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 10, 1995
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 22,
1995, 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 1994 is enclosed. We trust you
will find it interesting and informative.
Sincerely yours,
/s/ H. A. SKLENAR
Chairman and Chief
Executive Officer
NOTICE OF ANNUAL MEETING OF THE SHAREHOLDERS
TO BE HELD MAY 22, 1995
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 22, 1995, at 10:00 a.m., Central
Daylight Time, for the following purposes:
1. To elect four directors each to serve for a term of three years until
the Annual Meeting of the Shareholders in 1998 and until their
successors are chosen and shall qualify.
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors for 1995.
3. To act upon one shareholder proposal.
4. 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, 1995, 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 10, 1995
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 22, 1995
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 22,
1995, 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, in 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 10, 1995.
GENERAL INFORMATION
Holders of record of the Common Stock of the Company at the close of business
on March 31, 1995, 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 35,853,672 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, neither an
abstention nor a broker non-vote is a "vote" for the purpose of determining a
"majority of the votes cast" and therefore either reduces 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 11.
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 four persons for election as directors to serve
three-year terms expiring in 1998, all of whom are currently serving as
directors and whose current terms will expire at the 1995 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
10, 1995; (2) the year they first became directors of the Company; (3) their
principal occupations since January 1, 1990; (4) other directorships,
including 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 1998
JOHN K. GREENE
Age: 65. Director since 1974.
Special Partner, William Blair & Company, Chicago, Illinois (an
investment banking firm), since January 1995; Partner of that company
prior thereto.
COMMITTEE MEMBERSHIPS: Audit Review; Director and Management
Succession; Finance and Pension Funds.
DOUGLAS J. MCGREGOR
Age: 54. Director since 1992.
President and Chief Operating Officer, M. A. Hanna Company, Cleveland,
Ohio (an international specialty chemicals company with interests in
formulated polymers).
OTHER DIRECTORSHIPS: M. A. Hanna Company; Society Bank Corporation.
COMMITTEE MEMBERSHIPS: Audit Review; Compensation; Safety, Health and
Environmental Affairs.
DONALD B. RICE
Age: 55. 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.
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: 59. Director since 1983.
Chairman and Chief Executive Officer of Engelhard Corporation, Iselin,
New Jersey (a manufacturer and supplier of specialty chemicals and
engineered material technologies), since January 1995; President and
Chief Executive Officer of that company prior thereto.
OTHER DIRECTORSHIPS: Engelhard Corporation; Ingersoll-Rand Company(*);
Louisiana Land & Exploration Company; Minorco(*); Perkin-Elmer
Corporation; Summit Bancorporation.
COMMITTEE MEMBERSHIPS: Compensation; Director and Management
Succession; Executive; Safety, Health and Environmental Affairs.
(*)Mr. Smith has been nominated to the Boards of Directors of
Ingersoll-Rand Company and Minorco. He will be presented for election
at the annual meetings of those companies on April 22, 1995, and
May 10, 1995, respectively.
DIRECTORS CONTINUING IN OFFICE
TERMS EXPIRING IN 1997
MARION H. ANTONINI
Age: 64. 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: ABC Rail; Berisford International PLC; Engelhard
Corporation; Scientific-Atlanta, Inc.
COMMITTEE MEMBERSHIPS: Compensation; Director and Management
Succession; Executive; Finance and Pension Funds.
JAMES V. NAPIER
Age: 58. 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: 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: 63. 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.
TERMS EXPIRING IN 1996
LIVIO D. DESIMONE
Age: 58. 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; Dayton Hudson Corporation;
General Mills, Inc.; Minnesota Mining & Manufacturing Company.
COMMITTEE MEMBERSHIPS: Compensation; Director and Management
Succession; Executive; Safety, Health and Environmental Affairs.
WILLIAM J. GRAYSON, JR.
Age: 64. Director since March 7, 1995.
Vice Chairman of the Company since March 7, 1995; Executive Vice
President, Construction Materials Group of the Company prior thereto.
