SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant X
Filed by a party other than the registrant
Check the appropriate box:
Preliminary proxy statement
X Definitive proxy statement
X Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
VULCAN MATERIALS COMPANY
(Name of Registrant as Specified in Its Charter)
Phyllis D. Davis
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
X $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
$500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
April 11, 1994
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of the
Shareholders of Vulcan Materials Company, which will be held at the AmSouth
Sonat Tower, 1900 5th Avenue North, Birmingham, Alabama, on Monday, May 23,
1994, at 10:00 a.m., Central Daylight Time. The formal Notice of the Annual
Meeting, the Proxy Statement and a proxy accompany this letter.
We hope that you will be present at the meeting. Whether or not you
plan to attend, however, please execute and return your proxy so that the
Company may be assured of the presence of a quorum at the meeting. A
postage-prepaid envelope is enclosed for your convenience in replying. The
prompt return of your proxy will be greatly appreciated.
The Annual Report of your Company for 1993 is enclosed. We trust you
will find it interesting and informative.
Sincerely yours,
/s/ H. A. Sklenar
H. A. SKLENAR
Chairman and Chief
Executive Officer
NOTICE OF ANNUAL MEETING OF THE SHAREHOLDERS
TO BE HELD MAY 23, 1994
TO THE SHAREHOLDERS OF THE COMPANY:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of
Vulcan Materials Company will be held at the AmSouth Sonat Tower, 1900
5th Avenue North, Birmingham, Alabama, on Monday, May 23, 1994, at
10:00 a.m., Central Daylight Time, for the following purposes:
1. To elect three directors each to serve for a term of three years
until the Annual Meeting of the Shareholders in 1997 and until
their successors are chosen and shall qualify.
2. To ratify the appointment of Deloitte & Touche as independent
auditors for 1994.
3. To transact such other business as may properly come before the
meeting.
Holders of record of the Common Stock of the Company at the close of
business on March 31, 1994, are entitled to notice of and to vote at the
Annual Meeting.
The Annual Meeting may be adjourned from time to time without notice
other than announcement at the meeting, or any adjournment thereof, and
any business for which notice is hereby given may be transacted at any
such adjournment.
By Order of the Board of Directors,
WILLIAM F. DENSON, III
Secretary
One Metroplex Drive
Birmingham, Alabama 35209
April 11, 1994
NOTE--PLEASE SIGN, DATE AND RETURN YOUR PROXY
AS PROMPTLY AS POSSIBLE
WHETHER YOU OWN ONE OR MANY SHARES.
PROXY STATEMENT FOR THE ANNUAL MEETING OF THE SHAREHOLDERS
TO BE HELD MAY 23, 1994
The accompanying proxy is solicited by the Board of Directors of Vulcan
Materials Company (the "Company") for use at the Annual Meeting of the
Shareholders to be held at the AmSouth Sonat Tower, 1900 5th Avenue North,
Birmingham, Alabama, at 10:00 a.m., Central Daylight Time, on Monday, May 23,
1994, and any adjournments thereof. A shareholder giving a proxy may revoke
it at any time before it is voted by sending a letter of revocation to the
Secretary of the Company, care of First Chicago Trust Company of New York,
P. O. Box 8060, Edison, New Jersey 08818-9039. A proxy may also be revoked
by signing and returning a ballot at the Annual Meeting or by signing a proxy
with a more recent date than that of the proxy first given and returning it to
the inspectors of election. The mailing address of the principal executive
offices of the Company is P. O. Box 530187, Birmingham, Alabama 35253-0187.
The approximate date on which this Proxy Statement and the proxy are to be
first mailed to shareholders is April 11, 1994.
GENERAL INFORMATION
Holders of record of the Common Stock of the Company at the close of business
on March 31, 1994, are entitled to vote at the Annual Meeting. Each share is
entitled to one vote. There were outstanding on that date and will be
entitled to vote at the meeting 36,511,033 shares of Common Stock.
Proxies in the form enclosed, properly executed by shareholders and
duly returned, will be voted at the meeting as specified by the shareholders.
Each resolution must be passed by the affirmative vote of a majority of the
votes cast by the holders of outstanding shares of Common Stock present in
person or by proxy at the meeting. Under New Jersey law, an abstention or a
broker non-vote is not a "vote" for the purpose of determining a "majority of
the votes cast" and therefore both reduce the number of votes necessary to
constitute the required majority of votes cast. Duly executed proxies without
voting instructions will be voted in accordance with the Board of Director's
recommendations. At the time of printing of this Proxy Statement, the Board
did not know of any business to come before the meeting other than that
described in this Proxy Statement.
The Board has adopted a policy pursuant to which all
shareholder-meeting proxies, ballots and tabulations are to be maintained in
confidence, except where disclosure may be required by applicable law, where
shareholders write comments on their proxy forms, where disclosure is
expressly requested by a shareholder, and in limited circumstances to be
determined by the Board such as where there are proxy solicitations not
approved and recommended by the Board. The inspectors of election and the
tabulators of all proxies, ballots and voting results that identify
shareholders are independent and are not employees of the Company.
The costs of soliciting proxies on behalf of the Board will be borne
by the Company. In addition to use of the mails, proxies may be solicited by
personal interview, telephone or telegraph. The Company has retained
Georgeson & Company Inc. for a fee of $6,000 and the reimbursement of
out-of-pocket expenses, to assist in the solicitation of proxies from
brokerage firms, banks and other institutional holders. The Company will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred in forwarding proxy materials to, and obtaining
proxies from, beneficial owners of the Company's stock.
1. ELECTION OF DIRECTORS
The By-laws of the Company provide that the Board of Directors shall consist
of not fewer than nine nor more than 21 directors, the number of directors
within such minimum and maximum limits to be determined from time to time by
resolution of the Board. The Board has fixed the number of directors of the
Company at 10.
The Company's Certificate of Incorporation (Restated 1988) provides
that the Board shall be divided into three classes, each of which serves for
three years, with one class being elected each year.
The Board has nominated three persons for election as directors to
serve three-year terms expiring in 1997, all of whom are currently serving as
directors and whose current terms will expire at the 1994 Annual Meeting.
Unless otherwise directed, proxies will be voted in favor of these nominees.
Should any of the nominees be unable to accept election, the proxies will be
voted for the election of such other person or persons as the Board may
recommend. These nominees have consented to serve if elected, and the Board
has no reason to believe that any of the persons nominated will be unable to
accept election.
The following information about the nominees for director and the
directors continuing in office is provided below: (1) their ages as of
April 11, 1994; (2) the year they first became directors of the Company;
(3) their principal occupations since January 1, 1989; (4) any directorship
of a company which has a class of securities registered pursuant to Section
12 of the Securities Exchange Act of 1934, as amended, is subject to the
reporting requirements of Section 15(d) of said Act or is registered as an
investment company under the Investment Company Act of 1940; and (5)
memberships on committees of the Board.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
TERMS EXPIRING IN 1997
MARION H. ANTONINI
Age: 63. Director since 1983.
