FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 1-4033
VULCAN MATERIALS COMPANY
(Exact name of registrant as specified in its charter)
New Jersey 63-0366371
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Metroplex Drive, Birmingham, Alabama 35209
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 877-3000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, $1 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant as of February 29, 1996:
Common Stock, $1 Par Value $1,894,775,320
The number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:
Shares outstanding at
February 29, 1996
Common Stock, $1 Par Value 34,926,734
Documents Incorporated by Reference:
Portions of the registrant's Annual Report to Shareholders for the year
ended December 31, 1995, are incorporated by reference into Parts I, II and IV
of this Annual Report on Form 10-K.
Portions of the registrant's annual proxy statement for the annual
meeting of its shareholders to be held on May 17, 1996, are incorporated by
reference into Part III of this Annual Report on Form 10-K.
VULCAN MATERIALS COMPANY
CROSS REFERENCE SHEET FOR DOCUMENTS INCORPORATED BY REFERENCE
HEADING IN
ANNUAL REPORT PAGE IN
FORM 10-K TO SHAREHOLDERS FOR ANNUAL
ITEM NO. YEAR ENDED DECEMBER 31, 1995 REPORT
1. Business (Financial Results Segment Financial Data 22-23
by Business Segments)
Note 11, Segment Data 44
Note 13, Callaway Chemical
Acquisition 45
3. Legal Proceedings Note 9, Other Commitments and
Contingent Liabilities 43
5. Market for the Registrant's Common Stock Market Prices
Common Equity and Related and Dividends 21
Stockholder Matters
6. Selected Financial Data Selected Financial Data 20
7. Management's Discussion and Management's Discussion
Analysis of Financial and Analysis 24-31
Condition and Results Financial Terminology 47
of Operations
8. Financial Statements and Consolidated Statements 34
Supplementary Data of Earnings
Consolidated Balance Sheets 35
Consolidated Statements of
Cash Flows 36
Consolidated Statements of
Shareholders' Equity 37
Notes to Financial Statements 38-45
Management's Responsibility for
Financial Reporting and
Internal Control 46
Independent Auditors' Report 46
Supplementary Information-
Quarterly Financial Data
(Unaudited) 32
14. Exhibits, Financial Statement Management's Discussion
Schedules and Reports on and Analysis 24-31
Form 8-K
HEADING IN PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 17, 1996
10. Directors and Executive Election of Directors; Nominees for
Officers of the Registrant Election to the Board of Directors;
Directors Continuing in Office;
Compliance with the Securities
Exchange Act
11. Executive Compensation Compensation of Directors;
Executive Compensation; Shareholder
Return Performance Presentation;
Retirement Income Plan; Employee
Special Severance Plan
12. Security Ownership of Security Ownership of Certain
Certain Beneficial Owners Beneficial Owners; Security
and Management Holdings of Management
VULCAN MATERIALS COMPANY
ANNUAL REPORT ON FORM 10-K
Fiscal Year Ended December 31, 1995
CONTENTS
PART ITEM PAGE
I 1 Business 1
2 Properties 5
3 Legal Proceedings 8
4 Submission of Matters to a Vote of Security Holders 12
4 a. Executive Officers of the Registrant 12
II 5 Market for the Registrant's Common Equity and
Related Stockholder Matters 13
6 Selected Financial Data 13
7 Management's Discussion and Analysis of
Financial Condition and Results of Operations 13
8 Financial Statements and Supplementary Data 14
9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 14
III 10 Directors and Executive Officers of the Registrant 14
11 Executive Compensation 14
12 Security Ownership of Certain Beneficial Owners
and Management 15
13 Certain Relationships and Related Transactions 15
IV 14 Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 15
-- Signatures 22
PART I
ITEM 1. BUSINESS
Vulcan Materials Company, a New Jersey corporation incorporated in
1956, and its subsidiaries (together called the "Company") are principally
engaged in the production, distribution and sale of construction materials
("Construction Materials") and industrial and specialty chemicals
("Chemicals"). Construction Materials and Chemicals may each be considered
both a segment (or a line of business) and a class of similar products. The
Company is the nation's leading producer of construction aggregates.
All of the Company's products are marketed under highly competitive
conditions, including competition in price, service and product performance.
There are a substantial number of competitors in both the Construction
Materials segment and Chemicals segment.
No material part of the business of either segment of the Company is
dependent upon a single customer or upon a few customers, the loss of any one
of which would have a materially adverse effect on the segment. The Company's
products are sold principally to private industry. Although large amounts of
construction materials are used in public works, relatively insignificant
sales are made directly to federal, state, county or municipal governments, or
agencies thereof.
The Company conducts research and development activities for both
of its business segments. The Construction Materials research and development
laboratory is located near Birmingham, Alabama. The Chemicals research and
development laboratories are located in Wichita, Kansas and Columbus, Georgia.
In general, the Company's research and development effort is directed to
applied technological development for the use of its Construction Materials
and Chemicals products as well as for the manufacturing or processing of its
Chemicals products. The Company spent approximately $1,132,000 in 1993,
$1,080,000 in 1994 and $1,142,000 in 1995 on research and development
activities for its Construction Materials segment. The Company spent
approximately $4,941,000 in 1993, $7,215,000 in 1994 and $9,159,000 in 1995 on
research and development activities for its Chemicals segment.
The Company estimates that capital expenditures for environmental
control facilities in the current fiscal year (1996) and the succeeding fiscal
year (1997) will be approximately $5,173,000 and $1,986,000, respectively, for
the Construction Materials segment, and $15,042,000 and $5,410,000,
respectively, for the Chemicals segment.
The Company's principal sources of energy are electricity, natural gas
and diesel fuel. The Company does not anticipate any material difficulty in
obtaining the required sources of energy required for its operations.
In 1995, the Construction Materials segment employed an average of
approximately 5,153 people. The Chemicals segment employed an average of
approximately 1,613 people. The Company's corporate office employed an
average of approximately 152 people. The Company considers its relationship
with its employees to be good.
Financial results of the Company for any individual quarter are not
necessarily indicative of results to be expected for the year, due primarily
to the effect that weather can have on the sales and production volume of the
Construction Materials segment. Normally, the highest sales and earnings of
the Construction Materials segment are attained in the third quarter and the
lowest are realized in the first quarter.
CONSTRUCTION MATERIALS
The Company's construction aggregates business consists of the
production and sale of crushed stone, sand, gravel, rock asphalt and crushed
slag (a by-product of steel production). Crushed stone constituted
approximately 77% of the dollar volume of the Construction Materials segment's
1995 sales, as compared to 75% in 1994 and 74% in 1993. Construction
aggregates of suitable characteristics are employed in virtually all types of
construction, including highway construction and maintenance, and in the
production of asphaltic and portland cement concrete mixes. They also are
widely used as railroad track ballast.
Each type of aggregate is sold in competition with other types
of aggregates and in competition with other producers of the same type of
aggregate. Because of the relatively high transportation costs inherent in
the business, competition generally is limited to the areas in relatively
close proximity to production facilities. Noteworthy exceptions are the areas
along the Mississippi and Tennessee-Tombigbee river systems and the Gulf Coast
which are served by the Company's Reed quarry, areas served by rail-connected
quarries, and the areas along the Gulf Coast served by ocean-going vessels
that transport stone from the Company's joint venture operation in Mexico.
The Company's construction aggregates are sold principally in portions of most
of the southeastern states, portions of Texas, northern and central Illinois,
northern Indiana and southern Wisconsin.
Shipments of all construction aggregates from the Company's domestic
operations in 1995 totaled approximately 136 million tons, with crushed stone
shipments to customers accounting for 129 million tons.
In 1995, the Company, directly or through joint ventures, operated
121 domestic permanent and portable plants at quarries located in 13 states
for the production of crushed limestone and granite with estimated reserves
totaling approximately 7.5 billion tons.
In 1995, the Company, directly or through joint ventures, operated 13
sand and gravel plants, four slag plants and various other types of plants
which produce rock asphalt, mineral filler, pulverized limestone and fine
grind products. Estimates of sand and gravel reserves, calculated in a manner
comparable to the estimates of stone reserves set forth above, total
approximately 42 million tons.
Other Construction Materials products and services include asphaltic
concrete, ready-mixed concrete, trucking services, barge transportation, coal
handling services, a Mack Truck distributorship, paving construction,
dolomitic lime, emulsified asphalt and several other businesses.
Environmental and zoning regulations have made it increasingly
difficult for the construction aggregates industry either to expand existing
quarries or to develop new quarries. Although it cannot be predicted what
policies will be adopted in the future by governmental bodies regarding
environmental controls which affect the Construction Materials industry, the
Company anticipates that future environmental control costs will not have a
materially adverse effect upon its business.
CHEMICALS
The Chemicals Division is organized in two business units: the
Chloralkali Business Unit which manages the Company's chloralkali business,
and the Performance Systems Business Unit which manages the Company's
specialty chemicals business.
The principal chemicals produced by the Chloralkali Business Unit at
the Company's three chloralkali plants described in Item 2 below, are
chlorine, caustic soda (sodium hydroxide), muriatic acid, caustic potash
(potassium hydroxide) potassium carbonate, chlorinated hydrocarbons and
calcium chloride. Chlorine and various hydrocarbons (primarily ethylene and
methanol) are used to produce the Unit's line of chlorinated hydrocarbons,
including methylene chloride, perchloroethylene, chloroform, methyl chloride,
ethylene dichloride, carbon tetrachloride, methyl chloroform and
pentachlorophenol.
Principal markets for the Chloralkali Business Unit's chemical
products and services include pulp and paper, energy, food, pharmaceutical,
cleaning, chemical processing, fluorocarbons, water treatment and textiles.
In the paper-making industry, chlorine is used in pulp and paper bleaching,
while caustic soda is used primarily in the kraft and sulfite pulping process.
The Company supplies hydrochloric acid to the energy industry for use in oil
well stimulation and gas extraction. Caustic soda also is used to
demineralize water for steam production at electrical energy facilities and to
remove sulfur from gas and coal. Hydrochloric acid, caustic soda, methylene
chloride and caustic potash are used by the food and pharmaceutical
industries. Perchloroethylene, methylene chloride and methyl chloroform are
used in industrial cleaning applications. Perchloroethylene is also used in
the drycleaning industry. Potassium carbonate is used in the manufacture of
screen glass, rubber antioxidants and other chemicals.
The Chloralkali Business Unit's sales to the chemical processing
industry serve companies that produce organic and inorganic chemical
intermediates and finished products ranging from clay-based catalysts to
agricultural herbicides. Products sold to this market include hydrochloric
acid, chlorine, caustic soda and caustic potash. The Company sells
perchloroethylene, chloroform and methyl chloroform to the fluorocarbons
market. Chlorine is used in water and sewage treatment, and caustic soda and
caustic potash are used in the production of soaps and detergents. Chlorine
also is used as an industrial bleaching agent, in cleaning applications for
the electronics industry, as a biocide in the fruit processing industry and in
various applications in the oil industry. Calcium chloride, produced at the
Company's Wichita complex, has a multitude of uses including de-icing of
roads, dust control, road stabilization and oil well completion.
The principal chemicals produced for the Performance Systems Business
Unit by the Company's Callaway Chemical subsidiaries include process aids for
the pulp and paper and textile industries and various water treatment
chemicals. Through its Rio Linda Chemical subsidiary, the Performance Systems
Business Unit assembles and markets small-scale chlorine dioxide generators,
and sells related chemicals (primarily sodium chlorite manufactured by the
Company) and services to the water treatment, food processing and pulp and
paper industries. Additionally, through its Rio Linda Chemical subsidiary,
the Performance Systems Business Unit assembles and markets equipment, and
sells related chemicals (primarily hydrogen peroxide purchased from others)
and services, to the municipal and industrial water treatment markets. The
Performance Systems Business Unit produces sodium chlorite at the Chloralkali
Business Unit's Wichita plant which is used in the water treatment, food
processing, pulp and paper, textile and electronics industries. The
Performance Systems Business Unit also markets sodium hydrosulfite which is
used primarily in the pulp and paper industry and produced at the Port
Edwards Plant.
In February 1996, the Company sold the assets relating to its
perox-pure business formerly held by its subsidiary, Vulcan Peroxidation
Systems Inc. ("VPSI"). The remaining assets of VPSI relating to its
perox-serv business have been transferred to the Company's Rio Linda Chemical
subsidiary.
The Company competes throughout the United States with numerous
companies, including some of the largest chemical companies, in the production
and sale of its lines of chemicals. The Company also competes for sales to
customers located outside the United States, with sales to such customers
currently accounting for approximately 6% of the Company's chemicals sales.
In December 1995, the Company suspended funding for the development of
its joint venture soda ash project at Owens Lake, California. The venture had
encountered a continuing series of permitting delays and other obstacles that
adversely affected the project. In the fourth quarter of 1995, the Company
expensed the costs incurred in engineering and permitting in connection with
this venture.
The Company's underground reserves of salt, which is a basic raw
material in the production of chlorine and caustic soda, are located at or
near its Wichita, Kansas, and Geismar, Louisiana, plants. The Company
purchases salt for its Port Edwards, Wisconsin, plant. Ethylene, methanol,
and vinyl chloride monomer, the other major raw materials used in the
Chloralkali Business Unit and various chemicals used by the Performance
Systems Business Unit are purchased from several different suppliers.
Sources of salt, ethylene, methanol, vinyl chloride monomer and other various
chemicals are believed to be adequate for the Company's operations and the
Company does not anticipate any material difficulty in obtaining the raw
materials which it uses.
The Company's chemical operations are subject to the Resource
Conservation and Recovery Act ("RCRA"). Under the corrective action
requirements of RCRA, the Environmental Protection Agency ("EPA") must
identify facilities subject to RCRA's hazardous waste permitting provisions
where practices in the past have caused releases of hazardous waste or
constituents thereof. The owner of any such facility is then required to
conduct a Remedial Facility Investigation ("RFI") defining the nature and
extent of any such releases described by the EPA. If the results of the RFI
determine that constituent concentrations from any such release exceed action
levels specified by the EPA, the facility owner is further required to perform
a Corrective Measures Study ("CMS") identifying feasible technological
alternatives for addressing these releases. Depending upon the results
reported to the EPA in the RFI and CMS, the EPA subsequently may require
Corrective Measures Implementation ("CMI") by the facility owner -
essentially, implementation of a cleanup plan developed by the EPA based on
the RFI and CMS.
The Company expects to incur RFI and CMS costs over the next several
years at its Geismar, Port Edwards and Wichita manufacturing facilities. For
each of these three facilities, the RFI and CMS results will determine whether
the EPA subsequently requires a CMI to address releases at the facility, and
the scope and cost of any such CMI. With respect to those RFI and CMS costs
that currently can be reasonably estimated, the Company has determined that
its accrued reserves are adequate to cover such costs. However, the total
costs which ultimately may be incurred by the Company in connection with
discharging its obligations under RCRA's corrective action requirements cannot
reasonably be estimated at this time.
Various other environmental regulations also have a restrictive
effect upon the chemicals industry, both as to production and sales,
particularly the production and sale of certain chemicals which are subject to
regulation as ozone depleting chemicals. The production and marketing of
carbon tetrachloride ended effective January 1, 1996, for all end uses except
for exports to Article 5 countries as defined by the Montreal Protocol on
Ozone Depleting Chemicals. The production of methyl chloroform for emissive
applications also ended effective January 1, 1996. Existing inventory of
methyl chloroform may continue to be marketed for emissive uses. In addition,
methyl chloroform will continue to be produced and marketed for non- emissive
uses while carbon tetrachloride will continue to be produced and marketed for
export to Article 5 countries. However, sales volume of both products will be
significantly lower than in prior years.
FINANCIAL RESULTS BY BUSINESS SEGMENTS
Net sales, earnings, identifiable assets and related financial data
for each of the Company's business segments for the three years ended
December 31, 1995, are reported on page 44 (Note 11 of the Notes to Financial
Statements) and on pages 22 and 23 (under the caption "Segment Financial
Data") in the Company's 1995 Annual Report to Shareholders, which pages are
incorporated herein by reference.
ITEM 2. PROPERTIES
CONSTRUCTION MATERIALS
The Company's current estimate of approximately 7.5 billion tons of
domestic stone reserves is approximately 200 million tons less than the
estimate reported at the end of 1994. Decreases in the Company's reserves
have resulted from 1995 production tonnage and the sale of quarry sites in
Iowa. These decreases have been partially offset by leases or acquisitions
of new quarry sites and revisions in mining plans. Management believes that
the quantities of reserves at the Company's stone quarries are sufficient to
result in an average quarry life of approximately 60 years at present
operating levels.
The foregoing estimates of reserves are of recoverable stone of
suitable quality for economic extraction, based on drilling and studies by
the Company's geologists and engineers, recognizing reasonable economic and
operating restraints as to maximum depth of overburden and stone excavation.
These estimates do not include reserves at the Company's inactive and
undeveloped sites nor reserves in joint ventures.
Of the 121 domestic stone quarries which the Company operates directly
or through joint ventures, 32 are located on owned land, 17 are on land owned
in part and leased in part, and 72 are on leased land. While some of the
Company's leases run until reserves at the leased sites are exhausted,
generally the Company's leases have definite expiration dates which range from
1996 to 2104. Most of the Company's leases have options to extend them well
beyond their current terms.
Due to transportation costs, the marketing areas for most quarries in
the construction aggregates industry are limited, often consisting of a single
metropolitan area or one or more counties or portions thereof. The following
table itemizes the Company's 10 largest active stone quarries in terms of the
quantity of stone reserves, with nearby major metropolitan areas (if
applicable) shown in parentheses:
<TABLE>
<CAPTION>
Estimated
Years of Life Lease
At Average Expiration
Rate Of Nature of Date, if
Location Product Production* Interest Applicable**
<S> <C> <C> <C> <C>
McCook (Chicago), Illinois Limestone 92*** Owned
Paducah, Kentucky Limestone 44 Leased ****
Grayson (Atlanta), Georgia Granite Over 100 Owned
Gray Court (Greenville), South Carolina Granite Over 100 Owned
Warrenton, Virginia (Washington, D.C.) Diabase Over 100 Leased ****
Kennesaw (Atlanta), Georgia Granite 54 75% Owned
25% Leased 2013
Manteno, Illinois Limestone Over 100 Leased 2104
Skippers, Virginia Granite Over 100 Leased 2016
Lawrenceville (Norfolk/Virginia
Beach), Virginia Granite 89 25% Owned
75% Leased 2024
Columbus, Georgia Granite 68 60% Owned
40% Leased 2012
<FN>
* Estimated years of life of stone reserves are based on the average annual
rate of production of the quarry for the most recent three-year period,
except that if reserves are acquired or if production has been
reactivated during that period, the estimated years of life are based on
the annual rate of production from the date of such acquisition or
reactivation. Revisions may be necessitated by such occurrences as
changes in zoning laws governing quarry properties, changes in stone
specifications required by major customers and passage of government
regulations applicable to quarry operations. Estimates also are revised
when and if additional geological evidence indicates that a revision is
necessary.
** Renewable by the Company through date shown.
*** For some time, the Metropolitan Water Reclamation District of Greater
Chicago (MWRD) has had under consideration the condemnation of a portion
of this quarry in order to use it as a reservoir. The Company believes
that this action, if it occurs, could significantly reduce the life of
this quarry, but will not have a material effect on the financial
condition of the Company as a whole. Recently, the MWRD announced it
would seek to develop this reservoir on nearby property owned by it.
The Company continues to have discussions with the MWRD.
**** Lease does not expire until reserves are exhausted. Surface rights at
the Paducah, Kentucky, quarry are owned.
</TABLE>
The estimated average life of the Company's sand and gravel
operations, calculated in the same manner as described in the footnote to
the table set out above, is approximately 8 years. Approximately 46% of the
Company's estimated 42 million tons of sand and gravel reserves are located
on owned land, with the remaining 54% located on leased land.
CHEMICALS
Manufacturing facilities for the chemicals produced by the Chloralkali
Business Unit are owned and operated by the Company at Wichita, Kansas;
Geismar, Louisiana; and Port Edwards, Wisconsin. With a few exceptions, the
Geismar and Wichita facilities produce the full line of products manufactured
by the Company's Chloralkali Business Unit. The Port Edwards plant produces
chlorine, caustic soda, muriatic acid, caustic potash, potassium carbonate and
sodium hydrosulfite.
All of the facilities at Wichita are located on a 1,396-acre tract of
land owned by the Company. Mineral rights for salt are held by the Company
under two leases that are automatically renewable from year to year unless
terminated by the Company and under several other leases which may be kept in
effect so long as production from the underlying properties is continued. In
addition, the Company owns 320 acres of salt reserves and 160 acres of water
reserves. The Company maintains an electric power cogeneration facility at
the Wichita plant site which is capable of generating approximately one-third
of the plant's electricity and two-thirds of its process steam requirements.
Effective in July 1995, pursuant to a long-term agreement, the Company has
placed this facility in reserve and is purchasing all of its requirements for
electric power from a local utility at favorable rates.
The facilities at Geismar, Louisiana, are located on a 1,266-acre
tract of land owned by the Company. Included in the facilities at the Geismar
plant is an electric power cogeneration facility owned by the Company which
supplies substantially all of the electricity and process steam required by
the plant. Mineral rights for salt are held under a long-term lease expiring
in 2007.
The plant facilities at Port Edwards, Wisconsin, are located on a
34-acre tract of land, the surface rights to which are owned by the Company.
Currently, the Company purchases its salt and electrical power requirements
for the Port Edwards facility from regional sources of supply.
Manufacturing facilities for chemicals produced by the Performance
Systems Business Unit (other than sodium chlorite produced at Wichita and
sodium hydrosulfite, produced at Port Edwards) are operated by subsidiaries of
the Company. Callaway Chemical Company owns a headquarters office building
and two production facilities in Columbus, Georgia, and a smaller production
facility in Shreveport, Louisiana. Callaway Chemical Limited has an office
and small production facility on leased property in Vancouver, British
Columbia. Rio Linda Chemical Company leases its office and production
facilities in West Sacramento, California.
The Company's Chemicals manufacturing facilities are designed to
permit a high degree of flexibility as to feedstocks, product mix and
by-product ratios; therefore, actual plant production capacities vary
according to these factors. Management does not believe, however, that there
is material excess in production capacity at the Company's Chemicals
facilities.
OTHER PROPERTIES
The Company's corporate offices are located in an office complex near
Birmingham, Alabama. Headquarters staffs of the Construction Materials and
Chemicals segments, the Southern Division of the Construction Materials
segment, and Vulcan Gulf Coast Materials, Inc., also are located in this
complex. The space is occupied pursuant to several leases. The lease
pursuant to which the majority of the space is leased runs through December
31, 1998. The Company has the option of extending this lease for two
five-year periods. The Company's space in this complex is leased at an
approximate annual rental, as of December 31, 1995, of $1,400,000, which is
subject to limited escalation.
ITEM 3. LEGAL PROCEEDINGS
The Company is a defendant in various lawsuits in the ordinary course
of business. It is not possible to determine with precision the probable
outcome of or the amount of liability, if any, under these lawsuits; however,
in the opinion of the Company and its counsel, the disposition of these
lawsuits will not adversely affect the consolidated financial position of the
Company to a material extent.
In the course of its Construction Materials and Chemicals operations,
the Company is subject to occasional governmental proceedings and orders
pertaining to occupational health and safety or to protection of the
environment, such as proceedings or orders relating to noise abatement, air
emissions or water discharges. As part of its continuing program of
environmental stewardship, however, the Company has been able to resolve such
proceedings and to comply with such orders without any materially adverse
effects on its business.
1. In May 1985, the Company received a letter from the United
States Environmental Protection Agency ("EPA") regarding the Cleve Reber
Superfund Site in Ascension Parish, Louisiana (the "Reber Site"). EPA's
letter advised that the Company was deemed by EPA to be a potentially
responsible party ("PRP") with respect to the Site under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), and records
indicated that the Company generated a portion of wastes containing CERCLA
hazardous substances which were disposed of at the Reber Site. On February 5,
1991, EPA issued a unilateral administrative order ("UAO") directing named
respondents, including the Company and other PRPs, to clean up the site. In a
letter dated April 9, 1991, the Company, along with three other PRPs named in
the UAO, gave notice to EPA that they intend to comply with all lawful terms
and conditions of the UAO. Effective June 8, 1992, the Company and other PRPs
entered into a Site Participation Agreement ("Agreement") allocating among the
parties costs anticipated to be incurred both in connection with site
remediation and EPA's past response work or oversight work at the Reber Site.
The Company together with the other participating PRPs subsequently
implemented EPA's final cleanup plan for the Reber Site in accordance with the
requirements of the UAO, and completed active Site remediation during 1995.
Site capping and certain other remaining work required under the UAO is
expected to be completed in the second quarter of 1996. The Company believes
that total provisions now recorded are adequate to cover its share of the
anticipated remaining costs.
2. In August 1991, the Company received a letter from the State
of New Jersey Department of Environmental Protection ("NJDEP") concerning a
site located in Newark, New Jersey, which the Company previously owned and
upon which the Company operated a chemicals production facility from the early
1960s until 1974. The NJDEP's letter contends that hazardous substances and
pollutants contaminate the site and that a Remedial Investigation/Feasibility
Study ("RI/FS") is required in order to determine the nature and extent of
such contamination and whether a remedial action plan with respect thereto
should be developed. In November 1991, the Company received from NJDEP a
"Directive and Notice to Insurers" (the "Directive") purporting to direct the
Company to pay to the NJDEP $1,000,000 to be used by it in conducting an RI/FS
at the site. Although the NJDEP has not withdrawn its Directive, the NJDEP
has informally agreed that it will not seek to enforce its Directive as long
as the Company participates in the RI/FS for this site.
In August 1993, two other allegedly responsible parties, Safety-Kleen
Environsystems Company and Bristol-Meyers Squibb Company (collectively, the
"Respondents"), entered into an Administrative Consent Order ("ACO") issued by
the NJDEP concerning the site. The ACO contains certain findings of fact by
the NJDEP and provisions governing the conduct by the Respondents of an RI/FS
for the site and remedial actions, if any, resulting therefrom. Under a
separate agreement with Respondents and certain successors, the Company will
share in the cost of the RI/FS. The Respondents estimate a cost of $250,000
to complete the RI. The cost of the FS depends upon the results of the RI.
Depending, in turn, upon the results of the RI/FS, NJDEP will
determine what site remediation is required under the ACO, if any. In that
event, it is also likely that the Respondents or the NJDEP will assert that
the Company should bear some responsibility in connection with such
remediation. At this time, however, it is impossible to predict the ultimate
outcome of this matter.
3. In October 1991, the Company received a letter from Chevron
USA, Inc. ("Chevron"), contending that hazardous substances and pollutants
contaminate a site owned by Chevron and located in Woodbridge Township,
Middlesex County, New Jersey. The Company sold that site to Chevron in 1958,
and the Company owned and operated a detinning facility adjacent to the
Chevron site until 1964. Chevron has advised the Company that Chevron is
investigating the feasibility of corrective action pursuant to applicable
provisions of RCRA, and is seeking assistance from parties who may have been
responsible for some or all of the contamination at the site.
