SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[X] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
VULCAN MATERIALS COMPANY
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
[X} No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
[ ] Fee Paid Previously with preliminary materials.
Pursuant to Item 304 of Regulation S-T, the following is an appendix
listing and providing a narrative description of all image information which
appears in the 1997 Proxy Statement.
The boxes appearing in the section entitled "NOMINEES FOR
ELECTION TO THE BOARD OF DIRECTORS" represent photographs
of the individuals discussed in this section.
In the section entitled "Shareholder Return Performance Presentation", a graph
appears that illustrates comparative total returns to shareholders. There is
a table giving the coordinates of this graph. A paper copy has been provided
to the Securities and Exchange Commission.
April 7, 1997
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of the
Shareholders of Vulcan Materials Company, which will be held at the AmSouth
Sonat Tower, 1900 5th Avenue North, Birmingham, Alabama, on Friday, May 16,
1997, at 10:00 a.m., Central Daylight Time. The formal Notice of the Annual
Meeting, the Proxy Statement and a proxy accompany this letter.
We hope that you will be present at the meeting. Whether or not you plan
to attend, however, please execute and return your proxy so that the Company
may be assured of the presence of a quorum at the meeting. A postage-prepaid
envelope is enclosed for your convenience in replying. The prompt return of
your proxy will be greatly appreciated.
The Annual Report of your Company for 1996 is enclosed. We trust you
will find it interesting and informative.
Sincerely yours,
H. A. SKLENAR
Chairman of the Board
DONALD M. JAMES
President and
Chief Executive Officer
NOTICE OF ANNUAL MEETING OF THE SHAREHOLDERS
TO BE HELD MAY 16, 1997
To the Shareholders of the Company:
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Annual Meeting") of the
Shareholders of Vulcan Materials Company (the "Company") will be held in the
auditorium at the AmSouth Sonat Tower, 1900 5th Avenue North, Birmingham,
Alabama, on Friday, May 16, 1997, at 10:00 a.m., Central Daylight Time, for
the following purposes:
1. To elect two (2) directors each to serve for a term of three
(3) years until the Annual Meeting of the Shareholders in
2000 and one (1) director to serve a term of two (2) years
until the Annual Meeting of the Shareholders in 1999 and
until their successors are duly elected and qualified.
2. To ratify the appointment of Deloitte & Touche LLP as
independent auditors for 1997.
3. To transact such other business as may properly come before
the Annual Meeting.
Holders of record of the Common Stock of the Company at the close of
business on March 21, 1997, are entitled to notice of and to vote at
the Annual Meeting.
The Annual Meeting may be adjourned from time to time without notice
other than announcement at the meeting, or any adjournment thereof, and
any business for which notice is hereby given may be transacted at any
such adjournment.
By Order of the Board of Directors,
WILLIAM F. DENSON, III
Secretary
One Metroplex Drive
Birmingham, Alabama 35209
April 7, 1997
NOTE -- Please sign, date and return your proxy
as promptly as possible
whether you own one or many shares.
PROXY STATEMENT FOR THE
ANNUAL MEETING OF THE SHAREHOLDERS
TO BE HELD MAY 16, 1997
The accompanying proxy is solicited on behalf of the Board of Directors
of Vulcan Materials Company (the " Company") for use at the Annual Meeting
of the Shareholders of the Company (the "Annual Meeting") to be held at
the AmSouth Sonat Tower, 1900 5th Avenue North, Birmingham, Alabama, at
10:00 a.m., Central Daylight Time, on Friday, May 16, 1997, and any
adjournments thereof. A shareholder giving a proxy may revoke it at any time
before it is voted by sending a letter of revocation to the Secretary of the
Company, in care of First Chicago Trust Company of New York, P. O. Box 8060,
Edison, New Jersey 08818-9039. A proxy may also be revoked by signing and
returning a ballot at the Annual Meeting or by signing a proxy with a more
recent date than that of the proxy first given and returning it to the
inspectors of election. Attendance at the Annual Meeting by itself will not
revoke a proxy. The mailing address of the principal executive office of the
Company is P. O. Box 530187, Birmingham, Alabama 35253-0187. The approximate
date on which this Proxy Statement and the proxy are to be first mailed to
shareholders is April 7, 1997.
GENERAL INFORMATION
On March 21, 1997, the record date for the Annual Meeting, the number of
issued and outstanding shares of Common Stock of the Company was 33,857,425.
The holders of each outstanding share of Common Stock of the Company on such
date are entitled to one vote per share with respect to each matter to be
considered at the Annual Meeting.
A majority of the outstanding shares of Common Stock, represented in
person or by proxy, is required to constitute a quorum at the Annual Meeting.
Shares of Common Stock of the Company, represented by proxies which have been
properly executed and duly returned, will be counted for purposes of
determining a quorum and will be voted at the Annual Meeting as specified by
the shareholders. The affirmative vote of a majority of the votes cast by the
holders of outstanding shares of Common Stock of the Company, present in
person or represented by proxy, is necessary to pass each of the matters to be
presented at the Annual Meeting. Under New Jersey law, neither an abstention
nor a broker non-vote is considered a vote for the purpose of determining a
majority of the votes cast on a proposal. Accordingly, abstentions and broker
non-votes will reduce the number of affirmative votes required to constitute a
majority of votes cast. Duly executed proxies without voting instructions
will be voted in accordance with the recommendations of the Board of
Directors. As of the date of this Proxy Statement, the Board of Directors
does not know of any business to be presented for consideration or action at
the Annual Meeting other than that described in this Proxy Statement.
The Board of Directors has adopted a policy pursuant to which all
proxies, ballots and tabulations relating to shareholder meetings are to
be maintained in confidence, except where disclosure may be required by
applicable law, where shareholders write comments on their proxy forms,
where disclosure is expressly requested by a shareholder, and in limited
circumstances as determined by the Board of Directors, such as proxy
solicitations not approved and recommended by the Board of Directors. The
inspectors of election and the tabulators of all proxies, ballots and voting
results that identify shareholders are independent and are not employees of
the Company.
The costs of soliciting proxies on behalf of the Board of Directors will
be borne by the Company. In addition to use of the mails, proxies may be
solicited by personal interview, telephone or telegraph. The Company has
retained Georgeson & Company Inc. for a fee of $6,500 and the reimbursement of
out-of-pocket expenses, to assist in the solicitation of proxies from
brokerage firms, banks and other institutional holders. The Company will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred in forwarding proxy materials to, and obtaining
proxies from, beneficial owners of the Common Stock of the Company.
1. ELECTION OF DIRECTORS
The By-laws of the Company provide that the Board of Directors shall
consist of not fewer than nine nor more than 21 directors, the number of
directors within such minimum and maximum limits to be determined from time
to time by resolution of the Board of Directors. The Board of Directors has
fixed the number of directors of the Company at 11 until May 16, 1997, when
the number will become 10.
The Company's Certificate of Incorporation (Restated 1988) provides that
the Board of Directors shall be divided into three classes, each of which
serves for three years, with one class being elected each year.
The Board of Directors has nominated two persons for election as
directors to serve three-year terms expiring in 2000 and one person for
election as a director to serve a two- year term expiring in 1999. Unless
otherwise directed, proxies will be voted in favor of these three nominees.
Should any of the nominees be unable to accept election, the proxies will
be voted for the election of such other person or persons as the Board of
Directors may recommend. These nominees have consented to serve if elected,
and the Board of Directors has no reason to believe that any of the persons
nominated will be unable to accept election.
The following information about the nominees for director and the
directors continuing in office is provided below: (1) their ages as of
March 31, 1997; (2) the year they first became directors of the Company;
(3) their principal occupations since 1992; (4) other directorships,
including any directorship of a company which has a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended, is subject to the reporting requirements of Section 15(d) of
said Act or is registered as an investment company under the Investment
Company Act of 1940; and (5) memberships on committees of the Board
of Directors.
HERBERT A. SKLENAR
Age 65. Director since 1973.
Chairman of the Board of the Company since February, 1997; Chairman and
Chief Executive Officer from May, 1992 to February, 1997; President and
Chief Executive Officer prior thereto.
OTHER DIRECTORSHIPS: AmSouth Bancorporation; Protective Life Corporation;
Temple-Inland, Inc.
COMMITTEE MEMBERSHIP: Executive.
TERMS EXPIRING IN 2000
MARION H. ANTONINI
Age: 66. Director since 1983.
Chairman, Chief Executive Officer and President of Welbilt Corporation,
Stamford, Connecticut (a manufacturer and distributor of commercial food
service equipment and residential furnaces).
OTHER DIRECTORSHIPS: Berisford International PLC; Engelhard Corporation;
Scientific-Atlanta, Inc.
COMMITTEE MEMBERSHIPS: Compensation; Governance and Succession; Executive;
Finance and Pension Funds.
JAMES V. NAPIER
Age: 60. Director since 1983.
Chairman of the Board of Scientific-Atlanta, Inc., Atlanta, Georgia
(a manufacturer and designer of telecommunication systems, satellite-based
communications networks, and instrumentation for industrial,
telecommunications and government applications).