Chairman, Chief Executive Officer and President of Welbilt
Corporation, Stamford, Connecticut (a manufacturer and
distributor of commercial food service equipment and
residential furnaces, and a distributor of residential
appliances), since September 1990; Managing Director of
Kellner, DiLeo & Co., New York, New York (an investment
banking firm), until September 1990; Chairman (during a
portion of 1990) and Managing Director of KD Equities, New
York, New York (a private equity investment vehicle of the
general partners of Kellner, DiLeo & Co.), until September
1990.
OTHER DIRECTORSHIPS: Engelhard Corporation;
Scientific-Atlanta, Inc.
COMMITTEE MEMBERSHIPS:
Compensation; Director and Management Succession;
Executive; Finance and Pension Funds.
JAMES V. NAPIER
Age: 57. Director since 1983.
Chairman of the Board of Scientific-Atlanta, Inc., Atlanta,
Georgia (a manufacturer and designer of telecommunications
systems, satellite-based communications networks, and
instrumentation for industrial, telecommunications and
government applications), since 1992; Chairman and
President of Commercial Telephone Group, Inc., Tempe,
Arizona (a company engaged in the engineering and design of
telecommunications products), until 1992.
OTHER DIRECTORSHIPS: Centex Telemanagement, Inc.;
Engelhard Corporation; HBO & Co.; Intelligent Systems,
Inc.; Rhodes, Inc.; Scientific-Atlanta, Inc.; Summit
Communications Group, Inc.
COMMITTEE MEMBERSHIPS: Audit
Review; Compensation; Finance and Pension Funds.
HERBERT A. SKLENAR
Age: 62. Director since 1973.
Chairman and Chief Executive Officer of the Company since
May 1992; President and Chief Executive Officer prior
thereto.
OTHER DIRECTORSHIPS: AmSouth Bancorporation;
Protective Life Corporation; Temple-Inland, Inc.
COMMITTEE MEMBERSHIP: Executive.
DIRECTORS CONTINUING IN OFFICE
TERMS EXPIRING IN 1996
LIVIO D. DeSIMONE
Age: 57. Director since 1987.
Chairman and Chief Executive Officer of Minnesota Mining &
Manufacturing Company, St. Paul, Minnesota (a diversified
manufacturer), since November 1991; Executive Vice
President of various major business segments of that
company prior thereto.
OTHER DIRECTORSHIPS: Cargill, Incorporated (a
privately-held company); Cray Research, Inc.; Dayton Hudson
Corporation; General Mills, Inc.; Minnesota Mining &
Manufacturing Company.
COMMITTEE MEMBERSHIPS: Compensation; Director and
Management Succession; Executive; Safety, Health and
Environmental Affairs.
RICHARD H. LEET
Age: 67. Director since 1987.
Vice Chairman of Amoco Corporation, Chicago, Illinois (a
company engaged in the exploration for and the production
of petroleum products and the production of chemicals),
from March 1991 to October 1991 when he retired; Executive
Vice President of that company prior thereto.
OTHER DIRECTORSHIPS: Great Lakes Chemical Corporation;
Illinois Tool Works, Inc.; Landauer, Inc.
COMMITTEE MEMBERSHIPS: Compensation; Director and
Management Succession; Executive; Safety, Health and
Environmental Affairs.
ANN D. McLAUGHLIN
Age: 52. Director since 1990.
President, Federal City Council, Washington, D.C. (a
nonpartisan, nonprofit organization which is dedicated to
improving the nation's capital), since May 1990; Vice
Chairman, The Aspen Institute, Aspen, Colorado (an
independent, nonprofit organization whose programs are
designed to enhance the ability of leaders to understand
national and international issues), since August 1993;
President and Chief Executive Officer, New American Schools
Development Corporation, Arlington, Virginia (a private
organization which supports the design and establishment of
high-performance learning environments), from July 1992
until April 1993; Visiting Fellow, The Urban Institute,
Washington, D.C. (a private, nonprofit policy research and
educational organization), from 1989 to 1992; Chairman,
President's Commission on Aviation Security and Terrorism,
September 1989 to May 1990; Secretary, U.S. Department of
Labor, Washington, D.C., from 1987 to 1989.
OTHER DIRECTORSHIPS: AMR Corporation; General Motors
Corporation; Host Marriott Corporation; Kellogg Company;
Nordstrom; Potomac Electric Power Company; Union Camp
Corporation.
COMMITTEE MEMBERSHIPS: Audit Review; Finance
and Pension Funds; Safety, Health and Environmental
Affairs.
TERMS EXPIRING IN 1995
JOHN K. GREENE
Age: 64. Director since 1974.
Partner, William Blair & Company, Chicago, Illinois (an
investment banking firm).
COMMITTEE MEMBERSHIPS: Audit Review; Director and
Management Succession; Finance and Pension Funds.
DOUGLAS J. McGREGOR
Age: 53. Director since 1992.
President and Chief Operating Officer, M. A. Hanna Company,
Cleveland, Ohio (an international specialty chemicals
company with interests in formulated polymers), since May
1989; Executive Vice President of that company until May
1989.
OTHER DIRECTORSHIPS: M. A. Hanna Company; Society
Bank Corporation.
COMMITTEE MEMBERSHIPS: Audit Review; Compensation; Safety,
Health and Environmental Affairs.
DONALD B. RICE
Age: 54. Director since 1986.(*)
President and Chief Operating Officer of Teledyne, Inc.,
Los Angeles, California (a manufacturer of aviation,
electronic, industrial, specialty metal and consumer
products), since March 1993; Secretary of the Air Force,
May 1989 to January 1993; President and Chief Executive
Officer of The RAND Corporation, Santa Monica, California
(a private, non-profit research center), until May 1989.
OTHER DIRECTORSHIPS: Teledyne, Inc.; Wells Fargo &
Company; Wells Fargo Bank N.A.
COMMITTEE MEMBERSHIPS:
Audit Review; Director and Management Succession;
Executive; Finance and Pension Funds.
(*) Dr. Rice was reelected a director of the Company by
the Board of Directors on February 12, 1993. He was first
elected a director in 1986, and served until May 1989, when
he was appointed Secretary of the Air Force.
ORIN R. SMITH
Age: 58. Director since 1983.
President and Chief Executive Officer of Engelhard
Corporation, Iselin, New Jersey (a manufacturer and
supplier of specialty chemicals and engineered material
technologies).
OTHER DIRECTORSHIPS: Engelhard Corporation; Louisiana Land
& Exploration Company; Summit Bancorporation.
COMMITTEE MEMBERSHIPS: Compensation; Director and
Management Succession; Executive; Safety, Health and
Environmental Affairs.
BOARD OF DIRECTORS AND COMMITTEES
In 1993, the Board of Directors held six meetings. In addition, the Board has
established six standing committees which have the responsibilities set forth
below.