RICHARD H. LEET
Age: 68. 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: 53. 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.
OTHER DIRECTORSHIPS: AMR Corporation; Federal National Mortgage
Association; 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.
BOARD OF DIRECTORS AND COMMITTEES
In 1994, 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 met once in 1994.
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 1994.
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 1994.
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. This Committee will consider nominees for
director recommended by shareholders for 1996 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, 1995.
The Director and Management Succession Committee met two times during 1994.
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 two times in 1994.
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 1994.
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, four 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 21) 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 are 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 21) 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 1994, each director was granted 98 shares
pursuant to the Stock Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following is information, as of March 1, 1995, 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 61710 3,677,400 shares(1) 10.06%
AmSouth Bancorporation
AmSouth Sonat Tower
Birmingham, Alabama 35203 3,482,160 shares(2) 9.53%
Gerald Ratner, as Attorney and Agent
222 North LaSalle Street
Chicago, Illinois 60601 2,479,400 shares(3) 6.8%
INVESCO PLC
11 Devonshire Square
London EC2M 4YR
England 2,432,700 shares(4) 6%
(1) Based on information contained in the Schedule 13G, dated January 28,
1995, filed with the Securities and Exchange Commission. The total includes
2,791,200 shares over which State Farm Mutual Automobile Insurance Company
holds sole voting and dispositive power, 399,800 shares over which State Farm
Investment Management Corp. holds sole voting and dispositive power, and
486,400 shares over which State Farm Employees Savings and Thrift Plan holds
sole voting and dispositive power. State Farm Mutual Automobile Insurance
Company and each of the various affiliated entities listed on Exhibit A to the
Schedule 13G expressly disclaim "beneficial ownership" as to all shares as to
which such entity has no right to receive the proceeds of sale of the security
and disclaims that it is part of a "group."
(2) Based on information contained in a Schedule 13G, dated February 13, 1995,
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 of Alabama 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 of Alabama has shared voting power with respect
to 3,474,358 shares and shared dispositive power with respect to 2,971,345
shares.
(3) 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.
(4) Based on information contained in a Schedule 13G, dated February 10, 1995,
filed with the Securities and Exchange Commission. The total includes
2,326,000 shares beneficially owned directly or indirectly by INVESCO North
America Group Ltd., INVESCO Group Services, Inc., INVESCO Inc. and INVESCO
North America Holdings, Inc. INVESCO Capital Management, Inc., a registered
investment adviser under the Investment Advisers Act of 1940, has shared
voting and dispositive power with respect to 2,319,600 shares. Each such
entity 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, 1995, 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 2,174 17,681
Peter J. Clemens, III 31,926 46,126
Livio D. DeSimone 974 8,642
Michael J. Ferris 28,378 43,597
William J. Grayson, Jr. 65,160 81,482
John K. Greene 24,675 (3) 24,675 (3)
Richard H. Leet 2,174 2,174
Douglas J. McGregor 374 (4) 3,489 (4)
Ann D. McLaughlin 391 5,365
Guy K. Mitchell, Jr. 5,342 17,058
James V. Napier 974 974
Donald B. Rice 574 (5) 574 (5)
Herbert A. Sklenar 113,453 158,943
Orin R. Smith 974 9,340
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 (17 persons) were 309,384, representing .863% of
the outstanding Common Stock of the Company. Total stock-based holdings of
directors and executive officers as a group were 473,293.
(1) Includes shares held under the Company's Thrift Plan for Salaried
Employees on February 28, 1995, 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 17) 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. Also includes a total of 3,875 shares
which are held in four trusts of which Mr. Greene and another individual are
co-trustees.
