<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
</TABLE>
Centex Construction Products, Inc.
--------------------------------------------------------------------------------
(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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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
CENTEX CONSTRUCTIONS PRODUCTS, INC.
3710 RAWLINS, SUITE 1600, LB 78
DALLAS, TEXAS 75219
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 20, 2000
To The Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Centex
Construction Products, Inc., a Delaware corporation (the "Corporation"), will be
held in the Red Oak Room of the Sheraton Suites Hotel, 2101 Stemmons Freeway, in
the City of Dallas, Texas on Thursday, July 20, 2000 at 10:00 a.m. (C.D.T.) for
the following purposes.
(1) To elect five directors, each to hold office until the next
annual meeting of stockholders or until his successor shall
have been elected and qualified.
(2) To consider and vote on a proposal to approve and adopt the
Centex Construction Products, Inc. 2000 Stock Option Plan.
(3) To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors of the Corporation has fixed the close of business
on June 1, 2000 as the record date for the determination of stockholders
entitled to notice of and to vote at the meeting or any adjournment thereof.
Only stockholders of record at the close of business on the record date are
entitled to notice of and to vote at the meeting. The transfer books will not be
closed.
You are cordially invited to attend the meeting. Whether or not you expect
to attend the meeting in person, you are urged to sign, date and mail promptly
the accompanying form of Corporation proxy, so that your Corporation shares may
be represented and voted at the meeting. Your Corporation proxy will be returned
to you if you should be present at the meeting and request such return.
By Order of the Board of Directors
RAYMOND G. SMERGE
Secretary
Dallas, Texas
June [__], 2000
<PAGE> 3
CENTEX CONSTRUCTION PRODUCTS, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 20, 2000
INTRODUCTION
The accompanying proxy, mailed together with this proxy statement, is
solicited by and on behalf of the Board of Directors of Centex Construction
Products, Inc., a Delaware corporation (the "Corporation"), for use at the
Annual Meeting of Stockholders of the Corporation to be held on July 20, 2000,
and at any adjournment thereof. The mailing address of the executive offices of
the Corporation is 3710 Rawlins, Suite 1600, LB 78, Dallas, Texas 75219. The
approximate date on which this proxy statement and accompanying proxy were first
sent to stockholders is June [__], 2000.
PURPOSES OF THE MEETING
At the meeting, action will be taken upon the following matters:
(1) Election of five directors, each to hold office until the next
annual meeting of stockholders or until his successor shall
have been elected and qualified.
(2) Approval and adoption of the Centex Construction Products,
Inc. 2000 Stock Option Plan (the "2000 Option Plan").
(3) Such other business as may properly come before the meeting or
any adjournment thereof.
The Board of Directors of the Corporation (the "Board" or "Board of
Directors") does not know of any matters that may be acted upon at the meeting
other than the matters set forth in items (1) and (2) above.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS A VOTE FOR (i) THE
ELECTION OF THE FIVE NOMINEES FOR DIRECTOR OF THE CORPORATION NAMED IN THE
ACCOMPANYING CORPORATION PROXY AND (ii) THE APPROVAL AND ADOPTION OF THE 2000
OPTION PLAN.
RECORD DATE AND VOTING
The record date for the determination of stockholders entitled to notice of
and to vote at the meeting is the close of business on June 1, 2000. On the
record date, the issued and outstanding capital stock of the Corporation
entitled to vote at the meeting consisted of 18,580,832 shares of the
Corporation's common stock of $0.01 par value per share ("Common Stock").
The holders of Common Stock will be entitled to one vote per share upon the
election of directors, and each other matter that may be properly brought before
the meeting or any adjournment thereof. Neither the Certificate of
1
<PAGE> 4
Incorporation nor the Bylaws of the Corporation provide for cumulative voting
rights. The presence at the meeting, in person or by proxy, of a majority of the
outstanding shares of Common Stock is necessary to constitute a quorum;
abstentions and, by definition, broker non-votes will be counted as present for
the purpose of establishing a quorum.
Shares represented by valid proxies will be voted at the meeting in
accordance with the directions given. If the proxy card is signed and returned
without any direction given, the shares will be voted for election of the five
nominees for director named in the proxy and for approval and adoption of the
2000 Option Plan. The Board of Directors does not intend to present, and has no
information that others will present, any business at the annual meeting other
than as set forth in the attached Notice of Annual Meeting of Stockholders of
the Corporation. However, if other matters requiring the vote of stockholders
come before the meeting, it is the intention of the persons named in the
accompanying form of the Corporation proxy to vote the proxies held by them in
accordance with their best judgment in such matters. Any stockholder of the
Corporation has the unconditional right to revoke his, her or its Corporation
proxy at any time prior to the voting thereof by submitting a later-dated proxy,
by attending the meeting and voting in person, or by written notice to the
Corporation addressed to Raymond G. Smerge, Secretary, Centex Construction
Products, Inc., 3710 Rawlins, Suite 1600, LB 78, Dallas, Texas 75219; however,
no such revocation shall be effective until received by the Corporation at or
prior to the meeting.
The cost of solicitation of proxies for the meeting will be borne by the
Corporation. Solicitation may be made by mail, personal interview, telephone
and/or telegraph or other electronic transmission by officers and other
employees of the Corporation, who will receive no additional compensation
therefor. To aid in the solicitation of proxies, the Corporation has retained
the firm of ChaseMellon Shareholder Services, L.L.C., which will receive a fee
of approximately $4,500 plus out-of-pocket expenses. The Corporation will
reimburse banks, brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in forwarding proxy material to
beneficial owners.
ITEM 1. ELECTION OF DIRECTORS
In accordance with the Bylaws of the Corporation, the Board of Directors
has established the number of directors to be elected at the meeting at five,
which shall constitute the entire Board of Directors. Unless contrary
instructions are indicated on the proxy, it is intended that the shares
represented by the accompanying Corporation proxy will be voted for the election
of the five nominees for director named below or, if any such nominees should
become unavailable, which is not anticipated, for such substitute nominee as the
Board of Directors shall designate. Each director will hold office until the
next annual election of directors or until his successor shall have been elected
and qualified, subject to removal by the vote of the holders of not less than
two-thirds of the outstanding shares of Common Stock. A plurality of votes cast
at the annual meeting, in person or by proxy, is required to elect each nominee.
The Board recommends that stockholders vote FOR the election of such nominees.
The five persons named below are the Board's nominees for election as
directors at the meeting. All of the persons named below are currently directors
of the Corporation. The information appearing in the following table respecting
the nominees for director has been furnished to the Corporation by the
respective nominees.
2
<PAGE> 5
<TABLE>
<CAPTION>
POSITIONS AND OFFICES DIRECTOR BOARD COMMITTEE
NAME AND AGE WITH THE CORPORATION SINCE MEMBERSHIP
------------ -------------------- ------- ---------------
<S> <C> <C> <C>
Richard D. Jones, Jr., 54 President and Chief 1999 Executive
Executive Officer (1)
Laurence E. Hirsch, 54 Chairman of the Board (2) 1985 Compensation*, Executive*
& Stock Option*
Robert L. Clarke, 57 None (4) 1994 Audit* & Compensation
David W. Quinn, 58 None (3) 1994 Executive & Stock Option
Harold K. Work, 67 None (5) 1994 Audit & Compensation
</TABLE>
------------
* Chairman of the Committee
(1) Mr. Jones has served as President of the Corporation since January 1998
and as Chief Executive Officer since July 1999. Mr. Jones was Chief
Operating Officer of the Corporation from January 1990 until July 1999
and Executive Vice President of the Corporation from January 1990
through December 1997.
(2) Mr. Hirsch has served as Chairman of the Board of Directors of the
Corporation from January 1994 through December 1997 and from July 1999
to the present. Mr. Hirsch has served as a director of Centex
Corporation since 1985, as Chief Executive Officer of Centex
Corporation since July 1988 and as Chairman of the Board of Centex
Corporation since July 1991. He also served as President of Centex
Corporation from March 1985 until July 1991. Mr. Hirsch also serves as
a director of A.H. Belo Corporation and Luminex Corporation, and as an
advisory director of Heidelberger Zement A.G
(3) Mr. Quinn has served as a director of the Corporation since January
1994. Mr. Quinn has served as a director of Centex Corporation since
1989, was elected Vice Chairman of the Board of Centex Corporation in
May 1996, was Executive Vice President of Centex Corporation from
February 1987 until May 1996 and Chief Financial Officer of Centex
Corporation from February 1987 until June 1997 and from October 1997
through May 2000. Mr. Quinn is also a director of Elcor Corporation.
(4) Mr. Clarke has served as a director of the Corporation since July 1994.
Mr. Clarke has been a partner in the law firm of Bracewell & Patterson,
L.L.P. from 1971 to December 1985 and since March 1992. From December
1985 to February 1992, he was Comptroller of the Currency of the United
States. Mr. Clarke is also a director of First Investors Financial
Services, Inc.
(5) Mr. Work has served as a director of the Corporation since July 1994.
Mr. Work has served as Director, President and Chief Executive Officer
of Elk Corporation since 1979 and as Chairman of the Board, Chief
Executive Officer and President of Elcor Corporation since August 1997.
From 1993 until August 1997, Mr. Work served as Executive Vice
President of Elcor Corporation, and from 1982 to 1993, Mr. Work served
as Vice President of Elcor Corporation.
3
<PAGE> 6
BOARD MEETINGS, FEES, COMMITTEES AND ATTENDANCE RECORDS
During the Corporation's fiscal year ended March 31, 2000, the Board of
Directors held four regularly scheduled meetings and one special telephonic
meeting. During such fiscal year, each director attended all of the meetings of
the Board and the Board committees on which he served.
Board members who are not employees of the Corporation, Centex Corporation
or any of their respective subsidiaries ("Non-affiliated Independent Directors")
received an annual retainer of $22,500 for fiscal year 2000. Non-affiliated
Independent Directors received an additional annual retainer of $1,000 for each
committee on which they served. In addition, the Corporation reimburses the
directors for reasonable expenses incurred in attending Board and Board
committee meetings.
The Board of Directors has an Audit Committee, composed of Non-affiliated
Independent Directors, which reviews the functions of the Corporation's
management and independent auditors pertaining to the Corporation's financial
statements and performs such other duties and functions as are deemed
appropriate by the Audit Committee or the Board. During the last fiscal year,
the Audit Committee held two meetings, which were both attended by all members.
Audit Committee members are paid a fee of $1,000 per year.