The Executive Committee has the same powers as the Board, except as
limited by the New Jersey Business Corporation Act. In practice, the powers
of the Committee are exercised only for matters that arise between meetings of
the Board. The Executive Committee did not meet in 1993.
The Audit Review Committee advises the Board and the management of the
Company from time to time with respect to the internal controls, the systems
and procedures, the accounting policies and other significant aspects of the
financial management of the Company. The Audit Review Committee also reviews
with the firm of independent certified public accountants its audit procedures
and other significant aspects of the annual audit made by the firm, and
advises the Board of the adequacy of the audit by the independent certified
public accountants. The Audit Review Committee met two times during 1993.
The Compensation Committee interprets and administers the Company's
Management Incentive Plan and Long-Range Performance Share Plan. It is
comprised of nonemployee directors ineligible to participate in these plans.
The Compensation Committee also is responsible for determining and fixing the
amount of compensation paid to each officer of the Company, each group senior
vice president and each division president ("Senior Executives"). In
addition, it determines and fixes other benefits to be provided to such Senior
Executives and certain other employees of the Company. The Compensation
Committee met two times during 1993.
The Director and Management Succession Committee: (a) conducts such
meetings as are appropriate with other directors, officers, other employees of
the Company, or any other persons whom it might select for purposes of
discussing with them (i) the tenure and selection of persons for membership on
the Board and (ii) the tenure and selection of a successor to the chief
executive officer, and (b) makes appropriate recommendations to the Board with
respect thereto. The Director and Management Succession Committee met two
times in 1993. This Committee will consider nominees for director recommended
by shareholders for 1995 if such recommendations are made in writing,
addressed to the Committee, in care of the Secretary of the Company, at the
offices of the Company, and are received by December 12, 1994. The Director
and Management Succession Committee met two times during 1993.
The Safety, Health and Environmental Affairs ("SHE") Committee has the
responsibility for reviewing the Company's policies, practices, and programs
with respect to the management of safety, health and environmental affairs and
monitoring the Company's compliance with safety, health and environmental laws
and regulations. The SHE Committee met three times in 1993.
The Finance and Pension Funds Committee has responsibility for
overseeing the Company's financial affairs and recommending to the Board
policies and actions to accommodate the Company's goals and operating
strategies while maintaining a sound financial condition. The Committee's
functions include keeping informed about the Company's financial condition,
recommending a dividend policy, reviewing and recommending changes in the
quarterly dividend payments, and evaluating and making recommendations
concerning the appropriate mix of debt and equity, incurrence of long-term
debt, and changes in the authorized limit of short-term debt. The Finance and
Pension Funds Committee is also responsible for overseeing the funding and
management of assets for pension plans sponsored by the Company. To fulfill
these functions, the Committee establishes funding policies and methods
consistent with pension plan objectives and the Employee Retirement Income
Security Act of 1974, selects and removes investment managers, and appoints
trustees for the pension plans. The Finance and Pension Funds Committee met
three times in 1993.
COMPENSATION OF DIRECTORS
Members of the Board of Directors who are not employees of the Company are
paid a retainer of $30,000 per year, plus a fee of $1,500 for each Board
meeting actually attended.
Each member of a Board committee who is not an employee of the Company
is paid a fee of $1,500 for each committee meeting attended in person or by
telephone and for each unanimous consent to action in lieu of meeting
executed. In addition, each chairman of a Board committee who is not an
employee of the Company is paid a fee of $5,000 per year for service as
chairman of a committee.
The Company has a deferred compensation plan for nonemployee directors
under which payment to them of their compensation as directors may be deferred
for certain periods or until they cease to be directors. Currently, five
directors are participating in that plan. The deferred amounts, at the
election of the director, either (i) are credited with interest at prescribed
rates or (ii) are converted to the equivalent of that number of shares of the
Company's Common Stock (based on the market price at the time of deferral)
that could be purchased with the deferred amounts, and are thereafter credited
with amounts equal to dividends thereon (also converted to stock equivalents).
All payments under the plan are in the form of cash. The plan provides that
lump-sum payments of all deferred compensation would be made within 30 days if
(i) there is a Change in Control (see Employee Special Severance Plan on page
20) and (ii) at any time after a Change in Control the participating director
ceases to be a member of the Board, the plan is terminated or the Company's
capital structure is changed materially. This plan was approved by the
shareholders in 1993.
The Company also has a compensation plan for those now or in the
future serving the Company as a director emeritus, which provides for lifetime
annual payments, except as described below, equal to the retainer being paid
nonemployee directors at the time of the director's retirement from the Board.
Directors emeriti will be expected to consult with management of the Company
or directors when their views on a matter are sought. Prior to February 1991,
each person who served the Company or a predecessor of the Company as a member
of the Board (whether or not an employee of the Company) for at least five
years and who retired at the mandatory retirement age became a director
emeritus. In February 1991, the plan was amended to provide benefits to
nonemployee directors who cease to be directors after having served for at
least five years, regardless of their age. Such former directors would
receive payments for the shorter of life or the number of full years of
service on the Board. Payments to such former directors would commence when
the former director's age plus full years of Board service equals 70. The
plan provides for lump-sum payments to be made within 30 days if (i) there is
a Change in Control (see Employee Special Severance Plan on page 20) and (ii)
at any time after there is a Change in Control the director ceases to be a
member of the Board, the plan is terminated or the Company's capital structure
is changed materially. The plan provides for various lump-sum payments,
depending on the circumstances of the particular director.
In 1991, the shareholders adopted the Vulcan Materials Company Stock
Plan for Nonemployee Directors (the "Stock Plan") which became effective
following authorization by the Compensation Committee in May 1993. The
purpose of the Stock Plan is to encourage the acquisition of the Company's
Common Stock by nonemployee directors and to strengthen the Company's ability
to attract, motivate and retain nonemployee directors with experience and
ability. In consideration of the services provided to the Company by
nonemployee directors, the Stock Plan provides for annual grants of shares of
the Company's Common Stock to such nonemployee directors. These grants are
made immediately following the Annual Meeting each year. The number of shares
issued to each participating director is equal to 8% of the average annual
compensation paid to all nonemployee directors during the 12-month period
(May 1 to April 30) preceding the date of grant divided by the fair market
value per share. Annual average compensation is equal to the sum of all Board
and committee chairmen retainers and meeting fees paid to nonemployee
directors who served during the entire 12-month period, divided by the number
of such directors. The fair market value of shares is the average closing
price of the Company's Common Stock for the 20 trading days ending on each
April 30. The shares are unrestricted. In May 1993, each director was
granted 76 shares pursuant to the Stock Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following is information, as of March 1, 1994, regarding persons known to
the Company to have beneficial ownership of more than 5% of the outstanding
Common Stock of the Company, which is the only outstanding class of voting
securities of the Company.