OTHER DIRECTORSHIPS: Engelhard Corporation; HBO & Co.; Intelligent Systems,
Inc.; Personnel Group of America, Inc.; Scientific-Atlanta, Inc.;
Westinghouse Air Brake Co.
COMMITTEE MEMBERSHIPS: Audit Review; Compensation; Finance and
Pension Funds.
The Board of Directors of the Company
recommends a vote FOR the nominees named above.
DIRECTORS CONTINUING IN OFFICE
TERMS EXPIRING IN 1999
LIVIO D. DESIMONE
Age: 60. Director since 1987.
Chairman and Chief Executive Officer of Minnesota Mining & Manufacturing
Company, St. Paul, Minnesota (a diversified manufacturer).
OTHER DIRECTORSHIPS: Cargill, Incorporated; Dayton Hudson Corporation;
General Mills, Inc.; Minnesota Mining & Manufacturing Company.
COMMITTEE MEMBERSHIPS: Compensation; Governance and Succession; Executive;
Safety, Health and Environmental Affairs.
DONALD M. JAMES
Age: 48. Director since 1996.
President and Chief Executive Officer of the Company since February, 1997;
President and Chief Operating Officer from February, 1996 to February, 1997;
President of the Company's Southern Division from 1994 to 1996;
Senior Vice President, South, Construction Materials Group of the Company
from 1995 to 1996; Senior Vice President and General Counsel of the Company
from December, 1992 through 1993.
ANN D. MCLAUGHLIN
Age: 55. Director since 1990.
Chairman, The Aspen Institute, Aspen, Colorado (an independent, nonprofit
organization whose programs are designed to enhance the ability of leaders
to understand national and international issues), since 1996; Vice Chairman
of that organization from 1993 to 1996; President, Federal City Council,
Washington, D.C. (a nonpartisan, nonprofit organization which is dedicated to
improving the nation's capital), from 1990 until 1995; President and Chief
Executive Officer, New American Schools Development Corporation, Arlington,
Virginia (a private organization which supports the design and establishment
of high-performance learning environments), from 1992 until 1993.
OTHER DIRECTORSHIPS: AMR Corporation; Donna Karan International, Inc.;
Fannie Mae; General Motors Corporation; Harman International Industries, Inc.;
Host Marriott Corporation; Kellogg Company; Nordstrom; Potomac Electric Power
Company; Sedgwick Group plc; Union Camp Corporation.
COMMITTEE MEMBERSHIPS: Audit Review; Finance and Pension Funds; Safety,
Health and Environmental Affairs.
TERMS EXPIRING IN 1998
JOHN K. GREENE
Age: 67. Director since 1974.
Special Principal, William Blair & Company, Chicago, Illinois (an investment
banking firm), since 1995; Partner of that company prior thereto.
COMMITTEE MEMBERSHIPS: Audit Review; Governance and Succession; Finance and
Pension Funds.
DOUGLAS J. MCGREGOR
Age: 56. Director since 1992.
President and Chief Executive Officer, M. A. Hanna Company, Cleveland, Ohio
(an international specialty chemicals company with interests in formulated
polymers), since January, 1997; President and Chief Operating Officer of that
company prior thereto.
OTHER DIRECTORSHIPS: KeyCorp; M. A. Hanna Company.
COMMITTEE MEMBERSHIPS: Audit Review; Compensation; Safety, Health and
Environmental Affairs.
DONALD B. RICE
Age: 57. Director since 1986.(*)
President and Chief Executive Officer of UroGenesys, Inc., Santa Monica,
California (a biotechnology company developing therapeutics and diagnostic
testing for urogenital cancer), since 1996; President and Chief Operating
Officer of Teledyne, Inc., Los Angeles, California (a manufacturer of
aviation, electronic, industrial, specialty metal and consumer products),
from 1993 to 1996; Secretary of the Air Force, from 1989 to 1993.
OTHER DIRECTORSHIPS: UroGenesys, Inc.; Wells Fargo & Company;
Wells Fargo Bank N.A.
COMMITTEE MEMBERSHIPS: Audit Review; Governance and Succession; Executive;
Finance and Pension Funds.
(*) Dr. Rice was first elected a director in 1986, and served until May,
1989, when he was appointed Secretary of the Air Force. He was reelected a
director of the Company by the Board of Directors on February 12, 1993.
ORIN R. SMITH
Age: 61. Director since 1983.
Chairman and Chief Executive Officer of Engelhard Corporation, Iselin,
New Jersey (provider of Environmental Technologies, performance products,
Engineered Materials and related services), since January, 1995; President
and Chief Executive Officer of that company prior thereto.
OTHER DIRECTORSHIPS: Engelhard Corporation; Ingersoll-Rand Company; Louisiana
Land & Exploration Company; Minorco; Perkin-Elmer Corporation; Summit
Bancorporation; Summit Bank.
COMMITTEE MEMBERSHIPS: Compensation; Governance and Succession; Executive;
Safety, Health and Environmental Affairs.
BOARD OF DIRECTORS AND COMMITTEES
In 1996, the Board of Directors held five meetings. In addition, the
Board of Directors has established six standing committees which have
the responsibilities set forth below.
The Executive Committee has the same powers as the Board of Directors,
except as limited by the New Jersey Business Corporation Act. In practice,
the powers of the Executive Committee are exercised only for matters that
arise between meetings of the Board of Directors. The Executive Committee
met two times in 1996.
The Audit Review Committee advises the Board of Directors and the
management of the Company from time to time with respect to internal controls,
systems and procedures, accounting policies and other significant aspects of
the financial management of the Company. The Audit Review Committee also
reviews with the firm of independent certified public accountants its audit
procedures and other significant aspects of the annual audit made by the firm,
and advises the Board of Directors of the adequacy of the audit by the
independent certified public accountants. The Audit Review Committee met
two times during 1996.
The Compensation Committee interprets and administers the Company's
Management Incentive Plan, the 1991 Long-Range Performance Share Plan and
the 1996 Long-Term Incentive Plan. It is comprised of nonemployee directors
ineligible to participate in these plans. The Compensation Committee also is
responsible for determining and fixing the amount of compensation paid to each
officer of the Company, each division president and each Chemicals Group
business unit president ("Senior Executives"). In addition, it determines
and fixes other benefits to be provided to such Senior Executives and certain
other employees of the Company. It also makes recommendations to the Board of
Directors concerning changes in the compensation of the directors of the
Company. The Compensation Committee met five times during 1996.
The Governance and Succession Committee: (a) conducts such meetings
as are appropriate with other directors, officers, other employees of the
Company, or any other persons whom it might select for purposes of discussing
with them (i) the tenure and selection of persons for membership on the Board
of Directors and (ii) the tenure and selection of a successor to the chief
executive officer, and (b) makes appropriate recommendations to the Board of
Directors with respect thereto. This Committee will consider nominees for
director recommended by shareholders for 1998 if such recommendations are made
in writing, addressed to the Committee, in care of the Secretary of the
Company, at the principal office of the Company, and are received by
December 7, 1997. The Governance and Succession Committee met three times
during 1996.
The Safety, Health and Environmental Affairs ("SHE") Committee has
the responsibility for reviewing the Company's policies, practices and
programs with respect to the management of safety, health and environmental
affairs and monitoring the Company's compliance with safety, health and
environmental laws and regulations. The SHE Committee met two times
during 1996.
The Finance and Pension Funds Committee has responsibility for
overseeing the Company's financial affairs and recommending to the Board of
Directors financial policies and actions to accommodate the Company's goals
and operating strategies while maintaining a sound financial condition. Its
functions include keeping informed about the Company's financial condition,
recommending a dividend policy, reviewing and recommending changes in the
quarterly dividend payments, and evaluating and making recommendations
concerning the appropriate mix of debt and equity, incurrence of long-term
debt, and changes in the authorized limit of short-term debt. The Finance
and Pension Funds Committee is also responsible for overseeing the funding
and management of assets for pension plans sponsored by the Company. To
fulfill these functions, it establishes funding policies and methods
consistent with pension plan objectives and the Employee Retirement Income
Security Act of 1974, selects and removes investment managers, and appoints
trustees for the pension plans. The Finance and Pension Funds Committee met
two times in 1996.
COMPENSATION OF DIRECTORS
Members of the Board of Directors who are not employees of the Company
are paid a retainer of $30,000 per year, plus a fee of $1,500 for each meeting
actually attended.
Each member of a committee who is not an employee of the Company is paid
a fee of $1,500 for each committee meeting attended in person or by telephone
and for each unanimous consent to action in lieu of meeting executed. In
addition, each chairman of a committee who is not an employee of the Company
is paid a fee of $5,000 per year for service as chairman of a committee.
