<PAGE> 1
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 / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
ELCOR CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
LOGO
14643 DALLAS PARKWAY
SUITE 1000, WELLINGTON CENTRE
DALLAS, TEXAS 75240-8871
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, OCTOBER 24, 1995
To the Shareholders:
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of Elcor
Corporation (the "Company") will be held in the Derrick Room of the Midland
Petroleum Club, 501 West Wall Street, Midland, Texas, on Tuesday, October 24,
1995, at 10 a.m., local time, for the following purposes:
1. To elect two directors to hold office for the terms specified in
the Proxy Statement or until their successors are elected and qualified;
2. To ratify the appointment of Arthur Andersen LLP as independent
auditors of the Company for its fiscal year ending June 30, 1996; and
3. To transact such other business as may properly come before such
meeting or any adjournment or adjournments thereof (the "Meeting").
An alphabetical list of the names and addresses of shareholders eligible to
vote at the Meeting, together with the number of shares registered, will be
maintained during ordinary business hours at the offices of Ortloff Engineers,
Ltd. at Suite 2000, Wilco Building, 415 West Wall Street, Midland, Texas 79701
for at least ten days prior to the Meeting.
The Board of Directors has fixed the close of business on September 5,
1995, as the record date for the determination of shareholders entitled to
notice of and to vote at the Meeting.
By Order of the Board of Directors
DAVID G. SISLER
Secretary
Dated: September 19, 1995
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, YOU ARE URGED TO EXECUTE
THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED REPLY ENVELOPE,
WHICH REQUIRES NO POSTAGE. ANY SHAREHOLDER GRANTING A PROXY MAY REVOKE SAME AT
ANY TIME PRIOR TO ITS EXERCISE. ALSO, WHETHER OR NOT YOU GRANT A PROXY, YOU MAY
VOTE IN PERSON IF YOU ATTEND THE MEETING.
<PAGE> 3
LOGO
14643 DALLAS PARKWAY
SUITE 1000, WELLINGTON CENTRE
DALLAS, TEXAS 75240-8871
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, OCTOBER 24, 1995
SOLICITATION OF PROXY
The accompanying proxy is solicited on behalf of the Board of Directors of
Elcor Corporation (the "Company") for use at the Annual Meeting of Shareholders
of the Company to be held on Tuesday, October 24, 1995, and at any adjournment
or adjournments thereof (the "Meeting"). In addition to the use of the mails,
proxies may be solicited by personal interview, telephone or facsimile by
officers, directors and other employees of the Company, who will not receive
additional compensation for such services. The Company may also request
brokerage houses, nominees, custodians and fiduciaries to forward the soliciting
material to the beneficial owners of stock held of record and will reimburse
such persons for forwarding such material at the rates suggested by the New York
Stock Exchange. The Company will bear the cost of this solicitation of proxies.
Such costs are expected to be nominal. Proxy solicitation will commence with the
mailing of this Proxy Statement on or about September 19, 1995.
Any shareholder giving a proxy has the power to revoke the same at any time
prior to its exercise by executing a subsequent proxy or by written notice to
the Secretary of the Company or by attending the Meeting and withdrawing the
proxy.
PURPOSE OF MEETING
As stated in the Notice of Annual Meeting of Shareholders accompanying this
Proxy Statement, the business to be conducted and the matters to be considered
and acted upon at the Meeting are as follows:
1. To elect two directors to hold office for the terms specified
herein or until their successors are elected and qualified;
2. To ratify the appointment of Arthur Andersen LLP as independent
auditors of the Company for its fiscal year ending June 30, 1996; and
3. To transact such other business as may properly come before the
Meeting.
VOTING AT MEETING
The voting securities of the Company consist solely of common stock, par
value $1 per share ("Common Stock").
The record date for shareholders entitled to notice of and to vote at the
Meeting is the close of business on September 5, 1995 (the "Record Date"), at
which time the Company had outstanding and entitled to vote at the Meeting
8,722,908 shares of Common Stock. Shareholders are entitled to one vote, in
person or by proxy, for each share of Common Stock held in their names on the
Record Date.
Shareholders representing fifty-one percent of the Common Stock outstanding
and entitled to vote must be present or represented by proxy to constitute a
quorum.
<PAGE> 4
Neither abstentions nor broker non-votes are counted as votes cast on any
matter to which they relate. All shares represented in person or by proxy,
including abstentions and broker non-votes, are considered in determining
whether a quorum has been reached on a particular matter. A broker non-vote will
occur when a broker who holds shares in nominee form, or "street name," for a
customer does not have the authority under the rules of the New York Stock
Exchange ("NYSE") to cast a vote on a particular matter because the matter is
deemed by the NYSE to be non-discretionary and the broker's customer has not
furnished voting instructions.
If a shareholder is a participant in the Company's Employee Stock Ownership
Plan ("ESOP"), the proxy card will also serve as a voting direction for the
Trustee of such plan. Shares not yet allocated to ESOP participants, under the
terms of the ESOP, will be voted in proportion to allocated ESOP shares for
which voting is directed. Allocated shares held through the ESOP for which
participants do not return properly signed proxy cards will be voted as the
Trustee directs in the exercise of its fiduciary duties.
The election of directors and the ratification of the appointment of Arthur
Andersen LLP as independent auditors each will require the affirmative vote of a
majority of the Common Stock present or represented by proxy at the meeting and
voting thereon. Cumulative voting for directors is not authorized.