The Company and other allegedly responsible parties have had meetings
with Chevron to discuss the status of the site. Given the limited information
available to the Company regarding this site, the extent, if any, to which the
Company's former operations may have contributed to contamination at the site
cannot now be established or confirmed. For these reasons, it is impossible
at this time for the Company to predict the outcome of this matter or the
existence or extent of any liability of the Company with respect to this
matter.
4. In January 1992, the Company received a letter from the EPA
regarding alleged releases or threatened releases of hazardous substances at a
hazardous waste treatment, storage and disposal site in Greer, South Carolina,
which was operated by Aqua-Tech Environmental, Inc., a South Carolina
corporation. The EPA's letter advised that the Company may be considered a
CERCLA PRP. The Company confirmed that in 1987 it had sent cylinders
containing titanium tetrachloride to the site for disposal. In April 1992,
the Company became a party to a PRP Agreement whereby the signatories thereto
agreed to cooperate in responding as a PRP group to a CERCLA Section 106 UAO
issued to many of the PRPs, including the Company, directing the PRPs to
conduct a removal action with respect to hazardous substances on-site. A
total of 179 PRPs agreed to participate in the removal action and to share the
related costs according to a series of interim allocations. The removal
action has now been completed. The Company's allocated share is $124,769.51 of
which it has paid $116,571.00 to-date.
EPA has placed the site on the National Priorities List for
remediation under CERCLA; however, the extent to which the site is
contaminated has not been assessed, so additional costs associated with
assessing and remediating any such site contamination cannot yet be estimated.
Consequently, neither the extent, if any, to which the wastes the Company sent
to the site may have contributed to site contamination, nor the Company's
potential share, if any, of the costs associated with the assessment and
remediation of such site contamination, can yet be determined. However, based
on a proposed de minimis settlement which it currently is reviewing, the
Company does not believe that its potential share of any costs related to the
site will adversely affect the consolidated financial position of the Company
to a material extent.
5. In October 1992, the Company received a letter from the EPA
requesting information regarding waste generated by the Company and disposed
of at a sanitary landfill in Muskego, Wisconsin, which is operated by Waste
Management of Wisconsin ("Muskego Landfill"). The Company responded by
stating that it had no knowledge of the generation of any solid waste by the
Company's former aluminum recycling facility in Oak Creek, Wisconsin, which
was disposed of in the Muskego Landfill. Nevertheless, in January 1993, the
Company received a CERCLA Section 106 UAO directing that the Company and 45
other respondents/PRPs perform certain initial remedial design and action work
with respect to the Muskego Landfill.
The Company and other PRPs formed a PRP Group to formulate allocations
for certain of Waste Management's past response costs, a remedial design study
for the first phase of remediation, and first phase remedial work. The
Company subsequently paid its allocated share of the administrative costs for
the PRP Group, the cost of the remedial design study, and the costs relating
to past response efforts and the first phase of remediation.
In June 1995, the Company received another CERCLA Section 106 UAO,
dated June 6, 1995, wherein EPA purports to direct the Company, together with
55 other named respondents/PRPs, to submit a workplan for completing a
remedial design and remedial action to implement cleanup of groundwater
contamination at the Muskego Landfill. The Company believes that it can
assert substantial legal and equitable defenses with respect to this most
recent UAO. The Company's potential share of the ultimate cleanup cost,
therefore, cannot be determined at this time. The Company does not, however,
believe that its potential share, if any, of costs associated with the second
remediation phase involving groundwater cleanup will adversely affect the
consolidated financial position of the Company to a material extent.
6. The Company was notified in a March 1994 letter from EPA
that it was deemed a CERCLA PRP by EPA with respect to the Jack's
Creek/Sitkin Smelting Superfund Site in Mifflin County, Pennsylvania. The
Company is among some 880 PRPs that EPA claims shipped to the Site a total of
approximately 286 million pounds of material alleged to contain CERCLA
hazardous substances, including shipments by the Company claimed by EPA to
represent about 1.8 million pounds of that total amount.
The RI/FS prepared by EPA's contractor favors a Site remedy with an
estimated cost of $56.2 million. In addition, EPA claims that it has incurred
investigation and response costs relating to the Site of just over $5 million,
and the U.S. Department of the Interior has asserted a Site-related natural
resources damage claim of approximately $2.2 million. State natural resource
trustees have not formally asserted natural resource damage claims, although
State trustee agencies have reportedly conducted evaluations of Site impacts
on certain natural resources. Similarly, the Pennsylvania Department of
Environmental Protection ("PADEP") has allegedly incurred costs for
investigation and response at the Site, but has not yet formally asserted a
claim for, or stated the total amount of, the costs allegedly incurred. Under
the circumstances, the Company is not able to predict the probability of a
favorable or unfavorable outcome, or the amount of potential loss in the event
of any unfavorable outcome.
7. Lawsuits naming the Company have been filed in the District
Courts of Jefferson and Ector counties, Texas, by individual plaintiffs
alleging silicosis arising from exposure to industrial sand used for abrasive
blasting which was marketed by the Company from 1988 to 1994. The Company is
but one of from 20- 40 defendants named in each case. As of this date, 29
such cases are pending against the Company. At this time, the Company does
not expect that settlements or adverse judgments, if any, will adversely
affect the consolidated financial position of the Company to a material
extent.
8. On August 30, 1995, a complaint was filed in the District
Court of Nueces County, Texas, 214th Judicial District, by 144 individual
plaintiffs against 93 defendants, including the Company. Plaintiffs allege
personal injuries and damages arising from exposure to petroleum products,
asbestos, chemicals, solvents, minerals, metals and other products in
connection with plaintiffs' employment at the Corpus Christi Army Depot in
Corpus Christi, Texas. Plaintiffs' ad damnum plea is for $100 Million in
compensatory damages and "at least" $400 Million in punitive damages from all
defendants. The Company has retained counsel and is currently defending the
action. The Company does not believe that its potential share, if any, of
costs related to this action will adversely affect the consolidated financial
position of the Company to a material extent.
9. In 1987, the Company sold its former Neville Island,
Pennsylvania, detinning facility to AMG Resources Corporation. Under the
terms of the sale and subsequent agreements, the Company retained
responsibility for the assessment of certain environmental conditions at the
site, the preparation of a remediation plan to address such conditions for
submission to appropriate environmental regulatory agencies, and the
implementation of the approved remediation plan.
In 1991, the Company prepared and submitted to the PADEP the results
of an extensive site investigation. Subsequently, the Company's independent
consultants prepared a remediation proposal, and in November 1994, the Company
presented its remediation concept to PADEP representatives. At that time,
PADEP indicated that it was potentially willing to consider the proposed
remediation concept, and requested submission of certain additional
information. PADEP further stated that it intended to negotiate and enter
into a Consent Order setting forth the Company's remediation obligations at
the site.
In October 1995, the Company filed with the PADEP and Neville Township
a Notice of Intent to Remediate the AMG site under certain applicable
provisions of the Pennsylvania Land Recycling and Environmental Remediation
Standards Act (Act 2). With PADEP's authorization, the Company subsequently
implemented its remediation concept through a pilot remediation project which
addressed soil contamination in an area of the Neville Island site where AMG
was constructing a new recycling unit. Based on the results of the pilot
remediation effort, the Company has proposed to conduct additional remediation
activities under Act 2 to address the remainder of the AMG site, including
lead conditions in soils and arsenic conditions in groundwater. Concurrently,
PADEP, Vulcan and AMG are proceeding with negotiation of a consent order
covering the remediation effort and the scope of subsequent monitoring to
evidence the effectiveness of the remediation work. Under present
circumstances, however, the Company can neither predict the probability of a
favorable or unfavorable ultimate resolution of this matter nor the amount of
costs, if any, in excess of current reserves.
Note 9, Other Commitments and Contingent Liabilities on page 43 of the
Company's 1995 Annual Report to Shareholders is hereby incorporated by
reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to the Company's security holders through the
solicitation of proxies or otherwise during the fourth quarter of 1995.
ITEM 4a. EXECUTIVE OFFICERS OF THE REGISTRANT
The names, positions and ages of the executive officers of the Company
are as follows:
NAME POSITION AGE
Herbert A. Sklenar Chairman, Chief Executive Officer and Director 64
William J. Grayson, Jr. Vice Chairman and Director 65
Donald M. James President, Chief Operating Officer and Director 47
Peter J. Clemens, III Senior Vice President, West - Construction
Materials Group 52
Guy K. Mitchell, Jr. Senior Vice President, East - Construction
Materials Group 47
Michael J. Ferris President, Chemicals Division 51
R. Morrieson Lord Senior Vice President, Human Resources 65
William F. Denson, III Vice President-Law and Secretary 52
Daniel F. Sansone Vice President-Finance and Treasurer 43
Ejaz A. Khan Controller 39
The principal occupations of the executive officers during the past
five years are set forth below:
Herbert A. Sklenar was elected President and Chief Executive Officer
in May 1986. He was elected to his present position in May 1992.
William J. Grayson, Jr., was elected Vice Chairman effective
March 7, 1995. He served as Executive Vice President, Construction Materials
Group, prior thereto.
Donald M. James was elected President, Chief Operating Officer
and Director effective February 17, 1996. Mr. James joined the Company in
December 1992 as Senior Vice President and General Counsel. Prior to joining
the Company he was a partner in the law firm of Bradley, Arant, Rose & White.
In January 1994, Mr. James was elected President of the Southern Division and
in August 1995, he was also elected Senior Vice President, South, Construction
Materials Group.
Peter J. Clemens, III, served as Senior Vice President, Finance, until
January 1, 1994, when he was appointed Senior Vice President-West, Construction
Materials Group.
Guy K. Mitchell, Jr., served as President, Chattanooga Division, until
May 1991, when he was appointed Senior Vice President-East, Construction
Materials Group.
Michael J. Ferris was appointed President, Chemicals Division,
in May 1987.
R. Morrieson Lord was elected Senior Vice President, Human Resources,
in April 1979.
William F. Denson, III, has served continuously as Secretary since
April 1981. He served as Assistant General Counsel until May 1992, when he was
elected Vice President and Assistant General Counsel, and was elected Vice
President-Law effective January 1, 1994.
Daniel F. Sansone served as Controller until May 1991, when he was
elected Vice President and Controller, and was elected Vice President-Finance
and Treasurer effective January 1, 1994.
Ejaz A. Khan served as Controller, Chemicals Division, until September
1995, when he was elected Controller of the Company.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
"Common Stock Market Prices and Dividends" on page 21 of the Company's
1995 Annual Report to Shareholders is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data" on page 20 of the Company's 1995 Annual
Report to Shareholders is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
"Management's Discussion and Analysis" on pages 24 through 31 and
"Financial Terminology" on page 47 of the Company's 1995 Annual Report to
Shareholders are incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following information relative to this item is included in the
Company's 1995 Annual Report to Shareholders on the pages shown below, which
are incorporated herein by reference:
PAGE
Financial Statements and Notes 34
Management's Responsibility for Financial Reporting and Internal Control 46
Independent Auditors' Report 46
Supplementary Information-Quarterly Financial Data (Unaudited) 32
With the exception of the aforementioned information and the
information incorporated by reference in Items 1, 3, 5, 6, 7, 8 and 14, the
Company's 1995 Annual Report to Shareholders is not deemed filed as part of
this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
No information is required to be included herein pursuant to
Item 304 of Regulation S-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Within 120 days of the close of the Company's fiscal year on
December 31, 1995, the Company will file a definitive proxy statement with
the Securities and Exchange Commission pursuant to Regulation 14A (the
Company's "1996 Proxy Statement"). The information under the headings
"Election of Directors," "Nominees for Election to the Board of Directors"
and "Directors Continuing in Office" included in the 1996 Proxy Statement are
incorporated herein by reference. For the information required by Item 401 of
Regulation S-K concerning executive officers of the registrant, reference is
also made to the information provided in Part I, Item 4a, of this Annual
Report on Form 10-K. Based solely on a review of Forms 3 and 4 and amendments
thereto furnished to the Company pursuant to Rule 240.16a-3(e) during 1995,
and of Form 5 and amendments thereto furnished to the Company pursuant to Rule
240.16a-3(e) with respect to 1995, the Company has identified certain persons
subject to Section 16(a) of the Securities Exchange Act of 1934 who failed to
file on a timely basis required forms. Information concerning such failures
under the heading "Compliance with the Securities Exchange Act" included in
the Company's 1996 Proxy Statement is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information under the headings "Compensation of Directors,"
"Executive Compensation," "Shareholder Return Performance Presentation,"
"Retirement Income Plan" and "Employee Special Severance Plan" included in
the Company's 1996 Proxy Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The information under the headings "Security Ownership of Certain
Beneficial Owners" and "Security Holdings of Management" included in the
Company's 1996 Proxy Statement is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No information is required to be included herein pursuant to Item 404
of Regulation S-K, which requires disclosure of certain information with
respect to certain relationships or related transactions of the directors and
management.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a) (1) FINANCIAL STATEMENTS
The following financial statements are included in the Company's 1995
Annual Report to Shareholders on the pages shown below and are incorporated
herein by reference:
PAGE
Consolidated Statements of Earnings 34
Consolidated Balance Sheets 35
Consolidated Statements of Cash Flows 36
Consolidated Statements of Shareholders' Equity 37
Notes to Financial Statements 38
Management's Responsibility for Financial Reporting and
Internal Control 46
Independent Auditors' Report 46
Supplementary Information-Quarterly Financial Data (Unaudited) 32
(a) (2) FINANCIAL STATEMENT SCHEDULES
The following financial statement schedule for the years ended
December 31, 1995, 1994 and 1993 is included in Part IV of this report on
the indicated pages:
Schedule II Valuation and Qualifying Accounts and Reserves 19
Other schedules are omitted because of the absence of conditions under
which they are required or because the required information is provided in the
financial statements or notes thereto.
Financial statements (and summarized financial information) of 50%
or less owned entities accounted for by the equity method have been omitted
because they do not, considered individually or in the aggregate, constitute
a significant subsidiary.
(a) (3) EXHIBITS
The exhibits required by Item 601 of Regulation S-K and indicated
below, other than Exhibits (11) and (12) which are on pages 20 and 21 of this
report, are either incorporated by reference herein or accompany the copies of
this report filed with the Securities and Exchange Commission and the New York
Stock Exchange. Copies of such exhibits will be furnished to any requesting
shareholder of the Company upon payment of the costs of copying and
transmitting the same.
EXHIBIT (3)(i) Certificate of Incorporation (Restated 1988) of the
Company. Exhibit 3(a) to the Company's 1988 Form 10-K
Annual Report is incorporated herein by reference
(File No. 1-4033).
EXHIBIT (3)(ii) By-laws of the Company, as restated February 2, 1990,
and as last amended February 17, 1996.
Exhibit (4) Exhibits 1 (Distribution Agreement by and among the
Company, Goldman, Sachs & Co., Lehman Brothers and
Salomon Brothers Inc) and 4 (Indenture by and between
the Company and First Trust of New York (as successor
trustee to Morgan Guaranty Trust Company of New York))
to the Form S-3 filed with the Securities and Exchange
Commission by the Company on May 2, 1991, and
registering $200,000,000 in debt securities is
incorporated herein by reference. Form 8-K Report
filed with the Securities and Exchange Commission by
the Company on May 14, 1991, is incorporated herein by
reference. The Company hereby agrees to furnish the
Securities and Exchange Commission, upon request, all
instruments defining the rights of holders of its
other long-term debt or that of any of its
consolidated subsidiaries.
Exhibit (10)(a) The Management Incentive Plan of the Company, as last
amended and restated. Exhibit 10(a) to the Company's
1989 Form 10-K Annual Report is incorporated herein by
reference (File No. 1-4033).*
Exhibit (10)(b) The 1991 Long-Range Performance Share Plan of the
Company. Exhibit A to the Company's definitive proxy
statement for the annual meeting of its shareholders
held May 16, 1991 ("1991 Proxy Statement"), is
incorporated herein by reference (File No. 1-4033).*
Exhibit (10)(c) The Employee Special Severance Plan of the Company.
Exhibit 10(g) to the Company's 1989 Form 10-K Annual
Report is incorporated herein by reference
(File No. 1-4033).*
Exhibit (10)(d) The Plan for Directors Emeriti and Other Eligible
Directors, as last amended and restated. Exhibit
10(c) to the Company's 1990 Form 10-K Annual Report is
incorporated herein by reference (File No. 1-4033).*
Exhibit (10)(e) The Unfunded Supplemental Benefit Plan for Salaried
Employees. Exhibit 10(d) to the Company's 1989 Form
10-K Annual Report is incorporated herein by reference
(File No. 1-4033).*
Exhibit (10)(f) The 1983 Long-Term Incentive Plan, as last amended and
restated. Exhibit 10(f) to the Company's 1989 Form
10-K Annual Report is incorporated herein by reference
(File No. 1-4033).*
Exhibit (10)(g) The Deferred Compensation Plan for Directors Who Are
Not Employees of the Company, as last amended and
restated on February 17, 1996.
Exhibit (10)(h) The 1996 Long-Term Incentive Plan of the Company.
Exhibit (10)(i) The Directors Deferred Stock Plan of the Company.
Exhibit (11) Computation of Earnings Per Share for the five years
ended December 31, 1995 (set forth on page 20 of
this report).
Exhibit (12) Computation of Ratio of Earnings to Fixed Charges for
the five years ended December 31, 1995 (set forth on
page 21 of this report).
Exhibit (13) The Company's 1995 Annual Report to Shareholders.
Exhibit (21) List of the Company's subsidiaries as of
December 31, 1995.
Exhibit (24) Powers of Attorney for all directors whose names
are signed to this report pursuant to such Powers
of Attorney.
Exhibit (27) Financial Data Schedule (electronic filing only)
Information, financial statements and exhibits required by Form 11-K
with respect to the Company's Thrift Plan for Salaried Employees, Construction
Materials Divisions Hourly Employees Savings Plan and Chemicals Division
Hourly Employees Savings Plan, for the fiscal year ended December 31, 1995,
will be filed as one or more amendments to this Form 10-K on or before
June 28, 1996, as permitted by Rule 15d-21 under the Securities Exchange Act
of 1934.
* Management Contract or Compensatory Plan.
(b) REPORTS ON FORM 8-K
None.
INDEPENDENT AUDITORS' REPORT
Vulcan Materials Company:
We have audited the consolidated financial statements of Vulcan Materials
Company and its subsidiary companies as of December 31, 1995, 1994 and 1993
and for the years then ended, and have issued our report thereon dated
February 2, 1996; such consolidated financial statements and report are
included in your 1995 Annual Report to Shareholders and are incorporated
herein by reference. Our audits also included the consolidated financial
statement schedule of Vulcan Materials Company and its subsidiary companies,
listed in Item 14. This consolidated financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express
an opinion based on our audits. In our opinion, such consolidated financial
statement schedule, when considered in relation to the basic consolidated
financial statements as a whole, presents fairly in all material respects the
information shown therein.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Birmingham, Alabama
February 2, 1996
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
VULCAN MATERIALS COMPANY
(Registrant)
March 29, 1996 By /s/ H. A. Sklenar
Date H. A. Sklenar
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ H. A. Sklenar Chairman, Chief Executive March 29, 1996
H. A. Sklenar Officer and Director
(Principal Executive Officer)
/s/ D. M. James President, Chief Operating March 29, 1996
D. M. James Officer and Director
/s/ D. F. Sansone Vice President-Finance and Treasurer March 29, 1996
D. F. Sansone (Principal Financial Officer)
/s/ E. A. Khan Controller March 29, 1996
E. A. Khan (Principal Accounting Officer)
The following directors:
Marion H. Antonini Director
Livio D. DeSimone Director
William J. Grayson, Jr. Director
John K. Greene Director
Richard H. Leet Director
Douglas J. McGregor Director
Ann D. McLaughlin Director
James V. Napier Director
Donald B. Rice Director
Orin R. Smith Director
By /s/ William F. Denson, III March 29, 1996
William F. Denson, III
Attorney-in-Fact for
each of the ten directors
listed above
EXHIBITS
TO
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OF
VULCAN MATERIALS COMPANY
FILED MARCH 29, 1996
COMMISSION FILE NUMBER 1-4033
EXHIBIT INDEX
FORM 10-K
FISCAL YEAR ENDED DECEMBER 31, 1995
EXHIBIT (3)(i) Certificate of Incorporation (Restated 1988) of the
Company. Exhibit 3(a) to the Company's 1988 Form 10-K
Annual Report is incorporated herein by reference
(File No. 1-4033).
EXHIBIT (3)(ii) By-laws of the Company, as restated February 2, 1990,
and as last amended February 17, 1996.
EXHIBIT (4) Exhibits 1 (Distribution Agreement by and among the
Company, Goldman, Sachs & Co., Lehman Brothers and
Salomon Brothers Inc) and 4 (Indenture by and between
the Company and First Trust of New York (as successor
trustee to Morgan Guaranty Trust Company of New York))
to the Form S-3 filed with the Securities and Exchange
Commission by the Company on May 2, 1991, and
registering $200,000,000 in debt securities is
incorporated herein by reference. Form 8-K Report
filed with the Securities and Exchange Commission by
the Company on May 14, 1991, is incorporated herein by
reference. The Company hereby agrees to furnish the
Securities and Exchange Commission, upon request, all
instruments defining the rights of holders of its
other long-term debt or that of any of its
consolidated subsidiaries.
EXHIBIT (10)(a) The Management Incentive Plan of the Company, as last
amended and restated. Exhibit 10(a) to the Company's
1989 Form 10-K Annual Report is incorporated herein by
reference (File No. 1-4033).*
EXHIBIT (10)(b) The 1991 Long-Range Performance Share Plan of the
Company. Exhibit A to the Company's definitive proxy
statement for the annual meeting of its shareholders
held May 16, 1991 ("1991 Proxy Statement"), is
incorporated herein by reference (File No. 1-4033).*
EXHIBIT (10)(c) The Employee Special Severance Plan of the Company.
Exhibit 10(g) to the Company's 1989 Form 10-K Annual
Report is incorporated herein by reference (File
No. 1-4033).*
EXHIBIT (10)(d) The Plan for Directors Emeriti and Other Eligible
Directors, as last amended and restated.
Exhibit 10(c) to the Company's 1990 Form 10-K Annual
Report is incorporated herein by reference (File
No. 1-4033).*
EXHIBIT (10)(e) The Unfunded Supplemental Benefit Plan for Salaried
Employees. Exhibit 10(d) to the Company's 1989 Form
10-K Annual Report is incorporated herein by reference
(File No. 1-4033).*
EXHIBIT (10)(f) The 1983 Long-Term Incentive Plan, as last amended and
restated. Exhibit 10(f) to the Company's 1989 Form
10-K Annual Report is incorporated herein by reference
(File No. 1-4033).*
EXHIBIT (10)(g) The Deferred Compensation Plan for Directors Who Are
Not Employees of the Company, as last amended and
restated on February 17, 1996.
EXHIBIT (10)(h) The 1996 Long-Term Incentive Plan of the Company.
EXHIBIT (10)(i) The Directors Deferred Stock Plan of the Company.
EXHIBIT (11) Computation of Earnings Per Share for the five years
ended December 31, 1995 (set forth on page 20 of
this report).
EXHIBIT (12) Computation of Ratio of Earnings to Fixed Charges for
the five years ended December 31, 1995 (set forth on
page 21 of this report).
EXHIBIT (13) The Company's 1995 Annual Report to Shareholders.
EXHIBIT (21) List of the Company's subsidiaries as of
December 31, 1995.
EXHIBIT (24) Powers of Attorney for all directors whose names
are signed to this report pursuant to such Powers
of Attorney.
EXHIBIT (27) Financial Data Schedule (electronic filing only)
Information, financial statements and exhibits required by Form 11-K
with respect to the Company's Thrift Plan for Salaried Employees,
Construction Materials Divisions Hourly Employees Savings Plan and Chemicals
Division Hourly Employees Savings Plan, for the fiscal year ended December 31,
1995, will be filed as one or more amendments to this Form 10-K on or before
June 28, 1996, as permitted by Rule 15d-21 under the Securities Exchange Act
of 1934.
* Management Contract or Compensatory Plan.
BY - LAWS
VULCAN MATERIALS COMPANY
(Incorporated under the laws of the State of New Jersey)
Restated: February 2, 1990
Amended: June 27, 1990
March 27, 1991
February 5, 1992
(eff. 5/11/92)
May 11, 1992
December 8, 1992
February 12, 1993
March 5, 1995
February 17, 1996
I N D E X
Page
ARTICLE I Shareholders' Meetings
Section 1.1 Annual Meetings. . . . . . . . . . . . . 1
Section 1.2 Special Meetings . . . . . . . . . . . . 1
Section 1.3 Notice and Purpose of Meetings . . . . . 1
Section 1.4 Quorum and Adjournments. . . . . . . . . 1
Section 1.5 Organization . . . . . . . . . . . . . . 2
Section 1.6 Voting . . . . . . . . . . . . . . . . . 2
Section 1.7 Selection of Inspectors. . . . . . . . . 3
Section 1.8 Duties of Inspectors . . . . . . . . . . 3
ARTICLE II Directors
Section 2.1 Number, Qualification, Tenure, Term,
Quorum, Vacancies, Removal
(a) Number, Qualification and Tenure. . 4
(b) Term. . . . . . . . . . . . . . . . 4
(c) Quorum. . . . . . . . . . . . . . . 5
Section 2.2 Meetings of the Board of Directors . . . 5
Section 2.3 Committees of the Board of Directors . . 6
Section 2.4 Participation in Meetings by Means of
Conference Telephone or Similar
Instrument . . . . . . . . . . . . . . . 7
Section 2.5 Action of Board of Directors and
Committees Without a Meeting . . . . . . 7
Section 2.6 Dividends. . . . . . . . . . . . . . . . 7
Section 2.7 Conflict of Interest . . . . . . . . . . 8
ARTICLE III Officers
Section 3.1 (a) Corporate Officers. . . . . . . . . 8
(b) Group Officers. . . . . . . . . . . 8
(c) Division Officers . . . . . . . . . 9
Section 3.2 (a) Term and Removal of Officers of
the Corporation . . . . . . . . . . 9
(b) Term and Removal of Group and
Division Officers . . . . . . . . . 9
Section 3.3 (a) Chairman of the Board . . . . . . . 9
(b) Vice Chairman . . . . . . . . . . . 10
Section 3.4 President. . . . . . . . . . . . . . . . 10
Section 3.5 Vice Presidents. . . . . . . . . . . . . 10
Section 3.6 General Counsel. . . . . . . . . . . . . 10
Section 3.7 Secretary. . . . . . . . . . . . . . . . 11
Section 3.8 Treasurer. . . . . . . . . . . . . . . . 11
Section 3.9 Controller . . . . . . . . . . . . . . . 11
Section 3.10 Other Officers . . . . . . . . . . . . . 11
Section 3.11 Voting Corporation's Securities . . . . 11
ARTICLE IV Indemnification of Directors, Officers
and Employees . . . . . . . . . . . . . . . . . . . . 12
ARTICLE V Certificates of Stock
Section 5.1 Transfer of Shares . . . . . . . . . . . 14
Section 5.2 Transfer Agent and Registrar . . . . . . 14
Section 5.3 Fixing Record Date . . . . . . . . . . . 14
Section 5.4 Lost, Stolen or Destroyed Certificates . 14
ARTICLE VI Miscellaneous
Section 6.1 Fiscal Year. . . . . . . . . . . . . . . 15
Section 6.2 Corporate Seal . . . . . . . . . . . . . 15
Section 6.3 Delegation of Authority. . . . . . . . . 15
Section 6.4 Notices. . . . . . . . . . . . . . . . . 15
ARTICLE VII By-Laws and Their Amendments . . . . . . . . . . . . . 16
ARTICLE VIII National Emergency . . . . . . . . . . . . . . . . . . 16
ARTICLE I
Shareholders' Meetings
SECTION 1.1. Annual Meetings
(a) The annual meeting of the shareholders of the corporation may
be held at such place within or without the State of New Jersey as may be
fixed by the Board of Directors, at 10 a.m., local time, or at such other
hour as may be fixed by the Board of Directors, on such day in April or
May of each year as may be fixed by the Board of Directors, for the
purpose of electing directors and for the transaction of such other
business as may properly be brought before the meeting.