The Board has a Compensation Committee, composed of directors who are not
employees of the Corporation or any of its subsidiaries, which recommends to the
Board the base salaries and incentive bonuses of the officers of the
Corporation. During the last fiscal year, the Compensation Committee held one
meeting, which was attended by all members. Compensation Committee members who
are Outside Directors are paid a fee of $1,000 per year.
The Board has a Stock Option Committee, composed of directors who are not
employees of the Corporation or any of its subsidiaries, which administers the
Centex Construction Products, Inc. Amended and Restated Stock Option Plan. The
Stock Option Committee is authorized to grant options to acquire Common Stock,
and to grant awards of restricted stock. During the last fiscal year, the Stock
Option Committee met in conjunction with meetings of the Board of Directors.
Stock Option Committee members who are Non-affiliated Independent Directors are
paid a fee of $1,000 per year.
ITEM 2. PROPOSAL TO APPROVE AND ADOPT THE CENTEX CONSTRUCTION PRODUCTS, INC.
2000 OPTION PLAN
The Board of Directors has adopted the 2000 Option Plan subject to
approval by stockholders at the Annual Meeting. The purpose of the 2000 Option
Plan is to assist the Corporation in attracting and retaining as officers and
other key employees of the Corporation and its affiliates, and as non-employee
directors of the Corporation, individuals of training, experience and ability
and to furnish additional incentive to such individuals by encouraging them to
become owners of Common Stock.
REASONS FOR THE 2000 OPTION PLAN
The Board of Directors believes that the success of the Corporation is
greatly dependent on its ability to attract and retain individuals of
outstanding ability who are motivated to exert their best efforts on behalf of
the Corporation and its affiliates. The Board has found that the Corporation's
stock option program has been highly effective in achieving that goal and has
concluded that the stock option program should be continued. The Board of
Directors has also concluded that the number of shares currently available for
the grant of stock options by the Corporation is inadequate to achieve the
purposes of the Corporation's stock option program.
The Corporation presently has in effect the Centex Construction
Products, Inc. Amended and Restated Stock Option Plan. See "Executive
Compensation - Centex Construction Products, Inc. Amended and Restated Stock
4
<PAGE> 7
Option Plan." It is presently contemplated that, subject to approval and
adoption of the 2000 Option Plan, options granted in the future will be granted
under the Centex Construction Products, Inc. Amended and Restated Stock Option
Plan until such plan expires or the shares available for issuance upon exercises
of options thereunder are depleted, and then under the 2000 Option Plan. Options
outstanding under the Centex Option Construction Products, Inc. Amended and
Restated Stock Option Plan will not be affected by the adoption of the 2000
Option Plan.
SUMMARY OF THE 2000 OPTION PLAN
The principal provisions of the 2000 Option Plan are summarized below.
The summary is qualified in its entirety by reference to the full text of the
2000 Option Plan which is set forth as Appendix A to this Proxy Statement.
Stockholders are encouraged to read the 2000 Option Plan in its entirety.
Under the 2000 Option Plan, a maximum of 1,000,000 shares of Common
Stock may be subject to grants of options or awards of Restricted Stock to
officers and key employees of the Corporation and its affiliates and to
non-employee directors of the Corporation. Such options may be either Incentive
Options (which satisfy the requirements of Section 422 (a) of the Internal
Revenue Code) or Non-qualified Options (which do not satisfy such requirements).
Shares of Common Stock covered by options that terminate or are canceled prior
to exercise, and shares of Restricted Stock returned to the Corporation, are
again available for grant of options and awards of Restricted Stock. Options
granted and Restricted Stock awarded to any one person may not exceed 10 percent
of the shares then subject to the 2000 Option Plan. No option may be granted and
no Restricted Stock may be awarded after April 26, 2010. The option price may
not be less than the greater of the par value or 100 percent of the fair market
value of the Common Stock at the time of grant, in the case of Incentive
Options, and may not be less than the greater of the par value or 85 percent of
the fair market value of the Common Stock at the time of grant in the case of
Non-qualified Options. The last reported sale price of the Common Stock on the
New York Stock Exchange on June 1, 2000 was $30.3125 per share.
The Board of Directors of the Corporation has primary administrative
authority under the 2000 Option Plan. Certain aspects of the 2000 Option Plan
are administered by a committee (the "Committee"). The Committee is appointed by
the Board and must consist of at least two individuals and may be comprised of
the entire Board. If less than the entire Board, the Committee must be comprised
solely of two or more "non-employee directors" under Rule 16b-3 of the
Securities Exchange Act of 1934. The Board of Directors has appointed the Stock
Option Committee of the Board as the Committee; however, the entire Board must
ratify all Committee actions that require its approval. The Committee will
determine the grants of options, the terms of the options to the extent not
prescribed (including the power to amend outstanding options), and the
interpretation of the options. The estimated total number of employees eligible
to participate in the 2000 Option Plan is 50. The 2000 Option Plan provides that
the determination of the Board is binding with respect to all questions of
interpretation and application of the 2000 Option Plan and the determination of
the Committee is binding with respect to all questions of interpretation and
application of options or awards of Restricted Stock granted thereunder.
Optionees do not incur federal income tax upon the grant of Incentive
Options. At the time an optionee's rights to the option stock are freely
transferable or are not subject to substantial risk of forfeiture, the
difference between the fair market value of the Common Stock and the option
price is a preference item for alternative minimum tax purposes. Provided that
the option stock is held for at least two years from the date of grant and for
at least one year from the date of exercise, the gain or loss on the subsequent
disposition of the option stock is treated as long- term capital gain or loss.
The Corporation normally will not be entitled to any federal income tax
deduction with respect to Incentive Options. However, if the optionee fails to
hold the option stock for at least two years from the date of grant and for at
least one year from the date of exercise, a disqualifying disposition occurs. A
disqualifying disposition results in ordinary income to the optionee equal to
the difference between the fair market value of the Common Stock and the option
price at the date of exercise. The Corporation will receive a corresponding
deduction for the optionee's ordinary income element.
5
<PAGE> 8
Generally, a person receiving a Non-qualified Option will not be taxed
upon grant, but will be taxed at ordinary federal income tax rates on the
difference between the option price and the fair market value of Common Stock at
the time of exercise, and the Corporation will receive a federal income tax
deduction in the tax year in which exercised, in the same amount as the amount
which such person must recognize as taxable income.
Options will become exercisable at such time or times not more than 10
years from the date of grant as may be provided by their terms. The Committee
may, however, accelerate the time at which an option is exercisable without
regard to its terms. Generally all rights to exercise an Incentive Option will
terminate within three months after the date the optionee ceases to be an
employee of the Corporation or an affiliate of the Corporation for any reason
including death or disability. However, in the case of a Non-qualified Option,
all rights to exercise such option terminate within four months after the date
the optionee ceases to be an employee of the Corporation or any affiliate of the
Corporation, or ceases to be a director, for any reason other than death or
disability. In the event of an optionee's death, a Non-qualified Option will
terminate 15 months thereafter. In the event of an optionee's disability and
resulting termination of employment, a Non-qualified Option will terminate six
months after such optionee's employment termination date.
If a Non-qualified Option is held by an optionee who is an officer or
director of the Corporation (within the meanings thereof under Section 16(b) of
the Securities Exchange Act of 1934), all rights to exercise such Non-qualified
Option will terminate seven months after the date the optionee ceases to be an
employee of the Corporation or one of its affiliates or the optionee ceases to
be a director of the Corporation. In addition, if a Non-qualified Option is held
by an optionee who, at retirement, (i) is at least 62 years old and (ii) has at
least ten years of service with the Corporation or its affiliates, then all
shares subject to such Non-qualified Option will vest on such optionee's
retirement date, and all rights to exercise such Non-qualified Option will
terminate three years after the date the optionee retires from the Board. With
respect to any director who does not meet both such criteria, shares subject to
such Non-qualified Option will continue to vest in accordance with its terms for
a period of three years following such retirement date, and all rights to
exercise such Non-qualified Option will terminate three years after the date the
optionee retires from the Board.
The Committee may, in its discretion, grant a new Non-qualified Option
or amend an outstanding Non-qualified Option to provide an extended period of
time during which an Optionee can exercise such Non-qualified Option to the
maximum permissible exercise period (ten years from the original grant date) for
which such Option would have been exercisable in the absence of the Optionee's
ceasing to be an employee of the Corporation and its affiliates or ceasing to be
a director of the Corporation. In no case may any option be exercised later than
10 years from the date of grant. If the employment of the optionee is terminated
for cause, the option shall thereafter be null and void for all purposes.
No option is transferable except by will or the laws of descent and
distribution, and during the lifetime of the optionee, the option may be
exercised only by the optionee or his guardian or legal representative. The
Committee may, in its discretion, provide that a Non-qualified Option may be
transferred, without consideration, to members of the optionee's immediate
family, to trusts for the benefit of such persons and to entities in which such
members are the sole equity owners. The exercise price of options may be paid in
cash or by delivery of shares of Common Stock, including actual or deemed
multiple exchanges of shares. The Corporation may satisfy its tax withholding
obligations by retaining shares of the Common Stock that would otherwise be
issuable on exercise by an optionee.
The 2000 Option Plan contains antidilution provisions applicable in the
event of increase or decrease in the number of outstanding shares of the
Corporation effected without receipt of consideration therefor by the
Corporation, through a stock dividend or any recapitalization or merger or
otherwise in which the Corporation is the surviving corporation, resulting in a
stock split-up, combination or exchange of shares of the Corporation, in which
6
<PAGE> 9
event appropriate adjustments will be made in the maximum number of shares
subject to the 2000 Option Plan and the number of shares and option prices under
then outstanding options.
In addition, in the case of a dissolution or liquidation of the
Corporation, a merger or consolidation in which the Corporation is not the
surviving corporation, a transaction in which another corporation (other than
Centex Corporation or one of its affiliates) becomes the owner of 50 percent or
more of the total combined voting power of all classes of stock of the
Corporation, or a change in control, every option then outstanding will vest and
become exercisable in full (subject, in the case of Incentive Options, to the
limit of $100,000 worth of shares becoming first exercisable in any calendar
year) immediately prior to such dissolution, liquidation, merger, consolidation,
transaction or change in control (as defined), to the extent not theretofore
exercised, without regard to any limits on exercisability contained in the
option agreements, but only if such options have not yet expired or been
terminated. The accelerated vesting and exercisability upon a change in control
could be considered as having an anti-takeover effect. However, because the 2000
Option Plan was adopted for the purposes and reasons discussed above and not for
any perceived anti-takeover benefit, and because the maximum number of shares
available under the 2000 Option Plan (1,000,000) would be insignificant compared
to the total number of the Corporation's authorized shares (50,000,000), the
Board of Directors of the Corporation believes that this provision should not be
considered as having any anti-takeover effect.
