<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
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
LAFARGE CORPORATION
(Name of Registrant as Specified in Its Charter)
LAFARGE CORPORATION
(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(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / 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
LAFARGE CORPORATION
11130 SUNRISE VALLEY DRIVE
RESTON, VIRGINIA 22091
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 3, 1994
Notice is hereby given that the annual meeting of stockholders of Lafarge
Corporation (the "Company") will be held on Tuesday, May 3, 1994 at 9:00 a.m.,
local time, at the Hyatt Regency Reston, Reston Town Center, 1800 Presidents
Street, Reston, VA 22090, for the following purposes:
(1) To elect a Board of Directors for the ensuing year;
(2) To ratify the appointment of Arthur Andersen & Co. as auditors to
audit the financial statements of the Company for the fiscal year ending
December 31, 1994; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only holders of record of the Voting Stock and Common Stock of the Company
at the close of business on March 9, 1994 are entitled to notice of and to vote
at the meeting or any adjournment thereof. Holders of record of Exchangeable
Preference Shares of Lafarge Canada Inc. ("LCI"), a subsidiary of the Company,
are entitled to voting rights in the Company through a trust that holds shares
of the Voting Stock of the Company.
A record of the Company's activities and consolidated financial statements
for the fiscal year ended December 31, 1993 are contained in the enclosed 1993
Annual Report.
Dated: March 23, 1994
By Order of the Board of Directors,
DAVID C. JONES
Vice President--Legal
Affairs and Secretary
---------------------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE MARK, SIGN AND
DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE. IF
YOU DO ATTEND THE MEETING IN PERSON, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN
PERSON.
<PAGE> 3
LAFARGE CORPORATION
11130 SUNRISE VALLEY DRIVE
RESTON, VIRGINIA 22091
PROXY STATEMENT
INTRODUCTION
The enclosed proxy is solicited by the Board of Directors of Lafarge
Corporation ("Lafarge Corp." or the "Company") for use at the annual meeting of
stockholders of the Company (the "Meeting") to be held at the time and place and
for the purposes set forth in the foregoing notice.
Shares represented by a proxy in the form enclosed, duly signed, dated and
returned to the Company and not revoked, will be voted at the meeting in
accordance with the directions given, but in the absence of directions to the
contrary, such shares will be voted for the election of the Board's nominees for
director and in favor of the other proposals set forth in the foregoing notice.
Any stockholder of the Company may revoke his or her proxy, at any time before
it has been exercised, by notice in writing to the Secretary of the Company. Any
holder of exchangeable preference shares (the "Exchangeable Shares") of Lafarge
Canada Inc. ("LCI"), a subsidiary of the Company, may revoke his or her voting
instructions to the Montreal Trust Company (the "Trustee"), at any time before
the Trustee has acted upon such instructions, by notice in writing to the
Trustee.
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, certain officers and employees of the Company, who will
receive no additional compensation for their services, may solicit proxies in
person or by telephone or telegraph.
The approximate date on which this proxy statement and the form of proxy
are first being sent to stockholders is March 23, 1994.
VOTING SECURITIES
The securities with voting rights in the Company which were outstanding at
March 9, 1994, the record date, consisted of 58,406,650 shares of common stock
(the "Common Shares") and 9,104,150 shares of voting stock (the "Voting Stock")
of the Company. The Company has deposited shares of Voting Stock in trust under
an arrangement which entitles each holder (other than LCI and the Company) of
Exchangeable Shares to vote at meetings of stockholders of the Company on the
basis of one vote in the Company for each whole Common Share for which the
Exchangeable Shares held by such holder are then exchangeable. Exchangeable
Shares are presently exchangeable, at the option of the holder, into Common
Shares on a one for one basis. Each holder of record of Common Shares or
Exchangeable Shares (collectively, the "Voting Securities") is entitled to one
vote for each such share of capital stock so held, with all stockholders voting
together as a single class.
Each holder of shares of any class of Voting Securities is entitled to one
vote for each share owned of record on the record date; provided, however, that
any bona fide transferee of Exchangeable Shares after the close of business on
such record date shall be entitled to instruct the Trustee with respect to the
exercise of the voting rights pertaining to such shares or to attend the annual
meeting of stockholders of the Company and to personally exercise such voting
rights if, not later than ten business days prior to such meeting, such
transferee delivers written notice to the Trustee of his or her intention to so
instruct the Trustee or to so attend and vote and, within five business days of
such meeting, produces for inspection by the Trustee at its principal corporate
trust office in Montreal, Quebec, properly endorsed certificates for such
shares, or otherwise establishes to the satisfaction of the Trustee that he or
she is the bona fide owner of such shares.
<PAGE> 4
The affirmative vote of the holders of at least a majority of the Voting
Securities outstanding on the record date is required for (a) the election of
directors, and (b) ratification of the appointment of independent auditors.
A stockholder may withhold authority to vote for all nominees for director
or may withhold authority to vote for one or more of the nominees. Abstentions
from the proposal to ratify the appointment of auditors are neither counted as
votes for or as votes against the proposal. Broker non-votes are treated as
shares as to which voting power has been withheld by the beneficial holders and,
therefore, as shares not voting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 9, 1994, information with
respect to stockholders who were known to be beneficial owners of more than five
percent of any class of Voting Securities.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- ---------------------------- ------------------------------------- ----------------- --------
<S> <C> <C> <C>
Common Stock(1) Lafarge Coppee S.A. 36,267,833(2) 53.2%
("Lafarge Coppee")
61-63 rue des Belles Feuilles
76116 Paris France
Common Stock FMR Corp.(3) 8,287,400(3) 12.3%
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
- ---------------
(1) Under the rules and regulations of the Securities and Exchange Commission, a
"beneficial owner" is defined generally as any person who, directly or
indirectly, has or shares voting power or investment power with respect to a
security, and a person is deemed to be the beneficial owner of a security if
that person has the right to acquire beneficial ownership of such security
within 60 days. Accordingly, the table includes Exchangeable Shares, which
are presently exchangeable at the option of the holder into Common Shares on
a one for one basis, and Common Shares which Lafarge Coppee has the right to
acquire upon conversion of its Lafarge Corporation 7% Convertible
Subordinated Debentures Due 2013 in accordance with the terms thereof. In
addition, any securities not outstanding but which may be so acquired are
deemed to be outstanding for the purpose of computing the percentage of
outstanding securities of the class owned by such person but are not deemed
to be outstanding for the purpose of computing the percentage of the class
owned by any other person. Holders of Exchangeable Shares have voting rights
in the Company through a trust holding shares of the Voting Stock and are
entitled to direct the voting of one share of Voting Stock for each
Exchangeable Share held.
(2) Includes 21,165,697 Common Shares held of record by Lafarge (U.S.) Holdings,
a New York trust in which Lafarge Coppee owns 100% of the beneficial
interest ("Lafarge Holdings"), 13,862,091 Common Shares held of record by
Paris-Zurich Holdings, a New York trust in which the beneficial owners are
Lafarge Holdings and Cementia Holding A.G., a Swiss corporation and a
majority-owned subsidiary of Lafarge Coppee, and additional Voting
Securities held by certain other affiliates of Lafarge Coppee. Also included
are 677,966 Common Shares which Lafarge Holdings has the right to acquire
upon conversion of its Lafarge Corporation 7% Convertible Subordinated
Debentures Due 2013 in accordance with the terms thereof.