(b) If the annual meeting for the election of directors is not
held in one of the months set forth in Section 1.1(a), the Board of
Directors shall cause the meeting to be held as soon thereafter as
convenient.
SECTION 1.2. Special Meetings
(a) Special meetings of the shareholders may be called by the
Board of Directors, the chairman of the Board of Directors or the chief
executive officer.
(b) Special meetings shall be held at such time and date and at
such place as shall have been fixed by the Board of Directors, the
chairman of the Board of Directors or by the chief executive officer.
SECTION 1.3. Notice and Purpose of Meetings
Written notice of the time, place and purpose or purposes of every
meeting of shareholders shall be given, not less than ten nor more than 60
days before the meeting, either personally or by mail, to each shareholder
of record entitled to vote at the meeting.
SECTION 1.4. Quorum and Adjournments
(a) A quorum at all meetings of shareholders shall consist of the
holders of record of a majority of the shares of the issued and
outstanding capital stock of the corporation, entitled to vote thereat,
present in person or by proxy, except as otherwise provided by law or
the Certificate of Incorporation.
(b) A shareholders' meeting may be adjourned to another time or
place, and, if no new record date is fixed, it shall not be necessary to
give notice of the adjourned meeting if the time and place to which the
meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting only such business is
transacted as might have been transacted at the original meeting. If
after the adjournment a new record date is fixed by the Board of
Directors, notice of the adjourned meeting shall be given to shareholders
of record on the new record date entitled to vote. Less than a quorum
may adjourn the meeting as herein provided.
SECTION 1.5. Organization
Meetings of the shareholders shall be presided over by the chief
executive officer, or, if he is not present, by a chairman to be chosen by a
majority of the shareholders entitled to vote who are present in person or by
proxy at the meeting. The Secretary of the corporation, or, in his or her
absence, an Assistant Secretary, shall act as secretary of every meeting, but
if neither the Secretary nor an Assistant Secretary is present, the meeting
shall choose any person present to act as secretary of the meeting.
SECTION 1.6. Voting
(a) At all meetings of the shareholders the voting need not be by
ballot, except that all elections for directors shall be by ballot, and
except that the voting shall be by ballot on all other matters upon
which voting by ballot is expressly required by the Certificate of
Incorporation or by the laws of the State of New Jersey.
(b) The poll at all elections of directors shall be open in
accordance with the laws of the State of New Jersey.
(c) Subject to the foregoing provisions, the right of any
shareholder to vote at a meeting of shareholders shall be determined on
the basis of the number of shares registered in his or her name on the
date fixed as the record date for said meeting.
(d) Except as otherwise provided by statute or these By-laws, any
matter submitted to a vote of shareholders shall be viva voce unless the
person presiding at the meeting determines that the voting shall be by
ballot or unless the circumstances are such that the will of the holders
of a majority of shares entitled to vote cannot be determined with
certainty and the holder of a share entitled to vote or his or her proxy
shall demand a vote by ballot. In either of such events a vote by ballot
shall be taken.
SECTION 1.7. Selection of Inspectors
(a) The Board of Directors may in advance of any shareholders'
meeting or any proposed shareholder action without a meeting appoint one
or more inspectors to act at the meeting or any adjournment thereof or to
receive consents of shareholders. If inspectors are not so appointed for
a shareholders' meeting or shall fail to qualify, the person presiding at
the shareholders' meeting may, and upon the request of any shareholder
entitled to vote thereat shall, make such appointment.
(b) In case any person appointed as inspector fails to appear or
act, the vacancy may be filled by appointment made by the Board of
Directors in advance of the meeting or at the meeting by the person
presiding.
(c) Each inspector, before entering upon the discharge of his or
her duties, shall take and sign an oath faithfully to execute the duties
of inspector at such meeting or in tabulating consents with strict
impartiality and according to the best of his or her ability.
(d) No person shall be elected a director in an election for which
he has served as an inspector.
SECTION 1.8. Duties of Inspectors
The inspectors shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting or the shares
entitled to consent, the existence of a quorum, the validity and effect of
proxies, and shall receive votes or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count
and tabulate all votes or consents, determine the result, and do such acts as
are proper to conduct the election or vote or consents with fairness to all
shareholders. If there are three or more inspectors, the act of a majority
shall govern. On request of the person presiding at the meeting or any
shareholder entitled to vote thereat or of any officer, the inspectors
shall make a report in writing of any challenge, question or matter determined
by them. Any report made by them shall be prima facie evidence of the facts
therein stated, and such report shall be filed with the minutes of
the meeting.
ARTICLE II
Directors
SECTION 2.1. Number, Qualification, Tenure, Term, Quorum,
Vacancies, Removal
(a) Number, Qualification and Tenure. The business and affairs of
the corporation shall be managed by or under the direction of its Board
of Directors, consisting of 12 persons. However, effective at 9:30 a.m.,
Central Daylight Time, on May 17, 1996, the Board of Directors shall
consist of 11 persons. The number may, from time to time, be increased
or decreased by resolution adopted by a majority of the entire Board of
Directors, but the number shall not be less than nine nor more than 21.
Any directorship to be filled by reason of an increase in the number of
directors may be filled by the affirmative vote of two-thirds of the
directors in office at the time. Directors shall be at least 25 years of
age and need not be United States citizens or residents of New Jersey or
shareholders of the corporation.
Any outside director shall retire from the Board of Directors at
the annual meeting next following their 70th birthday, regardless of the
term for which they might have been elected; provided, howeer, that
current outside directors who continue to serve until the annual meeting
next following their 68th birthday shall have the option to retire then.
Any outside director who ceases to hold the position with the business or
professional organization with which such person was associated when most
recently elected a director shall automatically be deemed to have offered
his or her resignation as a director of the corporation, and the Director
and Management Succession Committee shall make a recommendation to the
Board of Directors with respect to such resignation; and, if the deemed
offer to resign is accepted by the Board of Directors, such resignation
shall be effective as of the next annual meeting of shareholders.
Any inside director shall retire from the Board of Directors at
the annual meeting next following his or her 65th birthday; provided,
however, that any inside director who has served as chief executive
officer of the corporation and who has been requested by the Board of
Directors to do so shall serve until the next annual meeting following
his or her 67th birthday, but not thereafter.
An inside director is one who is or has been in the full-time
employment of the corporation, and an outside director is any other
director.
(b) Term. Directors shall be divided into three classes, with the
term of office of one class expiring each year. Except as otherwise
provided in the Certificate of Incorporation or these By-laws, directors
shall be chosen at annual meetings of the shareholders, and each director
shall be chosen to serve until the third succeeding annual meeting of
shareholders following his or her election and until his or her successor
shall have been elected and qualified.
(c) Quorum. A majority of the members of the Board of Directors
then acting, but, in no event less than one-third of the entire Board of
Directors, acting at a meeting duly assembled, shall constitute a quorum
for the transaction of business. Directors having a personal or
conflicting interest in any matter to be acted upon may be counted in
determining the presence of a quorum. If at any meeting of the Board of
Directors there shall be less than a quorum present, a majority of those
present may adjourn the meeting, without further notice, from time to
time until a quorum shall have been obtained.
SECTION 2.2. Meetings of the Board of Directors
(a) Meetings of the Board of Directors shall be held at such place
within or without the State of New Jersey and at such time and date as
may from time to time be fixed by the Board of Directors, or, if not so
fixed, as may be specified in the notice of the meeting. A meeting of
the Board of Directors shall be held without notice immediately after
the annual meeting of the shareholders.
(b) Regular meetings of the Board of Directors shall be held on
such day of such months as may be fixed by the Board of Directors. At
any regular meeting of the Board of Directors any business that comes
before such meeting may be transacted except where special notice is
required by these By-laws.
(c) Special meetings of the Board of Directors may be held on
the call of the chairman of the Board of Directors, the chief executive
officer or any three directors.
(d) Notice of each regular meeting of the Board of Directors,
other than the meeting following the annual meeting of shareholders,
shall be given not less than seven days before the date on which such
regular meeting is to be held. Notice of each special meeting of the
Board of Directors shall be given to each member of the Board of
Directors not less than two days before the date upon which such meeting
is held. Notice of any such meeting may be given by mail, telegraph,
telephone, telex, facsimile transmission, personal service or by
personally advising the director orally. Notice of a meeting of the
Board of Directors may be waived in writing before or after the meeting.
Meetings may be held at any time without notice if all the directors are
present. Notice of special meetings of the Board of Directors shall
specify the purpose or purposes of the meeting. Neither the business to
be transacted nor the purpose or purposes of any meeting of the Board of
Directors need be specified in the notice of regular meetings or in the
waiver of notice of any regular or special meeting of the Board of
Directors.
(e) Notice of an adjourned meeting of the Board of Directors need
not be given if the time and place are fixed at the meeting adjourning
and if the period of adjournment does not exceed ten days in any one
adjournment.
SECTION 2.3. Committees of the Board of Directors
(a) The Board of Directors, by resolution adopted by a majority of
the entire Board of Directors, may appoint from among its members an
Executive Committee and one or more other committees, each of which shall
have at least three members. To the extent provided in such resolution
each such committee shall have and may exercise all the authority of the
Board of Directors, except as expressly limited by the New Jersey
Business Corporation Act.
(b) The Board of Directors, by resolution adopted by a majority
of the entire Board of Directors, may: (1) fill any vacancy in any such
committee; (2) appoint one or more directors to serve as additional
members of any such committee; (3) appoint one or more directors to serve
as alternate members of any such committee, to act in the absence or
disability of members of any such committee with all the powers of such
absent or disabled members; (4) abolish any such committee at its
pleasure; and (5) remove any director from membership on such committee
at any time, with or without cause.
(c) The Executive Committee shall meet at such time or times, and
at such place within or outside the State of New Jersey, as it shall
designate or, in the absence of such designation, as shall be designated
by the person or persons calling the meeting; and it shall make its own
rules of procedure. Meetings may be held at any time without notice if
all members of the Executive Committee are present, or if at any time
before or after the meeting those not present waive notice of the meeting
in writing. A majority of the members of the Executive Committee shall
constitute a quorum thereof, but at any meeting of the Committee at which
all the members are not present no action shall be taken except by the
unanimous vote of those present.
(d) Meetings of any committee may be called by the chairman of the
Board of Directors, the chief executive officer, the chairman of the
committee, by any two members of the committee or as provided in the
resolution appointing the committee. Notice of such meeting shall be
given to each member of the committee by mail, telegraph, telephone,
telex, facsimile transmission, personal service or by personally advising
the member orally. Said notice shall state the time and place of any
meeting of any such committee and shall be fixed by the person or persons
calling the meeting.
(e) Actions taken at a meeting of any committee shall be reported
to the Board of Directors at its next meeting following such committee
meeting; except that, when the meeting of the Board of Directors is held
within two days after the committee meeting, such report shall, if not
made at the first meeting, be made to the Board of Directors at its
second meeting following such committee meeting.
SECTION 2.4. Participation in Meetings by Means of Conference Telephone
or Similar Instrument
Where appropriate communication facilities are available, any or all
directors may participate in all or any part of a meeting of the Board of
Directors or in a meeting of any committee of the Board of Directors by means
of a conference telephone or any means of communication by which the persons
participating in the meeting are able to hear each other as though he was or
they were present in person at such meeting. Such participation without
protesting prior to the conclusion of such participation the lack of notice
of such meeting shall constitute a waiver of notice by such participating
director or directors with respect to business transacted during such
participation.
SECTION 2.5. Action of Board of Directors and Committees Without a
Meeting
Any action required or permitted to be taken pursuant to authorization
voted at a meeting of the Board of Directors or any committee of the Board of
Directors may be taken without a meeting if, prior or subsequent to such
action, all members of the Board of Directors or of such committee, as the
case may be, consent thereto in writing and such written consents are filed
with the minutes of the proceedings of the Board of Directors or committee.
SECTION 2.6. Dividends
Subject to the provisions of the laws of the State of New Jersey and the
Certificate of Incorporation, the Board of Directors shall have full power to
determine whether any and, if any, what part of any funds of the corporation
shall be declared in dividends and paid to shareholders; the division of the
whole or any part of such funds of the corporation shall rest wholly within
the lawful discretion of the Board of Directors, and it shall not be required
at any time, against such discretion, to divide or pay any part of such funds
among or to the shareholders as dividends or otherwise, and the Board of
Directors may fix a sum which may be set aside or reserved over and above the
capital paid in of the corporation as working capital for the corporation or
as a reserve for any proper purpose, and from time to time may increase,
diminish and vary the same in its absolute judgment and discretion.
SECTION 2.7. Conflict of Interest
No contract or other transaction between the corporation and one or more
of its directors, or between the corporation and any domestic or foreign
corporation, firm or association of any type or kind in which one or more of
its directors are directors or are otherwise interested, shall be void or
voidable solely by reason of such common directorship or interest, or solely
because such director or directors are present at the meeting of the Board of
Directors or a committee thereof which authorizes or approves the contract or
transaction, or solely because his or their votes are counted for such
purpose, if any of the following is true: (1) the contract or other
transaction is fair and reasonable as to the corporation at the time it is
authorized, approved or ratified; or (2) the fact of the common directorship
or interest is disclosed or known to the Board of Directors or committee and
the Board of Directors or committee authorizes, approves, or ratifies the
contract by unanimous written consent, provided at least one director so
consenting is disinterested, or by the affirmative vote of a majority of the
disinterested directors, even though the disinterested directors be less than
a quorum; or (3) the fact of the common directorship or interest is disclosed
or known to the shareholders, and they authorize, approve or ratify the
contract or transaction.
The Board of Directors, by the affirmative vote of a majority of
directors in office and irrespective of any personal interest of any of them,
shall have authority to establish reasonable compensation of directors for
services to the corporation as directors, officers or otherwise.
ARTICLE III
Officers
SECTION 3.1
(a) Corporate Officers. Each year promptly after the annual
meeting of the shareholders, the Board of Directors shall elect a
Chairman of the Board, a President, one or more Vice Presidents, with
such designations, if any, as it may determine, a General Counsel, a
Secretary, a Treasurer, and a Controller, and from time to time may elect
or appoint one or more Assistants to any of such officers, and such one
or more Assistant Secretaries, Assistant Treasurers, and Assistant
Controllers, and such other officers, agents, and employees, and with
such designations, as it may deem proper. Any two or more offices may be
concurrently held by the same person at the same time. The Chairman of
the Board and the President shall be chosen from among the directors.
(b) Group Officers. The chief executive officer of the corporation
may appoint such officers of any group of the corporation as he may deem
proper, except that group senior vice presidents may be appointed only by
the Board of Directors. A group officer shall not be an officer of the
corporation, and shall serve as an officer only of the group to which he
is appointed, but a person who holds a group office may also hold a
corporate office or a division office, or both.
(c) Division Officers. The chief executive officer of the
corporation may appoint such officers of any division of the corporation
as he may deem proper, except that division chairmen and presidents may
be appointed only by the Board of Directors. A division officer shall
not be an officer of the corporation, and shall serve as an officer only
of the division to which appointed, but a person who holds a division
office may also hold a corporate office or a group office, or both.
SECTION 3.2
(a) Term and Removal of Officers of the Corporation. The term of
office of all officers shall be one year and until their respective
successors are elected and qualify, but any officer may be removed from
office, either with or without cause, at any time, by the affirmative
vote of a majority of the members of the Board of Directors then in
office.
(b) Term and Removal of Group and Division Officers. Group senior
vice presidents and division chairmen and presidents shall serve at the
pleasure of the Board of Directors. Group senior vice presidents and
division chairmen and presidents may be removed from office, either with
or without cause, at any time, by the Board of Directors. Other group
and division officers shall serve at the pleasure of the chief executive
officer of the corporation. Any other group or division officer may be
removed from office as a group or division officer, either with or
without cause, at any time, by the chief executive officer of the
corporation.
SECTION 3.3.
(a) Chairman of the Board. The Chairman of the Board may execute
bonds, mortgages, and bills of sale, assignments, conveyances, and all other
contracts, except those required by law to be otherwise signed and executed,
or except when the signing and execution thereof when permitted by law shall
be expressly delegated by the Board of Directors to some other officer or
agent of the corporation. The Chairman of the Board shall preside at all
meetings of the Board of Directors. The Chairman of the Board shall serve as
the chief executive officer of the corporation responsible to the Board of
Directors for planning and directing the business of the corporation and for
initiating and directing those actions essential to its profitable growth and
development and shall perform such other duties as may be assigned to him by
the Board of Directors. The Chairman of the Board shall serve as an ex
officio member (nonvoting) of all committees of the Board of Directors of
which he is not otherwise a member.
(b) Vice Chairman. The Vice Chairman may execute bonds, mortgages,
and bills of sale, assignments, conveyances, and all other contracts, except
those required by law to be otherwise signed and executed, or except when the
signing and execution thereof when permitted by law shall be expressly
delegated by the Board of Directors to some other officer or agent of the
corporation. The Vice Chairman shall advise and counsel with the Chairman of
the Board, and with other officers of the corporation on any or all activities
in which the corporation may engage, and shall perform such other duties as
may be assigned to him by the Chairman of the Board or the Board of
Directors.
SECTION 3.4. President
The President may execute bonds, mortgages, and bills of sale,
assignments, conveyances, and all other contracts, except those required by
law to be otherwise signed and executed, or except when the signing and
execution thereof when permitted by law shall be expressly delegated by the
Board of Directors to some other officer or agent of the corporation. The
President shall serve as the chief operating officer of the corporation and,
subject to the authority and direction of the Chairman of the Board, the
President shall have general and active management of the operating affairs
of the corporation and shall carry into effect the resolutions of the Board
of Directors and the orders of the Chairman of the Board with respect to the
operating affairs of the corporation.
SECTION 3.5. Vice Presidents
Each Vice President of the corporation may execute bonds, mortgages,
bills of sale, assignments, conveyances, and all other contracts, except where
required by law to be otherwise signed and executed. Each Vice President of
the corporation shall perform such functions for the corporation as may be
designated by the chief executive officer of the corporation, and shall carry
into effect the resolutions of the Board of Directors and the orders of the
chief executive officer of the corporation with respect to such functions.
SECTION 3.6. General Counsel
The General Counsel shall be the chief legal officer of the corporation
and shall have overall responsibility for all legal affairs of the
corporation. The General Counsel shall have management responsibility for the
corporation's legal department and its relationships with outside counsel.
The General Counsel's duties shall include providing legal advice to corporate
and division officers, confirming compliance with applicable laws, overseeing
litigation, reviewing significant agreements, participating in important
negotiations, and selecting all outside counsel. He shall perform such other
functions for the corporation as may be designated by the Board of Directors
or the chief executive officer.
SECTION 3.7. Secretary
The Secretary shall keep or cause to be kept the minutes of all meetings
of the shareholders, of the Board of Directors, of the Executive Committee,
and unless otherwise directed by the Board of Directors, the minutes of
meetings of other committees of the Board of Directors. He shall attend to
the giving or serving of all notices required to be given by law or by the
By-laws or as directed by the Board of Directors or the chief executive
officer of the corporation. He shall have custody of the seal of the
corporation and shall have authority to affix or cause the same or a facsimile
thereof to be affixed to any instrument requiring the seal and to attest the
same. He shall perform such other functions for the corporation as may be
designated by the Board of Directors or the chief executive officer of the
corporation.
SECTION 3.8. Treasurer
The Treasurer shall be responsible for safeguarding the cash and
securities of the corporation and shall keep or cause to be kept a full and
accurate account of the receipts and disbursements of the corporation. He
shall perform such other functions for the corporation as may be designated
by the Board of Directors or the chief executive officer of the corporation.
SECTION 3.9. Controller
The Controller shall be the principal accounting officer of the
corporation, shall have supervision over the accounting records of the
corporation and shall be responsible for the preparation of financial
statements. He shall perform such other functions for the corporation as
may be designated by the Board of Directors or by the chief executive officer
of the corporation.
SECTION 3.10. Other Officers
The other officers of the corporation shall have such powers and duties
as generally pertain to their respective offices as well as such powers and
duties as from time to time may be designated by the Board of Directors or by
the chief executive officer of the corporation.
SECTION 3.11. Voting Corporation's Securities
Unless otherwise ordered by the Board of Directors, the chief executive
officer or his or her delegate, or, in the event of his or her inability to
act, such other officer as may be designated by the Board of Directors to act
in the absence of the chief executive officer shall have full power and
authority on behalf of the corporation to attend and to act and to vote, and
to execute a proxy or proxies empowering others to attend and to act and to
vote, at any meetings of security holders of the corporations in which the
corporation may hold securities, and at such meetings the chief executive
officer or such other officer of the corporation, or such proxy, shall possess
and may exercise any and all rights and powers incident to the ownership of
such securities, and which as the owner thereof the corporation might have
possessed and exercised, if present. The Secretary or any Assistant Secretary
may affix the corporate seal to any such proxy or proxies so executed by the
chief executive officer or such other officer and attest the same. The Board
of Directors by resolution from time to time may confer like powers upon any
other person or persons.
ARTICLE IV
Indemnification of Directors, Officers and Employees
(a) Subject to the provisions of this Article IV, the corporation
shall indemnify the following persons to the fullest extent permitted and
in the manner provided by and the circumstances described in the laws of
the State of New Jersey, including Section 14A:3-5 of the New Jersey
Business Corporation Act and any amendments thereof or supplements
thereto: (i) any person who is or was a director, officer, employee or
agent of the corporation; (ii) any person who is or was a director,
officer, employee or agent of any constituent corporation absorbed by the
corporation in a consolidation or merger, but only to the extent that (a)
the constituent corporation was obligated to indemnify such person at
the effective date of the merger or consolidation or (b) the claim or
potential claim of such person for indemnification was disclosed to the
corporation and the operative merger or consolidation documents contain
an express agreement by the corporation to pay the same; (iii) any person
who is or was serving at the request of the corporation as a director,
officer, trustee, fiduciary, employee or agent of any other domestic or
foreign corporation, or any partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise, whether
or not for profit; and (iv) the legal representative of any of the
foregoing persons (collectively, a "Corporate Agent").
(b) Anything herein to the contrary notwithstanding, the
corporation shall not be obligated under this Article IV to provide
indemnification (i) to any bank, trust company, insurance company,
partnership or other entity, or any director, officer, employee or agent
thereof or (ii) to any other person who is not a director, officer or
employee of the corporation, in respect of any service by such person or
entity, whether at the request of the corporation or by agreement
therewith, as investment advisor, actuary, custodian, trustee, fiduciary
or consultant to any employee benefit plan.
(c) To the extent that any right of indemnification granted
hereunder requires any determination that a Corporate Agent shall have
been successful on the merits or otherwise in any Proceeding (as
hereinafter defined) or in defense of any claim, issue or matter therein,
the Corporate Agent shall be deemed to have been "successful" if, without
any settlement having been made by the Corporate Agent, (i) such
Proceeding shall have been dismissed or otherwise terminated or abandoned
without any judgment or order having been entered against the Corporate
Agent, (ii) such claim, issue or other matter therein shall have been
dismissed or otherwise eliminated or abandoned as against the Corporate
Agent, or (iii) with respect to any threatened Proceeding, the Proceeding
shall have been abandoned or there shall have been a failure for any
reason to institute the Proceeding within a reasonable time after the
same shall have been threatened or after any inquiry or investigation
that could have led to any such Proceeding shall have been commenced.
The Board of Directors or any authorized committee thereof shall have
the right to determine what constitutes a "reasonable time" or an
"abandonment" for purposes of this paragraph (c), and any such
determination shall be conclusive and final.
(d) To the extent that any right of indemnification granted
hereunder shall require any determination that the Corporate Agent has
been involved in a Proceeding by reason of his or her being or having
been a Corporate Agent, the Corporate Agent shall be deemed to have been
so involved if the Proceeding involves action allegedly taken by the
Corporate Agent for the benefit of the corporation or in the performance
of his or her duties or the course of his or her employment for the
corporation.
(e) If a Corporate Agent shall be a party defendant in a
Proceeding, other than a Proceeding by or in the right of the
corporation, and the Board of Directors or a duly authorized committee of
disinterested directors shall determine that it is in the best interests
of the corporation for the corporation to assume the defense of any such
Proceeding, the Board of Directors or such committee may authorize and
direct that the corporation assume the defense of the Proceeding and pay
all expenses in connection therewith without requiring such Corporate
Agent to undertake to pay or repay any part thereof. Such assumption
shall not affect the right of any such Corporate Agent to employ his or
her own counsel or to recover indemnification under this By-law to the
extent that he may be entitled thereto.
(f) As used herein, the term "Proceeding" shall mean and include
any pending, threatened or completed civil, criminal, administrative or
arbitrative action, suit or proceeding, and any appeal therein and any
inquiry or investigation which could lead to such action, suit or
proceeding.
(g) The right to indemnification granted under this Article IV
shall not be exclusive of any other rights to which any Corporate Agent
seeking indemnification hereunder may be entitled.
ARTICLE V
Certificates of Stock
SECTION 5.1. Transfer of Shares
Stock of the corporation shall be transferable in accordance with the
provisions of Chapter 8 of the Uniform Commercial Code as adopted in New
Jersey (N.J.S. 12A:8-101, et seq.) as amended from time to time, except as
otherwise provided in the New Jersey Business Corporation Act.
SECTION 5.2. Transfer Agent and Registrar
The Board of Directors may appoint one or more transfer agents and one or
more registrars of transfers and may require all stock certificates to bear
the signatures of such transfer agent and registrar, one of which signatures
may be a facsimile.
SECTION 5.3. Fixing Record Date
For the purpose of determining the shareholders entitled to notice of or
to vote at any meeting of shareholders or any adjournment thereof, or to
express consent to or dissent from any proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment of any
dividend or allotment of any right, or for the purpose of any other action,
the Board of Directors may fix, in advance, a date as the record date for any
such determination of shareholders. Such date shall not be more than 60 nor
less than ten days before the date of such meeting, nor more than 60 days
prior to any other action.
SECTION 5.4. Lost, Stolen or Destroyed Certificates
(a) Where a certificate for shares has been lost, apparently
destroyed, or wrongfully taken and the owner thereof fails to so notify
the corporation or the transfer agent of that fact within a reasonable
time after he has notice of it and the transfer agent or the corporation
registers a transfer of the shares before receiving such a notification,
the owner shall be precluded from asserting against the corporation any
claim for registering the transfer of such shares or any claim to a new
certificate.