Moreover, in the event of such an above-referenced dissolution,
liquidation, merger, consolidation, transaction or change in control (as
defined), the Board may completely satisfy all obligations of the Corporation
and its affiliates with respect to any options outstanding on the date of such
event by delivering cash to the optionee in an amount equal to the difference
between the aggregate exercise price for shares under the option and the fair
market value of such shares on the date of such event.
The Board of Directors may, at any time, amend, suspend or terminate
the 2000 Option Plan except that it may not without the approval of the
stockholders (i) increase the maximum number of shares subject thereto or (ii)
increase the proportionate number of shares that may be purchased by or awarded
to any one person.
The 2000 Option Plan also provides that Restricted Stock may be awarded
by the Committee to such eligible recipients as it may determine from time to
time. The eligible recipients are those individuals who are eligible for option
grants. Restricted Stock is Common Stock that may not be sold, exchanged,
pledged, transferred, assigned or otherwise encumbered or disposed of until the
terms and conditions set by the Committee, which terms and conditions may
include, among other things, the achievement of specific goals, have been
satisfied (the "Restricted Period"). During the Restricted Period, unless
specifically provided otherwise in accordance with the terms of the 2000 Option
Plan, the recipient of Restricted Stock would be the record owner of such shares
and have all the rights of a stockholder with respect to such shares, including
the right to vote and the right to receive dividends or other distributions made
or paid with respect to such shares.
The 2000 Option Plan provides that the Committee has the authority to
cancel all or any portion of any outstanding restrictions prior to the
expiration of the Restricted Period with respect to all or any of the shares of
Restricted Stock awarded to an individual on such terms and conditions as the
Board or Committee may deem appropriate. In addition, upon a change in control
(as defined), the restrictions, if any, applicable to any outstanding shares or
awards of Restricted Stock lapse. If during the Restricted Period an
individual's continuous employment or position as a director of the Corporation
terminates for any reason, any Restricted Stock remaining subject to
restrictions will be forfeited by the individual and transferred at no cost to
the Corporation; provided, however, that as noted above, the Committee has the
authority to cancel any or all outstanding restrictions prior to the end of the
Restricted Period, including the cancellation of restrictions in connection with
certain types of termination of employment.
7
<PAGE> 10
The recipient of Restricted Stock will be taxed on his receipt of
Restricted Stock at the first time the stock becomes transferable or not subject
to a substantial risk of forfeiture, whichever occurs earlier. At such time, he
will include in gross income the excess of the then fair market value of the
Restricted Stock (determined without regard to any restriction other than a
restriction which by its terms will never lapse) over the amount, if any, paid
for such stock. However, a recipient of Restricted Stock can elect to include
the Restricted Stock in his gross income for the taxable year in which he first
receives such stock by filing an election with the IRS under Section 83(b) of
the Internal Revenue Code within 30 days after the date of such receipt. The
Corporation will be entitled to a federal income tax deduction in the tax year
in which the Restricted Stock becomes taxable to the recipient. The deduction
will equal the amount the recipient must include in income.
RECOMMENDATION AND REQUIRED AFFIRMATIVE VOTE
The Board of Directors unanimously recommends that stockholders approve
and adopt the 2000 Option Plan. The affirmative vote of holders of a majority of
the outstanding shares of Common Stock entitled to vote thereon at the Annual
Meeting is required in order to approve and adopt the 2000 Option Plan. If the
requisite vote of stockholders is not obtained, the 2000 Option Plan and any
options granted thereunder will become null and void. Unless indicated to the
contrary, the enclosed proxy will be voted FOR the 2000 Option Plan.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
MANAGEMENT
The following table sets forth information as of June 1, 2000 with
respect to the beneficial ownership of shares of Common Stock by each director,
nominee for election to the Board of Directors and executive officer named in
the Summary Compensation Table under "Executive Compensation," individually
itemized, and by all directors and executive officers of the Corporation as a
group. Except as otherwise indicated, all shares are owned directly and the
owner has the sole voting and investment power with respect thereto.
<TABLE>
<CAPTION>
COMMON STOCK (1)
----------------
NUMBER OF PERCENT
SHARES OF CLASS
--------- --------
<S> <C> <C>
Robert L. Clarke............................................. 10,448 *
Laurence E. Hirsch........................................... 10,000 *
H. David House............................................... 22,846 *
Richard D. Jones, Jr......................................... 43,640 *
David W. Quinn............................................... 2,000 *
Steven R. Rowley............................................. 38,910 *
Robert A. Sells.............................................. - *
Harold K. Work............................................... 7,448 *
Arthur R. Zunker, Jr......................................... 27,839 *
All directors and executive officers of
the Corporation as a group (9 persons)..................... 163,131 *
</TABLE>
------------
* Less than 1%.
8
<PAGE> 11
(1) Shares covered by stock options that are outstanding under the Centex
Construction Products, Inc. Amended and Restated Stock Option Plan
which are exercisable on June 1, 2000 or within 60 days thereafter, are
included as "beneficially owned" pursuant to the rules and regulations
of the Securities and Exchange Commission. Amounts include the
following shares that may be acquired upon exercise of such stock
options: Mr. Clarke -- 7,448 shares; Mr. House -- 22,846 shares; Mr.
Jones -- 41,470 shares; Mr. Rowley -- 37,846 shares; Mr. Work -- 7,448
shares; Mr. Zunker -- 22,846 shares; and all directors and executive
officers of the Corporation as a group (9 persons) -- 139,904 shares.
In addition, this table includes shares of Common Stock that may be
beneficially owned as of March 31, 2000, pursuant to the Common Stock
Fund of the Profit Sharing and Retirement Plan of Centex Construction
Products, Inc., a defined contribution plan (the "Profit Sharing
Plan"), as follows: Mr. Jones -- 2,170; Mr. Rowley -- 1,064; Mr. Zunker
-- 4,993 shares; and all directors and executive officers of the
Corporation as a group (9 persons) -- 8,227 shares. Amounts shown for
Mr. Hirsch and Mr. Quinn do not include 11,962,304 shares of Common
Stock owned by Centex Corporation, which shares each of Mr. Hirsch and
Mr. Quinn may be deemed to beneficially own indirectly because of their
positions as directors and executive officers of Centex Corporation.
CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of June 1, 2000 with respect
to the holders of shares of Common Stock who are known to the Corporation to be
beneficial owners of more than five percent of such shares outstanding.
<TABLE>
<CAPTION>
COMMON STOCK
------------------------------------------
NAME AND ADDRESS
OF BENEFICIAL HOLDER NUMBER OF SHARES PERCENT OF CLASS
-------------------- ---------------- ----------------
<S> <C> <C>
Centex Corporation
2728 N. Harwood Street 11,962,304 64.38%
Dallas, Texas 75201
</TABLE>
9
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth the cash and non-cash compensation awarded
to or earned by the Chief Executive Officer of the Corporation and the other
most highly compensated executive officers of the Corporation:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
---------------------
ANNUAL COMPENSATION AWARDS
----------------------------- ---------------------
NAME AND FISCAL SECURITIES UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS($)(1) OPTIONS/SARS (#) COMPENSATION ($)(2)
------------------ ------ ------------ ------------ --------------------- -------------------
<S> <C> <C> <C> <C> <C>
RICHARD D. JONES, JR., 2000 $ 258,750 $ 809,333 60,000 $ 25,418
President 1999 250,000 352,310 45,000 20,774
and Chief Executive Officer 1998 229,375 316,733 -- 22,459
H. DAVID HOUSE, 2000 $ 170,000 $ 808,895 28,000 $ 16,568
Executive Vice President - 1999 164,600 504,569 28,000 11,716
Gypsum 1998 159,000 355,277 -- 7,984
STEVEN R. ROWLEY, 2000 $ 143,900 $ 426,030 28,000 $ 13,836
Executive Vice President - 1999 130,000 191,326 28,000 9,563
Cement 1998 108,550 127,970 -- 11,008
ROBERT A. SELLS,(3) 2000 $ 119,904 $ 90,310 28,000 $ --
Executive Vice President -
Aggregates and Concrete
ARTHUR R. ZUNKER, JR., 2000 $ 160,300 $ 404,671 28,000 $ 15,853
Senior Vice President - 1999 153,800 206,426 28,000 11,608
Finance and Treasurer 1998 150,000 206,845 -- 15,393
</TABLE>
------------
(1) Cash bonuses for services rendered in fiscal years 2000, 1999 and 1998
have been listed in the year earned, but were actually paid in the
following fiscal year.
(2) Except as set forth below, the compensation reported in this column
includes fully vested Corporation contributions to, and forfeitures
allocated to, the account of the recipient under the Profit Sharing
Plan. The compensation reported for fiscal years 2000, 1999 and 1998
also includes contributions accrued pursuant to the Centex Construction
Products, Inc. Amended and Restated Supplemental Executive Retirement
Plan (the "SERP"), an unfunded, non-qualified plan for certain
executives of the Corporation (see "Report of Compensation Committee
and Stock Option Committee on Executive Compensation"), in the
following amounts: Mr. Jones - $9,656; $9,000; and $6,250,
respectively, of which Mr. Jones is fully vested; and Mr. House - $865
for fiscal year 2000, of which Mr. House is 40 percent vested.
(3) Mr. Sells became an executive officer of the Corporation in fiscal year
2000.
10
<PAGE> 13
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
----------------------------------------------------------------------------------- ---------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE
OPTIONS/SARS EMPLOYEES PRICE EXPIRATION
NAME GRANTED (#) IN FISCAL YEAR ($/SH) (2) DATE 5% ($) 10% ($)
---- ------------ -------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard D. Jones, Jr. 60,000 16.5% $34.9063 4/28/09 $1,317,138 $3,337,902
H. David House 28,000 7.7% 34.9063 4/28/09 614,664 1,557,668
Steven R. Rowley 28,000 7.7% 34.9063 4/28/09 614,664 1,557,668
Robert A. Sells 28,000 7.7% 39.5313 7/15/09 696,111 1,764,076
Arthur R. Zunker, Jr. 28,000 7.7% 34.9063 4/28/09 614,664 1,557,668
</TABLE>
------------
(1) Amounts set forth in the table reflect the number and value of shares
and options only. The Corporation has issued no SAR's.
(2) These performance-based options were granted at fair market value on
the date of grant. Vesting of these options is described in "Long-Term
Compensation" on page 14.
