<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>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
</TABLE>
Texas Industries, 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:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE> 2
<TABLE>
<S> <C>
TEXAS INDUSTRIES, INC.
[TXI LOGO] 1341 W. MOCKINGBIRD LANE - DALLAS, TEXAS 75247 - (972)
647-6700
</TABLE>
August 29, 2000
DEAR SHAREHOLDER:
You are cordially invited to attend the Annual Meeting of the Shareholders
of Texas Industries, Inc., to be held at 9:30 A.M. Central Daylight Time, on
Tuesday, October 17, 2000, at the Gerald J. Ford Stadium on the Southern
Methodist University Campus, located at 5800 Ownby (Central Expressway at
Mockingbird Lane) in Dallas, Texas.
The following Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the Annual Meeting. During the Annual
Meeting we will also report on the operations of the Company. Our 2000 Annual
Report accompanies this Proxy Statement.
It is important that your shares be represented at the Annual Meeting
regardless of the size of your holdings. If you are unable to attend in person,
we urge you to participate by voting your shares by proxy. You may do so by
filling out and returning the enclosed proxy card or by voting your proxy by
telephone.
If you arrive early, you are invited to have coffee and meet informally
with the Directors.
Sincerely,
/s/ ROBERT D. ROGERS
ROBERT D. ROGERS
President
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 17, 2000
The Annual Meeting of Shareholders of Texas Industries, Inc. (the
"Company") will be held at the Gerald J. Ford Stadium on the Southern Methodist
University Campus, located at 5800 Ownby (Central Expressway at Mockingbird
Lane) in Dallas, Texas, on Tuesday, October 17, 2000, at 9:30 A.M. (CDT) for the
following purposes:
1. To elect three (3) directors to terms expiring in 2003.
2. To transact such other business that may properly come before the
Annual Meeting or any adjournment thereof.
Only Shareholders of record at the close of business on August 23, 2000
will be entitled to vote at the Annual Meeting. A list of such Shareholders will
be open to the examination of any Shareholder during ordinary business hours for
a period of ten days prior to the Annual Meeting, at the Executive Offices of
the Company at 1341 W. Mockingbird Lane, Dallas, Texas.
While you are encouraged to attend the Annual Meeting, please vote your
shares as promptly as possible. For this year's Annual Meeting, the Company is
providing the additional option of voting your proxy by telephone. Therefore,
the Company requests that you either date, sign and return promptly the
accompanying proxy card in the enclosed envelope provided for that purpose or
instruct us by telephone as to how you would like your shares voted.
Instructions on how to vote your shares by telephone are on the accompanying
proxy card.
By Order of the Board of Directors,
/s/ ROBERT C.MOORE
ROBERT C. MOORE
Secretary
Dallas, Texas
August 29, 2000
<PAGE> 3
<TABLE>
<S> <C>
TEXAS INDUSTRIES, INC.
[TXI LOGO] 1341 W. MOCKINGBIRD LANE - DALLAS, TEXAS 75247 - (972)
647-6700
</TABLE>
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 17, 2000
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by
and on behalf of the Board of Directors of Texas Industries, Inc., a Delaware
corporation (the "Company"), of proxies for exercise at the Annual Meeting of
Shareholders of the Company to be held on October 17, 2000, and at any
adjournment thereof. The approximate date on which this Proxy Statement and
accompanying proxy were first sent to Shareholders is August 29, 2000.
The cost of soliciting proxies has been, or will be, borne by the Company.
In addition to solicitation by mail, the Company will request banks, brokers and
other custodians, nominees, and fiduciaries to send proxy material to the
beneficial owners and to secure their voting instructions, if necessary. The
Company will reimburse them for their expenses in so doing. If proxies are not
promptly received, officers and regular employees of the Company may solicit
proxies from some Shareholders in person, by telephone or by telecopy. In
addition, the Company has retained ChaseMellon Shareholder Services Group to
assist in the solicitation of proxies at a cost of $5,000 plus reasonable
out-of-pocket expenses.
OUTSTANDING VOTING STOCK AND QUORUM
The outstanding voting securities of the Company as of August 23, 2000,
were 21,070,893 shares of Common Stock. Each share is entitled to one vote. The
presence at the Annual Meeting, in person or by proxy, of the holders of a
majority of the issued and outstanding voting securities of the Company is
necessary to constitute a quorum to transact business.
VOTING OF PROXY
Although a Shareholder of record at the close of business on August 23,
2000 may not be able to attend the Annual Meeting in person, that Shareholder
has the opportunity to vote by using the proxy solicited by the Board of
Directors. Voting by use of the proxy can be accomplished either by dating,
signing and returning the proxy card in the envelope which is enclosed with this
document, or over the telephone by calling the toll-free number and following
the instructions set forth on the proxy card.
Shares cannot be voted at the Annual Meeting unless the owner is present or
represented by proxy. Any proxy may be revoked prior to the voting by notice in
writing to the Secretary of the Company at the address stated above, by
submitting another proxy by telephone, or by voting in person at the Annual
Meeting.
