SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _____________
Commission File Number : 0-24850
GIANT CEMENT HOLDING, INC.
(Exact name of registrant as specified in its charter)
Delaware 57-0997411
(State or other jurisdiction of incorporation) (Employer ID No.)
320-D Midland Parkway, Summerville, South Carolina 29485
Registrant's telephone number, including area code: (803) 851-9898
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the date of this filing.
Common Stock, $.01 Par Value 9,388,322 Shares Outstanding
Page 1 of 14
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GIANT CEMENT HOLDING, INC.
INDEX
PART I FINANCIAL INFORMATION
PAGE NO.
Item 1. Financial Statements
Condensed Consolidated Statements of Operations - Three
and Nine-Month Periods Ended September 30, 1997 and 1996............ 3
Condensed Consolidated Balance Sheets - September 30, 1997
and 1996 and December 31, 1996...................................... 4
Condensed Consolidated Statements of Cash Flows - Nine-Month
Periods Ended September 30, 1997 and 1996........................... 5
Notes to Condensed Consolidated Financial Statements................6-7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations..............................................8-12
PART II OTHER INFORMATION
Item 1. Legal Proceedings.................................................. 13
Item 6. Exhibits and Reports on Form 8-K................................... 13
(a) Exhibits....................................................... 13
(b) Reports on Form 8-K............................................ 13
2
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GIANT CEMENT HOLDING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and nine-month periods ended September 30, 1997 and 1996
(Unaudited)
Three Months Ended Nine Months Ended
1997 1996 1997 1996
---- ---- ---- ----
(In thousands, except per share data)
Operating revenues ..............$ 31,672 $ 29,335 $ 88,354 $ 82,540
Operating costs and expenses:
Cost of sales and services .... 20,715 19,636 62,600 58,908
Selling, general and
administrative ............. 1,845 1,820 5,763 6,036
-------- -------- -------- --------
Operating income ........... 9,112 7,879 19,991 17,596
Other income (expense):
Interest expense .............. (253) (242) (726) (820)
Other, net .................... 62 207 188 144
-------- -------- -------- --------
Income before taxes ........ 8,921 7,844 19,453 16,920
Provision for income taxes ...... 3,033 2,746 6,633 5,923
-------- -------- -------- --------
Net income .................$ 5,888 $ 5,098 $ 12,820 $ 10,997
======== ======== ======== ========
Net income per common share .....$ .63 $ .52 $ 1.35 $ 1.11
======== ======== ======== ========
Weighted average common shares .. 9,406 9,818 9,492 9,871
See accompanying notes to consolidated financial statements.
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GIANT CEMENT HOLDING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
(In thousands, except per share amounts) 1997 1996 1996
---- ---- ----
ASSETS
Current assets:
Cash and cash equivalents ................. $ 5,728 $ 6,577 $ 10,432
Accounts receivable, less allowances of
$1,450, $1,041 and $1,123, respectively . 18,312 17,047 14,897
Inventories ............................... 15,376 15,809 17,656
Other current assets ...................... 2,122 2,006 2,071
-------- -------- --------
Total current assets .................. 41,538 41,439 45,056
-------- -------- --------
Property, plant and equipment, at cost ...... 165,747 154,529 155,770
Less accumulated depreciation ............. 89,912 85,503 85,352
-------- -------- --------
75,835 69,026 70,418
-------- -------- --------
Deferred charges and other assets ........... 3,705 2,970 3,142
-------- -------- --------
Total assets .......................... $121,078 $113,435 $118,616
======== ======== ========
LIABILITIES
Current liabilities:
Accounts payable .......................... $ 5,326 $ 6,479 $ 10,437
Short-term borrowings ..................... -- -- --
Accrued expenses .......................... 7,124 8,145 6,843
Current maturities of long-term debt ...... 909 4,039 1,070
-------- -------- --------
Total current liabilities ............. 13,359 18,663 18,350
Long-term debt, net of current maturities ... 9,875 8,388 10,681
Accrued pension and postretirement benefits . 6,195 8,484 6,332
Deferred income taxes ....................... 6,367 4,332 6,125
-------- -------- --------
Total liabilities ..................... 35,796 39,867 41,488
-------- -------- --------
SHAREHOLDERS' EQUITY
Common stock, $.01 par value; 20,000 shares
authorized, 10,000 shares issued .......... 100 100 100
Capital in excess of par value .............. 41,208 41,022 41,022
Retained earnings ........................... 54,855 37,611 42,035
Less:
Treasury stock, at cost: 604, 218 and 336
shares, respectively .................... 9,343 2,696 4,491
Reduction for additional pension liability 1,538 2,469 1,538
-------- -------- --------
85,282 73,568 77,128
-------- -------- --------
Total liabilities and
shareholders' equity ................. $121,078 $113,435 $118,616
======== ======== ========
See accompanying notes to consolidated financial statements.
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GIANT CEMENT HOLDING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
for the nine-month periods ended September 30, 1997 and 1996
(Unaudited)
1997 1996
---- ----
(In thousands)
Operations:
Net income.................................. $12,820 $10,997
Depreciation and depletion.................. 7,319 6,767
Amortization of deferred charges and other.. 322 314
Deferred income taxes....................... 153 (200)
Changes in operating assets and liabilities:
Receivables................................. (3,415) (4,490)
Inventories................................. 2,280 1,293
Other current assets and deferred charges... (847) (812)
Accounts payable............................ (3,388) (1,693)
Accrued expenses............................ 230 290
------- -------
Net cash provided by operations........... 15,474 12,466
------- -------
Investing:
Purchase of property, plant and equipment... (14,459) (6,318)
------- -------
Financing:
Repayment of long-term debt................. (967) (3,098)
Repayment of short-term borrowings.......... (2,500) (5,385)
Proceeds from short-term borrowings......... 2,500 3,106
Purchase of treasury stock.................. (4,752) (2,296)
------- -------
Net cash (used) provided by financing..... (5,719) (7,673)
------- -------
Decrease in cash and cash equivalents... (4,704) (1,525)
Cash and Cash Equivalents:
Beginning of period......................... 10,432 8,102
------- -------
End of period............................... $ 5,728 $ 6,577
======= =======
See accompanying notes to consolidated financial statements.
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GIANT CEMENT HOLDING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying condensed consolidated financial statements have been
prepared in accordance with the requirements for interim financial
statements and, accordingly, they are condensed and omit disclosures
which would substantially duplicate those contained in the most recent
Annual Report to shareholders. The financial statements as of September
30, 1997 and 1996 and for the interim periods then ended are unaudited
and, in the opinion of management, include all adjustments (consisting
of normal recurring accruals) considered necessary for a fair
presentation. Due to the seasonal nature of the Company's business,
operating results for the interim periods are not necessarily indicative
of the results that may be expected for the full year.