The Company has a Deferred Compensation Plan for Directors Who Are Not
Employees of the Company (the "Deferred Compensation Plan") under which
payment to them of their compensation as directors may be deferred for certain
periods or until they cease to be directors. Currently, four directors are
deferring their fees pursuant to the Deferred Compensation Plan. The deferred
amounts, at the election of the director, either (i) are credited with
interest at prescribed rates or (ii) are converted to the equivalent of that
number of shares of the Company's Common Stock (based on the market price at
the time of deferral) that could be purchased with the deferred amounts, and
are thereafter credited with amounts equal to dividends thereon (also
converted to stock equivalents). All payments under the Deferred Compensation
Plan are in the form of cash. The Deferred Compensation Plan provides that
lump-sum payments of all deferred compensation would be made within 30 days if
(i) there is a Change in Control (see the definition of "Change in Control" on
page 22) and (ii) at any time after a Change in Control the participating
director ceases to be a member of the Board of Directors, the Deferred
Compensation Plan is terminated or the Company's capital structure is changed
materially. The Deferred Compensation Plan was approved by the shareholders
in 1993.
The Company also has a Deferred Stock Plan for Nonemployee Directors
of the Company (the "Deferred Stock Plan"), which was adopted by the Board of
Directors and approved by the shareholders of the Company in 1996. The
Deferred Stock Plan is designed to provide for the payment of a greater
portion of the compensation of nonemployee directors of the Company in the
form of equity, thereby more closely aligning the interests of the nonemployee
directors with those of the other shareholders of the Company. Under the
Deferred Stock Plan, an account is established for each nonemployee director
to which deferred stock units are credited. Each deferred stock unit will
evidence the right to receive a share of Common Stock of the Company upon the
director's termination of service. The Deferred Stock Plan provides that each
nonemployee director will receive annual grants of deferred stock units
calculated by dividing an amount equal to 40% of the annual retainer payable
to nonemployee directors then in effect by the average daily closing price per
share of Common Stock of the Company for the 20 trading days prior to the date
of grant. On each date on which a regular cash dividend is paid on the Common
Stock, the account of each eligible nonemployee director will be credited with
additional deferred stock units corresponding to the cash dividend paid on
the number of shares of Common Stock evidenced by the deferred stock units
credited to the account of each such nonemployee director.
The entire balance of a nonemployee director's account will be paid to
the director, in either a lump sum or installments at the election of such
director, in shares of Common Stock of the Company, upon the director's
termination of service. The value of the deferred stock units is dependent
upon the fair market value of the shares of Common Stock of the Company, and
therefore is subject to market fluctuations in the value of the Company's
Common Stock until the date of distribution. The total number of shares of
Common Stock of the Company reserved for issuance pursuant to the Deferred
Stock Plan is 100,000, subject to adjustment in the event of a stock split,
reverse stock split, reorganization or recapitalization.
The Company had in effect until 1996 a compensation plan for
nonemployee directors who have retired from the Board of Directors. This
plan provided for lifetime annual payments equal to the retainer being paid
nonemployee directors at the time of the director's retirement from the Board
of Directors. This plan has been terminated by the Company such that no
current or future nonemployee directors are eligible to participate in it.
The accrued benefits under this plan for all existing directors were rolled
over to the directors' accounts under the Deferred Compensation Plan last
year. No future accruals or payments will be made to directors under this
plan. Payments will continue to be made to those directors who retired
from the Board of Directors prior to 1996 in accordance with the terms of
the plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following is information regarding persons known to the Company to
have beneficial ownership of more than 5% of the outstanding Common Stock
of the Company, which is the only outstanding class of voting securities of
the Company.
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
State Farm Mutual Automobile Insurance 3,677,400 shares (1) 10.9%
Company and Affiliates
One State Farm Plaza
Bloomington, Illinois 61710
AmSouth Bancorporation 3,358,718 shares (2) 9.9%
AmSouth Sonat Tower
Birmingham, Alabama 35203
INVESCO PLC 2,637,175 (3) 7.8%
11 Devonshire Square
London EC2M 4YR
England
Gerald Ratner, as Attorney and Agent 2,402,517 shares (4) 7.1%
222 North LaSalle Street
Chicago, Illinois 60601
(1) Based on information contained in the Schedule 13G, dated January 6,
1997, filed with the Securities and Exchange Commission. The total includes
2,791,200 shares over which State Farm Mutual Automobile Insurance Company
holds sole voting and dispositive power, 399,800 shares over which State Farm
Investment Management Corp. holds sole voting and dispositive power, and
486,400 shares over which State Farm Employees Savings and Thrift Plan holds
sole voting and dispositive power. State Farm Mutual Automobile Insurance
Company and each of the various affiliated entities listed on Exhibit A to the
Schedule 13G expressly disclaim "beneficial ownership" as to all shares as to
which such entity has no right to receive the proceeds of sale of the security
and disclaims that it is part of a "group."
(2) Based on information contained in a Schedule 13G, dated February 14,
1997, filed with the Securities and Exchange Commission. The total consists
exclusively of shares of Common Stock held by estates and trusts of which
either AmSouth Bank of Alabama, AmSouth Bank of Florida or AmSouth Bank of
Tennessee, each a subsidiary of AmSouth Bancorporation, is a fiduciary. No
single one of these estates or trusts holds as much as 5% of the Common Stock
of the Company. As reported in the Schedule 13G, AmSouth Bank of Alabama has
shared voting power with respect to 3,339,718 shares and shared dispositive
power with respect to 2,872,873 shares.
(3) Based on information contained in a Schedule 13G, dated February 10,
1997, filed with the Securities and Exchange Commission. INVESCO PLC has
shared voting and dispositive power with respect to such shares with its
subsidiaries INVESCO North American Group Ltd., INVESCO Group Services, Inc.,
INVESCO, Inc., INVESCO North American Holdings, Inc. and INVESCO Capital
Management, Inc., a registered investment adviser under the Investment
Advisers Act of 1940.
(4) The Company has been advised by Gerald Ratner that Lester Crown, members
of his family, and certain partnerships and trusts associated with the Crown
family are the beneficial owners of 2,402,517 shares of the Common Stock of
the Company. Such persons, including Mr. Crown, disclaim that they act as a
group for purposes of Section 13 of the Securities Exchange Act of 1934 or
otherwise and disclaim that any one of such persons is the beneficial owner
of shares owned by any other such person.
SECURITY HOLDINGS OF MANAGEMENT
The following table sets forth information, unless otherwise indicated,
as of March 1, 1997, regarding Common Stock and stock-based holdings of the
directors, the chief executive officer and the four other most highly
compensated executive officers which are based on the Common Stock of the
Company. The "Stock" column shows beneficial ownership, direct and indirect,
and the "Total" column shows all stock-based holdings, including those in the
"Stock" column. The value of their total holdings will increase or decrease
with changes in the price of the Company's Common Stock.
COMMON STOCK AND TOTAL STOCK-BASED HOLDINGS (1)
NAME STOCK (2) TOTAL (3)
Marion H. Antonini 3,850 25,741
Peter J. Clemens, III 40,487 52,999
Livio D. DeSimone 1,050 13,845
Michael J. Ferris (4) 30,275 34,733
John K. Greene 24,576 (5) 28,073 (5)
Donald M. James 5,441 15,743
Daniel J. Leemon 28,618 39,399
Richard H. Leet 2,250 6,278
Douglas J. McGregor 450 (6) 7,694 (6)
Ann D. McLaughlin 485 8,064
James V. Napier 1,050 3,576
Donald B. Rice 650 (7) 2,853 (7)
Herbert A. Sklenar 119,564 154,243
Orin R. Smith 1,050 12,672
All Directors and Executive
Officers as a group (25 persons) 360,410 (8) 582,567
(1) None of the directors or executive officers listed in the table
individually own in excess of 1% of the outstanding Common Stock of the
Company.
(2) With respect to employees of the Company, includes shares held under
the Company's Thrift Plan for Salaried Employees on February 28, 1997,
to the extent the beneficial ownership was vested in the persons listed.
Also includes shares beneficially owned by spouses of persons listed and
other relatives living in their households, whether or not interest in
such shares is disclaimed by the person listed.
(3) With respect to the holdings of nonemployee directors, includes stock
equivalents as to which there are no voting rights and which will be paid
totally in cash under the Deferred Compensation Plan for Directors Who Are Not
Employees of the Company and deferred stock units held in an account for each
nonemployee director pursuant to the Company's Deferred Stock Plan for
Nonemployee Directors (both of which are more fully described on page 8
hereof). With respect to executive officers, these totals include shares
awarded but not yet earned under the 1991 Long-Range Performance Share Plan
(which is more fully described on page 13) which carry no voting or dividend
rights. Also includes stock equivalents as to which there are no voting
rights and which will be paid totally in cash under the Company's Unfunded
Supplemental Benefit Plan for Salaried Employees.
(4) Mr. Ferris resigned effective January 5, 1997, and is no longer an
employee of the Company.
(5) Includes 4,400 shares of the Common Stock of the Company held by
John K. Greene and a bank, as trustees under a trust created by Mr. Greene's
mother. Mr. Greene is an income beneficiary of this trust and has a special
power of appointment over the trust assets. Also includes a total of 3,700
shares which are held in three trusts of which Mr. Greene and another
individual are co-trustees.
(6) Two hundred of these shares are held in a trust of which Mr. McGregor
is the trustee.