11
<PAGE> 14
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END (#) AT FY-END ($)(2)
--------------------------- -----------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard D. Jones, Jr. -- $ -- 41,470 63,530 $ -- $ --
H. David House -- -- 22,846 33,154 -- --
Steven R. Rowley -- -- 37,846 33,154 245,649(3) --
Robert A. Sells -- -- -- 28,000 -- --
Arthur R. Zunker, Jr. 10,650 318,941(4) 22,846 33,154 -- --
</TABLE>
------------
(1) Amounts set forth in the table reflect the number and value of shares
and options only. The Corporation has issued no SAR's.
(2) Represents the difference between the closing price of the Common Stock
on March 31, 2000 of $26.25 per share and the exercise price of such
options, and includes maximum cash bonuses payable in connection with
the exercise of such options at the time of exercise as described in
footnote 3 below.
(3) Amount includes maximum cash bonuses in the aggregate amount of
$31,899, payable in connection with the exercise of stock options at
the time of exercise.
(4) Amount includes cash bonuses in the aggregate amount of $69,016 paid in
connection with the exercise of stock options at the time of exercise.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
None of the Corporation's directors, officers or employees has any
relationship requiring disclosure under Item 402(j) of Regulation S-K.
REPORT OF COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE ON EXECUTIVE
COMPENSATION
The Compensation Committee provides advice and recommendations to the Board
concerning the salaries and bonuses of the officers of the Corporation. The
Board approves those salaries and bonuses. The Stock Option Committee
administers the Centex Construction Products, Inc. Amended and Restated Stock
Option Plan and is authorized under such plan to grant options to officers and
other key employees of the Corporation and its subsidiaries, subject to
ratification by the Board. The Compensation Committee and the Stock Option
Committee are comprised of three and two non-employee directors, respectively.
This report describes the policies and principles that shape the structure of
the Corporation's executive compensation program.
12
<PAGE> 15
The Corporation's executive compensation program is structured to achieve
the following objectives:
- to attract, retain and motivate highly qualified, energetic and
talented executives;
- to create an incentive to increase stockholder returns by establishing
a direct and substantial link between individual compensation and
certain financial measures that have a direct effect on stockholder
values; and
- to create substantial long-term compensation opportunities for
individual executive officers based not only on long-term corporate
performance but also on sustained long-term individual performance.
To achieve its compensation objectives, the Corporation has structured an
executive compensation program using a combination of short-term and long-term
elements: (i) annual salary; (ii) annual bonus; and (iii) long-term incentive
compensation in the form of stock options. In addition, the executive officers
of the Corporation are eligible to receive other benefits such as medical
benefits and profit sharing plan contributions that are generally available to
employees of the Corporation and contributions under the Corporation's SERP that
are accrued for the named executive officers and certain other officers of the
Corporation and its subsidiaries.
In structuring the specific components of executive compensation, the
Corporation is guided by the following principles:
- annual compensation should be set within reasonable ranges of the
annual compensation for similar positions with similarly-sized and
types of companies that engage in one or more of the businesses in
which the Corporation engages;
- bonus payments should vary with the Corporation's financial
performance; and
- a significant portion of compensation should be in the form of
long-term incentive compensation that aligns the interests of
executives with those of the stockholders and that creates rewards for
long-term sustained Corporation performance and the achievement of the
Corporation's strategic objectives.
Base Salary
The Compensation Committee is responsible for recommending at the beginning
of each fiscal year the base salary levels for the five named executive
officers. In developing salary amounts for fiscal year 2000, the Compensation
Committee reviewed the salaries for similar positions in similarly-sized
companies which engage in one or more of the principal businesses of the
Corporation: the manufacture and sale of cement, gypsum wallboard and readymix
concrete and aggregates. Included within the survey were those companies which
comprise the peer group in the Comparative Cumulative Total Stockholder Return
graph on page 15. The Compensation Committee confirmed that the base salaries of
the named executives were consistent with its objective of setting base salaries
within reasonable ranges for similar positions in competitive companies. In
setting base salary levels, the Compensation Committee also considers the
executive's experience level and potential for significant contributions to the
Corporation's profitability. After completing its review and decision-making
process, the Compensation Committee submitted its decision as to base salary
levels to the entire Board of Directors, which confirmed the Compensation
Committee's decision.
Incentive Bonus
The Compensation Committee is also responsible for developing
recommendations for the incentive bonuses awarded to the named executives at the
end of each fiscal year. The annual incentive bonus program for the executive
officers has been structured to create financial incentives and rewards that are
directly related to corporate performance during the fiscal year. In particular,
the Compensation Committee weighs heavily certain financial measurements that
are directly related to stockholder returns such as net earnings, earnings
growth, return on net
13
<PAGE> 16
assets, return on equity and other factors. In fiscal year 1998, the
Compensation Committee restructured the annual incentive bonus program of the
Corporation so that a percentage of potential earnings is designated for bonuses
and, provided that established targets are achieved in the applicable fiscal
year, such pool is divided, and bonuses are paid, among the employees
participating in the plan. The amount of the bonus paid to an employee is based
on the earnings of the division in which such employee is employed, the
percentage of the pool designated for such employee and an objective assessment
of such employee's achievement of his or her established performance goals.
Long-Term Compensation
Consistent with the Corporation's effort to increase the proportion of
management compensation which is tied to the Corporation's performance, the
Compensation Committee in fiscal year 1995 structured certain of its stock
option programs to link the vesting of stock option grants to the achievement by
the Corporation of certain specific performance targets during the ten years
following the stock option grant. Beginning in fiscal year 1999, under the terms
of the stock options, the number of shares that "vest" or which become
exercisable by the optionee depends upon the achievement of specific financial
goals by the Corporation and, for a portion of such options, the passage of time
after the achievement of such goals. These financial goals are tied to the
Corporation's operating earnings and return on average net assets and are
structured to reward the optionee for superior long-term operating performance
of the Corporation. Failure to meet the specified goals results in those shares
not "vesting" until the end of the ten-year term. The Compensation Committee
believes that these programs properly align the interests of the Corporation's
officers and managers with the interests of the stockholders by linking a
majority of their long-term compensation with goals that have a direct and
positive effect on stockholder value. Except for certain grants of stock options
made in fiscal 1995 in connection with the Corporation's initial public
offering, all of the stock options granted by the Corporation to its officers
and key employees were granted under these performance programs.
Commencing with fiscal year 1995, the Corporation's Board approved the SERP
for certain employees participating in the Profit Sharing Plan. Pursuant to the
Internal Revenue Code, the Internal Revenue Service sets a limit (currently
$170,000) on the amount of annual compensation which may be considered in
determining, for the account of an eligible participant, the Corporation's
contribution to the Profit Sharing Plan. The SERP establishes balances for each
participant in an amount equal to the additional contribution which he or she
would have received under the Profit Sharing Plan had 100% of his or her annual
salary been eligible for a profit-sharing contribution. Contributions accrued
under the SERP for the benefit of the named executive officers vest under the
same terms and conditions as the Profit Sharing Plan. Bonuses paid to
participants are not included in making calculations for contributions made or
accrued to recipients' accounts under either the Profit Sharing Plan or the
SERP.
CEO Compensation
The Chief Executive Officer of the Corporation participates in the same
compensation programs as the other executive officers with each component of his
compensation determined by the Compensation Committee according to the same
criteria. The base salary and incentive bonus of the Chief Executive Officer for
fiscal year 2000 were consistent with the Compensation Committee's compensation
range guidelines and objectives for all officers, and the incentive bonus was
determined in accordance with the existing incentive bonus program.
The Internal Revenue Service limits the deductibility for federal income
tax purposes of certain executive compensation payments in excess of $1 million.
In fiscal year 2000, the salary and bonus of Richard D. Jones, President and
Chief Executive Officer of the Company, exceeded such limitation by $68,083. The
Compensation Committee will take appropriate action in the future as it
determines to be advisable to minimize any future impacts of this limitation on
the Corporation.
14
<PAGE> 17
<TABLE>
<CAPTION>
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
---------------------- ----------------------
<S> <C>
Laurence E. Hirsch, Chairman Laurence E. Hirsch, Chairman
Robert L. Clarke David W. Quinn
Harold W. Work
</TABLE>
PERFORMANCE GRAPH
The following graph compares the yearly change in the cumulative total
stockholder return on the Common Stock during the five fiscal years ended March
31, 2000 with the S&P 500 Index and a peer group composed of companies with
businesses in one or more of the Corporation's primary lines of businesses:
cement, gypsum wallboard and concrete/aggregates. The companies comprising the
peer group are weighted by their respective market capitalizations and include
the following: Lafarge Corporation, Lone Star Industries, Inc. (Dyckerhoff
Aktiengesellscaft acquired Lone Star Industries, Inc. in late 1999), Medusa
Corporation, Southdown, Inc. (Medusa Corporation and Southdown, Inc. merged in
1998) and USG Corporation. The comparison assumes $100 was invested on March 31,
1995 in the Common Stock and in each of the S&P 500 Index and the peer group,
and assumes reinvestment of dividends.
COMPARATIVE CUMULATIVE TOTAL STOCKHOLDER RETURN
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
<S> <C> <C> <C> <C> <C> <C>
Centex Construction Products, Inc. $100 $108 $145 $295 $284 $215
S&P 500 Index $100 $132 $158 $234 $278 $327
Peer Group $100 $115 $146 $258 $215 $200
</TABLE>
15
<PAGE> 18
SECTION 16(a) COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Corporation's directors and officers, and persons who beneficially own more
than 10% of a registered class of the Corporation's equity securities, to file
initial reports of ownership, reports of changes in ownership and annual reports
of ownership with the Securities and Exchange Commission (the "SEC") and the New
York Stock Exchange. Such persons are required by SEC regulations to furnish the
Corporation with copies of all Section 16(a) forms they file with the SEC.
Based solely on its review of the copies of such forms received by it with
respect to fiscal year 2000, or written representations from certain reporting
persons, the Corporation believes that its directors, officers and persons who
beneficially own more than 10% of a registered class of the Corporation's equity
securities have complied with all filing requirements required by Section 16(a)
for fiscal year 2000 applicable to such persons.
CERTAIN TRANSACTIONS
Centex Service Company ("CSC"), a subsidiary of Centex Corporation,
provides the Corporation with employee benefits administration, legal,
public/investor relations and certain other services. These services are
provided by CSC pursuant to an Administrative Services Agreement which will
expire on March 31, 2001, unless earlier terminated at the option of the
Corporation. For fiscal year 2000, the payment by the Corporation to CSC for
services rendered under this agreement was $198,000. Commencing April 1, 2000,
this agreement was amended to increase the annual payment for such services
rendered for the remainder of the term of the agreement to $220,000. Messrs.
Hirsch and Quinn, who are directors of the Corporation, are directors and
executive officers of CSC.
