-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RiNgyxxvrDiAVJeP9TlKT36TFwNkh+8LtySZ5f3FucssCbkyWeJTOVwVoGbD6ADm zfDs51aHCAjrFMH4Z8pQ5w== 0000103973-96-000005.txt : 19960401 0000103973-96-000005.hdr.sgml : 19960401 ACCESSION NUMBER: 0000103973-96-000005 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 21 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960329 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VULCAN MATERIALS CO CENTRAL INDEX KEY: 0000103973 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 630366371 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04033 FILM NUMBER: 96541002 BUSINESS ADDRESS: STREET 1: ONE METROPLEX DR CITY: BIRMINGHAM STATE: AL ZIP: 35209 BUSINESS PHONE: 2058773000 MAIL ADDRESS: STREET 1: PO BOX 530187 CITY: BIRMINGHAM STATE: AL ZIP: 35253-0187 10-K 1 10K95 FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 (Mark One) [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to Commission file number 1-4033 VULCAN MATERIALS COMPANY (Exact name of registrant as specified in its charter) New Jersey 63-0366371 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Metroplex Drive, Birmingham, Alabama 35209 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (205) 877-3000 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered Common Stock, $1 Par Value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the registrant as of February 29, 1996: Common Stock, $1 Par Value $1,894,775,320 The number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: Shares outstanding at February 29, 1996 Common Stock, $1 Par Value 34,926,734 Documents Incorporated by Reference: Portions of the registrant's Annual Report to Shareholders for the year ended December 31, 1995, are incorporated by reference into Parts I, II and IV of this Annual Report on Form 10-K. Portions of the registrant's annual proxy statement for the annual meeting of its shareholders to be held on May 17, 1996, are incorporated by reference into Part III of this Annual Report on Form 10-K. VULCAN MATERIALS COMPANY CROSS REFERENCE SHEET FOR DOCUMENTS INCORPORATED BY REFERENCE HEADING IN ANNUAL REPORT PAGE IN FORM 10-K TO SHAREHOLDERS FOR ANNUAL ITEM NO. YEAR ENDED DECEMBER 31, 1995 REPORT 1. Business (Financial Results Segment Financial Data 22-23 by Business Segments) Note 11, Segment Data 44 Note 13, Callaway Chemical Acquisition 45 3. Legal Proceedings Note 9, Other Commitments and Contingent Liabilities 43 5. Market for the Registrant's Common Stock Market Prices Common Equity and Related and Dividends 21 Stockholder Matters 6. Selected Financial Data Selected Financial Data 20 7. Management's Discussion and Management's Discussion Analysis of Financial and Analysis 24-31 Condition and Results Financial Terminology 47 of Operations 8. Financial Statements and Consolidated Statements 34 Supplementary Data of Earnings Consolidated Balance Sheets 35 Consolidated Statements of Cash Flows 36 Consolidated Statements of Shareholders' Equity 37 Notes to Financial Statements 38-45 Management's Responsibility for Financial Reporting and Internal Control 46 Independent Auditors' Report 46 Supplementary Information- Quarterly Financial Data (Unaudited) 32 14. Exhibits, Financial Statement Management's Discussion Schedules and Reports on and Analysis 24-31 Form 8-K HEADING IN PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 17, 1996 10. Directors and Executive Election of Directors; Nominees for Officers of the Registrant Election to the Board of Directors; Directors Continuing in Office; Compliance with the Securities Exchange Act 11. Executive Compensation Compensation of Directors; Executive Compensation; Shareholder Return Performance Presentation; Retirement Income Plan; Employee Special Severance Plan 12. Security Ownership of Security Ownership of Certain Certain Beneficial Owners Beneficial Owners; Security and Management Holdings of Management VULCAN MATERIALS COMPANY ANNUAL REPORT ON FORM 10-K Fiscal Year Ended December 31, 1995 CONTENTS PART ITEM PAGE I 1 Business 1 2 Properties 5 3 Legal Proceedings 8 4 Submission of Matters to a Vote of Security Holders 12 4 a. Executive Officers of the Registrant 12 II 5 Market for the Registrant's Common Equity and Related Stockholder Matters 13 6 Selected Financial Data 13 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 13 8 Financial Statements and Supplementary Data 14 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 14 III 10 Directors and Executive Officers of the Registrant 14 11 Executive Compensation 14 12 Security Ownership of Certain Beneficial Owners and Management 15 13 Certain Relationships and Related Transactions 15 IV 14 Exhibits, Financial Statement Schedules, and Reports on Form 8-K 15 -- Signatures 22 PART I ITEM 1. BUSINESS Vulcan Materials Company, a New Jersey corporation incorporated in 1956, and its subsidiaries (together called the "Company") are principally engaged in the production, distribution and sale of construction materials ("Construction Materials") and industrial and specialty chemicals ("Chemicals"). Construction Materials and Chemicals may each be considered both a segment (or a line of business) and a class of similar products. The Company