(7) Four hundred of these shares are held in a retirement trust of which
Dr. Rice is the trustee and full beneficiary.
(8) The Common Stock holdings of all directors and executive officers as
a group represents 1.7% of the outstanding Common Stock of the Company.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation for Mr. Sklenar and the four other executive officers
of the Company who were the most highly compensated for the fiscal year ended
December 31, 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
OPTIONS LTIP ALL OTHER
NAME AND GRANTED (2) PAYOUTS(3) COMPENSATION (4)
PRINCIPAL POSITION YEAR SALARY BONUS (1) (NUMBER)
OF SHARES)
<S> <C> <C> <C> <C> <C> <C>
Herbert A. Sklenar (5) 1996 $650,840 $700,000 60,000 $301,521 $46,034
Chairman of the Board 1995 $600,034 $500,000 $203,072 $36,001
1994 $570,004 $300,000 $274,821 $31,800
Donald M. James (6) 1996 $378,402 $360,000 50,000 $56,108 $7,951
President and 1995 $225,218 $150,000 $28,792 $3,517
Chief Executive Officer 1994 $209,174 $126,500 $22,866 $1,582
Michael J. Ferris (7) 1996 $276,010 $215,466 15,800 $98,414 $17,680
Executive Vice President, 1995 $254,018 $166,000 $64,299 $10,760
Chemicals 1994 $242,208 $15,000 $87,402 $11,088
Peter J. Clemens, III 1996 $273,658 $215,000 15,525 $90,100 $17,466
Executive Vice President 1995 $255,034 $163,000 $61,099 $15,341
and Chief Executive 1994 $243,038 $128,500 $84,878 $12,762
Officer
Daniel J. Leemon 1996 $221,510 $151,000 7,400 $80,655 $11,882
President, 1995 $216,684 $125,000 $55,897 $9,800
Midsouth Division 1994 $207,504 $110,000 $64,370 $8,835
<FN>
(1) Consists of payments made under the Company's Management Incentive Plan
("MIP"). If a Change in Control (see the definition of "Change in Control" on
page 22) occurs in a given year, awards already determined by the Compensation
Committee for that year will be paid. If the Change in Control occurs after
the end of a given year, and the Compensation Committee has not determined an
award, participants will be entitled to the entire "target award" (as defined
in the MIP). Participants will receive pro rata portions of their target
awards if the Change in Control occurs before the end of the given year.
(2) See Option Grant Table on page 14 for more detail concerning the option
grants.
(3) Represents the dollar value of performance shares paid under the
Company's 1981 Long-Range Performance Share Plan (the "1981 Plan") and the
1991 Long-Range Performance Share Plan (the "1991 Plan"). Payment of
performance share awards is subject to conditions for payment which are set
by the Compensation Committee. The Compensation Committee determined that
payment with respect to one-half of the award will be based on a comparison
of the Company's growth in earnings per share during the award period with the
growth in earnings per share of a group of comparison companies which was
selected by the Compensation Committee at the time awards were made. Payment
with respect to the other one-half of the award will be based on a comparison
of the Company's return on investment performance with the return on
investment performance of the companies constituting the comparison group.
Payments under the 1991 Plan will be made only if the Company's performance
in growth in earnings per share or in return on investment places it in at
least the 50th percentile in a ranking of companies in the comparison
group. However, regardless of the Company's ranking in the comparison
group, no payment with respect to the earnings per share half of the
award is made if the Company's average earnings per share during the
award period is less than the Company's average earnings per share
during the five years ended December 31, 1996. Likewise, no payment
with respect to the return on investment half of the award is made if
the Company's average pretax return on investment is less than the
average three-month U.S. Treasury Bill rate during the award period.
The Company's performance with respect to earnings per share or return
on investment must place it at the 50th percentile in the comparison group
in order to earn 50% of the half of the award allocated to such criterion.
The Company's performance with respect to earnings per share or return on
investment must place it at the 75th percentile in the comparison group in
order to earn 100% of the half of the award allocated to such criterion.
The Company's performance with respect to earnings per share or return on
investment must place it in the 100th percentile in the comparison group
in order to earn 150% of the half of the award allocated to such criterion.
Pro rata payments of all outstanding awards will be made if, within two
years of a Change in Control (see the definition of "Change in Control" on
page 22), a participant is terminated under the circumstances described in
the 1991 Plan.
Until 1996, payments made pursuant to the 1991 Plan were made partially in
cash and partially in the Company's Common Stock. The cash portion of the
payments was determined based on the average of the daily closing prices of
the Company's Common Stock for the 20 trading days ending on the fifth trading
day before the date set for payment by the Compensation Committee. The value
of the portion of the payments made in the Company's Common Stock is based on
the average of the high and low trading prices of the stock on the date of
payment. Payments made in 1996 and thereafter will be made entirely in
Common Stock.
(4) These amounts consist of Company contributions made on behalf of the
named employee to the Company's Thrift Plan for Salaried Employees (the
"Thrift Plan") and to the Company's Unfunded Supplemental Benefit Plan for
Salaried Employees (the "Supplemental Plan"). Under the Supplemental Plan,
participating employees whose Company-matching contributions to the Thrift
Plan have been reduced as a result of the limitations imposed by Sections 401
and 415 of the Internal Revenue Code are provided with a benefit that is
essentially equal to the benefit those employees would have received in the
absence of such limitations. The Compensation Committee designates the
participants under the Supplemental Plan. The following amounts were
contributed pursuant to the Thrift Plan during 1996: Mr. Sklenar $6,000,
Mr. James $1,500, Mr. Ferris $6,000, Mr. Clemens $6,000 and Mr. Leemon
$4,500. The following amounts were accrued pursuant to the Supplemental
Plan during 1996: Mr. Sklenar $40,034, Mr. James $6,451, Mr. Ferris $11,680,
Mr. Clemens $11,466 and Mr. Leemon $7,382.
(5) Mr. Sklenar served as Chairman of the Board and Chief Executive Officer
until February, 1997, when he relinquished the title of Chief Executive
Officer.
(6) Mr. James was elected to the office of President and Chief Executive
Officer by the Board of Directors in February, 1997. From February, 1996
until February, 1997, Mr. James served as President and Chief Operating
Officer. Prior to that time he served as Senior Vice President, South,
Construction Materials Group and President of the Southern Division.
(7) Mr. Ferris resigned effective January 5, 1997, and is no longer an
employee of the Company.
</TABLE>
OPTION GRANTS IN 1996
The following table sets forth each grant of stock options during 1996
to Mr. Sklenar and the other named executive officers:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL EXERCISE OR EXPIRATION GRANT DATE
NAME UNDERLYING SHARES BASE PRICE DATE PRESENT
OPTIONS GRANTED VALUE ($) (2)
GRANTED (1)
<S> <C> <C> <C> <C> <C>
H. A. Sklenar 60,000 13.96 $56.56 05/17/06 694,302
D. M. James 50,000 11.63 $56.56 05/17/06 578,585
M. J. Ferris (3) 15,800 3.68 $56.56 05/17/06 182,833
P. J. Clemens, III 13,425 3.12 $56.56 05/17/06 155,350
2,100 0.49 $57.94 06/26/06 24,893
15,525 3.61 180,243
D. J. Leemon 7,400 1.72 $56.56 05/17/06 85,631
<FN>
(1) Reflects nonqualified options granted pursuant to the Company's 1996
Long-Term Incentive Plan. The option exercise price of all options granted
equals the fair market value of the shares of Common Stock of the Company on
the date of grant. The options are subject to vesting in 20% increments over
a five-year period, unless accelerated upon the optionee's death, disability
or retirement or upon a change in control of the Company.
(2) Pursuant to the rules of the Securities and Exchange Commission, the
Company has elected to provide a grant date present value for these option
grants determined by the Black-Scholes pricing model. The assumptions
utilized in this model include: an expected volatility of 14.7% (derived by
using daily stock prices for the historical period of six years preceding the
grant date), a dividend yield of 2.9%, an interest rate of 6.5% (the
interpolated rate on a U.S. Treasury note with a maturity date of six years
from the grant date), and an expected time of exercise of six years from grant
date. The Company does not believe that the values estimated by the
Black-Scholes model, or any other model, will necessarily be indicative of the
values to be realized by an executive.
(3) Mr. Ferris resigned from the Company effective January 5, 1997. Since
none of his options were vested at the time of his resignation, all of the
options granted were forfeited.
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
Under the supervision of the Compensation Committee of the Board of
Directors (the "Committee"), which is composed entirely of nonemployee
directors, the Company has developed and implemented performance-based
compensation policies and plans that are intended to enhance the profitability
of the Company and shareholder value by aligning closely the financial
interests of the Company's senior managers with those of its shareholders.
The objective of the Company is to provide a competitive compensation program
that reflects both Company and individual performance. The Committee believes
that the senior management of the Company is dedicated to achieving
significant improvements in the Company's financial performance and that
the performance-based compensation policies and plans the Committee has
implemented contribute to achieving this management focus. Compensation
for senior management, including the Chief Executive Officer, consists of
base salary and annual and long-term incentive compensation. The annual
and long-term incentive compensation is directly related to the Company's
performance as measured by specific financial factors.
