<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
LAFARGE CORPORATION
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(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
--------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
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/ / 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
LAFARGE CORPORATION
11130 SUNRISE VALLEY DRIVE
RESTON, VIRGINIA 22091
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 1995
Notice is hereby given that the annual meeting of stockholders of Lafarge
Corporation (the "Company") will be held on Tuesday, May 2, 1995 at 9:00 a.m.,
local time, at Westfields International Conference Center, 14750 Conference
Center Drive, Chantilly, Virginia 22021, for the following purposes:
(1) To elect a Board of Directors for the ensuing year;
(2) To approve certain amendments to the Company's 1993 Stock Option
Plan including provisions for the automatic grant of options to nonemployee
directors;
(3) To ratify the appointment of Arthur Andersen LLP as auditors to
audit the financial statements of the Company for the fiscal year ending
December 31, 1995; and
(4) 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 8, 1995 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, 1994 are contained in the enclosed 1994
Annual Report.
Dated: March 24, 1995
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 24, 1995.
VOTING SECURITIES
The securities with voting rights in the Company which were outstanding at
March 8, 1995, the record date, consisted of 59,872,608 shares of common stock
(the "Common Shares") and 8,502,062 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 a majority of all of the votes cast at a meeting at
which a quorum is present is necessary for the election of a director. For
purposes of the election of directors, abstentions will not be counted as votes
cast and will have no effect on the result of the vote.
The affirmative vote of a majority of the shares entitled to vote at the
meeting is required for approval of the amendments to the Company's 1993 Stock
Option Plan. For purposes of the vote on the proposed amendments, abstentions
and broker non-votes will have the same effect as votes against the proposed
amendments.
The affirmative vote of a majority of all of the votes cast at a meeting at
which a quorum is present is necessary for ratification of the appointment of
independent auditors. For purposes of the vote regarding independent auditors,
abstentions and broker non-votes will not be counted as votes cast and will have
no effect on the result of the vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 8, 1995, 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. 36,806,723(2) 53.3%
("Lafarge Coppee")
61-63 rue des Belles Feuilles
76116 Paris France
Common Stock FMR Corp.(3) 7,742,703(3) 11.3%
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 (other than LCI
and the Company) 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 21,498,652 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"), 14,068,026 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 13, 1995 filed
with the U.S. Securities and Exchange Commission and received by the
Company. The Schedule 13G reports beneficial
2
<PAGE> 5
ownership by FMR Corp. of 7,742,703 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 842,900 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, and that the interest of one person, Fidelity Magellan Fund,
an investment company registered under the Investment Company Act of 1940,
in the Common Shares beneficially owned by FMR Corp. amounted to 4,678,546
shares, or 7.86% of the total outstanding Common Shares at December 31,
1994.
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 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 activities of the Lafarge Coppee Group are carried out in numerous
countries in Western Europe, North America, South America, Africa, Eastern
Europe and most recently China.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 8, 1995, the beneficial
ownership of the Company's Common Shares by each of the Company's current
directors who are standing for reelection, nominees for directors,
3
<PAGE> 6
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 SHARES(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(3) * 0 *
Marshall A. Cohen Current director and nominee 1,000(3)(4) * 0 *
Bertrand P. Collomb Current director and nominee 103,754(5) * 56,408(6) *
Bernard L. Kasriel Current director and nominee 0(3) * 30,761(7) *
Jacques Lefevre Current director and nominee 100(3) * 28,826(8) *
Paul W. MacAvoy Current director and nominee 2,000(3) * 0 *
Claudine B. Malone Current director and nominee 250(3)(9) * 0 *
Alonzo L. McDonald Current director and nominee 1,500(3)(10) * 0 *
David E. Mitchell Current director and nominee 5,652(3) * 0 *
Robert W. Murdoch Current director and nominee 107,100(3)(11) * 1,397 *
Bertin F. Nadeau Current director and nominee 1,000(3)(12) * 0 *
John M. Piecuch Current director and nominee; 98,177(13) * 4,300(14) *
former executive officer
John D. Redfern Current director and nominee 15,730(3) * 509 *
Joe M. Rodgers Current director and nominee 1,500(3)(15) * 0 *
Ronald D. Southern Current director and nominee 1,130(3)(16) * 0 *
Edward H. Tuck Current director and nominee 500(3) * 0 *
Michel Rose Current director and nominee; 21,250(17) * 4,032(18) *
executive officer
R. Gary Gentles Former executive officer 13,300(19) * 0 *
Jean-Pierre Cloiseau Executive officer 53,349(20) * 2,300(21) *
Edward T. Balfe Executive officer 43,027(22) * 2,000(23) *
Duncan Gage Executive officer 32,405(24) * 2,000(25) *
Share ownership of all 29 directors and executive 682,664(26) * 137,083(27) *
officers of the Company as a group
</TABLE>
---------------
* Less than 1%
(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) Does not include options for shares granted to each nonemployee director
pursuant to the proposed amendments to the Company's 1993 Stock Option
Plan, which options were granted subject to shareholder approval at the
annual meeting to be held on May 2, 1995. The option for 5,000 shares
4
<PAGE> 7
granted to each nonemployee director who had served on the Board for more
than four years as of the date of grant (Messrs. Kasriel, Lefevre,
McDonald, Mitchell, Murdoch, Nadeau, Redfern, Rodgers, Southern and Tuck)
will become immediately exercisable if the amendments to the Plan are
approved by the shareholders. With respect to the option for 5,000 shares
granted to each of the other nonemployee directors, such option will become
exercisable for the following number of shares for the following directors:
Mr. Buell, 2,500 shares; Mr. Cohen, 3,750 shares; Mr. MacAvoy, 2,500
shares; and Ms. Malone, 1,250 shares.
(4) These shares are owned by Adroit Investments Ltd., which is controlled by
Mr. Cohen.
(5) Includes 102,500 shares not outstanding but subject to currently
exercisable options.
(6) Includes 54,000 shares not outstanding but subject to currently exercisable
options.
(7) Includes 27,600 shares not outstanding but subject to currently exercisable
options.
(8) Includes 27,600 shares not outstanding but subject to currently exercisable
options.
(9) These shares are owned by Financial & Management Consulting, Inc. which is
controlled by Ms. Malone.
(10) Includes 500 shares owned by the McDonald Agape Foundation and 1,000 shares
owned by the Alonzo L. McDonald Jr. Trust, both of which are controlled by
Mr. McDonald.
(11) Includes 105,000 shares not outstanding but subject to currently
exercisable options.
(12) These shares are owned by La Financiere Nadeau Ltd. which is controlled by
Mr. Nadeau.
(13) Includes 97,000 shares not outstanding but subject to currently exercisable
options.
(14) These shares are not outstanding but are subject to currently exercisable
options.
(15) These shares are owned by JMR Investments which is controlled by Mr.
Rodgers and his wife.
(16) These shares are owned by Sentgraf Enterprises Ltd., which is controlled by
Mr. Southern.
(17) These shares are not outstanding but are subject to currently exercisable
options.
(18) Includes 4,000 shares not outstanding but subject to currently exercisable
options and 32 shares owned by Mr. Rose's wife.
(19) Includes 12,000 shares not outstanding but subject to currently exercisable
options. These options will expire on April 15, 1995 which is three months
from the date of termination of his employment with the Company.
(20) Includes 52,250 shares not outstanding but subject to currently exercisable
options.
(21) These shares are not outstanding but are subject to currently exercisable
options.
(22) Includes 41,750 shares not outstanding but subject to currently exercisable
options.
(23) These shares are not outstanding but are subject to currently exercisable
options.
(24) Includes 32,000 shares not outstanding but subject to currently exercisable
options.
(25) These shares are not outstanding but subject to currently exercisable
options.
(26) Includes 633,500 shares not outstanding but subject to currently
exercisable options. Does not include options for Shares granted to
nonemployee directors pursuant to the proposed amendments to the Company's
1993 Stock Option Plan, which options were granted subject to shareholder
approval at the annual meeting to be held on May 2, 1995; of these options,
options for 60,000 shares will become exercisable within 60 days if the
amendments to the Plan are approved by the shareholders.
(27) Includes 128,100 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
5
<PAGE> 8
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 1994. During 1994, Marshall A. Cohen, Bernard L. Kasriel and
Claudine B. Malone 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 or she served.
As permitted by the by-laws of the Company, the Board of Directors has also
designated several other committees from its members, including a Board
Governance Committee, a Management Development and Compensation Committee and an
Audit Committee. One of the functions of the Board Governance 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 Board Governance 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 Board
Governance Committee. The Board Governance Committee is presently composed of
Marshall A. Cohen, Bertrand P. Collomb, John D. Redfern and Edward H. Tuck. The
Board Governance Committee met three times in 1994.
At a meeting held on July 29, 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 16 members to 17 members and John M. Piecuch was appointed a
director effective as of August 1, 1994. At the annual meeting of stockholders,
17 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. Certain
background information regarding the 17 nominees of the Board for directors of
the Company is set forth below. Each of the nominees has consented to serve as a
director if elected. All of the nominees 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 63, 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., B.C. Gas, Inc. and Swiss Bank
Canada. 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 59, 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 Barrick Gold 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 the Company and Chairman of the
Board and Chief Executive Officer of Lafarge Coppee. Mr. Collomb, age 52, has
served as Chairman of the Board of the Company 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 the Company 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 the
Company from 1986
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<PAGE> 9
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, Vice Chairman, Chief Operating Officer and Managing Director
of Lafarge Coppee. Mr. Kasriel has served as Vice Chairman and Chief Operating
Officer of Lafarge Coppee since January 1, 1995 and 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 also President and a director of National Gypsum
Company from June 1987 to July 1989. Mr. Kasriel, age 48, is also a director of
National Gypsum Company. He has served as a director of the Company since 1989.
JACQUES LEFEVRE, Vice Chairman, Chief Operating Officer and Managing Director of
Lafarge Coppee. Mr. Lefevre, age 56, has served as Vice Chairman and Chief
Operating Officer of Lafarge Coppee since January 1, 1995 and as Managing
Director since August 1, 1989. He served as Senior Executive Vice President of
Lafarge Coppee from 1987 to August 1, 1989 and as Executive Vice President of
Lafarge Coppee from 1983 to 1987. He has served as a director of the Company
since 1983.