The financial information as of December 31, 1996 has been derived from
the audited financial statements as of that date. For further
information, refer to the financial statements and notes included in the
Company's 1996 Annual Report to Shareholders.
2. Inventories (in thousands):
September 30 December 31
------------ -----------
1997 1996 1996
---- ---- ----
Finished goods $ 2,516 $ 2,478 $ 3,141
In process 714 608 1,236
Raw materials 1,456 1,968 2,025
Supplies, repair parts and coal 10,690 10,755 11,254
------- ------- -------
$15,376 $15,809 $17,656
======= ======= =======
3. Accrued Expenses (in thousands):
September 30 December 31
------------ -----------
1997 1996 1996
---- ---- ----
Compensation $ 2,010 $ 1,956 $ 2,161
Pension plan contributions 1,434 1,996 2,781
Income taxes 1,377 1,963 -
Other 2,303 2,230 1,901
------- ------- -------
$ 7,124 $ 8,145 $ 6,843
======= ======= =======
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4. Contingencies
The Company's operations and properties are subject to extensive and
changing federal, state and local laws (including common law), regulations
and ordinances relating to noise and dust suppression, air and water
quality, as well as to the handling, treatment, storage and disposal of
wastes ("Environmental Laws"). In connection with the Company's quarrying
and manufacturing operations and its utilization of hazardous waste-derived
fuel, Environmental Laws require certain permits and other authorizations
mandating procedures under which the Company shall operate. Environmental
Laws also provide significant penalties for violators, as well as
liabilities and costs of cleaning up releases of hazardous wastes into the
environment. Violations of mandated procedures under operating permits,
even if immaterial or unintentional, may result in fines, shutdowns,
remedial actions or revocation of such permits.
5. Pending Acquisition
In September 1997, the Company entered into a definitive agreement to merge
Solite Corporation and certain of its subsidiaries with Giant Cement
Holding, Inc. The Solite transaction will include three lightweight
aggregate manufacturing facilities with their associated resource recovery
operations, five concrete block plants, and a waste treatment and blending
facility. Giant will exchange 650,000 shares of its common stock for all of
the outstanding stock of Solite. The terms of the transaction additionally
include the assumption of up to $20.0 million of Solite's long-term debt.
The Company and Solite have received second requests for information from
the United States Department of Justice, Antitrust Division, relating to
their Premerger Notification filings under the Hart-Scott-Rodino Antitrust
Improvements Act. The transaction (which would be accounted for as a
purchase) is currently expected to close in the fourth quarter of 1997 or
early in 1998.
6. Earnings per Share
The Financial Accounting Standards Board has issued Statement No. 128
"Earnings Per Share". FAS No. 128 is effective for financial statements
issued for periods ending after December 15, 1997. FAS No. 128 will be
implemented in the Company's financial statements filed with Form 10-K for
the year ended December 31, 1997. The Company does not expect that FAS No.
128 will have a material impact on the earnings per share computation.
7
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
General
The Company's cement operations are directly related to the construction
industry. The regional markets in which the Company operates, the
Middle-Atlantic and South-Atlantic regions, are highly cyclical, experiencing
peaks and valleys in demand corresponding to regional and national construction
cycles. Additionally, the demand for cement is seasonal because construction
activity diminishes during the winter months of December, January and February.
The seasonal impact can be particularly acute in the Company's Middle-Atlantic
market. In addition, the Company performs a substantial portion of its routine
annual major maintenance projects during the period of low plant utilization,
typically the first quarter of its fiscal year, which results in significant
additional expense during this period. Accordingly, the Company has historically
experienced its lowest levels of revenue and gross profit during the first
quarter and thus the results for the interim period ended September 30, 1997 are
not necessarily indicative of the results that may be expected for the full
year. As a result of the cyclicality of the Company's business, there can be no
assurance that cement prices and revenues will continue to increase at
historical rates or remain at current levels.
The Company derives revenues from sales of products, primarily cement, as well
as from the provision of resource recovery services. Resource recovery services
revenue is primarily derived from third parties that pay the Company to utilize
their waste as fuel, which additionally reduces the cost of traditional fossil
fuels used in the manufacture of cement. Due to the nature of the Company's
operations and the fact that the burning of waste-derived fuels is inseparable
from the manufacture of cement, it is impractical to disaggregate the costs of
sales and services by revenue classification. The Company's resource recovery
operations are dependent on general and regional economic conditions; federal,
state and local environmental polices; and competition from other waste disposal
alternatives. There can be no assurance that the Company's resource recovery
services revenues will increase at historical rates or remain at current levels.
8
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Results of Operations
Nine-month period ended September 30, 1997 versus nine-month period ended
September 30, 1996
Operating revenues increased 7.0% to $88.4 million in 1997, compared with $82.5
million in 1996. Revenues from product sales increased $3.5 million or 4.9% to
$76.2 million in 1997, compared with $72.7 million in 1996, as a result of
higher average selling prices of cement and increased aggregate sales. Cement
shipping volumes in 1997 were level with 1996 volumes.
The Company's average selling price per ton of cement increased 3.7% for the
period ended September 30, 1997, compared with the comparable period in 1996, as
a result of price increases implemented in April 1996 and 1997. The Company
realized a price increase of $4 per ton in April 1997 in its Middle-Atlantic
market.
Resource recovery services revenues increased $2.3 million or 23.2% to $12.2
million in 1997, compared with $9.9 million in 1996. Liquid fuels utilized
increased 9.6%, while liquids pricing improved 7.1% over the prior year period.
The Company's solid fuels volume increased 31.8% to 13,345 tons. The average
price realized improved 10.7% over the first nine months of 1996 for solid
fuels. The Company anticipates that its year over year growth rate of resource
recovery revenues will be more modest in the fourth quarter of 1997 due to a
more difficult comparison to the prior year.
Gross profit increased 9.0% to $25.8 million in 1997, compared with $23.6
million in 1996, as a result of higher cement selling prices and resource
recovery revenues. The Company's gross margins increased to 29.1% in 1997 from
28.6% in 1996. In 1997, cost of sales and services increased $3.7 million or
6.3% to $62.6 million, compared with $58.9 million in 1996. The increase in cost
was the result of a more extensive winter maintenance shutdown, higher resource
recovery volumes, and higher costs incurred to import clinker to meet customer
demand in the Company's South-Atlantic markets. Cost of sales per ton of cement
increased 1.1% in 1997, compared with 1996.