is the nation's leading producer of construction aggregates. All of the Company's products are marketed under highly competitive conditions, including competition in price, service and product performance. There are a substantial number of competitors in both the Construction Materials segment and Chemicals segment. No material part of the business of either segment of the Company is dependent upon a single customer or upon a few customers, the loss of any one of which would have a materially adverse effect on the segment. The Company's products are sold principally to private industry. Although large amounts of construction materials are used in public works, relatively insignificant sales are made directly to federal, state, county or municipal governments, or agencies thereof. The Company conducts research and development activities for both of its business segments. The Construction Materials research and development laboratory is located near Birmingham, Alabama. The Chemicals research and development laboratories are located in Wichita, Kansas and Columbus, Georgia. In general, the Company's research and development effort is directed to applied technological development for the use of its Construction Materials and Chemicals products as well as for the manufacturing or processing of its Chemicals products. The Company spent approximately $1,132,000 in 1993, $1,080,000 in 1994 and $1,142,000 in 1995 on research and development activities for its Construction Materials segment. The Company spent approximately $4,941,000 in 1993, $7,215,000 in 1994 and $9,159,000 in 1995 on research and development activities for its Chemicals segment. The Company estimates that capital expenditures for environmental control facilities in the current fiscal year (1996) and the succeeding fiscal year (1997) will be approximately $5,173,000 and $1,986,000, respectively, for the Construction Materials segment, and $15,042,000 and $5,410,000, respectively, for the Chemicals segment. The Company's principal sources of energy are electricity, natural gas and diesel fuel. The Company does not anticipate any material difficulty in obtaining the required sources of energy required for its operations. In 1995, the Construction Materials segment employed an average of approximately 5,153 people. The Chemicals segment employed an average of approximately 1,613 people. The Company's corporate office employed an average of approximately 152 people. The Company considers its relationship with its employees to be good. Financial results of the Company for any individual quarter are not necessarily indicative of results to be expected for the year, due primarily to the effect that weather can have on the sales and production volume of the Construction Materials segment. Normally, the highest sales and earnings of the Construction Materials segment are attained in the third quarter and the lowest are realized in the first quarter. CONSTRUCTION MATERIALS The Company's construction aggregates business consists of the production and sale of crushed stone, sand, gravel, rock asphalt and crushed slag (a by-product of steel production). Crushed stone constituted approximately 77% of the dollar volume of the Construction Materials segment's 1995 sales, as compared to 75% in 1994 and 74% in 1993. Construction aggregates of suitable characteristics are employed in virtually all types of construction, including highway construction and maintenance, and in the production of asphaltic and portland cement concrete mixes. They also are widely used as railroad track ballast. Each type of aggregate is sold in competition with other types of aggregates and in competition with other producers of the same type of aggregate. Because of the relatively high transportation costs inherent in the business, competition generally is limited to the areas in relatively close proximity to production facilities. Noteworthy exceptions are the areas along the Mississippi and Tennessee-Tombigbee river systems and the Gulf Coast which are served by the Company's Reed quarry, areas served by rail-connected quarries, and the areas along the Gulf Coast served by ocean-going vessels that transport stone from the Company's joint venture operation in Mexico. The Company's construction aggregates are sold principally in portions of most of the southeastern states, portions of Texas, northern and central Illinois, northern Indiana and southern Wisconsin. Shipments of all construction aggregates from the Company's domestic operations in 1995 totaled approximately 136 million tons, with crushed stone shipments to customers accounting for 129 million tons. In 1995, the Company, directly or through joint ventures, operated 121 domestic permanent and portable plants at quarries located in 13 states for the production of crushed limestone and granite with estimated reserves totaling approximately 7.5 billion tons. In 1995, the Company, directly or through joint ventures, operated 13 sand and gravel plants, four slag plants and various other types of plants which produce rock asphalt, mineral filler, pulverized limestone and fine grind products. Estimates of sand and gravel reserves, calculated in a manner comparable to the