The Committee sets base salaries, determines the amounts payable under
the Management Incentive Plan, makes awards under the 1996 Long-Term Incentive
Plan (the "1996 Plan") and authorizes payments under the predecessor 1991
Long-Range Performance Share Plan (the "1991 Plan") for all officers of the
Company, division presidents and Chemicals Group business unit presidents (the
"Senior Executives"). This group includes the Chief Executive Officer and
each of the other four executive officers named in the Summary Compensation
Table. In addition, the Committee determines the total amount payable to all
other eligible employees under the Management Incentive Plan, makes awards
under the 1996 Plan and authorizes payments under the 1991 Plan to all other
eligible employees.
BASE SALARY. The base salary of each Senior Executive (other than the Chief
Executive Officer) is established annually by the Committee based on the
recommendation of the Chief Executive Officer and is set independently from
the other elements of the compensation package. The recommendations of the
Chief Executive Officer are developed by a process which begins with the
establishment of a competitive market salary rate for each Senior Executive
position. The competitive market salary rate is based on a study conducted
by the Company's human resources staff of salaries paid to executives in
comparable positions at companies of comparable size to the Company. In order
to set these market rates, the Company's human resources staff relies on data
from general industry surveys. The companies in the Wilshire Materials and
Services Index, the performance of which is charted in the Shareholder Return
Performance Presentation, overlap to some extent with the companies in the
surveys. The competitive market rates are generally targeted to the medians of
the salaries identified in the surveys. The competitive market rate for each
Senior Executive is then reviewed by the Chief Executive Officer and
individual salaries are proposed to the Committee based on the established
rate and the results of individual performance evaluations that take into
account, among other factors, the achievement of individual, group and
company-wide performance goals. The resulting recommendations are then
presented to the Committee, along with data supporting the recommendations.
The Committee typically follows the recommendations of the Chief Executive
Officer in setting the salaries of the Senior Executives (other than the Chief
Executive Officer). The 1995 base salaries of the Senior Executives were
increased in 1996 to reflect increases in competitive market rates and the
performance of the Senior Executives. The average of the salaries paid to the
Senior Executives in 1996 was slightly above the median of the competitive
market rates.
In establishing the Chief Executive Officer's salary, the Committee also
reviews the competitive market rate for his position, its assessment of his
performance and the Company's performance. Mr. Sklenar does not participate
in setting his own salary. In 1996, the Committee increased Mr. Sklenar's
salary based on its consideration of his performance with respect to a number
of factors, including significant improvement in the Company's financial
performance.
MANAGEMENT INCENTIVE PLAN. The purpose of the Management Incentive Plan is to
promote the profitability of the Company by providing incentive and reward for
those employees who contribute most to the operating progress and earnings of
the Company. Annual incentive awards under the Company's Management Incentive
Plan are tied directly to the Company's performance and that of individual
profit centers as measured by specific financial performance factors approved
by the Committee. After the end of each fiscal year and completion of the
audit of the Company's financial statements for that year, the Committee
establishes the amount to be added to the Management Incentive Plan fund,
which amount, in accordance with the terms of the Management Incentive Plan,
cannot exceed 12 1/2% of consolidated net earnings in excess of an amount
equal to 6% of net capital for such year. The amount added to the fund is
usually well below the maximum allowable.
The Compensation Committee sets the target bonus for each Senior
Executive; it is equivalent to a specified percentage of each Senior
Executive's base salary. Generally, this percentage becomes greater as the
level of the Senior Executive's responsibility increases. The amount of any
award to an individual under the Management Incentive Plan may be lower or
higher than the individual's target bonus. The amount of an individual award
is determined on the basis of overall corporate or profit center or group
performance and the individual's personal performance.
During 1996, the Committee adopted Economic Profit ("EP") as the primary
financial performance measure upon which awards from the Management Incentive
Plan will be based. It is the view of the Committee and management that
improvement in Economic Profit is closely correlated with an increase in
shareholder wealth. EP is derived by subtracting a capital charge from the
Company's net operating profit after taxes. EP performance for 1996 was
compared to a targeted performance level. Bonuses under the Management
Incentive Plan are increased or decreased proportionately in relation to the
success (or failure) of the Senior Executive in achieving EP objectives. In
order to implement the EP-based incentive plan, the Committee adopted for 1996
and 1997 a transitional minimum payment arrangement under which bonus payments
will not be less than they would have been under the six objective financial
performance factors used by the Committee in prior years.
Also in 1996, the Committee determined that individual deferred bonus
accounts should be utilized in the administration of the Management Incentive
Plan. Such deferred bonus accounts are designed to enhance the motivational
value of the Management Incentive Plan by providing Management Incentive Plan
participants an equity-like stake in the future performance of the Company.
Each year the deferred bonus account will be debited or credited to reflect EP
and individual performance, and one-half of the resulting account balance will
be paid to the participant. The remaining account balance will be carried
forward for use in determining payments in subsequent years.
In establishing the 1996 Management Incentive Plan awards, the Committee
reviewed with the Chief Executive Officer management's recommendations
concerning the bonuses to be awarded and the target bonuses established for
each position. These recommendations do not include any recommendations with
respect to the Chief Executive Officer.
The Management Incentive Plan payment to Mr. Sklenar with respect to 1996
was determined as described above. In addition, the Committee independently
evaluated Mr. Sklenar's performance, including his leadership in improving net
cash provided by operations, net earnings and earnings per share, all of which
were at record levels for the Company. Based on 1996 performance, Mr.
Sklenar's payment under the Management Incentive Plan was 106% of his base
salary or 177% of the target bonus established for him under the Management
Incentive Plan.
LONG-TERM INCENTIVES. Long-term incentives are provided under the 1991 Plan
and the 1996 Plan (collectively, the " Plans"). The purpose of the Plans is
to further the long-term growth in profitability of the Company by offering
long-term incentives to those executives who will be largely responsible for
such growth. No further awards will be made under the 1991 Plan.
At the Annual Meeting in May, 1996, the shareholders approved the
adoption of the 1996 Plan, and the first awards were made to Senior
Executives. The 1996 Plan authorizes the granting of nonqualified stock
options, incentive stock options, stock appreciation rights, restricted stock
and other stock-based incentives which may be adopted by the Committee.
In 1996, long-term incentive awards were made exclusively in the form of
nonqualified stock options. The value of such stock option awards were
determined formulistically. The value of stock options awarded is equal
to a percentage of the base salary market rate for each Senior Executive.
Generally, this percentage becomes greater as the level of the Senior
Executive's responsibility increases.
The nonqualified stock options granted in 1996, have a ten-year term and
vest in equal amounts over a five-year period, unless accelerated due to the
retirement, death or disability of the optionee. The options were granted at
the prevailing market price and will have value only if the Company's stock
price increases, resulting in a commensurate benefit for the Company's
shareholders.
Awards of performance shares under the 1991 Plan were made annually
through 1995 by the Committee and have a maturity period of five years (except
for awards for shorter periods made to executives who are within five years of
retirement). One performance share corresponds to one share of the Company's
Common Stock, but carries no voting or dividend rights. The Committee has
established conditions for payment and selected a group of companies to which
the Company's performance is compared over the five-year award period. The
companies in the Wilshire Materials and Services Index, which was used in the
Shareholder Return Performance Presentation, overlap to some extent with the
companies in the comparison group. In setting the number of shares to be
awarded to each Senior Executive, the Committee used a formulistic approach.
The value of the performance shares awarded generally was equal to a
percentage of the sum of the market rate salary and the target bonus for each
Senior Executive. Generally, this percentage is greater as the level of the
Senior Executive's responsibility increases.
Payment with respect to one-half of each performance share award is based
on comparison of the Company's growth in earnings per share during the award
period with the growth in earnings per share of the comparison companies.
Payment with respect to the other one-half of the award is based on a
comparison of the Company's return on investment performance with the
return on investment performance of the comparison companies.
In May, 1996, the Committee determined that conditions established with
respect to performance shares awarded in 1991 had been met to the extent that
49% of the awards made in that year were earned and paid. The Company's
performance with respect to the five-year award period placed it at the 74th
percentile in return on investment, and at the 56th percentile in growth in
earnings per share with respect to a comparison group of companies chosen by
the Committee at the time of the award. However, no portion of the half based
upon earnings per share was earned because the Company's average earnings
during the five-year award period were less than the average earnings in the
five years preceding the award period. The performance share payment made
to Mr. Sklenar in 1996 was the same percentage that was paid to all other
participants in the Plan. The Committee will determine later this spring
the extent to which conditions have been satisfied with regard to performance
shares awarded in 1992 and the number of performance shares earned.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m). Internal Revenue
Code Section 162(m), enacted in 1993, prohibits a public corporation from
taking a deduction for compensation in excess of $1 million paid to its chief
executive officer or any of its four other highest paid executive officers.
To date, none of the executives named in the Summary Compensation Table, with
the exception of Mr. Sklenar, has received annual compensation exceeding
$1 million.
