Item 1.01 Entry into a Material Definitive Agreement.
On June 17, 2008, Vulcan Materials Company (the "Company") agreed to sell
$250,000,000 aggregate principal amount of its 6.30% Notes due 2013 (the "2013
Notes") and $400,000,000 aggregate principal amount of its 7.00% Notes due 2018
(the "2018 Notes," and together with the 2013 Notes, the "Notes") pursuant to
the provisions of an Underwriting Agreement dated June 17, 2007 (the
"Underwriting Agreement"), among the Company and Banc of America Securities LLC,
Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Wachovia Capital Markets,
LLC, as representatives of the several underwriters named therein (collectively,
the "Underwriters"). The sale of the Notes closed on June 20, 2008.
The Company intends to use the net proceeds of approximately $644,977,500
from the offering of the Notes to repay borrowings outstanding under the
Company's (i) 364-Day Bridge Credit Agreement dated as of November 16, 2007 with
Wachovia Bank, National Association, as administrative agent, and the lenders
and other parties thereto, (ii) 364-Day Credit Agreement dated as of November
16, 2007 with Bank of America, N.A., as administrative agent, and the lenders
and other parties thereto, (iii) Five-Year Credit Agreement dated as of November
16, 2007 with Bank of America, N.A., as administrative agent, and the lenders
and other parties thereto, or (iv) commercial paper issuances.
The Notes were offered and sold under a Registration Statement on Form S-3,
Registration No. 333-147796, filed by the Company with the Securities and
Exchange Commission on December 3, 2007, as supplemented by the final prospectus
supplement filed by the Company with the Securities and Exchange Commission on
June 19, 2008.
The Notes were issued under the Senior Debt Indenture, dated as of December
11, 2007 (the "Indenture"), between the Company and Wilmington Trust Company, as
trustee (the "Trustee"), as supplemented by the Second Supplemental Indenture,
dated as of June 20, 2008, between the Company and the Trustee (the "Second
Supplemental indenture").
The 2013 Notes were priced to investors at 99.799% of the principal amount,
will bear interest at 6.30% per annum and will mature on June 15, 2013, and the
2018 Notes were priced to investors at 99.895% of the principal amount, will
bear interest at 7.00% per annum and will mature on June 15, 2018. Interest on
each series of Notes will be payable on June 15 and December 15 of each year,
beginning on December 15, 2008.
Each series of Notes will be redeemable as a whole or in part, at the
Company's option, at any time, at a redemption price equal to the greater of (1)
100% of the principal amount of such notes and (2) the sum of the present values
of the remaining scheduled payments of principal and interest (exclusive of
interest accrued to the date of redemption) on the notes of that series
discounted to the redemption date semiannually (assuming a 360-day year
consisting of twelve 30-day months) at the treasury rate for that series, plus
45 basis points (in the case of the 2013 notes) or 45 basis points (in the case
of the 2018 notes), and plus in each case, any accrued and unpaid interest on
the notes being redeemed to the date of redemption but interest installments
whose stated maturity is on or prior to the date of redemption will be payable
to the holders of such notes of record at the close of business on the relevant
record dates for the notes.
Unless the Company has exercised its right to redeem the Notes or has
defeased the Notes, upon a change of control repurchase event (as defined in the
Second Supplemental Indenture), the Company will be required to make an offer to
repurchase the Notes at a price in cash equal to 101% of the principal amount of
the Notes, plus any accrued and unpaid interest to, but not including, the
purchase date.
The Indenture is filed as Exhibit 4.1 to the Company's Form 8-K filed with
the Securities and Exchange Commission on December 11, 2007 and is incorporated
herein by reference and the Second Supplemental Indenture is filed as Exhibit
4.1 to this Form 8-K and is incorporated herein by reference. The descriptions
of the material terms of each of the Indenture and the Second Supplemental
Indenture are qualified in their entirety by reference to such exhibits.
The Underwriting Agreement contains usual and customary terms, conditions,
representations and warranties and indemnification provisions. The Underwriting
Agreement is filed as Exhibit 1.1 to this Form 8-K and is incorporated herein by
reference. The description of the material terms of the Underwriting Agreement
is qualified in their entirety by reference to such exhibit.
Certain of the Underwriters and their respective affiliates have, from time
to time, performed, and may in the future perform, various financial advisory
and investment banking services for the company, for which they received or will
receive customary fees and expenses. Goldman, Sachs & Co. provided financial
advisory services to Vulcan in connection with the acquisition of Florida Rock
Industries, Inc. for which it received customary fees. In addition, each of Bank
of America, N.A., an affiliate of Banc of America Securities LLC, goldman Sachs
Credit Partners L.P., an affiliate of Goldman, Sachs & Co., JPMorgan Chase Bank,
N.A., an affiliate of J.P. Morgan Securities Inc., and Wachovia Bank, National
Association, an affiliate of Wachovia Capital Markets, LLC, is a lender under
the Bridge Credit Facility, 364-Day Credit Facility and Five-Year Credit
Facility. Banc of America Securities LLC and Goldman, Sachs & Co. are dealers
with respect to the Company's commercial paper program, and JPMorgan Chase Bank,
N.A., an affiliate of J.P. Morgan Securities Inc., is the issuing and paying
agent. Citigroup Global Markets Inc. is an affiliate of Citicorp USA Inc., a
lender under the Company's credit facilities, and Citibank, N.A., the
authenticating agent, paying agent, registrar and transfer agent with respect to
the Notes. In addition, certain of the other co-managers or their affiliates are
lenders under the Company's credit facilities. Certain of the Underwriters and
their respective affiliates may also participate in the Company's new term loan
anticipated to close on June 23, 2008.
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