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
State Farm Mutual Automobile Insurance
Company and Affiliates
One State Farm Plaza
Bloomington, Illinois 61701 3,677,400 shares 10%
AmSouth Bancorporation
AmSouth Sonat Tower
Birmingham, Alabama 35203 3,550,870 shares(1) 9.7%
Gerald Ratner, as Attorney and Agent
222 North LaSalle Street
Chicago, Illinois 60601 2,479,400 shares(2) 6.8%
INVESCO PLC
11 Devonshire Square
London EC2M 4YR
England 2,208,450 shares(3) 6%
(1) Based on information contained in a Schedule 13G, dated February 17,
1994, filed with the Securities and Exchange Commission. The total consists
exclusively of shares of Common Stock held by estates and trusts of which
either AmSouth Bank N.A. or AmSouth Bank of Florida, each a subsidiary of
AmSouth Bancorporation, is a fiduciary. No single one of these estates or
trusts holds as much as 5% of the Common Stock of the Company. As reported in
the Schedule 13G, AmSouth Bank N.A. has shared voting power with respect to
3,543,270 shares and shared dispositive power with respect to 3,022,818
shares. AmSouth Bank of Florida has shared voting power with respect to 3,600
shares and shared dispositive power with respect to 3,600 shares.
(2) The Company has been advised by Gerald Ratner that Lester Crown, members
of his family, and certain partnerships and trusts associated with the Crown
family are the beneficial owners of 2,479,400 shares of the Common Stock of
the Company. Such persons, including Mr. Crown, disclaim that they act as a
group for purposes of Section 13 of the Securities Exchange Act of 1934 or
otherwise and disclaim that any one of such persons is the beneficial owner of
shares owned by any other such person.
(3) Based on information contained in a Schedule 13G, dated February 10,
1994, filed with the Securities and Exchange Commission. The total includes
2,065,150 shares beneficially owned directly or indirectly by INVESCO North
America Group Ltd., INVESCO Inc., INVESCO North America Holdings, Inc., and
INVESCO Capital Management, Inc., a registered investment adviser under the
Investment Advisers Act of 1940, each of which is a subsidiary and shares the
same address as INVESCO PLC. INVESCO PLC and each such entity is reported in
the Schedule 13G as sharing voting and dispositive power with respect to the
shares attributed to it.
SECURITY HOLDINGS OF MANAGEMENT
The following table sets forth information, unless otherwise indicated, as of
March 1, 1994, regarding holdings of the directors, the chief executive
officer and the four other most highly compensated executive officers which
are based on the Common Stock of the Company. The "Stock" column shows
beneficial ownership, direct and indirect, and the "Total" column shows all
stock-based holdings, including those in the "Stock" column. The value of
their total holdings will increase or decrease with the price of the
Company's stock.
COMMON STOCK AND TOTAL STOCK-BASED HOLDINGS
NAME STOCK(1) TOTAL(2)
Marion H. Antonini 2,076 15,978
Peter J. Clemens, III 26,130 42,512
Livio D. DeSimone 876 7,182
William J. Grayson, Jr. 63,862 83,479
John K. Greene 18,460 (3) 18,460 (3)
Daniel J. Leemon 24,348 39,012
Richard H. Leet 2,076 2,076
Douglas J. McGregor 276 (4) 2,285 (4)
Ann D. McLaughlin 276 4,324
Guy K. Mitchell, Jr. 7,945 20,479
James V. Napier 876 876
Donald B. Rice 476 (5) 476 (5)
Herbert A. Sklenar 110,130 162,341
Orin R. Smith 876 8,440
None of the directors or executive officers named above owned in
excess of 1% of the outstanding Common Stock. Common Stock
holdings of all directors and executive officers as a group
(29 persons) were 621,520, representing 1.7% of the outstanding
Common Stock of the Company. Total stock-based holdings of directors
and executive officers as a group were 889,331.
(1) Includes shares held under the Company's Thrift Plan for Salaried
Employees on February 28, 1994, to the extent the beneficial ownership
was vested in the persons listed. Also includes shares beneficially
owned by spouses of persons listed and other relatives living in their
households, whether or not interest in such shares is disclaimed by the
person listed.
(2) Includes stock equivalents as to which there are no voting rights and
which will be paid totally in cash under the deferred compensation plan for
nonemployee directors. With respect to executive officers these totals
include shares awarded but not yet earned under the 1991 Long-Range
Performance Share Plan (which is more fully described on page 13) which carry
no voting or dividend rights. Also includes stock equivalents as to which
there are no voting rights and which will be paid totally in cash under the
Company's Unfunded Supplemental Benefit Plan for Salaried Employees.
(3) Includes 4,400 shares of the Common Stock of the Company held by John K.
Greene and a bank, as trustees under a trust created by Mr. Greene's mother.
Mr. Greene is an income beneficiary of this trust and has a special power of
appointment over the trust assets.
(4) Two hundred of these shares are held in a trust of which Mr. McGregor is
the trustee.
(5) Four hundred of these shares are held in a retirement trust of which Dr.
Rice is the trustee and full beneficiary.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and long-term
compensation for Mr. Sklenar and the four other executive officers of the
Company who were the most highly compensated for the fiscal year ended
December 31, 1993.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Name and Annual Compensation Long-Term All Other
Principal Position Year Compensation Compensation(4)
Salary(1) Bonus(2) LTIP Payouts(3)
<S> <C> <C> <C> <C> <C>
Herbert A. Sklenar 1993 $535,004 $225,000 $285,234 $29,400
Chairman and 1992 $485,004 $200,000 $244,156 $19,400
Chief Executive Officer 1991 $485,004 $0 $345,112
William J. Grayson, Jr. 1993 $302,000 $135,000 $130,819 $15,520
Executive Vice President, 1992 $282,000 $86,000 $102,728 $12,599
Construction Materials 1991 $282,000 $32,990 $123,347
Peter J. Clemens, III 1993 $230,508 $76,000 $89,048 $12,061
Senior Vice President, 1992 $217,008 $71,000 $76,147 $8,039
Finance 1991 $217,008 $20,830 $110,883
Daniel J. Leemon 1993 $212,505 $87,000 $65,410 $8,265
President, 1992 $210,000 $63,000 $51,990 $7,470
Midsouth Division 1991 $201,668 $39,000 $72,080
Guy K. Mitchell, Jr. 1993 $197,168 $79,700 $33,399 $10,047
Senior Vice President-East, 1992 $178,008 $54,000 $30,216 $8,240
Construction Materials Group 1991 $161,340 $28,000 $34,648
<FN>
(1) Salaries of the executives included in this table were not increased in
1991 or 1992, except for Mr. Leemon whose increase in May 1991 was due to a
promotion.
(2) Consists of payments made under the Company's Management Incentive Plan
("MIP"). If a Change in Control (see Employee Special Severance Plan on page
20) occurs in a given year, awards already determined by the Compensation
Committee for that year will be paid. If the Change in Control occurs after
the end of a given year, and the Compensation Committee has not determined an
award, participants will be entitled to the entire "target award" (as defined
in the MIP). Participants will receive pro rata portions of their target
awards if the Change in Control occurs before the end of the given year.