estimates of stone reserves set forth above, total approximately 42 million tons. Other Construction Materials products and services include asphaltic concrete, ready-mixed concrete, trucking services, barge transportation, coal handling services, a Mack Truck distributorship, paving construction, dolomitic lime, emulsified asphalt and several other businesses. Environmental and zoning regulations have made it increasingly difficult for the construction aggregates industry either to expand existing quarries or to develop new quarries. Although it cannot be predicted what policies will be adopted in the future by governmental bodies regarding environmental controls which affect the Construction Materials industry, the Company anticipates that future environmental control costs will not have a materially adverse effect upon its business. CHEMICALS The Chemicals Division is organized in two business units: the Chloralkali Business Unit which manages the Company's chloralkali business, and the Performance Systems Business Unit which manages the Company's specialty chemicals business. The principal chemicals produced by the Chloralkali Business Unit at the Company's three chloralkali plants described in Item 2 below, are chlorine, caustic soda (sodium hydroxide), muriatic acid, caustic potash (potassium hydroxide) potassium carbonate, chlorinated hydrocarbons and calcium chloride. Chlorine and various hydrocarbons (primarily ethylene and methanol) are used to produce the Unit's line of chlorinated hydrocarbons, including methylene chloride, perchloroethylene, chloroform, methyl chloride, ethylene dichloride, carbon tetrachloride, methyl chloroform and pentachlorophenol. Principal markets for the Chloralkali Business Unit's chemical products and services include pulp and paper, energy, food, pharmaceutical, cleaning, chemical processing, fluorocarbons, water treatment and textiles. In the paper-making industry, chlorine is used in pulp and paper bleaching, while caustic soda is used primarily in the kraft and sulfite pulping process. The Company supplies hydrochloric acid to the energy industry for use in oil well stimulation and gas extraction. Caustic soda also is used to demineralize water for steam production at electrical energy facilities and to remove sulfur from gas and coal. Hydrochloric acid, caustic soda, methylene chloride and caustic potash are used by the food and pharmaceutical industries. Perchloroethylene, methylene chloride and methyl chloroform are used in industrial cleaning applications. Perchloroethylene is also used in the drycleaning industry. Potassium carbonate is used in the manufacture of screen glass, rubber antioxidants and other chemicals. The Chloralkali Business Unit's sales to the chemical processing industry serve companies that produce organic and inorganic chemical intermediates and finished products ranging from clay-based catalysts to agricultural herbicides. Products sold to this market include hydrochloric acid, chlorine, caustic soda and caustic potash. The Company sells perchloroethylene, chloroform and methyl chloroform to the fluorocarbons market. Chlorine is used in water and sewage treatment, and caustic soda and caustic potash are used in the production of soaps and detergents. Chlorine also is used as an industrial bleaching agent, in cleaning applications for the electronics industry, as a biocide in the fruit processing industry and in various applications in the oil industry. Calcium chloride, produced at the Company's Wichita complex, has a multitude of uses including de-icing of roads, dust control, road stabilization and oil well completion. The principal chemicals produced for the Performance Systems Business Unit by the Company's Callaway Chemical subsidiaries include process aids for the pulp and paper and textile industries and various water treatment chemicals. Through its Rio Linda Chemical subsidiary, the Performance Systems Business Unit assembles and markets small-scale chlorine dioxide generators, and sells related chemicals (primarily sodium chlorite manufactured by the Company) and services to the water treatment, food processing and pulp and paper industries. Additionally, through its Rio Linda Chemical subsidiary, the Performance Systems Business Unit assembles and markets equipment, and sells related chemicals (primarily hydrogen peroxide purchased from others) and services, to the municipal and industrial water treatment markets. The Performance Systems Business Unit produces sodium chlorite at the Chloralkali Business Unit's Wichita plant which is used in the water treatment, food processing, pulp and paper, textile and electronics industries. The Performance Systems Business Unit also markets sodium hydrosulfite which is used primarily in the pulp and paper industry and produced at the Port Edwards Plant. In February 1996, the Company sold the assets relating to its perox-pure business formerly held by its subsidiary, Vulcan Peroxidation Systems Inc. ("VPSI"). The remaining assets of VPSI relating to its perox-serv business have been transferred to the Company's Rio Linda Chemical subsidiary. The Company competes throughout the United States with numerous companies, including some