(3) This information is based upon a Schedule 13G dated February 11, 1994 filed
with the U.S. Securities and Exchange Commission and received by the
Company. The Schedule 13G reports beneficial ownership by FMR Corp. of
8,287,400 shares, with sole power to dispose or direct the disposition of
all of these shares, but with sole power to vote or direct the vote for
838,100 of these shares. The Schedule 13G further reports that various
persons have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, these shares, but that no
one person's interest in these shares is more than 5% of the total
outstanding Common Stock of the Company.
On November 1, 1993, Lafarge Coppee and the Company entered into an option
agreement (the "Option Agreement") intended to enable Lafarge Coppee to maintain
its existing margin of voting control in the event
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<PAGE> 5
of future issuances by the Company of its voting securities. The Option
Agreement grants the Lafarge Coppee Group the right, until October 31, 2003, to
purchase from the Company additional voting securities. The Option Agreement is
essentially a renewal of an option agreement between Lafarge Coppee and the
Company dated October 31, 1983 and which expired on October 31, 1993. The Option
Agreement was approved by the vote of the independent directors of the Company
(being those directors who have no affiliation with Lafarge Coppee) based upon
the business advantages for the Company which result from Lafarge Coppee's
majority ownership of the Company. Lafarge Coppee has informed the Company that
it presently intends to maintain ownership of a majority of the outstanding
Voting Securities and to control the election of the Board of Directors.
Lafarge Coppee is a public company whose voting securities are traded on
various European securities exchanges. In the opinion of Lafarge Coppee's
directors and its management, Lafarge Coppee is controlled by its Board of
Directors. The Lafarge Coppee Group is principally engaged in the manufacture
and sale of most types of cement, aluminous cement, plaster and refractory
products. The Lafarge Coppee Group has also diversified into the biochemical
industry. The activities of the Lafarge Coppee Group are carried out in numerous
countries in Western Europe, North America, South America, Africa and most
recently Eastern Europe.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 9, 1994, the beneficial
ownership of the Company's Common Stock for each of the Company's current
directors who are standing for reelection, nominees for directors, each
executive officer named in the Summary Compensation Table, and all directors and
executive officers as a group, based upon information obtained from such
persons:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
OF THE COMPANY'S OF LAFARGE COPPEE
COMMON STOCK(1) COMMON STOCK(2)
---------------------- ----------------------
NUMBER PERCENT NUMBER PERCENT
NAME POSITION OF SHARES OF CLASS OF SHARES OF CLASS
- -------------------- ------------------------------ --------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
Thomas A. Buell Current director and nominee 1,500 * 0 *
Marshall A. Cohen Current director and nominee 1,000(3) * 0 *
Bertrand P. Collomb Current director and nominee 88,556(4) * 44,793(5) *
Bernard L. Kasriel Current director and nominee 0 * 25,600(6) *
Jacques Lefevre Current director and nominee 100 * 23,305(7) *
Paul W. MacAvoy Current director and nominee 0 * 0 *
Claudine B. Malone Nominee 0 * 0 *
Alonzo L. McDonald Current director and nominee 500 * 0 *
David E. Mitchell Current director and nominee 5,652 * 0 *
Robert W. Murdoch Current director and nominee 89,600(8) * 1,397 *
Bertin F. Nadeau Current director and nominee 1,000(9) * 0 *
John D. Redfern Current director and nominee 15,730 * 500 *
Joe M. Rodgers Current director and nominee 0 * 440 *
Ronald D. Southern Current director and nominee 1,130(10) * 0 *
Edward H. Tuck Current director and nominee 500 * 0 *
Michel Rose Current director and nominee; 2,500(11) * 3,032(12) *
executive officer
John M. Piecuch Executive officer 75,480(13) * 2,300(14) *
R. Gary Gentles Executive officer 15,206(15) * 2,300(16) *
Fred W. Koester Executive officer 86,939(17) * 0 *
Jean-Pierre Cloiseau Executive officer 36,136(18) * 2,300(19) *
Share ownership of all 28 directors and executive 505,205(20) * 111,967(21) *
officers of the Company as a group
</TABLE>
- ---------------
* Less than 1%
3
<PAGE> 6
(1) Unless otherwise indicated, all shares are directly owned. Under the rules
and regulations of the Securities and Exchange Commission, a "beneficial
owner" is defined generally as any person who, directly or indirectly, has
or shares voting power or investment power with respect to a security, and
a person is deemed to be the beneficial owner of a security if that person
has the right to acquire beneficial ownership of such security within 60
days. Accordingly, the table includes (a) Exchangeable Shares which are
presently exchangeable at the option of the holder into Common Shares on a
one for one basis; and (b) Common Shares and Exchangeable Shares covered by
stock options that were exercisable on the record date or within 60 days
thereafter. In addition, any securities not outstanding but which may be so
acquired are deemed to be outstanding for the purpose of computing the
percentage of outstanding securities of the class owned by such person but
are not deemed to be outstanding for the purpose of computing the
percentage of the class owned by any other person. Holders of Exchangeable
Shares have voting rights in the Company through a trust holding shares of
the voting Stock and are entitled to direct the voting of one share of
Voting Stock for each Exchangeable Share held.
(2) Lafarge Coppee is the Company's "parent" as that term is defined in
regulations promulgated under the Securities Exchange Act of 1934, as
amended.
(3) These shares are owned by Adroit Investments Ltd., which is controlled by
Mr. Cohen.
(4) Includes 87,500 shares not outstanding but subject to currently exercisable
options.
(5) Includes 43,000 shares not outstanding but subject to currently exercisable
options.
(6) Includes 22,100 shares not outstanding but subject to currently exercisable
options.
(7) Includes 22,100 shares not outstanding but subject to currently exercisable
options.
(8) Includes 87,500 shares not outstanding but subject to currently exercisable
options.
(9) These shares are owned by La Financiere Nadeau Ltd. which is controlled by
Mr. Nadeau.
(10) These shares are owned by Sentgraf Enterprises Ltd., which is controlled by
Mr. Southern.
(11) These shares are not outstanding but are subject to currently exercisable
options.
(12) Includes 3,000 shares not outstanding but subject to currently exercisable
options and 32 shares owned by Mr. Rose's wife.
(13) Includes 74,500 shares not outstanding but subject to currently exercisable
options.
(14) These shares are not outstanding but are subject to currently exercisable
options.
(15) Includes 15,000 shares not outstanding but subject to currently exercisable
options.
(16) These shares are not outstanding but are subject to currently exercisable
options.
(17) Includes 74,500 shares not outstanding but subject to currently exercisable
options.
(18) Includes 35,250 shares not outstanding but subject to currently exercisable
options.
(19) These shares are not outstanding but subject to currently exercisable
options.
(20) Includes 457,375 shares not outstanding but subject to currently
exercisable options.
(21) Includes 103,100 shares not outstanding but subject to currently
exercisable options.
ELECTION OF DIRECTORS
The business and affairs of the Company are managed under the direction of
the Board of Directors, which exercises all corporate powers of the Company
and establishes broad corporate policies. When the Board is not in session, the
executive committee may exercise the powers of the Board of Directors in the
management of the business and affairs of the Company with specified
limitations. The executive committee of the Board of Directors is presently
composed of Bertrand P. Collomb, Bernard L. Kasriel, John D. Redfern and Michel
Rose. The Board of Directors held four meetings in 1993. During 1993, Marshall
A. Cohen, Bernard L. Kasriel, Paul W. MacAvoy, and Ronald D. Southern each
attended fewer than 75 percent of the aggregate of the number of meetings of the
Board of Directors and the meetings of the committees on which he served.