STOCK OWNERSHIP
The following table sets forth as of September 5, 1995, the number of
shares of Common Stock beneficially owned by each director, each Named Executive
Officer (as defined under "Executive Compensation" below), and by all directors
and executive officers as a group.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER SHARES OF PERCENT
OR IDENTITY OF GROUP COMMON STOCK(1) OF CLASS
---------------------------------------------------------- --------------- --------
<S> <C> <C>
Roy E. Campbell........................................... 766,174(2) 8.78
F. H. Callaway............................................ 174,896 2.01
James E. Hall............................................. 120,800 1.38
Robert M. Leibrock........................................ 219,650 2.52
W. F. Ortloff............................................. 29,706 *
Phil Simpson.............................................. 10,000 *
James L. Dow II........................................... 381(3) *
Leonard R. Harral......................................... 7,026(4) *
Richard J. Rosebery....................................... 97,054(5) 1.11
Harold K. Work............................................ 114,533(6) 1.31
All directors and executive officers as a group (12
persons)................................................ 1,561,271(7) 17.73
</TABLE>
---------------
* Percentages of one percent or less have been omitted.
(1) All shares are owned directly and the owner has sole voting and investment
power with respect to such shares, except for (i) option shares as shown in
notes (2) and (4) through (7); (ii) shares allocated to such persons'
accounts in the ESOP; and (iii) shares that are treated as beneficially
owned by such persons for purposes of this table, such as, but not limited
to, shares which are held in the name of the wife or minor children of such
persons, or as trustee or custodian for children of such persons, or by
children who are not minors but who reside with such persons.
(2) Includes options currently exercisable or exercisable within sixty days for
20,850 shares.
(3) Represents ESOP shares, twenty percent of which were vested as of the date
of Mr. Dow's resignation.
(4) Includes options currently exercisable or exercisable within sixty days for
1,556 shares.
(5) Includes options currently exercisable or exercisable within sixty days for
27,000 shares.
(6) Includes options currently exercisable or exercisable within sixty days for
29,050 shares.
(7) Includes options currently exercisable or exercisable within sixty days for
82,955 shares.
2
<PAGE> 5
The following table sets forth as of September 5, 1995, certain information
with respect to each beneficial owner who is known to the Company to own more
than 5 percent of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES OF PERCENT
BENEFICIAL OWNER COMMON STOCK OF CLASS
----------------------------------------------- ------------ --------
<S> <C> <C>
Roy E. Campbell 745,324(1) 8.54
14643 Dallas Parkway
Wellington Centre, Suite 1000
Dallas, TX, 75240-8871
Trustees for the Employee Stock Ownership Plan
of Elcor Corporation 678,830 7.78
c/o Elcor Corporation
14643 Dallas Parkway
Wellington Centre, Suite 1000
Dallas, TX 75240-8871
FMR Corp. 550,900(2) 6.32
82 Devonshire Street
Boston, MA 02109-3614
State Farm Mutual Automobile Insurance Company 500,000(3) 5.73
One State Farm Plaza
Bloomington, IL 61710
</TABLE>
---------------
(1) Excludes 20,850 exercisable option shares reflected in Stock Ownership Table
above.
(2) This information was based solely on a letter from FMR Corp. dated September
12, 1995. As of August 31, 1995, FMR Corp. beneficially owned 550,900
shares, including: 517,300 shares beneficially owned by Fidelity Management
& Research Company, as a result of its serving as investment adviser to
various investment companies registered under Section 8 of the Investment
Company Act of 1940 and serving as investment adviser to certain other
funds which are generally offered to limited groups of investors; and
33,600 shares beneficially owned by Fidelity Management Trust Company, as a
result of its serving as trustee or managing agent for various private
investment accounts, primarily employee benefit plans and serving as
investment adviser to certain other funds which are generally offered to
limited groups of investors. FMR Corp. has sole voting power with respect
to 33,600 shares and sole dispositive power with respect to 550,900 shares.
(3) This information was taken from an Amended Schedule 13G filed with the
Securities and Exchange Commission as of January 26, 1995, by State Farm
Mutual Automobile Insurance Company (hereinafter referred to as "State
Farm") and a letter from State Farm dated September 12, 1995. State Farm or
its affiliates have sole voting power and sole dispositive power with
respect to 500,000 shares.
As far as is known to management of the Company, no other single person
owns beneficially more than 5 percent of the outstanding shares of Common Stock.
BOARD OF DIRECTORS
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company, although it
is not involved in day-to-day operating details. The Board meets regularly
throughout the year, including the annual organization meeting following the
Annual Meeting of Shareholders. During the last fiscal year, the Board met
eleven times.
The Board has established a number of standing committees of certain of its
members to perform particular areas of responsibility. These are the Executive,
Audit, and the Compensation Committees. There is no Nominating Committee.
The primary function of the Executive Committee is to assist the Board by
acting upon matters when the Board is not in session within general guidelines
previously authorized by the Board. All actions taken by the
3
<PAGE> 6
Committee are promptly reported to and reviewed by the full Board. The Committee
met twelve times during the last fiscal year. The Executive Committee consists
of Messrs. Campbell, Callaway, Leibrock and Ortloff.
The Audit Committee consists of Messrs. Leibrock, Hall and Simpson, all of
whom are nonemployee directors. The functions of the Committee are to determine
whether management has established internal controls which are sound, adequate
and working effectively; to ascertain whether Company assets are verified and
safeguarded; to review and approve external audits; to review audit fees and the
appointment of independent auditors; and to review nonaudit services provided by
the independent auditors. The Committee met three times during the last fiscal
year.