PAUL W. MACAVOY, Williams Brothers Professor of Management Studies, Yale School
of Organization and Management ("SOM"). Mr. MacAvoy, age 60, has been Williams
Brothers Professor since 1991. He served as Dean of the Yale SOM from 1992 to
1994, 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., Chase Manhattan
Bank, N.A., and Chase Manhattan Corporation. He has served as a director of the
Company since 1993.
CLAUDINE B. MALONE, President of Financial & Management Consulting, Inc. Ms.
Malone, age 58, 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, The Limited Inc., Penn Mutual Life Insurance Co., SAIC Corp.,
Scott Paper Company and Union Pacific Corporation. She has served as a director
of the Company since May 1994.
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 66, 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
68, is also a director of Air Canada, The Bank of Nova Scotia, Chieftain
International, Inc., Continental Airlines, Inc. and Hudson's Bay Company. He has
served as a director of the Company since 1985.
ROBERT W. MURDOCH, Corporate Director. Mr. Murdoch, age 53, was formerly
President and Chief Executive Officer of the Company 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 the Company from 1987 to 1989, as
Executive Vice President of the Company 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 and LCI. He has served as a director of the Company
since 1987.
BERTIN F. NADEAU, Chairman of the Board and Chief Executive Officer of GescoLynx
Inc. (a private holding company). Mr. Nadeau has served in such capacity since
September 30, 1994. He was also Chairman of the Board, President and Chief
Executive Officer of Unigesco Inc. from 1982 to September 1994 and Chairman of
the Board of Unigesco's affiliate, Univa Inc. (a marketer and distributor in the
food sector) from
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<PAGE> 10
October 1989 to July 1993. Mr. Nadeau, age 54, is also a director of DMR Group
Inc., and Sun Life Assurance Company of Canada. He has served as a director of
the Company since 1988.
JOHN M. PIECUCH, Group Executive Vice President of Lafarge Coppee. Mr. Piecuch,
age 46, has served as Group Executive Vice President of Lafarge Coppee since
July 1, 1994. He served as Senior Executive Vice President of the Company from
1992 to June 30, 1994 and as Executive Vice President of the Company from 1989
to 1992. He has served as a director of the Company since August 1, 1994.
JOHN D. REDFERN, Vice Chairman of the Board of the Company Mr. Redfern has
served as Vice Chairman of the Board of the Company since January 1989 and as
Chairman of the Board of LCI since 1984. Mr. Redfern served as Chairman of the
Board of the Company from 1985 until January 1989, as President and Chief
Executive Officer of the Company from 1983 until 1985 and as Chief Executive
Officer of LCI from 1977 to 1985. Mr. Redfern, age 59, is also a director of LCI
and Montreal Trust Company. He has served as a director of the Company since
1983.
JOE M. RODGERS, Chairman of the JMR Investments Group (a real estate development
and venture capital company). Mr. Rodgers, age 61, served as the United States
Ambassador to France from 1984 to 1989. He is also a director of AMR
Corporation/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 the Company and Senior
Executive Vice President of Lafarge Coppee. Mr. Rose, age 52, has served as
President and Chief Executive Officer of the Company 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 S.A., 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 64, is
also a director of Canadian Pacific Limited, PWA Corporation, Fletcher Challenge
Limited, Royal Insurance Company Limited, Xerox Canada Inc., Chrysler Canada
Ltd., and IMASCO Limited. He has served as a director of the Company since 1985.
EDWARD H. TUCK, Counsel to the law firm Shearman and Sterling. Mr. Tuck, age 67,
served as President of the French-American Foundation from 1987 to March 1,
1995. He was a partner in Shearman and Sterling 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 "Executive Compensation -- 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 (the
"Compensation Committee") and, with respect to stock-based compensation, the
Stock Option Committee of the Board of Directors (the "Stock Option Committee").
In 1994, the Compensation Committee and Stock Option Committee were both
comprised of the same directors, none of whom is an employee 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.
8
<PAGE> 11
In accordance with applicable U.S. securities laws, all decisions relating to
awards to employees under the Company's Stock Option Plan are made solely by the
Stock Option Committee.
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 1994. Claudine B.
Malone was first elected a director of the Company and appointed to the
Compensation Committee and the Stock Option Committee in May 1994, and she did
not participate in the decisions with respect to 1994 salaries and stock options
paid and awarded to the Company's executive officers. Also, Ms. Malone was not
present at the portion of the February 1995 meeting of the Compensation
Committee during which decisions were made with respect to the bonus for Mr.
Rose for 1994.
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 1994, 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 16 of
this proxy statement is a participant in the Hay & Associates survey and
therefore none of them is 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
9
<PAGE> 12
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") in the
first quarter of each year 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 1994, in view of the Company's
long-term compensation objectives and expected improvements in the Company's
financial results, the budgeted salary increases were comparable to projected
salary increases for the industry. Although the Compensation Committee generally
does not review salaries more frequently than annually, it did adjust the
salaries of several executive officers during 1994, based on changes in their
responsibilities.
The base salary of $425,000 for the President and Chief Executive Officer
was established in accordance with the policies established for all executive
officers and was slightly below the midpoint of the range for persons holding
comparable positions at other companies in the comparison group. 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. The increase in Mr. Rose's salary for 1994 was based upon Mr. Rose's
performance during 1993, including his leadership role with respect to the
Company's improved financial performance in 1993 and the Company's strategic
reorganization that commenced in 1993 and was expected to continue throughout
1994. The 1994 salaries of the other executive officers of the Company listed in
the Summary Compensation Table on page 12 of this proxy statement (the "named
executive officers") ranged from approximately 76% to 122% 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, Balfe and Gage, the individual
performance of the division for which they were responsible represents one-half
of the financially based performance component of the bonus opportunity.
Subjective performance criteria are used to evaluate each officer's individual
performance with respect to the individual objectives defined for such officer
at the beginning of each year. Individual 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 individual performance objectives for the year.
Because of the Company's improved earnings performance and, with respect to
Messrs. Piecuch, Gentles, Balfe and Gage, the improved earnings before interest
and taxes ("EBIT") of the division of the Company for which each was
responsible, financial performance bonuses were paid with respect to 1994 in
amounts in the range of 17% to 22% of the salaries of the Chief
10
<PAGE> 13
Executive Officer and the named executive officers. The individual performance
bonuses paid to these persons with respect to 1994 were in the range of 20% to
27% of such salaries.
Mr. Rose's total bonus amount was equal to approximately 48% of his salary.
The Company performance objective on which a portion of such bonus was based was
the achievement by the Company of earnings per share targets specified by the
Compensation Committee. The factors considered by the Compensation Committee in
determining the portion of the bonus based on individual objectives included his
leadership role with respect to the Company's improved financial performance in
1994, the Company's reorganization that commenced in 1993 and continued
throughout 1994 and several significant transactions undertaken in connection
with the Company's strategic repositioning of its assets.
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 interests of management with those of shareholders.
Long-term awards granted in 1994 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 have value only if the Company's stock price increases, resulting in a
commensurate benefit for 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. In 1994 the Stock Option Committee granted to Mr. Rose
options to purchase 35,000 shares of the Company's common stock based upon the
foregoing factors.
Lafarge Coppee S.A. ("Lafarge Coppee"), the Company's principal
shareholder, has advised the Company that it intends to grant to certain
executive officers of the Company options to purchase shares of Lafarge Coppee
stock from time to time, in recognition of their contributions to the overall
performance of Lafarge Coppee and its affiliated companies. Lafarge Coppee
granted options to certain executive officers of the Company in December 1993
including an option to purchase 3,000 shares of Lafarge Coppee stock granted to
Mr. Rose. Lafarge Coppee also granted an option to purchase 1,000 shares to Mr.
Rose in September 1994. Options granted by Lafarge Coppee are not considered by
the Stock Option Committee in determining the number of options to be granted by
the Company.
The Compensation Committee and the Stock Option Committee believe that
linking executive compensation to corporate performance results 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 1994 adequately reflect the Company's
compensation goals and policies.
March 1, 1995
<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
CLAUDINE B. MALONE CLAUDINE B. MALONE
JOHN D. REDFERN JOHN D. REDFERN
RONALD D. SOUTHERN RONALD D. SOUTHERN
</TABLE>
11
<PAGE> 14
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Of the five 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 1994, LCI purchased, in the ordinary course of business, natural gas
(Cdn. $5,519,000) from B.C. Gas Utility, with whom Mr. Buell is affiliated. Mr.
Southern is a director of Canadian Pacific Limited with whom LCI contracts for
rail transportation.
In 1994, Mr. Redfern was paid consulting fees by the Company and LCI in the
respective amounts of $1,832 and $34,800. The Company maintains pension
management and trust relations with Montreal Trust Company of which Mr. Redfern
is a director.
12
<PAGE> 15
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the Chief
Executive Officer, the four executive officers of the Company who were the most
highly compensated for the year ended December 31, 1994 who were serving as
executive officers at year end and one additional executive officer who was one
of the four most highly compensated for the year but was not an executive
officer at year end.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
----------
SECURITIES
ANNUAL COMPENSATION UNDERLYING
----------------------------------------------------- STOCK
NAME AND OTHER ANNUAL OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1)(2) (SHARES) COMPENSATION(1)
-------------------------- ---- -------- -------- ------------------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Michel Rose 1994 $425,000 $205,700 $22,248(2) 35,000 $16,537(3)
President and Chief 1993 405,000 187,000 10,000 18,634(3)
Executive Officer 1992 130,000(4) 19,000(4) 30,000 93,863(3)(5)
of Lafarge Corp.;
President and Chief
Executive Officer of LCI
R. Gary Gentles(6) 1994 273,000 113,900 20,000 15,491(7)
Executive Vice President 1993 260,000 100,600 0 17,451(7)
and President, 1992 31,250(8) 0(8) 20,000 76,659(7)(9)
Cement Group
Jean-Pierre Cloiseau 1994 210,000 86,700 467(2) 20,000 21,408(10)
Executive Vice President 1993 190,500 71,800 20,000 20,976(10)
and Chief Financial 1992 180,500 20,000 15,000 19,711(10)
Officer
John M. Piecuch(11) 1994 207,600(12) 87,360(13) 14,331(2) 20,000 26,473(14)
Executive Vice President 1993 328,000 122,700 8,203(2) 20,000 27,405(14)
and President, 1992 292,500 46,500 4,560(2) 30,000 27,853(14)
Construction Materials
Edward T. Balfe 1994 203,728 94,800 467(2) 15,000 69,624(15)(16)
Executive Vice President 1993 186,500 63,600 10,000 1,522(15)
and President, 1992 188,870 16,250 10,000 1,541(15)
Construction Materials
Duncan Gage 1994 200,000 76,000 15,000 213,074(17)(18)
Senior Vice President 1993 186,500 65,200 10,000 25,964(17)(19)
and President, U.S. 1992 169,330 15,000 10,000 110,863(17)(20)
Cement Region
</TABLE>
---------------
(1) Excludes perquisites and other benefits, unless the aggregate amount of
such benefits exceeded the lesser of $50,000 or 10 percent of the total of
annual salary and bonus reported for the named executive officer.