(3) Represents the dollar value of performance shares earned under the
Company's 1981 Long-Range Performance Share Plan (the "Plan") in 1991, 1992
and 1993. One-half of the Plan's payments is made in cash and one-half is
made in the Company's Common Stock. The cash portion of the payments was
determined based on the average of the daily closing prices of the Company's
Common Stock for the 20 trading days ending on the fifth working day before
the date set for payment by the Compensation Committee. The value of the
portion of the payments made in the Company's Common Stock is based on the
average of the high and low trading prices of the stock on the date of
payment.
(4) These amounts consist of Company contributions made on behalf of the
named employee to the Company's Thrift Plan for Salaried Employees (the
"Thrift Plan") and to the Company's Unfunded Supplemental Benefit Plan for
Salaried Employees (the "Supplemental Plan"). Under the Supplemental Plan,
participating employees whose Company-matching contributions to the Thrift
Plan have been reduced as a result of the limitations imposed by Sections 401
and 415 of the Internal Revenue Code are provided with a benefit that is
essentially equal to the benefit those employees would have received in the
absence of such limitations. The Compensation Committee designates the
participants under the Supplemental Plan. The following amounts were
contributed pursuant to the Thrift Plan during 1993: Mr. Sklenar $9,434,
Mr. Grayson $9,434, Mr. Clemens $9,251, Mr. Leemon $6,000, and Mr. Mitchell
$9,434. The following amounts were accrued pursuant to the Supplemental Plan
during 1993: Mr. Sklenar $19,966, Mr. Grayson $6,086, Mr. Clemens $2,810,
Mr. Leemon $2,265, and Mr. Mitchell $613.
</TABLE>
LONG-TERM INCENTIVE PLAN
The following table sets forth information on awards pursuant to the Company's
1991 Long-Range Performance Share Plan during the year ended December 31,
1993, to Mr. Sklenar and the four other executive officers named in the
Summary Compensation Table.
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
NAME NUMBER OF PERFORMANCE ESTIMATED FUTURE PAYOUTS (3)
SHARES, PERIOD TO NUMBER OF SHARES
UNITS OR MATURATION (2)
OTHER THRESHOLD TARGET MAXIMUM
RIGHTS(1)
<S> <C> <C> <C> <C> <C>
Herbert A. Sklenar 6,240 4 Years 3,120 6,240 9,360
William J. Grayson, Jr. 2,100 3 Years 1,050 2,100 3,150
Peter J. Clemens, III 2,400 5 Years 1,200 2,400 3,600
Daniel J. Leemon 2,280 5 Years 1,140 2,280 3,420
Guy K. Mitchell, Jr. 2,280 5 Years 1,140 2,280 3,420
<FN>
(1) The awards consist of performance shares and were based on a stock price
of $48.08 which was the average of the daily closing prices of the Company's
Common Stock in the last 20 trading days of 1992.
(2) Awards made in 1993 under the 1991 Long-Range Performance Share Plan
(the "Plan") will mature on December 31, 1997. Due to Mr. Sklenar's and
Mr. Grayson's mandatory retirement dates which fall during the award period,
they each received a prorated award with a shorter maturation period.
(3) A performance share is equal to a share of the Company's Common Stock,
but the performance shares carry no voting or dividend rights. Payment of
performance share awards is subject to conditions for payment which are set by
the Compensation Committee. The Committee determined that payment with
respect to one-half of the award will be based on a comparison of the
Company's growth in earnings per share during the award period with the growth
in earnings per share of a group of comparison companies which was selected by
the Compensation Committee at the time awards were made. Payment with respect
to the other one-half of the award will be based on a comparison of the
Company's return on investment performance with the return on investment
performance of the companies constituting the comparison group. Payments
under the Plan will be made only if the Company's performance in growth in
earnings per share or in return on investment places it in at least the 50th
percentile in a ranking of companies in the comparison group. However,
regardless of the Company's ranking in the comparison group, no payment with
respect to the earnings per share half of the award will be made if the
Company's average earnings per share during the award period is less than the
Company's average earnings per share during the five years ended December 31,
1992. Likewise, no payment with respect to the return on investment half of
the award will be made if the Company's average pretax return on investment
is less than the average three-month U.S. Treasury Bill rate during the
award period.
The Company's performance with respect to earnings per share or return on
investment must place it in the 50th percentile in the comparison group in
order to earn 50% of the half of the award allocated to such criterion. The
amounts set forth in the "Threshold" column in the above table assume a 50th
percentile ranking with respect to both earnings per share and return on
investment. The Company's performance with respect to earnings per share or
return on investment must place it in the 75th percentile in the comparison
group in order to earn 100% (the "Target") of the half of the award allocated
to such criterion. The Company's performance with respect to earnings per
share or return on investment must place it in the 100th percentile in the
comparison group in order to earn 150% (the "Maximum") of the half of the
award allocated to such criterion. Pro rata payments of all outstanding
awards will be made if, within two years of a Change in Control (see Employee
Special Severance Plan on page 20), a participant is terminated under the
circumstances described in the Plan.
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
Under the supervision of the Compensation Committee of the Board of Directors
(the "Committee") which is composed entirely of nonemployee directors, the
Company has developed and implemented performance-based compensation policies
and plans which are intended to enhance the profitability of the Company and
shareholder value by aligning closely the financial interests of the Company's
senior managers with those of its shareholders. The objective of the Company
is to provide a competitive compensation program that reflects both Company
and individual performance. The Committee believes that the senior management
of the Company is dedicated to achieving significant improvements in the
Company's long-term financial performance and that the performance-based
compensation policies and plans the Committee has implemented contribute to
achieving this management focus. Compensation for senior management,
including the Chief Executive Officer, consists of base salary and annual and
longer-term incentive compensation. The annual and longer-term incentive
compensation is directly related to the Company's performance as measured by
specific financial factors.
The Committee sets base salaries, determines the amounts payable under
the Management Incentive Plan, and makes awards and authorizes payments under
the Long-Range Performance Share Plan for all officers of the Company, group
senior vice presidents, and division presidents (the "Senior Executives").
This group includes the Chief Executive Officer and each of the other four
executive officers named in the Summary Compensation Table. In addition, the
Committee determines the total amount payable to all other eligible employees
under the Management Incentive Plan, and authorizes awards and payments under
the Long-Range Performance Share Plan to all other eligible employees.