Selling, general and administrative expenses decreased $273,000 to $5.8 million
in 1997, compared with $6.0 million in 1996. The expense decrease primarily
related to lower administrative costs.
Interest costs decreased $94,000 for the nine month period to $726,000 as a
result of lower average borrowings outstanding.
The income tax provisions recorded for the nine month periods ended September
30, 1997 and 1996, relate to federal and state income taxes and were recorded at
estimated annual effective rates of 34.0% and 35.0%, respectively.
Net income increased $1.8 million or 16.6% to $12.8 million in 1997, compared
with $11.0 million in 1996, primarily as a result of increased operating
revenues. Net income as a percentage of net sales increased from 13.3% in 1996
to 14.5% in 1997.
9
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Quarter ended September 30, 1997 versus quarter ended September 30, 1996
Operating revenues increased 8.0% to $31.7 million in 1997, compared with $29.3
million in 1996. Revenues from product sales increased $2.0 million or 7.7% to
$27.6 million in 1997, compared with $25.6 million in 1996, as a result of
increased shipping volumes in both of the Company's markets and higher average
selling prices of cement in the Company's Middle-Atlantic market. Cement
shipping volumes increased 3.4% in 1997, compared with the third quarter of
1996.
The Company's average selling price per ton of cement increased 2.8% for the
quarter ended September 30, 1997, compared with the third quarter of 1996,
primarily as a result of the $4 per ton April 1997 price increase implemented in
the Company's Middle-Atlantic market.
Resource recovery services revenues increased $373,000 or 10.0% to $4.1 million
in the third quarter of 1997, compared with $3.7 million in the third quarter of
1996. Liquid fuels utilized increased 4.7% while liquid fuels pricing improved
4.0% over a year earlier. The Company's solid fuels volume increased 8.5% to
4,500 tons, while the average price realized improved 4.1% over the third
quarter of 1996.
Gross profit increased 13.0% to $11.0 million in the third quarter of 1997,
compared with $9.7 million in the 1996 period, as a result of higher average
cement selling prices and improved resource recovery revenues. The Company's
gross margins increased to 34.6% in 1997 from 33.1% in 1996. In 1997, cost of
sales and services increased $1.1 million, or 5.5% for the quarter, primarily as
a result of higher shipping volumes.
Cement manufacturing costs per ton increased 2% in 1997, compared with the third
quarter of 1996. Selling, general and administrative expenses were level at $1.8
million in 1997 and 1996. Selling, general and administrative expenses as a
percentage of sales decreased from 6.2% in 1996 to 5.8% in 1997 as a result of
increased sales. Interest cost increased $11,000 for the 1997 quarter to
$253,000, as compared with $242,000 in 1996.
The income tax provisions recorded for the three months ended September 30, 1997
and 1996, related to federal and state income taxes and were recorded at
estimated annual effective rates of 34.0% and 35.0%, respectively.
Net income increased 15.5% to $5.9 million in 1997 compared with $5.1 million in
1996, primarily as a result of increased cement shipping volumes and pricing.
Net income as a percentage of net sales increased from 17.4% in 1996 to 18.6% in
1997.
10
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Liquidity and Capital Resources
The Company's liquidity requirements arise primarily from the funding of capital
expenditures, debt service obligations and working capital needs. The Company
has historically met these needs through internal generation of cash and
borrowings on revolving credit facilities. The Company's borrowings have
historically increased during the first half of the year because of the
seasonality of its business and the annual plant maintenance performed primarily
in the first quarter.
Cash and cash equivalents totalled $5.7 million at September 30, 1997, compared
with $10.4 million at December 31, 1996. At September 30, 1997 and December 31,
1996, the Company had net working capital of $28.2 million and $26.7 million,
respectively, with current ratios of 3.1 and 2.5, respectively. Accounts
receivable increased $3.4 million or 22.9% to $18.3 million at September 30,
1997, compared with $14.9 million at December 31, 1996, as a result of higher
cement and resource recovery revenues in September 1997, compared with December
1996. Inventories decreased $2.3 million, or 12.9%, to $15.4 million at
September 30, 1997. Total current liabilities decreased $5.0 million, or 27.2%,
to $13.4 million at September 30, 1997, primarily as a result of decreased
amounts payable to vendors for capital projects compared with December 31, 1996.
Cash provided by operations for the nine-month period ended September 30, 1997
increased $3.0 million to $15.5 million, compared with $12.5 million for the
comparable 1996 period. The increase of $3.0 million was primarily the result of
increased net income and depreciation, a smaller increase in receivables and a
decrease in inventories. Net cash used by investing activities increased from
$6.3 million in 1996 to $14.5 million in 1997 as a result of increased capital
expenditures. The Company anticipates that its capital expenditures will be in
the $12.0 million to $13.0 million range for 1998, excluding the Solite
acquisition described below and related capital expenditures. Net cash used by
financing activities decreased by $2.0 million in 1997 to $5.7 million as a
result of decreased net repayment of debt, partially offset by higher
repurchases of the Company's common stock which increased by $2.5 million to
$4.8 million in the 1997 period. Through September 30, 1997, the Company has
expended $9.2 million of the $10.0 million previously approved by the Board of
Directors for stock repurchases. In October 1997, the Company's Board of
Directors authorized an additional $5.0 million for repurchases of the Company's
common stock. The Company has utilized a total of $4.7 million in cash in 1997
versus $1.5 million in the comparable 1996 period, primarily as a result of the
increased capital spending and common stock repurchases.
In September 1997, the Company entered into a definitive agreement to merge
Solite Corporation (Solite) and certain of its subsidiaries into Giant Cement
Holding, Inc. The Solite transaction will include three lightweight aggregate
manufacturing facilities with their associated resource recovery operations,
five concrete block plants, and a waste treatment and blending facility. The
Solite operations expected to be acquired had revenues of approximately $51.0
million in the fiscal year ended March 31, 1997.
Solite's lightweight aggregate manufacturing facilities are located in Virginia
and North Carolina and have a combined rated production capacity of
approximately 600,000 tons. Their product is marketed throughout the eastern
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region of the United States to block producers, construction contractors and
road builders. Solite's concrete block facilities are located in Virginia and
North Carolina and have a combined rated production capacity of approximately
18.0 million blocks. Solite's resource recovery operations include permits to
utilize hazardous waste as a fuel substitute at each of the lightweight
aggregate facilities as well as a hazardous waste drum processing and fuel
blending facility in Alabama. The blending facility serves generators of
hazardous waste from the Midwest to the Southeast and Mid-Atlantic regions of
the United States.