The Compensation Committee consists of Messrs. Callaway, Hall and Ortloff.
Its function is to independently review and assess compensation for the Chief
Executive Officer and all other executive officers of the Company and provide
advice and recommendations to the Board of Directors concerning such
compensation, benefits and the development of policies on employee compensation
for the Company. The Committee met four times during the last fiscal year.
Due to an illness which included a lengthy hospital stay, Mr. Ortloff
attended only seven of the eleven Board of Directors meetings (63%) and six of
the twelve Executive Committee meetings (50%) during the last fiscal year.
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Meeting, two directors, Messrs. Roy E. Campbell and James E. Hall,
are to be elected for a three-year term or until their successors are elected
and qualified.
In accordance with Company's By-Laws, directors are divided into three
classes, each of which is composed of one-third of the directors. At the 1995
Annual Meeting, two directors will be elected to serve for terms of three years
expiring on the date of the Annual Meeting of Stockholders in 1998. Each
director elected will continue in office until a successor has been elected or
until resignation or removal in the manner provided by the By-Laws of the
Company. The nominees for directors are both currently board members. The names
of nominees for the Board of Directors and the names of directors whose terms
will continue after the Meeting are listed below.
Neither of the nominees has any family relationship with the other or any
officer or director of the Company or any of its subsidiaries. Neither of the
nominees is being proposed for election pursuant to any arrangement or
understanding between such nominee and any other person except only the
directors and executive officers of the Company acting solely as such.
Shares represented by properly executed proxies will be voted, in the
absence of contrary indication therein or revocation thereof by the shareholder
granting such proxy, in favor of the election of the nominees named below as
directors, to hold office for the term stated above. The persons named as
proxies in the enclosed proxy have been designated by the Company's management
and intend to vote for the election to the Board of Directors of the persons
named below. If the contingency should occur that any such nominee is unable to
serve as a director, it is intended that the shares represented by the proxies
will be voted, in the absence of contrary indication, for any substitute nominee
that management may designate. Management knows of no reason why any nominee
would be unable to serve. The information presented herein with respect to the
nominees was obtained in part from the respective persons, and in part from the
records of the Company.
NOMINEES FOR THREE-YEAR TERMS
ROY E. CAMPBELL, 69 -- Chairman of the Board, Chief Executive Officer and
President, Elcor Corporation.
Mr. Campbell has been President of the Company since 1965 and, for more
than the past five years, has also served as a director and/or officer of
each of the Company's subsidiaries. Mr. Campbell is a member
4
<PAGE> 7
of the board of governors of the Midland Memorial Foundation. Mr. Campbell
is Chairman of the Executive Committee. He has been a director since 1965
and his term expires in 1995.
JAMES E. HALL, 60 -- President of Chaparral Cars, Inc. and Manager of Condor
Operating Company.
For more than the past five years, Mr. Hall has been President and a
director of Chaparral Cars, Inc., which builds and operates cars for major
national racing events, and Manager of Condor Operating Company,
independent oil operators. Since June 1990, Mr. Hall has been a director
and officer of Hall Racing, Inc. Since March 1990, Mr. Hall has been a
director and officer of Condor Aviation Company, Inc. Mr. Hall has been a
director of Championship Auto Racing Teams, Inc. since June 1991. Mr. Hall
is a member of the Audit Committee and the Compensation Committee. He has
served as a director since 1974 and his term expires in 1995.
CONTINUING DIRECTORS
F. H. CALLAWAY, 73 -- Partner, Callaway Oil & Gas Co.
Mr. Callaway has, for more than the past five years, been an independent
oil operator and since May 1981 has been a partner in Callaway Oil & Gas
Co., an oil and gas exploration and production company. Mr. Callaway also
serves as a director of Canark Petroleum Inc., Caljam Oil & Gas Ltd., and
Callaway Production Co., Inc. Mr. Callaway is a member of the Executive
Committee and Chairman of the Compensation Committee and has been a
director of the Company since 1965. His current term expires in 1996.
ROBERT M. LEIBROCK, 75 -- Partner, Amerind Oil Company, Ltd.
Mr. Leibrock has, for more than the past five years, been an independent
oil operator and since February 1981 has been a partner in Amerind Oil
Company, Ltd., an oil and gas exploration and production company. Mr.
Leibrock is a director of Abell-Hanger Foundation. Mr. Leibrock is a member
of the Executive Committee and Chairman of the Audit Committee. He was a
director of the Company from 1965 to January 1968, and since March 1969.
His current term expires in 1997.
W. F. ORTLOFF, 72
Mr. Ortloff served as Executive Vice President of the Company (1965-1981)
and Vice Chairman of the Board of the Company (1977-1981). From February
1984 until April 24, 1989, Mr. Ortloff served as President, Chief Executive
Officer and Director of Gory Associated Industries, Inc., a subsidiary of
the Company. Mr. Ortloff is a member of the Board of Executors of the
Petroleum Museum of Midland, Texas. Mr. Ortloff is a member of the
Executive Committee and the Compensation Committee. He was elected a
director in 1965. His current term expires in 1997.
PHIL SIMPSON, 60 -- Chairman of the Board, President and Chief Executive Officer
of Republic Gypsum Company.