Whether a Shareholder chooses to vote by mail or telephone, a Shareholder
can specify approval, disapproval or absentia from each proposal set forth on
the proxy card. If the Shareholder properly signs and returns the proxy card or
votes by telephone without specifying how the shares are to be voted, those
shares will be voted in accordance with the Board of Directors' recommendations.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table furnishes information concerning all persons known to
the Company to beneficially own 5% or more of the Common Stock of the Company as
of June 30, 2000.
<TABLE>
<CAPTION>
NAME AND ADDRESS TITLE OF AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER SECURITY OF BENEFICIAL OWNERSHIP OF CLASS
------------------- -------- ----------------------- --------
<S> <C> <C> <C>
Bruce S. Sherman, Chairman, and
Private Capital Management, Inc................. Common Stock 1,606,828(1) 7.6
3003 Tamiami Trail N.
Naples, Florida 33940
J.R. Simplot/J.R. Simplot Self Declaration of
Revocable Trust................................. Common Stock 1,968,200(2) 9.35
999 Main Street
Boise, Idaho 83702
</TABLE>
---------------
(1) Based on Schedule 13G/A filed February 15, 2000 of both Private Capital
Management, Inc. and Bruce S. Sherman, its Chairman, which indicates that
(a) Bruce S. Sherman has sole voting and dispositive power over 7,000 shares
and shared dispositive power over 1,599,828 shares; and (b) Private Capital
Management, Inc. has shared dispositive power over 1,599,828 shares.
(2) Based on Amendment No. 1 to Schedule 13D dated February 16, 2000 which
indicates J.R. Simplot Self-Declaration of Revocable Trust has sole voting
and dispositive power over 1,968,200 shares.
2
<PAGE> 5
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The bylaws of the Company provide for a board of not fewer than three nor
more than twenty-one directors with the actual number to serve at any time to be
determined by resolution of the board. The bylaws further provide that the board
shall be divided into three classes, each class being as nearly equal in number
as possible. The three classes have staggered terms of three years. The terms of
office of three of the Directors expire at this Annual Meeting, all of which
have been nominated for reelection. The proxies solicited hereby cannot be voted
for a greater number of persons than the three nominees named below. Unless
otherwise indicated, all proxies that authorize the persons named therein to
vote for the election of directors will be voted for the election of the
nominees named below. Directors are elected by plurality vote. If any of the
nominees named should not be available for election as a result of unforeseen
circumstances, it is the intention of the persons named in the proxy to vote for
the election of such substitute nominee, if any, as the Board of Directors may
propose.
NOMINEES FOR DIRECTORS
The following are nominees for election as directors of the Company for a
term of office expiring at the Annual Meeting of Shareholders in 2003 or until
their respective successors shall have been elected and qualified.
<TABLE>
<CAPTION>
SERVED AS PROPOSED
PRINCIPAL OCCUPATION DIRECTOR TERM TO
NAME AGE DURING PAST FIVE YEARS* SINCE EXPIRE
---- --- ----------------------- --------- --------
<S> <C> <C> <C> <C>
John M. Belk................... 80 Chairman of the Board and Chief Executive 1998 2003
Officer of Belk, Inc. (department
stores), Charlotte, North Carolina,
since 1998; Chairman of the Board of
Belk Stores Services, Inc. (department
stores), Charlotte, North Carolina(a)
Gordon E. Forward.............. 64 Chairman, Applied Sustainability, LLC, 1991 2003
Austin, Texas since June 2000; Vice
Chairman of the Board of the Company
from July 1998 through May 2000;
President and Chief Executive officer of
Chaparral Steel Company (steel
manufacturer and subsidiary of the
Company) Midlothian, Texas until July
1998(b)
James M. Hoak, Jr. ............ 56 Principal of Hoak Capital Corporation 1995 2003
(private equity investment firm), Dallas,
Texas(c)
</TABLE>
3
<PAGE> 6
CONTINUING DIRECTORS
The term of office for each of the continuing directors expires at the
Annual Meeting of Shareholders to be held in the year indicated below, or until
his successor shall have been elected and qualified.
<TABLE>
<CAPTION>
SERVED AS
PRINCIPAL OCCUPATION DIRECTOR TERM TO
NAME AGE DURING PAST FIVE YEARS* SINCE EXPIRE
---- --- ----------------------- --------- --------
<S> <C> <C> <C> <C>
Gerald R. Heffernan............ 81 President, G.R. Heffernan & Associates, 1986 2001
Ltd. (investments), Toronto, Ontario,
Canada
Robert D. Rogers............... 64 President and Chief Executive Officer of 1970 2001
the Company (d)
Ian Wachtmeister............... 67 Chairman of The Empire, AB (metals 1977 2001
dealer), Stockholm, Sweden
Robert Alpert.................. 68 Chairman of the Board of The Alpert 1975 2002
Companies (financial services and real
estate), Dallas, Texas; Chairman of the
Board of Argo Funding Co. L.L.C.