The Corporation does not sell any of its products directly to Centex
Corporation or to any of its affiliates. Certain of the Corporation's customers
purchase readymix concrete and gypsum wallboard from the Corporation for resale
to subsidiaries of Centex Corporation and others. Although the Corporation does
not track the volume of such indirect sales to subsidiaries of Centex
Corporation or to any of its affiliates, the Corporation believes that such
sales account for less than 5% of its total sales volume.
Robert L. Clarke, a director of the Corporation, is a partner in the law
firm of Bracewell & Patterson, L.L.P., which law firm provides legal services to
certain subsidiaries of the Corporation.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP acted as the Corporation's independent public
accountants for the fiscal year ended March 31, 2000. The Corporation's
independent public accountants are selected annually by the Board of Directors
at its meeting held immediately following the annual meeting of stockholders. It
is anticipated that the Board of Directors will select Arthur Andersen LLP as
the Corporation's independent public accountants for the current year.
Representatives of Arthur Andersen LLP are expected to be present at the
meeting, with the opportunity to make a statement if they desire to do so, and
will be available to respond to appropriate questions from stockholders.
16
<PAGE> 19
STOCKHOLDERS PROPOSALS
The Corporation's 2001 annual meeting of stockholders is scheduled to be
held on July 19, 2001. In order to be considered for inclusion in the
Corporation's proxy material for that meeting, stockholder proposals must be
received at the Corporation's executive offices, addressed to the attention of
the Secretary, not later than February [__], 2001.
FORM 10-K
STOCKHOLDERS ENTITLED TO VOTE AT THE MEETING MAY OBTAIN A COPY OF THE
CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31,
2000, INCLUDING THE FINANCIAL STATEMENTS, REQUIRED TO BE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WITHOUT CHARGE, UPON REQUEST TO CENTEX
CONSTRUCTION PRODUCTS, INC., ATTENTION: RAYMOND G. SMERGE, SECRETARY, 3710
RAWLINS, SUITE 1600, LB 78, DALLAS, TEXAS 75219.
By Order of the Board of Directors
RAYMOND G. SMERGE
Secretary
Dallas, Texas
June [__], 2000
17
<PAGE> 20
APPENDIX A
CENTEX CONSTRUCTION PRODUCTS, INC.
2000 STOCK OPTION PLAN
1. PURPOSE
The purpose of the Plan is to assist Centex Construction Products,
Inc., a Delaware corporation, in attracting and retaining as officers
and key employees of the Company and its Affiliates, and as
Non-employee Directors of the Company, individuals of training,
experience and ability and to furnish additional incentive to such
individuals by encouraging them to become owners of Shares of the
Company's capital stock, by granting to such individuals Incentive
Options, Non-qualified Options, Restricted Stock, or any combination of
the foregoing.
2. DEFINITIONS
Unless the context otherwise requires, the following words as used
herein shall have the following meanings:
"Act" -- The Securities Exchange Act of 1934, as amended.
"Affiliate" -- Any corporation or other entity which is a direct or
indirect parent or subsidiary (including, without limitation,
partnerships and limited liability companies) of the Company or of the
parent of the Company.
"Agreement" -- The written agreement, whether delivered on paper or by
electronic medium, between the Company and the Optionee evidencing the
Option granted by the Company and the understanding of the parties with
respect thereto.
"Board" -- The Board of Directors of the Company as the same may be
constituted from time to time.
"Code" -- The Internal Revenue Code of 1986, as amended from time to
time.
"Committee" -- The Stock Option Committee of the Board, composed solely
of two or more Non-employee Directors appointed by the Board from time
to time, or composed of the entire Board. When the Committee is so
composed of the entire Board, the terms "Board" and "Committee," as
used herein, shall be deemed synonymous.
"Company"-- Centex Construction Products, Inc., a Delaware corporation.
"Disability" -- Total and permanent disability as set forth in Section
22(e)(3) of the Code.
"Fair Market Value" -- The closing price per Share as of a particular
date reported on the consolidated transaction reporting system for the
New York Stock Exchange, or, if there shall have been no such sale so
reported on that date, on the last preceding date on which such a sale
was reported. For purposes of valuing Shares to be made subject to
Incentive Options, the Fair Market Value of stock shall be determined
without regard to any restriction other than one which, by its terms,
will never lapse.
A-1
<PAGE> 21
"Incentive Options" -- Stock Options that are intended to satisfy the
requirements of Section 422 of the Code and Section 16 of the Plan.
"Non-employee Director" -- An individual who satisfies the requirements
of Rule 16b-3 promulgated under the Act.
"Non-qualified Options" -- Stock Options that do not satisfy the
requirements of Section 422 of the Code.
"Option" -- An option to purchase one or more Shares of the Company
granted under and pursuant to the Plan. Such Option may be either an
Incentive Option or a Non-qualified Option.
"Optionee" -- An individual who has been granted an Option under the
Plan.
"Plan"-- This Centex Construction Products, Inc. 2000 Stock Option
Plan.
"Permitted Transferees" -- (i) members of the Optionee's immediate
family, (ii) one or more trusts for the benefit of such members of the
Optionee's immediate family, (iii) partnerships in which such immediate
family members are the only partners and (iv) limited liability
companies in which such immediate family members are the only members.
For the purposes of this definition "immediate family" shall mean the
Optionee's spouse, parents, children (including adopted children) and
grandchildren.
"Restricted Stock" -- Shares issued pursuant to Section 19 of the Plan.
"Share" -- A share of the Company's present one cent ($0.01) par value
common stock and any share or shares of capital stock or other
securities of the Company hereafter issued or issuable upon, in respect
of or in substitution or in exchange for each present share. Such
Shares may be unissued or reacquired Shares, as the Board, in its sole
and absolute discretion, shall from time to time determine.
3. ADMINISTRATION
Except as is herein expressly provided otherwise, the Plan shall be
administered by the Board. The Board shall have full power and
authority, in its sole and absolute discretion, to (a) interpret the
Plan and (b) make all other determinations necessary or advisable for
the administration of the Plan. The Board may adopt such rules or
guidelines as it deems appropriate to implement the Plan. Subject to
the provisions hereof, the Committee shall have full power and
authority, in its sole and absolute discretion to, (a) determine the
terms and conditions of the respective Agreements, including provisions
defining or otherwise relating to (i) subject to the specific
provisions of the Plan, the term and the period or periods and extent
of vesting of the Options, (ii) the extent to which the transferability
of Shares issued upon exercise of Options is restricted, (iii) the
effect of termination of employment or directorship upon the vesting of
the Options, and (iv) the effect of approved leaves of absence
(consistent with any applicable regulations of the Internal Revenue
Service), (b) subject to Sections 8 and 10, accelerate, for any reason,
regardless of whether the Agreement so provides, the time of vesting of
any Option that has been granted, (c) construe the respective
Agreements, and (d) to exercise the powers conferred on the Committee
under Section 19. The determinations of the Board or Committee, as the
case may be, shall be final and binding on all persons.
4. SHARES SUBJECT TO PLAN
(a) A maximum of 1,000,000 Shares shall be subject to grants of
Options and awards of Restricted Stock under the Plan;
provided that such maximum shall be increased or decreased as
provided in Section 12 hereof.
A-2
<PAGE> 22
(b) At any time and from time to time after the Plan takes effect,
the Committee, pursuant to the provisions herein set forth,
may grant Options and award Restricted Stock until the maximum
number of Shares shall be exhausted or the Plan shall be
sooner terminated; provided, however, that no Option shall be
granted and no Restricted Stock shall be awarded after April
26, 2010.
(c) If any Option expires or is canceled without being fully
exercised, or if any Restricted Stock previously awarded is
reacquired by the Company, the number of Shares with respect
to which such Option shall not have been exercised prior to
its expiration or cancellation and the number of Shares of
such Restricted Stock so reacquired may again be optioned or
awarded pursuant to the provisions hereof.
(d) Any Shares withheld pursuant to Section 18(b) hereof shall be
available after such withholding for being optioned or awarded
pursuant to the provisions hereof.
5. ELIGIBILITY
Eligibility for receipt of a grant of Options under the Plan shall be
confined to (a) a limited number of persons who are employed by the
Company, or one or more of its Affiliates and who are officers of or
who, in the opinion of the Committee, hold other key positions in or
for the Company or one or more of its Affiliates and (b) directors of
the Company, including directors who are not employees of the Company
or its Affiliates; provided that only employees of the Company or its
Affiliates shall be eligible for the grant of Incentive Options. In
addition, an individual who becomes a director of the Company, but who
is not at the time he becomes a director also an employee of the
Company, shall not be eligible for a grant of Options or an award of
Restricted Stock, and shall not be eligible for the grant of an option,
stock allocation, or stock appreciation right under any other plan of
the Company or its affiliates (within the meaning of Rule 12b-2
promulgated under the Act) until the Board expressly declares such
person eligible by resolution. In no event may an Option be granted to
an individual who is not an employee of the Company or an Affiliate or
a director of the Company.
6. GRANTING OF OPTIONS
(a) From time to time while the Plan is in effect, the Committee
may in its absolute discretion, select from among the persons
eligible to receive a grant of Options under the Plan
(including persons who have already received such grants of
Options) such one or more of them as in the opinion of the
Committee should be granted Options. The Committee shall
thereupon, likewise in its absolute discretion, determine the
number of Shares to be allotted for option to each person so
selected; provided, however, that the total number of Shares
subject to Options granted to any one person, including a
director of the Company, when aggregated with the number of
Shares of Restricted Stock awarded to such person, shall not
exceed 10% of the Shares then subject to the Plan.
(b) Each person so selected shall be offered an Option to purchase
the number of Shares so allotted to him, upon such terms and
conditions, consistent with the provisions of the Plan, as the
Committee may specify.
(c) Each person who accepts an Option offered to him shall enter
into an Agreement with the Company, in such form as the
Committee may prescribe, setting forth the terms and
conditions of the Option, whereupon such person shall become a
participant in the Plan. In the event an individual is granted
both one or more Incentive Options and one or more
Non-qualified Options, such grants shall be evidenced by
separate Agreements, one each for the Incentive Option grants
and one each for the Non-qualified Options grants. The date
which the Committee specifies to be
A-3
<PAGE> 23
the grant date of an Option to an individual shall constitute
the date on which the Option covered by such Agreement is
granted. In no event, however, shall an Optionee gain any
rights in addition to those specified by the Committee in its
grant, regardless of the time that may pass between the grant
of the Option and the actual execution of the Agreement by the
Company and the Optionee.