Mr. Simpson is one of the founders of Republic Gypsum Company and has
served as an officer and director of that company since its incorporation
in 1961. Republic Gypsum Company and its wholly owned subsidiary, Republic
Paperboard Company, are manufacturers of recycled paperboard and gypsum
wallboard. Mr. Simpson is a Trustee of the Recycled Paperboard Technical
Association. He was appointed to the Board on July 26, 1993, and
subsequently elected as a director on October 25, 1993. His current term
expires in 1996.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR EACH OF THE DIRECTOR NOMINEES.
5
<PAGE> 8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table sets forth certain information regarding compensation
paid during each of the last three fiscal years to the Company's Chief Executive
Officer and each of the Company's four other most highly compensated executive
officers (collectively, "Named Executive Officers"), based on salary and bonus
earned during the prior three fiscal years ending June 30.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION ----------------
NAME AND FISCAL --------------------- STOCK OPTIONS ALL OTHER
PRINCIPAL POSITION(A) YEAR SALARY BONUS(B) (# OF SHARES)(C) COMPENSATION(D)
------------------------------ ------ -------- -------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Roy E. Campbell............... 1995 $360,167 $ 25,617 10,000 $70,285
1994 341,666 156,056 7,500 39,100
1993 318,667 185,480 7,100 24,377
James L. Dow II............... 1995 $118,960 $ 6,515 1,290 $14,389
1994 114,522 36,773 960 10,931
1993 111,146 41,410 1,000 2,277
Leonard R. Harral............. 1995 $ 94,333 $ 2,902 850 $ 8,120
1994 90,334 16,711 465 7,499
1993 0 0 0 0
Richard J. Rosebery........... 1995 $195,997 $ 10,501 7,500 $29,765
1994 185,141 58,934 7,500 19,491
1993 177,686 71,694 6,500 17,519
Harold K. Work................ 1995 $261,667 $ 35,672 7,500 $64,434
1994 245,513 138,061 7,500 39,047
1993 231,356 122,122 6,500 37,730
</TABLE>
---------------
(a) Capacities in which person served during the fiscal year ending June 30,
1995:
<TABLE>
<S> <C>
Roy E. Campbell Chairman of the Board, Chief Executive Officer and President
James L. Dow II Vice President, Secretary and General Counsel. Mr. Dow has
resigned from all positions with the Company.
Leonard R. Harral Vice President and Chief Accounting Officer
Richard J. Rosebery Executive Vice President, Chief Administrative and Financial
Officer and Treasurer
Harold K. Work Executive Vice President; President and Chief Executive Officer of
Elk Corporation of Dallas
</TABLE>
(b) Bonus amounts in the summary compensation table were paid under the
Company's Incentive Cash Bonus Plan. These amounts are determined through
the application of formula calculations based on a targeted range of
earnings before federal income taxes of the Company as a whole or of the
appropriate business unit.
(c) See the table below entitled "Option Grants During Fiscal 1995" for
information concerning the grant of options in fiscal year 1995 for shares
of Elcor Common Stock.
(d) Represents contributions by the Company to the Elcor Corporation Employees'
401(k) Savings Plan and Employee Stock Ownership Plan, supplemental
retirement benefits, and loans forgiven under the Stock/Loan Plan summarized
as follows:
6
<PAGE> 9
Company Contributions to Employee 401(k) Savings Plan and Employee Stock
Ownership Plan:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------
NAME 1995 1994 1993
------------------------------------------------------ ------- ------- -------
<S> <C> <C> <C>
Roy E. Campbell....................................... $ 6,900 $ 6,900 $10,849
James L. Dow II....................................... 6,900 6,848 2,277
Leonard R. Harral..................................... 4,967 4,929 0
Richard J. Rosebery................................... 6,900 6,900 10,849
Harold K. Work........................................ 6,900 6,900 10,849
</TABLE>
Loans Forgiven Under the Stock/Loan Plan:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------
NAME 1995 1994 1993
------------------------------------------------------ ------- ------- -------
<S> <C> <C> <C>
Roy E. Campbell....................................... $40,748 $32,200 $13,528
James L. Dow II....................................... 7,302 4,083 0
Leonard R. Harral..................................... 3,153 2,570 0
Richard J. Rosebery................................... 15,931 12,591 6,670
Harold K. Work........................................ 42,457 32,147 26,881
</TABLE>
Supplemental Retirement Benefits Paid:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------
NAME 1995 1994 1993
------------------------------------------------------ ------- ------- -------
<S> <C> <C> <C>
Roy E. Campbell....................................... $22,637 0 0
James L. Dow II....................................... 187 0 0
Leonard R. Harral..................................... 0 0 0
Richard J. Rosebery................................... 6,934 0 0
Harold K. Work........................................ 15,077 0 0
</TABLE>
OPTION EXERCISES DURING 1995 AND FISCAL YEAR END OPTION VALUES
The following table provides information related to options exercised and
options available under the Company's Incentive Stock Option Plan at June 30,
1995 to the Named Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END(B)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(A) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Roy E. Campbell............. 0 $ 0 13,550 21,050 $ 164,288 $ 96,162
James L. Dow II............. 200 2,025 0 3,050 0 11,164
Leonard R. Harral........... 50 463 1,920 3,434 26,087 28,423
Richard J. Rosebery......... 0 0 20,400 28,100 280,888 180,863
Harold K. Work.............. 3,700 42,200 22,450 28,100 311,368 180,863
</TABLE>
(a) Market value of underlying securities at exercise date minus the exercise
price, not reduced for taxes payable upon exercise.
(b) The unrealized value of in-the-money options at fiscal year-end represents
the aggregate difference between the market value of the underlying
securities at June 30, 1995 and the applicable exercise prices. These
differences accumulate over what may be, in many cases, several years.