Giant will exchange 650,000 shares of its common stock for all of the
outstanding stock of Solite. The terms of the transaction additionally include
the assumption of up to $20.0 million of Solite's long-term debt. The Company
and Solite have received second requests for information from the United States
Department of Justice, Antitrust Division, relating to their Premerger
Notification filings under the Hart-Scott-Rodino Antitrust Improvements Act. The
transaction is currently expected to close in the fourth quarter of 1997 or
early in 1998.
The Company has executed a commitment letter increasing the limit on its $32.0
million Credit Facility to $44.0 million and intends to refinance approximately
$20.0 million of Solite's existing indebtedness with proceeds from this
facility. The Company believes that its term loan and credit facility, together
with internally generated funds, will be sufficient to meet its needs for the
foreseeable future.
Disclosure Regarding Forward Looking Statements
This document contains certain forward-looking statements containing the words
"believes," "anticipates," "expects," and words of similar import, based upon
current expectations that involve a number of known and unknown business risks
and uncertainties. The factors that could cause results to differ materially
include the following: national and regional economic conditions, changes in the
levels of construction spending, changes in supply or pricing of waste fuels and
other risks as further described in the Company's Annual Report on Form 10-K
filed with the SEC for the year ended December 31, 1996.
12
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GIANT CEMENT HOLDING, INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
For information regarding environmental proceedings and legal matters, see
"Legal Proceedings" as reported in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(2) Form of Agreement and Plan of Merger between Giant and Solite
Corporation (Filed as Exhibit 6(a)(2) to the Company's
Registration Statement on Form S-4 dated September 30, 1997 and
incorporated herein by reference).
* (10.1) Form of Employment Agreement between the Company and Gary Pechota.
* (10.2) Form of Employment Agreement between the Company and Terry Kinder.
* (27) Financial Data Schedule.
(b) Reports on Form 8-K
During the quarter ended September 30, 1997, the Company did not file any
reports on Form 8-K.
Items 2, 3, 4 and 5 are not applicable.
* Filed herewith
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GIANT CEMENT HOLDING, INC. - Registrant
By: /s/ Terry L. Kinder
Terry L. Kinder
Vice President and Chief Financial Officer
Secretary-Treasurer
By: /s/ Victor Whitworth
Victor Whitworth
Corporate Controller
Principal Accounting Officer
Dated: November 1, 1997
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EMPLOYMENT AGREEMENT
AGREEMENT, dated as of July 30 , 1997, by and between GIANT CEMENT HOLDING,
INC., a Delaware corporation (the "Company"), and GARY PECHOTA (the
"Executive").
WHEREAS, the Company and the Executive as its President and Chief Executive
Officer wish to obtain assurances from each other that the Company will have the
benefit of the Executive's services;
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the Company and the Executive agree as follows:
1. Employment. The Company hereby employs the Executive as its Chairman,
President, Chief Executive Officer, and the Executive accepts such employment
and agrees to perform services for the Company for the Term (as defined in
Section 2 hereof) and upon the other terms and conditions set forth in this
Agreement.
2. Term. The term of the Executive's employment hereunder (the "Term")
shall be for a period commencing as of the date of this Agreement and
terminating on December 31, 2000, subject to earlier termination as hereafter
specified. This Agreement shall be automatically extended for one (1) year terms
unless the Company or the Executive gives the other written notice that the
Agreement is terminated prior to June 30, 2000 or thereafter on the applicable
anniversary date.
3. Position and Duties.
3.01 Service with the Company. The Executive agrees to perform such
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executive employment duties for the Company and its subsidiaries consistent with
the positions specified in Section 1 hereof and as the Board of Directors of the
Company (the "Board") shall assign to him from time to time. The executive also
agrees to serve, during the Term hereof, as requested by the Board, and without
any additional compensation, as a Director of the Company's subsidiaries.
3.02 Performance of Duties. The Executive agrees to serve the Company
faithfully and to the best of his ability and to devote the time, attention and
efforts necessary to advance the business and affairs of the Company and its
subsidiaries during the Term of this Agreement. During the Term hereof, the
Executive shall not serve as an officer, employee, proprietor, or partner
(excluding a non-executive capacity which will not conflict with his duties
herein) to any other corporation or other entity not affiliated with the Company
without the prior written consent of the Board.
4. Compensation.
4.01 Base Salary. As compensation for all services to be rendered by the
Executive under this Agreement, the Company shall pay the Executive an initial
base annual salary (the "Base Salary") of $275,000. The Base Salary shall be
paid in installments in accordance with the Company's normal payroll procedures
and policies. In addition, on an annual basis, the Compensation Committee of the
Board shall review the Base Salary with a view toward increases, bonuses or
both, based upon the Executive's performance during the preceding year or
pursuant to guidelines established by the Compensation Committee.
4.02 Stock Options. As an incentive to enter into this Agreement, the
Executive shall be entitled to stock options for the purchase of shares of the
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Company's Common Stock exercisable over a five (5) year period, pursuant to the
1994 Employee Stock Option Plan. The Executive may be granted additional stock
options as determined by the Stock Option Committee of the Board.
4.03 Participation in Benefit Plans. The Executive shall also be entitled,
to the extent that his position, title, tenure, salary, age, health and other
qualifications make him eligible, to participate in all employee benefit plans
or programs (including, but not limited to, medical/dental and life insurance,
disability, stock option, retirement and pension plans, vacation time, sick
leave and holidays) of the Company currently in existence on the date hereof or
as may hereafter be instituted from time to time. The Executive's participation
in any such plan or program shall be subject to the provisions, rules and
regulations applicable thereto. The Executive shall make himself available for
medical examinations in connection with the Company obtaining insurance on the
life of the Executive.
4.04 Expenses. In accordance with the Company's policies established from
time to time, the Company shall pay or reimburse the Executive for all
reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the presentment of
appropriate vouchers and receipts. The Company also shall provide the Executive
with an automobile of the type commensurate with the Executive's position.