7. OPTION PRICE
The option price for each Share covered by each Incentive Option shall
not be less than the greater of (a) the par value of each such Share or
(b) the Fair Market Value of the Share at the time such Option is
granted, except as provided hereinafter. The option price for each
Share covered by each Non-qualified Option shall not be less than the
greater of (a) the par value of each such Share or (b) 85% of the Fair
Market Value of the Share at the time the Option is granted; provided,
however, that the number of Shares covered by Non-qualified Options
granted under the Plan that have an option price less than the Fair
Market Value of a Share at the time the respective Option is granted
shall not exceed 10% of the total number of Shares authorized to be
issued under the Plan. If the Company or an Affiliate agrees to
substitute a new Option under the Plan for an old Option, or to assume
an old Option, by reason of a corporate merger, consolidation,
acquisition of property or stock, separation, reorganization, or
liquidation (any of such events being referred to herein as a
"Corporate Transaction"), the option price of the Shares covered by
each such new Option or assumed Option may be different than the Fair
Market Value of the Shares at the time the Option is granted as
determined by reference to a formula, established at the time of the
Corporate Transaction, which will give effect to such substitution or
assumption; provided, however, in no event shall --
(a) the excess of the aggregate Fair Market Value of the Shares
subject to the Option immediately after the substitution or
assumption over the aggregate option price of such Shares be
more than the excess of the aggregate Fair Market Value of all
Shares subject to the Option immediately prior to the
substitution or assumption over the aggregate option price of
such Shares; and
(b) in the case of an Incentive Option, the new Option or the
assumption of the old Option give the Optionee additional
benefits which he would not have under the old Option; and
(c) the ratio of the option price to the Fair Market Value of the
Shares subject to the Option immediately after the
substitution or assumption be more favorable to the Optionee
than the ratio of the option price to the Fair Market Value of
the Shares subject to the old Option immediately prior to such
substitution or assumption, on a Share by Share basis.
Notwithstanding the above, the provisions of this Section 7 with
respect to the Option price in the event of a Corporate Transaction
shall, in case of an Incentive Option, be subject to the requirements
of Section 424(a) of the Code and the Treasury regulations and revenue
rulings promulgated thereunder. In the case of an Incentive Option, in
the event of a conflict between the terms of this Section 7 and the
above cited statute, regulations, and rulings, or in the event of an
omission in this Section 7 of a provision required by said laws, the
latter shall control in all respects and are hereby incorporated herein
by reference as if set out at length.
8. OPTION PERIOD
(a) Each Option shall run for such period of time as the Committee
may specify, but in no event for longer than ten (10) years
from the date when the Option is granted, including the period
of time provided in subsections (i), (ii) and (iii) of this
Section 8(a); and subject to such limits, and the
A-4
<PAGE> 24
further condition that, unless designated otherwise by the
Committee, no Incentive Option shall become exercisable prior
to one year from the date of its grant,
(i) Except as provided below in this subsection (i), all
rights to exercise an Option shall terminate within
three (3) months for an Incentive Option and within
four (4) months for a Non-qualified Option after the
date the Optionee ceases to be an employee of at
least one of the employers in the group of employers
consisting of the Company and its Affiliates, or
after the date the Optionee ceases to be a director
of the Company, whichever may occur later, for any
reason other than death or Disability, except that,
in the case of a Non-qualified Option (A) that is
held by an Optionee who is, on the date of cessation
referred to in this clause, an officer or director of
the Company (within the meanings thereof under
Section 16(b) of the Act), all rights to exercise
such Non-qualified Option shall terminate seven (7)
months after the date the Optionee ceases to be an
employee of at least one of the employers in the
group of employers consisting of the Company and its
Affiliates or the Optionee ceases to be a director of
the Company; (B) that is held by an Optionee who on
the date of retirement from the Board (and if also an
employee from full-time employment) is at least 62
years old and has at least ten (10) years of service
with the Company or its Affiliates, then (i) all
shares subject to such Non-qualified Option will vest
on such retirement date, and all rights to exercise
such Non-qualified Option shall terminate three (3)
years after the date the Optionee retires from the
Board, and (ii) with respect to any director who does
not meet both such criteria, shares subject to such
Non-qualified Option will continue to vest in
accordance with its terms for a period of three (3)
years following such retirement date, and all rights
to exercise such Non-qualified Option shall terminate
three (3) years after the date the Optionee retires
from the Board; (C) the Committee may, in its
discretion, grant a new Non-qualified Option or amend
an outstanding Non-qualified Option to provide an
extended period of time during which an Optionee can
exercise such Non-qualified Option to the maximum
permissible exercise period (ten (10) years from the
date when the Option was originally granted) for
which such Option would have been exercisable in the
absence of the Optionee's ceasing to be an employee
of the Company and its Affiliates or ceasing to be a
director of the Company; and (D) if the employment of
the Optionee is terminated for cause, the Option,
covering both vested and unvested shares, shall
immediately terminate and thereafter be null and void
for all purposes.
(ii) If the Optionee ceases to be employed by at least one
of the employers in the group of employers consisting
of the Company and its Affiliates, or ceases to be a
director of the Company, whichever may occur later,
by reason of his death, all rights to exercise any
Incentive Option held by such Optionee shall
terminate three (3) months after his death and all
rights to exercise any Non-qualified Option held by
such Optionee shall terminate fifteen (15) months
after his death.
(iii) If the employment of the Optionee with the Company or
any of its Affiliates shall terminate as a result of
a Disability, he may, within three (3) months
thereafter exercise any Incentive Option held by such
Optionee, and within six (6) months following such
date, exercise any Non-qualified Option held by such
Optionee, in each case, to the extent he was entitled
to exercise such Option on the date of termination of
employment. To the extent that he was not entitled to
exercise such Option, or if he does not exercise such
Option (which he was entitled to exercise) within the
time specified herein, the Option shall terminate.
A-5
<PAGE> 25
(iv) If an Option is granted with a term shorter than ten
(10) years, the Committee may extend the term of the
Option, but for not more than ten (10) years from the
date when the Option was originally granted.
9. OPTIONS NOT TRANSFERABLE
No Option or interest therein shall be transferable by the person to
whom it is granted otherwise than by will or by the applicable laws of
descent and distribution. Notwithstanding the foregoing, the Committee
may, in its sole discretion, provide in the Agreement relating to the
grant of a Non-qualified Option that the Optionee may transfer such
Option, without consideration, to Permitted Transferees.
10. EXERCISE OF OPTIONS
(a) During the lifetime of an Optionee only he or his guardian or
legal representative or transferee may exercise an Option
granted to him. In the event of his death, any then
exercisable portion of his Option may, within fifteen (15)
months thereafter, or earlier date of termination of the
Option, be exercised in whole or in part by any person
empowered to do so under the deceased Optionee's will or under
the applicable laws of descent and distribution.
(b) At any time, and from time to time, during the period when any
Option, or a portion thereof, is exercisable, such Option, or
portion thereof, may be exercised in whole or in part
provided, however, that the Committee may require any Option
which is partially exercised to be so exercised with respect
to at least a stated minimum number of Shares.
(c) Each exercise of an Option or portion or part thereof shall be
evidenced by a notice in writing to the Company accompanied by
payment in full of the option price of the Shares then being
purchased. Payment in full shall mean payment of the full
amount due, either in cash, by certified check or cashier's
check or, with the consent of the Committee, with Shares owned
by the Optionee, including an actual or deemed multiple series
of exchanges of such Shares.
(d) No Shares shall be issued until full payment therefor has been
made, and an Optionee shall have none of the rights of a
stockholder until Shares are issued to him.
(e) Nothing herein or in any Agreement executed or Option granted
hereunder shall require the Company to issue any Shares upon
exercise of an Option if such issuance would, in the opinion
of counsel for the Company, constitute a violation of the
Securities Act of 1933, as amended, or any similar or
superseding statute or statutes, or any other applicable
statute or regulation, as then in effect. Upon the exercise of
an Option or portion or part thereof, the Optionee shall give
to the Company satisfactory evidence that he is acquiring such
Shares for the purpose of investment only and not with a view
to their distribution provided, however, if or to the extent
that the Shares subject to the Option shall be included in a
registration statement filed by the Company, or one of its
Affiliates, such investment representation shall be abrogated.
11. DELIVERY OF STOCK CERTIFICATES
As promptly as may be practicable after an Option, or a portion or part
thereof, has been exercised as hereinabove provided, the Company shall
make delivery of one or more certificates, either by delivery of a
physical certificate or an electronic transfer to a broker, for the
appropriate number of Shares. In the event that an Optionee exercises
both an Incentive Option, or a portion thereof, and a Non-qualified
Option, or
A-6
<PAGE> 26
a portion thereof, separate stock certificates shall be issued, one for
the Shares subject to the Incentive Option and one for the Shares
subject to the Non-qualified Option.
12. CHANGES IN COMPANY'S SHARES AND CERTAIN CORPORATE TRANSACTIONS
(a) If at any time while the Plan is in effect there shall be an
increase or decrease in the number of issued and outstanding
Shares of the Company effected without receipt of
consideration therefor by the Company, through the declaration
of a stock dividend or through any recapitalization or merger
or otherwise in which the Company is the surviving
corporation, resulting in a stock split-up, combination or
exchange of Shares of the Company, then and in each such
event:
(i) an appropriate adjustment shall be made automatically
in the maximum number of Shares then subject to being
optioned or awarded as Restricted Stock under the
Plan, to the end that the same proportion of the
Company's issued and outstanding Shares shall
continue to be subject to being so optioned and
awarded;
(ii) an appropriate adjustment shall be made automatically
in the number of Shares and the option price per
Share thereof then subject to purchase pursuant to
each Option previously granted, to the end that the
same proportion of the Company's issued and
outstanding Shares in each such instance shall remain
subject to purchase at the same aggregate option
price; and
(iii) in the case of Incentive Options, any such
adjustments shall in all respects satisfy the
requirements of Section 424(a) of the Code and the
Treasury regulations and revenue rulings promulgated
thereunder.
Except as is otherwise expressly provided herein, the issuance
by the Company of shares of its capital stock of any class, or
securities convertible into shares of capital stock of any
class, either in connection with a direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to,
the number of or option price of Shares then subject to
outstanding Options granted under the Plan. Furthermore, the
presence of outstanding Options granted under the Plan shall
not affect in any manner the right or power of the Company to
make, authorize or consummate (i) any or all adjustments,
recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger
or consolidation of the Company; (iii) any issuance by the
Company of debt securities or preferred or preference stock
which would rank above the Shares subject to outstanding
Options granted under the Plan; (iv) the dissolution or
liquidation of the Company; (v) any sale, transfer or
assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding,
whether of a similar character or otherwise.