(b) Subject to the foregoing, where the owner of shares claims that
the certificate representing shares has been lost, destroyed or
wrongfully taken, the corporation shall issue a new certificate in place
of the original certificate if the owner thereof requests the issue of a
new certificate before the corporation has notice that the certificate
has been acquired by a bona fide purchaser, makes proof in affidavit
form, satisfactory to the Secretary or Assistant Secretary of the
corporation and to its transfer agent, of his or her ownership of the
shares represented by the certificate and that the certificate has been
lost, destroyed or wrongfully taken; files an indemnity bond for an open
or unspecified amount or if authorized in a specific case by the
corporation, for such fixed amount as the chief executive officer, or a
Vice President, or the Secretary of the corporation may specify, in such
form and with such surety as may be approved by the transfer agent and
the Secretary or Assistant Secretary of the corporation, indemnifying the
corporation and the transfer agent and registrar of the corporation
against all loss, cost and damage which may arise from issuance of a new
certificate in place of the original certificate; and satisfies any
other reasonable requirements imposed by the corporation or transfer
agent. In case of the surrender of the original certificate, in lieu of
which a new certificate has been issued, or the surrender of such new
certificate, for cancellation, the bond of indemnity given as a condition
of the issuance of such new certificate may be surrendered.
ARTICLE VI
Miscellaneous
SECTION 6.l. Fiscal Year
The fiscal year of the corporation shall begin on the first day of
January in each year and shall end on the 31st day of December next following,
unless otherwise determined by the Board of Directors.
SECTION 6.2. Corporate Seal
The corporate seal of the corporation shall have inscribed thereon
the name of the corporation, the year 1956 and the words "Corporate Seal,
New Jersey."
SECTION 6.3. Delegation of Authority
Any provision of these By-laws granting authority to the Board of
Directors shall not be construed as indicating that such authority may not be
delegated by the Board of Directors to a committee to the extent authorized by
the New Jersey Business Corporation Act and these By-laws.
SECTION 6.4 Notices
In computing the period of time for the giving of any notice required or
permitted for any purpose, the day on which the notice is given shall be
excluded and the day on which the matter noticed is to occur shall be
included. If notice is given by mail, telegraph, telex or facsimile
transmission, the notice shall be deemed to be given when deposited in the
mail, delivered to the telegraph or telex office or transmitted via facsimile
transmitter, addressed to the person to whom it is directed at his or her last
address as it appears on the records of the corporation, with postage or
charges prepaid thereon; provided, however, that notice must be given by
telegraph, telephone, telex, facsimile transmission, personal service or by
personally advising the person orally when, as authorized in these By-laws,
less than three days' notice is given. Notice to a shareholder shall be
addressed to the address of such shareholder as it appears on the stock
transfer records of the corporation.
ARTICLE VII
By-Laws and Their Amendments
Subject to the rights, if any, of the holders of any series of Preference
Stock then outstanding, the By-laws of the corporation shall be subject to
alteration, amendment or repeal, and new By-laws not inconsistent with any
provisions of the Certificate of Incorporation and not inconsistent with the
laws of the State of New Jersey may be made, either by the affirmative vote of
a majority of the votes cast at any annual or special meeting of shareholders
by the holders of shares entitled to vote thereon, or, except with respect to
By-laws adopted by the shareholders of the corporation which by their terms
may not be altered, amended or repealed by the Board of Directors, by the
affirmative vote of a majority of the whole Board of Directors at any regular
or special meeting of the Board of Directors.
ARTICLE VIII
National Emergency
For the purpose of this Article VIII a national emergency is hereby
defined as any period following an enemy attack on the continental United
States of America or any nuclear or atomic disaster as a result of which and
during the period that communication or the means of travel among states in
which the corporation's plants or offices are disrupted or made uncertain or
unsafe. Persons not directors of the corporation may conclusively rely upon a
determination by the Board of Directors of the corporation, at a meeting held
or purporting to be held pursuant to this Article VIII that a national
emergency as hereinabove defined exists regardless of the correctness of such
determination. During the existence of a national emergency under the
foregoing provisions of this Article VIII the following provisions shall
become operative but no other provisions of these By- laws shall become
inoperative in such event unless directly in conflict with this Article VIII
or action taken pursuant hereto:
(a) When it is determined in good faith by any director that a
national emergency exists, special meetings of the Board of Directors may
be called by such director and at any such special meeting two directors
shall constitute a quorum for the transaction of business including
without limiting the generality hereof the filling of vacancies among
directors and officers of the corporation and the election of additional
officers. The act of a majority of the directors present thereat shall
be the act of the Board of Directors. If at any such special meeting of
the Board of Directors there shall be only one director present such
director present may adjourn the meeting from time to time until a quorum
is obtained, and no further notice thereof need be given of any such
adjournment. The director calling any such special meeting shall make a
reasonable effort to notify all other directors of the time and place of
such special meeting, and such effort shall be deemed to constitute the
giving of reasonable notice of such special meeting and every director
shall be deemed to have waived any requirement, of law or otherwise, that
any other notice of such special meeting be given. The directors present
at any such special meeting shall make reasonable effort to notify all
absent directors of any action taken thereat, but failure to give such
notice shall not affect the validity of the action taken at any such
meeting. Any action taken at any such special meeting may be
conclusively relied upon by all directors, officers, employees, and
agents of, and all persons dealing with, the corporation.
(b) The Board of Directors shall have the power to alter, amend,
or repeal any Articles of these By-laws by the affirmative vote of at
least two- thirds of the directors present at any special meeting
attended by two or more directors and held in the manner prescribed in
paragraph (a) of this Article, if it is determined in good faith by said
two-thirds that such alteration, amendment or repeal would be conducive
to the proper direction of the corporation's affairs.
SECOND AMENDMENT AND RESTATEMENT
OF THE
VULCAN MATERIALS COMPANY
DEFERRED COMPENSATION PLAN
FOR DIRECTORS WHO ARE NOT EMPLOYEES
OF THE COMPANY
1. ELIGIBILITY AND PURPOSE
Each member of the Board of Directors (the "Board") of Vulcan Materials
Company (the "Company") who is not an employee of the Company or its
subsidiaries shall be eligible to participate in the Vulcan Materials Company
Deferred Compensation Plan for Directors Who Are Not Employees of the Company
(the "Plan"). Any member of the Board who elects to participate in the Plan
("Director") shall thereby defer the receipt of all or any portion of the
annual retainer, meeting and committee fees payable by the Company to such
Director for serving as a member of the Board or one or more of its committees
(the "Deferrable Compensation").
2. DEFERRAL OF COMPENSATION
A Director may elect to defer all or any portion of the Deferrable
Compensation by executing a form prescribed by the Secretary of the Company
and delivering such form to the Secretary prior to the first day of the
calendar year for which the election is to be effective. In the calendar year
that a Director first becomes eligible to participate in the Plan, such
Director may elect to defer all or any portion of the Deferrable Compensation,
provided that the election form is delivered to the Secretary within thirty
(30) days after the Director first becomes eligible to participate in the Plan
for such year. An election made in this manner will be applicable only to
Deferrable Compensation earned after the effective date of the election. The
amount of Deferrable Compensation deferred shall be paid or distributed to
the Director in accordance with the provisions of Section 5 or Section 6,
below.
3. DEFERRED COMPENSATION ACCOUNT
The Company shall establish a deferred compensation account (the
"Account") for the Director. As of the date payments of Deferrable
Compensation otherwise would be made to the Director, the Company shall credit
to the Account, in cash or stock equivalents, or a combination thereof, as
hereinafter provided, that amount of the Deferrable Compensation which the
Director has elected to defer.
4. CASH OR STOCK ELECTION
(a) As of the date payments of Deferrable Compensation
otherwise would be made to the Director, the amount due the Director shall be
credited to the Account either as a cash allotment or as a stock allotment, or
a portion to each, as the Director shall elect at the time the deferred
election is made.
(b) If a cash allotment is elected in whole or in part, the
Account shall be credited with the dollar amount of the allotment. Interest
(at the rate described below) on the Average Daily Balance (computed as
described below) shall be credited to the Account as of the last day of each
calendar month before and after the termination of the Director's service and
after the Director's death until the total balance in the Account has been
paid out in accordance with the provisions of Section 5 or Section 6, below.
The interest rate for each calendar month shall be the composite 30-day
offering rate for prime commercial paper placed through dealers (rated A-1 by
Standard & Poor's Corporation or its successor and P-1 by Moody's Investors
Service, Inc., or its successor) for the last business day of the immediately
preceding calendar month as published by the Federal Reserve Bank of New York.
The "Average Daily Balance" shall be the quotient obtained by dividing the sum
of the closing balance in the Account at the end of each calendar day in a
calendar month by the number of days in such calendar month.
(c)(1)If a stock allotment is elected in whole or in part, the Account
shall be credited with a stock equivalent that shall be equal to the number of
full and fractional shares of the Company's Common Stock, par value $1.00 per
share (the "Common Stock"), that could be purchased with the dollar amount of
the allotment using the Average Closing Price (as defined below) of the Common
Stock for the twenty (20) trading days ending on the day preceding the date
the Account is so credited. The "Average Closing Price" of the Common Stock
means the average of the daily closing prices for a share of the Common Stock
for the applicable twenty (20) trading days on the Composite Tape for New York
Stock Exchange Listed Stocks, or, if the Common Stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on which
the Common Stock is listed, or, if the Common Stock is not listed on any such
Exchange, the average of the daily closing bid quotations with respect to a
share of the Common Stock for such twenty (20) trading days on the National
Association of Securities Dealers, Inc., Automated Quotations System or any
system then in use, or, if no such quotations are available, the fair market
value of a share of the Common Stock as determined by a majority of the Board;
provided, however, that if a Change in Control (as defined below) shall have
occurred, then such determination shall be made by a majority of the
Continuing Directors (as defined below).
(2) The Account also shall be credited as of the payment
date for each dividend on the Common Stock with additional stock equivalents
computed as follows: The dividend paid, either in cash or property (other
than Common Stock), upon a share of Common Stock to a shareholder of record
shall be multiplied by the number of stock equivalents in the Account and the
product thereof shall be divided by the Average Closing Price of the Common
Stock for the twenty (20) trading days ending on the day preceding the
dividend payment date. In the case of dividends payable in property, the
amount paid shall be based on the fair market value of the property at the
time of distribution of the dividend, as determined by a majority of the
Board; provided, however, that if a Change in Control shall have occurred,
then such determination shall be made by a majority of the Continuing
Directors.
(3) In the event of any change in the Common Stock, upon which the
stock equivalency hereunder is based, by reason of a merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination or
exchange of shares, or any other change in corporate structure, the number of
shares credited to the Account shall be adjusted in such manner as a majority
of the Board shall determine to be fair under the circumstances; provided,
however, that if a Change in Control shall have occurred, then such
determination shall be made by a majority of the Continuing Directors.
5. DISTRIBUTION
(a) Except as otherwise provided in the Plan, at the Director's
election, the balance in the Account shall be paid out to the Director when:
(1) the Director ceases to hold office as a
member of the Board; or
(2) the period of years which the Director
specified has elapsed from the date deferral of
Deferrable Compensation commenced.
Except as otherwise provided in the Plan, the balance in the Account shall
be paid either in a lump sum or, at the Director's election, in monthly,
quarterly, semiannual or annual installments, but such installments shall be
payable over a period of years not to exceed ten (10) years (the "Payout
Period") such election shall be made by executing a form prescribed by the
Secretary of the Company and delivering such form to the Secretary at least
thirty (30) days prior to the date payments are to begin in the case of the
cash allotment portion of the Account, or, in the case of the stock allotment
portion of the Account, six (6) months prior to the date payments are to
begin. The amount of each installment shall be determined as of the first day
of the period in which payment is to be made by dividing the then balance in
the Account by the then remaining number of payment dates in the Payout
Period. The lump sum or first periodic installment shall be paid by the
Company as promptly as is convenient, but not more than sixty (60) days
following the end of the calendar month in which one of the events referred
to in this Section 5(a) occurs.
(b) In the event of the death of the Director prior to distribution
of the entire balance in the Director's Account, the balance in the Account
shall be payable in a lump sum to
(i) the surviving beneficiary (or
surviving beneficiaries in such proportions as)
the Director may have designated by notice in
writing to the Company unrevoked by a later
notice in writing to the Company or, in the
absence of an unrevoked notice,
(ii) the beneficiary (or beneficiaries
in such proportions as) the Director may have
designated by will or, if no beneficiary is
designated,
(iii) the legal representative of the
Director's estate.
(c) The provisions of the Plan shall apply to and be binding upon the
beneficiaries, distributees and personal representatives and any other
successors in interest of the Director.
(d) Distribution of the cash in the Account shall be made in cash.
Distribution of stock equivalents in the Account shall be made in cash in an
amount equal to the number of stock equivalents to be distributed multiplied
by the Average Closing Price of the Common Stock for the twenty (20) trading
days ending on the day preceding the date of distribution.
(e) The Company shall deduct from all distributions hereunder any
taxes required to be withheld by the federal or any state or local
government.
6. ACCELERATION OF DISTRIBUTION
(a) "Change in Control" means:
(1) The acquisition by any person, entity or "group," within
the meaning of Section 13(d)(3) or (14)(d)(2) of the Exchange Act (excluding
for this purpose, any employee benefit plan of the Company or any of its
subsidiaries which acquires beneficial ownership of voting securities of the
Company), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 25% or more of either the then
outstanding shares of Common Stock or the combined voting power of the
Company's then outstanding voting securities, in one transaction or a series
of transactions; provided, however, that, if prior to such an acquisition, a
majority of the Continuing Directors determines that such acquisition shall
not, for purposes of the Plan, be deemed a Change in Control, such acquisition
shall not constitute a Change in Control hereunder;
(2) Individuals who, as of the Effective Date (as defined
below), constitute the Board (the "Continuing Directors") cease for any reason
to constitute at least a majority of the Board, provided that any person
becoming a Director of the Company subsequent to the Effective Date whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the Continuing Directors (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened solicitation with respect
to the election or removal of directors of the Company, as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be,
for purposes of the Plan, considered as though such person were a Continuing
Director; or
(3) Approval by the Board of (i) a merger, consolidation or
reorganization of the Company in which, as a consequence of the transaction,
either the Continuing Directors do not constitute a majority of the directors
of the continuing or surviving corporation or any person, entity or "group,"
within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act,
controls 25% or more of the combined voting power of the continuing or
surviving corporation; (ii) any sale, lease or other transfer, in one
transaction or a series of transactions, of all or substantially all of the
assets of the Company; or (iii) any plan or proposal for the liquidation or
dissolution of the Company; provided, however, that, if at the time of such
approval, a majority of the Continuing Directors determines that such merger,
consolidation, reorganization, sale, lease, other transfer, liquidation or
dissolution shall not, for purposes of the Plan, be deemed a Change in
Control, such transaction shall not constitute a Change in Control hereunder,
and, provided further, that, if a majority of the Continuing Directors so
determines, a Change in Control shall not be deemed to occur until the
consummation of any such transaction.
(b) Notwithstanding any other provision of the Plan, if a Change in
Control occurs and at any time after the occurrence of such Change in Control
either of the following events occurs:
(1) the Director ceases to hold office as a member of
the Board;
(2) the Plan is terminated, or
(3) The Company's capital structure is changed materially;
then the balance in the Account shall be payable in a lump sum to the
Director. Such payment shall be made by the Company as promptly as
practicable, but not more than thirty (30) days following the date on which
the right to such payment arose.
(c) Distribution shall be in accordance with Sections 5(b), 5(c),
5(d) and 5(e), above, except that distribution of stock equivalents in the
Account shall be made in cash in an amount equal to the number of stock
equivalents to be distributed multiplied by the greater of (i) the Average
Closing Price of the Common Stock for the twenty (20) trading days ending on
the day preceding the date on which the right to such distribution arose or
(ii) the Average Closing Price of the Common Stock for the twenty (20)
trading days ending on the day preceding the date of the Change in Control.
(d) The Company shall promptly reimburse the Director for all legal
fees and expenses reasonably incurred in successfully seeking to obtain or
enforce any right or benefit provided under this Section 6.
(e) This Section 6 may not be amended or modified after the
occurrence of a Change in Control.
7. MISCELLANEOUS
(a) The election to defer Deferrable Compensation, including, but not
limited to, the allocation of the amount deferred between the cash allotment
or the stock allotment portion of the Account, or a combination thereof, and
the time and manner of distribution, shall be irrevocable as to amounts earned
in the calendar year following the year in which the election is made, or, in
the case of a Director who first becomes eligible to participate in the Plan
during the calendar year, for the remaining part of the year in which the
election is made, and also for any subsequent calendar year, unless a new
election form reflecting a change or revocation of the deferral election or a
change in the allocation of the amount deferred between the cash allotment or
the stock allotment portion of the Account with respect to amounts earned in
such subsequent calendar year is delivered to the Secretary of the Company not
later than ten (10) days preceding the first day of the calendar year to which
such change or revocation is applicable.
(b) If the Director has elected to have the Account distributed
in installments, the Director may notify the Company in writing at any time
beginning more than six (6) months after termination of service as a director
to transfer a portion or all of the Account held as a cash allotment to a
stock allotment, or to transfer a portion or all of the Account held as a
stock allotment to a cash allotment. Any amounts transferred from or to
a stock allotment shall be computed in the manner provided in Section 4(c),
above.
(c) Neither the Director nor any other person shall have any interest
in any fund or in any specific asset of the Company by reason of amounts
credited to the Account of a Director hereunder, nor the right to exercise any
of the rights or privileges of a shareholder with respect to any stock
equivalents credited to the Account, nor the right to receive any distribution
under the Plan except as and to the extent expressly provided for in the Plan.
Distributions hereunder shall be made from the general funds of the Company,
and the rights of the Director shall be those of an unsecured general creditor
of the Company. The Company may establish a trust pursuant to a trust
agreement and make contributions thereto for the purpose of assisting the
Company in meeting its obligations hereunder. Any such trust agreement shall
contain procedures to the following effect:
(i) In the event of the insolvency of the Company, the trust
fund will be available to pay the claims of any creditor of the Company
to whom a distribution may be made in accordance with state and federal
bankruptcy laws. The Company shall be deemed to be "insolvent" if the
Company is subject to a pending proceeding as a debtor under the
Federal Bankruptcy Code (or any successor federal statute) or any state
bankruptcy code. In the event that the Company becomes insolvent, the
Board and chief executive officer of the Company shall notify the
trustee of the event as soon as practicable. Upon receipt of such
notice, or if the trustee receives other written allegations of the
Company's insolvency, the trustee shall cease making payments of
benefits from the trust fund, shall hold the trust fund for the benefit
of the Company's creditors, and shall take such steps as are necessary
to determine within 30 days whether the Company is insolvent. In the
case of the trustee's actual knowledge of or other determination of the
Company's insolvency, the trustee will deliver assets of the trust fund
to satisfy claims of the Company's creditors as directed by a court of
competent jurisdiction.
(ii) The trustee shall resume payments of benefits under the
trust agreement only after the trustee has determined that the Company
is not insolvent (or is no longer insolvent, if the trustee had
previously determined the Company to be insolvent) or upon receipt of
an order of a court of competent jurisdiction requiring such payment.
If the trustee discontinues payment of benefits pursuant to clause (i),
above, and subsequently resumes such payment, the first payment on
account of a Director following such discontinuance shall include an
aggregate amount equal to the difference between the payments which
would have been made on account of such Director by the Company during
any such period of discontinuance, plus interest on such amount at a
rate equivalent to the net rate of return earned by the trust fund
during the period of such discontinuance.
(d) The interest of the Director under the Plan shall not be
assignable by the Director or the Director's beneficiary or legal
representative, either by voluntary assignment or by operation of law, and any
assignment of such interest, whether voluntary or by operation of law, shall
be ineffective to transfer the Director's interest; provided, however, that
(i) the Director may designate a beneficiary to receive any benefit payable
under the Plan upon death, and (ii) the legal representative of the Director's
estate may assign the Director's interest under the Plan to the persons
entitled to any benefit payable under the Plan upon the Director's death.
(e) Except as provided in Section 6, above, the Company may amend,
modify, terminate or discontinue the Plan at any time; provided, however, that
no such action shall reduce the amounts credited to the Account of the
Director immediately prior to such action, nor change the time, method or
manner of distribution of such amount, including, without limitation,
distribution in accordance with Section 6, above.
(f) Nothing contained herein shall impose any obligation on the
Company to continue the tenure of the Director beyond the term for which such
Director may have been elected or shall prevent the removal of such Director.
(g) This Plan shall be interpreted by and all questions arising in
connection therewith shall be determined by a majority of the Board, whose
interpretation or determination, when made in good faith, shall be conclusive
and binding, unless a Change in Control shall have occurred, in which case
such interpretation or determination shall be made by a majority of the
Continuing Directors.
(h) The effective date (the "Effective Date") of this Amendment and
Restatement of the Plan shall be December 8, 1992.
8. ROLLOVER ELECTIONS
Within thirty (30) days subsequent to the termination of the Vulcan
Materials Company Plan for Directors Emeriti and Other Eligible Directors (the
"Director Emeriti Plan"), a Director shall elect to have credited to his
Account the net present value of the accrued benefit such Director would have
received under the Director Emeritus Plan had it not terminated as to such
director (the "Credit"). A Director may allocate all or any part of his
Credit to either or both of the stock or cash allotment; provided, however,
that to the extent a Director allocates his Credit to the stock allotment,
that Director shall be prohibited from selling any shares of Common Stock for
a period of six (6) months following such allocation without first obtaining
the prior written consent of the Secretary of the Company.
VULCAN MATERIALS COMPANY
1996 LONG-TERM INCENTIVE PLAN
Section 1. DEFINITIONS.
As used in the Plan, the following terms shall have the meanings set
forth below:
(a) "Affiliate" shall mean (i) any entity that, directly or through
one or more intermediaries, is controlled by the Company, or
(ii) any entity in which the Company owns a significant equity
interest, as determined by the Committee.
(b) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Share
Award, Dividend Equivalent, or Other Stock-Based Award granted
under the Plan.
(c) "Award Agreement" shall mean any written agreement, contract, or
other instrument or document evidencing any Award granted under
the Plan.
(d) "Award Period" shall mean the period beginning with the date an
Award is granted and ending on the date set forth in the
applicable Award Agreement.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time and any rules or regulations promulgated
thereunder.
(f) "Committee" shall mean those members of the Compensation
Committee of the Board of Directors of the Company (or any
successor committee thereto), consisting in number of not less
than the minimum number of directors required to satisfy the
requirements of Rule 16b-3 of the Exchange Act
and Section 162(m) of the Code, each
of whom qualifies as a "disinterested person" within the
meaning of Rule 16b-3 and an "outside director" within the
meaning of Section 162(m) of the Code.
(g) "Dividend Equivalent" shall mean any right granted under Section
6(e) of the Plan.
(h) "Eligible Employee" shall mean any person who in accordance with
Section 5 is eligible to receive an Award under the Plan.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
(j) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other
securities), the fair market value of such property determined
by such methods or procedures as shall be established from time
to time by the Committee.
(k) "Incentive Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is intended to meet the
requirements of Section 422 of the Code (or any successor
provision thereto).
(l) "Non-Qualified Stock Option" shall mean any option not intended
to be an Incentive Stock Option.
(m) "Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option.
(n) "Other Stock-Based Award" shall mean any right granted under
Section 6(f) of the Plan.
(o) "Participant" shall mean any key salaried employee of the
Company or of an Affiliate who is granted an Award under the
Plan.
(p) "Performance Share Award" shall mean any right granted under
Section 6(d) of the Plan.
(q) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated
organization, or government or political subdivision thereof.
(r) "Restricted Stock" shall mean any Shares granted under Section
6(c) of the Plan.
(s) "Restricted Stock Unit" shall mean any right granted under
Section 6(c) of the Plan that is denominated in Shares.
(t) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Exchange Act or
any successor rule or regulation thereto.
(u) "Shares" shall mean the common shares of the Company, $1.00 par
value, and such other securities or property as may become the
subject of Awards pursuant to an adjustment made under Section
4(b) of the Plan.
(v) "Stock Appreciation Right" shall mean any right granted under
Section 6(b) of the Plan.
Section 2. PURPOSE.
The purpose of the Vulcan Materials Company (the "Company") 1996
Long-Term Incentive Plan (the "Plan") is to promote the long-term success of
the Company by encouraging key employees of the Company and its Affiliates (as
defined below) to acquire a proprietary interest in the growth and performance
of the Company, and to enhance the ability of the Company and its Affiliates
to attract and retain highly qualified individuals upon whom, in large
measure, the sustained growth and profitability of the Company depend.
Section 3. ADMINISTRATION.
The Plan shall be administered by the Committee. Subject to the terms
of the Plan and applicable law, the Committee shall have the authority
to effectuate the purposes of the Plan.
Without limiting the generality of the foregoing, the Committee shall have the
exclusive right to: (i) designate Participants; (ii) determine the type or
types of Awards to be granted to each Participant; (iii) determine the number
of Shares to be covered by an Award (or with respect to which payments,
rights, or other matters are to be calculated in connection with an Award);
(iv) determine the terms and conditions of an Award; (v) determine whether, to
what extent, and under what circumstances an Award may be settled or exercised
in cash, Shares, other securities, other Awards, or other property, or
canceled, forfeited, or suspended, and the method or methods by which an Award
may be settled, exercised, canceled, forfeited, or suspended; (vi) determine
whether, to what extent, and under what circumstances cash, Shares, other
securities, other Awards, other property, and other amounts payable with
respect to an Award shall be deferred either automatically or at the election
of the holder thereof or of the Committee; (vii) determine the rights of
Participants in the events of death, disability, termination, change in
control and the like; (viii) interpret and administer the Plan and any
instrument or agreement relating to the Plan or an Award; (ix) establish,
amend, suspend, or waive rules and regulations for the administration of the
Plan; (x) appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (xi) make any other determination and take any
other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan,
all designations, determinations, interpretations, and other decisions under
or with respect to the Plan or any Award shall be within the sole discretion
of the Committee, may be made at any time, and shall be final, conclusive, and
binding upon all Persons, including the Company, any Affiliate, any
Participant, any holder or beneficiary of any Award, any shareholder, and any
employee of the Company or of any Affiliate.
Section 4. SHARES AVAILABLE FOR AWARDS.
(a) Shares Available. Subject to adjustment as provided in
Section 4(b):
i) Calculation of Number of Shares Available. The number of
Shares available for granting Awards in each calendar year
shall be .95% of the issued common shares of the Company
(including treasury shares) as of the first day of each
calendar year; provided, however, that in any calendar year
the number of available Shares shall be increased by the
number of Shares available under the Plan in previous years
but not covered by Awards granted under the Plan in such
years. Further, if any Shares covered by an Award granted
under the Plan are forfeited, or if an Award denominated in
Shares terminates without the delivery of Shares, then the
Shares covered by such Award shall again be available for
granting Awards under the Plan. Notwithstanding the
foregoing, but subject to adjustment as hereinafter
provided in Section 4(b), no more than 1,000,000 Shares
shall be cumulatively available for delivery pursuant to
the exercise of Incentive Stock Options and no more than
one-third of the Shares available for Awards in any
calendar year shall be available for grants of Restricted
Stock or Restricted Stock Units.
ii) Accounting for Awards. For purposes of this Section 4:
A) if an Award is denominated in Shares, the number of
Shares covered by such Award shall be counted on the
date of grant of such Award against the aggregate
number of Shares available for granting Awards under
the Plan; provided, however, that an Award denominated
in Shares that operates in tandem with (whether granted
simultaneously with or at a different time from)
another Award denominated in Shares shall be deemed a
single Award with respect to the number of Shares that
are common to the respective Awards.