(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, 1994.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
NAME AND ANNUAL COMPENSATION LONG-TERM ALL OTHER
PRINCIPAL POSITION Year COMPENSATION COMPENSATION(3)
SALARY BONUS(1) LTIP PAYOUTS(2)
<S> <C> <C> <C> <C> <C>
Herbert A. Sklenar 1994 $570,004 $300,000 $274,821 $31,800
Chairman and 1993 $535,004 $225,000 $285,184 $29,400
Chief Executive Officer 1992 $485,004 $200,000 $244,156 $19,400
William J. Grayson, Jr. 1994 $321,840 $200,000 $129,473 $18,274
Vice Chairman (formerly 1993 $302,000 $135,000 $130,819 $15,520
Executive Vice President, 1992 $282,000 $86,000 $102,728 $12,599
Construction Materials Group
Peter J. Clemens, III 1994 $243,038 $128,500 $84,878 $12,762
Senior Vice President 1993 $230,508 $76,000 $89,048 $12,061
Construction Materials Group 1992 $217,008 $71,000 $76,147 $8,039
Guy K. Mitchell, Jr. 1994 $217,670 $119,500 $34,181 $11,895
Senior Vice President 1993 $197,168 $79,700 $33,399 $10,047
Construction Materials Group 1992 $178,008 $54,000 $30,216 $8,240
Michael J. Ferris 1994 $242,208 $15,000 $87,402 $11,088
President, 1993 $229,674 $35,000 $84,884 $12,987
Chemicals 1992 $212,004 $95,000 $68,877 $10,640
<FN>
(1) Consists of payments made under the Company's Management Incentive Plan
("MIP"). If a Change in Control (see Employee Special Severance Plan on
page 21) 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.
(2) Represents the dollar value of performance shares earned under the
Company's 1981 Long-Range Performance Share Plan (the "Plan") in 1992, 1993
and 1994. 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.
(3) 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 1994: Mr. Sklenar $6,000, Mr.
Grayson $6,000, Mr. Clemens $6,000, Mr. Mitchell $6,000, and Mr. Ferris
$6,000. The following amounts were accrued pursuant to the Supplemental Plan
during 1994: Mr. Sklenar $25,800.30, Mr. Grayson $12,273.60, Mr. Clemens
$6,761.52, Mr. Mitchell $5,894.80, and Mr. Ferris $5,088.32.
</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,
1994, 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
NUMBER OF ESTIMATED FUTURE PAYOUTS(3)
SHARES PERFORMANCE NUMBER OF SHARES
NAME UNITS OR PERIOD TO
OTHER MATURATION(2)
RIGHTS (1) THRESHOLD TARGET MAXIMUM
<S> <C> <C> <C> <C> <C>
Herbert A. Sklenar 5,500 3 years 2,750 5,500 8,250
William J. Grayson, Jr. 1,540 2 years 770 1,540 2,310
Peter J. Clemens, III 2,640 5 years 1,320 2,640 3,960
Guy K. Mitchell, Jr. 2,500 5 years 1,250 2,500 3,750
Michael J. Ferris 2,700 5 years 1,350 2,700 4,050
<FN>
(1) The awards consist of performance shares and were based on a stock price
of $45.54 which was the average of the daily closing prices of the Company's
Common Stock in the last 20 trading days of 1993.
(2) Awards made in 1994 under the 1991 Long-Range Performance Share Plan (the
"Plan") will mature on December 31, 1998. 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,
1993. 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 21), 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, sets conditions for
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 sets conditions for 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 identified 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 1993 base salaries of the Senior Executives were
increased in 1994 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 1994 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. In 1994, the Committee increased Mr.
Sklenar's salary based on its consideration of his performance with respect to
a number of factors, including providing leadership in achieving long-term and
short-term profitability goals, dealing with important strategic business
issues and directing the Company's management development and succession
planning programs.
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,
which amount, in accordance with the terms of the Plan, cannot exceed 12 1/2%
of consolidated net earnings in excess of an amount equal to 6% of net capital
for such year. The amount added to the fund is usually well below the maximum
allowable.
Management Incentive Plan payments from the fund for 1994 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 totaled 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 supplementary factors such as safety, health and environmental
matters, community relations, management development, employee relations and
pursuit of 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.
