<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
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
LAFARGE CORPORATION
11130 SUNRISE VALLEY DRIVE
RESTON, VIRGINIA 22091
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 7, 1996
Notice is hereby given that the annual meeting of stockholders of Lafarge
Corporation (the "Company") will be held on Tuesday, May 7, 1996 at 9:00 a.m.,
local time, at The Ritz-Carlton, 1700 Tysons Boulevard, McLean, VA 22102, for
the following purposes:
(1) To elect a Board of Directors for the ensuing year;
(2) 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, 1996; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only holders of record of the Voting Stock and Common Stock of the Company
at the close of business on March 8, 1996 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, 1995 are contained in the enclosed 1995
Annual Report.
Dated: March 25, 1996
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 25, 1996.
VOTING SECURITIES
The securities with voting rights in the Company which were outstanding at
March 8, 1996, the record date, consisted of 60,999,014 shares of common stock
(the "Common Shares") and 8,499,924 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 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, 1996, 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 S.A. 37,516,497(2) 53.5%
61-63 rue des Belles Feuilles
76116 Paris France
Common Stock FMR Corp.(3) 7,358,392(3) 10.6%
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 S.A. 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 21,937,509 Common Shares held of record by Lafarge (U.S.) Holdings,
a New York trust in which Lafarge S.A. owns 100% of the beneficial interest
("Lafarge Holdings"), 14,338,945 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 S.A. and additional Voting Securities
held by certain other affiliates of Lafarge S.A. 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 14, 1996 filed
with the U.S. Securities and Exchange Commission and received by the
Company. The Schedule 13G reports beneficial ownership by FMR Corp. of
7,358,392 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
757,800 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
2
<PAGE> 5
Shares beneficially owned by FMR Corp. amounted to 5,691,048 shares, or 9.4%
of the total outstanding Common Shares at December 31, 1995.
On November 1, 1993, Lafarge S.A. and the Company entered into an option
agreement (the "Option Agreement") intended to enable Lafarge S.A. 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 S.A.
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 S.A. 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 S.A.) based upon the business advantages for the
Company which result from Lafarge S.A.'s majority ownership of the Company.
Lafarge S.A. 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 S.A. is a public company whose voting securities are traded on
various European securities exchanges (in 1995, its name was changed from
Lafarge Coppee S.A. to Lafarge S.A.). In the opinion of Lafarge S.A.'s directors
and its management, Lafarge S.A. is controlled by its Board of Directors. The
Lafarge Group is principally engaged in the manufacture and sale of cement,
concrete aggregates, gypsum and specialty materials. The activities of the
Lafarge 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, 1996, 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 S.A.
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 6,000(3) * 0 *
Marshall A. Cohen Current director and nominee 7,000(4) * 0 *
Bertrand P. Collomb Current director and nominee 118,928(5) * 89,657(6) *
Bernard L. Kasriel Current director and nominee 6,000(7) * 44,938(8) *
Jacques Lefevre Current director and nominee 6,100(7) * 44,748(9) *
Paul W. MacAvoy Current director and nominee 5,000(10) * 0 *
Claudine B. Malone Current director and nominee 1,750(11) * 0 *
Alonzo L. McDonald Current director and nominee 7,500(12) * 0 *
David E. Mitchell Current director and nominee 11,652(7) * 0 *
Robert W. Murdoch Current director and nominee 113,100(13) * 1,536 *
Bertin F. Nadeau Current director and nominee 7,000(14) * 0 *
John M. Piecuch Current director and nominee; 83,351(15) * 9,940(16) *
former executive officer
John D. Redfern Current director and nominee 21,730(7) * 559 *
Joe M. Rodgers Current director and nominee 7,500(17) * 0 *
Ronald D. Southern Current director and nominee 7,130(18) * 0 *
Edward H. Tuck Current director and nominee 6,500(7) * 0 *
Michel Rose Current director and nominee; 48,750(19) * 7,432(20) *
executive officer
Edward T. Balfe Executive officer 56,951(21) * 2,200(22) *
Jean-Pierre Cloiseau Former executive officer 71,047(23) * 2,640(24) *
Duncan Gage Executive officer 44,905(25) * 2,200(26) *
Thomas W. Tatum Executive officer 44,902(27) * 2,200(28) *
Share ownership of all 30 directors and executive 866,407(29) * 218,711(30) *
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 S.A. is the Company's "parent" as that term is defined in
regulations promulgated under the Securities Exchange Act of 1934, as
amended.