of the largest chemical companies, in the production and sale of its lines of chemicals. The Company also competes for sales to customers located outside the United States, with sales to such customers currently accounting for approximately 6% of the Company's chemicals sales. In December 1995, the Company suspended funding for the development of its joint venture soda ash project at Owens Lake, California. The venture had encountered a continuing series of permitting delays and other obstacles that adversely affected the project. In the fourth quarter of 1995, the Company expensed the costs incurred in engineering and permitting in connection with this venture. The Company's underground reserves of salt, which is a basic raw material in the production of chlorine and caustic soda, are located at or near its Wichita, Kansas, and Geismar, Louisiana, plants. The Company purchases salt for its Port Edwards, Wisconsin, plant. Ethylene, methanol, and vinyl chloride monomer, the other major raw materials used in the Chloralkali Business Unit and various chemicals used by the Performance Systems Business Unit are purchased from several different suppliers. Sources of salt, ethylene, methanol, vinyl chloride monomer and other various chemicals are believed to be adequate for the Company's operations and the Company does not anticipate any material difficulty in obtaining the raw materials which it uses. The Company's chemical operations are subject to the Resource Conservation and Recovery Act ("RCRA"). Under the corrective action requirements of RCRA, the Environmental Protection Agency ("EPA") must identify facilities subject to RCRA's hazardous waste permitting provisions where practices in the past have caused releases of hazardous waste or constituents thereof. The owner of any such facility is then required to conduct a Remedial Facility Investigation ("RFI") defining the nature and extent of any such releases described by the EPA. If the results of the RFI determine that constituent concentrations from any such release exceed action levels specified by the EPA, the facility owner is further required to perform a Corrective Measures Study ("CMS") identifying feasible technological alternatives for addressing these releases. Depending upon the results reported to the EPA in the RFI and CMS, the EPA subsequently may require Corrective Measures Implementation ("CMI") by the facility owner - essentially, implementation of a cleanup plan developed by the EPA based on the RFI and CMS. The Company expects to incur RFI and CMS costs over the next several years at its Geismar, Port Edwards and Wichita manufacturing facilities. For each of these three facilities, the RFI and CMS results will determine whether the EPA subsequently requires a CMI to address releases at the facility, and the scope and cost of any such CMI. With respect to those RFI and CMS costs that currently can be reasonably estimated, the Company has determined that its accrued reserves are adequate to cover such costs. However, the total costs which ultimately may be incurred by the Company in connection with discharging its obligations under RCRA's corrective action requirements cannot reasonably be estimated at this time. Various other environmental regulations also have a restrictive effect upon the chemicals industry, both as to production and sales, particularly the production and sale of certain chemicals which are subject to regulation as ozone depleting chemicals. The production and marketing of carbon tetrachloride ended effective January 1, 1996, for all end uses except for exports to Article 5 countries as defined by the Montreal Protocol on Ozone Depleting Chemicals. The production of methyl chloroform for emissive applications also ended effective January 1, 1996. Existing inventory of methyl chloroform may continue to be marketed for emissive uses. In addition, methyl chloroform will continue to be produced and marketed for non- emissive uses while carbon tetrachloride will continue to be produced and marketed for export to Article 5 countries. However, sales volume of both products will be significantly lower than in prior years. FINANCIAL RESULTS BY BUSINESS SEGMENTS Net sales, earnings, identifiable assets and related financial data for each of the Company's business segments for the three years ended December 31, 1995, are reported on page 44 (Note 11 of the Notes to Financial Statements) and on pages 22 and 23 (under the caption "Segment Financial Data") in the Company's 1995 Annual Report to Shareholders, which pages are incorporated herein by reference. ITEM 2. PROPERTIES CONSTRUCTION MATERIALS The Company's current estimate of approximately 7.5 billion tons of domestic stone reserves is approximately 200 million tons less than the estimate reported at the end of 1994. Decreases in the Company's reserves have resulted from 1995 production tonnage and the sale of quarry sites in Iowa. These decreases have been partially offset by leases or acquisitions of new quarry sites and revisions in mining plans. Management believes that the quantities of reserves at the Company's stone quarries are sufficient to result in an average quarry life of approximately 60 years at present