(venture capital), Dallas, Texas, since
1998(d)
Eugenio Clariond Reyes......... 67 Director General of Grupo IMSA, S.A. 1998 2002
(metal fabrication), Monterrey, Mexico
Elizabeth C. Williams.......... 57 Treasurer, Southern Methodist University, 1995 2002
Dallas, Texas
</TABLE>
---------------
* Based upon information provided by the Directors to the Company as of July
1, 2000.
(a) Mr. Belk is a member of the Board of Directors of Belk, Inc. and Coca-Cola
Bottling Co. Consolidated.
(b) Mr. Forward is a member of the Board of Directors of Nexfor Inc.
(c) Mr. Hoak is a member of the Board of Directors of TeleCorp PCS, Inc.,
PanAmSat Corporation and Pier 1 Imports, Inc.
(d) Messrs. Rogers and Alpert are members of the Board of Directors of CNF
Transportation, Inc.
BOARD COMMITTEES, MEETINGS, ATTENDANCE AND FEES
The Board of Directors has an Audit Committee and a Compensation Committee
and the full Board of Directors acts in lieu of a Nominating Committee. The
Company's Compensation Committee, composed during the last fiscal year of
Directors Hoak (Chairman), Alpert and Clariond Reyes, met once during the year.
The Compensation Committee recommends and approves the salaries of top
management of the Company and all stock option awards to key employees of the
Company and its subsidiaries. Its actions are subject to the review and approval
of the Board of Directors.
The Company's Audit Committee, composed during the last fiscal year of
Directors Williams (Chairman), Belk and Wachtmeister, met twice during the year.
The Audit Committee reviews the scope, plan and results of the annual audit with
the independent auditors, approves and ratifies each professional service
provided by the independent auditors; considers the independence of the
auditors, and reviews and approves all non-audit fees paid to the independent
auditors.
The Board, acting in lieu of a Nominating Committee, will consider nominees
for directors recommended by Shareholders. Communications to the Board may be
addressed in care of the Company's Secretary at the Company's Executive Offices.
The Board of Directors met four times during the last fiscal year. Each
Director attended at least 75% of the meetings of the Board of Directors and the
meetings of the committees on which the Director served.
4
<PAGE> 7
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or its affiliates currently
receive $10,000 per year plus $1,000 for each day that a Board and/or a
Committee meeting is attended in person and $250 for each meeting attended by
conference telephone. In addition, on January 1 of each year, each non-employee
director receives an award of 500 restricted shares of the Company's Common
Stock under the Company's directors restricted award plan. The Chairman of the
Board, Gerald R. Heffernan, receives an additional 2,000 restricted shares of
the Company's Common Stock. The restrictions on the shares are removed at the
time the director ceases holding such position. Until such time, the director is
entitled to vote the shares and to receive all cash dividends. Under a deferred
compensation agreement, annual and meeting fees may be deferred in whole or in
part at the election of the director. Compensation so deferred is denominated in
shares of the Company's Common Stock determined by reference to the average
market price during the thirty (30) trading days prior to the date of the
agreement. Dividends are credited to the account in the form of Common Stock at
a value equal to the fair market value of the stock on the date of payment of
such dividend. Each non-employee director is automatically granted an option to
purchase 10,000 shares of Common Stock when first elected either by the Board,
or by the Shareholders at an annual meeting, and an option to purchase 5,000
shares of Common Stock each time that such director is reelected at an annual
meeting. The Company also reimburses directors for travel, lodging and related
expenses they may incur in attending Board and/or Committee meetings.
OTHER TRANSACTIONS
No reportable transactions occurred between the Company and any Director,
nominee for director, officer or any affiliate of, or person related to, any of
the foregoing since the beginning of the Company's last fiscal year (June 1,
1999).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised exclusively of Directors who are
not officers or employees of the Company. No executive officer of the Company
serves or has served during the year on the Compensation Committee or as a
director of another company, one of whose executive officers serves as a member
of the Compensation Committee or as a Director of the Company.
5
<PAGE> 8
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of June 30, 2000, the approximate number
of shares of Common Stock of the Company beneficially owned by each Director, by
each executive officer named in the Summary Compensation Table and by all
Directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
COMPANY COMMON STOCK
--------------------------------------
BENEFICIALLY OWNED**(1) PERCENT(2)
------------------------ ----------
<S> <C> <C>
Robert Alpert........................................ 21,610(3) *
John M. Belk......................................... 17,496(3) *
Melvin G. Brekhus.................................... 100,584 *
Eugenio Clariond Reyes............................... 6,000(3) *
Gordon E. Forward.................................... 59,328 *
Richard M. Fowler.................................... 180,104 *
Gerald R. Heffernan(4)............................... 305,500(3) 1.4
James M. Hoak, Jr. .................................. 30,000(3) *
Robert D. Rogers..................................... 499,906 2.3
Tommy A. Valenta(5).................................. 69,230 *
Ian Wachtmeister(6).................................. 26,594(3) *
Elizabeth C. Williams................................ 24,400(3) *
All Directors and Executive Officers as a Group (16
Persons)........................................... 1,464,765(2) 6.7
</TABLE>
---------------
* Represents less than one percent (1%) of the total number of shares
outstanding.