(2) This amount was paid as a tax equalization payment to reimburse the
indicated officer for taxes and related expenses 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, plus tax return preparation
fees).
(3) Includes $13,613 (1994), $15,329 (1993) and $8,450 (1992) contributed or
allocated by the Company to Mr. Rose's account under the Company's Thrift
Savings Plan and Thrift Savings Restoration Plan and $2,924 (1994), $3,305
(1993) and $1,061 (1992) 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.
(5) Includes moving expenses of $84,352 in connection with Mr. Rose's
relocation from France to the United States.
(6) Mr. Gentles' employment with the Company terminated on January 15, 1995.
(7) Includes $13,613 (1994), $15,329 (1993) and $2,031 (1992) contributed or
allocated by the Company to Mr. Gentles' account under the Company's
Thrift Savings Plan and Thrift Savings Restoration Plan and $1,878 (1994),
$2,122 (1993) and $257 (1992) in term life insurance premiums paid by the
Company.
(8) 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.
(9) Includes moving expenses of $74,371 in connection with Mr. Gentles'
relocation from France to the United States.
13
<PAGE> 16
(10) Includes $13,613 (1994), $13,684 (1993) and $11,733 (1992) contributed or
allocated by the Company to Mr. Cloiseau's account under the Company's
Thrift Savings Plan and Thrift Savings Restoration Plan; $1,445 (1994),
$1,554 (1993) and $1,473 (1992) in term life insurance premiums paid by
the Company; and $6,350 (1994), $5,738 (1993) and $6,505 (1992) of
interest that would have been payable by him on his interest free loan if
the Company did require interest payments (calculated at the average
prime rate for the year).
(11) Mr. Piecuch was appointed Executive Vice President of Lafarge Coppee
effective July 1, 1994 and he is based in Paris, France and no longer
serves in the position indicated in the table; however, he has continued
to serve as an employee of the Company and to participate in the
Company's compensation and benefit programs.
(12) This amount reflects the Company's payment of 100% of Mr. Piecuch's
salary from January 1 through June 30, 1994 and 20% of his aggregate
salary from July 1 through December 31, 1994, which are the respective
percentages of his time and effort devoted to the Company during such
periods. The portion of Mr. Piecuch's aggregate salary paid by Lafarge
Coppee was for services rendered to Lafarge Coppee and is not included in
the table.
(13) Mr. Piecuch's bonus was calculated using financial performance objectives
based 50% on the Company's earnings performance and 50% on Lafarge
Coppee's earnings performance for 1994. The amount shown in the table
reflects the Company's payment of 60% of the total bonus amount based on
the percentage of Mr. Piecuch's time and effort devoted to the Company
during 1994 (100% during the first half of the year and 20% during the
second half of the year). The amount paid as bonus to Mr. Piecuch by
Lafarge Coppee related to services rendered to Lafarge Coppee is not
included in the table.
(14) Includes $13,613 (1994), $15,329 (1993) and $14,876 (1992) contributed or
allocated by the Company to Mr. Piecuch's account under the Company's
Thrift Savings Plan and Thrift Savings Restoration Plan; $2,380 (1994),
$2,676 (1993) and $2,387 (1992) in term life insurance premiums paid by
the Company; and $10,480 (1994), $9,400 (1993) and $10,590 (1992) of
interest that would have been payable by him on his interest free loan if
the Company did require interest payments (calculated at the average
prime rate for the year).
(15) Includes $9,750 (1994) contributed by the Company to Mr. Balfe's account
under the Company's Thrift Savings Plan; $1,402 (1994), $1,522 (1993) and
$1,541 (1992) in term life insurance premiums paid by the Company; and
$9,125 (1994) of interest that would have been payable by him on his
interest free loans if the Company did require interest payments
(calculated at the average prime rate for the year).
(16) Includes moving expenses of $49,227 in connection with Mr. Balfe's
relocation from Canada to corporate headquarters in Virginia.
(17) Includes $13,613 (1994), $10,775 (1993) and $12,866 (1992) contributed or
allocated by the Company to Mr. Gage's account under the Company's Thrift
Savings Plan and Thrift Savings Restoration Plan; $1,376 (1994), $1,518
(1993) and $1,382 (1992) in term life insurance premiums paid by the
Company; and $4,743 (1994) of interest that would have been payable by
him on his interest free loan if the Company did require interest
payments (calculated at the average prime rate for the year).
(18) Includes moving expenses of $193,342 in connection with Mr. Gage's two
relocations in 1994, the first from Texas to corporate headquarters in
Virginia and the second from Virginia to the U.S. cement region
headquarters in Michigan.
(19) Includes moving expenses of $13,671 relating to his relocation in 1992.
(20) Includes moving expenses of $96,615 in connection with Mr. Gage's
relocation from Dallas to Houston.
OPTION EXERCISES AND YEAR END VALUES
The following table shows information with respect to stock options
exercised during 1994 and unexercised stock options granted under the Company's
Employee Stock Option Plan to the Chief Executive Officer and the other named
executive officers and held by them at December 31, 1994.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT DECEMBER 31, 1994 AT DECEMBER 31, 1994(1)
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michel Rose 7,500 $ 91,875 10,000 57,500 $ 42,500 $90,000
R. Gary Gentles 56,250 556,156 12,000 30,000 18,125 36,250
Jean-Pierre Cloiseau 16,000 224,500 35,250 45,750 76,438 66,688
John M. Piecuch 26,000 339,125 77,000 55,000 140,250 95,000
Edward T. Balfe 0 0 31,125 29,375 78,313 38,438
Duncan Gage 12,600 150,431 21,375 29,375 34,438 38,438
</TABLE>
---------------
(1) Based on the closing price on the New York Stock Exchange of the Company's
Common Shares on December 31, 1994 ($17.75).
14
<PAGE> 17
OPTION GRANTS
The following table shows information with respect to grants of stock
options pursuant to the Company's 1993 Stock Option Plan during 1994 to the
Chief Executive Officer and the other named executive officers. No stock
appreciation rights were granted under the Plan during 1994.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL
YEAR POTENTIAL REALIZABLE
NUMBER ---------------------------- VALUE
OF PERCENTAGE AT ASSUMED ANNUAL RATES
SECURITIES OF OF STOCK PRICE
UNDERLYING TOTAL APPRECIATION FOR
OPTIONS OPTIONS EXERCISE OPTION TERM(2)
GRANTED(1) GRANTED PRICE EXPIRATION -------------------------
NAME (#) IN 1994 ($/SH) DATE 5% 10%
----------------------- ------ --- ------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Michel Rose 35,000 7.5% $24.125 2-07-04 $531,023 $1,345,716
R. Gary Gentles 20,000 4.3 24.125 2-07-04 303,442 768,981
Jean-Pierre Cloiseau 20,000 4.3 24.125 2-07-04 303,442 768,981
John M. Piecuch 20,000 4.3 24.125 2-07-04 303,442 768,981
Edward T. Balfe 15,000 3.2 24.125 2-07-04 227,581 576,736
Duncan Gage 15,000 3.2 24.125 2-07-04 227,581 576,736
</TABLE>
---------------
(1) All of the options granted become exercisable in annual 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, 1994 with the closing price on the New York Stock Exchange of the
Company's Common Stock of $17.75 a share of the Company's Common Stock would
have a value on December 31, 2004 of approximately $28.91 at an assumed
appreciation rate of 5% and approximately $46.04 at an assumed appreciation
rate of 10%.
15
<PAGE> 18
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, 1989 and ended December 31, 1994. The companies in
the peer group index constructed by the Company are as follows: St. Lawrence
Cement, Inc., Texas Industries, Inc., Southdown, Inc., Vulcan Materials Company,
CalMat Co. and Medusa Corporation. Lone Star Industries, Inc. was previously
included in the group of peer companies; however, when Lone Star emerged from
reorganization under the bankruptcy laws, it was essentially a new entity with
"fresh start" financial reporting which precludes any comparison with historical
stock price information. Medusa Corporation has been added to the group of peer
companies because it became a publicly-held corporation in October 1988 and,
therefore, sufficient historical information is now available.
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>
1989 100.00 100.00 100.00
1990 78.99 93.82 73.92
1991 74.87 125.91 83.71
1992 91.98 137.20 103.12
1993 144.82 152.67 143.80
1994 113.95 152.52 133.87
</TABLE>
* Assumes $100 invested on December 31, 1989 in Lafarge Corporation Common
Shares, 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 (not in excess of 35) 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
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<PAGE> 19
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. 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 the 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 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, 1995 to each
individual named in the compensation table above who is a participant in the
plan were as follows: Mr. Piecuch -- sixteen years; and Mr. Cloiseau -- eleven
years.
Compensation 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 $30,000 each, payable
in quarterly installments, for their services as directors. In addition, such
other directors receive an annual fee of $3,000 for each committee of the Board
on which they serve (and an additional $3,000 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.
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<PAGE> 20
The Company has 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 Board
Governance 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
receive $7,500 per year for the remainder of his or her life following such
director's death. Any nonemployee 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 $19,000 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 1994, Mr.