4
<PAGE> 7
As permitted by the by-laws of the Company, the Board of Directors has also
designated several other committees from its members, including a Nominating
Committee, a Management Development and Compensation Committee and an Audit
Committee. The function of the Nominating Committee is to recommend nominees for
election as directors at the annual meeting of stockholders and to recommend
candidates for election to fill vacancies on the Board if they occur. The Board
of Directors considers and takes action upon the recommendations of the
Nominating Committee. Although this committee has no formal policy on the
subject, the Board believes that any nominee recommended by a stockholder in
writing to the Secretary of the Company with complete biographical data
regarding the nominee would be considered by the Nominating Committee. The
Nominating Committee is presently composed of Marshall A. Cohen, Bertrand P.
Collomb, John D. Redfern and Edward H. Tuck. The Nominating Committee met three
times in 1993.
At a meeting held on February 8, 1994, the Board of Directors of the
Company pursuant to the by-laws of the Company, increased the size of the Board
of Directors from 15 members to 16 members, effective as of the annual meeting.
At the annual meeting of stockholders, 16 directors are to be elected to serve
until the next annual meeting of stockholders and until their successors have
been elected and qualified. Holders of Voting Securities having the right to
vote shall be entitled to vote each share of stock held on the record date for
as many individuals as there are directors to be elected. Cumulative voting is
not permitted.
All duly submitted and unrevoked proxies will be voted for the nominees for
director selected by the Board of Directors, except where authorization so to
vote is withheld. If any nominee should become unavailable for election for any
presently unforeseen reason, the persons designated as proxies will have full
discretion to cast votes for another person designated by the Board. The 16
names and certain background information regarding the nominees of the Board for
directors of the Company are set forth below. Each of the nominees has consented
to serve as a director if elected. All of the nominees except Claudine B. Malone
are currently directors of the Company.
NAME, PRINCIPAL OCCUPATION, OTHER DIRECTORSHIPS AND AGE
THOMAS A. BUELL, Chairman of the Board of Weldwood of Canada Limited
(diversified manufacturer of paper products). Mr. Buell has served in such
capacity for more than five years. Mr. Buell, age 62, was President and Chief
Executive Officer of Weldwood of Canada Limited from December 1987 to December
1992. He is also a director of Placer Dome Inc., and B.C. Gas, Inc. He has
served as a director of the Company since January 1, 1993.
MARSHALL A. COHEN, President and Chief Executive Officer and a director of The
Molson Companies Limited (brewing, cleaning/sanitizing products and systems'
suppliers and retail merchandising). Mr. Cohen, age 58, has served in such
capacity since November 1, 1988. From October 1985 to October 1988, he was
President of Olympia & York Enterprises Corporation and from October 1986 to
October 1988 he was also Chairman of Gulf Canada Resources Limited, part of the
Olympia & York group. He is also a director of American Barrick Resources
Corporation, and American International Group, Inc. He has served as a director
of the Company since 1991.
BERTRAND P. COLLOMB, Chairman of the Board of Lafarge Corp. and Chairman of the
Board and Chief Executive Officer of Lafarge Coppee. Mr. Collomb, age 51, has
served as Chairman of the Board of Lafarge Corp. since January 1989 and as
Chairman of the Board and Chief Executive Officer of Lafarge Coppee since August
1, 1989. He served as Vice Chairman of the Board and Chief Operating Officer of
Lafarge Coppee from January 1989 to August 1, 1989. He was Vice Chairman of the
Board and Chief Executive Officer of Lafarge Corp. and Senior Executive Vice
President of Lafarge Coppee from 1987 until January 1989. He served as President
and Chief Executive Officer of General Portland Inc. (a former subsidiary of the
Company) ("GPI") from 1985 until January 1988, Executive Vice President of
Lafarge Corp. from 1986 until 1987, and Executive Vice President of Lafarge
Coppee from 1982 to 1987. He is also a director of the Canadian Imperial Bank of
Commerce. He has served as a director of the Company since 1985.
BERNARD L. KASRIEL, Managing Director of Lafarge Coppee. Mr. Kasriel has served
as Managing Director since August 1, 1989, was Senior Executive Vice President
of Lafarge Coppee from March 1987 to August 1, 1989 and was Executive Vice
President of Lafarge Coppee from 1982 until March 1987. He was
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<PAGE> 8
also President and a director of National Gypsum Company from June 1987 to July
1989. Mr. Kasriel, age 47, is also a director of National Gypsum Company. He has
served as a director of the Company since 1989.
JACQUES LEFEVRE, Managing Director of Lafarge Coppee. Mr. Lefevre, age 55, has
served Lafarge Coppee as Managing Director since August 1, 1989, Senior
Executive Vice President from 1987 to August 1, 1989 and as Executive Vice
President from 1983 to 1987. He has served as a director of the Company since
1983.
PAUL W. MACAVOY, Dean, and Williams Brothers Professor of Management Studies,
Yale School of Organization and Management ("SOM"). Mr. MacAvoy, age 59, has
served as Dean of the Yale SOM since 1992, and as Williams Brothers Professor
since 1991. He served as McLaughlin Visiting Professor of Business
Administration, Amos Tuck School, Dartmouth College in 1991, as Lester Crown
Visiting Professor, Yale SOM from 1990 to 1991 and as Dean and John M. Olin
Professor of Public Policy, W.E. Simon Graduate School of Business
Administration, University of Rochester from 1983 to 1991. Mr. MacAvoy is also a
director of Alumax Inc., American Cyanamid Company, Chase Manhattan Bank, N.A.,
and Chase Manhattan Corporation. He has served as a director of the Company
since May 4, 1993.
CLAUDINE B. MALONE, President of Financial & Management Counsulting, Inc. Ms.
Malone, age 57, has served in such capacity since 1982. Ms. Malone is also a
director of Dell Computer Corp., Hannaford Bros. Co., Hasbro, Inc., Houghton
Mifflin Company, IMCGRA Group Inc., The Limited Inc., Penn Mutual Life Insurance
Co., SAIC Corp., Scott Paper Company and Union Pacific Corporation. She has not
previously served as a director of the Company.
ALONZO L. MCDONALD, Chairman and Chief Executive Officer of Avenir Group, Inc.
(development bankers). Mr. McDonald has served in such capacity for more than
five years. Mr. McDonald, age 65, is a director of Scientific-Atlanta, Inc. and
C.A.E. Industries Ltd. He has served as a director of the Company since 1984.
DAVID E. MITCHELL, Chairman of the Board of Alberta Energy Company Ltd. (energy
and industrial development). Mr. Mitchell became Chairman of the Board of
Alberta Energy Company in January 1994 and previously he was President and Chief
Executive Officer of such company for more than five years. Mr. Mitchell, age
67, is also a director of Air Canada, The Bank of Nova Scotia, Chieftain
International, Inc., Continental Airlines, Inc., Hudson's Bay Company and
Noranda Inc. He has served as a director of the Company since 1985.
ROBERT W. MURDOCH, Corporate Director. Mr. Murdoch, age 52, was formerly
President and Chief Executive Officer of Lafarge Corp. from January 1989 to
August 1992, President and Chief Executive Officer of LCI from 1985 to 1992 and
Senior Executive Vice President of Lafarge Coppee from August 1989 to 1992. He
served as President and Chief Operating Officer of Lafarge Corp. from 1987 to
1989, as Executive Vice President of Lafarge Corp. from 1983 to 1987 and as
Executive Vice President of Lafarge Coppee from 1983 to August 1, 1989. Mr.