B) Shares issuable pursuant to Awards that are not
denominated in Shares shall be counted against and
restored to the aggregate number of Shares available
for granting Awards under the Plan in such amount and
at such time as the Committee shall determine under
procedures adopted by the Committee consistent with the
purposes of the Plan.
iii) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued Shares or of treasury
Shares.
(b) Adjustments. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of
cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other
securities of the Company, issuance of warrants or other rights
to purchase Shares or other securities of the Company, or other
similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the
benefits intended to be made available under the Plan, the
Committee may, in such manner as it shall deem equitable,
adjust any or all of (i) the number and type of Shares (or
other securities or property) which thereafter may be made the
subject of Awards under the Plan, (ii) the number and type of
Shares (or other securities or property) subject to outstanding
Awards, and (iii) the grant, purchase, or exercise price with
respect to any Award, or, if the Committee deems appropriate,
make provision for a cash payment to the holder of an
outstanding Award.
Section 5. ELIGIBILITY.
Any key salaried employee of the Company or an Affiliate, including a
director of the Company or an Affiliate who is an employee, shall be eligible
to receive Awards under the Plan.
Section 6. AWARDS.
(a) Options. The Committee is hereby authorized to grant Incentive
Stock Options and Non-Qualified Stock Options to Eligible Employees with the
following terms and conditions and with such additional terms and conditions,
in either case not inconsistent with the provisions of the Plan, as the
Committee shall determine:
i) Exercise Price. The exercise price per Share shall be
determined by the Committee; provided, however, that such
exercise price per Share shall not be less than the Fair
Market Value of a Share on the date of grant of such
Option.
ii) Option Term. The term of each Option shall be fixed by the
Committee, provided that in no event shall the term of an
Incentive Stock Option exceed a period of ten (10) years.
iii) Time and Method of Exercise. The Committee shall determine
the time or times at which an Option may be exercised in
whole or in part, and the method or methods by which, and
the form or forms (including, without limitation, cash,
Shares, other Awards, or other property, or any combination
thereof) in which payment of the exercise price may
be made.
iv) Incentive Stock Options. The terms of any Incentive Stock
Option granted under the Plan shall comply in all respects
with the provisions of Section 422 of the Code (or any
successor provision thereto).
(b) Stock Appreciation Rights. The Committee is hereby authorized
to grant Stock Appreciation Rights to Eligible Employees.
Subject to the terms of the Plan and any applicable Award
Agreement, one Stock Appreciation Right granted under the Plan
shall confer on the holder thereof a right to receive, upon
exercise thereof, the excess of (i) the Fair Market Value of
one Share on the date of exercise or, if the Committee shall so
determine in the case of any such Stock Appreciation Right
other than one related to any Incentive Stock Option, at any
time during a specified period before or after the date of
exercise, over (ii) the grant price of the right as specified
by the Committee, which shall not be less than the Fair Market
Value of one Share on the date of grant of the Stock
Appreciation Right. Subject to the terms of the Plan and any
applicable Award Agreement, the grant price, term, methods of
exercise, methods of settlement, and any other terms and
conditions of any Stock Appreciation Right shall be as
determined by the Committee. The Committee may impose such
conditions or restrictions on the exercise of any Stock
Appreciation Right as it may deem appropriate.
(c) Restricted Stock and Restricted Stock Units.
i) Issuance. The Committee is hereby authorized to grant
Awards of Restricted Stock and Restricted Stock Units to
Eligible Employees.
ii) Restrictions. Restricted Stock and Restricted Stock Units
shall be subject to such restrictions as the Committee may
impose (including, without limitation, any limitation on
the right to vote the Restricted Stock or on the right to
receive any dividend or other right or property), which
restrictions may lapse at such time or times, in such
installments or otherwise, as the Committee may deem
appropriate; provided, however, that all Restricted Stock
and Restricted Stock Units granted pursuant to the Plan
shall be subject to at least a three-year vesting period.
iii) Evidence of Award. Any Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee may
deem appropriate, including, without limitation, book-entry
registration or issuance of a stock certificate or
certificates. In the event any stock certificate is issued
in respect of Restricted Stock, such certificate shall be
registered in the name of the Participant and shall bear an
appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock.
Certificates for shares of Restricted Stock may be
delivered to the Participant or held by the Company.
(d) Performance Share Awards. The Committee is hereby authorized
to grant Performance Share Awards to Participants. Subject to
the terms of the Plan and any applicable Award Agreement, a
Performance Share Award granted under the Plan (i) may be
denominated or payable in cash, Shares (including, without
limitation, Restricted Stock), other securities, other Awards,
or other property, and (ii) shall confer on the holder thereof
rights payable to, or exercisable by, the holder of the
Performance Share Award, upon the achievement of such
performance goals during such performance periods as the
Committee shall establish based on earnings as reported or
after deducting a charge reflecting the cost of capital, return
on investment or total shareholder return of the Company or an
Affiliate, or any division or operating unit thereof, as
measured on an absolute basis, as compared to another
performance period, or as compared to a group of comparison
companies. Subject to the terms of the Plan and any applicable
Award Agreement, the performance goals to be achieved during
any performance period, the length of any performance period
and the amount of any Performance Share Award granted shall be
determined by the Committee. The equivalent Share value (if
the performance goals are fully achieved) of each Performance
Share Award granted shall be counted against the limitation set
forth in Section 6(g)(v).
(e) Dividend Equivalents. The Committee is hereby authorized to
grant to holders of Awards the right to receive payments
equivalent to dividends with respect to a number of Shares
comprising such Award as determined by the Committee, and the
Committee may provide that such amounts (if any) shall be
deemed reinvested in additional Shares or otherwise reinvested.
Subject to the terms of the Plan and any applicable Award
Agreement, such Awards may have such terms and conditions as
the Committee shall determine.
(f) Other Stock-Based Awards. The Committee is hereby authorized
to grant to Participants such other Awards that are denominated
or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares (including, without
limitation, securities convertible into Shares), as are deemed
by the Committee to be consistent with the purposes of the
Plan. Subject to the terms of the Plan and any applicable
Award Agreement, the Committee shall determine the terms and
conditions of such Awards. Shares or other securities
delivered pursuant to a purchase right granted under this
Section 6(f) shall be purchased for such consideration, which
may be paid by such method or methods and in such form or
forms, including, without limitation, cash, Shares, other
securities, other Awards, or other property, or any combination
thereof, as the Committee shall determine.
(g) General.
i) Awards May Be Granted Separately or Together. Awards may,
in the discretion of the Committee, be granted alone, in
addition to or in tandem with any other Award or any award
granted under any other plan of the Company or any
Affiliate. Awards granted in addition to or in tandem with
other Awards, or in addition to or in tandem with awards
granted under any other plan of the Company or any
Affiliate, may be granted either at the same time as or
at a different time from the grant of such other Awards
or awards.
ii) Forms of Payment Under Awards. Subject to the terms of the
Plan and of any applicable Award Agreement, payments or
transfers to be made by the Company or an Affiliate upon
the grant, exercise, or payment of an Award may be made in
such form or forms as the Committee shall determine,
including, without limitation, cash, Shares, other
securities, other Awards, or other property, or any
combination thereof, and may be made in a single payment or
transfer, in installments, or on a deferred basis, in each
case in accordance with rules and procedures established by
the Committee. Such rules and procedures may include,
without limitation, provisions for the payment or crediting
of reasonable interest on installment or deferred payments
or the grant or crediting of Dividend Equivalents in
respect of installment or deferred payments.
iii) Limits on Transfer of Awards. No Award, and no right under
any such Award, shall be assignable, alienable, saleable,
or transferable by a Participant other than by will or by
the laws of descent and distribution, except as otherwise
permitted by the Committee consistent with Rule 16b-3 and
provided for in the governing Award Agreement. If so
determined by the Committee, a Participant may, in the
manner established by the Committee, designate a
beneficiary or beneficiaries to exercise the rights of the
Participant, and to receive any property distributable,
with respect to any Award upon the death of the
Participant. Each Award, and each right under any Award,
shall be exercisable, during the Participant's lifetime,
only by the Participant or, if permissible under applicable
law, by the Participant's guardian or legal representative,
except that any transferable Award may be exercised by a
permitted transferee. No Award and no right under any such
Award, may be pledged, alienated, attached, or otherwise
encumbered, and any purported pledge, alienation,
attachment, or encumbrance thereof shall be void and
unenforceable against the Company or any Affiliate.
iv) Term of Awards. Subject to the terms of the Plan, the term
of each Award shall be for such period as may be determined
by the Committee.
v) Limitation on Awards. The maximum number of Shares with
respect to which Awards may be granted to any Participant
in any year may not exceed 100,000 Shares.
vi) Share Certificates. All certificates for Shares or other
securities delivered under the Plan pursuant to any Award
or the exercise thereof shall be subject to such stop
transfer orders and other restrictions as the Committee may
deem advisable under the Plan or the rules, regulations,
and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares or
other securities are then listed, and any applicable
federal or state securities laws, and the Committee may
cause a legend or legends to be put on any such
certificates to make appropriate reference to such
restrictions.
Section 7. AMENDMENT AND TERMINATION.
Except to the extent prohibited by applicable law:
(a) Amendments to the Plan. The Board of Directors of the Company
may amend, alter, suspend, discontinue, or terminate the Plan,
including, without limitation, any amendment, alteration,
suspension, discontinuation, or termination that would impair
the rights of any Participant, or any other holder or
beneficiary of any Award theretofore granted, without the
consent of any shareholder of the Company, Participant, other
holder or beneficiary of an Award, or other Person; provided,
however, that, notwithstanding any other provision of the Plan
or any Award Agreement, without the approval of the
shareholders of the Company, no such amendment, alteration,
suspension, discontinuation, or termination shall be made
that would:
i) increase the total number of Shares available for Awards
under the Plan or increase the limitation on Awards set
forth in Section 6(g)(v), except as provided in Section
4(b) hereof; or
ii) modify the eligibility criteria set forth in Section 5; or
iii) permit Options or Stock Appreciation Rights to be granted
with per Share grant, purchase or exercise prices of less
than the fair market value of a Share on the date of grant
thereof.
(b) Adjustments of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee shall be authorized to make
adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring
events (including, without limitation, the events described in
Section 4(b) hereof) affecting the Company, any Affiliate, or
the financial statements of the Company or any Affiliate, or of
changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such
adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits to be made
available under the Plan. Notwithstanding any other provision
of this Plan to the contrary, the Committee shall not have the
discretion to make any modifications to outstanding Awards
which are intended to satisfy the "performance-based" exception
under Code Section 162(m) if such modifications would result in
the loss of the ability to comply with such "performance-based"
exception (e.g., with respect to such Awards, the Committee
shall not be authorized to exercise discretion to increase
awards).
(c) Correction of Defects, Omissions, and Inconsistencies. The
Committee may correct any defect, supply any omission, or
reconcile any inconsistency in the Plan or any Award in the
manner and to the extent it shall deem desirable to carry the
Plan into effect.
Section 8. GENERAL PROVISIONS.
(a) No Rights to Awards. No Participant or other Person shall have
any claim to be granted any Award under the Plan, and there is
no obligation for uniformity of treatment of Participants, or
holders or beneficiaries of Awards under the Plan. The terms
and conditions of Awards need not be the same with respect to
each recipient.
(b) Delegation. The Committee may delegate to one or more officers
or managers of the Company or of any Affiliate, or a committee
of such officers or managers, the authority, subject to the
terms and limitations as the Committee shall determine, to
grant Awards to, or to cancel, modify, waive rights with
respect to, and to alter, discontinue, suspend, or terminate
Awards held by Participants who are not subject to Section 16
of the Exchange Act or covered by Section 162(m) of the Code.
(c) Withholding. The Company or any Affiliate shall be authorized
to withhold from any Award granted or any payment due or
transfer made under any Award or under the Plan the amount
(in cash, Shares, other securities, other Awards, or other
property) of withholding taxes due in respect of an Award,
its exercise, or any payment or transfer under such Award
or under the Plan and to take such other action as may be
necessary or advisable to satisfy all obligations for the
payment of such taxes.
(d) No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any Affiliate from
adopting or continuing in effect other or additional
compensation arrangements.
(e) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in
the employ of the Company or any Affiliate. The Company or an
Affiliate may at any time dismiss a Participant from
employment, free from any liability, or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any
Award Agreement.
(f) Severability. If any provision of the Plan or any Award
Agreement is, or becomes or is deemed to be invalid, illegal,
or unenforceable in any jurisdiction, or as to any Person or
Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to applicable laws, or
if it cannot be so construed or deemed amended without, in the
determination of the Committee, materially altering the intent
of the Plan or the Award, such provision shall be stricken as
to such jurisdiction, Person, or Award, and the remainder of
the Plan and any such Award shall remain in full force
and effect.
(g) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of
any kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person. To the extent
that any Person acquires a right to receive payments from the
Company or any Affiliate pursuant to an Award, such right shall
be no greater than the right of any unsecured general creditor
of the Company or any Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee
shall determine whether cash, other securities, or other
property shall be paid or transferred in lieu of any fractional
Shares, or whether such fractional Shares or any rights thereto
shall be canceled, terminated, or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections
of the Plan solely as a convenience to facilitate reference.
Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or
any provision thereof.
Section 9. EFFECTIVE DATE OF THE PLAN.
The Plan shall be effective as of the date of its approval by the
shareholders of the Company.
Section 10. TERM OF THE PLAN.
No Award shall be granted under the Plan after May 1, 2006. However,
unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award theretofore granted may extend beyond such date, and the
authority of the Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Award, or to waive any conditions or rights under any such
Award, and the authority of the Board of Directors of the Company to amend the
Plan, shall extend beyond such date.
VULCAN MATERIALS COMPANY
DEFERRED STOCK PLAN FOR
NONEMPLOYEE DIRECTORS
1. DEFINITIONS.
As used herein, the following terms shall have the meanings
hereinafter set forth:
(a) "Annual Meeting" means the Annual Meeting of the shareholders of
the Company.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Company" shall mean Vulcan Materials Company, a New Jersey
corporation.
(d) "Deferred Stock Unit" means the equivalent of one Share, as
established pursuant to this Plan.
(e) "Directors Emeriti Plan" means the Vulcan Materials Company Plan
for Directors Emeriti and Other Eligible Directors, as amended
or restated from time to time.
(f) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(g) "Fair Market Value Per Share" means the average of the daily
closing prices of a Share as reported on the New York Stock
Exchange for the twenty (20) trading days prior to the date of
determination, or if the Shares are not listed on such exchange,
on the principal United States securities exchange registered
under the Exchange Act on which the Shares are listed.
(h) "Nonemployee Director" means any person who is a member of the
Board and who is not, as of the date of an award under this
Plan, an employee of the Company or any of its subsidiaries.
(i) "Plan" means this Vulcan Materials Company Deferred Stock
Plan for Nonemployee Directors, as it may be amended from time
to time.
(j) "Share" means a share of the Company's Common Stock, $1.00
par value.
(k) "Stock Plan" means the Vulcan Materials Company Stock Plan
for Nonemployee Directors.
2. PURPOSE AND EFFECTIVE DATE.
The primary purpose of the Plan is to advance the interests of the
Company and its shareholders by providing for the payment of a greater portion
of the compensation of Nonemployee Directors in the form of equity by the
grant to such directors of Deferred Stock Units under the terms set forth
herein. By thus compensating Nonemployee Directors and increasing Nonemployee
Directors' equity position in the Company, the Company seeks to attract,
retain, compensate, and motivate those highly competent individuals upon whose
judgment, initiative, leadership, and continued efforts the success of the
Company in large measure depends and to align more closely the interests of
the Nonemployee Directors with those of the shareholders of the Company.
This Plan is designed to replace the Stock Plan and the Directors Emeriti
Plan. The Stock Plan shall be terminated upon the Effective Date of this Plan.
The Directors Emeriti Plan shall be phased out after adoption of this Plan as
set forth below. New Nonemployee Directors shall not be permitted to
participate in the Directors Emeriti Plan, and shall instead be permitted to
participate in this Plan. Furthermore, current Nonemployee Directors who
elect to terminate participation in the Directors Emeriti Plan after the
adoption of this Plan shall be entitled to a larger annual grant pursuant to
paragraph 6 below.
The Plan shall be deemed adopted and shall become effective as of the
date of its approval by the affirmative vote of the holders of a majority of
the Shares of the Company voted in person or by proxy at the next Annual
Meeting (the "Effective Date"). No grants of Deferred Stock Units shall be
made unless and until such shareholder approval is obtained.
3. ELIGIBILITY.
Each director who as of the date of any award made pursuant to the Plan
is not an employee of the Company or any of its subsidiaries shall be eligible
to participate in the Plan.
4. SHARES OF COMMON STOCK AVAILABLE.
The number of Shares that may be issued pursuant to the Plan shall not
exceed 100,000, subject to proportionate adjustment in the event of any stock
split, reverse stock split, reorganization or recapitalization.
5. DEFERRED STOCK ACCOUNT.
The Company shall establish a deferred stock account (an "Account") for
each Nonemployee Director participating in the Plan. On each Award Date (as
defined below) and on each Dividend Date (as defined below), as the case may
be, the Company shall credit the Account with the number of Deferred Stock
Units determined in accordance with paragraph 6 below. Distributions from a
Nonemployee Director's Account shall be made in Shares upon the retirement of
a Nonemployee Director, unless the distributions are accelerated in accordance
with paragraphs 8 or 9 below. The value of the Deferred Stock Units is
dependent upon the fair market value of the Shares on the date the Shares are
distributed to the Nonemployee Director, and is therefore subject to market
fluctuations in value until such distribution.
6. ANNUAL AWARDS.
(a) On or prior to the Effective Date of the Plan, each Nonemployee
Director shall make an irrevocable election to continue or
discontinue participation in the Company's Directors Emeriti
Plan. On the date that is six (6) months after the Effective
Date and on June 1 of each year thereafter (an "Award Date"), the
Company shall credit to the Account of (i) each Nonemployee
Director who on or prior to the Effective Date has made an
irrevocable election not to continue to participate in
the Director's Emeriti Plan and (ii) each person who becomes a
Nonemployee Director after the Effective Date, the number of
Deferred Stock Units calculated by dividing an amount equal to
forty percent (40%) of the annual retainer payable to Nonemployee
Directors then in effect by the Fair Market Value Per Share as of
the applicable Award Date. The Account of each Nonemployee
Director who does not irrevocably elect on or prior to the
Effective Date to discontinue his or her participation
in the Directors Emeriti Plan shall be credited
on each Award Date with the number of Deferred Stock Units
calculated by dividing an amount equal to fifteen percent (15%) of
the annual retainer payable to Nonemployee Directors then in
effect by the Fair Market Value Per Share as of the Award Date.
(b) At any time a balance is maintained in a Nonemployee Director's
Account, there shall be credited to the Account of such
Nonemployee Director additional Deferred Stock Units on each
regular cash dividend payment date (a "Dividend Date"). The
number of such additional Deferred Stock Units shall be determined
by (i) multiplying the total number of Deferred Stock Units
(including fractional Deferred Stock Units) credited to the
Account immediately prior to the Dividend Date by the amount of
the dividend and (ii) dividing the product by the Fair Market
Value Per Share as of the day preceding the Dividend Date.
(c) In the event of any change in the outstanding Shares upon which
the stock equivalency hereunder is based, by reason of a merger,
consolidation, reorganization, recapitalization, stock dividend,
stock split, combination or exchange of shares, or any other
change in corporate structure or in the event of any dividend that
is paid in Shares or other property, the number of Deferred Stock
Units credited to the Account shall be adjusted in such a manner
as a majority of the Board shall determine to be fair under the
circumstances; provided, however, that if a Change in Control
shall have occurred, then such determination shall be made by a
majority of the Continuing Directors. In the case of dividends
payable in property, the amount paid shall be based on the fair
market value of the property at the time of distribution of the
dividend, as determined by a majority of the Board, or, in the
event of a Change in Control, by a majority of the Continuing
Directors.
7. DISTRIBUTION.
(a) Except as otherwise provided herein, the balance of each
Nonemployee Director's Account shall be paid to the Nonemployee
Director, in a lump sum or in installments, as determined by the
Nonemployee Director in accordance with paragraph 7(f) below,
commencing at the beginning of the first quarter after the first
Annual Meeting following the date that such director reaches the
mandatory retirement age then in effect.
(b) In the event of the death of the Nonemployee Director prior to
such director's retirement or prior to the distribution of the
entire balance in such director's Account, the entire balance in
the Account as of the date of the Nonemployee Director's death
shall be paid in Shares in a lump sum or in installments, as
determined by the Nonemployee Director in accordance with
paragraph 7(f) below, to the surviving beneficiary or
beneficiaries as the Nonemployee Director may have designated by
notice in writing to the Company or by will, or, if no
beneficiaries are so designated, the legal representative of such
director's estate.
(c) If a Nonemployee Director shall become totally and permanently
disabled, as determined by a majority of the Board, while he or
she is a director of the Company, the entire balance in the
Account as of the date of such total and permanent disability
shall be paid to such Nonemployee Director, or his or her personal
representative, in a lump sum or in installments, as determined by
the Nonemployee Director in accordance with paragraph 7(f) below,
within one hundred twenty (120) days of the date of such total and
permanent disability.
(d) If a Nonemployee Director ceases to be a director of the Company
for any reason other than due to death or total and permanent
disability, including, without limitation, the failure of such
person to be re-elected as a director of the Company by the
shareholders of the Company, the balance of such director's
Account as of the date such person ceases to be a director of the
Company shall be paid in a lump sum or in installments, as
determined by the Nonemployee Director in accordance with
paragraph 7(f) below, to such director within one hundred twenty
(120) days of the date such person ceases to be a director of the
Company.
(e) All distributions of Deferred Stock Units made pursuant to this
Plan shall be in Shares in an amount equal to the number of
Deferred Stock Units held in the Account and to be distributed.
On the date of any such distribution, the Company shall cause to
be issued and delivered to such Nonemployee Director a stock
certificate evidencing the Shares registered in the name of such
Nonemployee Director, or such other person as the Nonemployee
Director may designate.
(f) All distributions of Shares in accordance with this paragraph 7
shall be made, at such director's election, either in a lump sum
or in monthly, quarterly, semiannual or annual installments,
provided, however, that such director shall have delivered to the
Secretary of the Company a form specifying the director's election
at least six (6) months prior to the date payments are to
commence. In the event that such director fails to make a timely
election, the distribution of Shares shall be made in a lump sum.
Deferred Stock Units representing fractional Shares shall be
paid in cash.
(g) The provisions of this Plan shall apply to and be binding upon the
beneficiaries, distributees, and personal representatives, and any
other successors in interest of the Nonemployee Director.
(h) The Company shall deduct from all distributions hereunder any
taxes required to be withheld by the federal, state or local law.
8. ACCELERATION OF DISTRIBUTION.
(a) "Change in Control" means:
i) The acquisition by any person, entity or "group," within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act (excluding any employee benefit plan of the Company or
any of its subsidiaries which acquires beneficial ownership
of voting securities of the Company), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of either the then
outstanding Shares or the combined voting power of the
Company's then outstanding voting securities, in one
transaction or a series of transactions; provided, however,
that, if prior to such an acquisition, a majority of the
Continuing Directors determines that such acquisition shall
not, for purposes of the Plan, be deemed a Change in
Control, such acquisition shall not constitute a Change in
Control hereunder;
ii) Individuals who, as of the date of a Change in Control,
constitute the Board (the "Continuing Directors") cease for
any reason to constitute at least a majority of the Board,
provided that any person becoming a director of the Company
subsequent to the Change in Control Date whose election, or
nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the Continuing
Directors (other than an election or nomination of an
individual whose initial assumption of office is in
connection with an actual or threatened solicitation with
respect to the election or removal of directors of the
Company, as such terms are used in Rule 14a-11 promulgated
under the Exchange Act) shall be, for purposes of the Plan,
considered as though such person were a Continuing
Director; or
iii) Approval by the Board of (i) a merger, consolidation or
reorganization of the Company in which, as a consequence of
the transaction, either the Continuing Directors do not
constitute a majority of the directors of the continuing or
surviving corporation or any person, entity or "group,"
within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, controls 25% or more of the combined voting
power of the continuing or surviving corporation; (ii) any
sale, lease or other transfer, in one transaction, or a
series of related transactions, of all or substantially all
of the assets of the Company; or (iii) any plan or proposal
for the liquidation or dissolution of the Company;
provided, however, that, if at the time of such approval, a
majority of the Continuing Directors determines that such
merger, consolidation, reorganization, sale, lease, other
transfer, liquidation or dissolution shall not, for
purposes of the Plan, be deemed a Change in Control, such
transaction shall not constitute a Change in Control
hereunder, and, provided further, that, if a majority of
the Continuing Directors so determines, a Change in Control
shall not be deemed to occur until the consummation of any
such transaction.
(b) Notwithstanding any other provision of the Plan, if a Change in
Control occurs and at any time after the occurrence of such
Change in Control either of the following events occurs:
i) the Nonemployee Director ceases for any reason to be a
director of the Company; or
ii) the Plan is terminated;
then the entire balance of the Account shall be payable in a lump
sum to the director in Shares. Such payment shall be made by the
Company as promptly as practicable, but not more than thirty (30)
days following the date on which the right to such payment
arose.
(c) The Company shall promptly reimburse the director for all legal
fees and expenses reasonably incurred in successfully seeking to
obtain or enforce any right or benefit provided under this
paragraph 8.
(d) This paragraph 8 may not be amended or modified after the
occurrence of a Change in Control.
9. NONTRANSFERABILITY OF DEFERRED STOCK UNITS.
No Deferred Stock Units shall be transferred by a Nonemployee Director
other than by will or the laws of descent and distribution, or, to the extent
permitted by Rule 16b-3 under the Exchange Act, pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of 1986, as
amended (the "Code").
10. AMENDMENT AND TERMINATION.
Unless approved by the shareholders of the Company, no amendment of the
Plan shall be effective which would (i) materially increase the maximum number
of Shares that may be issued under the Plan, (ii) materially increase the
benefits accruing to participants under the Plan, or (iii) materially modify
the requirements as to eligibility for participation in the Plan. No
amendment to the Plan shall materially and adversely affect any right of any
Nonemployee Director with respect to any Deferred Stock Units theretofore
credited without such Nonemployee Director's written consent.
11. TERM.
The Plan shall continue in effect without limit unless and until the
Board otherwise determines.
12. COMPLIANCE WITH SEC REGULATIONS.
It is the Company's intent that the Plan comply with the provisions of
Section 16 of the Exchange Act and the rules promulgated thereunder. To the
extent that any provision of the Plan is later found not to be in compliance
with Section 16 or such rules, such provision shall be deemed to be null and
void.