7
<PAGE> 10
OPTION GRANTS DURING FISCAL 1995
The following table provides information related to options granted under
the Company's Incentive Stock Option Plan to the Named Executive Officers during
the fiscal year ended June 30, 1995.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL
------------------------------------------------------------------------------------ RATES OF STOCK
NUMBER OF % OF TOTAL PRICE APPRECIATION
SECURITIES OPTIONS EXERCISE FOR OPTION
UNDERLYING GRANTED TO OR BASE TERMS(C)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ------------------
NAME GRANTED(A) FISCAL 1995 SHARE(B) DATE 5% 10%
-------------------------------------------- ------------ --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Roy E. Campbell.................... 10,000 17.48% $ 17.250 10/24/1999 $47,659 $105,313
James L. Dow II.................... 1,290 2.26% 19.875 8/28/2004 16,124 40,862
Leonard R. Harral.................. 850 1.49% 19.875 8/28/2004 10,624 26,924
Richard J. Rosebery................ 7,500 13.11% 19.875 8/28/2004 93,745 237,567
Harold K. Work..................... 7,500 13.11% 19.875 8/28/2004 93,745 237,567
</TABLE>
---------------
(a) Options vest at 20% per year on the second through the sixth anniversary
dates of the grant except for options to Roy E. Campbell which vest 50% on
the second anniversary and 50% on the third anniversary of the grant.
Except for options to Roy E. Campbell, options granted are for a term of 10
years, subject to earlier termination upon certain events related to
termination of employment. Options granted to Roy E. Campbell are for a
term of 5 years.
(b) All options above were granted at market value at date of grant. The
exercise price and tax withholding obligations related to exercise may be
paid by cash, delivery of already owned shares or a combination of the
foregoing.
(c) Gains are reported net of the option exercise price, but before taxes
associated with the exercise. These gains are calculated based on the
stated assumed compounded rates of appreciation as set by the Securities
and Exchange Commission for disclosure purposes. Actual gains, if any, on
stock option exercises are dependent on the future performance of the
Common Stock, overall stock market conditions, as well as the
optionholders' continued employment through the vesting period. The amounts
reflected in this table may not necessarily be achieved.
STOCK/LOAN PLAN
Under the Company's Stock/Loan Plan, described in the Compensation
Committee Report included with this Proxy Statement, the Named Executive
Officers had outstanding loans from the Company of which the highest outstanding
balance and ending outstanding balance for the fiscal year ended June 30, 1995
are reflected in the table below:
<TABLE>
<CAPTION>
LOANS UNDER STOCK/LOAN PLAN
-----------------------------------------------------
HIGHEST OUTSTANDING OUTSTANDING
NAME BALANCE IN FISCAL 1995 BALANCE AT JUNE 30, 1995
------------------------------------------- ---------------------- ------------------------
<S> <C> <C>
Roy E. Campbell............................ $195,979 $172,140
James L. Dow II............................ * *
Leonard R. Harral.......................... * *
Richard J. Rosebery........................ $ 74,085 $ 67,138
Harold K. Work............................. $170,313 $140,609
</TABLE>
---------------
* Balances of not more than $60,000 have been omitted.
8
<PAGE> 11
COMPANY STOCK PERFORMANCE
The following graph sets forth a comparison of the cumulative total return
of the Company's Common Stock against the cumulative total return of the Dow
Jones Building Materials index and the Russell 2000 index for the five year
period ending June 30, 1995. Cumulative total return assumes reinvestment of
dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG ELCOR CORPORATION, THE RUSSELL 2000 INDEX
AND THE DOW JONES BUILDING MATERIALS INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD DJ BUILDING
(FISCAL YEAR COVERED) ELCOR CORP RUSSELL 2000 MATERIALS
<S> <C> <C> <C>
6/90 100 100 100
6/91 70 101 97
6/92 93 116 113
6/93 278 146 130
6/94 263 152 128
6/95 239 183 148
</TABLE>
*$100 INVESTED ON 06/30/90 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JUNE 30.
DIRECTORS' COMPENSATION
Nonemployee directors receive $20,000 per year for serving on the Board.
The employee directors are not compensated separately for service on the Board.
During the last fiscal year, W. F. Ortloff received $60,000 in annual
compensation as an employee of the Company.
Nonemployee members of the Executive Committee receive $6,000 per year for
service on such Committee. The employee directors are not compensated separately
for service on such Committee.
Audit Committee members (all of whom are nonemployees) receive $825 per
meeting, except the Chairman, who receives $1,200 per meeting.
Compensation Committee members (all of whom are nonemployees) receive $825
per meeting, except the Chairman, who receives $1,200 per meeting.
9
<PAGE> 12
COMPENSATION COMMITTEE REPORT
The Compensation Committee provides advice and recommendations to the Board
concerning the compensation, including salaries, bonuses and stock option awards
under the Company's Incentive Stock Option Plan ("ISOP") for the Named Executive
Officers, ISOP awards to other eligible employees, and the compensation of
directors of Elcor. The non-employee members of the Board assess and approve the
award of such stock options. All Board members, other than the Chief Executive
Officer, evaluate the Chief Executive Officer's performance and approve other
elements of his compensation. The Board approves all other elements of
compensation for the other Named Executive Officers.
