<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 / /
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / 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:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
[ELCOR LOGO]
14643 DALLAS PARKWAY
SUITE 1000, WELLINGTON CENTRE
DALLAS, TEXAS 75240-8871
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, OCTOBER 22, 1996
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 22,
1996, at 10 a.m., local time, for the following purposes:
1. To elect three directors to hold office for the terms specified in
the attached 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, 1997; 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,
1996, 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 20, 1996
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 GRANTING A PROXY,
SHAREHOLDERS OF RECORD MAY VOTE IN PERSON IF THEY ATTEND THE MEETING.
<PAGE> 3
[ELCOR LOGO]
14643 DALLAS PARKWAY
SUITE 1000, WELLINGTON CENTRE
DALLAS, TEXAS 75240-8871
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, OCTOBER 22, 1996
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 22, 1996, 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 20, 1996.
Any shareholder giving a proxy has the power to revoke the same at any time
prior to its exercise by executing a subsequent proxy, by providing 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 three 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, 1997; 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, 1996 (the "Record Date"), at
which time the Company had outstanding and entitled to vote at the Meeting
8,757,117 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 at the Meeting 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") or separate agreement 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 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 in the same manner.
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, 1996, the number of
shares of Common Stock beneficially owned by each director or nominee, 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........................................... 759,970(2) 8.67
F. H. Callaway............................................ 168,896(3) 1.93
James E. Hall............................................. 122,800(3) 1.40
Robert M. Leibrock........................................ 221,850(3)(4) 2.53
W. F. Ortloff............................................. 31,706(3) *
David W. Quinn............................................ 4,000(3) *
Richard J. Rosebery....................................... 104,379(5) 1.19
Harold K. Work............................................ 121,865(6) 1.39
Leonard R. Harral......................................... 7,301(7) *
David G. Sisler........................................... 446 *
All directors and executive officers as a group (12
persons)................................................ 1,566,243(8) 17.71
</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), (3), and (5) through (8); (ii) shares allocated to such persons'
accounts in the ESOP; and (iii) certain 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
12,500 shares.
(3) Includes options currently exercisable for 2,000 shares.
(4) Includes 200 shares owned by Mr. Leibrock's wife as to which Mr. Leibrock
has disclaimed beneficial ownership.
(5) Includes options currently exercisable or exercisable within sixty days for
21,100 shares.
(6) Includes options currently exercisable or exercisable within sixty days for
34,100 shares.
(7) Includes options currently exercisable or exercisable within sixty days for
2,353 shares.
(8) Includes options currently exercisable or exercisable within sixty days for
86,004 shares.
2
<PAGE> 5
The following table sets forth as of September 5, 1996, or such other date
indicated below, 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, except Roy E. Campbell, whose information is set forth in the
table above.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES OF PERCENT
BENEFICIAL OWNER COMMON STOCK OF CLASS
- ----------------------------------------------- ------------ --------
<S> <C> <C>
Trustees for the Employee Stock Ownership Plan
of Elcor Corporation 675,776 7.72
c/o Elcor Corporation
14643 Dallas Parkway
Wellington Centre, Suite 1000
Dallas, TX 75240-8871
Heine Securities Corporation 516,100(1) 5.89
Michael F. Price
51 John F. Kennedy Parkway
Short Hills, NJ 07078
State Farm Mutual Automobile Insurance Company 500,000(2) 5.71
One State Farm Plaza
Bloomington, IL 61710
Reich & Tang Capital Management Group 468,000(3) 5.34
600 Fifth Avenue
New York, NY 10020-2302
</TABLE>
- ---------------
(1) This information was based on a letter dated August 15, 1996 from Heine
Securities Corporation ("HSC"). As of that date, HSC beneficially owned
516,100 shares, as a result of HSC's serving as investment adviser to
various clients. According to the letter and a previous Schedule 13G,
Michael F. Price is President of HSC, in which capacity he exercises voting
control and dispositive power over the reported securities, and therefore
may be deemed to have indirect beneficial ownership of such securities. HSC
has sole voting and sole dispositive power with respect to all such shares.
(2) This information was taken from an Amended Schedule 13G filed with the
Securities and Exchange Commission as of January 22, 1996, by State Farm
Mutual Automobile Insurance Company (hereinafter referred to as "State
Farm") and a letter from State Farm dated August 14, 1996. State Farm or
its affiliates have sole voting power and sole dispositive power with
respect to 500,000 shares.