13. MISCELLANEOUS.
(a) Neither the Plan nor any action taken hereunder shall be
construed as giving any Nonemployee Director any right to
continue to serve as a director of the Company or otherwise to
be retained in the service of the Company.
(b) No Shares shall be issued hereunder unless and until counsel
for the Company shall be satisfied such issuance will be in
compliance with applicable federal, state and other securities
laws and regulations.
(c) The expenses of the Plan shall be borne by the Company.
(d) Neither the Nonemployee Director nor any other person shall have
any interest in any fund or in any specific asset of the Company
by reason of amounts credited to the Account of such director,
nor the right to exercise any of the rights or privileges of a
shareholder with respect to any Deferred Stock Unit credited to
such Account, nor the right to receive any distribution under the
Plan except as expressly provided herein. Distributions
hereunder shall be made from the general funds of the Company,
and the rights of the director shall be those of an unsecured
general creditor of the Company.
(e) The Plan, the grant of Deferred Stock Units thereunder, and the
obligation of the Company to deliver Shares, shall be subject to
all applicable federal and state laws, rules and regulations and
to such approvals by any governmental or regulatory agency or
national securities exchange as may be required. The Company
shall not be required to issue or deliver any certificates for
Shares prior to the completion of any registration or
qualification of such Shares under any federal or state law or
any ruling or regulation of any governmental body or national
securities exchange which the Company shall, in its sole
discretion, determine to be necessary or advisable.
(f) This Plan shall be interpreted by and all questions arising in
connection therewith shall be determined by a majority of the
Board, whose interpretation or determination, when made in good
faith, shall be conclusive and binding, except in the event of
a Change in Control, in which case such interpretation and
determination shall be made by a majority of the Continuing
Directors.
<TABLE>
<CAPTION>
EXHIBIT 11
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
COMPUTATION OF EARNINGS PER SHARE
For the Years Ended December 31
Amounts in Thousands, Except per Share Data
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Primary and fully diluted earnings:
Average common shares outstanding.......... 35,544 36,450 36,757 37,590 38,052
Common share equivalents:
Performance Share Plan................ 389 233 218 190 164
Total Shares.......................... 35,933 36,683 36,975 37,780 38,216
Net earnings before cumulative effect of
accounting change.......................... $166,240 $97,976 $88,229 $90,980 $52,580
Cumulative effect of accounting change....... - - - 3,005 -
Net earnings............................... $166,240 $97,976 $88,229 $93,985 $52,580
Primary and fully diluted earnings per share
of common stock:
Net earnings before cumulative effect of
accounting change.......................... $4.63 $2.67 $2.39 $2.41 $1.38
Cumulative effect of accounting change....... - - - 0.08 -
Net earnings............................... $4.63 $2.67 $2.39 $2.49 $1.38
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT 12
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
For the Years Ended December 31
Amounts in Thousands
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Fixed charges:
Interest expense before capitalization credits..$ 11,396 $ 10,699 $ 10,187 $ 10,441 $ 11,336
Amortization of financing costs................... 109 114 115 116 75
One-third of rental expense....................... 9,532 10,393 7,375 7,190 4,815
Total fixed charges........................$ 21,037 $ 21,206 $ 17,677 $ 17,747 $ 16,226
Net earnings......................................$ 166,240 $ 97,976 $ 88,229 90,980 $ 52,580
Provisions for income taxes......................... 92,181 47,930 36,993 39,746 20,867
Fixed charges....................................... 21,037 21,206 17,677 17,747 16,226
Capitalized interest credits........................ (297) (878) (1,016) (673) (131)
Amortization of capitalized interest................ 1,031 997 882 792 840
Earnings before income taxes as adjusted...... $ 280,192 $ 167,231 $ 142,765 $ 148,592 $ 90,382
Ratio of earnings to fixed charges.................. 13.3 7.9 8.1 8.4 5.6
</TABLE>
Vulcan Materials Company
1995 Annual Report
<TABLE>
<CAPTION>
Financial Review
Selected Financial Data
Amounts and shares in millions, except per share data
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Operations
Net sales........................................................ $1,461.0 $1,253.4 $1,133.5 $1,078.0 $1,007.5
Gross profit..................................................... $ 416.3 $ 268.2 $ 246.7 $ 249.1 $ 212.1
As a percent of net sales.................................... 28.5% 21.4% 21.8% 23.1% 21.1%
Interest expense................................................. $ 11.1 $ 9.8 $ 9.2 $ 9.8 $ 11.3
Net earnings before cumulative effect of accounting change....... $ 166.2 $ 98.0 $ 88.2 $ 91.0 $ 52.6
As a percent of average shareholders' equity................. 21.9% 13.6% 12.8% 13.3% 7.7%
Cumulative effect of accounting change........................... $ - $ - $ - $ 3.0 $ -
Net earnings..................................................... $ 166.2 $ 98.0 $ 88.2 $ 94.0 $ 52.6
Primary and fully diluted earnings per common share:
Net earnings before cumulative effect of accounting change... $ 4.63 $ 2.67 $ 2.39 $ 2.41 $ 1.38
Cumulative effect of accounting change....................... $ - $ - $ - $ 0.08 $ -
Net earnings................................................. $ 4.63 $ 2.67 $ 2.39 $ 2.49 $ 1.38
Effective tax rate............................................... 35.7% 32.8% 29.5% 30.4% 28.4%
Operating income after taxes..................................... $ 173.4 $ 104.5 $ 93.3 $ 98.7 $ 59.5
As a percent of average capital employed..................... 16.6% 10.5% 9.7% 10.3% 6.1%
Liquidity and Capital Resources
Working capital.................................................. $ 184.7 $ 125.5 $ 161.8 $ 169.8 $ 149.8
Current ratio.................................................... 2.0 1.6 2.1 2.3 2.1
Net cash provided by continuing operations....................... $ 267.4 $ 209.2 $ 194.1 $ 199.1 $ 184.9
As a percent of long-term obligations (year end)............. 296.1% 214.8% 190.2% 185.6% 166.4%
Ratio of earnings to fixed charges............................... 13.3 7.9 8.1 8.4 5.6
Total assets (year end).......................................... $1,215.8 $1,181.1 $1,078.6 $1,083.9 $1,073.1
Average capital employed:
Short-term debt.............................................. $ 45.6 $ 39.4 $ 25.2 $ 24.1 $ 72.7
Long-term obligations........................................ 93.3 99.1 105.6 108.2 66.5
Other noncurrent liabilities................................. 144.7 135.0 140.4 138.4 155.7
Shareholders' equity......................................... 758.6 719.6 691.7 686.5 682.7
Total.................................................... $1,042.2 $ 993.1 $ 962.9 $ 957.2 $ 977.6
Long-term obligations (year end)................................. $ 90.3 $ 97.4 $ 102.0 $ 107.3 $ 111.1
As a percent of long-term capital............................ 8.7% 10.0% 10.9% 11.3% 11.8%
Dividends declared and paid per common share..................... $ 1.46 $ 1.32 $ 1.26 $ 1.20 $ 1.20
Total common stock dividends..................................... $ 51.8 $ 48.1 $ 46.3 $ 45.1 $ 45.7
Common shares outstanding (year end)............................. 35.0 35.9 36.3 37.2 38.0
</TABLE>
<TABLE>
<CAPTION>
Segment Financial Data
Amounts in millions
Amount Percent of Company Total
1995 1994 1993 1992 1991 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales
Construction Materials.............$ 884.7 $ 842.9 $ 756.7 $ 686.4 $ 648.1 61% 67% 67% 64% 64%
Chemicals.......................... 576.3 410.5 376.8 391.6 359.4 39 33 33 36 36
Total......................$1,461.0 $1,253.4 $1,133.5 $1,078.0 $1,007.5 100% 100% 100% 100% 100%
Earnings Before Interest
Expense and Income Taxes
Construction Materials.............$ 181.5 $ 162.5 $ 116.7 $ 88.3 $ 41.8 67% 104% 87% 63% 50%
Chemicals.......................... 87.8 (7.3) 17.4 51.3 42.6 33 (5) 13 36 50
Segment earnings................... 269.3 155.2 134.1 139.6 84.4 100 99 100 99 100
Interest income, etc............... 0.2 0.5 0.3 0.9 0.3 ----- 1 ----- 1 -----
Total......................$ 269.5 $ 155.7 $ 134.4 $ 140.5 $ 84.7 100% 100% 100% 100% 100%
Operating Income
After Taxes
Construction Materials.............$ 120.6 $ 108.8 $ 81.6 $ 65.3 $ 32.1 70% 104% 87% 66% 54%
Chemicals.......................... 52.7 (4.7) 11.5 32.7 27.3 30 (4) 12 33 46
Interest income, etc............... 0.1 0.4 0.2 0.7 0.1 ----- ----- 1 1 -----
Total......................$ 173.4 $ 104.5 $ 93.3 $ 98.7 $ 59.5 100% 100% 100% 100% 100%
Net Cash Provided by
Continuing Operations
Construction Materials.............$ 182.9 $ 182.5 $ 156.6 $ 141.9 $ 141.8 68% 87% 81% 71% 77%
Chemicals.......................... 90.8 31.5 41.1 63.8 50.0 34 15 21 32 27
Interest expense, interest
income, etc., net.............. (6.3) (4.8) (3.6) (6.6) (6.9) (2) (2) (2) (3) (4)
Total......................$ 267.4 $ 209.2 $ 194.1 $ 199.1 $ 184.9 100% 100% 100% 100% 100%
Property Additions
Construction Materials.............$ 94.4 $ 69.3 $ 59.3 $ 56.5 $ 60.8 75% 43% 59% 57% 71%
Chemicals.......................... 31.2 90.5 41.3 42.0 24.9 25 57 41 43 29
Total......................$ 125.6 $ 159.8 $ 100.6 $ 98.5 $ 85.7 100% 100% 100% 100% 100%
Depreciation, Depletion and
Amortization
Construction Materials.............$ 72.0 $ 72.8 $ 74.3 $ 75.5 $ 80.4 65% 68% 72% 73% 73%
Chemicals.......................... 38.7 33.9 28.5 27.8 29.3 35 32 28 27 27
Total......................$ 110.7 $ 106.7 $ 102.8 $ 103.3 $ 109.7 100% 100% 100% 100% 100%
Average Capital Employed
Construction Materials.............$ 681.5 $ 688.1 $ 707.4 $ 708.4 $ 748.4 65% 69% 73% 74% 77%
Chemicals.......................... 353.9 294.0 248.5 226.4 226.1 34 30 26 24 23
Cash items......................... 6.8 11.0 7.0 22.4 3.1 1 1 1 2 -----
Total......................$1,042.2 $ 993.1 $ 962.9 $ 957.2 $ 977.6 100% 100% 100% 100% 100%
Operating Income After
Taxes as a Percent of
Average Capital Employed
Construction Materials............. 17.7% 15.8% 11.5% 9.2% 4.3%
Chemicals.......................... 14.9 (1.6) 4.6 14.5 12.1
Interest income, etc. ............. 1.9 3.4 3.0 3.0 5.1
Total...................... 16.6% 10.5% 9.7% 10.3% 6.1%
<FN>
Definitions of certain financial terms used in this report
are provided on page 47.
</TABLE>
<TABLE>
<CAPTION>
COMMON STOCK MARKET PRICES AND DIVIDENDS
Range of Dividend Paid
Common Stock Market Prices Per Share
1995 1994
High Low High Low 1995 1994
Quarter Ended
<S> <C> <C> <C> <C> <C> <C>
March 31 $57-5/8 $48-1/8 $51-7/8 $45-1/2 $ .365 $ .33
June 30 58-3/4 54 48-1/2 44 .365 .33
September 30 60-3/8 51-3/4 54 44-7/8 .365 .33
December 31 58-7/8 52-1/2 56-1/2 46-1/2 .365 .33
$1.46 $1.32
</TABLE>
The Company's common stock is traded on the New York Stock Exchange (ticker
symbol VMC). As of January 31, 1996, the number of shareholders of record
approximated 4,300.
Dividends paid in 1995 totaled $51,848,000 as compared with $48,109,000 paid
in 1994. On February 17, 1996, the Board of Directors authorized a quarterly
dividend of 42 cents per common share payable March 8, 1996. The new
quarterly dividend represents a 15.1% increase over quarterly dividends paid
in 1995.
During the last five years, the Company's dividend payout rate has averaged
32% of prior year free funds flow. The Company's policy is to pay out a
reasonable share of free funds as dividends consistent, on average, with the
payout record of past years, and consistent with the goal of maintaining debt
ratios within prudent and generally acceptable limits. Additionally,
management believes that purchases of the Company's stock frequently may
represent an attractive long-term investment. Management intends to continue
buying shares when appropriate based on prevailing market conditions and based
on the Company's cash position and long-term capital requirements.
MANAGEMENT DISCUSSION AND ANALYSIS
Of Results of Operations and Financial Condition
Vulcan is the largest producer of construction aggregates in the United States
and is recognized as one of the nation's leading producers of chemicals. The
following is a discussion and analysis of the results of operations and the
financial condition of the Company. The discussion and analysis should be
read in connection with the historical financial information included in the
Consolidated Financial Statements and their notes.
RESULTS OF OPERATIONS
Vulcan's 1995 sales, net earnings and earnings per share were at record
levels. Net earnings were $166.2 million, or $4.63 per share, as compared
with 1994 net earnings and earnings per share of $98.0 million and $2.67,
respectively. Sales in 1995 were $1.461 billion, up from the 1994 total of
$1.253 billion. Pretax earnings totaled $258.4 million, up 77% from last
year's amount of $145.9 million.
CONSTRUCTION MATERIALS
1995 vs. 1994
Construction Materials sales were at a record level of $884.7 million, up
5% from the 1994 result of $842.9 million. The 1995 result reflects a 3%
increase in shipments and a 5% rise in average unit selling prices of crushed
stone, the segment's principal product. Of the total increase in sales of
$41.8 million, $13.0 million was related to increased volume and $28.8 million
was due to higher prices.
Segment earnings of $181.5 million, which are before interest expense and
income taxes, also were at a record level and were up 12% from 1994's record
level of $162.5 million. This improvement reflects better operating results
as well as significant gains from assets sales, primarily surplus land. The
favorable effects of higher volume and prices were partially offset by higher
operating costs. The cost increases were due mainly to the development of
several new quarry sites and a significant project to redesign the segment's
procurement process. For the year, gains from land sales were $14.2
million as compared with 1994 gains of $4.3 million. The 1994 earnings
included a gain from the sale of the Company's industrial sand operation
in Brady, Texas, which had been operated jointly by the Construction
Materials and Chemicals segments. Accordingly, the gain resulting from
the sale of the business was shared equally by the two segments. The
Construction Materials segment's $2.1 million share of the pretax gain
was offset by provisions associated with the shutdown of an operating
facility.
Results from the Crescent Market Project (the Company's joint venture to
supply limestone from Mexico to the U.S. Gulf Coast market) improved again
in 1995. Since the vast majority of its revenues are U.S. dollar
denominated, and its functional currency is U.S. dollars, the Crescent Market
Project has not been adversely impacted by recent fluctuations in the value of
the Mexican peso.
1994 vs. 1993
Construction Materials sales in 1994 of $842.9 million were up 11% from the
1993 result of $756.7 million. This improvement reflected an 8% increase in
crushed stone shipments and a 5% rise in average unit selling prices. Of the
total increase of $86.2 million in sales, $58.8 million was related to
increased volume and $27.4 million was due to higher prices.
Construction Materials segment earnings of $162.5 million increased 39% from
1993's level of $116.7 million. The improvement reflected principally higher
volumes and prices, partially offset by higher operating costs. Earnings
also included the previously mentioned gains from the sale of surplus land and
from the sale of the industrial sand business. Results from joint ventures
also improved in 1994.
CHEMICALS
1995 vs. 1994
Record 1995 sales of $576.3 million were up 40% from the 1994 level of $410.5
million. The increase was due to the recovery in caustic soda prices, higher
prices for chlorinated organic products and the effects of acquisitions. The
$165.8 million increase in sales reflects $53.1 million due to the effect of
higher volume and $112.7 million due to higher prices. Excluding the effects
of the Callaway Chemical acquisition on August 1, 1994, and the Rio Linda
acquisition on June 1, 1995, sales increased 27%.
Segment earnings reached a record of $87.8 million in 1995 as compared to
last year's loss of $7.3 million. The increase reflects the effects of
higher selling prices for caustic soda and chlorinated organic products.
This was partially offset by higher raw material and maintenance costs. The
1995 results include a $7.1 million pretax charge referable to the Company's
suspended joint venture soda ash project at Owens Lake, California. Costs
incurred to date for engineering and in the pursuit of permitting were
expensed. Current year results also included a $3.5 million environmental
remediation provision. The loss in 1994 included that year's $7.0 million
charge for remediation and the Chemicals $2.1 million share of the gain on the
sale of the industrial sand business.
1994 vs. 1993
Chemicals 1994 sales of $410.5 million increased 9% from the 1993 level
of $376.8 million, due entirely to the effects of acquisitions. Excluding
acquisitions, sales decreased 4% due mainly to lower liquid caustic soda
prices in the first half of the year. Average prices also declined for
chlorinated organics as a group, but this decline was mitigated by improved
prices for chlorine. The increase in volume resulted in a $36.6 million
increase in sales, partially offset by a $2.9 million decrease from net
lower prices.
The Chemicals segment reported a loss for the year of $7.3 million as compared
with 1993 earnings of $17.4 million. Within the segment's Chloralkali
Business Unit, lower sales, higher raw materials prices, a $7.0 million
environmental remediation provision and costs related to production outages
at both major plants were the principal causes of the segment's earnings
decline.
ENVIRONMENTAL ISSUES
In 1991 the Environmental Protection Agency issued a unilateral
administrative order ("UAO") which directed the named respondents, including
the Company and other potentially responsible parties ("PRP"), to clean up a
now-closed third party waste disposal site to which the Chemicals segment
last shipped waste materials in 1970. During the years 1986 through 1989, the
Company recorded provisions totaling $28.8 million for environmental
remediation at this site. In 1995 and 1994, the Company recorded additional
provisions of $3.5 million and $7.0 million, respectively, for remedial
actions at this site, for total provisions of $39.3 million. During 1995, the
Company and the other participating PRPs completed active site remediation.
Site capping and certain other remaining work under the UAO is expected to be
completed in the second quarter of 1996. The Company believes that total
provisions now recorded are adequate to cover its share of the anticipated
remaining costs. Provisions for other environmental expenses for the last
three years have not been material.
In 1987 the Company discontinued its former Metals segment and recorded a loss
on disposal that reflected provisions for phaseout costs, including the
estimated cost of contractual liabilities associated with remediation of
environmental conditions at several Metals plants. An additional provision
for estimated remediation costs was recorded in 1989. The Company has made
significant progress in addressing these contractual liabilities by completing
several environmental remediation projects at certain of these Metals plants.
Expenditures for these projects were within recorded provisions. While the
Company believes its recorded provisions are adequate to address the remainder
of these contractual liabilities and other liabilities associated with these
operations, factors that might impact the adequacy of provisions include the
results of further environmental testing, engineering analyses and planning
and negotiations among interested parties.
SELLING, ADMINISTRATIVE AND GENERAL
Selling, administrative and general expenses of $159.8 million in 1995
increased 28% from the 1994 level of $125.0 million. This reflects
principally the effects of Chemicals acquisitions, and, to a lesser extent,
higher provisions for incentive plans and professional fees. In 1994 selling,
administrative and general expenses were up 13% from the 1993 level. This
increase reflects principally the effect of acquisitions by the Chemicals
segment and higher provisions for stock-based incentive plans.
NEW ACCOUNTING STANDARDS
In 1995 the Financial Accounting Standards Board issued SFAS No. 123,
Accounting for Stock-Based Compensation, which will be effective for fiscal
years beginning after December 15, 1995. The new standard defines a fair
value method of accounting for stock-based compensation. Under the fair value
method, compensation is measured at the grant date based on the fair value of
the award and is recognized over the service period, which is usually the
vesting period.
Pursuant to the new standard, companies are encouraged, but are not required,
to adopt the fair value method of accounting for employee stock-based
transactions. Companies also are permitted to continue to account for such
transactions under Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, but would be required to disclose in a note to the
financial statements pro forma net income and earnings per share as if the
company had applied the new method of accounting. The Company intends to
continue to account for employee stock-based compensation under Opinion
No. 25. Adoption of the new standard will have no effect on the Company's
cash flows.
The FASB recently issued SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, effective for
financial statements for fiscal years beginning after December 15, 1995. The
Company does not expect the adoption of the statement to have any initial
material impact upon results of operations.
INCOME TAXES
The Company's 1995 effective tax rate was 35.7%, up from the 1994 rate of
32.8%. The increase reflects principally the relatively greater impact of
higher Chemicals earnings which diluted the effect on the tax rate of
statutory depletion referable to construction aggregates production.
The effective tax rate increased in 1994 from the 1993 rate of 29.5%. The
increase reflects principally the absence in 1994 of adjustments comparable
to those made in 1993 to close out excess provisions referable to completed
tax audits.
OUTLOOK
For 1996 the Company is assuming that GDP growth in the U.S. economy will
continue throughout the year, but with notably weaker growth during the first
half and stronger growth in the second half. The market for construction
aggregates is expected to remain reasonably stable, overall, with demand for
the year as a whole continuing relatively unchanged or down very slightly.
The construction end-use outlook is mixed: demand should be strongest for
"other public works" and non-residential buildings, whereas residential
buildings may be the weakest sector. However, the outlook for residential
construction probably is the hardest to call. Highway construction and
maintenance should remain very close to 1995's level. Overall, for Vulcan's
Construction Materials segment, 1996 earnings are expected to decline modestly
from 1995's level as a result of slightly lower volume and lower gains from
surplus land sales.
Current market conditions for Chemicals' two business units - Chloralkali and
Performance Systems - are relatively stable. Notwithstanding some recent
softening in caustic prices, Chloralkali earnings should increase in 1996,
reflecting principally the absence of significant unusual charges recorded in
1995. Owing to business development activities, mainly at Callaway Chemical
Company, opportunities in each of the principal markets served by Performance
Systems - pulp and paper, textiles and water treatment - should remain
attractive in 1996. Performance Systems earnings should increase in 1996 for
several reasons. These include: the impact of a full year's results from the
1995 acquisition of Rio Linda Chemical Company, improved margins at Callaway
Chemical Company, and improved earnings resulting from the restructuring of
Vulcan Peroxidation Systems and the sale of its equipment business. In view
of all these prospects, the Chemicals segment is expected to achieve record
sales and earnings again in 1996.
For the Company as a whole, the current expectation is that 1996 earnings
and earnings per share should approximate, or possibly exceed, the record
1995 results.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS
Net cash provided by continuing operations amounted to $267.4 million in 1995,
up 28% from 1994's total of $209.2 million. Net cash provided by the
Chemicals segment increased by $59.3 million, principally as a result of
sharply higher earnings and lower spending on acquisitions. Net cash provided
by the Construction Materials segment of $182.9 million was virtually level
compared with the prior year. The Company's long-standing ability to generate
significant cash flows enabled it to fund capital requirements internally,
reduce long-term debt, and return $101.9 million to shareholders through
dividends and share purchases.
Net cash provided by operations for each segment in each of the last three
years, including the effect of working capital changes, is summarized below
(amounts in millions):
1995 1994 1993
Construction Materials $182.9 $182.5 $156.6
Chemicals 90.8 31.5 41.1
Interest expense, interest
income, etc., net (6.3) (4.8) (3.6)
Total $267.4 $209.2 $194.1
Net cash used for investing activities totaled $106.4 million in 1995, down
$68.0 million from the 1994 level. Cash expenditures for property, plant and
equipment, including acquisitions, were $136.3 million in 1995, down $51.3
million, while cash investments of $1.9 million in associated companies was
virtually the same as the prior year. Cash spending for acquisitions totaled
$27.2 million compared with $87.6 million in 1994.
Net cash used for financing activities amounted to $145.9 million in 1995, up
$105.7 million from the prior year's $40.2 million. Interest-bearing debt was
reduced $43.9 million in 1995 compared with a net increase of $36.6 million in
1994. No long-term debt was issued during 1995 or 1994. Purchases of the
Company's common stock totaled $50.1 million in 1995, up sharply from the 1994
level of $28.6 million.
The Company's policy is to pay out a reasonable share of free funds flow as
dividends consistent, on average, with the payout record of past years, and
consistent with the goal of maintaining debt ratios within prudent and
generally acceptable limits. Additionally, management believes that purchases
of the Company's stock frequently may represent an attractive long-term
investment. Management intends to continue buying shares when appropriate
based on prevailing market conditions and based on the Company's cash position
and long-term capital requirements.
Working Capital
Working capital, exclusive of debt and cash items (cash, cash equivalents and
short-term investments), totaled $174.8 million at December 31, 1995, up $8.2
million from the 1994 level. This increase compares with a working capital
increase of $15.7 million in 1994 and a decrease of $5.7 million in 1993.
The Company's overall current position is summarized below (dollar amounts in
millions and as of year end):
1995 1994 1993
Working capital, exclusive of
debt and cash items $174.8 $166.6 $150.9
Cash and cash equivalents 21.9 7.7 14.0
Short-term debt (10.6) (47.5) (1.7)
Accrued interest (1.4) (1.3) (1.4)
Total working capital
(including debt and
cash items) $184.7 $125.5 $161.8
Current ratio 2.0 1.6 2.1
Acid test ratio 1.1 .9 1.2
The increase in the current ratio from 1994 to 1995 is attributable to lower
current liabilities, i.e., short-term borrowing of $3.6 million at year end
1995 as compared with $42.8 million at December 31, 1994. The reduction in
the current ratio from 1993 to 1994 was due to higher current liabilities,
mainly short-term borrowing which amounted to $42.8 million at year end 1994
as compared with none at December 31, 1993.
PROPERTY ADDITIONS
Property additions, including acquisitions, totaled $125.6 million in 1995,
down 21% from the 1994 level of $159.8 million. The Company classifies its
property additions into three categories based upon the predominant purpose
of the project, as explained on page 47.
The table below summarizes property additions by each category (amounts
in millions):
Project Purpose 1995 1994 1993
Replacement $ 69.0 $ 53.0 $ 48.7
Environmental control 8.4 3.9 7.1
Subtotal 77.4 56.9 55.8
Profit adding:
Acquisitions 12.3 58.1 4.2
Other 35.9 44.8 40.6
Subtotal 48.2 102.9 44.8
Total $125.6 $159.8 $100.6
Total property additions were lower in 1995 due to less spending for
acquisitions by the Chemicals segment. The increase in property additions in
1994 reflects higher spending for acquisitions by the Chemicals segment.
Commitments for capital expenditures were $17.0 million at December 31, 1995.
This included $11.9 million referable to various Chemicals projects. Cash
flow for the next year is expected to be adequate to cover commitments.
SHORT-TERM BORROWINGS AND INVESTMENTS
During most of the years 1993 through 1995, the Company was in a net
short-term borrowing position. Short-term borrowings in 1995 reached a
maximum of $93.9 million, averaged $39.9 million and were $3.6 million at year
end. Comparable 1994 amounts were $91.7 million, $36.0 million and $42.8
million, respectively.