Internal Revenue Service regulations exempt certain "qualified
performance-based compensation" from the application of the Section 162(m)
limitation. It is the Committee's understanding that awards and payments made
pursuant to the 1991 Plan and the options granted under the 1996 Plan should
qualify under the regulations as "performance-based" and remain fully
deductible, despite the new limitation. The Management Incentive Plan has
been approved by the shareholders and satisfies several, but not all, of the
criteria necessary to be deemed "qualified performance-based compensation."
The Committee will continue to study possible revisions to the Management
Incentive Plan that would result in all payments under that plan being
fully deductible.
COMPENSATION COMMITTEE
O. R. Smith, Chairman
M. H. Antonini
L. D. DeSimone
R. H. Leet
D. J. McGregor
J. V. Napier
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The following graph and table compare the performance of the Company's
Common Stock to that of the Standard & Poor's 500 Stock Index ("S&P 500") and
the Wilshire Materials and Services Index ("Wilshire M&S") for the period
commencing December 31, 1991, and ending on December 31, 1996. All of these
indices have been calculated by Wilshire Associates, Incorporated. The
Wilshire M&S Index is a market capitalization weighted index containing the
public equities of firms in the Materials and Services sector as defined by
Wilshire Associates, Incorporated. The Materials and Services sector includes
the Company and approximately 1,600 other corporations, some of which are in
the mining and chemicals industries. The Index is one of nine sectors that
make up the Wilshire 5000. The graph assumes that the index value of the
investment in the Company's Common Stock and each index was 100 on
December 31, 1991, and that all dividends have been reinvested.
COMPARATIVE TOTAL RETURNS TO SHAREHOLDERS
CUMULATIVE RETURN INDEX
The aforementioned line graph is represented by the following coordinates:
INDEX AS OF DECEMBER 31
1991 1992 1993 1994 1995 1996
Vulcan (VMC) 100 138 138 153 179 194
S&P 500 Index 100 108 118 120 165 203
Wilshire M&S 100 107 119 117 146 167
RETIREMENT INCOME PLAN
The Retirement Income Plan for Salaried Employees of Vulcan Materials
Company (the "Retirement Plan") provides benefits under a funded
noncontributory defined benefit plan and covers most salaried employees,
including all executive officers. Under the Retirement Plan, normal retirement
benefits are paid commencing at age 65 (or later actual retirement) based on
the participant's years of benefit service under the Retirement Plan and the
average of the highest 36 consecutive months of eligible earnings. Eligible
earnings under the Retirement Plan include an employee's salary and any awards
under the Company's Management Incentive Plan, as described in the "Salary"
and "Bonus" columns of the Summary Compensation Table. The benefit amounts
are subject to deductions equal to 1.34% of a participant's monthly primary
social security benefit for each year of benefit service, up to a maximum of
50% of the primary social security benefit. There were no contributions by
the Company to the Retirement Plan in 1996 due to the full funding limitations
imposed by federal law.
Under Section 415 of the Internal Revenue Code, the maximum benefit
allowable under the Retirement Plan for an employee retiring at age 65 in 1996
is $120,000, an amount which may change each year in accordance with a
determination made by the Internal Revenue Service. In addition, Section 401
of the Internal Revenue Code limits the amount of an employee's compensation
which may be taken into account under the Retirement Plan to $150,000, an
amount which also is subject to change each year in accordance with a similar
determination. Therefore, the Company has an Unfunded Supplemental Benefit
Plan for Salaried Employees (the "Supplemental Plan") which enables the
Company to pay to any person designated by the Compensation Committee whose
pension under the Retirement Plan has been reduced as a result of the
limitations imposed by Sections 401 and 415 of the Internal Revenue Code an
amount equal to the difference between the amount the person would have
received under the Retirement Plan had there been no limitations and the
amount the person will receive under the Retirement Plan after giving effect
to the limitations.
The Supplemental Plan is unfunded and amounts due the employees covered
thereby are general obligations of the Company; however, the Supplemental Plan
contains provisions which allow for the creation of a trust to help ensure the
payment of benefits under the Supplemental Plan.
The Supplemental Plan provides for the vesting of excess retirement
benefits in the same manner that benefits vest under the Retirement Plan,
which is after five years. In addition, the Supplemental Plan provides for an
acceleration of the payment of excess retirement benefits in connection with a
Change in Control of the Company (see the definition of "Change in Control" on
page 22 below) if, simultaneously with or subsequent to the Change in Control,
the participant's employment is terminated, the Supplemental Plan is
terminated or the Company's capital structure is changed materially.
Assuming continuance of the Retirement Plan and the Supplemental Plan
in their present form, annual benefits payable to participating employees
(including executive officers) following retirement, in specific salary
classifications and with the continuous years of benefit service indicated,
are shown in the table below. Each amount in the table is based on the
benefit applicable on December 31, 1996, to an employee retiring at age 65
payable in the form of a single life annuity and is subject to the
above-described deduction for the primary social security benefit.
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
$100,000 25,200 33,600 40,650 47,700 54,750 58,000
150,000 37,800 50,400 60,975 71,550 82,125 87,000
200,000 50,400 67,200 81,300 95,400 109,500 116,000
250,000 63,000 84,000 101,625 119,250 136,875 145,000
300,000 75,600 100,800 121,950 143,100 164,250 174,000
350,000 88,200 117,600 142,275 166,950 191,625 203,000
400,000 100,800 134,400 162,600 190,800 219,000 232,000
500,000 126,000 168,000 203,250 238,500 273,750 290,000
600,000 151,200 201,600 243,900 286,200 328,500 348,000
700,000 176,400 235,200 284,550 333,900 383,250 406,000
800,000 201,600 268,800 325,200 381,600 438,000 464,000
900,000 226,800 302,400 365,850 429,300 492,750 522,000
1,000,000 252,000 336,000 406,500 477,000 547,500 580,000
The benefit service accruals used to determine benefits under the
Retirement Plan as of December 31, 1996, for Mr. Sklenar and four other
executive officers named in the Summary Compensation Table are shown below.
YEARS OF
BENEFIT SERVICE
NAME AS OF 12/31/96
Herbert A. Sklenar 24 6/12
Donald M. James 4 0/12
Michael J. Ferris(1) 25 7/12
Peter J. Clemens, III 19 5/12
Daniel J. Leemon 15 5/12
(1) Mr. Ferris resigned effective January 5, 1997, and is no longer an
employee of the Company.
EMPLOYEE SPECIAL SEVERANCE PLAN
The Company's Employee Special Severance Plan (the "Special Severance
Plan") became effective in 1990, following adoption by the Board of Directors.
The Special Severance Plan covers all full-time salaried employees, including
the executive officers named in the Summary Compensation Table, and is
designed to reassure participants in the event of a Change in Control (as
defined below) of the Company, so that they can continue to focus their time
and energy on business-related concerns rather than personal concerns. A
Change in Control is defined as (1) the acquisition by any person, entity or
group of 25% or more of the outstanding shares of Company stock or the
combined voting power of the Company's outstanding voting securities, unless a
majority of the continuing directors determines that this acquisition does not
constitute a Change in Control; (2) the continuing directors cease to
constitute a majority of the Board of Directors; (3) approval by the Board
of Directors of (a) a merger, consolidation or reorganization of the Company,
after which either (i) the continuing directors do not constitute a majority
of the directors of the surviving corporation, or (ii) any person, entity or
group controls more than 25% of the combined voting power, ( b) any sale,
lease or other transfer of all or substantially all of the Company's assets,
or (c) any plan or proposal for the Company's dissolution or liquidation,
unless a majority of the continuing directors determine that such merger,
consolidation, reorganization, sale, lease, other transfer, liquidation or
dissolution shall not be deemed a Change in Control for purposes of the
Special Severance Plan. A participant is entitled to benefits under the
Special Severance Plan if, within two years after a Change in Control, the
participant's employment is terminated without substantial cause ("Substantial
Cause") or is voluntarily terminated by the participant for good reason ("Good
Reason"). Substantial Cause is defined as: (1) the participant's willful and
continued failure to substantially perform his duties after receiving a
written demand for substantial performance; (2) the participant's willful
engaging in an act of gross misconduct which is demonstrably injurious to the
Company; or (3) the participant's commission of an act of fraud intended to
result in substantial personal enrichment. Good Reason is defined as:
(1) the assignment to the participant of duties that are materially
inconsistent with his position or a change in the participant's title or
office without his consent; (2) a reduction in the participant's salary or
the Company's failure to increase the participant's salary by a specified
percentage and by a specified date; (3) a change in the participant's
principal work location to a location more than 50 miles from his current
principal work location; (4) the Company's failure to maintain any benefit
or compensation plan (collectively, "Plans") in which the participant was
participating, a reduction of the participant's benefits under the Plans, or
the failure to provide the participant the number of vacation days to which he
is entitled; (5) the Company's failure to pay the participant any compensation
within seven days of its due date; (6) the Company's failure to require any
successor to the Company to assume the obligations pursuant to the Special
Severance Plan; or (7) the Company's termination of the participant in a
manner inconsistent with the Special Severance Plan.