(b) Notwithstanding anything to the contrary above, a dissolution
or liquidation of the Company, a merger (other than a merger
effecting a reincorporation of the Company in another state)
or consolidation in which the Company is not the surviving
corporation (or survives only as a subsidiary of another
corporation in a transaction in which the stockholders of the
parent of the Company and their proportionate interests
therein immediately after the transaction are not
substantially identical to the stockholders of the Company and
their proportionate interests therein immediately prior to the
transaction), a transaction in which another corporation
(other than Centex Corporation or one of its affiliates (as
defined in the Act)) becomes the owner of 50% or more of the
total combined voting power of all classes of stock of the
Company, or a change in control (as
A-7
<PAGE> 27
specified below), shall cause every Option then outstanding to
become exercisable in full, subject to the limitation on the
aggregate Fair Market Value of Shares that may become first
exercisable during any calendar year set forth in Section 16
hereof, immediately prior to such dissolution, liquidation,
merger, consolidation, transaction, or change in control, to
the extent not theretofore exercised, without regard to the
determination as to the periods and installments of
exercisability contained in the Agreements if (and only if)
such Options have not at that time expired or been terminated.
For purposes of this Section 12(b), a change in control shall
be deemed to have taken place if: (i) a third person (other
than Centex Corporation or one of its affiliates (as defined
in the Act)), including a "group" as defined in Section
13(d)(3) of the Act, becomes the beneficial owner of Shares of
the Company having 50% or more of the total number of votes
that may be cast for the election of directors of the Company;
or (ii) as a result of, or in connection with, a contested
election for directors, the persons who were directors of the
Company immediately before such election shall cease to
constitute a majority of the Board. Notwithstanding the
foregoing provisions of this paragraph, in the event of any
such dissolution, merger, consolidation, transaction, or
change in control, the Board may completely satisfy all
obligations of the Company and its Affiliates with respect to
any Option outstanding on the date of such event by delivering
to the Optionee cash in an amount equal to the difference
between the aggregate exercise price for Shares under the
Option and the Fair Market Value of such Shares on the date of
such event, such payment to be made within a reasonable time
after such event.
13. EFFECTIVE DATE
The Plan shall be effective on April 26, 2000, the date of its adoption
by the Board, but shall be submitted to the stockholders of the Company
for ratification at the next regular or special meeting thereof to be
held within twelve (12) months after the Board shall have adopted the
Plan. If at such a meeting of the stockholders of the Company a quorum
is present, in person or by proxy, the Plan shall be presented for
ratification, and unless at such a meeting the Plan is ratified by the
affirmative vote of a majority of the outstanding $0.01 par value
common stock of the Company, then and in such event, the Plan and all
Options granted under the Plan and all awards of Restricted Stock under
the Plan shall become null and void and of no further force or effect.
14. AMENDMENT, SUSPENSION OR TERMINATION
(a) Subject to the other terms and conditions of the Plan and the
limitations set forth in Section 14(b) hereof, the Board may
at any time amend, suspend or terminate the Plan; provided,
however, that after the stockholders have ratified the Plan,
the Board may not, without approval of the stockholders of the
Company, amend the Plan so as to:
(i) Increase the maximum number of Shares subject
thereto, as specified in Sections 4(a) and 12 hereof;
or
(ii) Increase the proportionate number of Shares which may
be purchased pursuant to an Option by any one person
or awarded as Restricted Stock to any one person, as
specified in Section 6(a) or Section 19(a) hereof.
(b) Neither the Board nor the Committee may amend the Plan or any
Agreement to reduce the option price of an outstanding Option
or modify, impair or cancel any existing Option without the
consent of the holder thereof.
A-8
<PAGE> 28
15. REQUIREMENTS OF LAW
Notwithstanding anything contained herein to the contrary, the Company
shall not be required to sell or issue Shares under any Option if the
issuance thereof would constitute a violation by the Optionee or the
Company of any provisions of any law or regulation of any governmental
authority or any national securities exchange; and as a condition of
any sale or issuance of Shares under Option the Company may require
such agreements or undertakings, if any, as the Company may deem
necessary or advisable to ensure compliance with any such law or
regulation.
16. INCENTIVE STOCK OPTIONS
The Committee, in its discretion, may designate any Option granted
under the Plan as an Incentive Option intended to qualify under Section
422 of the Code. Any provision of the Plan to the contrary
notwithstanding, (i) no Incentive Option shall be granted to any person
who, at the time such Incentive Option is granted, owns stock
possessing more than 10 percent of the total combined voting power of
all classes of stock of the Company or any Affiliate unless the
purchase price under such Incentive Option is at least 110 percent of
the Fair Market Value of the Shares subject to an Incentive Option at
the date of its grant and such Incentive Option is not exercisable
after the expiration of five years from the date of its grant, and (ii)
the aggregate Fair Market Value of the Shares subject to such Incentive
Option and the aggregate Fair Market Value of the shares of stock of
any Affiliate (or a predecessor of the Company or an Affiliate) subject
to any other incentive stock option (within the meaning of Section 422
of the Code) of the Company and its Affiliates (or a predecessor
corporation of any such corporation), that may become first exercisable
in any calendar year, shall not (with respect to any Optionee) exceed
$100,000, determined as of the date the Incentive Option is granted.
For purposes of this Section 16, "predecessor corporation" means a
corporation that was a party to a transaction described in Section
424(a) of the Code (or which would be so described if a substitution or
assumption under such section had been effected) with the Company, or a
corporation which, at the time the new incentive stock option (within
the meaning of Section 422 of the Code) is granted, is an Affiliate of
the Company or a predecessor corporation of any such corporations.
17. MODIFICATION OF OPTIONS
Subject to the terms and conditions of and within the limitations of
the Plan, the Committee may modify, extend or renew outstanding Options
granted under the Plan, or accept the surrender of Options outstanding
hereunder (to the extent not theretofore exercised) and authorize the
granting of new Options hereunder in substitution therefor (to the
extent not theretofore exercised), provided that to the extent existing
Options are exchanged for new Options, the total Options exchanged will
not exceed 10% of all Options then outstanding. Notwithstanding the
foregoing provisions of this Section 17, no modification of an Option
granted hereunder shall, without the consent of the Optionee, alter or
impair any rights or obligations under any Option theretofore granted
hereunder to such Optionee under the Plan, except as may be necessary,
with respect to Incentive Options, to satisfy the requirements of
Section 422 of the Code.
18. AGREEMENT PROVISIONS
(a) Each Agreement shall contain such provisions (including,
without limitation, restrictions or the removal of
restrictions upon the exercise of the Option and the transfer
of shares thereby acquired) as the Committee shall deem
advisable. Each Agreement shall identify the Option evidenced
thereby as an Incentive Option or Non-qualified Option, as the
case may be. Incentive Options and Non-qualified Options may
not both be covered by a single Agreement. Each such Agreement
relating to Incentive Options granted hereunder shall contain
such limitations and restrictions upon
A-9
<PAGE> 29
the exercise of the Incentive Option as shall be necessary for
the Incentive Option to which such Agreement related to
constitute an incentive stock option, as defined in Section
422 of the Code.
(b) Each Agreement relating to an Incentive Option shall contain a
covenant by the Optionee immediately to notify the Company in
writing of any disqualifying disposition (within the meaning
of Section 421(b) of the Code) of an Incentive Option.
19. RESTRICTED STOCK
(a) Shares of Restricted Stock may be awarded by the Committee to
such individuals as are eligible for grants of Options, as the
Committee may determine at any time and from time to time
before the termination of the Plan. The total number of Shares
of Restricted Stock awarded to any one person, including
directors of the Company, when aggregated with the number of
Shares subject to Options in favor of such person, shall not
exceed shall not exceed 10% of the Shares then subject to the
Plan.
(b) A Share of Restricted Stock is a Share that does not
irrevocably vest in the holder or that may not be sold,
exchanged, pledged, transferred, assigned or otherwise
encumbered or disposed of until the terms and conditions set
by the Committee at the time of the award of the Restricted
Stock have been satisfied. A Share of Restricted Stock shall
be subject to a minimum three-year vesting period and shall
contain such other restrictions, terms and conditions as the
Committee may establish, which may include, without
limitation, the rendition of services to the Company or its
Affiliates for a specified time or the achievement of specific
goals. The Committee may, when it deems it appropriate,
require the recipient of an award of Restricted Stock to enter
into an agreement with the Company evidencing the
understanding of the parties with respect to such award.
If an individual receives Shares of Restricted Stock, whether
or not escrowed as provided below, the individual shall be the
record owner of such Shares and shall have all the rights of a
stockholder with respect to such Shares (unless the escrow
agreement, if any, specifically provides otherwise), including
the right to vote and the right to receive dividends or other
distributions made or paid with respect to such Shares. Any
certificate or certificates representing Shares of Restricted
Stock shall bear a legend similar to the following:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ISSUED PURSUANT TO THE TERMS OF THE CENTEX
CONSTRUCTION PRODUCTS, INC. 2000 STOCK OPTION 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 DATED
________________, 20___ .
In order to enforce the restrictions, terms and conditions
that may be applicable to an individual's Shares of Restricted
Stock, the Committee may require the individual, upon the
receipt of a certificate or certificates representing such
Shares, or at any time thereafter, to deposit such certificate
or certificates, together with stock powers and other
instruments of transfer, appropriately endorsed in blank, with
the Company or an escrow agent designated by the Company under
an escrow agreement in such form as shall be determined by the
Committee.
After the satisfaction of the terms and conditions set by the
Committee at the time of an award of Restricted Stock to an
individual, which award is not subject to a non-lapse feature,
a new certificate, without the legend set forth above, for the
number of Shares that are no longer subject
A-10
<PAGE> 30
to such restrictions, terms and conditions shall be delivered
to the individual, either by delivery of a physical
certificate or an electronic transfer to a broker.
If an individual to whom Restricted Stock has been awarded
dies after satisfaction of the terms and conditions for the
payment of all or a portion of the award but prior to the
actual payment of all or such portion thereof, such payment
shall be made to the individual's beneficiary or beneficiaries
at the time and in the same manner that such payment would
have been made to the individual.
The Committee may cancel all or any portion of any outstanding
restrictions prior to the expiration of such restrictions with
respect to any or all of the Shares of Restricted Stock
awarded to an individual hereunder only upon the individual's
death, Disability or retirement on or after the earlier of (i)
such Optionee reaching age 65 or (ii) such time as the sum of
the Optionee's age and years of service equals 70, provided
such individual is at least 55. With respect to the occurrence
of any event specified in the last paragraph of Section 12
hereof, the restrictions, if any, applicable to any
outstanding Shares awarded as Restricted Stock shall lapse
immediately prior to the occurrence of the event.