BASE SALARY
The base salary of each Senior Executive (other than the Chief
Executive Officer) is established annually by the Committee based on the
recommendation of the Chief Executive Officer and is set independently from
the other elements of the compensation package. The recommendation of the
Chief Executive Officer is developed by a process which begins with the
establishment of a competitive market salary rate for each Senior Executive
position. The competitive market salary rate is based on a study conducted by
the Company's human resources staff of salaries paid to executives in
comparable positions at companies of comparable size to the Company. In order
to set these market rates, the Company's human resources staff relies on data
from general industry surveys. The companies in the Wilshire Materials and
Services Index, the performance of which is charted in the Shareholder Return
Performance Presentation, overlap to some extent with the companies in the
surveys. The competitive market rate is targeted to the median of the
salaries in the surveys. The competitive market rate for each Senior
Executive is then reviewed by the Chief Executive Officer and individual
salaries are proposed to the Committee based on the competitive market rate
and the results of individual performance evaluations that take into account,
among other factors, the achievement of individual, group and company-wide
performance goals. The resulting recommendation is then presented to the
Committee, along with data supporting the recommendation. The Committee
typically follows the recommendation of the Chief Executive Officer in setting
the salaries of the Senior Executives other than the Chief Executive Officer.
The 1990 base salaries of the Senior Executives, which had not been increased
in 1991 or 1992, except in the cases of promotions, were increased in 1993 to
reflect increases in competitive market rates and the performance of the
Senior Executives. The average of the salaries paid to the Senior Executives
in 1993 was slightly above the median of the competitive market rates.
In establishing the Chief Executive Officer's salary, the Committee
also reviews the competitive market rate for his position, its assessment of
his performance and the Company's performance. Mr. Sklenar does not
participate in setting his own salary. Mr. Sklenar's salary was not
increased in 1991 or 1992. In 1993, the Committee increased Mr. Sklenar's
salary based upon its determination that Mr. Sklenar had done a commendable
job in leading the Company during the recent recession, particularly in
achieving cost and overhead reductions and in improving profitability. The
Committee also increased his salary to reflect the additional responsibilities
he assumed upon becoming Chairman of the Board of Directors in 1992.
MANAGEMENT INCENTIVE PLAN
The purpose of the Management Incentive Plan is to promote the
profitability of the Company by providing incentive and reward for those
employees who contribute most to the operating progress and earnings of the
Company. Annual incentive awards under the Company's Management Incentive
Plan are tied directly to the Company's performance and that of individual
profit centers as measured by specific financial performance factors approved
by the Committee. After the end of each fiscal year and completion of the
audit of the Company's financial statements for that year, the Committee
establishes the amount to be added to the Management Incentive Plan fund. The
Management Incentive Plan provides that the addition to the incentive fund for
a fiscal year cannot exceed 12 1/2% of consolidated net earnings in excess of
6% of net capital for such year, and the amount added to the fund is usually
well below the maximum allowable.
Management Incentive Plan payments for 1993 were based primarily
on six objective financial performance factors which are calculated separately
for each profit center: (1) inflation-adjusted return on capital employed
compared to real cost of capital; (2) inflation-adjusted return on capital
employed compared to the average of such returns for the prior six years;
(3) pre-tax earnings compared to budget; (4) inflation-adjusted pre-tax
earnings compared to the average of such earnings for the prior six years;
(5) cash flow compared to budget; and (6) cash flow compared to the average
of inflation-adjusted cash flow for the prior six years. Each of the first
four factors are given a weight of 20% and each of the last two are given a
weight of 10%. These six factors are then totalled and given a combined
weight of 85% in establishing awards. The performance with respect to these
"objective" factors can exceed the target bonus. The remaining 15% of the
total award is based on the performance of each profit center measured with
respect to safety, health and environmental matters, community relations,
management development, employee relations and commitment to profitable
growth. Regardless of the composite results of a profit center's performance,
no bonus is earned if the profit center fails to achieve at least 40% of its
budgeted earnings, the third category listed above.
Individual payments under the Management Incentive Plan are based
on overall corporate or profit center performance and the extent to which
target bonus levels established for each Senior Executive are attained or
exceeded. The target bonus is equivalent to a specified percentage of each
Senior Executive's salary. Generally, this percentage becomes greater as the
level of the Senior Executive's responsibility increases.
In establishing the 1993 Management Incentive Plan payments, the
Committee reviewed with the Chief Executive Officer management's
recommendations concerning the bonuses to be awarded and the target bonuses
established for each position. These recommendations are based upon each
profit center's performance relative to both the objective and management
factors described above and do not include any recommendations with respect to
the Chief Executive Officer.
The Management Incentive Plan payment to Mr. Sklenar with respect
to 1993 was based on the same performance factors described above which were
used in setting bonuses for all other participants in the Management Incentive
Plan. In addition, the Committee has independently evaluated Mr. Sklenar's
performance, in particular his leadership in maintaining the solid financial
position of the Company and in directing strategic planning efforts. Based on
1993 performance, Mr. Sklenar's payment under the Management Incentive Plan
was 41% of his base salary or 83% of the target bonus established for him
under the Management Incentive Plan.
LONG-RANGE PERFORMANCE SHARE PLAN
Long-term incentives are provided under the Company's Long-Range
Performance Share Plan (the "Plan"). The purpose of the Plan is to further
the long-term growth in profitability of the Company by offering long-term
incentives to those executives who will be largely responsible for such
growth. Awards under the Plan are made annually by the Committee, have a
maturity period of five years (except for awards for shorter periods made to
executives who are within five years of retirement), and consist of
performance shares. One performance share is equal to a share of the
Company's Common Stock but carries no voting or dividend rights. The
Committee establishes conditions for payment and selects a group of companies
to which the Company's performance will be compared over the five-year award
period. The companies in the Wilshire Materials and Services Index, which was
used in the Shareholder Return Performance Presentation, overlap to some
extent with the companies in the comparison group. In setting the number of
shares to be awarded to each Senior Executive, the Committee uses a
formulistic approach. The value of the performance shares awarded generally
is equal to a percentage of the total of the market rate salary and the target
bonus for each Senior Executive; thus, the size of an individual's award made
in any given year may vary from year to year. Generally, this percentage
becomes greater as the level of the Senior Executive's responsibility
increases.
Payment with respect to one-half of the long-term incentive award
is based on comparison of the Company's growth in earnings per share during
the award period with the growth in earnings per share of the comparison
companies. Payment with respect to the other one-half of the award is based
on a comparison of the Company's return on investment performance with the
return on investment performance of the comparison companies.
In May 1993, the Committee determined that conditions established
with respect to performance shares awarded in 1988 had been met to the extent
that 80.2% of the awards made in that year were earned and paid. The
Company's performance with respect to the five-year award period placed it in
the top quartile in return on investment, and in the top half in growth in
earnings per share with respect to a comparison group of companies chosen by
the Committee at the time of the award. The Long-Range Performance payment
made to Mr. Sklenar in 1993 was the same percentage that was paid to all other
participants in the Plan. The Committee will determine later this spring the
extent to which conditions have been satisfied with regard to performance
shares awarded in 1989 and the number of performance shares earned.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m)
The Internal Revenue Service has recently proposed regulations
pursuant to Section 162(m) of the Code which would eliminate the deductibility
of some forms of compensation exceeding $1 million paid to the Chief Executive
Officer and each of the four other executive officers named in the Summary
Compensation Table. To date, none of the executives named in the Summary
Compensation Table, with the exception of Mr. Sklenar, have received annual
compensation exceeding $1 million.