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 1994 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 supplementary
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
1994 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 independently evaluated Mr. Sklenar's
performance, in particular his leadership in improving the Company's earnings
- - entirely attributable to the Construction Materials segment - and refocusing
and restructuring the Chemicals segment, thereby positioning it to take
advantage of strategic business opportunities. Based on 1994 performance, Mr.
Sklenar's payment under the Management Incentive Plan was 52% of his base
salary or 104% 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 of performance shares under the Plan are made annually by the
Committee and have a maturity period of five years (except for awards for
shorter periods made to executives who are within five years of retirement).
One performance share corresponds to one 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 sum of the market rate salary and the target bonus for each Senior
Executive. 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 1994, the Committee determined that conditions established with
respect to performance shares awarded in 1989 had been met to the extent that
78.4% 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 1994 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 1990 and the number of performance shares earned.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Internal Revenue Code Section 162(m), enacted in 1993, prohibits a
public corporation from taking a deduction in 1994 or subsequent years for
compensation in excess of $1 million paid to its chief executive officer or
any of its four other highest-paid executive officers. To date, none of the
executives named in the Summary Compensation Table, with the exception of Mr.
Sklenar, has received annual compensation exceeding $1 million.
The Internal Revenue Service has proposed regulations pursuant to
Section 162(m) which exempt certain "qualified performance-based compensation"
from the application of 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 continues to study
possible revisions to the compensation program that would be necessary in
order to continue to maintain the deductibility of all forms of compensation.
COMPENSATION COMMITTEE
O. R. Smith, Chairman
M. H. Antonini
L. D. DeSimone
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, 1989 and ending on December 31, 1994. 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 industries. 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, 1989, and that all dividends have been reinvested.
COMPARATIVE TOTAL RETURNS TO SHAREHOLDERS
HERE IS LINE GRAPH REPRESENTED BY THE FLOOWING COORDINATES:
Index as of December 31.
1989 1990 1991 1992 1993 1994
Vulcan (VMC) 100 79 86 119 119 132
S&P 500 Index 100 97 126 136 150 152
Wilshire M & S 100 89 115 123 137 134
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 1994 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, 1994, 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 84,000 101,625 119,250 136,875 145,000
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 1994
is $118,800, 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 $150,000, 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 21) 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, 1994, for Mr. Sklenar and four other
executive officers named in the Summary Compensation Table are shown below.
YEARS OF
BENEFIT SERVICE
NAME AS OF 12/31/94
Peter J. Clemens, III 17 5/12
Michael J. Ferris 23 7/12
William J. Grayson, Jr. 32 2/12
Guy K. Mitchell, Jr. 20 9/12
Herbert A. Sklenar 22 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 LLP, a firm of independent certified public
accountants, as independent auditors for the year 1995 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 LLP as independent
auditors, the Board will consider the selection of another independent
certified public accounting firm.
The firm of Deloitte & Touche LLP, 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.
3. SHAREHOLDER PROPOSAL
PROPOSAL RELATING TO RETIREMENT BENEFITS
FOR NONEMPLOYEE DIRECTORS
The Illinois Carpenters Pension Trust Fund, #1 Kalmia Way, P.O. Box 4365,
Springfield, Illinois 62708, which is the beneficial holder of 48,000 shares
of Common Stock of the Company, has advised the Company that it plans to
introduce the following proposal at the Annual Meeting.
To be adopted, this proposal, WHICH IS OPPOSED BY THE BOARD OF
DIRECTORS, would require the affirmative vote of the majority of the
votes cast.
SHAREHOLDER PROPOSAL
BE IT RESOLVED: That the shareholders of Vulcan Materials Company ("Company")
urge our Board of Directors to refrain from providing guaranteed consulting
agreements, pension or other retirement benefits to nonemployee directors
unless such benefits are specifically submitted to the shareholders for
approval.
SUPPORTING STATEMENT
The Board of Directors should play a vital and independent role in
helping to determine overall corporate policy and strategic direction. They
should actively monitor senior management in faithfully implementing these
policies. In their capacity on the Board, directors owe their fundamental
allegiance to the shareholders of our Company -- the owners who elect them --
and not to management.