Benefits under the Special Severance Plan include a lump-sum payment upon
termination which, in the case of executives of the Company whose compensation
is determined by the Compensation Committee of the Board of Directors, would
be equal to two years' base salary. The lump-sum payments made to other
participants would be equal to two and one-half weeks' base salary times the
participant's years of service, subject to a maximum of two years' base salary
and a minimum ranging from one-fourth year's base salary to one year's base
salary, depending upon the participant's position with the Company. (The
Special Severance Plan also contains limitations on benefits which are
designed to prevent the payments made under the Special Severance Plan, when
added to payments which may be made to employees under other Company plans in
the event of a Change in Control, from exceeding certain limits imposed by
the Internal Revenue Code.) Benefits under the Special Severance Plan also
include the maintenance bythe Company of all life insurance, accidental death
and dismemberment insurance and medical, dental and prescription drug plans in
which the participant was entitled to participate for up to one year from a
participant's termination.
The Special Severance Plan is unfunded, but contains provisions which
allow for the creation of a trust to help ensure the payment of benefits under
the Special Severance Plan.
2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Review Committee, which is composed of
directors who are not officers of the Company, the Board of Directors has
appointed Deloitte & Touche LLP, a firm of independent certified public
accountants, as independent auditors for the year 1997 and until their
successors are chosen. The function of the independent auditors is to audit
the accounts and records of the Company, to report on the consolidated balance
sheet, the related statements of consolidated earnings, consolidated
shareholders' equity and changes in consolidated financial position of the
Company and its subsidiaries, and to perform such other appropriate accounting
services as may be required by the Board of Directors. Although shareholder
ratification is not required, the Board of Directors has determined that it
would be desirable to request an expression from the shareholders as to
whether or not they concur in this appointment. If a majority of the shares
voting at the Annual Meeting fails to ratify the selection of Deloitte &
Touche LLP as independent auditors, the Board of Directors will consider
the selection of another independent certified public accounting firm.
The firm of Deloitte & Touche LLP, or its predecessors, Deloitte Haskins
& Sells and Haskins & Sells, has audited the Company's financial statements
since 1956. A representative of that firm will be present at the Annual
Meeting and will be given an opportunity to make a statement and to respond
to appropriate questions.
The Board of Directors recommends a vote FOR
the proposal to ratify its independent auditors.
COMPLIANCE WITH THE SECURITIES EXCHANGE ACT
Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
each of the Company's directors and executive officers, and any beneficial
owner of more than 10% of the Common Stock, is required to file with the
Securities and Exchange Commission (the "SEC") initial reports of beneficial
ownership of the Common Stock and reports of changes in beneficial ownership
of the Common Stock. Such persons also are required by SEC regulations to
furnish the Company with copies of all such reports. Based solely on its
review of the copies of such reports furnished to the Company for the year
ended December 31, 1996, and on the written representations made by such
persons that no other reports were required, the Company is not aware of
any instances of noncompliance with Section 16(a) by such persons.
SHAREHOLDER PROPOSALS FOR 1998
To be eligible for inclusion in the Company's Proxy Statement and form of
proxy for its 1998 annual meeting, a shareholder's proposal must be received
by the Company at its principal office no later than December 7, 1997.
Proposals should be addressed to William F. Denson, III, Secretary,
P. O. Box 530187, Birmingham, Alabama 35253-0187.
VULCAN MATERIALS COMPANY
WILLIAM F. DENSON, III
Secretary
One Metroplex Drive
Birmingham, Alabama 35209
April 7, 1997
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMNET
ANNUAL MEETING OF
SHAREHOLDERS
MAY 16, 1997
VULCAN MATERIALS COMPANY
PROXY
VULCAN MATERIALS COMPANY
ANNUAL MEETING OF SHAREHOLDERS MAY 16, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VULCAN
MATERIALS COMPANY
The undersigned hereby appoints LIVIO D. DeSIMONE, HERBERT A. SKLENAR
and ORIN R. SMITH, and each of them, with full power of substitution,
proxies to vote all shares of stock that the undersigned could vote if
present at the 1997 Annual Meeting of Shareholders to be held May 16, 1997,
and at any adjournments or adjournments thereof, on all matters coming before
said meeting as set forth on the opposite side of this card.
Election of Directors
Nominees for Election as Directors: Herbert A. Sklenar, Marion H. Antonini
and James V. Napier
You are encouraged to specify your choices by marking the appropriate boxes
(SEE REVERSE SIDE), but you NEED NOT MARK any boxes if you wish to VOTE IN
ACCORDANCE with the Board of Directors' recommendations. Please mark, sign,
date, and return this Proxy promptly using the enclosed envelope.
SEE REVERSE
SIDE
DETACH HERE
ABOVE IS YOUR PROXY CARD
X votes as in this
example.
This Proxy when properly executed will be voted in the manner directed
herein. If no direction is given, this Proxy will be voted FOR all of
the Board of Directors' nominees and FOR proposal 2.
The Board of Directors recommends a vote FOR its nominees and FOR proposal 2.
FOR WITHHELD
1. Election of
Directors.
(See reverse)
For, except vote withheld from the following nominee(s):
FOR AGAINST ABSTAIN
2. Ratification of Deloitte
& Touche LLP as independent
auditors for the year 1997.
Please sign name(s) exactly as printed hereon. If
shares are held jointly, each shareholder must sign.
If signing as an attorney, administrator, executor,
guardian, or trustee, please give full title as such.
SIGNATURE(S) DATE
DETACH HERE
TO VULCAN MATERIALS COMPANY SHAREHOLDERS:
Attached above is your 1997 Vulcan Materials Company proxy card. Please read
both sides of the card and mark, SIGN, and date it. Then detach and return it
promptly, using the enclosed envelope. We urge you to vote your shares.
You are invited to attend the 1997 Annual Meeting of Shareholders on Friday,
May 16, 1997, at 10:00 a.m. at the AmSouth Sonat Tower, 1900 5th Avenue North,
Birmingham, Alabama 35203.
Thank you in advance for voting on these important issues.
William F. Denson, III
Secretary
DON'T FORGET TO SIGN AND DATE THIS PROXY.
VULCAN MATERIALS COMPANY
NOTICE TO THRIFT PLAN PARTICIPANTS
OF MATTERS TO BE ACTED UPON AT
THE ANNUAL MEETING OF SHAREHOLDERS
VOTING INSTRUCTION INFORMATION
As a participant in the Company's Thrift Plan for Salaried Employees
(the "Thrift Plan"), you have the right to direct the Trustee under the Thrift
Plan as to how certain shares of the Company's Common Stock represented by
moneys standing to your credit under the Thrift Plan as of February 28, 1997,
should be voted at the Annual Meeting of Shareholders. The number of such
shares is shown on the enclosed voting instruction card.
The Annual Meeting will be held at the AmSouth Sonat Tower, 1900 5th
Avenue North, Birmingham, Alabama, on Friday, May 16, 1997, at 10:00 a.m.,
Central Daylight Time, for the following purposes:
(1) To elect two (2) directors to serve for a term of three years
until the Annual Meeting of the Shareholders in 2000 and one
(1) director to serve a term of two years until the Annual
Meeting of the Shareholders in 1999 and until their
successors are duly elected and qualified.
(2) To ratify the appointment of Deloitte & Touche LLP as
independent auditors for 1997.
(3) To transact such other business as may properly come before
the Annual Meeting.
The Thrift Plan Administrative Committee hopes that every participant
will take this opportunity to participate in the affairs of the Company by
completing, signing and returning the enclosed instruction card, in the
envelope provided, to The Northern Trust Company, the Trustee under the
Thrift Plan. The directions of any participant will be kept in complete
confidence by the Trustee. Common Stock of the Company with respect to which
directions are not received by the Trustee prior to the Annual Meeting shall
be voted by the Trustee in the same proportion as the shares for which
instructions are received.
Information of interest to participants in connection with the Annual
Meeting is set forth in the enclosed Proxy Statement, which is being
distributed to all shareholders of record.
The Annual Report of your Company for 1996 also is enclosed.
ON BEHALF OF THE THRIFT PLAN
ADMINISTRATIVE COMMITTEE,
J. WAYNE HOUSTON, CHAIRMAN
March 31, 1997
VULCAN MATERIALS COMPANY THRIFT PLAN FOR SALARIED EMPLOYEES
VOTING INSTRUCTIONS TO THE TRUSTEE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned Thrift Plan participant hereby directs The Northern Trust
Company of Chicago, Illinois, Trustee under the Vulcan Materials Company
Thrift Plan for Salaried Employees, to vote, in person or by proxy, the shares
of stock represented by moneys standing to the credit of the undersigned as of
February 28, 1997, and representing his/her own savings and Company
contributions, upon all matters at the Company's Annual Meeting of
Shareholders to be held on May 16, 1997, and at any adjournment or
adjournments thereof, and without limiting the general direction hereby given,
the Trustee is directed to vote with respect to the following matters
described in the Voting Instruction Information and Proxy Statement:
(1) ELECTION OF DIRECTORS
Nominees: Herbert A. Sklenar, Marion H. Antonini and James V. Napier
VOTE FOR all nominees listed above, except vote withheld from
the following nominee(s) (if any):
VOTE WITHHELD from all nominees.