** Except as indicated in the notes below, each person has the sole voting and
investment authority with respect to the shares set forth in the above
table.
(1) Includes, with respect to such person (s) shares of Common Stock subject to
options exercisable within 60 days of June 30, 2000, as follows: Robert D.
Rogers, 209,000 shares; Robert Alpert, 14,000 shares; John M. Belk, 4,000
shares; Melvin G. Brekhus, 79,560 shares; Eugenio Clariond Reyes, 4,000
shares; Gordon E. Forward, 40,400 shares; Richard M. Fowler, 83,540 shares;
Gerald R. Heffernan, 17,000 shares; James M. Hoak, Jr., 18,000 shares; Tommy
A. Valenta, 43,672 shares; Ian Wachtmeister, 17,000 shares; Elizabeth C.
Williams, 22,000 shares; and all Directors and Executive Officers as a
Group, 646,352 shares.
(2) Based on the sum of (i) 21,070,893 shares of Common Stock, which on June 30,
2000, was the approximate number of shares outstanding, and (ii) the number
of shares subject to options exercisable by such person(s) within 60 days of
such date.
(3) Includes with the respect to such person(s) restricted shares of Common
Stock received as compensation as a non-employee director, as follows:
Robert Alpert, 2,500 shares; John M. Belk, 2,000 shares; Eugenio Clariond
Reyes, 2,000 shares; Gerald R. Heffernan, 8,500 shares; James M. Hoak, 2,000
shares; Ian Wachtmeister, 2,000 shares; and Elizabeth C. Williams, 2,000
shares.
(4) The wife of Mr. Heffernan owns 38,000 shares of Common Stock as to which he
disclaims beneficial ownership.
(5) A Children's Trust established by Mr. Valenta owns 1,128 shares of Common
Stock as to which he disclaims beneficial ownership.
(6) The wife of Mr. Wachtmeister owns 200 shares of Common Stock as to which he
disclaims beneficial ownership.
6
<PAGE> 9
EXECUTIVE COMPENSATION
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended May 31, 2000, 1999 and 1998, of those persons who were, at May 31, 2000,
(i) the Chief Executive Officer and (ii) the other four most highly compensated
executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------
AWARDS PAYOUTS
----------- -----------
ANNUAL COMPENSATION SECURITIES ALL OTHER
---------------------- UNDERLYING LTIP COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) PAYOUTS ($) ($)(3)
--------------------------- ---- ---------- --------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert D. Rogers.............. 2000 1,186,236 -- 20,000 -- 23,380
President and Chief 1999 860,894 -- 15,000 688,715(2) 23,450
Executive Officer 1998 1,318,651 303,290 45,000 1,054,921(2) 23,676
Melvin G. Brekhus............. 2000 267,308 67,362 16,600 160,000 6,656
Executive Vice President -- 1999 246,635 -- 40,000 232,500 6,867
Cement, Aggregates 1998 181,251 41,688 8,900 280,000 6,827
and Concrete
Tommy A. Valenta.............. 2000 267,308 67,362 16,600 160,000 6,656
Executive Vice President -- 1999 245,801 -- 40,000 232,500 6,867
Steel 1998 170,625 39,244 6,000 236,000 6,947
Richard M. Fowler(1).......... 2000 258,654 65,181 16,600 139,500 5,504
Executive Vice President -- 1999 232,500 -- 10,000 232,500 3,200
Finance 1998 225,000 130,500 8,200 416,175 3,000
Gordon E. Forward(1).......... 2000 300,000 -- -- -- 1,872
Vice Chairman of the Board 1999 298,462 -- -- 105,000 4,582
1998 300,000 105,000 11,000 165,386 19,913
</TABLE>
---------------
(1) Compensation for fiscal year 1998 includes compensation from June 1, 1997
through December 31, 1997 paid by Chaparral Steel Company.
(2) Payment of one-half of this cash incentive was deferred pursuant to the
terms of Mr. Rogers' employment contract.
(3) Vested and non-vested portion of amounts contributed and allocated by
employer to employee benefit plans.
Certain of the former executives of Chaparral Steel Company ("Chaparral"),
including Messrs. Forward and Fowler, have been granted performance shares under
a performance share plan established in 1976 when Chaparral was jointly owned by
the Company and Co-Steel Inc. The value of a performance share is based upon
Chaparral's annual financial results averaged over the preceding five years and
a cash dividend is paid on a performance share at the end of each fiscal year,
equal to 10% of Chaparral's earnings per share for such fiscal year, based on an
assumed 4.5 million shares. Performance shares are 40% vested after three years,
60% vested after four years, and 100% vested after five years. At five year
intervals, the plan requires, subject to several restrictions and conditions,
that a percentage of the vested portion be redeemed based on the age of the
executive such that 100% of vested shares are redeemed by the time the executive
reaches 65 years of age. In 1986, grants under the plan were discontinued.
Under an employment contract which extends through May 31, 2001, Robert D.