We believe that certain business or financial relationships can
adversely affect the ability of directors to function in their appropriate
oversight role. This is especially critical for so-called outside or
independent directors who are not employees of our Company and who should
bring a certain arms-length objectivity to Board deliberations.
The Company's April 11, 1994 proxy discloses that in addition to cash
payments of $30,000 per year plus $1,500 for each meeting attended plus $5,000
for chairing a committee, directors receive the following additional
compensation:
(i) Guaranteed consulting agreements for retired directors. All nonemployee
directors who have served for at least 5 years and left the Board will
be considered a director emeritus and is entitled to a continuation of
the payment of the annual retainer fee (currently $30,000) in exchange
for consulting services. Payments last the shorter of life time or
years of service on the Board.
(ii) The annual receipt of shares of Company common stock equal to 8% of the
annual retainer fee.
Director compensation policies should endeavor to attract talented and
committed people without paying them in such a way that compromises their
independence. Stock grants make sense because they align the interests of
nonemployee directors with shareholders.
In contrast, the Company's system of guaranteed consulting agreements
for nonemployee directors align directors' interests with management and thus
threatens to compromise the independence and judgment of those directors. A
failure to support management initiatives may result in a director not being
re-nominated to the Board prior to five years of service and, accordingly,
will not receive the $30,000 annuity.
Additionally, under the Company's director compensation plan, if
shareholders question the performance of incumbent directors and choose to
elect new directors, the old directors still get rewarded even though they did
not perform up to shareholder expectations.
Because of our strong concern for maximizing the ability of Boards of
Directors to act in the shareholders' interest, we feel that the long-term
best interest of the Company are not well served by such retirement policies.
The vast preponderance of directors at various corporations are undoubtedly
covered by generous retirement policies at their principal place of
employment, and they need not be "double-dipping" at this Company or
any others.
BOARD OF DIRECTORS'
STATEMENT OF OPPOSITION
Your Board of Directors recommends a vote AGAINST this proposal for the
following reasons:
The Amendment and Restatement of the Vulcan Materials Company Plan for
Directors Emeriti and Others Eligible Directors (the "Plan") as described on
page 9 generates a substantial benefit to the Company. The Plan was initially
adopted by the Board in 1981. The best interests of the Company and its
shareholders are served by having high caliber, talented and experienced
individuals serving as outside directors. To attract and retain these highly
sought-after individuals, the Company must provide a total compensation
package for its outside directors that is fair and competitive with that
offered by other major corporations. Retirement benefits are a common element
of director compensation packages at large corporations. In fact, the Spencer
Stuart Board Index - 1994 Proxy Report indicates in its review of 100 major
companies that 79 of those companies have retirement plans for outside
directors. Payment of retirement benefits also recognizes the ever increasing
time commitment, diligence and risks associated with Board service.
The Plan not only benefits shareholders by enabling the Company to
attract and retain nonemployee directors, but, as importantly it enables the
Company to continue to profit from those directors' experience after they
leave the Board. The Plan requires consulting, thereby securing for the
Company and its shareholders the continuing counsel of those former
nonemployee directors whose objectivity, independence and experience have
proven to be quite valuable. The Plan provides an incentive to join the
Board, to remain long enough to gain experience and knowledge of the Company's
business and to remain available to provide advice after retirement.
For the foregoing reasons, your Board of Directors believes that this
proposal is not in the best interest of the Company and unanimously recommends
that you vote AGAINST this proposal.
COMPLIANCE WITH THE SECURITIES EXCHANGE ACT
Under Section 16(a) of the Securities Exchange Act of 1934, as amended, each
of the Company's directors and executive officers, and any beneficial owner of
more than 10% of the Common Stock, is required to file with the Securities and
Exchange Commission (the "SEC") initial reports of beneficial ownership of
the Common Stock and reports of changes in beneficial ownership of the Common
Stock. Such persons also are required by SEC regulations to furnish the
Company with copies of all such reports. Based solely on its review of the
copies of such reports furnished to the Company for the year ended December
31, 1994, and on the written representations made by such persons that no
other reports were required, the Company is not aware of any instances of
noncompliance with Section 16(a) by such persons, except that the initial
reports of beneficial ownership for four family trusts of which John K.