Redfern was paid consulting fees by the Company and LCI in the respective
amounts of $1,832 and $34,800.
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 1994, Mr.
Murdoch was paid consulting fees by the Company in the amount of $2,500.
Directors who are not officers or employees of the Company or any
subsidiary will be entitled to receive certain automatic grants of options under
the Company's 1993 Stock Option Plan, if the proposed amendments to the Plan are
approved at the annual meeting. See "Proposal to Approve Amendments to the
Company's 1993 Stock Option Plan."
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. With respect to loans with an outstanding balance in
excess of $60,000 at any time during 1994, the largest aggregate amount of such
indebtedness outstanding during 1994 and the amount thereof outstanding as of
December 31, 1994, respectively, were as follows with respect to the following
individuals: Bertrand P. Collomb, Chairman of the Board -- $107,096, $99,212;
John M. Piecuch, former Senior Executive Vice President and President --
Construction Materials -- $151,667, $141,667; Edward T. Balfe, Executive Vice
President and President, Construction Materials -- $500,000, $195,000; Duncan
Gage, Senior Vice President and President -- U.S. Cement Region, $200,000,
$198,333; H.L. Youngblood, Senior Vice President and President -- Western Cement
Region, $83,254, $75,746; Peter H. Cooke, Senior Vice President and
President -- Eastern Cement Region, $60,992, $55,844; Jean-Pierre Cloiseau,
Executive Vice President and Chief Financial Officer, $92,250, $85,500; Thomas
W. Tatum, Senior Vice President -- Human Resources, $95,692, $88,696; John C.
Porter, Vice President and Controller, $84,167, $79,167.
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<PAGE> 21
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 1994, the Company and LCI recorded expenses under these
agreements for the approximate sums of $2,519,000 and Cdn. $2,886,000,
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 1994, charges to Lafarge Coppee totaled
approximately $313,000.
During 1994, the Company and LCI purchased products from the Lafarge Coppee
Group in the ordinary course of business. These purchases totaled approximately
$11,028,000 and Cdn. $976,000 for the Company and LCI, respectively.
Messrs. Collomb, Kasriel, Lefevre, Murdoch, Piecuch and Rose, directors of
the Company, are also directors or officers of Lafarge Coppee.
During 1994, LCI purchased, in the ordinary course of business, natural gas
(Cdn. $5,519,000) from B.C. Gas Utility, with whom Mr. Buell, a director of the
Company, is 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. Mr. Mitchell is a director of the Bank of Nova Scotia which owns
Montreal Trust Company. Mr. Nadeau is a director of Sun Life Assurance Company
which is an insurance provider to LCI.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Paul W. MacAvoy purchased 2,000 shares of the Company's Common Stock in
December 1994. The purchase of these shares was not reported until his 1994 Form
5 filing made in February 1995.
PROPOSAL TO APPROVE AMENDMENTS TO THE COMPANY'S
1993 STOCK OPTION PLAN
At the annual meeting in May 1993, the Company's shareholders approved the
adoption of the 1993 Stock Option Plan of the Company (the "Plan"). The Plan is
intended to promote the interests of the Company and its shareholders by
attracting, retaining and stimulating the performance of selected employees by
giving such persons the opportunity to acquire a proprietary interest in the
Company and an increased personal interest in the Company's success and
progress. On February 7, 1995, the Board of Directors adopted, subject to
shareholder approval, amendments to the Plan (a) to provide for the automatic
grant of stock options to nonemployee directors of the Company under the Plan
("Director Options") and (b) to make certain related changes throughout the Plan
to distinguish between stock options granted to employees ("Employee Options")
and Director Options. The shares covered by Director Options will be part of the
3,000,000 Common Shares already authorized for issuance under the Plan.
A copy of the Plan, as amended by the Board of Directors, is set forth in
its entirety as Appendix A to this proxy statement. At the annual meeting to be
held on May 2, 1995, the shareholders will be asked to consider and adopt a
proposal (the "Proposal") to approve the amendments to the Plan adopted by the
Board of Directors, as reflected in Appendix A. None of the amendments will be
effective unless the Proposal is adopted by the shareholders.
REASONS FOR AND PRINCIPAL EFFECTS OF THE PROPOSAL
The Plan currently provides that options to purchase Common Shares may be
granted to employees of the Company and its subsidiaries (including directors
and officers who are employees). If the Proposal is adopted, directors who are
not employees of the Company or a subsidiary will automatically be granted stock
options for a certain number of shares at certain times as follows: Existing
nonemployee directors each were granted options for 5,000 shares on February 7,
1995, subject to shareholder approval of the Proposal. Each
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<PAGE> 22
future nonemployee director will automatically receive a one-time grant of an
option for 5,000 shares at the time of election or appointment to the Board of
Directors. Each year beginning in February 1996, each nonemployee director will
automatically be granted an option for 1,000 shares. If, however, as of the date
of any grant of Director Options, there are not sufficient shares available
under the Plan to allow for the grant to each nonemployee director of a Director
Option for the number of shares as described above, then each nonemployee
director would be granted an option for a pro rata portion of the total number
of shares then available. A nonemployee director may not be granted Director
Options for more than the lesser of 20,000 shares or 5% of the outstanding
shares of the Company's Common Stock.
The exercise price per share for a Director Option will be 100% of the per
share fair market value of the Common Shares on the option grant date. The
Director Options granted on February 7, 1995 to the existing nonemployee
directors, Messrs. Buell, Cohen, Kasriel, Lefevre, MacAvoy, McDonald, Mitchell,
Murdoch, Nadeau, Redfern, Rodgers, Southern and Tuck and Ms. Malone, have an
exercise price of $18.00 per share.
The vesting schedule for Director Options is based on the years of service
by the director on the Board of Directors. If a nonemployee director has served
on the Board continuously for more than four years at the time of option grant,
then the Director Option will be fully vested on the date of grant. If the
nonemployee director has served on the Board for less than four years at the
time of option grant, then the Director Option will be vested at the date of
grant with respect to one-fourth of the shares for each continuous full year of
service on the Board prior to the grant date and will vest with respect to
one-fourth of the shares on each subsequent anniversary of the date of
commencement of the nonemployee director's service on the Board, so that the
option will be fully vested as to all of the underlying shares on the date which
is four years from such date of commencement. A Director Option will expire and
become null and void no later than the first to occur of (i) 10 years from the
grant date, (ii) three years from the date of termination of the director's
service on the Board of Directors by reason of death or retirement under the
normal or early retirement provisions of any retirement plan maintained by the
Company for nonemployee directors or (iii) three months from the date of
termination of the director's service on the Board of Directors for any reason
other than death or retirement as described in clause (ii). If, however, the
director's service is terminated by reason of his (i) fraud or intentional
misrepresentation or (ii) embezzlement, misappropriation or conversion of assets
or opportunities of the Company or any affiliate, his or her Director Options
will expire and become null and void immediately.
A stock option committee composed of directors appointed by the Board of
Directors is responsible for administration of the Plan. The committee is
currently composed of Thomas Buell, Claudine B. Malone, Alonzo L. McDonald, John
D. Redfern and Ronald D. Southern. The committee will have no authority or
discretion to determine recipients of Director Options, the number of shares
covered by Director Options or the vesting, exercise prices, exercise periods or
any other terms of Director Options, but will simply administer the Plan, as it
relates to Director Options, in accordance with the express provisions thereof.
Each member of the committee is a nonemployee director and is therefore eligible
to receive automatic awards of Director Options under the Plan.
The provisions of the Plan governing (a) the number of Director Options to
be awarded to nonemployee directors, (b) the number of Common Shares to be
covered by each Director Option, (c) the exercise price per share under each
Director Option, (d) when and under what circumstances Director Options will be
granted and (e) the period within which Director Options may be exercised, may
not be amended or altered more than once every six months, other than to comport
with changes in the Internal Revenue Code of 1986, as amended (the "Code") or
the rules promulgated thereunder.
Except as otherwise provided in the Plan, Director Options are subject to
the provisions of the Plan relating to options generally, including for example,
the provisions governing the payment of exercise prices and adjustments of
outstanding options as a result of mergers, stock splits or similar
transactions.
Nonemployee directors will not be eligible to receive awards of Restricted
Stock under the Plan or to receive stock appreciation rights in connection with
Director Options.
DESCRIPTION OF THE 1993 STOCK OPTION PLAN AS CURRENTLY IN EFFECT
The Plan became effective on August 4, 1993 upon the expiration of the
Company's 1983 Stock Option Plan. Stock options for an aggregate of 880,800
shares (of which options for 43,750 shares have been canceled
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<PAGE> 23
due to employee terminations) have been granted under the Plan to a total of 91
employees. Also, options for 1,636,959 shares are currently outstanding under
the Company's 1983 Stock Option Plan.
The Plan provides for the granting of stock options to purchase Common
Shares and the awarding of Common Shares subject to certain restrictions
("Restricted Stock") to key employees of the Company and its subsidiaries who
contribute or who, in the opinion of the stock option committee, possess a
capacity for contributing in substantial measure to the success of the Company.
These stock options are nonqualified stock options which do not qualify as
incentive stock options under Section 422 of the Code. Options granted to
employees under the Plan may also include stock appreciation rights ("SARs").
Such rights entitle the optionee to receive, upon the exercise of part or all of
an option, cash or Common Shares having a value equal to the excess of the fair
market value of one Common Share over the option price, multiplied times the
number of Common Shares represented by such option. Each option and SAR granted
under the Plan is governed by a stock option agreement between the Company and
the optionee.
The stock option committee has full authority, subject to the provisions of
the Plan, to determine the employees to be granted options and SARs and to be
awarded Restricted Stock, the number and purchase price of the Common Shares
represented by each option granted to an employee, the time or times at which
options granted to employees may be exercised, the terms and provisions of the
respective agreements which will evidence each grant of options and SARs under
the Plan, and the restrictions, terms and conditions applicable to awards of
Restricted Stock. Members of the committee are not eligible to receive
discretionary awards of options, SARs or Restricted Stock under the Plan or any
other stock option or stock plan of the Company or its subsidiaries.