(3) Includes 4,500 shares not outstanding but subject to currently exercisable
options.
(4) Includes 6,000 shares not outstanding but subject to currently exercisable
options and 1,000 shares are owned by Adroit Investments Ltd., which is
controlled by Mr. Cohen.
4
<PAGE> 7
(5) Includes 117,500 shares not outstanding but subject to currently
exercisable options.
(6) Includes 87,400 shares not outstanding but subject to currently exercisable
options.
(7) Includes 6,000 shares not outstanding but subject to currently exercisable
options.
(8) Includes 43,360 shares not outstanding but subject to currently exercisable
options.
(9) Includes 43,360 shares not outstanding but subject to currently exercisable
options.
(10) Includes 3,000 shares not outstanding but subject to currently exercisable
options.
(11) Includes 1,500 shares not outstanding but subject to currently exercisable
options and 250 shares are owned by Financial & Management Consulting, Inc.
which is controlled by Ms. Malone.
(12) 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, and 6,000 shares not outstanding but subject to currently
exercisable options.
(13) Includes 111,000 shares not outstanding but subject to currently
exercisable options.
(14) Includes 6,000 shares not outstanding but subject to currently exercisable
options and 1,000 shares are owned by La Financiere Nadeau Ltd. which is
controlled by Mr. Nadeau.
(15) Includes 82,000 shares not outstanding but subject to currently exercisable
options.
(16) Includes 9,830 shares not outstanding but subject to currently exercisable
options.
(17) Includes 6,000 shares not outstanding but subject to currently exercisable
options and 1,500 shares are owned by JMR Investments which is controlled
by Mr. Rodgers and his wife.
(18) Includes 6,000 shares not outstanding but subject to currently exercisable
options and 1,130 shares are owned by Sentgraf Enterprises Ltd., which is
controlled by Mr. Southern.
(19) These shares are not outstanding but are subject to currently exercisable
options.
(20) Includes 7,400 shares not outstanding but subject to currently exercisable
options and 32 shares owned by Mr. Rose's wife.
(21) Includes 55,500 shares not outstanding but subject to currently exercisable
options.
(22) These shares are not outstanding but are subject to currently exercisable
options.
(23) Includes 69,750 shares not outstanding but subject to currently exercisable
options.
(24) Includes 2,530 shares not outstanding but subject to currently exercisable
options.
(25) Includes 44,500 shares not outstanding but subject to currently exercisable
options.
(26) These shares are not outstanding but are subject to currently exercisable
options.
(27) Includes 43,750 shares not outstanding but subject to currently exercisable
options.
(28) These shares are not outstanding but are subject to currently exercisable
options.
(29) Includes 818,625 shares not outstanding but subject to currently
exercisable options.
(30) Includes 210,640 shares not outstanding but subject to currently
exercisable options.
ELECTION OF DIRECTORS
The business and affairs of the Company are managed under the direction of
the Board of Directors, which exercises all corporate powers of the Company
and establishes broad corporate policies. When the Board is not in session, the
executive committee may exercise the powers of the Board of Directors in the
management of the business and affairs of the Company with specified
limitations. The Executive Committee of the Board of Directors is presently
composed of Bertrand P. Collomb, Bernard L. Kasriel, John D. Redfern and Michel
Rose. The Board of Directors held four meetings in 1995. During 1995, Joe M.
Rodgers and Ronald D. Southern each attended fewer than 75 percent of the
aggregate of the number of meetings of the Board of Directors and the meetings
of the committees on which he served.
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
5
<PAGE> 8
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 Thomas A. Buell, Marshall A. Cohen, Bertrand P. Collomb, Claudine B. Malone,
John D. Redfern and Edward H. Tuck. The Board Governance Committee met three
times in 1995.
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 64, 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., Canadian Liquid
Air 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 60, 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 S.A. Mr. Collomb, age 53, 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 S.A. since August
1, 1989. He served as Vice Chairman of the Board and Chief Operating Officer of
Lafarge S.A. 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 S.A. 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 until 1987, and Executive Vice President of Lafarge S.A. 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 and, Chief Operating Officer of Lafarge S.A.
Mr. Kasriel, age 49, has served as Vice Chairman and Chief Operating Officer of
Lafarge S.A. since January 1, 1995. He was Managing Director of Lafarge S.A.
from 1989 to 1994, was Senior Executive Vice President of Lafarge S.A. from
March 1987 to August 1, 1989 and was Executive Vice President of Lafarge S.A.
from 1982 until March 1987. He was also President and Chief Operating Officer of
National Gypsum Company from June 1987 to July 1989 and was a director of that
company from October 1993 to September 1995.