Rogers, the President and Chief Executive Officer of the Company, receives an
annual salary consisting of a $300,000 base and an annual award of 21,632 shares
of Common Stock, or the market value thereof in cash. In the event the annual
salary earned in a year is greater than $900,000, the Board of Directors may, in
its discretion, defer payment of salary earned in excess of $900,000 until
termination of employment. Such deferred amounts shall be treated
7
<PAGE> 10
in the same manner as the deferred incentive compensation discussed below. The
contract also has a long term incentive component which provides that in the
event the Company's consolidated average return on equity for the two
consecutive fiscal year periods ending May 31, 1997 and the four consecutive,
fiscal year periods ending May 31, 1998, 1999, 2000 and 2001, respectively,
equals or exceeds a return on equity objective of 16%, Mr. Rogers will receive
an incentive payment in respect of each year in which such objective is achieved
as follows: if the average return on equity is equal to or greater than 16% but
less than 21%, an incentive payment equal to 80% of salary, if 21% or greater,
the incentive payment will equal 160% of salary. Fifty percent of this latter
incentive will be paid in cash and 50% deferred until termination of employment
and distributed in three equal annual installments. Deferred incentive
compensation is denominated in shares of the Company's Common Stock determined
by reference to the fair market value of the stock (as defined in the employment
contract) at the time of deferral and dividends are credited to the deferred
account in the form of Common Stock at a value equal to the fair market value of
the stock on the date of payment of such dividend. The shares of Common Stock
credited to the account are adjusted to reflect any increase or decrease in the
number of shares outstanding as a result of stock splits, combination of shares,
recapitalizations, mergers or consolidations.
The Company offers financial security plans for substantially all of its
senior managerial and executive employees. The plans include disability benefits
under certain circumstances and death benefits payable to beneficiaries for a
period of ten years or until the participant would have attained age 65,
whichever last occurs. Participants who retire at or after attaining age 65 (age
60 in the case of executive officers) will be entitled to a supplemental
retirement benefit. In the event of termination of employment under certain
circumstances following a change in control (as defined in the plans), a
participant will be deemed to be fully vested in any supplemental retirement
benefit, without reduction, provided by the plans.
2000 STOCK OPTION GRANTS
The following table sets forth certain information concerning options
granted during the fiscal year ended May 31, 2000, to each executive officer
named in the Summary Compensation Table under the Company's stock option plan.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENT OF VALUE OF ASSUMED ANNUAL
NO. OF TOTAL RATE OF STOCK PRICE
SECURITIES OPTIONS EXERCISE APPRECIATION FOR OPTION
UNDERLYING GRANTED TO OR BASE TERM(2)
OPTIONS EMPLOYEES PRICE PER -------------------------
NAME GRANTED (#)(1) IN 2000 SHARES ($) EXPIRATION DATE 0% 5% 10%
---- -------------- ---------- ---------- ---------------- --- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert D. Rogers..... 20,000 8.45% 41.53125 January 12, 2010 -0- 522,376 1,323,802
Melvin G. Brekhus.... 16,600 7.01 41.53125 January 12, 2010 -0- 433,572 1,098,756
Tommy A. Valenta..... 16,600 7.01 41.53125 January 12, 2010 -0- 433,572 1,098,756
Richard M. Fowler.... 16,600 7.01 41.53125 January 12, 2010 -0- 433,572 1,098,756
Gordon E. Forward.... -- -- -- -- -- -- --
</TABLE>
---------------
(1) The options to purchase Common Stock become exercisable in annual
installments beginning one year from the date of grant.
(2) The dollar amounts under these columns are the result of calculation at 0%
and at the 5% and 10% rates set by the Securities and Exchange Commission
and are not intended to forecast possible future appreciation, if any, of
the price of the Company's Common Stock. The Company did not use an
alternative formula for a grant date value as it is not aware of any formula
which will determine with reasonable accuracy a present value based on
future unknown or volatile factors.
8
<PAGE> 11
OPTION EXERCISES AND YEAR-END VALUES
The following table provides information concerning each option exercised
during the fiscal year ended May 31, 2000, under the Company's stock option plan
by each of the named executive officers and the value of unexercised options
held by such executive officer on May 31, 2000.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE MONEY
NUMBER OF AT FISCAL OPTIONS AT FISCAL
SHARES YEAR END (#) YEAR END ($)(1)
ACQUIRED ON VALUE --------------------- -------------------------
NAME EXERCISE(#) REALIZED($) EXERCISED/UNEXERCISED EXERCISABLE/UNEXERCISABLE
---- ----------- ----------- --------------------- -------------------------
<S> <C> <C> <C> <C>
Robert D. Rogers............. -- -- 187,000/103,000 1,191,313/27,500
Melvin G. Brekhus............ -- -- 74,560/65,940 676,875/73,125
Tommy A. Valenta............. 928 13,717 38,672/63,800 273,788/71,613
Richard M. Fowler............ -- -- 75,140/49,760 609,871/120,758
Gordon E. Forward............ -- -- 40,400/30,600 136,125/90,750
</TABLE>
---------------
(1) Computed based upon the difference between aggregate fair market value and
aggregate purchase price.