Greene, a director of the Company, is a co-trustee were filed on his behalf
by the Company several days late.
SHAREHOLDERS' PROPOSALS FOR 1996
To be eligible for inclusion in the Company's proxy statement and form of
proxy for its 1996 annual meeting, a shareholder's proposal must be received
by the Company at its principal offices no later than December 12, 1995.
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 10, 1995
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 1995 Proxy Statement.
1) In the section entitled "NOMINEES FOR ELECTION
TO THE BOARD OF DIRECTORS", to the left of each director's name there
are photographs of the individuals discussed in this section.
2) In the section entitled "SHAREHOLDER RETURN PERFORMANCE
PRESENTATION", a graph appears that illustrates comparative total
returns to shareholders. There is a table giving the coordinates of
this graph. A paper copy has been provided to the Securities and
Exchange Commission.
PROXY
VULCAN MATERIALS COMPANY
ANNUAL MEETING OF SHAREHOLDERS MAY 22, 1995
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 22, 1995, 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: John K. Greene, Douglas J. McGregor,
Donald B. Rice and Orin R. Smith.
(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,
FOR proposal 2 and AGAINST proposal 3.
The Board of Directors recommends a vote FOR proposals 1 and 2.
FOR WITHHELD
1. Election of
Directors.
(See reverse)
FOR AGAINST ABSTAIN
2. Ratification of the
appointment of
Deloitte & Touche LLP
as independent auditors
for the year 1995.
For, except vote withheld from the
following nominee(s) (if any):
The Board of Directors recommends a vote AGAINST proposal 3.
FOR AGAINST ABSTAIN
3. Proposal relating to
retirement benefits for
nonemployee directors.
4. 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.
VULCAN MATERIALS COMPANY CHEMICALS DIVISION
HOURLY EMPLOYEES SAVINGS PLAN - VOTING INSTRUCTIONS TO THE TRUSTEE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned Savings Plan participant hereby directs The Northern Trust
Company of Chicago, Illinois, Trustee under the Vulcan Materials Company
Chemicals Division Hourly Employees Savings Plan, to vote, in person or by
proxy, the shares of stock represented by moneys standing to the credit of
the undersigned as of March 1, 1995, and representing his/her own savings and
Company contributions, upon all matters at the Company's Annual Meeting of
Shareholders to be held on May 22, 1995, and at any adjournment thereof, and
without limiting the general direction hereby given, the Trustee is directed
to vote with respect to the following matters described in the Voting
Instruction Information and Proxy Statement:
(1) ELECTION OF DIRECTORS
Nominees: John K. Greene, Douglas J. McGregor, Donald B. Rice and
Orin R. Smith.
VOTE FOR all nominees listed above, except vote withheld from
the following nominee(s) (if any):
VOTE WITHHELD from all nominees.
(Continued, and to be signed on the reverse side)
(Continued from other side)
(2) To vote FOR AGAINST ABSTAIN
Ratification of the appointment of Deloitte & Touche LLP as independent
auditors for the year 1995.
(3) To vote FOR AGAINST ABSTAIN
The proposal relating to retirement benefits for nonemployee directors.
(4) To vote, in their discretion, upon such other matters as may properly
come before the meeting.
IF NO INDICATION IS MADE WITH RESPECT TO THE FOREGOING MATTERS, THE SHARES TO
WHICH THIS VOTING INSTRUCTION CARD RELATES WILL BE VOTED BY THE TRUSTEE IN THE
SAME PROPORTION AS THE SHARES FOR WHICH INSTRUCTIONS ARE RECEIVED.
Number of shares participant
is entitled to instruct.
Dated , 1995
(Signature)
Signature must agree with the same as shown immediately to the left.