The objectives of Elcor's executive compensation program are to:
1. Compensate competitively in order to attract, retain and motivate a
highly competent executive team dedicated to achieving the Company's
Mission and Strategic Plans, which are designed to result in long-term
growth in shareholder value;
2. Tie individual compensation to individual and team performance and the
success of the Company;
3. Align the executive officers' and certain eligible employees' interests
with those of the Company by making incentive compensation dependent
upon the performance of the Company or the appropriate business unit;
4. Align executive officers' and certain eligible employees' interests
with those of the shareholders by providing long-term compensation
opportunities through participation in the Company's Incentive Stock
Option Plans, Stock/Loan Plan and Employee Stock Ownership Plan.
5. Maximize the tax deductibility of executive compensation.
To achieve these compensation objectives, Elcor uses a combination of short-term
and long-term compensation elements, all of which are affected by the
performance of the individual and/or the performance of Elcor or the appropriate
business unit. A significant amount of the total compensation is longer term
compensation through stock ownership to assure alignment with shareholder
interests. In addition, the Named Executive Officers participate in other
compensation plans offered to all non-union employees. The Company does not
provide post-retirement health care benefits or defined benefit pension plans
for the Named Executive Officers or any other non-union employees.
Section 162(m) of the Internal Revenue Code limits the deductibility of
compensation paid to specified executive officers. It is presently anticipated
that all compensation to be paid to the Company's executive officers will be
fully deductible by the Company for federal income tax purpose. It is the
Company's intention to evaluate compensation received by executive officers and
take the steps necessary, including submitting such matters for shareholder
approval if necessary, to assure that such compensation is deductible by the
Company.
BASE SALARY
Base compensation is set based on offering competitive salaries in
comparison to market practices. Independent survey data developed by an
independent data service for executive positions in other similarly sized
industrial companies is used to establish a minimum, median and maximum
compensation level for each executive position. These ranges may be subjectively
adjusted from industry averages for factors such as local market conditions or
unique aspects, responsibilities or qualifications of the position not believed
to normally be associated with the position in other similarly sized companies.
Base salary ranges are reviewed annually. A range of predetermined percentage
increases and a maximum merit increase is established for various performance
levels. The base salary position within the range is set after an annual
subjective review of performance in areas of the executives' responsibilities,
including an evaluation of work performance, achieving specific goals, position
requirements and financial performance of the applicable business unit in
relation to expected performance based on the annual strategic plan. No specific
weighting of factors is used in evaluating overall job performance. Increases in
base salaries are consistent with the Company's overall
10
<PAGE> 13
guidelines for other employee salary percentage increases for defined
performance levels. These guidelines are revised annually to reflect the
influence of economic, industry and Company factors. All base salaries for the
Named Executive Officers fall within the range of compensation for their
specific positions based on the independent survey data.
INCENTIVE CASH BONUS
All Named Executive Officers except Mr. Work are eligible for bonuses under
the Elcor Incentive Cash Bonus Plan, which has a plan year of October 1 to
September 30. Mr. Work is eligible for bonuses under the Elk Corporation of
America Incentive Cash Bonus Plan, which also has a plan year of October 1 to
September 30. The incentive plan year for Elcor and Elk differs from the
Company's fiscal year due to seasonality considerations. Normally for Elcor and
Elk, the quarters ending June 30 and September 30 of each fiscal year are
seasonally stronger than the quarters ending December 31 and March 31. By
beginning the incentive plan year on October 1 of each year, the financial
performance during the seasonally weaker quarters are considered before the
seasonally stronger quarters, providing greater assurance that executive
incentive bonuses accurately reflect full year financial performance. The bonus
plans for other business units correspond to the Company's fiscal year, as these
businesses are typically less seasonal in nature.
The Company or its operating units provide incentive cash bonuses payable
quarterly for the Named Executive Officers and certain other non-union eligible
employees. Beginning with the bonus plan year which commenced in fiscal 1994,
bonuses were calculated based on a targeted range of earnings before federal
income taxes. During the bonus plan year which commenced in fiscal 1995,
targeted earnings levels were modified to include a factor for increases or
decreases in total assets employed. The target earnings range for which bonuses
will be paid is established annually based on (1) the fiscal year strategic plan
for Elcor or the appropriate business unit, and (2) threshold and target levels
of earnings, subjectively determined to represent a beginning level and target
bonus level that provides incentive to achieve desired results. Desired results
are subjectively determined. However, the target is considered to be in the
range of the upper quartile performance for the business circumstances present
during the plan year. The threshold level is considered to be in the range of
average performance under the business circumstances. No bonus is payable until
the minimum threshold level of earnings is achieved. Prior to fiscal 1994, the
incentive cash bonuses were calculated on a return on total assets concept for
Elcor or the appropriate business unit.
The changes in methodology for calculating incentive cash bonuses were
deemed to be a more accurate way to assess the performance of the Company or the
appropriate business unit. The relationship of bonuses to base salaries in the
Summary Compensation Table reflects the performance level of the Company or
applicable business unit for each of the three fiscal years presented through
the application of formula calculations based on earnings above the targeted
thresholds. Bonuses paid for target performance vary by executive officer and
range from 20% to 50% of base salary. Should earnings exceed the upper end of
the target range, a premium bonus is awarded. Premium bonuses are calculated at
a reduced rate (20%) of the amount of bonus that would have paid had these
earnings in excess of target been within the target range.