The aggregate number of Common Shares which may be issued pursuant to
options granted under the Plan or as Restricted Stock awarded under the Plan to
any one individual may not exceed 5% of the number of Common Shares outstanding
at the time of the grant.
Options and shares of Restricted Stock awarded under the Plan may be
subject to complete or partial termination or forfeiture in the event of the
termination of the recipient's employment. No option or SAR granted under the
Plan may be transferred by an optionee other than by will or the laws of descent
or distribution and, during the lifetime of an optionee, the option may be
exercised only by him or her. Restricted Stock may not be transferred except as
set forth in the terms of the award. If any options granted under the Plan
expire or terminate without having been exercised, or if any shares of
Restricted Stock are forfeited, the undelivered Common Shares represented
thereby will again become available for purposes of the Plan.
The stock option committee may in its discretion remove, modify or
accelerate the release of restrictions on any Restricted Stock. Holders of
shares of Restricted Stock are entitled to vote, and to receive any dividends
declared with respect to, such shares equally with other holders of Common
Shares. Restricted Stock is awarded without the receipt of monetary
consideration by the Company, except that recipients are required to pay the par
value for previously unissued shares.
The Plan provides that the option price per share of any stock option
granted thereunder may not be less than 100% of the per share fair market value
of the Common Shares on the date the option is granted. The term of each option
granted to an employee under the Plan is determined by the stock option
committee, but in no event may such term exceed ten years from the date of
grant. Each option granted to an employee under the Plan will become exercisable
from time to time, in such amounts as the stock option committee may determine,
commencing one year after the date the option is granted. The Plan extends
option exercise rights for three years from the date of termination of the
optionee's employment with the Company or one of its subsidiaries by reason of
death, disability or retirement under the normal or early retirement provisions
of a pension or retirement plan maintained by the Company or one of its
affiliates or for three months from the date of termination for any reason other
than death, disability or retirement under such provisions. The exercise price
may be paid in cash or partially or entirely in issued and outstanding Common
Shares, valued at the per share fair market value of the Common Shares on the
date the option is exercised.
The Plan provides for the proportionate adjustment of the total number of
Common Shares reserved for the grant of options and for award as Restricted
Stock, the number of Common Shares represented by each outstanding option and
the exercise price of outstanding options in the event of recapitalization,
capital
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<PAGE> 24
adjustment or a merger in which the Company is the surviving corporation. The
Plan also authorizes the Board of Directors to take such action as it deems
necessary to preserve the interest of optionees or of recipients of Restricted
Stock in the event of a merger in which the Company is not the surviving
corporation, a dissolution of the Company or a transfer of all or substantially
all of its assets.
Unless sooner terminated, the Plan will expire five years from the date on
which it became effective. The Board of Directors may amend, suspend or
terminate the Plan at any time, except that, without stockholder approval, the
Board of Directors may not make any amendment which would materially increase
the benefits accruing to participants under the Plan, increase the number of
Common Shares which may be issued under the Plan or materially modify the
requirements for participation in the Plan. The amendment, suspension or
termination of the Plan may not materially or adversely affect the rights of an
optionee as set forth in his or her option agreement, except with the consent of
such optionee.
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal U.S. federal income tax
consequences to optionees resident in the U.S. of the grant and exercise of
nonqualified stock options (both Employee Options and Director Options).
An optionee will not recognize income for federal income tax purposes upon
the grant of a nonqualified stock option. Upon exercise of a nonqualified
option, the optionee will recognize ordinary income in an amount equal to the
excess of the fair market value of the shares on the date of exercise over the
option price of such shares.
Income recognized by optionees who are employees of the Company upon the
exercise of nonqualified stock options will be considered compensation subject
to withholding at the time such income is recognized, and the Company must make
the necessary arrangements with the optionee to ensure that the amount of the
tax required to be withheld is available for payment.
The nonqualified stock options granted under the Stock Option Plan are
designed to provide the Company with a deduction equal to the amount of ordinary
income recognized by the optionee at the time of such recognition by the
optionee.
The basis of shares transferred to an optionee pursuant to the exercise of
a nonqualified stock option is the price paid for such shares (if any) plus an
amount equal to any income recognized by the optionee as a result of the
exercise. If an optionee sells shares acquired upon exercise of a nonqualified
stock option (whether an Employee Option or a Director Option), any amount
realized over the basis of such shares will constitute capital gain to such
optionee for federal income tax purposes.
If an optionee uses already owned shares of Common Stock to pay the
exercise price for shares under a nonqualified option, the number of shares
received pursuant to the option which is equal to the number of shares delivered
in payment of the exercise price will be considered received in a nontaxable
exchange, and the fair market value of the remaining shares received by the
optionee upon such exercise will be taxable to the optionee as ordinary income.
If such already owned Common Shares are not "statutory option stock" (which is
defined in Section 424(c)(3)(B) of the Code to include any stock acquired
through the exercise of an incentive stock option, a qualified stock option, an
option granted pursuant to an employee stock purchase plan or a restricted stock
option, but not through the exercise of a nonqualified stock option) or are
statutory option stock with respect to which the applicable holding period
referred to in Section 424(c)(3)(A) of the Code has been satisfied, the shares
received pursuant to the exercise of the option will not be statutory option
stock and the optionee's basis in the number of shares delivered in payment of
the exercise price will be equal to the basis of the shares delivered in
payment. The basis of the remaining shares received upon such exercise will be
equal to the fair market value of such shares. However, if such already owned
Common Shares are statutory option stock with respect to which the applicable
holding period has not been satisfied, it is not presently clear whether such
exercise will be considered a disqualifying disposition of the statutory option
stock, whether the shares received upon such exercise will be statutory option
stock or how the optionee's basis will be allocated among the shares received.
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<PAGE> 25
Limitations on the Company's Compensation Deduction. Section 162(m) of the
Code, which became effective in 1994, limits the deduction which the Company may
take for otherwise deductible compensation payable to certain executive officers
of the Company to the extent that compensation paid to such officers for such
year exceeds $1 million, unless such compensation is performance based, is
approved by the Company's stockholders and meets certain other criteria. To
date, only proposed, and not final, Treasury Regulations have been issued with
respect to Section 162(m) of the Code. Although the Company intends that
nonqualified stock options and SARs granted to employees under the Stock Option
Plan will satisfy the requirements to be considered performance-based for
purposes of Section 162(m) of the Code, there is no assurance that such
nonqualified stock options and SARs, as well as Restricted Stock awarded under
the Stock Option Plan, will satisfy such requirements and, accordingly, the
Company may be limited by Section 162(m) of the Code in the amount of deductions
it would otherwise be entitled to take with respect to nonqualified stock
options, SARs and Restricted Stock awarded under the Plan.
The above summary relates to U.S. federal income tax consequences only and
applies to U.S. citizens and foreign persons who are U.S. residents. The U.S.
tax consequences associated with the grant of nonqualified stock options
pursuant to the Stock Option Plan to nonresident aliens depends upon a number of
factors including whether such grant or award is considered to be U.S. source
income and whether the provisions of any treaty are applicable.
CANADIAN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal Canadian federal income tax
consequences to optionees resident in Canada of the grant and exercise of
options.
The grant of an option will not give rise to a taxable benefit to the
optionee. Where in a taxation year an optionee acquires a share on the exercise
of an option, the amount, if any, by which the value at that time of the share
exceeds the amount paid or to be paid therefor by him or her will be deemed to
be a benefit to the optionee and included in computing his or her income. The
amount so included in the optionee's income will be added in computing the
adjusted cost base to him or her of the share. Provided the share qualifies as a
"prescribed share" at the time of its issue, the optionee will be entitled to a
deduction in respect of the amount so included in his or her income in computing
his or her taxable income. The deduction is equal to one-quarter of the amount
of the benefit. The deduction in computing taxable income will not be permitted
in computing an optionee's alternative minimum tax.
AUDITORS
The firm of Arthur Andersen LLP audited the consolidated financial
statements of the Company for the fiscal year ended December 31, 1994. Upon the
recommendation of the audit committee, Arthur Andersen LLP has been appointed by
the Board of Directors to audit the consolidated financial statements of the
Company for the fiscal year ending December 31, 1995, 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 LLP 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
1994.
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<PAGE> 26
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 1996 annual meeting of stockholders of the Company is scheduled to be
held during the first week of May 1996. 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 23, 1995.
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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MARKED TO SHOW CHANGES FROM
PLAN AS ORIGINALLY ADOPTED
APPENDIX A
LAFARGE CORPORATION
1993 STOCK OPTION PLAN
[AS AMENDED AND RESTATED FEBRUARY 7, 1995]
SECTION I. PURPOSE
The purpose of the Lafarge Corporation 1993 Stock Option Plan (the "Plan")
is to encourage and enable [key employees] NONEMPLOYEE DIRECTORS of Lafarge
Corporation (the "Company") AND KEY EMPLOYEES OF THE COMPANY and its subsidiary
corporations ("Subsidiary" or "Subsidiaries") as defined under Section 424(f) of
the Internal Revenue Code of 1986, as amended (the "Code"), upon whose judgment,
initiative and efforts the Company largely depends for the successful conduct of
its business, to remain with and devote their best efforts to the business of
the Company, thereby advancing the interests of the Company and its
stockholders. Accordingly, the Company may grant to certain employees the option
[("Option")] to purchase shares of the Common Stock of the Company, par value
$1.00 per share ("Stock"), and may award bonuses in the form of Stock subject to
the restrictions set forth in Section IX ("Restricted Stock"), as hereinafter
set forth. OPTIONS TO PURCHASE SHARES OF STOCK SHALL BE GRANTED AUTOMATICALLY,
AS HEREINAFTER SET FORTH, TO MEMBERS OF THE BOARD OF DIRECTORS OF THE COMPANY
WHO ARE NOT OFFICERS OR EMPLOYEES OF THE COMPANY OR ANY SUBSIDIARY ("NONEMPLOYEE
DIRECTORS"). OPTIONS GRANTED TO EMPLOYEES OF THE COMPANY AND ITS SUBSIDIARIES
AND OPTIONS GRANTED TO NONEMPLOYEE DIRECTORS ARE REFERRED TO HEREIN AS "EMPLOYEE
OPTIONS" AND "DIRECTOR OPTIONS", RESPECTIVELY, AND COLLECTIVELY AS "OPTIONS".