5. Confidential Information. Except as permitted or directed by the Board,
the Executive shall not during the Term of this Agreement nor at any time
thereafter divulge, furnish or make accessible to anyone for use in any way
(other than in the ordinary course of the business of the Company) any
confidential or secret knowledge or information of the Company (for the purposes
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of this Section 5 and Section 6 hereof, the term "Company" shall be deemed to
include any subsidiary or affiliate of the Company, including, but not limited
to, Giant Cement Company, Keystone Cement Company and Giant Resource Recovery
Company, Inc.) which the Executive has acquired or become acquainted with or
will acquire or become acquainted with prior to the termination of the Term of
his employment by the Company, whether developed by himself or by others,
concerning any trade secrets, confidential or secret designs, processes,
formulae, plans, devices or material (whether or not patented or patentable)
directly or indirectly useful in any aspect of the business of the Company, and
confidential customer or supplier lists of the Company, or any confidential or
secret development or research work of the Company or any other confidential or
secret aspects of the business of the Company. The Executive acknowledges that
the above-described knowledge or information constitutes a unique and valuable
asset of the Company acquired at great time and expense by the Company, and that
any disclosure or other use of such knowledge or information other than for the
sole benefit of the Company would be wrongful and would cause irreparable harm
to the Company. Both during and after the Term of this Agreement, the Executive
shall refrain from any acts or omissions that would reduce the value of the use
of such knowledge or information to the Company. The foregoing obligations of
confidentiality, however, shall not apply to any knowledge or information which
is now published or which subsequently becomes generally publicly known, other
than as a direct or indirect result of the breach of this Agreement by the
Executive.
6. Non-Competition.
6.01 Prohibition. The Executive agrees that for a period of one (1) year
following the termination of his employment hereunder he shall not act as an
4
<PAGE>
officer, director, stockholder, partner, employee or consultant to a
corporation, partnership or other entity which engages in a business competitive
to the business that the Company is engaged in at the time the Executive ceased
to be an employee of the Company or within six (6) months prior to the cessation
of his employment hereunder, and which is located in area within a three hundred
(300) mile radius of any cement plant or other major facility owned or operated
by the Company at the time the Executive ceased to be an employee of the
Company.
6.02 Application. The restrictions in this Section 6 shall not apply (i)
with respect to a passive investment by the Executive of less than five percent
(5%) of the outstanding shares of capital stock of any corporation, (ii) with
respect to employment by the Executive with an entity in a management capacity
in an area of business which is not, directly or indirectly, competitive with
that of the Company, (iii) if the Executive's employment is terminated by the
Company other than pursuant to Section 7.03 or by the Executive for Good Reason
pursuant to Section 7.04 hereof or (iv) if the Company gives written notice to
the Executive that the Agreement is terminated, pursuant to Section 2 hereof.
7. Termination.
7.01 By Death or Disability of the Executive. This Agreement shall
automatically terminate in the event of the death or disability of the
Executive. For purposes of this Agreement, "disability" shall mean a condition,
due to illness or injury, either physical or mental, subject to which the
Executive is unable to perform his customary duties and responsibilities as
required by this Agreement for more than six (6) months in the aggregate out of
any period of twelve (12) consecutive months. The determination that the
Executive is disabled will be made by the Executive Committee, based upon the
5
<PAGE>
examination and certification by a qualified physician selected by the Company
and subject to the Executive's approval.
7.02 Payment on Death or Disability. In the event this Agreement is
terminated by reason of death of the Executive, the Company shall pay the
representative of the Executive an amount equal to twice his then current Base
Salary (less any disability insurance benefits previously paid to the Executive
from disability policies provided by the Company) which payment shall be made
within sixty (60) days after the date of death. The foregoing death benefit
shall be in addition to any life insurance proceeds payable to the Executive's
estate on policies taken by the Company or any subsidiary thereof. In the event
this Agreement is terminated by reason of the disability of the Executive, the
Company shall pay the Executive an amount equal to twice his then current Base
Salary (less any disability insurance benefits paid to the Executive from
disability policies provided by the Company), in twelve (12) equal monthly
installments commencing no more than thirty (30) days after such termination.
7.03 By the Company for Cause. The Company may terminate this Agreement for
cause at any time. For purposes of this Section 7.03, the term "cause" shall be
limited to (i) the willful engaging by the Executive in gross misconduct which
is materially injurious to the Company, with written notice of specific
misconduct given to the Executive, (ii) the conviction of the Executive of a
crime involving any financial impropriety or other crime which would materially
interfere with the Executive's ability to perform his services required under
this Agreement or otherwise be materially injurious to the Company or (iii) the
willful breach by the Executive of any of his material obligations under this
Agreement without proper justification, which breach is not cured within ten
(10) days after written notice thereof from the Company. For the purposes of
this Section 7.03 and Section 6.02 hereof, no act, or failure to act, on the
6
<PAGE>
Executive's part shall be considered willful unless done, or admitted to be
done, by the Executive in bad faith and without reasonable belief that such
action or omission was in the best interest of the Company. In the event this
Agreement is terminated pursuant to the Section 7.03, the Executive shall not be
entitled to any compensation other than his then current Base Salary which has
accrued though his date of termination, subject to the Company's right of offset
based upon acts of the Executive which gave rise to the termination.
7.04 By the Executive for Good Reason.
(a) The Executive may terminate this Agreement at any time for good reason
(as defined in Subsection (b) below). In the event that the Executive terminates
this Agreement pursuant to this Section 7.04, or should the Company terminate
this Agreement other than pursuant to Section 7.03 hereof, the Executive shall
receive a severance allowance equal to the greater of (i) his then current Base
Salary for twelve (12) months or (ii) the Base Salary for the remainder of the
then Term of this Agreement, which payments shall be in equal monthly
installments.
(b) "Good Reason" shall mean, without the Executive's express written
consent, any of the following circumstances, unless in the case of paragraphs
(i), (iv), (v) or (vii) immediately below such circumstances are fully corrected
prior to the date of termination specified in the notice of termination, given
in respect thereof;
(i) the assignment to the Executive of any duties inconsistent with his
status as the President, Chief Executive Officer of the Company or a substantial
adverse alteration in the nature or status of his responsibilities from those in
effect immediately prior to a change in such duties or responsibilities;
7
<PAGE>
(ii) a reduction by the Company in the Executive's Base Salary as then in
effect, except for across-the-board salary reductions similarly affecting all
senior executives of the Company and all senior executives of any entity in
control of the Company;
(iii) the failure by the Company to pay to the Executive any portion of his
current compensation except pursuant to an across-the-board compensation
deferral similarly affecting all senior executives of the Company and all senior
executives of any entity in control of the Company;
(iv) the failure by the Company to continue in effect any compensation plan
in which the Executive participates which is material to the Executive's total
compensation, unless an equitable arrangement (embodied in an ongoing substitute
or alternative plan) has been made with respect to such plan, or the failure by
the Company to continue the Executive's participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both
in terms of the amount of benefits provided and the level of the Executive's
participation relative to other participants, than the Executive's participation
as it existed at the time of a change in any such plan;
(v) the failure by the Company to continue to provide the Executive with
benefits substantially similar to those enjoyed by him under any of the
Company's medical/dental and life insurance, disability, retirement or pension
plans in which he was participating, or the taking of any action by the Company
which would, directly or indirectly, materially reduce any of such benefits or
deprive the Executive of any material fringe benefit enjoyed by him, or the
failure by the Company to provide the Executive with the number of paid vacation
days to which he is entitled on the basis of years of service with the Company
8
<PAGE>
in accordance with the Company's normal vacation policy;
(vi) the assignment of this Agreement by the Company pursuant to Section
9.05 hereof without the consent of the Executive;
(vii) any purported termination of the Executive's employment which is not
effected pursuant to the terms of this Agreement.