Details pertaining to short-term borrowings during the last three years
(dollar amounts in millions) are as follows:
1995 1994 1993
Year end $ 3.6 $42.8 $ -
Maximum outstanding $93.9 $91.7 $64.0
Average outstanding $39.9 $36.0 $25.5
Weighted average interest rate 6.4% 4.8% 3.2%
The above interest rate averages were computed using daily outstanding
principal amounts.
The Company's policy is to maintain unused bank lines of credit and/or
committed credit facilities at least equal to its outstanding commercial
paper. Unsecured bank lines of credit totaling $130.0 million were maintained
at the end of 1995. Standard & Poor's Corporation and Moody's Investors
Services, Inc. have assigned ratings of A-1+ and P-1, respectively, to the
Company's commercial paper.
The investment of excess cash during the last three years (dollar amounts
in millions) is shown below:
1995 1994 1993
Year end $16.0 $ - $ -
Maximum invested $45.0 $45.1 $26.2
Average invested $ 3.5 $ 7.7 $ 7.2
Taxable-equivalent yield 7.1% 4.7% 3.3%
LONG-TERM OBLIGATIONS
During 1995 the Company reduced its total long-term obligations by $7.1
million to $90.3 million as compared with a net decrease of $4.6 million in
1994. During the three-year period ended December 31, 1995, long-term
obligations decreased cumulatively by $17.0 million from the $107.3 million
outstanding at December 31, 1992.
During the same three year period, shareholders' equity, net of common stock
purchases of $118.7 million and dividends of $146.3 million, increased by
$96.5 million to $796.6 million. The Company's overall long-term capital
position is shown in the following table (dollar amounts in millions and as of
year end):
1995 1994 1993
Long-term debt $ 90.3 $ 97.4 $102.0
Other noncurrent liabilities 151.5 140.8 132.8
Shareholders' equity 796.6 731.6 703.0
Total long-term capital $1,038.4 $969.8 $937.8
Long-term debt
as a percent of:
Total long-term capital 8.7% 10.0% 10.9%
Shareholders' equity 11.3% 13.3% 14.5%
Net cash provided by
continuing operations
as a percent of
long-term debt 296% 215% 190%
Ratio of earnings to
fixed charges 13.3 7.9 8.1
Although the future ratio of long-term obligations to total long-term capital
will depend upon specific investment and financing decisions, management
believes the Company's cash-generating capability, along with its financial
strength and business diversification, can reasonably support a ratio of 25%
to 30%. The actual ratio at the end of 1995 was 8.7%. The Company has made
acquisitions from time to time and will continue actively to pursue
attractive investment opportunities. If financing is required for this
purpose, it may be accomplished temporarily on a short-term basis or by
incurring long-term debt.
Letters of intent to acquire Lion Industries and Mayo Chemical Company through
the Chemicals segment have been announced. Subject to normal due diligence
reviews and related negotiations, the Company plans to close these
transactions by the second quarter of 1996.
The Company's long-term borrowing requirements can be satisfied in either the
public debt or private placement markets. The Company's medium-term notes
issued in 1991 are rated AA- by Standard & Poor's and A1 by Moody's.
COMMON STOCK
During 1995 the Company purchased 947,908 shares of its common stock at a cost
of $50.1 million, equal to an average price of $52.90 per share. The acquired
shares are being held for general corporate purposes, including distributions
under management incentive plans. The Company's decisions to purchase shares
of common stock are made based upon the common stock's valuation and price,
the Company's liquidity, its actual and projected needs for cash for
investment projects and regular dividends, and the Company's debt level.
The number and cost of shares purchased during each of the last three years
is shown below:
1995 1994 1993
Shares purchased:
Number 947,908 603,700 895,015
Total cost (millions) $50.1 $28.6 $40.0
Average cost $52.90 $47.39 $44.68
Shares in treasury at year end:
Number 11,602,590 10,666,952 10,224,218
Average cost $37.34 $35.93 $35.03
The number of shares remaining under the current purchase authorization was
1,599,792 shares as of December 31, 1995.
CAPITAL EMPLOYED
During 1995 total average capital employed in continuing operations was
$1,042.2 million, up $49.1 million from the 1994 average of $993.1 million.
The latter figure reflects an increase of $30.2 million, or 3%, from the
$962.9 million employed on average in 1993. Average capital employed in the
Company's business segments is shown in the table below (amounts in
millions):
1995 1994 1993
Construction Materials $ 681.5 $688.1 $707.4
Chemicals 353.9 294.0 248.5
Cash items 6.8 11.0 7.0
Total $1,042.2 $993.1 $962.9
The sources and deployment of the year-to-year increases in total average
capital employed are shown below (amounts in millions; brackets indicate
a decrease):
1994-95 1993-94
Sources:
Short-term debt $ 6.2 $ 14.2
Long-term obligations (5.8) (6.5)
Other noncurrent liabilities 9.7 (5.4)
Shareholders' equity 39.0 27.9
Total $ 49.1 $ 30.2
Deployment:
Construction Materials $ (6.6) $(19.3)
Chemicals 59.9 45.5
Cash items (4.2) 4.0
Total $ 49.1 $ 30.2
During the period 1991 through 1995, total average capital employed in
continuing operations has grown at an average annual compound rate of 2.0%,
or by the cumulative amount of $127.3 million. During this period,
interest-bearing debt has increased by $29.6 million and, as a percent
of average capital employed, has increased from 12.0% to 13.3%.
The following summary indicates the sources and deployment of the increase in
average capital employed from 1991 to 1995 (amounts in millions):
Amount
of Increase % of
(Decrease) Total
Sources:
Short-term debt $(16.5) (13)%
Long-term obligations 46.1 36
Other noncurrent liabilities .6 1
Shareholders' equity 97.1 76
Total $127.3 100 %
Deployment:
Construction Materials $ 24.7 19 %
Chemicals 125.0 98
Cash items (22.4) (17)
Total $127.3 100 %
<TABLE>
<CAPTION>
SUPPLEMENTARY INFORMATION - QUARTERLY FINANCIAL DATA
Amounts in millions, except per share data
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
<S> <C> <C> <C> <C> <C>
1995
Net sales..............................................$294.4 $382.8 $422.0 $361.8 $1,461.0
Gross profit........................................... 58.8 113.2 133.8 110.5 416.3
Net earnings .......................................... 16.0 47.7 59.1 43.4 166.2
Primary and fully diluted earnings per share........... 0.44 1.32 1.64 1.23 4.63
1994
Net sales..............................................$216.9 $326.7 $360.4 $349.4 $1,253.4
Gross profit........................................... 21.0 77.4 90.4 79.4 268.2
Net earnings (loss).................................... (5.2) 33.7 37.6 31.9 98.0
Primary and fully diluted earnings (loss) per share.... (0.14) 0.92 1.02 0.87 2.67
1993
Net sales..............................................$214.1 $306.0 $331.4 $282.0 $1,133.5
Gross profit........................................... 29.7 74.0 85.1 57.9 246.7
Net earnings (loss).................................... (0.5) 31.6 36.6 20.5 88.2
Primary and fully diluted earnings (loss) per share.... (0.01) 0.84 0.99 0.57 2.39
</TABLE>
<TABLE>
<CAPTION>
Consolidated Statements of Earnings
Vulcan Materials Company and Subsidiary Companies
For the Years Ended December 31, 1995, 1994 and 1993
Amounts and shares in thousands, except per share data
1995 1994 1993
<S> <C> <C> <C>
Net sales................................................$1,460,974 $1,253,360 $1,133,489
Cost of goods sold....................................... 1,044,710 985,198 886,764
Gross profit on sales.................................... 416,264 268,162 246,725
Selling, administrative and general expenses............. 159,829 125,036 111,085
Other operating costs.................................... 6,347 5,526 4,987
Other income, net
Interest income........................................ 1,099 1,224 1,013
Other, net............................................. 18,333 16,903 2,727
Total other income, net..................... 19,432 18,127 3,740
Earnings before interest expense and income taxes........ 269,520 155,727 134,393
Interest expense (Note 4)................................ 11,099 9,821 9,171
Earnings before income taxes............................. 258,421 145,906 125,222
Provision for income taxes (Note 7)
Current................................................ 86,437 41,339 37,460
Deferred............................................... 5,744 6,591 (467)
Total provision for income taxes............ 92,181 47,930 36,993
Net earnings.............................................$ 166,240 $ 97,976 $ 88,229
Primary and fully diluted net earnings per share......... $4.63 $2.67 $2.39
Dividends per share...................................... $1.46 $1.32 $1.26
Average common and common equivalent shares outstanding.. 35,933 36,683 36,975
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
Vulcan Materials Company and Subsidiary Companies
As of December 31, 1995, 1994 and 1993
Amounts in thousands
1995 1994 1993
<S> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents (Note 2)..............................$ 21,869 $ 7,717 $ 13,996
Accounts and notes receivable:
Customers, less allowance for doubtful accounts:
1995, $8,176; 1994, $8,244; 1993, $7,284.................. 178,966 179,315 141,606
Other......................................................... 2,094 2,813 8,798
Inventories (Note 3)........................................... 126,801 112,481 105,017
Deferred income taxes........................................... 26,555 29,074 26,898
Prepaid expenses................................................ 5,836 5,398 6,298
Total current assets................................. 362,121 336,798 302,613
Investments and long-term receivables............................. 56,272 58,138 56,505
Property, plant and equipment, net (Note 4)....................... 698,033 701,757 657,785
Deferred charges and other assets (Note 8)........................ 99,368 84,451 61,648
Total ...............................................$1,215,794 $1,181,144 $1,078,551
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt............................$ 7,070 4,687 $ 1,671
Notes payable (Note 2).......................................... 3,569 42,779 -
Trade payables and accruals..................................... 98,253 102,394 89,504
Accrued income taxes............................................ 22,262 19,423 14,450
Accrued salaries and wages...................................... 28,658 23,068 20,437
Accrued interest................................................ 1,300 1,415 1,356
Other accrued liabilities (Note 9).............................. 16,297 17,582 13,397
Total current liabilities............................ 177,409 211,348 140,815
Long-term debt (Note 5)........................................... 90,278 97,380 102,035
Deferred income taxes (Note 7).................................... 85,935 82,507 74,193
Deferred management incentive and other compensation (Note 8)..... 26,618 21,575 17,885
Other postretirement benefits (Note 8)............................ 32,717 29,835 27,377
Other noncurrent liabilities (Note 9)............................. 6,199 6,870 13,283
Other commitments and contingent liabilities (Note 9)
Shareholders' equity
Common stock, $1 par value...................................... 46,573 46,573 46,573
Capital in excess of par value.................................. 9,089 8,585 4,587
Retained earnings............................................... 1,174,171 1,059,779 1,009,912
Total................................................ 1,229,833 1,114,937 1,061,072
Less cost of stock in treasury.................................. 433,195 383,308 358,109
Total shareholders' equity........................... 796,638 731,629 702,963
Total................................................$1,215,794 $1,181,144 $1,078,551
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Vulcan Materials Company and Subsidiary Companies
For the Years Ended December 31, 1995, 1994 and 1993
Amounts in thousands
1995 1994 1993
<S> <C> <C> <C>
OPERATIONS
Net earnings ....................................................$ 166,240 $ 97,976 $ 88,229
Adjustments to reconcile net earnings to net cash provided
by continuing operations:
Depreciation, depletion and amortization................... 110,677 106,695 102,780
(Increase) decrease in assets before effects
of business acquisitions:
Accounts and notes receivable...................... 3,634 (21,188) 991
Inventories....................................... (11,899) 965 3,199
Deferred income taxes............................. 2,519 (2,176) (2,294)
Prepaid expenses.................................. (362) 1,056 (1,085)
Increase (decrease ) in liabilities before effects
of business acquisitions:
Accrued interest and income taxes................. (355) (84) (27)
Trade payables, accrual, etc...................... (1,352) 16,457 5,906
Deferred income taxes............................ 3,428 8,314 1,810
Other noncurrent liabilities..................... 7,255 (266) (10,564)
Issuance of common stock in connection
with Performance Share Plan............................. 699 998 904
Other, net................................................. (13,126) 470 4,246
Net cash provided by continuing operations ............ 267,358 209,217 194,095
Net cash used for discontinued operations (Note 9)..... (902) (958) (1,077)
Net cash provided by operations........................ 266,456 208,259 193,018
INVESTING ACTIVITIES
Purchases of property plant and equipment........................ (109,174) (100,090) (95,977)
Payment for business acquisitions................................ (27,172) (87,540) (4,507)
Proceeds from sale of property, plant and equipment.............. 31,881 15,358 6,009
Net investment in nonconsolidated companies...................... (1,913) (2,112) (9,336)
Net cash used for investing activities................. (106,378) (174,384) (103,811)
FINANCING ACTIVITIES
Net borrowings (payments)
- commercial paper and bank lines of credit................ (39,211) 42,779 -
Payment of short-term debt....................................... (4,687) (1,809) (1,184)
Payment of long-term debt........................................ (32) (4,403) (3,414)
Purchases of common stock (Note 10).............................. (50,148) (28,612) (39,986)
Dividends paid................................................... (51,848) (48,109) (46,296)
Net cash used for financing activities................. (145,926) (40,154) (90,880)
Net decrease in cash and cash equivalents........................ 14,152 (6,279) (1,673)
Cash and cash equivalents at beginning of year................... 7,717 13,996 15,669
Cash and cash equivalents at end of year.........................$ 21,869 $ 7,717 $ 13,996
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
Consolidated Statements of Shareholders' Equity
Vulcan Materials Company and Subsidiary Companies
For the Years Ended December 31, 1995, 1994 and 1993
Amounts and shares in thousands
1995 1994 1993
Shares Amount Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C>
Common stock, $1 par value
Authorized:160,000 shares
Issued (no changes in 1995, 1994
and 1993)....................... 46,573 $ 46,573 46,573 $ 46,573 46,573 $ 46,573
Capital in excess of par value
Balance at beginning of year....... 8,585 4,587 3,962
Shares issued in connection with
the acquisition of business .... - 3,490 -
Distributions under Performance
Share Plan....................... 414 514 604
Distributions under Stock Plan for
Non-employee Directors.......... 24 23 21
Other.............................. 66 (29) -
Balance at end of year............. 9,089 8,585 4,587
Retained earnings
Balance at beginning of year....... 1,059,779 1,009,912 967,979
Net earnings....................... 166,240 97,976 88,229
Cash dividends on common stock (51,848) (48,109) (46,296)
Balance at end of year............. 1,174,171 1,059,779 1,009,912
Common stock held in treasury
Balance at beginning of year....... (10,666) (383,308) (10,224) (358,109) (9,350) (318,402)
Shares issued in connection with
the acquisition of business .... - - 140 2,952 -
Purchase of common shares.......... (948) (50,148) (604) (28,612) (895) (39,985)
Distributions under Performance
Share Plan...................... 11 247 21 442 20 270
Distributions under Stock Plan for
Non-employee Directors.......... 1 14 1 19 1 8
Balance at end of year............. (11,602) (433,195) (10,666) (383,308) (10,224) (358,109)
Total....................... $ 796,638 $ 731,629 $ 702,963
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
all majority or wholly-owned subsidiary companies. All significant
intercompany transactions and accounts have been eliminated in consolidation.
Investments in joint ventures and the common stock of associated companies in
which the Company has ownership interests of 20% to 50% are accounted for by
the equity method. All other investments are carried at the lower of cost or
market, and income is recorded as dividends are received or interest is
earned.
CASH EQUIVALENTS
The Company classifies as cash equivalents all highly liquid securities with
a maturity of three months or less at the time of purchase.
INVENTORIES
The Company uses the last-in, first-out (LIFO) method of valuation for most of
its inventories because it results in a better matching of costs with
revenues. Inventories, other than operating supplies, are stated at the lower
of cost, as determined by the LIFO method, or market. Such cost includes raw
materials, direct labor and production overhead. Substantially all operating
supplies are carried at average cost, which does not exceed market.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are carried at cost less allowances for
accumulated depreciation, depletion and amortization. The cost of properties
held under capital leases is equal to the lower of the net present value of
the minimum lease payments or the fair value of the leased property at the
inception of the lease.
DEPRECIATION, DEPLETION AND AMORTIZATION
Depreciation is computed by the straight-line method at rates based upon the
estimated service lives of the various classes of assets, which include
machinery and equipment, buildings and land improvements. Amortization of
capitalized leases is included with depreciation expense.
Cost depletion on depletable quarry land is computed by the unit of production
method based upon estimated recoverable units.
Leaseholds are amortized over varying periods not in excess of applicable
lease terms.
OTHER COSTS
Income is charged as costs are incurred for start-up of new plants and for
normal recurring costs of mineral exploration, removal of overburden from
active mineral deposits, and research and development.
Repairs and maintenance are charged to costs and operating expenses. Renewals
and betterments which add materially to the utility or useful lives of
property, plant and equipment are capitalized.
Environmental expenditures that pertain to current operations or relate to
future revenues are expensed or capitalized consistent with the Company's
capitalization policy. Expenditures that relate to an existing condition
caused by past operations and do not contribute to future revenue are
expensed. Environmental compliance costs include maintenance and operating
costs with respect to pollution control facilities, the cost of ongoing
monitoring programs and similar costs. Costs are expensed and accrued as
liabilities when environmental assessments and/or remedial efforts are
probable, and the cost can be reasonably estimated. These amounts are accrued
no later than the feasibility study and/or when the Company commits to a
formal plan of action.
INCOME TAXES
Annual provisions for income taxes are based primarily on reported earnings
before income taxes and include appropriate provisions for deferred income
taxes resulting from the tax effect of the difference between the tax basis
of assets and liabilities and their carrying amounts for financial reporting
purposes. In addition, such provisions reflect adjustments for the
following items:
Permanent differences, principally the excess of percentage
depletion over the tax basis of depletable properties.
An estimate of additional cost that may be incurred,
including interest on deficiencies but excluding adjustments
representing temporary differences, upon final settlement of
returns after audit by various taxing authorities.
Balances or deficiencies in prior year provisions that become
appropriate as audits of those years progress.
EARNINGS PER SHARE
Primary and fully diluted earnings per share of common stock are computed
by dividing net earnings by the weighted average number of common shares and
common share equivalents outstanding during the year. Common share
equivalents represent the number of shares contingently issuable under
long-term performance share plans and the stock plan for non-employee
directors.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
2. CASH
Bank lines of credit amounted to $130,000,000 at year end 1995 and 1994, and
$70,000,000 at the end of 1993. At year end 1995 the Company did not have any
commercial paper outstanding, but did have $3,400,000 in bank borrowings
referable to a Canadian subsidiary. At the end of 1994, $35,000,000 was used
to back up commercial paper outstanding and $7,800,000 was drawn down as bank
borrowings. The lines were not in use at the end of 1993.
All of the lines of credit extended to the Company in 1995, 1994 and 1993 were
based on a commitment fee arrangement. The Company also maintained balances
or paid fees to compensate its banks for certain services. The Company was in
compliance with these informal compensation arrangements during all three
years. Because the arrangements are evaluated on a twelve-month average
basis, the Company does not consider any of its cash balances to be restricted
as of any specific date.
3. INVENTORIES
Inventories at December 31 are as follows (in thousands of dollars):
1995 1994 1993
Finished products $ 90,009 $ 77,721 $ 75,954
Raw materials 10,062 9,248 3,856
Products in process 979 622 965
Operating supplies and other 25,751 24,890 24,242
Total inventories $126,801 $112,481 $105,017
The above amounts include inventories valued under the last-in, first-out
(LIFO) method totaling $97,959,000, $79,909,000 and $80,614,000 at
December 31, 1995, 1994 and 1993, respectively. Estimated current cost
exceeded LIFO cost at December 31, 1995, 1994 and 1993 by $36,899,000,
$29,049,000 and $32,986,000, respectively. If all inventories valued at LIFO
cost had been valued under the methods (substantially average cost) used prior
to the adoption of the LIFO method, the approximate effect on net earnings
would have been an increase of $4,784,000 ($.13 per share effect) in 1995, a
decrease of $2,476,000 ($.07 per share effect) in 1994 and an increase of
$387,000 ($.01 per share effect) in 1993.
4. PROPERTY, PLANT AND EQUIPMENT
Balances of major classes of assets and allowances for depreciation, depletion
and amortization at December 31 are as follows (in thousands of dollars):
1995 1994 1993
Land and land
improvements $ 203,920 $ 206,457 $ 200,856
Buildings 77,732 76,629 62,995
Machinery and equipment 1,536,742 1,486,577 1,372,667
Leaseholds 6,483 6,471 5,575
Construction in progress 34,559 32,754 55,912
Total 1,859,436 1,808,888 1,698,005
Less allowances for
depreciation, depletion
and amortization 1,161,403 1,107,131 1,040,220
Property, plant and
equipment, net $ 698,033 $ 701,757 $ 657,785
The Company capitalized interest cost of $297,000 in 1995, $878,000 in 1994
and $1,016,000 in 1993 with respect to qualifying construction projects.
Total interest cost incurred before recognition of the capitalized amount was
$11,396,000 in 1995, $10,699,000 in 1994 and $10,187,000 in 1993.
5. DEBT
Long-term debt, exclusive of current maturities, at December 31 is summarized
as follows (in thousands of dollars):
1995 1994 1993
Medium-term notes $ 71,000 $76,000 $ 80,000
6 5/8% pollution control
revenue bonds 6,800 6,800 6,800
6 3/8% pollution control
revenue bonds 5,800 5,800 5,800
Variable rate pollution control
revenue bonds 1,200 3,000 3,350
Other notes 5,478 5,780 6,085
Total $ 90,278 $97,380 $102,035
Estimated fair value $101,782 $98,597 $114,372
In May 1991 the Company filed a shelf registration statement with the
Securities and Exchange Commission for the registration of $200,000,000
principal amount of debt securities. The issuances of these medium-term notes
in 1991 totaled $81,000,000. The dollar-weighted average maturity of the
notes, as calculated from the dates of issuance, approximated 13 years.
Maturities at the time of issuance ranged from three to thirty years with a
maximum of $10,000,000 due in any one year. At that time, the weighted
average interest rate on the notes was 8.53% with a range of 7.59% to 8.85%.
The $71,000,000 in notes outstanding as of December 31, 1995 have a weighted
average maturity of 10.0 years with a weighted average interest rate of
8.60%.
The 6 5/8% pollution control revenue bonds issued on behalf of the Company in
1978 are payable in installments of $1,000,000 in the years 1998 and 1999 and
installments of $1,200,000 in the years 2000-2003. The 7 7/8% and 8%
pollution control revenue bonds issued in 1980 were refunded effective
February 1, 1992, at an interest rate of 6 3/8%, and are now payable in 2012.
The variable rate pollution control revenue bonds issued in 1984 are due in
1999 ($1,200,000).
Other notes include $3,000,000 representing a fixed rate tax exempt industrial
development bond issue which matures in 2011 and notes issued for businesses
acquired.
The aggregate principal payments for the five years subsequent to December 31,
1995 are: 1996-$7,074,000; 1997-$5,400,000; 1998-$6,565,000; 1999-$6,565,000;
and 2000-$6,565,000.
The Company is not subject to any contractual restrictions on the aggregate
amount of its indebtedness or minimum working capital, or the amount it may
expend for cash dividends and purchases of its stock.
The estimated fair value amounts of long-term debt have been determined by
discounting expected future cash flows using interest rates on U.S. Treasury
bills, notes or bonds, as appropriate. For cash equivalents, accounts and
notes receivable, current portion of deferred income taxes, accounts payable,
accrued income taxes, accrued interest and other applicable accrued
liabilities, the carrying amounts are a reasonable estimate of fair value.
The fair value estimates presented are based on information available to
management as of December 31, 1995, 1994 and 1993. Although management is
not aware of any factors that would significantly affect the estimated fair
value amounts, such amounts have not been comprehensively revalued since
those dates.
6. OPERATING LEASES
Total rental expense of nonmineral leases, exclusive of rental payments made
under leases of one month or less, is summarized as follows (in thousands of
dollars):
1995 1994 1993
Minimum rentals $17,234 $16,138 $ 7,600
Contingent rentals (based
principally on usage) 11,205 11,212 10,021
Total $28,439 $27,350 $17,621
Future minimum operating lease payments under all leases with initial or
remaining noncancellable lease terms in excess of one year, exclusive of
mineral leases, at December 31, 1995 range from $2,045,000 to $9,826,000
annually through 2000 and aggregate $8,265,000 thereafter.
Lease agreements frequently include renewal options and require that the
Company pay for utilities, taxes, insurance and maintenance expense.
Options to purchase also are included in some lease agreements.
7. INCOME TAXES
The components of earnings before income taxes are as follows (in thousands
of dollars):
1995 1994 1993
Domestic $253,991 $143,502 $123,932
Foreign 4,430 2,404 1,290
Total $258,421 $145,906 $125,222
Provisions for income taxes consist of the following (in thousands
of dollars):
1995 1994 1993
Current:
Federal $72,332 $34,194 $33,179
State and local 14,087 7,135 4,277
Foreign 18 10 4
Total 86,437 41,339 37,460
Deferred:
Federal 4,861 5,953 (59)
State and local 883 578 (408)
Foreign - 60 -
Total 5,744 6,591 (467)
Total provision $92,181 $47,930 $36,993
The effective tax rate on income differs from the U.S. statutory rate due
to the following:
1995 1994 1993
Federal statutory tax rate 35.0% 35.0% 35.0%
Increase (decrease) in tax
rate resulting from:
Depletion (4.5) (7.2) (7.3)
State and local income taxes,
net of federal income
tax benefit 3.8 3.4 2.0
Adjustment to net deferred
income tax liability for
enacted federal tax rate
change - - 0.9
Miscellaneous items 1.4 1.6 (1.1)
Effective tax rate 35.7% 32.8% 29.5%
Deferred income taxes on the balance sheet result from temporary differences
between the amount of assets and liabilities recognized for financial
reporting and tax purposes. The components of the net deferred income tax
liability are as follows (in thousands of dollars):
1995 1994 1993
Deferred tax assets related to:
Accrual for postretirement
benefits $ 13,318 $12,123 $11,117
Accrual for environmental
reclamation 1,604 5,902 8,675
Accounts receivable,
principally allowance
for doubtful accounts 3,592 3,780 3,075
Inventory adjustments 7,278 7,079 7,231
Pensions, incentives and
deferred compensation 10,066 7,142 4,827
Other items 9,518 7,765 6,126
Total deferred tax assets 45,376 43,791 41,051
Deferred tax liabilities related to:
Fixed assets,
principally depreciation 98,821 92,120 83,175
Other items 5,935 5,259 5,171
Total deferred
tax liabilities 104,756 97,379 88,346
Net deferred tax liability $ 59,380 $53,588 $47,295
8. PENSION, OTHER POSTRETIREMENT BENEFITS AND INCENTIVE
COMPENSATION PLANS
PENSION PLANS
The Company sponsors three noncontributory, defined benefit pension plans.
These plans cover substantially all employees other than those covered by
union-administered plans. Normal retirement age is 65, but the plans contain
provisions for earlier retirement. Benefits for the Salaried Plan and the
Chemicals Hourly Plan are based on salaries or wages and years of service; the
Construction Materials Hourly Plan provides benefits equal to a flat dollar
amount for each year of service.