operating levels. The foregoing estimates of reserves are of recoverable stone of suitable quality for economic extraction, based on drilling and studies by the Company's geologists and engineers, recognizing reasonable economic and operating restraints as to maximum depth of overburden and stone excavation. These estimates do not include reserves at the Company's inactive and undeveloped sites nor reserves in joint ventures. Of the 121 domestic stone quarries which the Company operates directly or through joint ventures, 32 are located on owned land, 17 are on land owned in part and leased in part, and 72 are on leased land. While some of the Company's leases run until reserves at the leased sites are exhausted, generally the Company's leases have definite expiration dates which range from 1996 to 2104. Most of the Company's leases have options to extend them well beyond their current terms. Due to transportation costs, the marketing areas for most quarries in the construction aggregates industry are limited, often consisting of a single metropolitan area or one or more counties or portions thereof. The following table itemizes the Company's 10 largest active stone quarries in terms of the quantity of stone reserves, with nearby major metropolitan areas (if applicable) shown in parentheses:
Estimated Years of Life Lease At Average Expiration Rate Of Nature of Date, if Location Product Production* Interest Applicable** McCook (Chicago), Illinois Limestone 92*** Owned Paducah, Kentucky Limestone 44 Leased **** Grayson (Atlanta), Georgia Granite Over 100 Owned Gray Court (Greenville), South Carolina Granite Over 100 Owned Warrenton, Virginia (Washington, D.C.) Diabase Over 100 Leased **** Kennesaw (Atlanta), Georgia Granite 54 75% Owned 25% Leased 2013 Manteno, Illinois Limestone Over 100 Leased 2104 Skippers, Virginia Granite Over 100 Leased 2016 Lawrenceville (Norfolk/Virginia Beach), Virginia Granite 89 25% Owned 75% Leased 2024 Columbus, Georgia Granite 68 60% Owned 40% Leased 2012 * Estimated years of life of stone reserves are based on the average annual rate of production of the quarry for the most recent three-year period, except that if reserves are acquired or if production has been reactivated during that period, the estimated years of life are based on the annual rate of production from the date of such acquisition or reactivation. Revisions may be necessitated by such occurrences as changes in zoning laws governing quarry properties, changes in stone specifications required by major customers and passage of government regulations applicable to quarry operations. Estimates also are revised when and if additional geological evidence indicates that a revision is necessary. ** Renewable by the Company through date shown. *** For some time, the Metropolitan Water Reclamation District of Greater Chicago (MWRD) has had under consideration the condemnation of a portion of this quarry in order to use it as a reservoir. The Company believes that this action, if it occurs, could significantly reduce the life of this quarry, but will not have a material effect on the financial condition of the Company as a whole. Recently, the MWRD announced it would seek to develop this reservoir on nearby property owned by it. The Company continues to have discussions with the MWRD. **** Lease does not expire until reserves are exhausted. Surface rights at the Paducah, Kentucky, quarry are owned.
The estimated average life of the Company's sand and gravel operations, calculated in the same manner as described in the footnote to the table set out above, is approximately 8 years. Approximately 46% of the Company's estimated 42 million tons of sand and gravel reserves are located on owned land, with the remaining 54% located on leased land. CHEMICALS Manufacturing facilities for the chemicals produced by the Chloralkali Business Unit are owned and operated by the Company at Wichita, Kansas; Geismar, Louisiana; and Port Edwards, Wisconsin. With a few exceptions, the Geismar and Wichita facilities produce the full line of products manufactured by the Company's Chloralkali Business Unit. The Port Edwards plant produces chlorine, caustic soda, muriatic acid, caustic potash, potassium carbonate and sodium hydrosulfite. All of the facilities at Wichita are located on a 1,396-acre tract of land owned by the Company. Mineral rights for salt are held by the Company under two leases that are automatically renewable from year to year unless terminated by the Company and under several other leases which may be kept in effect so long as production from the underlying properties is continued. In addition, the Company owns 320 acres of salt reserves and 160 acres of water reserves. The Company maintains an electric power cogeneration facility at the Wichita plant site which is capable of generating approximately one-third of the plant's electricity and two-thirds of its process steam requirements. Effective in July 1995, pursuant to a long-term agreement, the Company has placed this facility in reserve and is purchasing all of its requirements for electric power from a local utility at favorable rates. The facilities at Geismar, Louisiana, are located on a 1,266-acre tract of