Options granted under the Plan shall be nonqualified stock options which shall
not be treated as incentive stock options under Section 422 of the Code.
SECTION II. ADMINISTRATION OF THE PLAN
The Plan shall be administered by a committee (the "Committee") of three or
more directors of the Company appointed by the Board of Directors. Members of
the Committee shall not, within one year prior to their appointment to the
Committee, have been granted or awarded equity securities pursuant to the Plan
(OTHER THAN PURSUANT TO SECTION X HEREOF) or pursuant to any other stock option
or stock plan of the Company or any parent or subsidiary corporation of the
Company (an "Affiliate") within the meaning of Section 424(e) and (f) of the
Code.
The Committee shall have sole authority to determine the employees who are
to be granted EMPLOYEE Options or stock appreciation rights or awarded
Restricted Stock from among those eligible hereunder and to establish the number
of shares of Stock to be optioned to each, the number of stock appreciation
rights to be granted to each, and the number of shares to be awarded to each in
the form of Restricted Stock after taking into consideration the position held,
the duties performed, the compensation received, the services expected to be
rendered by such employee and other relevant factors. The Committee is
authorized to interpret the Plan, and may from time to time adopt such rules and
regulations, not inconsistent with the provisions of the Plan, as it may deem
advisable to carry out the Plan; PROVIDED, HOWEVER, THAT THE COMMITTEE SHALL
HAVE NO AUTHORITY, DISCRETION OR POWER TO SELECT THE PERSONS WHO WILL RECEIVE
DIRECTOR OPTIONS, TO SET THE NUMBER OF SHARES TO BE COVERED BY ANY DIRECTOR
OPTION, TO SET THE EXERCISE PRICE OR THE PERIOD WITHIN WHICH DIRECTOR OPTIONS
MAY BE EXERCISED OR TO ALTER ANY OTHER TERMS OR CONDITIONS SPECIFIED HEREIN,
EXCEPT IN THE SENSE OF ADMINISTERING THE PLAN SUBJECT TO THE EXPRESS PROVISIONS
HEREOF. A majority of the Committee shall constitute a quorum and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee, shall be deemed the
acts of the Committee. All decisions made by the Committee in selecting the
employees to whom EMPLOYEE Options and stock appreciation rights shall be
granted or Restricted Stock shall be awarded, in establishing the number of
shares which may be issued under each EMPLOYEE Option or awarded as Restricted
Stock TO EMPLOYEES and in construing the provisions of the Plan shall be final.
No member of the Committee shall be liable for any action taken, failure to act,
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determination or interpretation made in good faith with respect to the Plan or
any Option or stock appreciation right granted or Restricted Stock awarded under
the Plan.
SECTION III. SHARES SUBJECT TO THE PLAN
The aggregate number of shares of Stock issued under Options or awarded in
the form of Restricted Stock under this Plan shall not exceed 3,000,000 shares.
Such shares of Stock may consist of authorized but unissued shares of Stock or
previously issued shares of Stock reacquired by the Company. Any of such shares
of Stock which remain unissued and which are not subject to outstanding Options
and have not been awarded in the form of Restricted Stock at the termination of
the Plan shall cease to be subject to the Plan. Should any Option hereunder
expire or terminate prior to its exercise in full, or any Stock previously
awarded as Restricted Stock be forfeited, the shares of Stock subject to such
Option at the time of its expiration or termination and the shares of Restricted
Stock so forfeited will again be available for grant or award under the Plan.
The aggregate number of shares of Stock which may be issued under the Plan shall
be subject to adjustment as provided in Section [X] XI hereof. Exercise of an
Option in any manner, including an exercise involving an election of an
alternative settlement method referred to in Section VII hereof, shall result in
a decrease in the number of shares of Stock which may thereafter be available
for purposes of the Plan by the number of shares of Stock as to which the Option
is exercised.
SECTION IV. ELIGIBILITY
The Committee shall determine and designate, at any time or from time to
time, the key [personnel EMPLOYEES] of the Company and the Subsidiaries to whom
EMPLOYEE Options are to be granted or Restricted Stock is to be awarded, but
subject to the terms and conditions set forth below:
(a) THE COMMITTEE MAY AUTHORIZE THE GRANT OF EMPLOYEE Options [may be
granted] and THE AWARD OF Restricted Stock [may be awarded] only to
individuals who are key employees (including officers and directors who are
also key employees) of the Company or a Subsidiary at the time the Option
is granted or the Restricted Stock is awarded. Options may be granted or
Restricted Stock awarded to the same employee on more than one occasion.
(b) The aggregate number of shares of Stock which may be issued under
EMPLOYEE Options granted or Restricted Stock awarded under the Plan to any
one [individual] EMPLOYEE shall not exceed THE LESSER OF 500,000 SHARES
OR 5% of the outstanding shares of Stock.
SECTION V. OPTION PRICE
The Option price per share of Stock underlying each EMPLOYEE Option shall
be fixed by the Committee at the time the Option is granted, but shall not be
less than 100% of the fair market value of the Stock at the time of the granting
of the Option. THE OPTION PRICE PER SHARE OF STOCK UNDERLYING EACH DIRECTOR
OPTION SHALL BE 100% OF THE FAIR MARKET VALUE OF THE STOCK AT THE TIME OF THE
GRANTING OF THE OPTION. For purposes of the Plan, the fair market value of Stock
on any particular date shall be [determined by the Committee which may use any
reasonable method of valuation, including] the mean of the high and low sales
prices of publicly traded shares of Stock on the date in question as reported on
the Composite Transactions reporting system or, if the Stock is listed on a U.S.
national securities exchange, the last sales price reported on such exchange on
that date, PROVIDED, THAT IF THERE ARE NO SALES OF STOCK ON THE DATE IN
QUESTION, THEN SUCH DETERMINATION SHALL BE MADE ON THE BASIS OF SALES OF STOCK
ON THE LAST PRECEDING DATE FOR WHICH SUCH SALES ARE REPORTED.
SECTION VI. OPTION TERM
The expiration date of an EMPLOYEE Option shall be determined by the
Committee at the time of grant, but shall in no event be later than ten years
from the date of grant. THE EXPIRATION DATE OF EACH DIRECTOR OPTION SHALL BE THE
DATE THAT IS TEN YEARS FROM THE DATE OF GRANT.
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SECTION VII. OPTION AGREEMENTS
Each Option shall be evidenced by an option agreement ("Option Agreement")
and shall contain such terms and conditions not inconsistent with the provisions
of the Plan as may be approved by the Committee. The terms and conditions of the
respective Option Agreements EVIDENCING EMPLOYEE OPTIONS need not be identical
and may be amended by the Committee from time to time, subject to the provisions
of the Plan. THE TERMS AND CONDITIONS OF THE RESPECTIVE OPTION AGREEMENTS
EVIDENCING DIRECTOR OPTIONS SHALL BE IDENTICAL, TO THE EXTENT PRACTICABLE, AND
MAY BE AMENDED BY THE COMMITTEE AS NECESSARY TO ENSURE COMPLIANCE WITH THE
PROVISIONS OF THE PLAN. Payment of the purchase price of any Option exercised
shall be made to the Company either (i) in cash (including check, bank draft or
money order) or (ii) by delivering shares of Stock already owned by the optionee
and which have been owned for at least six (6) months, duly endorsed for
transfer or (iii) a combination of such Stock and cash. The fair market value of
any Stock so delivered shall be determined on the same basis as provided in
Section V hereof. An Option Agreement EVIDENCING AN EMPLOYEE OPTION may provide
for the surrender of the right to purchase shares of Stock under the Option in
return for a payment in cash or shares of Stock or a combination of cash and
shares of Stock equal to the excess of the fair market value of the shares of
Stock with respect to which the right to purchase is surrendered over the Option
price therefor, on such terms and conditions as the Committee in its sole
discretion may prescribe.
SECTION VIII. EXERCISE OF EMPLOYEE OPTIONS
(a) Each EMPLOYEE Option granted under the Plan shall be exercisable during
such period commencing on or after the expiration of one year from the date of
the grant of such Option as the Committee shall determine; provided, however,
that the otherwise unexpired portion of any EMPLOYEE Option shall expire and
become null and void no later than upon the first to occur of (i) the expiration
of ten years from the date such Option was granted, (ii) the expiration of three
months from the date of the termination of the optionee's employment with the
Company or an Affiliate for any reason other than death, disability or
retirement under the normal or early retirement provisions of a pension or
retirement plan maintained by the Company or an Affiliate, or (iii) the
expiration of three years from the date of the termination of the optionee's
employment with the Company or an Affiliate by reason of death, disability or
retirement under the normal or early retirement provisions of a pension or
retirement plan maintained by the Company or an Affiliate. Transfer of
employment without interruption of service between or among the Company and its
Affiliates shall not be considered to be a termination of employment for the
purposes of this Plan. Any provision of this Plan to the contrary
notwithstanding, the otherwise unexpired portion of any EMPLOYEE Option granted
hereunder shall expire and become null and void immediately upon an optionee's
termination of employment with the Company or an Affiliate by reason of such
optionee's fraud, dishonesty or performance of other acts detrimental to the
Company or an Affiliate.
(b) Each EMPLOYEE Option granted hereunder shall be exercisable in full or
in such annual installments as may be determined by the Committee at the time of
the grant; provided, however, that the Committee in its discretion may
subsequently accelerate the exercise date of an EMPLOYEE Option. The right to
purchase shares of Stock shall be cumulative so that when the right to purchase
any shares of Stock has accrued, such shares or any part thereof may be
purchased at any time thereafter until the expiration or termination of the
EMPLOYEE Option.
(c) If the Committee grants stock appreciation rights in connection
with an EMPLOYEE Option, either at the time of grant or by amendment, such
[right] RIGHTS shall be subject to the same terms and conditions as the related
Option and shall be exercisable only to the extent the Option is exercisable.