STOCK/LOAN PLAN
Under the Stock/Loan Plan the Company may grant to certain eligible key
employees rights to apply to the Company for a loan, the proceeds of which must
be used to purchase Elcor Common Stock at that time or applied to previous stock
purchases not made in connection with the Stock/Loan Plan. The normal maximum
amount which may be loaned to each eligible key employee is a percentage of the
payment earned under the Incentive Cash Bonus Plan. For the Named Executive
Officers, stock loans are granted at 37 1/2 to 50% of amounts earned under the
Incentive Cash Bonus Program. Such loans bear no interest and are repayable by
the key employee through continued service with the Company or a subsidiary,
with the principal amount of the loan being forgiven at the rate of 20% for each
year of continuous service subsequent to the date of the making of the loan. The
outstanding balances of such loans are required to be repaid on any termination
of employment with the company, except for termination due to disability, death
or retirement.
11
<PAGE> 14
LONG TERM COMPENSATION
Under the Company's Incentive Stock Option Plan, which has previously been
approved by the shareholders, the Company may grant qualified and/or
nonqualified options to purchase the Company's Common Stock to the Named
Executive Officers and eligible key employees of the Company and its
subsidiaries. Except for options awarded to Mr. Campbell, stock options awarded
in fiscal 1995 must be exercised within ten years from the date of grant.
Options awarded to Mr. Campbell in fiscal 1995 must be exercised within five
years from the date of grant. The number of options granted is individually
determined for each executive based on subjective evaluation of the individual's
responsibility level and criticality to the Company, and is influenced by
applying a formula of base pay times a predetermined percentage ranging from 10%
to 40% of base pay, and dividing this number by the average market price of the
Company's stock during the preceding thirty-six months prior to the grant. In
recognition of unique performance, some awards are greater than provided by this
formula. In fiscal 1995, options were subjectively awarded to Mr. Campbell, Mr.
Rosebery, Mr. Work and Mr. Harral in amounts above the formula calculation and
Mr. Dow in accordance with the formula calculation.
EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)
The Named Executive Officers and all employees of the Company and its
subsidiaries, except those covered by other plans established through collective
bargaining, are eligible to participate in the ESOP upon completion of one year
of service with the Company under the plan. The Company contributes a percentage
(2.3% in fiscal 1995) of each participant's annual compensation, subject to
limitations imposed by the Internal Revenue Service. Amounts contributed to the
ESOP vest over a period of years (20% after three years of service and an
additional 20% for each additional year of service thereafter until 100%
vested).
ELCOR CORPORATION EMPLOYEES' 401(K) SAVINGS PLAN
The Elcor Corporation Employees' 401(k) Savings Plan provides for
participation by all employees, including the Named Executive Officers, after
one year of service, except those covered by other plans established through
collective bargaining. Contribution percentages and vesting of any Company
contributions are made according to the same schedule as that of the ESOP
described above.
SUPPLEMENTAL RETIREMENT BENEFITS
In accordance with Internal Revenue Code Section 401(a)(17)(A), qualified
benefit plans must limit the annual compensation of each employee taken into
account under the plans for any year to an indexed dollar amount, currently
$150,000. In September 1994, the Board of Directors determined that this
limitation reduces retirement funds intended for the benefit of the employees
affected by this limitation and authorized a special cash payment to any
employee, including the Named Executive Officers, in an amount equal to the
difference between the actual amount contributed for their benefit to the ESOP
and 401(k) Savings Plan and the amount that would have been contributed to these
plans for their benefit, including a factor to offset a portion of the Federal
tax liability due on the payment, had there been no statutory dollar limitation.
EMPLOYMENT AND SEVERANCE AGREEMENTS
None of the Named Executive Officers has employment or severance agreements
with the Company.
CEO COMPENSATION
The Chief Executive Officer of Elcor, Roy E. Campbell, participates in the
same compensation programs as the other Named Executive Officers with each
component of his compensation determined according to the same criteria. Mr.
Campbell's base salary was increased 5.0% in fiscal 1995, determined in the same
manner as other executive officers and as described in the Base Salary section
described previously. This percentage increase and dollar increase was within
the range and consistent with Company merit performance criteria based on a
subjective evaluation of Mr. Campbell's performance in achieving job related
goals and objectives and the Company's overall financial performance. Mr.
Campbell's incentive compensation was calculated on a
12
<PAGE> 15
formula basis using the same methodology and guidelines as described in the
Incentive Cash Bonus section of this report. The decrease in incentive
compensation in fiscal 1995 reflects the Company's not achieving target earnings
in the current year's Incentive Cash Bonus plan year through June 30, 1995.
In fiscal 1995, Mr. Campbell was awarded qualified and nonqualified stock
options using the same methodology and factors as previously described for other
Named Executive Officers. However, consistent with Company practice, Mr.
Campbell's stock options were awarded subsequent to the annual meeting in
October 1994 whereas stock options to the other Named Executive Officers and
other key employees were granted by the Board in August 1994. Accordingly, the
option price for Mr. Campbell's award differs from the option price for the
other Named Executive Officers.
All other compensation for Mr. Campbell was determined on the same basis
and using the same criteria as the other Named Executive Officers.
F.H. Callaway, Chairman
James E. Hall, Member
W.F. Ortloff, Member
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF AUDITORS
On recommendation of the Audit Committee, the Board of Directors has
appointed, subject to ratification by the shareholders, Arthur Andersen LLP, of
Dallas, Texas, as independent auditors of the Company for the fiscal year ending
June 30, 1996. This firm has made the annual audit of the accounts of the
Company since 1966. The Company has been advised that neither Arthur Andersen
LLP nor any member thereof has any direct or indirect financial or other
interest in the Company or any of its subsidiaries. The Board of Directors each
year requests the shareholders to ratify the appointment of auditors and in the
past, the shareholders have overwhelmingly ratified the appointment each year.