PERFORMANCE GRAPH
The Company has two major business segments -- a cement, aggregate and
concrete ("CAC") segment and a steel segment. The following chart compares the
Company's cumulative total shareholder return on its Common Stock for the
five-year period ended May 31, 2000, with the cumulative total return of the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"), the Standard
& Poor's Steel Index (the "S&P Steel Group") and a Cement Peer Group comprised
of Lafarge Corporation, Lone Star Industries, Inc. (through October 4, 1999) and
Southdown, Inc. (the "Cement Peer Group"). These comparisons assume the
investment of $100 on May 31, 1995 and the reinvestment of dividends.
[GRAPH]
<TABLE>
<CAPTION>
TEXAS INDUSTRIES, INC. S&P 500(R) CEMENT PEER GROUP S&P STEEL
--------------------- ---------- ----------------- ---------
<S> <C> <C> <C> <C>
1995 100 100 100 100
1996 168 128 122 100
1997 130 166 157 104
1998 324 217 254 104
1999 200 263 239 89
2000 159 290 217 67
</TABLE>
9
<PAGE> 12
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is composed of three
non-employee Directors. The Committee establishes the general compensation
policies of the Company and the compensation incentive plans for executive
officers. It also administers the Company's stock option plan. The Company's
benefit plans, such as the Company's retirement plan and group insurance plan,
are administered by the Company's Human Resources Department.
General. The objective of the Company's management compensation program is
to (i) attract and retain highly qualified and productive individuals; (ii)
motivate such individuals; and (iii) align their interests with those of the
Company's Shareholders by building long-term value and thereby improving the
return to the Company's Shareholders. The program provides for competitive base
salaries, annual bonus opportunities, long-term incentives in the form of a
rolling three-year incentive plan, stock options and competitive benefits
including health, life and disability insurance, vacation, a financial security
plan and a savings and defined contribution retirement plan. Typically,
executives receive annual performance reviews. Such reviews cover considerations
such as revenue generated, operating profit, return on assets, cost
improvements, operational efficiency, safety, customer service, and cooperation
with other employees, depending on the responsibilities of the executive. Only
the Chief Executive Officer of the Company is subject to an employment
agreement.
Compensation Elements. The executive officers' total compensation objective
consists of three basic elements -- salaries, annual incentives and long-term
incentives. Annual and long-term incentives are a significant portion of total
compensation and are strongly linked to financial performance.
Salaries. Salaries comprise approximately 45% of the total compensation
objective for an executive other than the Chief Executive Officer. Salaries of
the Company's executive officers are determined by the Chief Executive Officer
within the general compensation policies established by the Committee.
Subjective criteria such as the impact the executive has on the Company, the
skills and experience required by the job, individual performance and internal
equities are considered in determining salary levels. Quantitative relative
weights are not assigned to the different criteria nor is a mathematical formula
followed. Salaries are also reviewed periodically and compared to industry and
geographic salary surveys to assure that they are in line with competitive
market levels. The Company may at times suspend or limit salary increases when
the operating performance of the Company will not support such increases.
Annual Incentives. In order to (i) encourage above-average performance and
teamwork, (ii) focus employee's work on short-term results which are key to the
Company's long-term business success, and (iii) attract and retain the best
possible employees by rewarding outstanding performance, the Board of Directors
annually considers the adoption for the ensuing fiscal year of a cash incentive
plan for employees, including the named executives (except for the Chief
Executive Officer), of the business units comprising the Company's business
segments who do not participate in an operations/production plan. Under this
annual incentive plan, a cash bonus equal to a designated percentage of an
eligible executive's annual wages is earned if the pre-established levels of
rates of return on equity (translated into a return on assets) is achieved by
the respective business units. Cash incentive awards increase based upon
specified return on equity levels pre-established by the Committee. Target
return on equity levels and the designated percentage of an executive's salary
are not established for executives individually; rather they are the same for
all executives in order to foster a team-based approach. The Board of Directors
has approved an annual incentive plan for fiscal year 2001 under which a
threshold return on equity for each of the business units has been established.
The threshold level pre-established for the incentive plan for fiscal year 2000
was exceeded by the CAC business segment enabling eligible executives to earn a
cash incentive. Approximately 10% of the total compensation objective for an
executive is based on this annual cash incentive plan.
Long-Term Incentives. Long-term incentives, which comprise approximately
45% of the executive's total compensation objective, are provided under a
rolling three-year executive cash incentive plan and the Company's stock option
plan.