The regulations provide that "qualified performance-based
compensation" will not be affected by the deduction limitation. It is
the Committee's understanding that awards and payments made pursuant to the
Long-Range Performance Share Plan should qualify under the proposed
regulations as "performance-based" and remain fully deductible, despite
the new limitation. The Management Incentive Plan has been approved by the
shareholders and satisfies several, but not all, of the criteria necessary
to be deemed "qualified performance-based compensation." The Committee is
currently studying possible revisions to the compensation program in order
to be able to continue to maintain the deductibility of all forms
of compensation.
Compensation Committee
O. R. Smith, Chairman
M. H. Antonini
R. H. Leet
D. J. McGregor
J. V. Napier
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The following graph and table compare the performance of the Company's Common
Stock to that of the Standard & Poor's 500 Stock Index ("S&P 500") and the
Wilshire Materials and Services Index ("Wilshire M&S") for the period
commencing December 31, 1988 and ending on December 31, 1993. All of these
indices have been calculated by Wilshire Associates, Incorporated. The
Wilshire M&S Index is a market capitalization weighted index containing the
public equities of firms in the Materials and Services sector as defined by
Wilshire Associates, Incorporated. The Materials and Services sector includes
the Company and approximately 1,300 other corporations, some of which are in
the mining and chemicals industry. The Index is one of nine sectors that make
up the Wilshire 5000. The graph assumes that the index value of the
investment in the Company's Common Stock and each index was 100 on
December 31, 1988, and that all dividends have been reinvested.
HERE IS LINE GRAPH REPRESENTED BY THE FOLLOWING COORDINATES:
Index as of December 31.
1988 1989 1990 1991 1992 1993
Vulcan 100 110 87 95 131 131
S&P 500 Index 100 132 127 166 179 197
Wilshire M&S 100 123 109 141 151 168
RETIREMENT INCOME PLAN
The Retirement Income Plan for Salaried Employees of Vulcan Materials Company
(the "Retirement Plan") provides benefits under a funded noncontributory
defined benefit plan and covers most salaried employees, including all
executive officers. Under the Retirement Plan, normal retirement benefits are
paid commencing at age 65 (or later actual retirement) based on the
participant's years of benefit service under the Retirement Plan and the
average of the highest 36 consecutive months of eligible earnings. Eligible
earnings under the Retirement Plan include an employee's salary and any awards
under the Company's Management Incentive Plan, as described in the "Salary"
and "Bonus" columns of the Summary Compensation Table. The benefit amounts
are subject to deductions equal to 1.34% of a participant's monthly primary
social security benefit for each year of benefit service, up to a maximum of
50% of the primary social security benefit. There were no contributions by
the Company to the Retirement Plan in 1993 due to the full funding limitations
imposed by federal law.
Assuming continuance of the Retirement Plan in its present form,
annual benefits payable to participating employees (including executive
officers) following retirement, in specific salary classifications and with
the continuous years of benefit service indicated, are shown in the table
below.* Each amount in the table is based on the benefit applicable on
December 31, 1993, to an employee retiring at age 65 payable in the form of
a single life annuity and is subject to the above-described deduction for the
primary social security benefit.
<TABLE>
<CAPTION>
Remuneration 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
<S> <C> <C> <C> <C> <C> <C>
$100,000 25,200 33,600 40,650 47,700 54,750 58,000
150,000 37,800 50,400 60,975 71,550 82,125 87,000
200,000 50,400 67,200 81,300 95,400 109,500 116,000
250,000 63,000 84,000 101,615 119,250 136,875 145,000
300,000 75,600 100,800 121,950 143,100 164,250 174,000
350,000 88,200 117,600 142,275 166,950 191,625 203,000
400,000 100,800 134,400 162,600 190,800 219,000 232,000
500,000 126,000 168,000 203,250 238,500 273,750 290,000
600,000 151,200 201,600 243,900 286,200 328,500 348,000
700,000 176,400 235,200 284,550 333,900 383,250 406,000
800,000 201,600 268,800 325,200 381,600 438,000 464,000
900,000 226,800 302,400 365,850 429,300 492,750 522,000
1,000,000 252,000 336,000 406,500 477,000 547,500 580,000
<FN>
* Under Section 415 of the Internal Revenue Code, the maximum benefit
allowable under the Retirement Plan for an employee retiring at age 65 in 1993
is $115,641, an amount which may change each year in accordance with a
determination made by the Internal Revenue Service. In addition, Section 401
of the Internal Revenue Code limits the amount of an employee's compensation
which may be taken into account under the Retirement Plan to $235,840
($150,000 effective January 1, 1994), an amount which also is subject to
change each year in accordance with a similar determination. The Company's
Unfunded Supplemental Benefit Plan for Salaried Employees (the "Supplemental
Plan") enables the Company to pay to any person designated by the Compensation
Committee whose pension under the Retirement Plan has been reduced as a result
of the limitations imposed by Sections 401 and 415 of the Internal Revenue
Code an amount equal to the difference between the amount the person would
have received under the Retirement Plan had there been no limitations and the
amount the person will receive under the Retirement Plan after giving effect
to the limitations.
The Supplemental Plan is unfunded and amounts due the employees covered
thereby are general obligations of the Company; however, the Supplemental Plan
contains provisions which allow for the creation of a trust to help ensure the
payment of benefits under the Supplemental Plan.
The Supplemental Plan provides for the vesting of excess retirement benefits
in the same manner that benefits vest under the Retirement Plan, which is
after five years. In addition, the Supplemental Plan provides for an
acceleration of the payment of excess retirement benefits in connection with a
Change in Control of the Company (see Employee Special Severance Plan on page
20) if, simultaneously with or subsequent to the Change in Control, the
participant's employment is terminated, the Supplemental Plan is terminated or
the Company's capital structure is changed materially.
</TABLE>
The benefit service accruals used to determine benefits under the
Retirement Plan as of December 31, 1993, for Mr. Sklenar and four other
executive officers named in the Summary Compensation Table are shown below.
YEARS OF
BENEFIT SERVICE
NAME AS OF 12/31/93
Peter J. Clemens, III 16 5/12
William J. Grayson, Jr. 31 2/12
Daniel J. Leemon 12 5/12
Guy K. Mitchell, Jr. 19 9/12
Herbert A. Sklenar 21 6/12
EMPLOYEE SPECIAL SEVERANCE PLAN
The Company's Employee Special Severance Plan (the "Special Severance Plan")
became effective in 1990, pursuant to a resolution of the Board of Directors.