land owned by the Company. Included in the facilities at the Geismar plant is an electric power cogeneration facility owned by the Company which supplies substantially all of the electricity and process steam required by the plant. Mineral rights for salt are held under a long-term lease expiring in 2007. The plant facilities at Port Edwards, Wisconsin, are located on a 34-acre tract of land, the surface rights to which are owned by the Company. Currently, the Company purchases its salt and electrical power requirements for the Port Edwards facility from regional sources of supply. Manufacturing facilities for chemicals produced by the Performance Systems Business Unit (other than sodium chlorite produced at Wichita and sodium hydrosulfite, produced at Port Edwards) are operated by subsidiaries of the Company. Callaway Chemical Company owns a headquarters office building and two production facilities in Columbus, Georgia, and a smaller production facility in Shreveport, Louisiana. Callaway Chemical Limited has an office and small production facility on leased property in Vancouver, British Columbia. Rio Linda Chemical Company leases its office and production facilities in West Sacramento, California. The Company's Chemicals manufacturing facilities are designed to permit a high degree of flexibility as to feedstocks, product mix and by-product ratios; therefore, actual plant production capacities vary according to these factors. Management does not believe, however, that there is material excess in production capacity at the Company's Chemicals facilities. OTHER PROPERTIES The Company's corporate offices are located in an office complex near Birmingham, Alabama. Headquarters staffs of the Construction Materials and Chemicals segments, the Southern Division of the Construction Materials segment, and Vulcan Gulf Coast Materials, Inc., also are located in this complex. The space is occupied pursuant to several leases. The lease pursuant to which the majority of the space is leased runs through December 31, 1998. The Company has the option of extending this lease for two five-year periods. The Company's space in this complex is leased at an approximate annual rental, as of December 31, 1995, of $1,400,000, which is subject to limited escalation. ITEM 3. LEGAL PROCEEDINGS The Company is a defendant in various lawsuits in the ordinary course of business. It is not possible to determine with precision the probable outcome of or the amount of liability, if any, under these lawsuits; however, in the opinion of the Company and its counsel, the disposition of these lawsuits will not adversely affect the consolidated financial position of the Company to a material extent. In the course of its Construction Materials and Chemicals operations, the Company is subject to occasional governmental proceedings and orders pertaining to occupational health and safety or to protection of the environment, such as proceedings or orders relating to noise abatement, air emissions or water discharges. As part of its continuing program of environmental stewardship, however, the Company has been able to resolve such proceedings and to comply with such orders without any materially adverse effects on its business. 1. In May 1985, the Company received a letter from the United States Environmental Protection Agency ("EPA") regarding the Cleve Reber Superfund Site in Ascension Parish, Louisiana (the "Reber Site"). EPA's letter advised that the Company was deemed by EPA to be a potentially responsible party ("PRP") with respect to the Site under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), and records indicated that the Company generated a portion of wastes containing CERCLA hazardous substances which were disposed of at the Reber Site. On February 5, 1991, EPA issued a unilateral administrative order ("UAO") directing named respondents, including the Company and other PRPs, to clean up the site. In a letter dated April 9, 1991, the Company, along with three other PRPs named in the UAO, gave notice to EPA that they intend to comply with all lawful terms and conditions of the UAO. Effective June 8, 1992, the Company and other PRPs entered into a Site Participation Agreement ("Agreement") allocating among the parties costs anticipated to be incurred both in connection with site remediation and EPA's past response work or oversight work at the Reber Site. The Company together with the other participating PRPs subsequently implemented EPA's final cleanup plan for the Reber Site in accordance with the requirements of the UAO, and completed active Site remediation during 1995. Site capping and certain other remaining work required under the UAO is expected to be completed in the second quarter of 1996. The Company believes that total provisions now recorded are adequate to cover its share of the anticipated remaining costs. 