8. Injunctive Relief. The Executive agrees that it would be difficult to
compensate the Company fully for damages for any violation of the provisions of
this Agreement, including without limitation the provisions of Sections 5 and 6
hereof. Accordingly, the Executive specifically agrees that the Company shall be
entitled to temporary and permanent injunctive relief to enforce the provisions
of this Agreement. This provision with respect to injunctive relief shall not,
however, diminish the right of the Company to claim and recover damages in
addition to injunctive relief.
9. Miscellaneous.
9.01 Governing Law. This Agreement is made under and shall be governed by
and construed in accordance with the laws of the State of Delaware, subject to
any principles of conflict of laws.
9.02 Prior Agreements. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof and supersedes all prior
agreements and understandings with respect to such subject matter, and the
parties hereto have made no agreements, representations or warranties relating
to the subject matter of this Agreement which are not set forth herein.
9
<PAGE>
9.03 Withholding Taxes. The Company may withhold from any benefits payable
under this Agreement all federal, state, city and other taxes as shall be
required pursuant to any law or governmental regulation or ruling.
9.04 Amendments. No amendment or modification of this Agreement shall be
deemed effective unless made in writing and signed by the party against whom
enforcement of the amendment or modification is sought. Any written waiver shall
not be deemed a continuing waiver unless specifically so stated and shall
operate only as to the particular term, condition or act specified.
9.05 Binding; Assignment. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, successors,
administrators and permitted assigns. The Company may, without the consent of
the Executive, assign its rights and obligations under this Agreement to any
corporation, firm or other business entity (i) with or into which the Company
may merge or consolidate, or (ii) to which the Company may sell or transfer all
or substantially all of its assets or (iii) of which fifty percent (50%) or more
of the equity investment and of the voting control is owned, directly or
indirectly, by, or is under common ownership with, the Company; provided,
however, that if the assignee was not previously part of a consolidated group
with the Company, within thirty (30) days after receipt of written notice of the
assignment the Executive may terminate this Agreement pursuant to Section 7.04
hereof, or the executive may terminate this Agreement pursuant to the terms of
the Change of Control Agreement, dated July 30, 1997, by and between Giant
Cement Holding, Inc. and the Executive.
9.06 Notices. Any notice, request, demand or other document to be given
hereunder shall be in writing, and shall be delivered personally or sent by
10
<PAGE>
registered, certified or express mail or facsimile followed by mail as follows:
If to the Company:
Giant Cement Holding, Inc.
320-D Midland Parkway
Summerville, SC 29485
Attention: Chairman of the Compensation Committee
If to the Executive, to his or her last shown address on the books of the
Company, or to such other address as either party hereto may hereinafter duly
give to the other.
9.07. Severability. To the extent any provision of this Agreement shall be
invalid or unenforceable, it shall be considered deleted here from and the
remainder of such provision of this Agreement shall be unaffected and shall
continue in full force and effect. In furtherance and not in limitation of the
foregoing, should the duration or geographical extent of, or business activities
covered by, any provision of this Agreement be in excess of that which is valid
or enforceable under applicable law, then such provision shall be reconstructed
to cover only that duration, extent or activities which may be valid and
enforceable.
11
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year set forth above.
GIANT CEMENT HOLDING, INC.
By: _____________________________
Name:
Title:
_____________________________
GARY PECHOTA
12
<PAGE>
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of July 30 , 1997, by and between GIANT CEMENT HOLDING,
INC., a Delaware corporation (the "Company"), and TERRY L. KINDER (the
"Executive").
WHEREAS, the Company and the Executive wish to obtain assurances from each
other that the Company will have the benefit of the Executive's services;
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the Company and the Executive agree as follows:
1. Employment. The Company hereby employs the Executive as its Vice
President and Chief Financial Officer and Treasurer, and the Executive accepts
such employment and agrees to perform services for the Company for the Term (as
defined in Section 2 hereof) and upon the other terms and conditions set forth
in this Agreement.
2. Term. The term of the Executive's employment hereunder (the "Term")
shall be for a period commencing as of the date of this Agreement and
terminating on December 31, 2000, subject to earlier termination as hereafter
specified. This Agreement shall be automatically extended for one (1) year terms
unless the Company or the Executive gives the other written notice that the
Agreement is terminated prior to June 30, 2000 or thereafter on the applicable
anniversary date.
3. Position and Duties.
3.01 Service with the Company. The Executive agrees to perform such
1
<PAGE>
executive employment duties for the Company and its subsidiaries consistent with
the positions specified in Section 1 hereof and as the Chairman of the Board,
the President or the Board of Directors of the Company (the "Board") shall
assign to him from time to time. The executive also agrees to serve, during the
Term hereof, as requested by the Board, and without any additional compensation,
as a Director of the Company's subsidiaries.
3.02 Performance of Duties. The Executive agrees to serve the Company
faithfully and to the best of his ability and to devote the time, attention and
efforts necessary to advance the business and affairs of the Company and its
subsidiaries during the Term of this Agreement. During the Term hereof, the
Executive shall not serve as an officer, employee, proprietor, or partner
(excluding a non-executive capacity which will not conflict with his duties
herein) to any other corporation or other entity not affiliated with the Company
without the prior written consent of the Board.
4. Compensation.
4.01 Base Salary. As compensation for all services to be rendered by the
Executive under this Agreement, the Company shall pay the Executive an initial
base annual salary (the "Base Salary") of $165,000. The Base Salary shall be
paid in installments in accordance with the Company's normal payroll procedures
and policies. In addition, on an annual basis, the Compensation Committee of the
Board shall review the Base Salary with a view toward increases, bonuses or
both, based upon the Executive's performance during the preceding year or
pursuant to guidelines established by the Compensation Committee.
4.02 Stock Options. As an incentive to enter into this Agreement, the
Executive shall be entitled to stock options for the purchase of shares of the
2
<PAGE>
Company's Common Stock exercisable over a five (5) year period, pursuant to the
1994 Employee Stock Option Plan. The Executive may be granted additional stock
options as determined by the Stock Option Committee of the Board.