Murdoch is also a director of Lafarge Coppee, LCI and Lafarge Calcium
Aluminates. He has served as a director of the Company since 1987.
BERTIN F. NADEAU, Chairman of the Board, President and Chief Executive Officer
of Unigesco Inc. (a diversified marketing and distribution company). Mr. Nadeau
has served in such capacity for more than five years. He was also Chairman of
the Board of Unigesco's affiliate, Univa Inc. (a marketer and distributor in the
food sector) from October 1989 to July 1993. Mr. Nadeau, age 53, is also a
director of DMR Group Inc., The National Bank of Canada, and Sun Life Assurance
Company of Canada. He has served as a director of the Company since 1988.
JOHN D. REDFERN, Vice Chairman of the Board of Lafarge Corp. Mr. Redfern has
served as Vice Chairman of the Board of Lafarge Corp. since January 1989 and as
Chairman of the Board of LCI since 1984. Mr. Redfern served as Chairman of the
Board of Lafarge Corp. from 1985 until January 1989, as President and Chief
Executive Officer of Lafarge Corp. from 1983 until 1985 and as Chief Executive
Officer of LCI from 1977 to 1985. Mr. Redfern, age 58, is also a director of LCI
and Montreal Trust Company. He has served as a director of the Company since
1983.
6
<PAGE> 9
JOE M. RODGERS, Chairman of the JMR Investments Group (a real estate development
and venture capital company). Mr. Rodgers, age 60, served as the United States
Ambassador to France from 1984 to 1989. He is also a director of AMR/American
Airlines, Third National Bank, BellSouth Telecommunications, Gaylord
Entertainment Company, Gryphon Holdings, Inc., Willis Corroon plc., American
Constructors, Inc., Baccarat, Inc. and Thomas Nelson, Inc. He has served as a
director of the Company since 1989.
MICHEL ROSE, President and Chief Executive Officer of Lafarge Corporation and
Senior Executive Vice President of Lafarge Coppee. Mr. Rose, age 51, has served
as President and Chief Executive Officer of Lafarge Corporation since September
1, 1992 and as Senior Executive Vice President of Lafarge Coppee since 1989. He
served as Chairman and Chief Executive Officer of Orsan SA, a subsidiary of
Lafarge Coppee from 1987 to 1992. From 1985 to 1987, he was Vice Chairman of
Orsan. He has served as a director of the Company since 1992.
RONALD D. SOUTHERN, Chairman of the Board and Chief Executive Officer of ATCO
Ltd. (a diversified industrial company) and Chairman of the Board and Chief
Executive Officer of Canadian Utilities Limited (a utility company). Mr.
Southern has served ATCO Ltd. as Chairman of the Board since May 1990 and as CEO
since 1984. He was also President of such company from August 1988 until the end
of 1993. He has been Chairman of the Board of Canadian Utilities Limited since
1980 and he became CEO of such company in January 1994. Mr. Southern, age 63, is
also a director of Canadian Pacific Limited, PWA Corporation, Fletcher Challenge
Limited, Royal Insurance Company Limited, Xerox Canada Inc., and Chrysler Canada
Ltd., and IMASCO Limited. He has served as a director of the Company since 1985.
EDWARD H. TUCK, President of the French-American Foundation since 1987. Mr.
Tuck, age 66, is counsel to the law firm Shearman and Sterling and was a partner
from 1962 to 1987. He is a director of Commercial Bank (New York). He has served
as a director of the Company since 1987.
There is no family relationship between any of the nominees or between any
of the nominees and any executive officer of the Company or any of its
subsidiaries. For information regarding certain business relationships between
certain nominees and the Company, see "Compensation and Certain Transactions --
Transactions with Management and Others".
EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Management Development and Compensation Committee of the Board of Directors
("Compensation Committee") and, with respect to stock-based compensation, the
Stock Option Committee of the Board of Directors (the "Stock Option Committee").
In 1993, the Compensation Committee and Stock Option Committee were each
comprised of the same directors, none of whom are employees of the Company. All
decisions made by the Compensation Committee relating to the compensation of the
Company's executive officers are reviewed by the full Board. In accordance with
applicable U.S. securities laws, all decisions relating to awards under the
Company's Stock Option Plan are made solely by the Stock Option Committee.
In accordance with recently adopted rules designed to enhance disclosure of
companies' policies toward executive compensation, the following is a report
submitted by members of the Compensation Committee and Stock Option Committee,
addressing the Company's compensation policy as it related to the executive
officers for fiscal 1993.
7
<PAGE> 10
REPORT TO SHAREHOLDERS BY THE MANAGEMENT DEVELOPMENT
AND COMPENSATION COMMITTEE AND THE STOCK OPTION
COMMITTEE OF THE COMPANY'S BOARD OF DIRECTORS
TO THE SHAREHOLDERS OF LAFARGE CORPORATION:
COMPENSATION POLICY
The goal of the Company's executive compensation policy is to ensure that
an appropriate relationship exists between executive pay and the creation of
shareholder value, while at the same time motivating and retaining key
employees. To achieve this goal, the Company's executive compensation policies
integrate competitive levels of annual base compensation with bonuses based upon
corporate performance and individual initiatives and performance. This annual
cash compensation, together with the payment of equity-based, incentive
compensation, is designed to attract and retain qualified executives and to
ensure that such executives have a continuing stake in the long-term success of
the Company. All executive officers and certain key managers participate in the
Company's incentive compensation plans.
For 1993, the Company's executive compensation program consisted primarily
of (i) base salary adjusted from the prior year, (ii) a bonus opportunity, based
upon the performance measurements described below, and (iii) options granted
under the Company's Stock Option Plan.
Base Salary. In establishing base salaries for executive officers of the
Company, the Company participates in executive compensation surveys with other
construction materials and cement companies in the United States and Canada,
reviews market data of general industry companies of similar size, and utilizes
Hay & Associates, independent compensation consultants. The comparison group
utilized by Hay & Associates for the Company for cash compensation matters
generally includes industrial companies with annual sales in excess of $1
billion, that employ more than 1,000 full time employees, with a unionized labor
force, which have been profitable over the most recent two to three year period
and which participate in the Hay & Associates compensation survey. Individual
performance among the companies included in the comparison group is not
separately evaluated. None of the six companies in the peer group index
constructed by the Company for the performance graph which appears on page 13 of
this proxy statement is a participant in the Hay & Associates data and therefore
none of them are included in the comparison group utilized by Hay & Associates
for the Company.
The Company annually sets base salary targets, or midpoints, for each of
its executives, including the President and Chief Executive Officer, at levels
within the range of those persons holding comparably responsible positions at
other companies in the Company's comparison group. Such midpoints are
established based upon a point system devised by the Company's consultants to
assign a value for each executive office, taking into account the various
responsibilities and duties of the specific position. Due to Lafarge's long-term
approach to compensation and the cyclical nature of the company's business,
historically a greater percentage of the annual compensation (base salary plus
bonus) paid to executive officers has been represented by the salary component.
Consequently, the Company has paid slightly higher base salaries and lower
annual bonuses than other companies in its comparison group. However, the annual
cash compensation targets for the Company's executive officers have generally
been set at the middle point of the range for annual cash compensation totals in
the comparison group.