(3) This information was based on a letter dated September 11, 1996 from Reich
& Tang Capital Management Corporation ("Reich & Tang"). As of that date,
Reich & Tang beneficially owned 468,000 shares as a result of its serving
as investment adviser to various clients. Reich & Tang has sole voting
power and sole dispositive power with respect to all such 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
thirteen 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.
3
<PAGE> 6
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 Committee are
promptly reported to and reviewed by the full Board. The Committee met seven
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 Quinn, 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 three times during the last fiscal year.
All directors attended in excess of seventy-five percent (the reporting
threshold) of Board of Directors and applicable Board committee meetings during
their service as directors in fiscal 1996.
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Meeting, three directors, Messrs. F. H. Callaway, David W. Quinn and
Richard J. Rosebery, are to be elected for a three-year term or until their
successors are elected and qualified.
Under the Company's bylaws, directors are divided into three classes, each
of which is composed of approximately one-third of the directors. In 1996, in
accordance with the bylaws, the number of directorships on the Board was
increased from six to eight. The classes whose terms expire in 1996 and 1997
have three directors each, and the class whose term expires in 1998 has two
directors.
At the Meeting, three directors will be elected to serve for terms of three
years expiring on the date of the Annual Meeting of Shareholders in 1999. Each
director elected will continue in office until a successor has been elected or
until resignation or removal in the manner provided by the bylaws of the
Company. The nominees for directors are all currently Board members. Messrs.
Quinn and Rosebery were appointed by the Board in July 1996 to fill vacant
directorships in accordance with the bylaws of the Company, the latter of which
was created when the size of the Board increased from six to eight. The names
and other information about nominees for the Board of Directors and the
directors whose terms will continue after the Meeting are set forth below.
None of the nominees has any family relationship with the others or any
officer or director of the Company or any of its subsidiaries. None 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 nominees 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 nominees, and in part from the records of the
Company.
4
<PAGE> 7
NOMINEES FOR THREE-YEAR TERMS
F. H. CALLAWAY, 74 -- 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.
DAVID W. QUINN, 54 -- Vice Chairman and Chief Financial Officer of Centex
Corporation.
Prior to his appointment to his current position with Centex Corporation in
1996, Mr. Quinn served as its Executive Vice President and Chief Financial
Officer since 1987. He has served on Centex's Board of Directors since
1989, and also serves as a director of its 51% owned subsidiary, Centex
Construction Products, Inc. Mr. Quinn also is a member of the Board of
Directors and Executive Committee and is Chairman of the Finance Committee
of Zale Lipshy University Hospital in Dallas, Texas. He was appointed to
fill a vacancy on the Board of the Company on July 29, 1996 for a term
expiring in 1996 and serves on the Audit Committee.
RICHARD J. ROSEBERY, 61 -- Executive Vice President, Treasurer, Chief
Administrative and Financial Officer of Elcor Corporation.
Mr. Rosebery has served as an officer of the Company for 21 years. In
addition to his position with the Company, he serves as an officer of all
of Elcor's subsidiaries and is President and/or a director of four Elcor
subsidiaries. Mr. Rosebery has served as a Vice President in various
capacities with Elcor Corporation since 1975. He also serves as First Vice
President and a director of the Dallas Chapter of the Financial Executives
Institute. Mr. Rosebery was appointed to fill a vacancy, created when the
number of directors on the Board of the Company was increased from six to
eight on July 29, 1996, for a term expiring in 1996.
CONTINUING DIRECTORS
ROY E. CAMPBELL, 70 -- Chairman of the Board, Chief Executive Officer and
President of 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 principal subsidiaries. Mr. Campbell is a member 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 1998.
JAMES E. HALL, 61 -- 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 1998.
ROBERT M. LEIBROCK, 76 -- 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 shareholder of Abell-Hanger Foundation. Mr. Leibrock is a
member of the
5
<PAGE> 8
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, 73
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 1989, Mr. Ortloff served as President, Chief Executive
Officer and director of Gory Associated Industries, Inc., a subsidiary of
the Company. He retired from part-time employment as an executive with the
Company on May 31, 1995. 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.
HAROLD K. WORK, 63 -- Executive Vice President of Elcor Corporation; President
and Chief Executive Officer of Elk Corporation of Dallas.
Mr. Work has served as President and Chief Executive Officer of Elk
Corporation of Dallas since 1979, and serves on its board of directors. Mr.
Work is also President, Chief Executive Officer and a director of each of
the subsidiaries of Elk Corporation of Dallas. He is a member of the Board
of Directors of Centex Construction Products, Inc. and of the Asphalt
Roofing Manufacturers Association, where he served as Chairman of the
Executive Committee from 1990 to 1992. He was appointed to fill a vacancy,
created when the number of directors on the Board of the Company was
increased from six to eight on July 29, 1996, for a term expiring in 1997.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR EACH OF THE DIRECTOR NOMINEES.