4.03 Participation in Benefit Plans. The Executive shall also be entitled,
to the extent that his position, title, tenure, salary, age, health and other
qualifications make him eligible, to participate in all employee benefit plans
or programs (including, but not limited to, medical/dental and life insurance,
disability, stock option, retirement and pension plans, vacation time, sick
leave and holidays) of the Company currently in existence on the date hereof or
as may hereafter be instituted from time to time. The Executive's participation
in any such plan or program shall be subject to the provisions, rules and
regulations applicable thereto. The Executive shall make himself available for
medical examinations in connection with the Company obtaining insurance on the
life of the Executive.
4.04 Expenses. In accordance with the Company's policies established from
time to time, the Company shall pay or reimburse the Executive for all
reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the presentment of
appropriate vouchers and receipts. The Company also shall provide the Executive
with an automobile of the type commensurate with the Executive's position.
5. Confidential Information. Except as permitted or directed by the Board,
the Executive shall not during the Term of this Agreement nor at any time
thereafter divulge, furnish or make accessible to anyone for use in any way
(other than in the ordinary course of the business of the Company) any
confidential or secret knowledge or information of the Company (for the purposes
3
<PAGE>
of this Section 5 and Section 6 hereof, the term "Company" shall be deemed to
include any subsidiary or affiliate of the Company, including, but not limited
to, Giant Cement Company, Keystone Cement Company and Giant Resource Recovery
Company, Inc.) which the Executive has acquired or become acquainted with or
will acquire or become acquainted with prior to the termination of the Term of
his employment by the Company, whether developed by himself or by others,
concerning any trade secrets, confidential or secret designs, processes,
formulae, plans, devices or material (whether or not patented or patentable)
directly or indirectly useful in any aspect of the business of the Company, and
confidential customer or supplier lists of the Company, or any confidential or
secret development or research work of the Company or any other confidential or
secret aspects of the business of the Company. The Executive acknowledges that
the above-described knowledge or information constitutes a unique and valuable
asset of the Company acquired at great time and expense by the Company, and that
any disclosure or other use of such knowledge or information other than for the
sole benefit of the Company would be wrongful and would cause irreparable harm
to the Company. Both during and after the Term of this Agreement, the Executive
shall refrain from any acts or omissions that would reduce the value of the use
of such knowledge or information to the Company. The foregoing obligations of
confidentiality, however, shall not apply to any knowledge or information which
is now published or which subsequently becomes generally publicly known, other
than as a direct or indirect result of the breach of this Agreement by the
Executive.
6. Non-Competition.
6.01 Prohibition. The Executive agrees that for a period of one (1) year
following the termination of his employment hereunder he shall not act as an
4
<PAGE>
officer, director, stockholder, partner, employee or consultant to a
corporation, partnership or other entity which engages in a business competitive
to the business that the Company is engaged in at the time the Executive ceased
to be an employee of the Company or within six (6) months prior to the cessation
of his employment hereunder, and which is located in area within a three hundred
(300) mile radius of any cement plant or other major facility owned or operated
by the Company at the time the Executive ceased to be an employee of the
Company.
6.02 Application. The restrictions in this Section 6 shall not apply (i)
with respect to a passive investment by the Executive of less than five percent
(5%) of the outstanding shares of capital stock of any corporation, (ii) with
respect to employment by the Executive with an entity in a management capacity
in an area of business which is not, directly or indirectly, competitive with
that of the Company, (iii) if the Executive's employment is terminated by the
Company other than pursuant to Section 7.03 or by the Executive for Good Reason
pursuant to Section 7.04 hereof or (iv) if the Company gives written notice to
the Executive that the Agreement is terminated, pursuant to Section 2 hereof.
7. Termination.
7.01 By Death or Disability of the Executive. This Agreement shall
automatically terminate in the event of the death or disability of the
Executive. For purposes of this Agreement, "disability" shall mean a condition,
due to illness or injury, either physical or mental, subject to which the
Executive is unable to perform his customary duties and responsibilities as
required by this Agreement for more than six (6) months in the aggregate out of
any period of twelve (12) consecutive months. The determination that the
Executive is disabled will be made by the Executive Committee, based upon the
5
<PAGE>
examination and certification by a qualified physician selected by the Company
and subject to the Executive's approval.
7.02 Payment on Death or Disability. In the event this Agreement is
terminated by reason of death of the Executive, the Company shall pay the
representative of the Executive an amount equal to twice his then current Base
Salary (less any disability insurance benefits previously paid to the Executive
from disability policies provided by the Company) which payment shall be made
within sixty (60) days after the date of death. The foregoing death benefit
shall be in addition to any life insurance proceeds payable to the Executive's
estate on policies taken by the Company or any subsidiary thereof. In the event
this Agreement is terminated by reason of the disability of the Executive, the
Company shall pay the Executive an amount equal to twice his then current Base
Salary (less any disability insurance benefits paid to the Executive from
disability policies provided by the Company), in twelve (12) equal monthly
installments commencing no more than thirty (30) days after such termination.
7.03 By the Company for Cause. The Company may terminate this Agreement for
cause at any time. For purposes of this Section 7.03, the term "cause" shall be
limited to (i) the willful engaging by the Executive in gross misconduct which
is materially injurious to the Company, with written notice of specific
misconduct given to the Executive, (ii) the conviction of the Executive of a
crime involving any financial impropriety or other crime which would materially
interfere with the Executive's ability to perform his services required under
this Agreement or otherwise be materially injurious to the Company or (iii) the
willful breach by the Executive of any of his material obligations under this
Agreement without proper justification, which breach is not cured within ten
(10) days after written notice thereof from the Company. For the purposes of
this Section 7.03 and Section 6.02 hereof, no act, or failure to act, on the
6
<PAGE>
Executive's part shall be considered willful unless done, or admitted to be
done, by the Executive in bad faith and without reasonable belief that such
action or omission was in the best interest of the Company. In the event this
Agreement is terminated pursuant to the Section 7.03, the Executive shall not be
entitled to any compensation other than his then current Base Salary which has
accrued though his date of termination, subject to the Company's right of offset
based upon acts of the Executive which gave rise to the termination.
7.04 By the executive for Good Reason.
(a) The Executive may terminate this Agreement at any time for good reason
(as defined in Subsection (b) below). In the event that the Executive terminates
this Agreement pursuant to this Section 7.04, or should the Company terminate
this Agreement other than pursuant to Section 7.03 hereof, the Executive shall
receive a severance allowance equal to the greater of (i) his then current Base
Salary for twelve (12) months or (ii) the Base Salary for the remainder of the
then Term of this Agreement, which payments shall be in equal monthly
installments.
