

 

 

  

 

 

 

 

621,277

 

 

 

 

 

1.

Mr. Pruitt’s salary severance benefit is equal to his monthly base salary multiplied by 24. Messrs. Kunz’s, Jolas’s, Roberts’s and Emmert’s salary severance benefits are equal to their monthly base salaries multiplied by 12.

2.

The value of healthcare and insurance benefits is for 18-months of COBRA coverage and is based upon the medical benefit plans and the tier coverage that the executive participated in as of December 31, 2020.

3.

Any unused but accrued vacation pay was excluded from the above table. Each Named Executive Officer is entitled to four weeks of annual vacation.

Based on a hypothetical termination without “cause” or by the Named Executive Officer for “good cause” and a change in control date of December 31, 2020, for each of our Named Executive Officers who were employed by us on December 31, 2020, the change in control termination benefits for those Named Executive Officers pursuant to the terms of the executive severance agreements would have been as follows:

 

 

Name

 

  

Change in
Control Sum
(1)

 

    

Healthcare
and Insurance
Benefits
(2)

 

    

FMV of
Accelerated
Vesting

 

    

Total(3)

 

 

 

Ronnie Pruitt

 

  

 

 

 

 

$4,068,750

 

 

 

 

  

 

 

 

 

$34,573

 

 

 

 

  

 

 

 

 

$3,317,510

 

 

 

 

  

 

 

 

 

$7,420,883

 

 

 

 

 

John E. Kunz

 

  

 

 

 

 

1,593,900

 

 

 

 

  

 

 

 

 

30,107

 

 

 

 

  

 

 

 

 

2,046,464

 

 

 

 

  

 

 

 

 

3,670,471

 

 

 

 

 

Paul M. Jolas

 

  

 

 

 

 

1,295,600

 

 

 

 

  

 

 

 

 

21,691

 

 

 

 

  

 

 

 

 

1,363,776

 

 

 

 

  

 

 

 

 

2,681,068

 

 

 

 

 

Jeffrey W. Roberts

 

  

 

 

 

 

1,088,000

 

 

 

 

  

 

 

 

 

39,330

 

 

 

 

  

 

 

 

 

887,334

 

 

 

 

  

 

 

 

 

2,014,664

 

 

 

 

 

Matthew Emmert

 

  

 

 

 

 

1,024,000

 

 

 

 

  

 

 

 

 

39,330

 

 

 

 

  

 

 

 

 

792,205

 

 

 

 

  

 

 

 

 

1,855,535

 

 

 

 

 

1.

Mr. Pruitt’s change in control sum was based upon his base salary plus target bonus multiplied by 2.5. For each of Messrs. Kunz, Jolas, Roberts and Emmert; the change in control sum was based upon their respective base salary plus target bonus multiplied by 2.0.

2.

The value of healthcare and insurance benefits is for 18-months of COBRA coverage and is based upon the medical benefit plans and the tier coverage that the executive participated in as of December 31, 2020.

3.

Any unused but accrued vacation pay was excluded from the above table. Each Named Executive Officer is entitled to four weeks of annual vacation.

Based on a hypothetical termination date of December 31, 2020 for each of our Named Executive Officers who were employed by us on December 31, 2020, the severance benefits for those Named Executive Officers due to a termination by reason of the officer’s death or long-term/permanent disability, pursuant to the terms of the executive severance agreements would have been as follows:

 

 

Name

 

  

 

Total Base
Salary
(1)

 

    

 

Target Bonus

 

    

 

Healthcare and
Insurance
Benefits

 

    

 

FMV of
Accelerated
Vesting

 

    

 

Total(2)

 

 

 

Ronnie Pruitt

 

  

 

 

 

 

$1,550,000

 

 

 

 

  

 

 

 

 

$852,500

 

 

 

 

  

 

 

 

 

$34,573

 

 

 

 

  

 

 

 

 

$3,065,699

 

 

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