Charges to earnings referable to company-administered pension plans totaled
$1,187,000 in 1995, $3,088,000 in 1994 and $2,148,000 in 1993. Components of
the net periodic pension charges are as follows (in thousands of dollars):
1995 1994 1993
Service cost - benefits earned
during the period $ 8,665 $ 9,551 $ 8,286
Interest cost 18,019 17,167 16,195
Actual return on plan assets (51,744) (3,923) (32,280)
Net amortization and deferral 26,247 (19,707) 9,947
Net periodic pension charge $ 1,187 $ 3,088 $ 2,148
The Company's qualified pension plans have assets in excess of the accumulated
benefit obligation. Plan assets are composed primarily of marketable domestic
and international equity securities, corporate and government debt securities
and real estate. Unrecognized net plan assets at the implementation of SFAS
No. 87, Employers' Accounting for Pensions, in 1986 are being amortized over
the average of the covered employees' remaining service lives, which range
from 12 to 16 years. The following table reconciles the funded status of all
the Company's plans with the related amounts recognized in the Company's
consolidated balance sheets at December 31 (in thousands of dollars):
1995 1994 1993
Actuarial present value of
benefit obligations:
Based on employment
service to date and
current salary levels:
Vested $(174,436) $(134,409) $(139,958)
Nonvested (7,143) (4,792) (5,927)
Accumulated benefit
obligation (181,579) (139,201) (145,885)
Effect of projected future
salary increases (83,011) (68,107) (85,297)
Projected benefit
obligation (264,590) (207,308) (231,182)
Plan assets at fair market
value 305,398 264,174 271,821
Plan assets in excess of
projected benefit
obligation 40,808 56,866 40,639
Unamortized portion of
unrecognized net asset
at implementation of
SFAS No. 87 (13,225) (16,696) (20,167)
Unrecognized net gain (26,057) (38,748) (16,395)
Unrecognized prior
service cost 8,148 9,151 9,308
Net prepaid pension cost $ 9,674 $ 10,573 $ 13,385
Annual net periodic pension charges and credits are calculated using plan
assumptions as of the end of the prior year, whereas the funded status and
related pension obligations are determined using the assumptions as of the end
of the current year. Plan assumptions at December 31 were as follows:
1995 1994 1993
Discount rates used to determine
the pension obligations 7.00% 8.50% 7.25%
Discount rates used to determine
the net periodic cost and
other recognized gains
- First 18 years 8.50 7.25 8.00
- Thereafter 8.50 7.25 6.75
Rates of increase in
compensation levels
(for salary-related plans) 4.25 5.00 5.50
Expected long-term rates of
return on plan assets 8.25 8.25 8.25
The Company funds the pension trusts currently in amounts determined under
the individual entry age level premium method, including benefit increases
expected as a result of projected wage and salary increases occurring between
the date of valuation and the individual retirement dates.
Certain of the Company's hourly employees in unions are covered by
multi-employer defined benefit pension plans. Contributions to these plans
approximated $1,859,000 in 1995, $1,617,000 in 1994 and $1,637,000 in 1993.
The actuarial present value of accumulated plan benefits and net assets
available for benefits for employees in the union-administered plans are not
determinable from available information. Seventeen percent of the labor force
is covered by collective bargaining agreements and 7% are covered by labor
agreements that expire within one year.
POSTRETIREMENT PLANS
In addition to pension benefits, the Company provides certain health care
benefits and life insurance for some retired employees. Substantially all
of the Company's salaried employees and, where applicable, hourly employees
may become eligible for those benefits if they reach at least age 55 and meet
certain service requirements while working for the Company. Generally,
company-provided health care benefits terminate when covered individuals
become eligible for Medicare benefits or reach age 65, whichever
first occurs.
The components of net periodic postretirement benefit charges and credits are
as follows (in thousands of dollars):
1995 1994 1993
Service cost - benefits attributed
to service during the period $1,965 $1,742 $1,536
Interest cost 3,558 2,919 2,792
Actual return on assets (158) (150) (136)
Net amortization and deferral 209 329 178
Net periodic postretirement
benefit cost $5,574 $4,840 $4,370
The Company funds the postretirement benefits plan each year through
contributions to a trust fund for health care benefits and through payments of
premiums to providers of life insurance. All assets of the plan relate to the
life insurance and are composed of reserves held by the insurer. The
following table sets forth the combined funded status of the plan and its
reconciliation with the related amounts recognized in the Company's
consolidated balance sheets at December 31 (in thousands of dollars):
1995 1994 1993
Accumulated postretirement
benefit obligation:
Retirees $(11,355) $(10,570) $(11,471)
Fully eligible active
plan participants (13,658) (11,934) (11,982)
Other active plan participants (19,478) (18,439) (16,004)
Total accumulated
postretirement
benefit obligation (44,491) (40,943) (39,457)
Plan assets at fair market value 2,842 2,628 2,378
Accumulated postretirement benefit
obligation in excess of
plan assets (41,649) (38,315) (37,079)
Unrecognized prior service cost 6 6 7
Unrecognized net loss 7,726 7,274 8,495
Accrued postretirement
benefit cost $(33,917) $(31,035) $(28,577)
Annual net periodic postretirement benefit charges and credits are calculated
using plan assumptions as of the end of the prior year, whereas the funded
status and related benefit obligations are determined using the assumptions
as of the end of the current year. Plan assumptions at December 31 were
as follows:
1995 1994 1993
Discount rates 7.00% 8.50% 7.25%
Expected long-term rate of
return on plan assets 7.00 7.00 7.00
Rate of increase in per
capita claims cost
- First year 10.00 12.00 13.00
- Ultimate rate 5.00 6.00 6.00
If the health care cost trend rates were increased 1.0% each year, the
accumulated postretirement benefit obligation as of December 31, 1995 would
have increased by $4,582,000 (or 10.3%) and the aggregate of the service and
interest cost for 1995 would have increased by $580,000 (or 10.5%).
INCENTIVE COMPENSATION PLANS
The Company has incentive compensation plans under which awards are made to
officers and other key employees. Expense provisions referable to the plans
amounted to $13,374,000 in 1995, $7,494,000 in 1994 and $4,295,000 in 1993.
The expense provisions for these plans reflect the cost of distributions
payable currently as well as distributions that may be payable in future
periods if certain conditions are satisfied. Expense provisions for certain
of the plans also are affected by changes in the market value of the Company's
common stock.
In 1995, the Financial Accounting Standards Board issued SFAS No. 123,
Accounting for Stock-Based Compensation, which will be effective for fiscal
years beginning after December 15, 1995. The new standard defines a fair
value method of accounting for stock-based compensation. Under the fair value
method, compensation cost is measured at the grant date based on the fair
value of the award and is recognized over the service period, which is usually
the vesting period.
Pursuant to the new standard, companies are encouraged, but are not required,
to adopt the fair value method of accounting for employee stock-based
transactions. Companies are also permitted to continue to account for such
transactions under Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, but would be required to disclose in a note to the
financial statements pro forma net income and earnings per share as if the
company had applied the new method of accounting. The Company intends to
continue to account for stock-based compensation under Opinion No. 25.
Adoption of the new standard will have no effect on the Company's cash flows.
9. OTHER COMMITMENTS AND CONTINGENT LIABILITIES
In 1987 the Company formed three jointly owned companies with Industrias ICA,
S.A. de C.V., ("Indica"), a principal member of Grupo ICA, one of Mexico's
leading diversified industrial entities, to develop and operate a limestone
quarry on Mexico's Yucatan Peninsula and to import Mexican crushed stone for
sale along the U.S. Gulf Coast (the "Crescent Market Project"). The
shareholder agreements for these three companies provide that each sponsor
will contribute its share of the equity required to fund the project. The
Company's share of $68,608,000 had been contributed as of December 31, 1995;
Indica contributed a substantially equal pro rata amount. Two of the jointly
owned companies have entered into term loan agreements which have current
balances totaling $47,801,000. The Company and Indica have agreed to
guarantee these loans on a several and pro rata basis equal to approximately
50% each. Certain of the loan guarantees will be terminated if and when the
project meets defined financial tests. In addition, the Company has
approximately $3,700,000 outstanding from the three companies at December 31,
1995 as its share of loans to the project. The carrying amount of net assets
of these entities located outside the United States was $42,959,000 as of
December 31, 1995.
Other commitments of the Company include the purchase of property, plant and
equipment approximating $17,044,000 at December 31, 1995.
The Company is a defendant in various lawsuits incident to the ordinary course
of business. It is not possible to determine with precision the probable
outcome or the amount of liability, if any, under these lawsuits; however, in
the opinion of the Company and its counsel, the disposition of these lawsuits
will not adversely affect the consolidated financial statements of the Company
to a material extent.
The Company received a letter from the United States Environmental Protection
Agency ("EPA") in May 1985 regarding remedial actions at a chemical waste site
in Ascension Parish, Louisiana (the "Reber Site"). Records indicate that the
Company generated a portion of the waste placed at the site, and the Company
therefore was deemed by the EPA to be a potentially responsible party ("PRP")
with respect to the site under the Comprehensive Environmental Response,
Compensation and Liability Act.
On February 5, 1991, the EPA issued a unilateral administrative order ("UAO")
which directed the named respondents, including the Company and other PRPs, to
clean up the site. During 1995, the Company and the other participating PRPs
completed active site remediation. Site capping and certain other remaining
work required under the UAO is expected to be completed in the second quarter
of 1996. The Company is continuing to make payments from its accrued reserve
to fund its allocated share under the Agreement of costs associated with
remediating the Reber site. The Company believes that total provisions now
recorded are adequate to cover its share of the anticipated remaining costs.
The Company's consolidated balance sheets as of December 31 include accrued
environmental cleanup costs for the Chemicals segment of $2,765,000 for 1995,
$12,867,000 for 1994 and $19,100,000 for 1993.
In 1987 the Company discontinued its former Metals segment and recorded a loss
on disposal that reflected provisions for phaseout costs, including the
estimated cost of contractual liabilities associated with remediation of
environmental conditions at several Metals plants. An additional provision
for estimated phaseout costs was recorded in 1989. The Company has made
significant progress in addressing these contractual liabilities by completing
several environmental remediation projects at certain of these Metals plants.
Expenditures for these projects were within recorded provisions. While the
Company believes its recorded provisions are adequate to address the remainder
of these contractual liabilities and other liabilities associated with these
operations, factors that might impact the adequacy of provisions include the
results of further environmental testing, engineering analyses and planning,
and negotiations among interested parties.
Current liabilities reported on the Company's consolidated balance sheets
include accrued provisions for discontinued operations in the following
amounts as of December 31: $1,805,000 in 1995, $2,649,000 in 1994 and
$1,583,000 in 1993. In addition, other noncurrent liabilities include
$493,000 each in 1995 and 1994 and $2,650,000 in 1993 referable to
discontinued operations.
10. COMMON STOCK
A total of 12,051,571 shares has been purchased at a cost of $442,671,000
pursuant to a common stock purchase plan initially authorized by the Board of
Directors in July 1985 and increased in subsequent years, and pursuant to a
tender offer during the period November 5, 1986 through December 4, 1986. The
number of shares remaining under purchase authorizations is 1,599,792 shares.
11. SEGMENT DATA
Operations in the Company's Construction Materials segment principally involve
the production and sale of crushed aggregates and related products and
services. Sales are in 14 states located in the southeast, midwest and
southwest regions of the United States. Customers primarily use crushed
aggregates in the construction and maintenance of highways, roads and streets
and in the construction of housing and nonresidential, commercial and
industrial facilities.
The Chemicals segment, through its Chloralkali Business Unit, produces and
sells basic industrial and specialty chemicals, including chlorine, caustic
soda and chlorinated organic chemicals. Principal markets for these chemicals
include pulp and paper, energy, food and pharmaceuticals, textiles, water
treatment, and chemical processing. The Performance Systems Business Unit
provides specialty process aids for the pulp and paper and textile industries
and furnishes the municipal, industrial and environmental water treatment
markets with chemicals and services. Products are principally marketed
throughout the United States, but are also exported to Mexico, the Far East
and Western Europe.
Segment data referable to net sales to unaffiliated customers, property
additions, and depreciation, depletion and amortization are provided in
Segment Financial Data on pages 56 and 57.
The Company's determination of segment earnings recognizes equity in the
income or losses of nonconsolidated affiliates as part of segment earnings and
also reflects allocations of general corporate expenses to the segments. SFAS
No. 14, Financial Reporting for Segments of a Business Enterprise, does not
provide for the inclusion of these items in "operating profit or loss of
reportable segments." The net amounts of those items were expenses of
$22,533,000 in 1995, $14,110,000 in 1994 and $15,542,000 in 1993.
Segment earnings are reconciled with earnings before income taxes as follows
(in thousands of dollars):
1995 1994 1993
Segment Earnings:
Construction Materials $181,528 $162,505 $116,689
Chemicals 87,792 (7,349) 17,400
269,320 155,156 134,089
Interest income, etc. 200 571 304
Interest expense (11,099) (9,821) (9,171)
Earnings before income taxes $258,421 $145,906 $125,222
Identifiable assets by segment at December 31 are as follows (in thousands
of dollars):
1995 1994 1993
Construction Materials $ 690,044 $ 678,793 $ 670,079
Chemicals 395,487 389,491 288,720
Total identifiable assets 1,085,531 1,068,284 958,799
Investment in
nonconsolidated affiliates 50,780 53,902 51,054
General corporate assets 57,614 51,241 54,702
Cash items 21,869 7,717 13,996
Total assets $1,215,794 $1,181,144 $1,078,551
12. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental information referable to the Consolidated Statements of Cash
Flows is summarized below (amounts in thousands):
1995 1994 1993
Cash payments:
Interest (exclusive of
amount capitalized) $11,214 $ 9,762 $ 9,198
Income taxes 85,324 36,846 41,393
Noncash investing and
financing activities:
Amounts referable to
business acquisitions:
Liabilities assumed 1,382 12,198 -
Fair value of stock issued - 6,443 -
13. CALLAWAY CHEMICAL ACQUISITION
On August 1, 1994, the Company acquired the net assets and business of
Callaway Chemical Company from Exxon Chemical Company. In a related
transaction, the Company also acquired the net assets and business of Comcor
Chemicals Limited from Exxon Corporation's affiliated Canadian company,
Imperial Oil Limited. The Company paid cash for the assets acquired. The
purchase price paid for all assets, including net working capital, was
approximately $82,000,000. Funds for the purchase price were primarily
obtained by the Company through issuance and sale of short-term notes.
On a pro forma basis, as if the assets and businesses had been acquired at the
beginning of each fiscal year, consolidated revenues of the Company would have
increased by $51,800,000 in 1994 and $84,900,000 in 1993. On a pro forma
basis, net income and earnings per share would not differ materially with
amounts reflected in the Company's consolidated financial statements. Pro
forma results do not purport to be indicative of results of operations which
may be obtained in the future.
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
AND INTERNAL CONTROL
The Shareholders of Vulcan Materials Company:
Vulcan's management acknowledges and accepts its responsibility for all the
information contained in the financial statements and other sections of this
report. The statements were prepared in conformity with generally accepted
accounting principles appropriate in the circumstances and we believe they
reflect fairly the Company's financial position, results of operations and
cash flows for the periods shown. The financial statements necessarily
reflect our informed judgments and estimates of the expected outcome of
numerous current events and transactions.
The Company maintains an internal control structure which we believe provides
reasonable assurance that the Company's financial statements, books and
records accurately reflect the Company's financial condition, results of
operations and cash flows and that the Company's assets are safeguarded from
loss or unauthorized use. This internal control structure includes
well-defined and communicated policies and procedures, organizational
structures that provide for appropriate separations of responsibilities, high
standards applied in the selection and training of management personnel, and
adequate procedures for properly assessing and applying accounting principles,
including careful consideration of the accuracy and appropriateness of all
significant accounting estimates. Vulcan also has an internal audit function
that continually reviews compliance with established policies and procedures.
The Company's independent auditors, Deloitte & Touche LLP, consider the
internal control structure as a part of their audits of the Company's
financial statements and provide an independent opinion as to the fairness of
the presentation of those statements. Their report is presented below.
The Board of Directors pursues its oversight role for the financial statements
and internal control structure in major part through the Audit Review
Committee, which is composed of five outside directors. In addition, the full
Board regularly reviews detailed management reports covering all aspects of
the Company's financial affairs. The Audit Review Committee meets
periodically with management, the independent auditors and the internal
auditors to review the work of each and to ensure that each is properly
discharging its responsibilities. To ensure independence, the Committee also
meets on these matters with the internal and independent auditors without the
presence of management representatives.
/s/ D. F. Sansone
D. F. Sansone
Vice President, Finance
/s/ E. A. Khan
E. A. Khan
Controller
February 2, 1996
INDEPENDENT AUDITORS' REPORT
The Shareholders of Vulcan Materials Company:
We have audited the accompanying consolidated balance sheets of Vulcan
Materials Company and its subsidiary companies as of December 31, 1995, 1994,
and 1993, and the related consolidated statements of earnings, shareholders'
equity, and cash flows for the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Vulcan Materials Company and its
subsidiary companies at December 31, 1995, 1994 and 1993, and the results of
their operations and their cash flows for the years then ended in conformity
with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Birmingham, Alabama
February 2, 1996
FINANCIAL TERMINOLOGY
Capital employed For the Company; the sum of interest-bearing debt,
other noncurrent liabilities and shareholders'
equity; for a segment: the net sum of the segment's
assets, current liabilities, and allocated corporate
assets and current liabilities, exclusive of cash
items and short-term debt
Cash items The sum of cash, cash equivalents and short-term
investments
Common shareholders' The sum of common stock (less the cost of common
equity stock in treasury), capital in excess of par value
and retained earnings, as reported in the balance
sheet
Long-term capital The sum of long-term debt, other noncurrent
liabilities and shareholders' equity
Operating income from For the Company: net earnings from continuing
continuing operations operations plus the after-tax cost of interest
after taxes expense; for a segment: segment earnings less the
segment's computed share of the consolidated
provision for income taxes
Property additions * Capitalized replacements of and additions to
property, plant and equipment (and such asses of
businesses acquired), including capitalized leases,
renewals and betterments; each segment's property
additions include allocated corporate amounts
Ratio of earnings to The sum of earnings from continuing operations
fixed charges before income taxes, amortization of capitalized
interest and fixed charges net of interest
capitalization credits, divided by fixed charges.
Fixed charges are the sum of interest expense before
capitalization credits, amortization of financing
costs and one-third of rental expense.
Segment earnings Earnings before interest expense and income taxes
and after allocation of corporate expenses and
income, other than "interest income, etc,"
(principally interest income earned on cash items
and gains or losses on corporate financing
transactions), and after assignment of equity income
to the segments with which it is related in terms of
products and services. Allocations are based
primarily on one or a combination of the following
factors: average gross investment, average equity
and sales.
Short-term debt The sum of current interest-bearing debt, including
current maturities of long-term debt and
interest-bearing notes payable
* The Company classifies its property additions into three categories based
upon the predominant purpose of the project expenditures. Thus, a project
is classified entirely as a replacement if that is the principal reason
for making the expenditure even though the project may involve some cost
saving and/or capacity improvement aspects. Likewise, a profit-adding
project is classified entirely as such if the principal reason for making
the expenditure is to add operating facilities at new locations (which
occasionally replace facilities at old locations), to add product lines,
to expand the capacity of existing facilities, to reduce costs, to
increase mineral reserves or to improve products, etc.
Property additions classified as environmental control expenditures do not
reflect those expenditures for environmental control activities, including
industrial health programs, which are expensed currently. Such
expenditures are made on a continuing basis and at significant levels
in each of the Company's segments. Frequently, profit-adding and major
replacement projects also include expenditures for environmental
control purposes.
<TABLE>
<CAPTION>
VULCAN MATERIALS COMPANY
SUBSIDIARIES
AS OF DECEMBER 31, 1995
STATE OR OTHER % OWNED
JURISDICTION OF DIRECTLY OR
INCORPORATION OR INDIRECTLY
ENTITY ORGANIZATION BY VULCAN
Subsidiaries
<S> <C> <C>
Atlantic Granite Company* South Carolina 33 1/3
Birmingham Slag Company* Alabama 100
BRT Transfer Terminal, Inc. Kentucky 100
Calizas Industriales del Carmen, S.A. de C.V. Mexico 49
Callaway Chemical Company New Jersey 100
Callaway Chemical Limited British Columbia 100
Dixie Sand and Gravel Company* Tennessee 100
Knoxville Mack Distributors, Inc.* Tennessee 100
Lambert Bros., Inc.* Tennessee 100
Midsouth Machine and Service Company Tennessee 100
Peroxidation Systems GmbH Germany 100
Reco Transportation, Inc. Kentucky 100
Rio Linda Chemical Co., Inc. Delaware 100
Statewide Transport, Inc. Texas 100
Vulcan/ICA Distribution Company (Partnership) Texas 51
Vulcan Gulf Coast Aggregates, Inc. New Jersey 100
Vulcan Gulf Coast Materials, Inc. New Jersey 100
Vulcan International, Ltd. U.S. Virgin Islands 100
Vulcan Lands, Inc. New Jersey 100
Vulcan Peroxidation Systems Inc. New Jersey 100
Vulcan Soda Ash Company California 100
VULICA Shipping Company, Limited Bahamas 50
Wanatah Trucking Co., Inc. Indiana 100
Wesco Contracting Company* Tennessee 100
White's Mines, Inc.* Texas 100
*Inactive
</TABLE>
POWER OF ATTORNEY
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints William F. Denson,
III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of
the undersigned to sign the name of the undersigned as director to the Report
on Form 10-K for the year ended December 31, 1995 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to said
report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company
has executed this Power of Attorney this 1st day of February, 1996.
/s/ Marion H. Antonini
Marion H. Antonini
POWER OF ATTORNEY
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints William F. Denson,
III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of
the undersigned to sign the name of the undersigned as director to the Report
on Form 10-K for the year ended December 31, 1995 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to
said report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company
has executed this Power of Attorney this 1st day of February, 1996.
/s/ Livio D. DeSimone
Livio D. DeSimone
POWER OF ATTORNEY
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints William F. Denson,
III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of
the undersigned to sign the name of the undersigned as director to the Report
on Form 10-K for the year ended December 31, 1995 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to
said report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company
has executed this Power of Attorney this 1st day of February, 1996.
/s/ William J. Grayson, Jr.
William J. Grayson, Jr.
POWER OF ATTORNEY
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints William F. Denson,
III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of
the undersigned to sign the name of the undersigned as director to the Report
on Form 10-K for the year ended December 31, 1995 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to
said report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company
has executed this Power of Attorney this 1st day of February, 1996.
/s/ John K. Greene
John K. Greene
POWER OF ATTORNEY
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints William F. Denson,
III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of
the undersigned to sign the name of the undersigned as director to the Report
on Form 10-K for the year ended December 31, 1995 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to
said report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company
has executed this Power of Attorney this 5th day of February, 1996.
/s/ Richard H. Leet
Richard H. Leet
POWER OF ATTORNEY
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints William F. Denson,
III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of
the undersigned to sign the name of the undersigned as director to the Report
on Form 10-K for the year ended December 31, 1995 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to
said report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company
has executed this Power of Attorney this 1st day of February, 1996.
/s/ Douglas J. McGregor
Douglas J. McGregor
POWER OF ATTORNEY
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints William F. Denson,
III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of
the undersigned to sign the name of the undersigned as director to the Report
on Form 10-K for the year ended December 31, 1995 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to
said report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company
has executed this Power of Attorney this 5th day of February, 1996.
/s/ Ann McLaughlin
Ann McLaughlin
POWER OF ATTORNEY
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints William F. Denson,
III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of
the undersigned to sign the name of the undersigned as director to the Report
on Form 10-K for the year ended December 31, 1995 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to
said report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company
has executed this Power of Attorney this 1st day of February, 1996.
/s/ James V. Napier
James V. Napier
POWER OF ATTORNEY
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints William F. Denson,
III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of
the undersigned to sign the name of the undersigned as director to the Report
on Form 10-K for the year ended December 31, 1995 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to
said report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company
has executed this Power of Attorney this 1st day of February, 1996.
/s/ Donald B. Rice
Donald B. Rice
POWER OF ATTORNEY
The undersigned director of Vulcan Materials Company, a New Jersey
corporation, hereby nominates, constitutes and appoints William F. Denson,
III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of
the undersigned to sign the name of the undersigned as director to the Report
on Form 10-K for the year ended December 31, 1995 of said corporation to be
filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and to any and all amendments to
said report.
The undersigned hereby grants to said attorneys full power of
substitution, resubstitution and revocation, all as fully as the undersigned
could do if personally present, hereby ratifying all that said attorneys or
their substitutes may lawfully do by virtue hereof.
IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company
has executed this Power of Attorney this 1st day of February, 1996.
/s/ Orin R. Smith
Orin R. Smith
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Earnings for the twelve months ended December 31,
1995, and the Consolidated Balance Sheet as of December 31, 1995 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 21869
<SECURITIES> 0
<RECEIVABLES> 187142
<ALLOWANCES> 8176
<INVENTORY> 126801
<CURRENT-ASSETS> 362121
<PP&E> 1859436
<DEPRECIATION> 1161404
<TOTAL-ASSETS> 1215794
<CURRENT-LIABILITIES> 177409
<BONDS> 90278
0
0
<COMMON> 46573
<OTHER-SE> 750065
<TOTAL-LIABILITY-AND-EQUITY> 1215794
<SALES> 1460974
<TOTAL-REVENUES> 1460974
<CGS> 1044710
<TOTAL-COSTS> 1044710
<OTHER-EXPENSES> 6347
<LOSS-PROVISION> 983
<INTEREST-EXPENSE> 11099
<INCOME-PRETAX> 258421
<INCOME-TAX> 92181
<INCOME-CONTINUING> 166240
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 166240
<EPS-PRIMARY> 4.63
<EPS-DILUTED> 4.63
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE II
VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Amounts in Thousands
Column A Column B Column C Column D Column E Column F
Balance at Additions Charged To Balance at
Beginning Costs and Other End
Description Of Period Expenses Accounts Deductions Of Period
<S> <C> <C> <C> <C> <C>
Reserves deducted from assets to
which they apply:
1995
Accrued Environmental Costs........ $12,867 $3,998 $14,100 $ 2,765
Doubtful Receivables............... 8,243 984 $18 1,069 8,176
All Other (3)...................... 2,005 1,395
1994
Accrued Environmental Costs........ $19,100 $7,833 $14,066 (1) $12,867
Doubtful Receivables............... 7,284 $1,001 $70 112 (2) 8,243
All Other (3)...................... 2,428 2,005
1993
Accrued Environmental Costs........ $26,530 $ (110) $ 7,320 (1) $19,100
Doubtful Receivables............... 6,814 1,237 767 (2) 7,284
All Other (3)...................... 5,078 2,428
<FN>
(1) Expenditures on environmental remendiation projects
(2) Write-offs of uncollected accounts and worthless notes, less recoveries
(3) Valuation and qualifying accounts and reserves for which additions, deductions
and balances are not individually significant
</TABLE>