6
<PAGE> 9
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............... 1996 $366,000 $ 51,922 15,000 $73,329
1995 360,167 25,617 10,000 70,285
1994 341,666 156,056 7,500 39,100
Leonard R. Harral............. 1996 $ 99,067 $ 6,238 1,185 $ 8,608
1995 94,333 2,902 850 8,120
1994 90,334 16,711 465 7,499
Richard J. Rosebery........... 1996 $203,165 $ 20,015 10,000 $31,149
1995 195,997 10,501 7,500 29,765
1994 185,141 58,934 7,500 19,491
David G. Sisler............... 1996 $ 98,471 $ 15,000 1,000 0
1995 0 0 0 0
1994 0 0 0 0
Harold K. Work................ 1996 $264,000 $ 40,966 10,000 $65,258
1995 261,667 35,672 7,500 64,434
1994 245,513 138,061 7,500 39,047
</TABLE>
- ---------------
(a) Capacities in which Named Executive Officers served during the fiscal year
ending June 30, 1996:
<TABLE>
<S> <C>
Roy E. Campbell Chairman of the Board, Chief Executive Officer and President
Leonard R. Harral Vice President and Chief Accounting Officer
Richard J. Rosebery Executive Vice President, Chief Administrative and Financial
Officer and Treasurer
David G. Sisler Vice President, Secretary and General Counsel. Elected effective
August 14, 1995 and assumed full-time responsibilities August 31,
1995.
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 ordinarily 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; however, the bonus to Mr. Sisler was paid
pursuant to a first-year bonus guaranty.
(c) See the table below entitled "Option Grants During Fiscal 1996" for
information concerning the grant of options in fiscal year 1996 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, loans forgiven under
the Stock/Loan Plan, and supplemental retirement benefits summarized as
follows:
7
<PAGE> 10
Company Contributions to Employee 401(k)Savings Plan and Employee Stock
Ownership Plan:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------
NAME 1996 1995 1994
------------------------------------------------------ ------- ------- -------
<S> <C> <C> <C>
Roy E. Campbell....................................... $ 6,900 $ 6,900 $ 6,900
Leonard R. Harral..................................... 4,811 4,967 4,929
Richard J. Rosebery................................... 6,900 6,900 6,900
David G. Sisler....................................... 0 0 0
Harold K. Work........................................ 6,900 6,900 6,900
</TABLE>
Loans Forgiven Under the Stock/Loan Plan:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------
NAME 1996 1995 1994
------------------------------------------------------ ------- ------- -------
<S> <C> <C> <C>
Roy E. Campbell....................................... $47,275 $40,748 $32,200
Leonard R. Harral..................................... 3,797 3,153 2,570
Richard J. Rosebery................................... 18,429 15,931 12,591
David G. Sisler....................................... 0 0 0
Harold K. Work........................................ 44,139 42,457 32,147
</TABLE>
Supplemental Retirement Benefits Contributed:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------
NAME 1996 1995 1994
------------------------------------------------------ ------- ------- -------
<S> <C> <C> <C>
Roy E. Campbell....................................... $19,154 $22,637 0
Leonard R. Harral..................................... 0 0 0
Richard J. Rosebery................................... 5,820 6,934 0
David G. Sisler....................................... 0 0 0
Harold K. Work........................................ 14,219 15,077 0
</TABLE>
AGGREGATED OPTION EXERCISES DURING 1996 AND FISCAL YEAR-END OPTION VALUES
The following table provides information related to options exercised
during fiscal 1996 and options available under the Company's Incentive Stock
Option Plan at June 30, 1996 by or 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............. 17,100 $ 185,025 3,750 28,750 $ 0 $ 10,000
Leonard R. Harral........... 1,417 21,050 1,426 3,696 11,618 10,563
Richard J. Rosebery......... 0 0 27,000 31,500 244,475 65,463
David G. Sisler............. 0 0 0 1,000 0 0
Harold K. Work.............. 2,050 25,625 27,000 31,500 244,475 65,463
</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, 1996 and the applicable exercise prices. These
differences accumulate over what may be, in many cases, several years.
8
<PAGE> 11
OPTION GRANTS DURING FISCAL 1996
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, 1996.