Salaries for executive officers are reviewed by the Board's Management
Development and Compensation Committee (the "Compensation Committee") on an
annual basis and may be increased at that time on the basis of the individual
performance of the executive, as evaluated by senior management, the Company's
expected financial performance, and changes in competitive pay levels. An annual
overall budget of salary increases for the year is prepared, based upon the
Company's expected financial performance and taking into consideration the
expected pay increases, if any, indicated by the various industry surveys and
the Company's compensation consultant. The Compensation Committee then utilizes
this budget in establishing salaries based upon management's evaluation of each
officer's prior year's performance. In 1993, in an effort to control costs and
in view of the Company's expected financial results, the budgeted salary
increases were generally lower than the average projected salary increases for
the industry.
8
<PAGE> 11
The base salary of $405,000 for the President and Chief Executive Officer
was established in accordance with the policies established for all executive
officers and was below the midpoint of the range. The Chairman of the Board
reviews on an annual basis the chief executive officer's performance and makes a
salary recommendation which is acted upon by the Compensation Committee.
However, since Mr. Rose's employment commenced in September 1992, a full year's
evaluation was not possible in establishing a 1993 base salary. The 1993
salaries of the other four most highly compensated executive officers of the
Company ranged from approximately 92% to 120% of the midpoints established with
respect to each of such positions.
Annual Incentives. The Company has an annual bonus plan that provides for
the payment of bonuses to certain executive officers and key managers contingent
upon the achievement of certain financial targets and/or individual objectives.
The bonus plan is intended to reward the accomplishment of corporate objectives,
reflect the company's priority on maximizing earnings, and to provide a fully
competitive compensation package which will attract, reward and retain quality
individuals. Under the plan, one-half of the total bonus opportunity for a
participant is based upon the attainment of financially based Company
performance objectives and one-half of the total bonus opportunity is based upon
the achievement of individual objectives. If both the Company and individual
performance objectives are obtained or surpassed, participants will be eligible
to receive maximum amounts ranging from 15% to 70% of their base salary,
depending upon their position with the Company.
Financially based performance objectives are established for each fiscal
year in support of the Company's annual business plan. Objective criteria are
based on targeted Company earnings performance for the year. In addition, for
those executive officers who are responsible for a specific division of the
Company, such as Messrs. Piecuch, Gentles and Koester, the individual
performance of the division for which they are responsible represents one-half
of the financially based performance component of the bonus opportunity.
Subjective performance criteria encompasses the evaluation of each officer's
individual performance on personal objectives defined for such officer at the
beginning of each year. Personal objectives may include targeted earnings
objectives, the performance of a specific division or product line for which an
officer is responsible, the reduction of Company or division expenses or debt,
or other specific tasks or goals, and typically include a series of
non-quantifiable objectives.
Annual incentives are paid only upon the achievement of either financial
performance objectives or personal performance objectives for the year. No
financial performance bonuses were paid in either 1991 or 1992. In an effort to
control costs and in view of the difficult environment experienced by the
construction materials and cement industry in recent years and the Company's
financial results, a bonus was paid in 1991 to only one executive, and in 1992,
despite the significant improvement of the Company's operating performance in
1992 over 1991 levels, the amount of each personal performance bonus actually
paid was reduced to one-half of the normal earned level (or approximately
one-fourth of the total bonus opportunity). Because of the Company's improved
earnings performance and, with respect to Messrs. Piecuch, Gentles and Koester,
the improved earnings before interest and taxes ("EBIT") of the division of the
Company for which each was responsible in 1993, financial performance bonuses
were paid in amounts in the range of 12% to 18% of the respective salaries of
the Chief Executive Officer and the four other most highly compensated executive
officers of the Company. The personal performance bonuses paid to these persons
with respect to 1993 were in the range of 15% to 28% of such salaries.
Mr. Rose's total bonus amount, which was equal to approximately 46% of his
salary, was based upon his leadership role with respect to both the Company's
improved financial performance in 1993 and the Company's reorganization which
was planned and commenced in 1993.
Long-Term Incentives. Long-term incentive awards strengthen the ability of
the Company to attract, motivate and retain executives of superior capability
and more closely align the interest of management with those shareholders.
Long-term awards granted in 1993 consisted of non-qualified stock options
granted under the Company's Stock Option Plan. Unlike cash, the value of a stock
option will not be immediately realized and does not result in a current expense
to the Company. Stock options are granted at the prevailing market value and
will only have value if the Company's stock price increases, resulting in a
commensurate benefit for
9
<PAGE> 12
the Company's shareholders. Generally, grants may vest in equal amounts over
four years. Executives generally must be employed by the Company or an affiliate
of the Company at the time of vesting.
The Board's Stock Option Committee (the "Stock Option Committee") considers
on an annual basis the grant of options to executive officers and key managers.
The number of options granted is generally based upon the position held by a
participant and the Stock Option Committee's subjective evaluation of such
participant's contribution to the Company's future growth and profitability. In
accordance with the policy maintained by the Stock Option Committee, the total
number of options granted annually under the Company's stock option program
represents less than 1% of the approximately 67,000,000 outstanding shares of
common stock of the Company (including LCI exchangeable shares). Generally, the
grant of options is an annual determination, but the Stock Option Committee may
consider the size of past awards and the total amounts outstanding in making
such a determination. For example, in 1993 the Stock Option Committee granted to
Mr. Rose options to purchase 10,000 shares of the Company's common stock,
substantially fewer shares than granted to other senior executive officers of
Lafarge, in part due to the fact that options were granted in September 1992
upon the commencement of his employment with the Company.
The Compensation Committee and the Stock Option Committee believe that
linking executive compensation to corporate performance results are in a better
alignment of compensation with corporate goals and shareholder interests. As
performance goals are met or exceeded, resulting in increased value to
shareholders, executives are rewarded commensurately. The Committees believe
that compensation levels during 1993 adequately reflect the Company's
compensation goals and policies.
March 1, 1994
<TABLE>
<CAPTION>
MANAGEMENT DEVELOPMENT AND COMPENSATION
COMMITTEE STOCK OPTION COMMITTEE
<S> <C>
ALONZO L. MCDONALD, Chairman ALONZO L. MCDONALD, Chairman
THOMAS A. BUELL THOMAS A. BUELL
JOHN D. REDFERN JOHN D. REDFERN
RONALD D. SOUTHERN RONALD D. SOUTHERN
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Of the four directors who constitute both the Compensation Committee and
the Stock Option Committee, only John D. Redfern has been an officer of the
Company and of LCI. Mr. Redfern's current and previous positions with the
Company and LCI are described under "Election of Directors".
During 1993, LCI purchased, in the ordinary course of business, natural gas
(Cdn. $5,304,000) from Atcor Resources, a subsidiary of ATCO Ltd., with whom Mr.
Southern is affiliated. Mr. Southern is a director of Canadian Pacific Limited
with whom LCI contracts for rail transportation.
In 1993, Mr. Redfern was paid consulting fees by the Company and LCI in the
respective amounts of $3,572 and $33,060. The Company maintains pension
management and trust relations with Montreal Trust Company of which Mr. Redfern
is a director.
10
<PAGE> 13
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the Chief
Executive Officer and the four executive officers of the Company who were the
most highly compensated for the year ended December 31, 1993.