6
<PAGE> 9
Mr. Kasriel is also a director of Sonoco Products Company. He has served as a
director of the Company since 1989.
JACQUES LEFEVRE, Vice Chairman, Chief Operating Officer and Managing Director of
Lafarge S.A. Mr. Lefevre, age 57, has served as Vice Chairman and Chief
Operating Officer of Lafarge S.A. since January 1, 1995 and as Managing Director
since August 1, 1989. He served as Senior Executive Vice President of Lafarge
S.A. from 1987 to August 1, 1989 and as Executive Vice President of Lafarge S.A.
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 Management ("SOM"). Mr. MacAvoy, age 61, 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., Chase
Manhattan Corporation and Open Environment Corp. He has served as a director of
the Company since 1993.
CLAUDINE B. MALONE, President of Financial & Management Consulting, Inc. Ms.
Malone, age 59, 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., Lowe's Companies, Mallinckroot Group Inc.,
Penn Mutual Life Insurance Co., SAIC Corp. and Union Pacific Resources
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 67, 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. (oil and
gas projects). 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 from 1975 to 1993. Mr. Mitchell, age 69, 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 54, 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 S.A. 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 S.A. from 1983 to August 1, 1989. Mr. Murdoch is also a
director of Lafarge S.A., LCI and Usinor Sacilor S.A. 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 October 1989 to July 1993. Mr. Nadeau, age 55, is also a
director of 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 S.A. Mr. Piecuch, age
47, has served as Group Executive Vice President of Lafarge S.A. 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.
7
<PAGE> 10
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 60, 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, The JMR Group (investment company). Mr. Rodgers, age
62, served as the United States Ambassador to France from 1985 until 1989. He is
also a director of AMR Corporation/American Airlines, Inc., BellSouth
Telecommunications, Inc., The Freedom Forum First Amendment Center, Inc.,
Gaylord Entertainment Company, Gryphon Holdings Inc., SunTrust Bank, Nashville,
N.A., Thomas Nelson, Inc., Tractor Supply Company and Willis Corroon Group plc.
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 S.A. Mr. Rose, age 53, has served as
President and Chief Executive Officer of the Company since September 1, 1992 and
as Senior Executive Vice President of Lafarge S.A. since 1989. He served as
Chairman and Chief Executive Officer of Orsan S.A., a subsidiary of Lafarge
S.A., 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 65, is
also a director of Canadian Pacific Limited, Canadian Airlines Corporation,
Fletcher Challenge Limited, Fletcher Challenge Canada 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 68,
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 1995, 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. 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 1995.
8
<PAGE> 11
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 1995, 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 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 1995, in view of the Company's
long-term compensation objectives and improvements in the Company's financial
results, the
9
<PAGE> 12
budgeted salary increases were comparable to projected salary increases for the
comparison group utilized by Hay & Associates for the Company.
The base salary of $450,000 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 1995 was based upon Mr. Rose's
performance during 1994, including his leadership role with respect to the
Company's improved financial performance in 1994 and the Company's strategic
repositioning that commenced in 1993 and continued throughout 1995. The 1995
salaries of the other executive officers of the Company listed in the Summary
Compensation Table on page 13 of this proxy statement (the "named executive
officers") ranged from approximately 79% to 106% 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 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 attained 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 measure the Company's performance
for the year against certain return on equity and return on net asset criteria.
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 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, financial performance
bonuses were paid with respect to 1995 in amounts in the range of 19% to 27% of
the salaries of the Chief Executive Officer and the named executive officers.
The individual performance bonuses paid to these persons with respect to 1995
were in the range of 20% to 28% of such salaries.
Mr. Rose's total bonus amount was equal to approximately 55% of his salary.
The Company performance objective on which a portion of such bonus was based was
the achievement by the Company of return on equity 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
1995.
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 1995 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
10
<PAGE> 13
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 1995 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 S.A., 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 S.A. stock from time to time, in recognition of their
contributions to the overall performance of Lafarge S.A. and its affiliated
companies. Lafarge S.A. did not grant any options to executive officers of the
Company in 1995. Options granted by Lafarge S.A. 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 1995 adequately reflect the Company's
compensation goals and policies.
March 1, 1996
<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>
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".