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE AT
- ----------------------------------------------------------------------------------- ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS EXERCISE PRICE APPRECIATION
UNDERLYING GRANTED TO OR BASE FOR OPTION TERMS(C)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION -------------------
NAME GRANTED(A) FISCAL 1996 SHARE(B) DATE 5% 10%
---- --------- ---------- -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Roy E. Campbell................... 15,000 20.34% $ 21.500 10/23/2000 $ 89,101 $196,889
Leonard R. Harral................. 1,185 1.61% 22.375 8/27/2005 16,675 42,257
Richard J. Rosebery............... 10,000 13.56% 21.500 10/23/2005 135,212 342,655
David G. Sisler................... 1,000 1.36% 22.375 8/27/2005 14,072 35,660
Harold K. Work.................... 10,000 13.56% 21.500 10/23/2005 135,212 342,655
</TABLE>
- ---------------
(a) Options become exercisable 20% per year on the second through the sixth
anniversary dates of the grant except for options to Roy E. Campbell which
become exercisable 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 ten years, subject to earlier termination upon
certain events related to termination of employment. Options granted to Roy
E. Campbell are for a term of five years.
(b) All options above were granted at market value at date of grant. The
exercise price 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 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, 1996
are reflected in the table below:
<TABLE>
<CAPTION>
LOANS UNDER STOCK/LOAN PLAN
-----------------------------------------------------
HIGHEST OUTSTANDING OUTSTANDING
NAME BALANCE IN FISCAL 1996 BALANCE AT JUNE 30, 1996
------------------------------------------- ---------------------- ------------------------
<S> <C> <C>
Roy E. Campbell............................ $172,140 $137,984
Leonard R. Harral.......................... * *
Richard J. Rosebery........................ $ 67,138 *
David G. Sisler............................ * *
Harold K. Work............................. $140,609 $115,696
</TABLE>
- ---------------
* Balances of not more than $60,000 have been omitted.
9
<PAGE> 12
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, 1996. 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
[CHART]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD DJ BUILDING
(FISCAL YEAR COVERED) ELCOR CORP RUSSELL 2000 MATERIALS
--------------------- ---------- ------------ -----------
<S> <C> <C> <C>
6/91 100 100 100
6/92 133 116 115
6/93 398 145 133
6/94 377 151 131
6/95 342 181 152
6/96 283 224 180
</TABLE>
*$100 INVESTED ON 06/30/91 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.
Annual cash compensation for nonemployee directors was not increased during the
Company's fiscal year ending June 30, 1996. In its meeting held in October 1995,
however, the Board approved in principle a plan to investigate and implement, if
practicable and in compliance with law, annual grants to each nonemployee
director of options to buy 2,000 shares of the Company's Common Stock at the
fair market value on the date of grant. The purpose of these grants would be to
attract and retain highly qualified independent directors and to underscore
their mutual interest with shareholders consistent with what management
perceives to be a general desire in the investor community that significant
elements of director compensation be equity-based and thereby dependent on
corporate performance. Under the Company's existing Incentive Stock Option Plan
(ISOP) approved by the Company's shareholders, on August 22, 1996, the directors
approved the initial grant and subsequent annual grants of options to buy 2,000
shares of Common Stock to each nonemployee director serving after each Annual
Meeting of Shareholders through October 1999. Options granted to nonemployee
directors under the ISOP will be
10
<PAGE> 13
nonqualified options and will become exercisable immediately. Each option will
have a term ending the earlier of ten years after the grant date or three months
after the cessation of a participant's status as a director of the Company for
any reason other than death or disability, in which case the options generally
remain exercisable for one year.
Nonemployee members of the Executive Committee receive $6,000 per year for
service on such Committee. The employee director is 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1996, no member of the Compensation Committee was an officer
or employee of the Company or any of its subsidiaries. Mr. Ortloff is a former
officer of the Company and certain of its subsidiaries. No director, member of
the Compensation Committee, or executive officer of the Company had a
relationship with the Company or any other company during fiscal 1996 that is
required by Securities and Exchange Commission regulations to be disclosed as a
compensation committee interlock.
COMPENSATION COMMITTEE REPORT
The Compensation Committee provides advice and recommendations to the Board
concerning the compensation, including base 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, employer
contributions to the ESOP and 401(k) Savings Plans, and the compensation of
directors of Elcor. The nonemployee members of the Board assess and approve the
award of such stock options. All nonemployee directors 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 with the abstention of Messrs. Rosebery and Work each from
consideration and decisions regarding compensation for either of them.
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 Company and its 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; and
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
11
<PAGE> 14
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 purposes. 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 of executive officers is set based on offering
competitive salaries in comparison to market practices. Independent survey data
developed by an independent data service for comparable 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 be normally 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. This review includes an evaluation of work performance,
achievement of 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 of executive officers,
including Named Executive Officers, are consistent with the Company's overall
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. Salary increases are not
necessarily granted each year. For example, neither Mr. Campbell's nor Mr.