(Continued, and to be signed on the reverse side)
(Continued from other side)
(2) To vote FOR AGAINST ABSTAIN
Ratification of the appointment of Deloitte & Touche LLP as independent
auditors for the year 1997.
(3) To vote, in its discretion, upon such other matters as may properly
come before the meeting.
IF NO INDICATION IS MADE WITH RESPECT TO THE FOREGOING MATTERS, THE SHARES TO
WHICH THIS VOTING INSTRUCTION CARD RELATES WILL BE VOTED BY THE TRUSTEE IN THE
SAME PROPORTION AS THE SHARES FOR WHICH INSTRUCTIONS ARE RECEIVED.
Number of shares participant
is entitled to instruct.
Dated , 1997
(Signature)
Please sign name exactly as printed immediately to the left.
VULCAN MATERIALS COMPANY
NOTICE TO CONSTRUCTION MATERIALS DIVISIONS
SAVINGS PLAN PARTICIPANTS
OF MATTERS TO BE ACTED UPON AT
THE ANNUAL MEETING OF SHAREHOLDERS
VOTING INSTRUCTION INFORMATION
As a participant in the Company's Construction Materials Divisions Hourly
Employees Savings Plan (the "Savings Plan"), you have the right to direct the
Trustee under the Savings Plan as to how certain shares of the Company's
Common Stock represented by moneys standing to your credit under the Savings
Plan as of February 28, 1997, should be voted at the Annual Meeting of
Shareholders. The number of such shares is shown on the enclosed voting
instruction card.
The Annual Meeting will be held at the AmSouth Sonat Tower, 1900 5th
Avenue North, Birmingham, Alabama, on Friday, May 16, 1997, at 10:00 a.m.,
Central Daylight Time, for the following purposes:
(1) To elect two (2) directors to serve for a term of three years
until the Annual Meeting of the Shareholders in 2000 and one
(1) director to serve a term of two years until the Annual
Meeting of the Shareholders in 1999 and until their
successors are duly elected and qualified.
(2) To ratify the appointment of Deloitte & Touche LLP as
independent auditors for 1997.
(3) To transact such other business as may properly come before
the Annual Meeting.
The Savings Plan Administrative Committee hopes that every participant
will take this opportunity to participate in the affairs of the Company by
completing, signing and returning the enclosed instruction card, in the
envelope provided, to The Northern Trust Company, the Trustee under the
Savings Plan. The directions of any participant will be kept in complete
confidence by the Trustee. Common Stock of the Company with respect to which
directions are not received by the Trustee prior to the Annual Meeting shall
be voted by the Trustee in the same proportion as the shares for which
instructions are received.
Information of interest to participants in connection with the Annual
Meeting is set forth in the enclosed Proxy Statement, which is being
distributed to all shareholders of record.
The Annual Report of your Company for 1996 also is enclosed.
ON BEHALF OF THE CONSTRUCTION MATERIALS
DIVISIONS SAVINGS PLAN ADMINISTRATIVE
COMMITTEE,
J. WAYNE HOUSTON, CHAIRMAN
March 31, 1997
VULCAN MATERIALS COMPANY CONSTRUCTION MATERIALS DIVISIONS
HOURLY EMPLOYEES SAVINGS PLAN - VOTING INSTRUCTIONS TO THE TRUSTEE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned Savings Plan participant hereby directs The Northern Trust
Company of Chicago, Illinois, Trustee under the Vulcan Materials Company
Construction Materials Divisions Hourly Employees Savings Plan, to vote, in
person or by proxy, the shares of stock represented by moneys standing to the
credit of the undersigned as of February 28, 1997, and representing his/her
own savings and Company contributions, upon all matters at the Company's
Annual Meeting of Shareholders to be held on May 16, 1997, and at any
adjournment or adjournments thereof, and without limiting the general
direction hereby given, the Trustee is directed to vote with respect to
the following matters described in the Voting Instruction Information and
Proxy Statement:
(1) ELECTION OF DIRECTORS
Nominees: Herbert A. Sklenar, Marion H. Antonini and James V. Napier
VOTE FOR all nominees listed above, except vote withheld from
the following nominee(s) (if any):
VOTE WITHHELD from all nominees.
(Continued, and to be signed on the reverse side)
(Continued from other side)
(2) To vote FOR AGAINST ABSTAIN
Ratification of the appointment of Deloitte & Touche LLP as independent
auditors for the year 1997.
(3) To vote, in its discretion, upon such other matters as may properly
come before the meeting.
IF NO INDICATION IS MADE WITH RESPECT TO THE FOREGOING MATTERS, THE SHARES TO
WHICH THIS VOTING INSTRUCTION CARD RELATES WILL BE VOTED BY THE TRUSTEE IN THE
SAME PROPORTION AS THE SHARES FOR WHICH INSTRUCTIONS ARE RECEIVED.
Number of shares participant
is entitled to instruct.
Dated , 1997
(Signature)
Please sign name exactly as printed immediately to the left.
VULCAN MATERIALS COMPANY
NOTICE TO CHEMICALS GROUP SAVINGS PLAN PARTICIPANTS
OF MATTERS TO BE ACTED UPON AT
THE ANNUAL MEETING OF SHAREHOLDERS
VOTING INSTRUCTION INFORMATION
As a participant in the Company's Chemicals Group Hourly Employees
Savings Plan (the "Savings Plan"), you have the right to direct the Trustee
under the Savings Plan as to how certain shares of the Company's Common Stock
represented by moneys standing to your credit under the Savings Plan as of
February 28, 1997, should be voted at the Annual Meeting of Shareholders.
The number of such shares is shown on the enclosed voting instruction card.
The Annual Meeting will be held at the AmSouth Sonat Tower, 1900 5th
Avenue North, Birmingham, Alabama, on Friday, May 16, 1997, at 10:00 a.m.,
Central Daylight Time, for the following purposes:
(1) To elect two (2) directors to serve for a term of three years
until the Annual Meeting of the Shareholders in 2000 and one
(1) director to serve a term of two years until the Annual
Meeting of the Shareholders in 1999 and until their
successors are duly elected and qualified.
(2) To ratify the appointment of Deloitte & Touche LLP as
independent auditors for 1997.
(3) To transact such other business as may properly come before
the Annual Meeting.
The Savings Plan Administrative Committee hopes that every participant
will take this opportunity to participate in the affairs of the Company by
completing, signing and returning the enclosed instruction card, in the
envelope provided, to The Northern Trust Company, the Trustee under the
Savings Plan. The directions of any participant will be kept in complete
confidence by the Trustee. Common Stock of the Company with respect to which
directions are not received by the Trustee prior to the Annual Meeting shall
be voted by the Trustee in the same proportion as the shares for which
instructions are received.
Information of interest to participants in connection with the Annual
Meeting is set forth in the enclosed Proxy Statement, which is being
distributed to all shareholders of record.
The Annual Report of your Company for 1996 also is enclosed.
ON BEHALF OF THE CHEMICALS GROUP SAVINGS
PLAN ADMINISTRATIVE COMMITTEE,
J. WAYNE HOUSTON, CHAIRMAN
March 31, 1997
VULCAN MATERIALS COMPANY CHEMICALS GROUP
HOURLY EMPLOYEES SAVINGS PLAN - VOTING INSTRUCTIONS TO THE TRUSTEE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned Savings Plan participant hereby directs The Northern Trust
Company of Chicago, Illinois, Trustee under the Vulcan Materials Company
Chemicals Group Hourly Employees Savings Plan, to vote, in person or by
proxy, the shares of stock represented by moneys standing to the credit of
the undersigned as of February 28, 1997, and representing his/her own savings
and Company contributions, upon all matters at the Company's Annual Meeting
of Shareholders to be held on May 16, 1997, and at any adjournment or
adjournments thereof, and without limiting the general direction hereby
given, the Trustee is directed to vote with respect to the following matters
described in the Voting Instruction Information and Proxy Statement:
(1) ELECTION OF DIRECTORS
Nominees: Herbert A. Sklenar, Marion H. Antonini and James V. Napier
VOTE FOR all nominees listed above, except vote withheld from
the following nominee(s) (if any):
VOTE WITHHELD from all nominees.
(Continued, and to be signed on the reverse side)
(Continued from other side)
(2) To vote FOR AGAINST ABSTAIN
Ratification of the appointment of Deloitte & Touche LLP as independent
auditors for the year 1997.
(3) To vote, in its discretion, upon such other matters as may properly
come before the meeting.
IF NO INDICATION IS MADE WITH RESPECT TO THE FOREGOING MATTERS, THE SHARES TO
WHICH THIS VOTING INSTRUCTION CARD RELATES WILL BE VOTED BY THE TRUSTEE IN THE
SAME PROPORTION AS THE SHARES FOR WHICH INSTRUCTIONS ARE RECEIVED.
Number of shares participant
is entitled to instruct.
Dated , 1997
(Signature)
Please sign name exactly as printed immediately to the left.
