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Item 1.01
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Entry into a Material Definitive Agreement.
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On December 21, 2016, Vulcan
Materials Company (“Vulcan”, “we”, “our”, or “us”) entered into a new credit agreement
(the “Credit Agreement”) that provides a five-year $750 million unsecured revolving credit facility and a five-year
$250 million unsecured delayed draw term loan facility (the “Credit Facilities”). The Credit Facilities are guaranteed
by our significant subsidiaries. Proceeds of the Credit Facilities will be used for general corporate purposes.
The Credit Agreement contains
affirmative, negative, and financial covenants and events of default customary for investment-grade credit facilities.
The
primary negative covenant limits our ability to incur secured debt. The financial covenants are: (1) a maximum debt to EBITDA ratio
of 3.50:1.00 (with a permitted step-up to 3.75:1.00 for three (3) fiscal quarters ending after the consummation of certain material
acquisitions), and (2) a minimum EBITDA to interest expense ratio of 3.00:1.00.
Loans under the Credit
Facilities bear interest at a rate equal to the Eurodollar Rate (LIBOR, adjusted for any reserves for Eurocurrency liabilities),
or the Base Rate (which is defined as the highest of the SunTrust prime rate, the Federal funds rate plus 0.50% and the one-month
Eurodollar Rate plus 1.00%) plus a credit spread based on our credit ratings (which is different for Eurodollar Rate loans and
Base Rate loans).
SunTrust Bank serves as
administrative agent and the lenders (the “Lenders”) under the Credit Agreement are:
SunTrust Bank
Wells Fargo Bank, National Association
U.S. Bank National Association
Bank of America, N.A.
Regions Bank
Goldman Sachs Bank USA
The Northern Trust Company
First Tennessee Bank National Association
Synovus Bank
Atlantic Capital Bank
Certain of the Lenders
and their affiliates have provided from time to time, and may continue to provide, investment banking, commercial banking, financial
and other services to us for which we have paid, and intend to pay, customary fees. Additionally, our pension fund invests in funds
managed by certain of the Lenders or affiliates of the Lenders.
The foregoing description
of the Credit Facilities is qualified in its entirety by reference to the full text of the Credit Agreement, which is filed as
Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The Credit Agreement has
been included to provide shareholders with information regarding its terms. The inclusion of such document is not intended to provide
any other factual information about Vulcan or our subsidiaries or affiliates. The representations, warranties and covenants contained
in the Credit Agreement were made solely for purposes of such document and as of specific dates, were solely for the benefit of
the parties to the Credit Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified
by confidentiality disclosures made for the purposes of allocating contractual risk between the parties to the Credit Agreement
instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties
that differ from those applicable to shareholders. Shareholders are not third-party beneficiaries under the Credit Agreement and
should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual
state of facts or condition of Vulcan or any of our subsidiaries or affiliates. Moreover, information concerning the subject matter
of the representations and warranties may change after the date of the Credit Agreement, which subsequent information may or may
not be fully reflected in Vulcan’s public disclosures.
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Item 1.02
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Termination of a Material Definitive Agreement.
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On December 21, 2016, Vulcan
terminated the credit agreement dated June 19, 2015 among Vulcan, SunTrust Bank, as administrative agent, and the several banks
from time to time parties thereto as lenders (the “2015 Credit Agreement”). The 2015 Credit Agreement provided a five-year
$750 million unsecured revolving credit facility that was guaranteed by Vulcan’s significant subsidiaries. Certain of the
lenders under the 2015 Credit Agreement and their affiliates have provided from time to time, and may continue to provide, investment
banking, commercial banking, financial and other services to us for which we have paid, and intend to pay, customary fees. Additionally,
our pension fund invests in funds managed by certain of the lenders or affiliates of the lenders. No early termination penalty
was incurred by Vulcan in connection with the termination. The 2015 Credit Agreement was terminated in anticipation of Vulcan entering
into the Credit Agreement as described in Item 1.01 of this Current Report on Form 8-K.