10
<PAGE> 13
A continuous rolling three-year cash incentive plan has been established
for certain executives of the Company including, except for the Chief Executive
Officer, the named executives. For an executive to earn an annual cash incentive
award under this plan, the Company must reach or surpass the average return on
equity threshold established for the three-year period ending in the year in
respect of which the incentive is earned. If the average threshold is reached or
surpassed, the participating executives can earn a cash incentive award ranging
from 35% to 120% or more of the executive's base salary, depending on the return
on asset or return on equity achieved, as the case may be, and the
recommendation of the chief executive officer based upon his subjective
evaluation of the executive's individual performance. Under this plan, a minimum
threshold to be achieved in order to earn a cash incentive award is established
annually for the next three-year period. Minimum thresholds based on a
calculated average return on assets for the Company have been established for
each of the consecutive three-year periods through May 31, 2003. In 2000, the
Compensation Committee established a minimum threshold for the three-year period
ending May 31, 2003 based on a calculated average return on equity for this
segment. The Committee believes that the rolling three-year plan focuses plan
participants on growth and profitability for the Company. The average return on
asset threshold established by the Committee for the rolling three years ending
with the Company's 2000 fiscal year was achieved and the participating
executives were awarded incentive payments in accordance with the plan.
The Committee believes that ownership of the Company's stock is an
important element of its executive compensation program. When granted under the
Company's Stock Option Plan, stock options have exercise prices of not less than
100% of the fair market value of the Company's Common Stock on the date of
grant, become exercisable 20% after one year, 40% after two years, 60% after
three years, 80% after four years and 100% five years after grant, and all
expire not more than ten years after grant. Unlike cash, the value of a stock
option award will not be immediately realized and will be dependent on the
market value of the Common Stock in the future; thus, the option not only
provides the executive an incentive for years after it has been awarded but ties
this incentive program directly into increasing shareholder value. Stock options
also strengthen the ability of the Company to attract, motivate and retain
executives of superior capability required to achieve the Company's business
objectives in an intensely competitive environment. Options are granted under
guidelines established under the general compensation policies of the Company.
An executive is targeted to have between three to five times annual salary in
accumulated options priced at the time of grant, such grants occurring annually.
Under these guidelines, during fiscal year 2000, Robert D. Rogers, Melvin G.
Brekhus, Tommy A. Valenta and Richard M. Fowler received stock option awards of
20,000, 16,600, 16,600, and 16,600 respectively.
Chief Executive Officer's 2000 Compensation. Compensation for the Chief
Executive Officer ("CEO") is determined through a process similar to that
discussed above for executive officers in general and is embodied in the terms
of an employment contract. During 2000, the CEO's compensation was paid in
accordance with the terms of an employment contract which expires at the end of
the fiscal year ending May 31, 2001. Pursuant to the terms of the employment
contract (see Executive Compensation), the CEO received an annual salary
consisting of a $300,000 base component and an award in cash equal to the fair
market value of 21,632 shares of Common Stock. The shareholder-approved
long-term incentive plan objective set forth in his employment contract was not
achieved by the Company, and as a result the CEO received no incentive
compensation.
Tax Deductibility of Executive Compensation. The Omnibus Budget
Reconciliation Act of 1993 added Section 162(m) to the Internal Revenue Code.
Section 162(m) makes certain "non-performance based" compensation to certain
executives of the Company in excess of $1,000,000 non-deductible to the Company.
To qualify as "performance-based compensation", performance goals must be
pre-established and such goals approved by the Company's Shareholders before
such compensation is paid. To satisfy the requirements of Section 162(m), the
Company submitted and obtained approval of the Company's Shareholders of the
incentive payment provisions of the Chief Executive Officer's employment
contract. The Company generally intends to structure the compensation with its
executives to achieve maximum deductibility under Section 162(m) with minimum
sacrifices in flexibility and corporate objectives.
James M. Hoak, Chairman Eugenio Clariond Reyes, Member
Robert Alpert, Member
11
<PAGE> 14
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 generally requires
the Company's Directors and executive officers and persons who own more than 10%
of a registered class of the Company's equity securities ("10% owners") to file
with the Securities and Exchange Commission and the New York Stock Exchange
initial reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company. Directors, executive officers and
10% owners are required by the Securities and Exchange Commission regulation to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on review of copies of such reports furnished to the Company and written
transaction reports of its Directors and executive officers indicating that no
other reports were required to be filed during the 2000 fiscal year, the Company
believes that all filing requirements applicable to its Directors, executive
officers and 10% owners were complied with in accordance with Section 16(a).
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP were the Company's independent auditors for the last
fiscal year and will continue to be for the current year. A representative of
Ernst & Young LLP will attend the Annual Meeting; and although such
representative does not intend to make a statement to the Shareholders, such
representative will be available to respond to any relevant questions of the
Shareholders.
ANNUAL REPORT
A copy of the Company's Annual Report for the fiscal year ended May 31,
2000, is being mailed to each Shareholder of record along with the proxy
material, but is not to be considered as a part of the proxy soliciting
materials.
2001 SHAREHOLDER PROPOSALS
Proposals of Shareholders intended to be presented at the next Annual
Meeting of Shareholders presently scheduled for October 16, 2001, must be
received by the Secretary of the Company not later than May 1, 2001, to be
eligible for inclusion in the proxy statement and form of proxy relating to that
meeting.