(b) "Good Reason" shall mean, without the Executive's express written
consent, any of the following circumstances, unless in the case of paragraphs
(i), (iv), (v) or (vii) immediately below such circumstances are fully corrected
prior to the date of termination specified in the notice of termination, given
in respect thereof;
(i) the assignment to the Executive of any duties inconsistent with his
status as the Vice President and Chief Financial Officer and Treasurer of the
Company or a substantial adverse alteration in the nature or status of his
responsibilities from those in effect immediately prior to a change in such
duties or responsibilities;
7
<PAGE>
(ii) a reduction by the Company in the Executive's Base Salary as then in
effect, except for across-the-board salary reductions similarly affecting all
senior executives of the Company and all senior executives of any entity in
control of the Company;
(iii) the failure by the Company to pay to the Executive any portion of his
current compensation except pursuant to an across-the-board compensation
deferral similarly affecting all senior executives of the Company and all senior
executives of any entity in control of the Company;
(iv) the failure by the Company to continue in effect any compensation plan
in which the Executive participates which is material to the Executive's total
compensation, unless an equitable arrangement (embodied in an ongoing substitute
or alternative plan) has been made with respect to such plan, or the failure by
the Company to continue the Executive's participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both
in terms of the amount of benefits provided and the level of the Executive's
participation relative to other participants, than the Executive's participation
as it existed at the time of a change in any such plan;
(v) the failure by the Company to continue to provide the Executive with
benefits substantially similar to those enjoyed by him under any of the
Company's medical/dental and life insurance, disability, retirement or pension
plans in which he was participating, or the taking of any action by the Company
which would, directly or indirectly, materially reduce any of such benefits or
deprive the Executive of any material fringe benefit enjoyed by him, or the
failure by the Company to provide the Executive with the number of paid vacation
days to which he is entitled on the basis of years of service with the Company
8
<PAGE>
in accordance with the Company's normal vacation policy;
(vi) the assignment of this Agreement by the Company pursuant to Section
9.05 hereof without the consent of the Executive;
(vii) the failure of the Company to maintain the Executive's primary place
of employment within a reasonable commuting distance of Charleston, South
Carolina; or
(viii) any purported termination of the Executive's employment which is not
effected pursuant to the terms of this Agreement.
8. Injunctive Relief. The Executive agrees that it would be difficult to
compensate the Company fully for damages for any violation of the provisions of
this Agreement, including without limitation the provisions of Sections 5 and 6
hereof. Accordingly, the Executive specifically agrees that the Company shall be
entitled to temporary and permanent injunctive relief to enforce the provisions
of this Agreement. This provision with respect to injunctive relief shall not,
however, diminish the right of the Company to claim and recover damages in
addition to injunctive relief.
9. Miscellaneous.
9.01 Governing Law. This Agreement is made under and shall be governed and
construed in accordance with the laws of the State of Delaware, subject to any
principles of conflict of laws.
9.02 Prior Agreements. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof and supersedes all prior
agreements and understandings with respect to such subject matter, and the
parties hereto have made no agreements, representations or warranties relating
to the subject matter of this Agreement which are not set forth herein.
9
<PAGE>
9.03 Withholding Taxes. The Company may withhold from any benefits payable
under this Agreement all federal, state, city and other taxes as shall be
required pursuant to any law or governmental regulation or ruling.
9.04 Amendments. No amendment or modification of this Agreement shall be
deemed effective unless made in writing and signed by the party against whom
enforcement of the amendment or modification is sought. Any written waiver shall
not be deemed a continuing waiver unless specifically so stated and shall
operate only as to the particular term, condition or act specified.
9.05 Binding; Assignment. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, successors,
administrators and permitted assigns. The Company may, without the consent of
the Executive, assign its rights and obligations under this Agreement to any
corporation, firm or other business entity (i) with or into which the Company
may merge or consolidate, or (ii) to which the Company may sell or transfer all
or substantially all of its assets or (iii) of which fifty percent (50%) or more
of the equity investment and of the voting control is owned, directly or
indirectly, by, or is under common ownership with, the Company; provided,
however, that if the assignee was not previously part of a consolidated group
with the Company, within thirty (30) days after receipt of written notice of the
assignment the Executive may terminate this Agreement pursuant to Section 7.04
hereof, or the executive may terminate this Agreement pursuant to the terms of
the Change of Control Agreement, dated July 30, 1997, by and between Giant
Cement Holding, Inc. and the Executive.
10
<PAGE>
9.06 Notices. Any notice, request, demand or other document to be given
hereunder shall be in writing, and shall be delivered personally or sent by
registered, certified or express mail or facsimile followed by mail as follows:
If to the Company:
Giant Cement Holding, Inc.
320-D Midland Parkway
Summerville, SC 29485
Attention: Chairman of the Compensation Committee
If to the Executive, to his or her last shown address on the books of the
Company, or to such other address as either party hereto may hereinafter duly
give to the other.
9.07. Severability. To the extent any provision of this Agreement shall be
invalid or unenforceable, it shall be considered deleted here from and the
remainder of such provision of this Agreement shall be unaffected and shall
continue in full force and effect. In furtherance and not in limitation of the
foregoing, should the duration or geographical extent of, or business activities
covered by, any provision of this Agreement be in excess of that which is valid
or enforceable under applicable law, then such provision shall be reconstructed
to cover only that duration, extent or activities which may be valid and
enforceable.
11
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year set forth above.
GIANT CEMENT HOLDING, INC.
By: _____________________________
Name:
Title:
______________________________
TERRY KINDER
12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company' financial statements and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Sep-30-1997
<CASH> 5728
<SECURITIES> 0
<RECEIVABLES> 18312
<ALLOWANCES> 1450
<INVENTORY> 15376
<CURRENT-ASSETS> 41538
<PP&E> 165747
<DEPRECIATION> 89912
<TOTAL-ASSETS> 121078
<CURRENT-LIABILITIES> 13359
<BONDS> 0
0
0
<COMMON> 100
<OTHER-SE> 85182
<TOTAL-LIABILITY-AND-EQUITY> 121078
<SALES> 88354
<TOTAL-REVENUES> 88354
<CGS> 62600
<TOTAL-COSTS> 62600
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 726
<INCOME-PRETAX> 19453
<INCOME-TAX> 6633
<INCOME-CONTINUING> 12820
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12820
<EPS-PRIMARY> 1.35
<EPS-DILUTED> 1.35
</TABLE>
