SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549


FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 11, 2010

VULCAN MATERIALS COMPANY
(Exact name of registrant as specified in its charter)

New Jersey
(State or other jurisdiction
of incorporation)
001-33841
(Commission File Number)
20-8579133
(IRS Employer
Identification No.)

1200 Urban Center Drive
Birmingham, Alabama 35242
(Address of principal executive offices) (zip code)

Registrant's telephone number, including area code:
(205) 298-3000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

o           Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o           Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o           Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o           Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 

Item 1.01           Entry into a Material Definitive Agreement
 
On February 11, 2010, the Compensation Committee of the Board of Directors of Vulcan Materials Company (the "Company") approved for each of the named executive officers to be included in the Company’s 2010 proxy statement (the “NEOs”), (i) the 2010 base salaries, effective March 1, 2010 and (ii) the short term target bonus percentages for the 2010 fiscal year.  Due to the continued downturn in the economy, short term cash bonuses were not earned, and therefore, the Compensation Committee did not approve the payment of any cash bonuses for the NEO’s based on the Company’s 2009 performance.  The compensation for the CEO was ratified by the Board of Directors.

 
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Salary and Cash Bonus
 
Each of the NEO’s participates in the Company’s Executive Incentive Plan (“EIP”).  Under this plan, participating executives are entitled to earn an annual cash incentive award to the extent established financial objectives are achieved.
 
The Compensation Committee has selected Economic Profit (“EP”), which is defined as operating income after current taxes less a charge for capital employed, as the financial performance objective for determining awards under the EIP and MIP.  A target EP is established by the Compensation Committee annually at its February meeting based on the average of last year’s actual EP and last year’s target EP for the Company as well as each of its divisions, subject to certain adjustments, including the effects of certain long-term investment projects.  The target EP represents the amount of EP that must be earned in order for a “target bonus” to be paid.  The “target bonus” is expressed as a percentage of base salary and established for each named executive officer based on market surveys of similar-sized industrial companies.  A named executive officer can earn from zero up to an amount equal to his Bonus Cap, depending on the actual EP results for the year.  If the EP performance relative to the EP target (for the Company or its business units as applicable for the particular executive officer) is not met, then the executive’s bonus would be reduced in accordance with a predetermined schedule.  In the case of the NEOs other than the Chief Executive Officer, the Chief Executive Officer can adjust the actual bonus to be paid to the NEOs subject to the EIP individual Bonus Caps, based on:
 
 
·
the individual performance of the executive
 
 
·
the safety, health and environmental performance record of the Company and its Divisions
 
 
·
consistent above target performance for 3 or more years
 
 
·
successful implementation of Vulcan strategic objectives
 
The Compensation Committee likewise determines the actual bonus payable to the Chief Executive Officer based on his performance, subject to the restraints set forth above.
 
For each NEO, the following table reflects (i) the 2010 base salary effective March 1, 2010, (ii) the fact that no cash bonuses were approved or paid, and (iii) the target bonus opportunity for the 2010 fiscal year.
 
Named Executive
  
Title
  
Base Salary
    
Target 2010
Annual Bonus Opportunity as
a Percentage of Base Salary
    
2009 Bonus
  
Donald M. James
  
Chairman and Chief Executive Officer
   $ 1,250,000       100 %   $ 0  
Daniel F. Sansone
  
Senior Vice President, Chief Financial Officer
     515,000       70 %     0  
Ronald G. McAbee
  
Senior Vice President, Construction Materials – West
     416,000       65 %     0  
Danny R. Shepherd
  
Senior Vice President, Construction Materials - East
     416,000       65 %     0  
Robert A. Wason IV
  
Senior Vice President, General Counsel
     391,000       55 %     0  
 
For Donald M. James, Chairman and CEO, the base salary effective March 1, 2010 remains unchanged from the base salary effective March 1, 2008.
 
Long-Term Incentive Award Payments
 
The Compensation Committee also authorized payments to the NEOs for the Performance Share Units previously granted pursuant to the Company’s 2006 Long-Term Incentive Plan. The payments were based on internal performance measures along with changes in the market value of our common stock and total shareholder return versus the S&P 500 index.

 
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The following table sets forth the amount earned for the previously granted Performance Share Units for the period ending December 31, 2009. Note that the value will be paid in shares of the Company’s common stock.
 
Named Executive
  
Title
  
Performance
Period
  
Original Grant
    
Units
Earned
    
Value ($)
  
Donald M. James
  
Chairman and Chief Executive Officer
  
1/1/2007 –
12/31/2009
     15,000       11,550       494,687  
Daniel F. Sansone
  
Senior Vice President, Chief Financial Officer
  
1/1/2007 –
12/31/2009
     2,940       2,264       96,967  
Ronald G. McAbee
  
Senior Vice President, Construction Materials – West
  
1/1/2007 –
12/31/2009
     2,620       2,017       86,388  
Danny R. Shepherd
  
Senior Vice President, Construction Materials – East
  
1/1/2007 –
12/31/2009
     2,620       2,017       86,388  
Robert A. Wason IV
  
Senior Vice President, General Counsel
  
1/1/2007 –
12/31/2009
     1,470       1,132       48,484  

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned, thereunto duly authorized.

VULCAN MATERIALS COMPANY
(Registrant)
   
By: 
/Robert A. Wason IV
 
Robert A. Wason IV

Dated:     February 17, 2010

 
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