<TABLE>
<CAPTION>
STOCK
NAME AND OTHER ANNUAL OPTION ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1)(2) (SHARES) COMPENSATION(1)
- ------------------------------- ---- -------- -------- ------------------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Michel Rose 1993 $405,000 $187,000 10,000 $18,634(3)
President and Chief 1992 130,000(4) 19,000(4) 30,000 93,863(5)
Executive Officer 1991 n/a n/a n/a
of Lafarge Corp.; President
and Chief Executive Officer
of LCI
John M. Piecuch 1993 328,000 122,700 8,203(6) 20,000 $27,405(7)
Senior Executive Vice 1992 292,500 46,500 4,560(6) 30,000 27,853(8)
President and President 1991 262,000 0 20,000
Construction Materials Group
R. Gary Gentles 1993 260,000 100,600 0 17,451(9)
Executive Vice President 1992 31,250(10) 0(10) 20,000 76,659(11)
and President Cement Group 1991 n/a n/a n/a
Fred W. Koester 1993 219,500 61,000 10,000 17,120(12)
Senior Vice President and 1992 209,250 21,000 10,000 77,707(13)
President -- Great Lakes 1991 197,000 0 10,000
Region
Jean-Pierre Cloiseau 1993 190,500 71,800 20,000 20,976(14)
Executive Vice President 1992 180,500 20,000 15,000 19,711(15)
and Chief Financial Officer 1991 173,500 0 13,000
</TABLE>
- ---------------
(1) Pursuant to the transitional provisions set forth in the proxy rules,
amounts of Other Annual Compensation and All Other Compensation are
excluded for 1991.
(2) Excludes perquisites and other benefits, unless the aggregate amount of
such benefits is the lesser of $50,000 or 10 percent of the total of annual
salary and bonus reported for the named executive officer.
(3) Includes $15,329 contributed by the Company to Mr. Rose's account under the
Company's Employee Savings Plan and $3,305 in term life insurance premiums
paid by the Company.
(4) Mr. Rose joined the Company and was elected President and Chief Executive
Officer effective September 1, 1992; therefore, his salary and bonus for
1992 reflect only the four month period through December 31, 1992, and no
amounts are reported for 1991.
(5) Includes moving expenses of $84,352 in connection with Mr. Rose's
relocation from France to the United States, $8,450 contributed by the
Company to his account under the Company's Employee Savings Plan, and
$1,061 in term life insurance premiums paid by the Company.
(6) This amount was paid to Mr. Piecuch as a tax equalization payment to
reimburse him for taxes which he paid to the Canadian revenue authorities
as a result of his performance of services in Canada (such payment being
equal to the difference between the total tax paid in both the U.S. and
Canada and the tax that would have been paid if only a U.S. tax return had
been required).
(7) Includes $15,329 contributed by the Company to Mr. Piecuch's account under
the Company's Employee Savings Plan, $2,676 in term life insurance premiums
paid by the Company and $9,400 of interest (at the average prime rate for
1993) that would have been payable by him on his interest-free loan if the
Company did require interest payments.
(8) Includes $14,876 contributed by the Company to Mr. Piecuch's account under
the Company's Employee Savings Plan, $2,387 in term life insurance premiums
paid by the Company and $10,590 of interest (at the average prime rate for
1992) that would have been payable by him on his interest-free loan if the
Company did require interest payments.
(9) Includes $15,329 contributed by the Company to Mr. Gentles' account under
the company's Employee Savings Plan and $2,122 in term life insurance
premiums paid by the Company.
(10) Mr. Gentles joined the Company on November 16, 1992; therefore, his salary
for 1992 reflects only the period from that date to December 31, 1992 and
no amounts are reported for 1991.
(11) Includes moving expenses of $74,371 in connection with Mr. Gentles'
relocation from France to the United States, $2,031 contributed by the
Company to his account under the Company's Employee Savings Plan and $257
in term life insurance premiums paid by the Company.
11
<PAGE> 14
(12) Includes $15,329 contributed by the Company to Mr. Koester's account under
the Company's Employee Savings Plan and $1,791 in term life insurance
premiums paid by the Company.
(13) Includes moving expenses of $62,409 in connection with Mr. Koester's
relocation from the Company's Southern Region to the Great Lakes Region,
$13,601 contributed by the Company to his account under the Company's
Employee Savings Plan, and $1,697 in term life insurance premiums paid by
the Company.
(14) Includes $13,684 contributed by the Company to Mr. Cloiseau's account under
the Company's Employee Savings Plan, $1,554 in term life insurance premiums
paid by the Company and $5,738 of interest (at the average prime rate for
1993) that would have been payable by him on his interest free loan if the
Company did require interest payments.
(15) Includes $11,733 contributed by the Company to Mr. Cloiseau's account under
the Company's Employee Savings Plan, $1,473 in term life insurance premiums
paid by the Company and $6,505 of interest (at the average prime rate for
1992) that would have been payable by him on his interest-free loan if the
Company did require interest payments.
OPTION EXERCISES AND YEAR END VALUES
The following table shows information with respect to stock options
exercised during 1993 and unexercised stock options granted under the Company's
Employee Stock Option Plan to the Chief Executive Officer and the four most
highly compensated executive officers and held by them at December 31, 1993.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT DECEMBER 31, 1993 AT DECEMBER 31, 1993(1)
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michel Rose 0 0 7,500 32,500 $ 75,938 $ 299,063
John M. Piecuch 5,600 28,000 80,500 57,500 650,438 440,313
R. Gary Gentles 12,600 28,463 60,750 17,500 510,375 143,750
Fred W. Koester 11,000 94,875 64,500 25,000 680,125 190,625
Jean-Pierre Cloiseau 0 0 37,750 39,250 342,438 301,688
</TABLE>
- ---------------
(1) Based on the closing price on the New York Stock Exchange of the Company's
Common Stock on December 31, 1993 ($22.875).
OPTION GRANTS
The following table shows information with respect to grants of stock
options pursuant to the Company's Employee Stock Option Plan during 1993 to the
Chief Executive Officer and the four most highly compensated executive officers.
No stock appreciation rights were granted under the Plan during 1993.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
AT ASSUMED RATES OF
STOCK PRICE
PERCENTAGE OF APPRECIATION(2)
OPTIONS TOTAL OPTIONS EXERCISE EXPIRATION -----------------------
NAME GRANTED(1) GRANTED IN 1993 PRICE DATE 5% 10%
- ---------------------- ---------- --------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Michel Rose 10,000 2.3% $15.75 2-08-03 $ 99,051 $251,014
John M. Piecuch 20,000 4.6 15.75 2-08-03 198,102 502,029
R. Gary Gentles 0 0.0 -- -- -- --
Fred W. Koester 10,000 2.3 15.75 2-08-03 99,051 251,014
Jean-Pierre Cloiseau 20,000 4.6 15.75 2-08-03 198,102 502,029
</TABLE>
- ---------------
(1) All of the options granted become exercisable in increments of 25% beginning
one year after the date of grant.
(2) These assumed 5% and 10% rates of stock price appreciation are specified by
the proxy rules and do not reflect expected actual appreciation. The amounts
shown represent the assumed value of the stock options (less exercise price)
at the end of the ten year period beginning on the date of grant and ending
on the option expiration date. Based on a ten year period beginning December
31, 1993 with the closing price on the New York Stock Exchange of the
Company's Common Stock of $22.875 a share of the Company's Common Stock
would have a value on December 31, 2003 of approximately $37.26 at an
assumed appreciation rate of 5% and approximately $59.33 at an assumed
appreciation rate of 10%.