Shares represented by properly executed proxies will be voted, in the absence of
contrary indication therein or revocation thereof by the shareholder granting
such proxy, in favor of the ratification of the appointment of Arthur Andersen
LLP as independent auditors of the Company for the fiscal year ending June 30,
1996. In the unlikely event that such appointment is not ratified, the Board of
Directors will consider alternatives which might be pursued. Such alternatives
could include the selection of another auditor or continuation of Arthur
Andersen LLP as auditor. A representative of Arthur Andersen LLP will attend the
Annual Meeting of Shareholders and will have the opportunity to make a statement
if he desires to do so, and such representative will be available to respond to
appropriate shareholder questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THIS PROPOSAL.
SHAREHOLDER PROPOSALS
Proposals of shareholders with respect to matters to be voted upon at the
Company's 1996 Annual Meeting of Shareholders, now scheduled to be held on
October 22, 1996, must be received by the Company's Secretary on or before May
21, 1996, in order to be considered for inclusion in the Company's proxy
statement and proxy relating to that meeting. Although not included in the
Company's proxy statement and proxy relating to that meeting, proposals received
after that date but on or before June 20, 1996, will nevertheless be included in
the meeting's agenda if in accordance with the Bylaws of the Company.
13
<PAGE> 16
ANNUAL REPORT AND FORM 10-K
The Annual Report of the Company for the year ending June 30, 1995,
including financial statements, is being mailed to shareholders of record at the
close of business on the record date together with this proxy statement.
UPON WRITTEN REQUEST BY ANY SHAREHOLDER ENTITLED TO VOTE AT THE 1995 ANNUAL
MEETING, THE COMPANY WILL FURNISH THAT PERSON WITHOUT CHARGE A COPY OF THE FORM
10-K ANNUAL REPORT, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR FISCAL
YEAR ENDED JUNE 30, 1995. REQUESTS SHOULD BE ADDRESSED TO RICHARD J. ROSEBERY,
CHIEF ADMINISTRATIVE AND FINANCIAL OFFICER, ELCOR CORPORATION, 14643 DALLAS
PARKWAY, SUITE 1000, DALLAS, TEXAS 75240-8871.
OTHER MATTERS
No business other than that referred to in this Proxy Statement is expected
to come before the meeting, but should any other matters requiring a vote arise,
including a question of adjourning the meeting, the persons named as proxies in
the enclosed proxy will vote thereon according to their best judgment in the
interest of the Company.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Based solely on a review of Forms 3, 4 and 5 and amendments thereto
furnished to the Company and written representation that no Forms 5 were
required, the Company believes that all reports required by Section 16(a) of the
Securities and Exchange Act of 1934 applicable to its directors, executive
officers and greater than ten percent stockholders were timely filed in such
fiscal year and prior fiscal years except that: (i) executive officer James L.
Dow filed a Form 4 on July 5, 1995 which due to clerical error did not reflect
the sale of 200 shares on the open market on June 19, 1995, and (ii) director
and executive officer Roy E. Campbell filed a Form 4 on April 7, 1995 which due
to clerical error did not reflect the correct number of indirect shares. Mr. Dow
and Mr. Campbell filed amended Forms 4 on July 12, 1995 and August 28, 1995,
respectively, which corrected the errors.
By Order of the Board of Directors
DAVID G. SISLER
Secretary
Dated: September 19, 1995
14
<PAGE> 17
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[LOGO]
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 24, 1995 10:00 a.m.
Derrick Room of the Midland Petroleum Club, 501 West Wall Avenue,
Midland, Texas
The undersigned, revoking all prior proxies, hereby appoints Roy E.
Campbell and Richard J. Rosebery, or either one of them, with full power of
substitution, as proxies to represent and vote as designated hereon all shares
of common stock which the undersigned would be entitled to vote at the Annual
Meeting of Shareholders of Elcor Corporation dated October 24, 1995 and at any
adjournment(s) thereof (collectively, the "Meeting") with all the powers the
undersigned would possess if personally present and voting thereat, (a) as
instructed on the reverse side with respect to the following matters more
fully described in the Proxy Statement dated September 19, 1995, and (b) in
their discretion upon other matters which properly come before the meeting.
PLEASE SEE REVERSE SIDE
FOLD AND DETACH HERE
UNLESS OTHERWISE INSTRUCTED HEREON, IT IS INTENDED THAT THE PROXIES WILL VOTE
THE SHARES FOR ITEMS 1 AND 2.
<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS Nominees: Messrs. Roy E. Campbell and James E. Hall.
FOR WITHHOLD To withhold authority to vote for an individual Nominee,
all AUTHORITY write that Nominee's name on the line below.
Nominees for all Nominees --------------------------------------------------------
/ / / /
2. APPROVAL OF
ARTHUR ANDERSEN LLP
AS AUDITORS FOR FISCAL 1996:
FOR AGAINST ABSTAIN
/ / / / / /
</TABLE>
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Please date and sign exactly as name appears on this proxy. Joint owners should
each sign. If held by a corporation, please sign full corporate name by duly
authorized officer. Executors, Administrators, Trustees, etc. should give full
title as such.
Dated , 1995
--------------------------
Signature of Shareholder
--------------------------
Signature of Shareholder
PLEASE MARK INSIDE BLUE BOXES SO THAT
DATA PROCESSING EQUIPMENT WILL RECORD YOUR VOTES
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