The Special Severance Plan covers all full-time salaried employees, including
the executive officers named in the Summary Compensation Table, and is
designed to reassure participants in the event of a Change in Control of the
Company, so that they can continue to focus their time and energy on
business-related concerns rather than personal concerns. A Change in Control
is defined as: (1) the acquisition by any person, entity, or group of 25% or
more of the outstanding shares of Company stock or the combined voting power
of the Company's outstanding voting securities, unless a majority of the
continuing directors determines that this acquisition does not constitute a
Change in Control; (2) the continuing directors cease to constitute a majority
of the Board; (3) approval by the Board of (a) a merger, consolidation, or
reorganization of the Company, after which either (i) the continuing directors
do not constitute a majority of the directors of the surviving corporation, or
(ii) any person, entity, or group controls more than 25% of the combined
voting power, (b) any sale, lease, or other transfer of all or substantially
all of the Company's assets, or (c) any plan or proposal for the Company's
dissolution or liquidation, unless a majority of the continuing directors
determine that such merger, consolidation, reorganization, sale, lease, other
transfer, liquidation or dissolution shall not be deemed a Change in Control
for purposes of the Special Severance Plan. A participant is entitled to
benefits under the Special Severance Plan if, within two years after a Change
in Control, the participant's employment is terminated without substantial
cause ("Substantial Cause") or is voluntarily terminated by the participant
for good reason ("Good Reason"). Substantial Cause is defined as: (1) the
participant's willful and continued failure to substantially perform his
duties after receiving a written demand for substantial performance; (2) the
participant's willful engaging in an act of gross misconduct which is
demonstrably injurious to the Company; or (3) the participant's commission of
an act of fraud intended to result in substantial personal enrichment. Good
Reason is defined as: (1) the assignment to the participant of duties that are
materially inconsistent with his position or a change in the participant's
title or office without his consent; (2) a reduction in the participant's
salary or the Company's failure to increase the participant's salary by a
specified percentage and by a specified date; (3) a change in the
participant's principal work location to a location more than fifty (50) miles
from his current principal work location; (4) the Company's failure to
maintain any benefit or compensation plan (collectively, "Plans") in which the
participant was participating, a reduction of the participant's benefits under
the Plans, or the failure to provide the participant the number of vacation
days to which he is entitled; (5) the Company's failure to pay the participant
any compensation within seven days of its due date; (6) the Company's failure
to require any successor to the Company to assume the obligations pursuant to
the Special Severance Plan; or (7) the Company's termination of the
participant in a manner inconsistent with the Special Severance Plan.
Benefits under the Special Severance Plan include a lump-sum payment
upon termination which, in the case of executives of the Company whose
compensation is determined by the Compensation Committee of the Board, would
be equal to two years' base salary. The lump-sum payments made to other
participants would be equal to two and one-half weeks' base salary times the
participant's years of service, subject to a maximum of two years' base salary
and a minimum ranging from one-fourth year's base salary to one year's base
salary, depending upon the participant's position with the Company. (The
Special Severance Plan also contains limitations on benefits which are
designed to prevent the payments made under the Special Severance Plan, when
added to payments which may be made to employees under other Company plans in
the event of a Change in Control, from exceeding certain limits imposed by the
Internal Revenue Code.) Benefits under the Special Severance Plan also
include the maintenance by the Company of all life insurance, accidental death
and dismemberment insurance and medical, dental and prescription drug plans in
which the participant was entitled to participate for up to one year from a
participant's termination.
The Special Severance Plan is unfunded, but contains provisions
which allow for the creation of a trust to help ensure the payment of benefits
under the Special Severance Plan.
2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Review Committee, which is composed of
directors who are not officers of the Company, the Board of Directors has
appointed Deloitte & Touche, a firm of independent certified public
accountants, as independent auditors for the year 1994 and until their
successors are chosen. The function of the independent auditors is to audit
the accounts and records of the Company, to report on the consolidated balance
sheet, the related statements of consolidated earnings, consolidated
shareholders' equity and changes in consolidated financial position of the
Company and its subsidiaries, and to perform such other appropriate accounting
services as may be required by the Board. Although shareholder ratification
is not required, the Board has determined that it would be desirable to
request an expression from the shareholders as to whether or not they concur
in this appointment. If a majority of the shares voting at the Annual Meeting
fails to ratify the selection of Deloitte & Touche as independent auditors,
the Board will consider the selection of another independent certified public
accounting firm.
The firm of Deloitte & Touche, or its predecessors, Deloitte
Haskins & Sells and Haskins & Sells, has audited the Company's books since
1956. A representative of that firm will be present at the Annual Meeting and
will be given an opportunity to make a statement if he or she so desires. He
or she will be available to respond to appropriate questions.
SHAREHOLDERS' PROPOSALS FOR 1995
To be eligible for inclusion in the Company's proxy statement and form of
proxy for its 1995 annual meeting, a shareholder's proposal must be received
by the Company at its principal offices no later than December 12, 1994.
Proposals should be addressed to William F. Denson, III, Secretary,
P. O. Box 530187, Birmingham, Alabama 35253-0187.
VULCAN MATERIALS COMPANY
WILLIAM F. DENSON, III
Secretary
One Metroplex Drive
Birmingham, Alabama 35209
April 11, 1994
Pursuant to Item 304 of Regulation S-T, the following is an appendix
listing and providing a narrative description of all image information which
appears in the 1994 Proxy Statement.
In the section entitled "NOMINEES FOR ELECTION TO THE BOARD OF
DIRECTORS", the blank area to the left of each director's name
represents photographs of the individuals discussed in this
section.
In the section entitled "SHAREHOLDER RETURN PERFORMANCE
PRESENTATION", in place of the graph "Comparative Total
Returns to Shareholders" there is a table giving the
coordinates of this graph.
VULCAN MATERIALS COMPANY
Annual Meeting of Shareholders May 23, 1994
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
VULCAN MATERIALS COMPANY
The undersigned hereby appoints LIVIO D. DeSIMONE, HERBERT A. SKLENAR and
ORIN R. SMITH, and each of them, with full power of substitution, proxies to
vote the shares of stock which the undersigned could vote if personally
present at the Annual Meeting of Shareholders of Vulcan Materials Company to
be held May 23, 1994, and at any adjournments thereof, on all matters coming
before said meeting as set forth on the opposite side of this card.
Election of Directors
Nominees for Election as Directors: Marion H. Antonini, James V. Napier
and Herbert A. Sklenar
(continued, and to be signed on the reverse side)
Please mark your votes as in this example.
THIS PROXY WILL BE VOTED AS SPECIFIED BY THE
UNDERSIGNED, AND, IF NO SPECIFICATIONS ARE GIVEN,
FOR THE ELECTION OF ALL DIRECTOR NOMINEES AND
FOR PROPOSAL
1. Election of Directors. FOR WITHHELD
(See reverse) All Nominees Except Those From All
Written In Below Nominees
Vote withheld from the following nominee(s) (if any):
FOR AGAINST ABSTAIN
2. Ratification of the
appointment of Deloitte &
Touche as independent
auditors for the year 1994.
3. The undersigned further gives the proxies authority to vote, in their
discretion, upon such other matters as may properly come before the
meeting.
Please sign name(s) exactly as printed hereon.
If shares are held jointly, each shareholder
must sign.
Signature
Signature Date
Please sign, date and return this Proxy in the enclosed postage paid
envelope.