Stock appreciation rights shall be granted only in connection with an EMPLOYEE
Option. A right shall entitle the optionee to surrender to the Committee the
related unexercised Option, or any portion thereof, and to receive from the
Company in exchange therefor cash, shares of Stock, or a combination of cash
and Stock, having an aggregate value equal to (i) the excess of the fair market
value of one share of Stock over the Option price, times (ii) the number of
shares of Stock called for by the Option, or portion thereof, which is
surrendered. The number of shares of Stock which may be received pursuant to
the exercise of a right may not exceed the number of shares of Stock called for
by the Option, or portion thereof, which is surrendered. No fractional shares
of Stock will be issued. The Committee shall have the right to determine
whether the Company's obligation shall be paid in cash,
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shares of Stock, or a combination of cash and Stock. The Committee may establish
a maximum appreciation value which would be awardable under any granted right or
rights.
(d) No EMPLOYEE Option or stock appreciation right granted under the Plan
shall be transferable by the holder thereof otherwise than by will or by the
laws of descent and distribution, and shall be exercisable during the lifetime
of the optionee only by him OR HER.
(e) Nothing in this Section shall operate to extend the period of exercise
of an EMPLOYEE Option beyond the expiration date specified in the Option
Agreement.
SECTION IX. RESTRICTED STOCK
The Committee may from time to time, in its sole discretion, award bonuses
in the form of Restricted Stock to persons eligible to receive awards of
Restricted Stock under Section IV. All Restricted Stock awarded under the Plan
shall be subject to such restrictions, terms and conditions, if any, as may be
determined by the Committee. The Committee may in its sole discretion remove,
modify or accelerate the release of restrictions on any Restricted Stock in the
event of death or disability of the recipient of such Restricted Stock, or for
such other reasons as the Committee may deem appropriate. NONEMPLOYEE DIRECTORS
SHALL NOT BE ELIGIBLE TO RECEIVE AWARDS OF RESTRICTED STOCK UNDER THIS PLAN.
Any certificate or certificates representing shares of Restricted Stock
shall bear a stamped or printed notice on the face thereof to the effect that
such shares have been awarded pursuant to the terms of the Plan and may not be
sold, pledged, transferred, assigned or otherwise encumbered in any manner
except as set forth in the terms of such award. If the Committee so determines,
the certificates representing Restricted Stock shall be deposited by the
recipient with the Company or an escrow agent designated by the Company until
the restrictions thereon have lapsed or have been removed in accordance with the
provisions of this Section. Upon the lapse of the restrictions or removal
thereof by the Committee, new unrestricted certificates for the number of shares
on which the restrictions have lapsed or been removed shall, upon request by the
recipient of the Restricted Stock, be issued in exchange for such restricted
certificates.
SECTION X. DIRECTOR OPTIONS
IN ADDITION TO THE OTHER PROVISIONS OF THIS PLAN RELATING TO DIRECTOR
OPTIONS, THE FOLLOWING PROVISIONS SHALL GOVERN THE GRANT AND EXERCISE OF
DIRECTOR OPTIONS UNDER THE PLAN:
(A) DIRECTOR OPTIONS SHALL BE GRANTED TO NONEMPLOYEE DIRECTORS IN
ACCORDANCE WITH THE FOLLOWING, PROVIDED, HOWEVER, THAT A NONEMPLOYEE DIRECTOR
MAY DECLINE TO ACCEPT ANY DIRECTOR OPTION BY GIVING NOTICE TO SUCH EFFECT TO THE
COMMITTEE OR BY REFUSING TO EXECUTE AN OPTION AGREEMENT RELATING TO THE OPTION:
(1) A DIRECTOR OPTION REPRESENTING THE RIGHT TO PURCHASE 5,000 SHARES
OF STOCK SHALL BE GRANTED EFFECTIVE AS OF THE DATE OF THE MEETING OF THE
COMMITTEE HELD IN FEBRUARY 1995 TO EACH PERSON SERVING AS A NONEMPLOYEE
DIRECTOR ON SUCH DATE;
(2) A DIRECTOR OPTION REPRESENTING THE RIGHT TO PURCHASE 5,000 SHARES
OF STOCK SHALL BE GRANTED AUTOMATICALLY TO EACH NONEMPLOYEE DIRECTOR WHO
WAS NOT GRANTED A DIRECTOR OPTION UNDER SUBSECTION (A)(1), ON AND EFFECTIVE
AS OF THE DATE ON WHICH SUCH PERSON IS FIRST ELECTED OR APPOINTED TO SERVE
AS A NONEMPLOYEE DIRECTOR, PROVIDED, THAT IF A NONEMPLOYEE DIRECTOR WHO HAS
RECEIVED A DIRECTOR OPTION UNDER SUBSECTION (A)(1) OR (A)(2) OF THIS
SECTION X CEASES SERVING AS A DIRECTOR AND IS SUBSEQUENTLY ELECTED OR
APPOINTED AS A NONEMPLOYEE DIRECTOR, HE OR SHE SHALL NOT RECEIVE A SECOND
DIRECTOR OPTION PURSUANT TO THIS SUBSECTION (A)(2); AND
(3) A DIRECTOR OPTION REPRESENTING THE RIGHT TO PURCHASE 1,000 SHARES
OF STOCK SHALL BE GRANTED AUTOMATICALLY ON AND EFFECTIVE AS OF THE DATE OF
THE FIRST MEETING OF THE COMMITTEE IN EACH YEAR, BEGINNING WITH THE YEAR
1996, TO EACH PERSON WHO IS A NONEMPLOYEE DIRECTOR OF THE COMPANY ON SUCH
DATE (INCLUDING PERSONS WHO HAVE PREVIOUSLY RECEIVED DIRECTOR OPTIONS UNDER
THIS PLAN);
PROVIDED, HOWEVER, THAT IF AS OF THE EFFECTIVE DATE OF ANY GRANT OF DIRECTOR
OPTIONS THERE ARE NOT SUFFICIENT SHARES AVAILABLE UNDER THE PLAN TO ALLOW FOR
THE GRANT TO EACH NONEMPLOYEE DIRECTOR OF A DIRECTOR OPTION FOR
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THE NUMBER OF SHARES PROVIDED HEREIN, THEN EACH NONEMPLOYEE DIRECTOR SHALL BE
GRANTED AN OPTION FOR A PRO RATA PORTION OF THE TOTAL NUMBER OF SHARES THEN
AVAILABLE (DISREGARDING FRACTIONAL SHARES).
(B) EACH DIRECTOR OPTION SHALL VEST IN ACCORDANCE WITH THE FOLLOWING:
(1) ONE-FOURTH OF THE SHARES SUBJECT TO THE DIRECTOR OPTION SHALL BE
VESTED AT THE DATE OF GRANT OF THE DIRECTOR OPTION FOR EACH CONTINUOUS FULL
YEAR OF SERVICE BY THE GRANTEE ON THE BOARD OF DIRECTORS OF THE COMPANY
PRIOR TO SUCH DATE OF GRANT; AND
(2) IF THE DIRECTOR OPTION IS NOT FULLY VESTED ON THE DATE OF GRANT,
ONE-FOURTH OF THE SHARES SUBJECT THERETO SHALL VEST ON EACH ANNIVERSARY OF
THE DATE OF COMMENCEMENT OF THE GRANTEE'S SERVICE ON THE BOARD OF DIRECTORS
OF THE COMPANY UNTIL THE DIRECTOR OPTION IS FULLY VESTED, PROVIDED,
HOWEVER, THAT NO PORTION OF ANY DIRECTOR OPTION SHALL VEST AFTER THE
NONEMPLOYEE DIRECTOR'S SERVICE ON THE BOARD OF DIRECTORS HAS TERMINATED FOR
ANY REASON.
EACH DIRECTOR OPTION SHALL BE EXERCISABLE IN WHOLE AT ANY TIME AND IN PART FROM
TIME TO TIME TO THE EXTENT SUCH DIRECTOR OPTION HAS VESTED IN ACCORDANCE WITH
THE FOREGOING; PROVIDED, HOWEVER, THAT THE OTHERWISE UNEXPIRED PORTION OF ANY
DIRECTOR OPTION SHALL EXPIRE AND BECOME NULL AND VOID NO LATER THAN UPON THE
FIRST TO OCCUR OF (I) THE EXPIRATION OF TEN YEARS FROM THE DATE SUCH OPTION WAS
GRANTED, (II) THE EXPIRATION OF THREE MONTHS FROM THE DATE OF THE TERMINATION OF
THE NONEMPLOYEE DIRECTOR'S SERVICE ON THE BOARD OF DIRECTORS OF THE COMPANY FOR
ANY REASON OTHER THAN DEATH OR RETIREMENT UNDER THE NORMAL OR EARLY RETIREMENT
PROVISIONS OF ANY RETIREMENT PLAN MAINTAINED BY THE COMPANY FOR NONEMPLOYEE
DIRECTORS OR (III) THE EXPIRATION OF THREE YEARS FROM THE DATE OF THE
TERMINATION OF THE NONEMPLOYEE DIRECTOR'S SERVICE ON THE BOARD OF DIRECTORS OF
THE COMPANY BY REASON OF DEATH OR RETIREMENT UNDER THE NORMAL OR EARLY
RETIREMENT PROVISIONS OF ANY RETIREMENT PLAN MAINTAINED BY THE COMPANY FOR
NONEMPLOYEE DIRECTORS. ANY PROVISION OF THIS PLAN TO THE CONTRARY
NOTWITHSTANDING, THE OTHERWISE UNEXPIRED PORTION OF ANY DIRECTOR OPTION GRANTED
HEREUNDER SHALL EXPIRE AND BECOME NULL AND VOID IMMEDIATELY UPON TERMINATION OF
THE NONEMPLOYEE DIRECTOR'S SERVICE ON THE BOARD OF DIRECTORS IF SUCH TERMINATION
OCCURS BY REASON OF SUCH NONEMPLOYEE DIRECTOR'S (I) FRAUD OR INTENTIONAL
MISREPRESENTATION OR (II) EMBEZZLEMENT, MISAPPROPRIATION OR CONVERSION OF ASSETS
OR OPPORTUNITIES OF THE COMPANY OR ANY AFFILIATE. THE RIGHT TO PURCHASE SHARES
OF STOCK SHALL BE CUMULATIVE SO THAT WHEN THE RIGHT TO PURCHASE ANY SHARES OF
STOCK HAS ACCRUED, SUCH SHARES OR ANY PART THEREOF MAY BE PURCHASED AT ANY TIME
THEREAFTER UNTIL THE EXPIRATION OR TERMINATION OF THE DIRECTOR OPTION.