Proposals of Shareholders intended to be presented at the next Annual
Meeting of Shareholders which are not received by the Secretary of the Company
before May 1, 2001 shall be untimely. Upon the presentation at the next Annual
Meeting of Shareholders of any matter not timely proposed, the persons named in
the proxy accompanying the Company's proxy statement relating to that meeting
will have the discretionary authority to vote all proxies on such matters in
accordance with their best judgment.
OTHER MATTERS
At the date of this Proxy Statement, the Board of Directors was not aware
that any matters not referred to in this Proxy Statement would be presented for
action at this Annual Meeting. If any other matters should come before the
Annual Meeting, the persons named in the accompanying proxy will have the
discretionary authority to vote all proxies in accordance with their best
judgment.
By Order of the Board of Directors,
/s/ ROBERT MOORE
ROBERT C. MOORE
Secretary
12
<PAGE> 15
FOR SHARES OF COMMON STOCK
TEXAS INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS OCTOBER 17, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints ROBERT ALPERT, GERALD R. HEFFERNAN and
ROBERT D. ROGERS, or any of them, attorneys and proxies, with power of
substitution and revocation, to vote, as designated on the reverse side, all
shares of stock which the undersigned is entitled to vote, with all powers
which the undersigned would possess if personally present, at the Annual
Meeting (including all adjournments thereof) of shareholders of Texas
Industries, Inc. to be held on Tuesday, October 17, 2000 at 9:30 A.M. (CDT) at
the Gerald J. Ford Stadium on the Southern Methodist University Campus, located
at 5800 Ownby (Central Expressway at Mockingbird Lane) in Dallas, Texas.
The proxy, when duly executed, will be voted in the manner directed herein,
and in the absence of specific directions to the contrary, this proxy will be
voted (i) for the election of the three nominees for director, and (ii) in the
discretion of the proxy holders on any other matters that may properly come
before the meeting and any adjournments thereof.
This proxy is solicited on behalf of the Board of Directors of the Company
and may be revoked prior to its exercise. The Board of Directors of the Company
requests that you promptly execute and mail this Proxy.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
o FOLD AND DETACH HERE o
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF TWO WAYS:
1. Call TOLL FREE 1-800-840-1208 on a Touch Tone telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
NOTE: Telephone voting option closes at 3:00 (P.M.) (CDT)
on October 16, 2000.
OR
2. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
PLEASE VOTE
<PAGE> 16
TO VOTE IN ACCORDANCE WITH THE BOARD OF Please mark
DIRECTOR'S RECOMMENDATIONS JUST SIGN your votes as [X]
BELOW; NO BOXES NEED TO BE CHECKED. THE indicated in
BOARD OF DIRECTORS RECOMMENDS A VOTE this example
FOR THE PROPOSALS IN ITEMS 1 AND 2
Item 1 - Election of Directors (see reverse). 01 John M. Belk, 02 Gordon E.
Forward and 03 James M. Hoak,
FOR all nominees WITHHOLD Jr. to serve in a class of
(except as AUTHORITY directors with a term expiring
specified hereon) to vote for all in 2003.
nominees listed at right
(Instruction: To withhold
authority to vote for an
individual nominee write that
nominee's name on the space
provided below.)
Item 2 - To transact such other business THIS PROXY WHEN PROPERLY
that may properly come before the meeting. EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE
UNDERSIGNED. IN THE ABSENCE OF
SUCH INSTRUCTIONS THIS PROXY
WILL BE VOTED FOR THE NOMINEES
LISTED IN ITEM 1 AND FOR THE
PROPOSAL IN ITEM 2.
(Sign exactly as name(s)
appear hereon. If shares are
held jointly each holder
should sign. If signing for
estate, trust or corporation,
title or capacity should be
stated.)
Please date, sign and return
this Proxy in the enclosed
business envelope.
Dated:__________________, 2000
______________________________
______________________________
[FOLD AND DETACH HERE AND READ THE REVERSE SIDE]
[VOTE BY TELEPHONE]
[QUICK *** EASY *** IMMEDIATE]
YOUR VOTE IS IMPORTANT! - YOU CAN VOTE IN ONE OF TWO WAYS:
1. TO VOTE BY PHONE: Call toll-free 1-800-840-1208 on a touch tone telephone 24
hours a day - 7 days a week
There is NO CHARGE to you for this call. - Have your proxy card in hand.
You will be asked to enter a Control Number, which is located in the box in the
lower right hand corner of this form
________________________________________________________________________________
OPTION 1: To vote as the Board of Directors recommends on ALL proposals,
press 1
________________________________________________________________________________
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
________________________________________________________________________________
OPTION 2: If you choose to vote on each Proposal separately, press 0. You
will hear these instructions:
________________________________________________________________________________
Proposal 1 - To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL nominees,
press 9
To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to the
instructions
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
The instructions are the same for Proposal 2.
OR
2. TO VOTE BY PROXY: Mark, sign and date your proxy card and return
promptly in the enclosed envelope.
NOTE: If you vote by telephone, THERE IS NO NEED TO MAIL BACK your Proxy Card.
Telephone voting option closes at 3:00 P.M. (CDT) on October 16, 2000.
THANK YOU FOR VOTING.