12
<PAGE> 15
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total shareholder return on the Company's Common Stock with the cumulative total
return of the Wilshire 5000 Index (a broad market equity index) and with the
cumulative total return of a group of peer companies in the construction
materials and cement industry selected by the Company for the period of five
years commencing December 31, 1988 and ended December 31, 1993. The companies in
the peer group index constructed by the Company are as follows: St. Lawrence
Cement, Inc., Texas Industries, Inc., Lone Star Industries, Inc., Southdown,
Inc., Vulcan Materials Company, and CalMat Co.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG LAFARGE CORPORATION, WILSHIRE 5000 INDEX AND PEER GROUP
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) LAFARGE WILSHIRE 5000 PEER GROUP
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 105.38 129.17 106.02
1990 83.19 121.19 74.23
1991 78.81 162.64 88.65
1992 96.78 177.23 100.14
1993 152.32 197.22 115.45
</TABLE>
* Assumes $100 invested on December 31, 1988 in Lafarge Corporation Common
Stock, Wilshire 5000 Index and Peer Group Index (constructed by the Company as
described above). Total return assumes reinvestment of dividends.
RETIREMENT PLANS
The Company has a trusteed noncontributory defined benefit pension plan for
salaried U.S. employees. The normal retirement age of participants is 65. The
amount of retirement income available to participants under the plan is based
upon the years of credited service between the ages of 21 and 65 and final
average earnings, which is defined to be the average of the highest annual
earnings (which includes salary, bonus and overtime payments) for any 60
consecutive months during the last 120 months of employment. The annual
retirement income for each year of credited service is equal to 1.50% of the
final average earnings, less 1.50% of annual primary social security benefits. A
participant's accrued benefit under the plan is fully vested on the date on
which such participant completes five years of service under the plan.
Certain U.S.-domiciled executives of the Company are participants in a
supplemental executive retirement plan (the "SERP") which supplements their
benefits under the Lafarge Corp. retirement plan.
13
<PAGE> 16
The SERP will not be funded in advance for payment of future benefits; the
general assets of the Company are the source of funds for the SERP. Pursuant to
the SERP, the annual retirement income for each year of credited services for
selected executives will be increased from that stated above to 1.75% of final
average earnings, less 1.75% of annual primary social security benefits.
Further, under SERP, pension payments will be permitted in excess of the limit
of $90,000 per year (as increased annually according to U.S. Internal Revenue
Service rules) applicable under the Lafarge Corp. retirement plan. Mr. Piecuch,
Mr. Koester and Mr. Cloiseau are participants in the SERP.
The table set forth below illustrates the amount of combined annual pension
benefits payable under the Lafarge Corp. retirement plan and the SERP to
participants in specified average annual earnings and years-of-service
classifications, without taking into account offsets for primary social security
benefits.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
FIVE-YEAR ANNUAL PENSION
AVERAGE COVERED YEARS OF SERVICE AT AGE 65
ANNUAL ----------------------------------------------------
EARNINGS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- -------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$50,000..................................... $ 13,125 $ 17,500 $ 21,875 $ 26,250 $ 30,625
100,000..................................... 26,250 35,000 43,750 52,500 61,250
150,000..................................... 39,375 52,500 65,625 78,750 91,875
200,000..................................... 52,500 70,000 87,500 105,000 122,500
250,000..................................... 65,625 87,500 109,375 131,250 153,125
300,000..................................... 78,750 105,000 131,250 157,500 183,750
350,000..................................... 91,875 122,500 153,125 183,750 214,375
400,000..................................... 105,000 140,000 175,000 210,000 245,000
450,000..................................... 118,125 157,500 196,875 236,250 275,625
500,000..................................... 131,250 175,000 218,750 262,500 306,250
550,000..................................... 144,375 192,500 240,625 288,750 336,875
600,000..................................... 157,500 210,000 262,500 315,000 367,500
</TABLE>
The years of service credited under the plan at March 1, 1994 to each
individual named in the compensation table above who is a participant in the
plan were as follows: Mr. Piecuch -- fifteen years; Mr. Koester -- twenty-three
years; and Mr. Cloiseau -- ten years.
Remuneration of Directors. Directors of the Company who are also full-time
employees of the Company or any subsidiary thereof receive no fees or
remuneration for services as members of the Board of Directors or any committee
of the Board. All other directors receive annual fees of $25,000 each, payable
in quarterly installments, for their services as directors. In addition, such
other directors receive an annual fee of $2,000 for each committee of the Board
upon which they serve (and an additional $2,000 per year for being chairperson
of a committee), payable in quarterly installments. The Company also reimburses
directors for travel, lodging and related expenses they may incur attending
Board and committee meetings.
The Company has adopted a plan which permits directors to defer the payment
of directors' fees until their termination as members of the Board. Elections
must be made prior to the date of the annual meeting of stockholders in each
year and must specify the settlement option in the event of such termination
(lump sum or annual installments over a period not to exceed 10 years). Deferred
directors' fees under the plan bear interest computed quarterly at the average
prime rate for the quarter.
The Company has adopted a retirement plan for directors of the Company who
are not employees of the Company or any of its subsidiaries. Under the plan, an
eligible director who is 70 years of age or older (or, with the approval of the
nominating committee, between the ages of 65 and 69) and has seven or more years
of credited service as a director is entitled to receive upon his or her
retirement from the Board of Directors an annual payment of $15,000 for the
remainder of his or her life, and his or her surviving spouse is entitled to
14
<PAGE> 17
receive $7,500 per year for the remainder of his or her life following such
director's death. Any non-employee director who retires from the Board prior to
age 70, who is 55 years of age or older and has three or more years of credited
service is entitled under the plan to receive at retirement an annual payment of
$15,000 per year for a period of time equal to his or her period of credited
service as a director and, in the event of death prior to the end of such
period, his or her surviving spouse shall be entitled to receive $7,500 per year
for the balance of such period.
Directors of LCI who are also full-time employees of the Company or any of
its subsidiaries receive no fees or remuneration for services as members of the
Board of Directors or any committee of the Board. All other directors of LCI are
compensated for their services by payment of a retainer of Cdn. $10,000 per
annum, payable semi-annually, plus Cdn. $500 for each meeting attended. In
addition, such other directors receive Cdn. $500 for each committee meeting
attended. Directors are reimbursed for costs of travel, meals and lodging
incurred in connection with attendance at meetings. LCI does not provide any
plan of deferred compensation for services as director. LCI has three directors
who are not full-time employees of the Company or any of its subsidiaries.
In addition to the directors' fees described above, John D. Redfern
receives an annual stipend of $12,000 for serving as Vice Chairman of the Board
of the Company, an annual stipend of $20,000 for serving as Chairman of the
Board of LCI, and consulting fees from both the Company and LCI. In 1993, Mr.
Redfern was paid consulting fees by the Company and LCI in the respective
amounts of $3,572 and $33,060.
The Company and LCI entered into an agreement as of September 1, 1992 (the
"Agreement") with Robert W. Murdoch, a director of the Company, in connection
with his resignation as President and Chief Executive Officer of the Company and
of LCI. The Agreement provides, among other things, that stock options which
were granted to Mr. Murdoch under the Company's Stock Option Plan will continue
to vest in accordance with their terms as if Mr. Murdoch's employment had not
terminated until the earlier to occur of (i) the date on which he ceases to
provide consulting or similar services to, or to serve as a director of, the
Company or an affiliate of the Company, and (ii) December 31, 1995. In 1993, Mr.
Murdoch was paid consulting fees by the Company in the amount of $17,500.