(C) STOCK APPRECIATION RIGHTS SHALL NOT BE GRANTED IN CONNECTION WITH
DIRECTOR OPTIONS.
(D) NO DIRECTOR OPTION GRANTED UNDER THE PLAN SHALL BE TRANSFERRABLE BY THE
HOLDER THEREOF OTHERWISE THAN BY WILL OR BY THE LAWS OF DESCENT AND
DISTRIBUTION, AND SHALL BE EXERCISABLE DURING THE LIFETIME OF THE OPTIONEE ONLY
BY HIM OR HER.
(E) THE AGGREGATE NUMBER OF SHARES OF STOCK WHICH MAY BE ISSUED UNDER
DIRECTOR OPTIONS GRANTED UNDER THE PLAN TO ANY ONE NONEMPLOYEE DIRECTOR SHALL
NOT EXCEED THE LESSER OF 20,000 SHARES OR 5% OF THE OUTSTANDING SHARES OF STOCK.
(F) NOTHING IN THIS SECTION SHALL OPERATE TO EXTEND THE PERIOD OF EXERCISE
OF A DIRECTOR OPTION BEYOND THE EXPIRATION DATE SPECIFIED IN THE OPTION
AGREEMENT.
SECTION XI. ADJUSTMENTS UPON RECAPITALIZATION OR REORGANIZATION
In the event the Company shall effect a split of the Stock or dividend
payable in Stock (other than pursuant to the Company's Optional Stock Dividend
Plan), or in the event the outstanding Stock shall be combined into a smaller
number of shares, the maximum number of shares of Stock as to which Options may
be granted and Restricted Stock may be awarded under the Plan shall be increased
or decreased proportionately. In the event that before delivery by the Company
of all of the shares of Stock in respect of which any Option or stock
appreciation right has been granted under the Plan, the Company shall have
effected such a split, dividend or combination, the shares of Stock still
subject to the Option or stock appreciation right shall be increased or
decreased proportionately and the purchase price per share of Stock shall be
decreased or
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increased proportionately so that the aggregate purchase price for all of the
then optioned shares of Stock shall remain the same as immediately prior to such
split, dividend or combination.
In the event of a reclassification of the Stock not covered by the
foregoing, or in the event of a liquidation or reorganization, including a
merger, consolidation or sale of assets, the Board of Directors shall make such
adjustments, if any, as it may deem appropriate in the number and kind of shares
for which Options, stock appreciation rights or Restricted Stock may be granted
or awarded under the Plan and, with respect to outstanding Options and stock
appreciation rights, in the number, purchase price and kind of shares covered
thereby. The provisions of this Section shall only be applicable if, and only to
the extent that, the application thereof does not conflict with any valid
governmental statute, regulation or rule.
SECTION [XI] XII. CONTINUANCE OF EMPLOYMENT OR BOARD MEMBERSHIP
Neither the Plan nor any agreement relating to any Option, stock
appreciation right or award of Restricted Stock shall impose any obligation on
the Company or an Affiliate to continue to employ any employee. OR TO PERMIT ANY
NONEMPLOYEE DIRECTOR TO CONTINUE AS A DIRECTOR OF THE COMPANY.
SECTION [XII] XIII. WITHHOLDING
The Company shall have the right to withhold taxes, as required by law,
from any transfer of cash or Stock to an employee under the Plan or to collect,
as a condition of such transfer, any taxes required by law to be withheld.
(a) Subject to the provisions of paragraphs (b) and (c) of this Section, at
any time when an employee is required to pay to the Company an amount required
to be withheld under applicable tax laws in connection with an issuance of Stock
upon exercise of an EMPLOYEE Option or stock appreciation right, the employee
may satisfy this obligation in whole or in part by electing (the "Election") to
have the Company withhold from the issuance shares of Stock having a fair market
value equal to the amount required to be withheld. The value of the shares of
Stock to be withheld shall be based on the fair market value of such shares as
of the date on which shares of Stock are issued to the employee pursuant to
exercise of the Option or stock appreciation right (the "Tax Date"). The
employee must pay to the Company any difference between the amount required to
be withheld by the Company and the value of the shares of Stock so withheld. Any
shares of Stock withheld shall not thereafter be available to be subject to an
Option granted under the Plan.
(b) Each Election must be made prior to the Tax Date. The Committee may
disapprove of any Election, may suspend or terminate the right to make Elections
and may provide with respect to any EMPLOYEE Option or stock appreciation right
that the right to make Elections shall not apply to such Option or stock
appreciation right. An Election is irrevocable.
(c) If an employee is an officer OR DIRECTOR of the Company within the
meaning of Section 16 of the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder, then an Election is subject to the following
additional conditions:
(1) No Election shall be effective with respect to a Tax Date which
occurs within six months of the grant of the Option or stock appreciation
right, except that this limitation shall not apply in the event the death
or disability of the employee occurs prior to expiration of the six-month
period.
(2) The Election must be made either six months prior to the Tax Date
or during a period beginning on the third business day following the date
of release for publication of the Company's quarterly or annual summary
statements of sales and earnings and ending on the twelfth business day
following such date.
SECTION [XIII] XIV. AMENDMENT OR TERMINATION OF THE PLAN
The Board of Directors in its discretion may terminate the Plan at any time
with respect to any shares of Stock for which Options have not theretofore been
granted or which have not been awarded as Restricted Stock. The Board of
Directors shall have the right to alter or amend the Plan or any part thereof
from time to
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time; provided, that no such change may be made which would impair the rights of
the optionee under any outstanding Option or the recipient of Restricted Stock
without the consent of such optionee or recipient; and provided, further, that
the Board of Directors may not make any alteration or amendment which would
materially increase the benefits accruing to participants under the Plan,
increase the aggregate number of shares of Stock which may be issued pursuant to
the provisions of the Plan, or materially modify the requirements for
participation in the Plan without the approval of the stockholders of the
Company. NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SECTION XIV, THE
PROVISIONS OF THE PLAN GOVERNING (A) THE NUMBER OF DIRECTOR OPTIONS TO BE
AWARDED TO NONEMPLOYEE DIRECTORS, (B) THE NUMBER OF SHARES OF STOCK TO BE
COVERED BY EACH SUCH DIRECTOR OPTION, (C) THE EXERCISE PRICE PER SHARE UNDER
EACH DIRECTOR OPTION, (D) WHEN AND UNDER WHAT CIRCUMSTANCES DIRECTOR OPTIONS
WILL BE GRANTED AND (E) THE PERIOD WITHIN WHICH DIRECTOR OPTIONS MAY BE
EXERCISED, SHALL NOT BE AMENDED OR ALTERED MORE THAN ONCE EVERY SIX MONTHS,
OTHER THAN TO COMPORT WITH CHANGES IN THE CODE OR THE RULES PROMULGATED
THEREUNDER.
SECTION [XIV] XV. EFFECTIVENESS AND EXPIRATION OF THE PLAN
If adopted by the Board of Directors and approved by the vote of the
holders of a majority of the stock of the Company entitled to vote thereon at a
meeting of stockholders duly called and held for such purpose, or at an annual
meeting thereof, the notice of which has specified that action is to be taken on
the Plan, and the Committee shall have been advised by legal counsel for the
Company that in the opinion of such counsel all applicable requirements of law
precedent to its becoming effective have been fully met, then the Plan shall
become effective on August 4, 1993 or as soon thereafter as the aforesaid
requirements have been met. The Plan shall expire five years after the effective
date of the Plan. If the stockholders of the Company fail so to approve the
Plan, the Plan shall thereupon terminate and all Options previously granted and
all awards of Restricted Stock under the Plan shall become void and of no
effect. THE PROVISIONS OF THE PLAN RELATING TO DIRECTOR OPTIONS SHALL BECOME
EFFECTIVE AS OF THE DATE OF THE MEETING OF THE COMMITTEE HELD IN FEBRUARY 1995
IF SUCH PROVISIONS ARE ADOPTED BY THE BOARD OF DIRECTORS AND APPROVED BY THE
STOCKHOLDERS OF THE COMPANY IN THE MANNER SPECIFIED IN THE FIRST SENTENCE OF
THIS SECTION XV. IF THE STOCKHOLDERS OF THE COMPANY FAIL SO TO APPROVE SUCH
PROVISIONS, SUCH PROVISIONS AND ALL CONFORMING AND OTHER AMENDMENTS TO THE PLAN
ADOPTED BY THE BOARD OF DIRECTORS IN CONNECTION THEREWITH SHALL THEREUPON
TERMINATE AND ALL DIRECTOR OPTIONS PREVIOUSLY GRANTED UNDER THE PLAN, AS AMENDED
THEREBY, SHALL BECOME VOID AND OF NO EFFECT. With respect to persons subject to
Section 16 of THE Securities Exchange Act of 1934 (the "1934 Act"), transactions
under the Plan are intended to comply with applicable conditions of Rule 16b-3
or its successors under the 1934 Act. To the extent any provisions of the Plan
or action by the Committee fails to so comply, it shall be deemed null and void,
to the extent permitted by law and deemed advisable by the Committee OR BY THE
BOARD OF DIRECTORS.
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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 8, 1995, at the Annual Meeting of Stockholders
to be held on May 2, 1995 in Chantilly, 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 24, 1995, and the proxy
statement accompanying the same, receipt of which is hereby acknowledged.
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<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 M. Piecuch, John D.
(except as marked to vote for all Redfern, Joe M. 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.
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2. Approval or amendments in 1993 Stock Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
(Continued, and to be signed and dated on reverse side)
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<PAGE> 35
<TABLE>
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3. Approval of appointment of Arthur Andersen LLP 4. In their discretion, the Proxies are authorized to vote on such
as auditors of the Company. other business as may properly come before the meeting or any
/ / FOR / / AGAINST / / ABSTAIN adjournment thereof.
Dated: , 1995
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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.
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Please complete, date and sign this proxy and return it in the enclosed
envelope, which requires no postage if mailed in the United States.