Mr. Buell, a director of the Company, is a director of B.C. Gas Utility
from which LCI purchased natural gas ($4,959,000) in 1995. Mr. Southern, a
director of the Company, is Chairman of the Board and Chief Executive Officer of
ATCO Ltd. from which LCI purchased natural gas ($531,000) in 1995 and he is also
a director of Canadian Pacific Limited from which LCI purchased railroad
transportation ($5,773,000) in 1995. All of these purchases were made in the
ordinary course of business.
In 1995, Mr. Redfern was paid consulting fees by the Company and LCI in the
respective amounts of $916 and $17,400. Such payments ceased on June 30, 1995.
The Company maintains pension management and trust relations with Montreal Trust
Company of which Mr. Redfern is a director.
11
<PAGE> 14
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the Chief
Executive Officer and the four executive officers of the Company who were the
most highly compensated for the year ended December 31, 1995 who were serving as
executive officers 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) (SHARES) COMPENSATION(1)
- ----------------------------- ---- -------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Michel Rose 1995 $450,000 $246,700 35,000 $ 13,624(3)
President and Chief 1994 425,000 205,700 $22,248(2) 35,000 16,537(3)
Executive Officer of
Lafarge Corp.; 1993 405,000 187,000 10,000 18,634(3)
President and Chief
Executive Officer of LCI
Edward T. Balfe 1995 228,000 98,600 20,000 28,994(4)
Executive Vice President 1994 198,428 94,800 467(2) 15,000 73,893(4)(5)
and President, 1993 143,936 45,340 10,000 1,522(4)
Construction Materials
Jean-Pierre Cloiseau(6) 1995 220,500 103,700 15,000 16,293(7)
Executive Vice President 1994 210,000 86,700 467(2) 20,000 21,408(7)
and Chief Financial Officer 1993 190,500 71,800 20,000 20,976(7)
Duncan Gage 1995 217,000 80,000 15,000 39,562(8)(9)
Executive Vice President 1994 200,000 76,000 15,000 213,074(8)(10)
and President, U.S. Cement 1993 186,500 65,200 10,000 25,964(8)(11)
Region
Thomas Tatum 1995 173,900 68,100 10,000 19,284(12)
Senior Vice President 1994 168,000 55,600 15,000 17,519(12)
Human Resources 1993 159,600 50,700 15,000 13,694(12)
</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 $11,284 (1995), $13,613 (1994) and $15,329 (1993) contributed or
allocated by the Company to Mr. Rose's account under the Company's Thrift
Savings Plan and Thrift Savings Restoration Plan (including interest
earned) and $2,340 (1995), $2,924 (1994) and $3,305 (1993) in term life
insurance premiums paid by the Company.
(4) Includes $10,794 (1995) and $4,722 (1994) contributed by the Company to Mr.
Balfe's account under the Company's Thrift Savings Plan and Thrift Savings
Restoration Plan (including interest earned); $1,423 (1995), $1,402 (1994)
and $1,522 (1993) in term life insurance premiums paid by the Company; and
$16,777 (1995) and $9,125 (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).
(5) Includes moving expenses of $58,644 in connection with Mr. Balfe's
relocation from Canada to corporate headquarters in Virginia.
(6) Mr. Cloiseau's employment with the Company terminated on December 31, 1995.
(7) Includes $11,142 (1995), $13,613 (1994) and $13,684 (1993) contributed or
allocated by the Company to Mr. Cloiseau's account under the Company's
Thrift Savings Plan and Thrift Savings Restoration Plan (including interest
earned); $1,376 (1995), $1,445 (1994) and $1,554 (1993) in term life
insurance premiums paid by the Company; and $3,775 (1995), $6,350 (1994)
and $5,738 (1993) 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).
(8) Includes $11,125 (1995), $13,613 (1994) and $10,775 (1993) contributed or
allocated by the Company to Mr. Gage's account under the Company's Thrift
Savings Plan and Thrift Savings Restoration Plan (including interest
earned); $1,354 (1995), $1,376 (1994) and $1,518 (1993) in term life
insurance premiums paid by the
12
<PAGE> 15
Company; and $17,071 (1995) 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).
(9) Includes moving expenses of $10,012 relating to his relocation in 1994.
(10) 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.
(11) Includes moving expenses of $13,671 relating to his relocation from Dallas
to Houston in 1992.
(12) Includes $10,675 (1995), $9,884 (1994) and $6,746 (1993) contributed or
allocated by the Company to Mr. Tatum's account under the Company's Thrift
Savings Plan and Thrift Savings Restoration Plan (including interest
earned); $1,086 (1995), $1,048 (1994) and $997 (1993) in term life
insurance premiums paid by the Company; and $7,523 (1995), $6,587 (1994)
and $5,951 (1993) 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).