Work's salary was changed this past year. 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 years which commenced in fiscal 1995 and
fiscal 1996, 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
12
<PAGE> 15
be in the range of average performance under the business circumstances. No
bonus is payable until the minimum threshold level of earnings is achieved.
The relationship of bonuses to base salaries in the Summary Compensation
Table generally 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 22 1/2% to 50% of base salary for the Named Executive Officers.
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 Plan. 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
forgiven portion of the loan is considered compensation to the employee at the
time of forgiveness by the Company. 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.
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 directors and key employees of the Company and
its subsidiaries. Except for options awarded to Mr. Campbell, stock options
awarded in fiscal 1996 must be exercised within ten years from the date of
grant. Options awarded to Mr. Campbell in fiscal 1996 must be exercised within
five years from the date of grant. The number of options granted is individually
determined for each Named Executive Officer 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
currently ranging from 26% to 50% 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 1996, options were subjectively
awarded to Mr. Campbell, Mr. Rosebery, and Mr. Work in amounts above 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 ESOP. The Company currently contributes a
percentage (2.3% in fiscal 1996) 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 currently are made according to the same schedule as that of the
ESOP described above.
13
<PAGE> 16
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 tenure 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 by the Board of Directors according to
the same criteria described above. Mr. Campbell's base salary is generally
determined in the same manner as other executive officers and as described in
the Base Salary section described previously. Mr. Campbell's incentive
compensation was calculated on a formula basis using the same methodology and
guidelines as described in the Incentive Cash Bonus section of this report.
In fiscal 1996, 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 1995, as were Mr. Work's and Mr. Rosebery's, whereas stock options to
the other Named Executive Officers and other key employees were granted by the
Board in August 1995. Accordingly, the option price for Mr. Campbell's, Mr.
Work's and Mr. Rosebery's awards 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, 1997. 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,
1997. 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.
14
<PAGE> 17
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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of Forms 3, 4 and 5 and amendments thereto
furnished to the Company and certain written representations of its directors
and officers, 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 as previously reported.
SHAREHOLDER PROPOSALS
Proposals of shareholders with respect to matters to be voted upon at the
Company's 1997 Annual Meeting of Shareholders, now scheduled to be held on
October 28, 1997, must be received by the Company's Secretary on or before May
22, 1997, 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 July 30, 1997, will nevertheless be included in
the meeting's agenda if proposed in accordance with the bylaws of the Company.
ANNUAL REPORT AND FORM 10-K
The Annual Report of the Company for the year ending June 30, 1996,
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 1996 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 THE
FISCAL YEAR ENDED JUNE 30, 1996. 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. Although the minutes from last year's Annual Meeting of
Shareholders are expected to be presented for approval, approval of such minutes
will not itself constitute substantive approval.
By Order of the Board of Directors
DAVID G. SISLER
Secretary
Dated: September 20, 1996
15
<PAGE> 18
[ELCOR CORPORATION LOGO]
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 22, 1996, 10:00 A.M.
DERRICK ROOM OF THE MIDLAND PETROLEUM CLUB,
501 WEST WALL STREET, MIDLAND, TEXAS
The undersigned, revoking all prior proxies, hereby appoints Roy E. Campbell,
Richard J. Rosebery and David G. Sisler, or any 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 22, 1996 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 20, 1996, and (b) in their
discretion upon other matters which properly come before the Meeting.
PLEASE SEE REVERSE SIDE
- FOLD AND DETACH HERE -
<PAGE> 19
<TABLE>
<S> <C> <C>
UNLESS OTHERWISE INSTRUCTED HEREON, IT IS INTENDED THAT THE PROXIES WILL VOTE THE SHARES FOR ITEMS 1 AND 2. / X /
1. ELECTION OF DIRECTORS
FOR WITHHOLD Nominees: Messrs. F.H. Callaway, David W. Quinn and Richard J. Rosebery
all AUTHORITY To withhold authority to vote for any individual Nominee, write that
Nominees for all Nominees Nominee's name on the line below.
/ / / / _________________________________________________________________________
2. APPROVAL OF ARTHUR ANDERSEN LLP
AS AUDITORS FOR FISCAL 1997:
FOR AGAINST ABSTAIN
/ / / / / /
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__________________________________________________, 1996
_____________________________________________________________
Signature of Shareholder
_____________________________________________________________
Signature of Shareholder
- FOLD AND DETACH HERE -
</TABLE>