(c) Subject to the provisions of Section 19(b) hereof, if an
individual to whom Restricted Stock has been awarded ceases to
be employed by at least one of the employers in the group of
employers consisting of the Company and its Affiliates, or
ceases to be a director of the Company, whichever may occur
later, for any reason prior to the satisfaction of any terms
and conditions of an award, any Restricted Stock remaining
subject to restrictions shall thereupon be forfeited by the
individual and transferred to, and reacquired by, the Company
or an Affiliate at no cost to the Company or the Affiliate. In
such event, the individual, or in the event of his death, his
personal representative, shall forthwith deliver to the
Secretary of the Company the certificates for the Shares of
Restricted Stock remaining subject to such restrictions,
accompanied by such instruments of transfer, if any, as may
reasonably be required by the Secretary of the Company.
(d) In case of any consolidation or merger of another corporation
into the Company in which the Company is the surviving
corporation and in which there is a reclassification or change
(including a change to the right to receive cash or other
property) of the Shares (other than a change in par value, or
from par value to no par value, or as a result of a
subdivision or combination, but including any change in such
shares into two or more classes or series of shares), the
Committee may provide that payment of Restricted Stock shall
take the form of the kind and amount of shares of stock and
other securities (including those of any new direct or
indirect parent of the Company), property, cash or any
combination thereof receivable upon such reclassification,
change, consolidation or merger.
20. TAX WITHHOLDING
The Company shall have the right to take whatever affirmative actions
are required, in the opinion of the Board or Committee, to enable the
Company or appropriate Affiliate to satisfy its payroll tax withholding
requirements, including but not limited to withholding cash from a
same-day-sale exercise of an Option and/or on exercise of an Option,
withholding Shares otherwise issuable to the Optionee. The Committee
may also permit withholding to be satisfied by the transfer to the
Company of Shares theretofore owned by the holder of the Non-qualified
Option with respect to which withholding is required. If Shares, either
covered by the Option or theretofore owned by the holder, are used to
satisfy tax withholding, such Shares shall be valued based on the Fair
Market Value when the tax withholding is required to be made. If Shares
subject to a substantial risk of forfeiture (as defined in Section
83(c)(1) or (c)(3) of the Code) are issuable on exercise of the Option
and the Optionee does not make a timely election under Section 83(b) of
the Code
A-11
<PAGE> 31
with respect thereto, the tax withholding is required to be made as of
the date on which the substantial risk of forfeiture lapses.
21. GENERAL
(a) The proceeds received by the Company from the sale of Shares
pursuant to Options shall be used for general corporate
purposes.
(b) Nothing contained in the Plan, or in any Agreement, shall
confer upon any Optionee or recipient of Restricted Stock the
right to continue in the employ of the Company or any
Affiliate, or interfere in any way with the rights of the
Company or any Affiliate to terminate his employment at any
time.
(c) Neither the members of the Board nor any member of the
Committee shall be liable for any act, omission, or
determination taken or made in good faith with respect to the
Plan or any Option or Restricted Stock granted under it; and
the members of the Board and the Committee shall be entitled
to indemnification and reimbursement by the Company in respect
of any claim, loss, damage or expense (including counsel fees)
arising therefrom to the full extent permitted by law and
under any directors and officers liability or similar
insurance coverage that may be in effect from time to time.
(d) As partial consideration for the granting of each Option or
award of Restricted Stock hereunder, the Optionee or recipient
shall agree with the Company that he will keep confidential
all information and knowledge which he has relating to the
manner and amount of his participation in the Plan; provided,
however, that such information may be disclosed as required by
law or given in confidence to the individual's spouse, tax or
financial advisors, or to a financial institution to the
extent that such information is necessary to secure a loan. In
the event any breach of this promise comes to the attention of
the Committee, it shall take into consideration such breach,
in determining whether to grant any future Option or award any
future Restricted Stock to such individual, as a factor
militating against the advisability of granting any such
future Option or awarding any such future Restricted Stock to
such individual.
(e) Participation in the Plan shall not preclude an individual
from eligibility in any other stock option plan of the Company
or any Affiliate or any old age benefit, insurance, pension,
profit sharing, retirement, bonus, or other extra compensation
plans which the Company or any Affiliate has adopted, or may,
at any time, adopt for the benefit of its employees or
directors.
(f) Any payment of cash or any issuance or transfer of Shares to
the Optionee, or to his legal representative, heir, legatee,
or distributee, in accordance with the provisions hereof,
shall, to the extent thereof, be in full satisfaction of all
claims of such persons hereunder. The Board or Committee may
require any Optionee, legal representative, heir, legatee, or
distributee, as a condition precedent to such payment, to
execute a release and receipt therefor in such form as it
shall determine.
(g) Neither the Committee nor the Board nor the Company guarantees
the Shares from loss or depreciation.
(h) All expenses incident to the administration, termination, or
protection of the Plan, including, but not limited to, legal
and accounting fees, shall be paid by the Company or its
Affiliates.
A-12
<PAGE> 32
(i) Records of the Company and its Affiliates regarding an
individual's period of employment, termination of employment
and the reason therefor, leaves of absence, re-employment,
tenure as a director and other matters shall be conclusive for
all purposes hereunder, unless determined by the Board or
Committee to be incorrect.
(j) The Company and its Affiliates shall, upon request or as may
be specifically required hereunder, furnish or cause to be
furnished, all of the information or documentation which is
necessary or required by the Board or Committee to perform its
duties and functions under the Plan.
(k) The Company assumes no obligation or responsibility to an
Optionee or recipient of Restricted Stock or his personal
representatives, heirs, legatees, or distributees for any act
of, or failure to act on the part of, the Board or Committee.
(l) Any action required of the Company shall be by resolution of
its Board or by a person authorized to act by resolution of
the Board. Any action required of the Committee shall be by
resolution of the Committee or by a person authorized to act
by resolution of the Committee.
(m) If any provision of the Plan or any Agreement is held to be
illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining provisions of the
Plan or the Agreement, as the case may be, but such provision
shall be fully severable and the Plan or the Agreement, as the
case may be, shall be construed and enforced as if the illegal
or invalid provision had never been included herein or
therein.
(n) Whenever any notice is required or permitted hereunder, such
notice must be in writing and personally delivered or sent by
mail. Any notice required or permitted to be delivered
hereunder shall be deemed to be delivered on the date on which
it is personally delivered, or, whether actually received or
not, on the third business day after it is deposited in the
United States mail, certified or registered, postage prepaid,
addressed to the person who is to receive it at the address
which such person has theretofore specified by written notice
delivered in accordance herewith. The Company, an Optionee or
a recipient of Restricted Stock may change, at any time and
from time to time, by written notice to the other, the address
which it or he had theretofore specified for receiving
notices. Until changed in accordance herewith, the Company and
each Optionee and recipient of Restricted Stock shall specify
as its and his address for receiving notices the address set
forth in the Agreement pertaining to the shares of Stock to
which such notice relates.
(o) Any person entitled to notice hereunder may waive such notice.
(p) The Plan shall be binding upon the Optionee or recipient of
Restricted Stock, his heirs, legatees, and legal
representatives, upon the Company, its successors, and
assigns, and upon the Board and Committee, and their
successors.
(q) The titles and headings of Sections and paragraphs are
included for convenience of reference only and are not to be
considered in construction of the provisions hereof.
(r) All questions arising with respect to the provisions of the
Plan shall be determined by application of the laws of the
State of Delaware except to the extent Delaware law is
preempted by federal law. The obligation of the Company to
sell and deliver Shares hereunder is subject to applicable
laws and to the approval of any governmental authority
required in connection with the authorization, issuance, sale,
or delivery of such Shares.
A-13
<PAGE> 33
(s) Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of the Plan dictates, the
plural shall be read as the singular and the singular as the
plural.
(t) Transactions related to the Plan, including but not limited to
the delivery and acceptance of any Agreement and the exercise
of any Option, whether in whole or in part, may be evidenced
by either signed documentation or on-line transactions through
the Stock Option Benefit Services Web Site of the Company's
designated broker, PaineWebber Incorporated, or the successor
thereof.
A-14
<PAGE> 34
------------------------------------------------------------------------------
CENTEX CONSTRUCTION PRODUCTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - JULY 20, 2000
The undersigned hereby appoints Laurence E. Hirsch and Richard D. Jones, Jr.
(acting unanimously or, if only one be present, by that one alone), and each of
them, proxies, with full power of substitution to each, to vote, as specified
on the reverse side, at the Annual Meeting of Stockholders of Centex
Construction Products, Inc. to be held July 20, 2000, or any adjournment
thereof, all shares of Common Stock of Centex Construction Products, Inc.
registered in the name of the undersigned at the close of business on June 1,
2000.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED ON THE BALLOT ON
THE REVERSE SIDE, BUT IF NO INSTRUCTIONS ARE INDICATED, THEN THIS PROXY WILL BE
VOTED FOR ITEMS 1 AND 2. THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO
ANY MATTER REFERRED TO IN ITEM 3.
By execution of this proxy, you hereby acknowledge receipt herewith of Notice
of Meeting and Proxy Statement dated June ___, 2000.
READ, EXECUTE AND DATE REVERSE SIDE AND MAIL IN THE ENCLOSED ENVELOPE.
------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
<PAGE> 35
<TABLE>
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------------
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2, AND AT THE DISCRETION OF THE Please mark
NAMED PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY BE BROUGHT BEFORE THE MEETING OR ANY ADJOURNMENT your vote as [X]
THEREOF. BY EXECUTING THIS PROXY, THE UNDERSIGNED HEREBY REVOKES PRIOR PROXIES RELATING TO THE MEETING. indicated in
this example
1. Election of directors listed to the right.
FOR all nominees WITHHOLD (INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THE
listed to the right AUTHORITY NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
(except as marked to vote for all
to the contrary). nominees listed
to the right. Robert L. Clarke, Laurence E. Hirsch, Richard D. Jones, Jr., David W. Quinn, Harold K. Work
[ ] [ ] -------------------------------------------------------------------------------------------
THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED AT THE ANNUAL MEETING.
2. To consider and vote on a proposal to approve and adopt the 3. In their discretion, on such other business as may properly be
Centex Construction Products, Inc. 2000 Stock Option Plan. brought before the meeting or any adjournment thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Dated , 2000
--------------------------------
-------------------------------------------
Signature
-------------------------------------------
Signature
NOTE: Please sign as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title.
------------------------------------------------------------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
</TABLE>