OPTION EXERCISES AND YEAR END VALUES
The following table shows information with respect to unexercised options
to purchase the Company's Common Stock granted under the Company's Stock Option
Plan to the Chief Executive Officer and the four most highly compensated
executive officers and held by them at December 31, 1995. None of these officers
exercised any stock options during 1995.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, 1995 AT DECEMBER 31, 1995(1)
------------------------------- -------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Michel Rose 28,750 73,750 $ 102,500 $80,313
Edward T. Balfe 41,750 38,750 130,813 37,500
Jean-Pierre Cloiseau 52,250 43,750 151,063 54,063
Duncan Gage 32,000 33,750 78,406 34,375
Thomas W. Tatum 31,250 31,250 99,063 38,438
</TABLE>
- ---------------
(1) Based on the closing price on the New York Stock Exchange of the Company's
Common Stock on December 31, 1995 ($18.63).
OPTION GRANTS
The following table shows information with respect to grants of stock
options pursuant to the Company's 1993 Stock Option Plan during 1995 to the
Chief Executive Officer and the other named executive officers. No stock
appreciation rights were granted under the Plan during 1995.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL RATES
SECURITIES OPTION GRANTS IN LAST FISCAL YEAR OF STOCK PRICE
UNDERLYING --------------------------------------------- APPRECIATION FOR
OPTIONS PERCENTAGE OF OPTION TERM(2)
GRANTED(1) TOTAL OPTIONS EXERCISE EXPIRATION ---------------------------
NAME (#) GRANTED IN 1995 PRICE ($/SH) DATE 5% 10%
- --------------------------- ------------- --------------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Michel Rose 35,000 7.2% $18.00 2-06-05 $ 396,200 $1,004,150
Edward T. Balfe 20,000 4.1 18.00 2-06-05 226,400 573,800
Jean-Pierre Cloiseau 15,000 3.1 18.00 2-06-05 169,800 430,350
Duncan Gage 15,000 3.1 18.00 2-06-05 169,800 430,350
Thomas W. Tatum 10,000 2.1 18.00 2-06-05 113,200 286,900
</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 February
6, 1995 with the closing price on the New York Stock Exchange of the
Company's Common Stock of $18.00, a share of the Company's Common Stock
would have a value on February 6, 2005 of approximately $29.32 at an assumed
appreciation rate of 5% and approximately $46.69 at an assumed appreciation
rate of 10%.
13
<PAGE> 16
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, 1990 and ended December 31, 1995. 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.
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>
1990 100.00 100.00 100.00
1991 95.00 134.21 113.92
1992 117.00 146.24 135.99
1993 184.59 162.74 186.66
1994 145.55 162.59 172.21
1995 155.99 221.91 213.08
</TABLE>
* Assumes $100 invested on December 31, 1990 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.
** Includes St. Lawrence (converted to U.S. currency at a constant rate),
Southdown, Medusa, TXI, Vulcan and CalMat.
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 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.
14
<PAGE> 17
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 1.5%
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. Cloiseau and Mr. Tatum 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, 1996 to each
individual named in the compensation table above who is a participant in the
plan were as follows: Mr. Cloiseau -- 12 years and Mr. Tatum -- 28 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.
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
15
<PAGE> 18
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. $12,000 per
annum, payable semi-annually, plus Cdn. $800 for each meeting attended. In
addition, such other directors receive Cdn. $800 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
pension plan or plan of deferred compensation for directors. LCI has three
directors who are not full-time employees of the Company or any of its
subsidiaries.
In addition to the directors' fees described above, John D. Redfern
receives an annual stipend of $12,000 for serving as Vice Chairman of the Board
of the Company, an annual stipend of Cdn. $20,000 for serving as Chairman of the
Board of LCI, and consulting fees from both the Company and LCI. In 1995, Mr.
Redfern was paid consulting fees by the Company and LCI in the respective
amounts of $916 and $17,400.
Directors who are not officers or employees of the Company or any
subsidiary are entitled to receive certain automatic grants of stock options
under the Company's 1993 Stock Option Plan ("Director Options"). Nonemployee
directors each were granted an option for 5,000 shares in February, 1995 and
each 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. In February of each year, each nonemployee director automatically
is granted an option for 1,000 shares. A nonemployee director may not be granted
Director Options for more than 20,000 shares. The exercise price per share is
100% of the per share fair market value of the Company's Common Stock on the
option grant date.