VULCAN MATERIALS COMPANY CONSTRUCTION MATERIALS DIVISION
HOURLY EMPLOYEES SAVINGS PLAN - VOTING INSTRUCTIONS TO THE TRUSTEE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned Savings Plan participant hereby directs The Northern
Trust Company of Chicago, Illinois, Trustee under the Vulcan Materials
Company Construction Materials Division Hourly Employees Savings Plan,
to vote, in person or by proxy, the shares of stock represented by
moneys standing to the credit of the undersigned as of March 1, 1995,
and representing his/her own savings and Company contributions, upon all
matters at the Company's Annual Meeting of Shareholders to be held on
May 22, 1995, and at any adjournment thereof, and without limiting the
general direction hereby given, the Trustee is directed to vote with
respect to the following matters described in the Voting Instruction
Information and Proxy Statement:
(1) ELECTION OF DIRECTORS
Nominees: John K. Greene, Douglas J. McGregor, Donald B. Rice and
Orin R. Smith.
VOTE FOR all nominees listed above, except vote withheld from
the following nominee(s) (if any):
VOTE WITHHELD from all nominees.
(Continued, and to be signed on the reverse side)
(Continued from other side)
(2) To vote FOR AGAINST ABSTAIN
Ratification of the appointment of Deloitte & Touche LLP as independent
auditors for the year 1995.
(3) To vote FOR AGAINST ABSTAIN
The proposal relating to retirement benefits for nonemployee directors.
(4) To vote, in their discretion, upon such other matters as may properly
come before the meeting.
IF NO INDICATION IS MADE WITH RESPECT TO THE FOREGOING MATTERS, THE SHARES TO
WHICH THIS VOTING INSTRUCTION CARD RELATES WILL BE VOTED BY THE TRUSTEE IN THE
SAME PROPORTION AS THE SHARES FOR WHICH INSTRUCTIONS ARE RECEIVED.
Number of shares participant
is entitled to instruct.
Dated , 1995
(Signature)
Signature must agree with the same as shown immediately to the left.
VULCAN MATERIALS COMPANY THRIFT PLAN FOR SALARIED EMPLOYEES
VOTING INSTRUCTIONS TO THE TRUSTEE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned Thrift Plan participant hereby directs The Northern Trust
Company of Chicago, Illinois, Trustee under the Vulcan Materials Company
Thrift Plan for Salaried Employees, to vote, in person or by proxy, the shares
of stock represented by moneys standing to the credit of the undersigned as of
March 1, 1995, and representing his/her own savings and Company contributions,
upon all matters at the Company's Annual Meeting of Shareholders to be held on
May 22, 1995, and at any adjournment thereof, and without limiting the general
direction hereby given, the Trustee is directed to vote with respect to the
following matters described in the Voting Instruction Information and Proxy
Statement:
(1) ELECTION OF DIRECTORS
Nominees: John K. Greene, Douglas J. McGregor, Donald B. Rice and
Orin R. Smith.
VOTE FOR all nominees listed above, except vote withheld from
the following nominee(s) (if any):
VOTE WITHHELD from all nominees.
(Continued, and to be signed on the reverse side)
(Continued from other side)
(2) To vote FOR AGAINST ABSTAIN
Ratification of the appointment of Deloitte & Touche LLP as independent
auditors for the year 1995.
(3) To vote FOR AGAINST ABSTAIN
The proposal relating to retirement benefits for nonemployee directors.
(4) To vote, in their discretion, upon such other matters as may properly
come before the meeting.
IF NO INDICATION IS MADE WITH RESPECT TO THE FOREGOING MATTERS, THE SHARES TO
WHICH THIS VOTING INSTRUCTION CARD RELATES WILL BE VOTED BY THE TRUSTEE IN THE
SAME PROPORTION AS THE SHARES FOR WHICH INSTRUCTIONS ARE RECEIVED.
Number of shares participant
is entitled to instruct.
Dated , 1995
(Signature)
Signature must agree with the same as shown immediately to the left.