INDEBTEDNESS OF MANAGEMENT
The Company and LCI have extended non-interest bearing loans to certain of
their officers for the purpose of assisting in the purchase of housing in the
course of relocations. A portion of these loans resulted in the course of the
relocation of the Company's headquarters from Dallas, Texas to Reston, Virginia.
The largest aggregate amount of such indebtedness outstanding during 1993 and
the amount thereof outstanding as of December 31, 1993, respectively, were as
follows with respect to the following individuals: Bertrand P. Collomb, Chairman
of the Board -- $114,980, $107,096; John M. Piecuch, Senior Executive Vice
President and President -- Construction Materials -- $161,667, $151,667; and
Thomas W. Tatum, Senior Vice President -- Human Resources -- $102,688, $95,692.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Company, LCI, and Lafarge Coppee are parties to two agreements
concerning the sharing of costs for research and development, strategic
planning, human resources, communications activities and the use of certain
trademarks. In 1993, the Company and LCI recorded expenses under these
agreements for the approximate sums of $2,524,000 and Cdn. $3,163,000,
respectively. The Company and LCI have entered into agreements with Lafarge
Coppee under which Lafarge Coppee pays for certain services provided to Lafarge
Coppee by the Company and LCI. In 1993, charges to Lafarge Coppee totaled
approximately $252,000.
During 1993, the Company and LCI purchased products from the Lafarge Coppee
Group in the ordinary course of business. These purchases totaled approximately
$6,072,000 and Cdn. $285,000 for the Company and LCI, respectively.
Messrs. Collomb, Kasriel, Lefevre, Murdoch and Rose, directors of the
Company, are also directors or officers of Lafarge Coppee.
During 1993, LCI purchased, in the ordinary course of business, natural gas
(Cdn. $5,304,000) from Atcor Resources, a subsidiary of ATCO Ltd., with whom Mr.
Southern, a director of the Company, is
15
<PAGE> 18
affiliated. Mr. Southern is a director of Canadian Pacific Limited with whom LCI
contracts for rail transportation.
One of the banks with which the Company maintains banking and borrowing
relations is the Canadian Imperial Bank of Commerce. Mr. Collomb, Chairman of
the Board of the Company, is a director of the bank. The Company maintains
pension management and trust relations with Montreal Trust Company. Mr. Redfern,
Vice Chairman of the Board of the Company, is a director of Montreal Trust
Company.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The 1992 Form 5 filings made in February 1993 for Peter H. Cooke, Senior
Vice President and President -- Eastern Region, and for H.L. Youngblood, Senior
Vice President and President -- Western Region, inadvertently failed to report a
small number of Exchangeable Shares granted to each of them pursuant to an LCI
savings plan and which shares are held in a plan account with a Canadian bank.
These errors were corrected in amended Form 5 filings.
AUDITORS
The firm of Arthur Andersen & Co. audited the consolidated financial
statements of the Company for the fiscal year ended December 31, 1993. Upon the
recommendation of the audit committee, Arthur Andersen & Co. has been appointed
by the Board of Directors to audit the consolidated financial statements of the
Company for the fiscal year ending December 31, 1994, and stockholder approval
of such appointment is requested. While there is no legal requirement that this
proposal be submitted to stockholders, it will be submitted at the meeting
nonetheless, as the Board believes that the selection of auditors to audit the
consolidated financial statements of the Company is of sufficient importance to
seek stockholder approval. In the event the proposal is defeated, the Board will
reconsider its appointment of auditors of the Company. It is expected that one
or more representatives of Arthur Andersen & Co. will be present at the meeting
and available to respond to appropriate questions. Such representatives will
also have an opportunity to make a statement if they desire to do so.
The audit committee of the Board of Directors is presently composed of
Edward H. Tuck, Thomas A. Buell, Marshall A. Cohen, Bertin F. Nadeau and Joe M.
Rodgers. The audit committee makes an annual recommendation to the Board of
Directors as to the appointment of auditors of the Company for the ensuing
fiscal year. The audit committee also reviews the results and scope of and the
fees for the annual audit, reviews the financial statements and any significant
transactions or events and any changes in accounting principles and practices
with the auditors and reviews the internal controls and internal audit
procedures and programs of the Company. The audit committee held two meetings in
1993.
OTHER MATTERS
Management of the Company does not intend to present any other matters at
the meeting and knows of no other matters which will be presented. However, if
any other matters come before the meeting, it is the intention of the persons
named in the enclosed proxy to vote in accordance with their judgment on such
matters.
STOCKHOLDER PROPOSALS
The 1995 annual meeting of stockholders of the Company is scheduled to be
held during the first week of May 1995. In order to be considered for inclusion
in the proxy material for that meeting, stockholder proposals must be received
at the Company's principal executive office not later than November 20, 1994.
FORM 10-K ANNUAL REPORT
The Company will provide without charge to each person from whom a proxy is
solicited by this proxy statement, upon the written request of any such person,
a copy of the Company's Annual Report on Form 10-K, including the financial
statements and the schedules thereto, required to be filed with the Securities
and Exchange Commission pursuant to Section 13(a)(2) under the Exchange Act for
the Company's most recent fiscal year. Requests should be directed to David C.
Jones, Vice President -- Legal Affairs and Secretary, Lafarge Corporation, P.O.
Box 4600, Reston, Virginia 22090.
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<PAGE> 19
LAFARGE CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Bertrand P. Collomb, John D. Redfern
and Michel Rose (acting by a majority or if only one be present, by that one
alone), and each of them, proxies with power of substitution in each, and
hereby authorizes them to represent and to vote, as designated below, all
shares of Common Stock of Lafarge Corporation (the "Company") standing in the
name of the undersigned on March 9, 1994, at the Annual Meeting of Stockholders
to be held on May 3, 1994 in Reston, Virginia, and at any adjournment thereof
and especially to vote on the items of business specified below, as more fully
described in the Notice of the meeting dated March 23, 1994, and the proxy
statement accompanying the same, receipt of which is hereby acknowledged.
(Continued, and to be signed and dated on reverse side)
<TABLE>
<S> <C> <C>
1. Election of Directors: The nominees are: Thomas A. Buell, Marshall A. Cohen, Bertrand P. Collomb, Bernard L. Kasriel,
/ / FOR all nominees / / WITHHOLD Jacques Lefevre, Paul W. MacAvoy, Claudine B. Malone, Alonzo L. McDonald, David
listed to the right AUTHORITY E. Mitchell, Robert W. Murdoch, Bertin F. Nadeau, John D. Redfern, Joe M.
(except as marked to vote for all Rodgers, Michel Rose, Ronald D. Southern, Edward H. Tuck.
to the contrary) nominees listed
INSTRUCTION: (To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
2. Approval of appointment of Arthur Andersen 3. In their discretion, the Proxies are authorized to vote on such
& Co. as auditors of the Company. other business as may properly come before the meeting or any
/ / FOR / / AGAINST / / ABSTAIN adjournment thereof.
Dated: , 1994
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Signature(s) of Stockholder(s)
This proxy should be signed exactly as your name appears
hereon. Joint owners should both sign. If signed as
attorney, executor, guardian, or in some other
representative capacity, or as officer of a corporation,
please indicate your capacity or title.
</TABLE>
Please complete, date and sign this proxy and return it in the enclosed
envelope, which requires no postage if mailed in the United States.
<PAGE> 20
EDGAR APPENDIX
The table on EDGAR page 15 appeared in the printed version of this
document as a line graph.