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.
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 1995, the largest aggregate amount of such
indebtedness outstanding during 1995 and the amount thereof outstanding as of
December 31, 1995, respectively, were as follows with respect to the following
individuals: Bertrand P. Collomb, Chairman of the
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Board -- $99,212, $91,328; John M. Piecuch, former Senior Executive Vice
President and President -- Construction Materials -- $141,667, $131,677; Edward
T. Balfe, Executive Vice President and President, Construction
Materials -- $195,000, $185,000; Duncan Gage, Executive Vice President and
President -- U.S. Cement Operations, $198,333, $188,333; H.L. Youngblood, Senior
Vice President and President -- Western Cement Region, $75,746, $72,374;
Jean-Pierre Cloiseau, former Executive Vice President and Chief Financial
Officer, $85,500, $0; Thomas W. Tatum, Senior Vice President -- Human Resources,
$88,696, $81,700; John C. Porter, Vice President and Controller, $79,167,
$74,166.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Company, LCI, and Lafarge S.A. 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 1995,
the Company and LCI recorded expenses under these agreements for the approximate
sums of $2,878,000 and Cdn. $3,383,000, respectively. The Company and LCI have
entered into agreements with Lafarge S.A. under which Lafarge S.A. pays for
certain services provided to Lafarge S.A. by the Company and LCI. In 1995,
charges to Lafarge S.A. totaled approximately $286,000.
During 1995, the Company and LCI purchased products from the Lafarge S.A.
Group in the ordinary course of business. These purchases totaled approximately
$26,558,000 and Cdn. $1,604,000 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 S.A.
In 1995, the Company paid Mr. Collomb a salary of $195,000 and Mr. Piecuch
a salary of $159,000 for services provided to the Company.
Mr. Buell, a director of the Company, is a director of B.C. Gas Utility
from which LCI purchased natural gas ($4,959,000) in 1995. Mr. Southern, a
director of the Company, is Chairman of the Board and Chief Executive Officer of
ATCO Ltd. from which LCI purchased natural gas ($531,000) in 1995 and he is also
a director of Canadian Pacific Limited from which LCI purchased railroad
transportation ($5,773,000) in 1995. All of these purchases were made in the
ordinary course of business.
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. Mr. Cohen is a director of American
International Group, Inc. which is an insurance provider to the Company.
AUDITORS
The firm of Arthur Andersen LLP audited the consolidated financial
statements of the Company for the fiscal year ended December 31, 1995. 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, 1996, 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
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<PAGE> 20
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
1995.
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 1997 annual meeting of stockholders of the Company is scheduled to be
held during the first week of May 1997. 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 27, 1996.
FORM 10-K ANNUAL REPORT
The Company will provide without charge to each person from whom a proxy is
solicited by this proxy statement, upon the written request of any such person,
a copy of the Company's Annual Report on Form 10-K, including the financial
statements and the schedules thereto, required to be filed with the Securities
and Exchange Commission pursuant to Section 13(a)(2) under the Exchange Act for
the Company's most recent fiscal year. Requests should be directed to David C.
Jones, Vice President -- Legal Affairs and Secretary, Lafarge Corporation, P.O.
Box 4600, Reston, Virginia 22090.
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<PAGE> 21
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, 1996, at the Annual Meeting of Stockholders
to be held on May 7, 1996 in McLean, 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 25, 1996, and the proxy
statement accompanying the same, receipt of which is hereby acknowledged.
<TABLE>
<S> <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. MacDonald,
listed to the right AUTHORITY David E. Mitchell, Robert W. Murdoch, Bertin F. Nadeau, John M. Piecuch, John
(except as marked to vote for all D. 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.)
_____________________________________________________________________________
2. Approval of appointment of Arthur Andersen
LLP as auditors of the Company.
/ / FOR / / AGAINST / / ABSTAIN
(Continued, and to be signed and dated on reverse side)
3. In their discretion, the Proxies are authorized
to vote on such other business as may properly come
before the meeting or any adjournment thereof.
Dated: _____________________________________,1996
_________________________________________________
_________________________________________________
_________________________________________________
Signature(s) of Stockholder(s)
This Proxy should be signed exactly as your name
appears hereon. Joint owners should both sign. If
signed as attorney, executor, guardian, or in some
other representative capacity, or as officer of a
corporation, please indicate your capacity or title.
</TABLE>
Please complete, date and sign this proxy and return it in the enclosed
envelope, which requires no postage if mailed in the United States.