2. In August 1991, the Company received a letter from the State of New Jersey Department of Environmental Protection ("NJDEP") concerning a site located in Newark, New Jersey, which the Company previously owned and upon which the Company operated a chemicals production facility from the early 1960s until 1974. The NJDEP's letter contends that hazardous substances and pollutants contaminate the site and that a Remedial Investigation/Feasibility Study ("RI/FS") is required in order to determine the nature and extent of such contamination and whether a remedial action plan with respect thereto should be developed. In November 1991, the Company received from NJDEP a "Directive and Notice to Insurers" (the "Directive") purporting to direct the Company to pay to the NJDEP $1,000,000 to be used by it in conducting an RI/FS at the site. Although the NJDEP has not withdrawn its Directive, the NJDEP has informally agreed that it will not seek to enforce its Directive as long as the Company participates in the RI/FS for this site. In August 1993, two other allegedly responsible parties, Safety-Kleen Environsystems Company and Bristol-Meyers Squibb Company (collectively, the "Respondents"), entered into an Administrative Consent Order ("ACO") issued by the NJDEP concerning the site. The ACO contains certain findings of fact by the NJDEP and provisions governing the conduct by the Respondents of an RI/FS for the site and remedial actions, if any, resulting therefrom. Under a separate agreement with Respondents and certain successors, the Company will share in the cost of the RI/FS. The Respondents estimate a cost of $250,000 to complete the RI. The cost of the FS depends upon the results of the RI. Depending, in turn, upon the results of the RI/FS, NJDEP will determine what site remediation is required under the ACO, if any. In that event, it is also likely that the Respondents or the NJDEP will assert that the Company should bear some responsibility in connection with such remediation. At this time, however, it is impossible to predict the ultimate outcome of this matter. 3. In October 1991, the Company received a letter from Chevron USA, Inc. ("Chevron"), contending that hazardous substances and pollutants contaminate a site owned by Chevron and located in Woodbridge Township, Middlesex County, New Jersey. The Company sold that site to Chevron in 1958, and the Company owned and operated a detinning facility adjacent to the Chevron site until 1964. Chevron has advised the Company that Chevron is investigating the feasibility of corrective action pursuant to applicable provisions of RCRA, and is seeking assistance from parties who may have been responsible for some or all of the contamination at the site. The Company and other allegedly responsible parties have had meetings with Chevron to discuss the status of the site. Given the limited information available to the Company regarding this site, the extent, if any, to which the Company's former operations may have contributed to contamination at the site cannot now be established or confirmed. For these reasons, it is impossible at this time for the Company to predict the outcome of this matter or the existence or extent of any liability of the Company with respect to this matter. 4. In January 1992, the Company received a letter from the EPA regarding alleged releases or threatened releases of hazardous substances at a hazardous waste treatment, storage and disposal site in Greer, South Carolina, which was operated by Aqua-Tech Environmental, Inc., a South Carolina corporation. The EPA's letter advised that the Company may be considered a CERCLA PRP. The Company confirmed that in 1987 it had sent cylinders containing titanium tetrachloride to the site for disposal. In April 1992, the Company became a party to a PRP Agreement whereby the signatories thereto agreed to cooperate in responding as a PRP group to a CERCLA Section 106 UAO issued to many of the PRPs, including the Company, directing the PRPs to conduct a removal action with respect to hazardous substances on-site. A total of 179 PRPs agreed to participate in the removal action and to share the related costs according to a series of interim allocations. The removal action has now been completed. The Company's allocated share is $124,769.51 of which it has paid $116,571.00 to-date. EPA has placed the site on the National Priorities List for remediation under CERCLA; however, the extent to which the site is contaminated has not been assessed, so additional costs associated with assessing and remediating any such site contamination cannot yet be estimated. Consequently, neither the extent, if any, to which the wastes the Company sent to the site may have contributed to site contamination, nor the Company's potential share, if any, of the costs associated with the assessment and remediation of such site contamination, can yet be determined. However, based on a proposed de minimis settlement which it currently is reviewing, the Company does not believe that its potential share of any costs related to the site will adversely affect the consolidated financial position of the Company to a material extent. 5. In October 1992, the Company received a letter from the EPA requesting information regarding waste generated by the Company and disposed of at a sanitary landfill in Muskego, Wisconsin, which is operated by Waste Management of Wisconsin ("Muskego Landfill"). The Company responded by stating that it had no knowledge of the generation of any solid waste by the Company's former aluminum recycling facility in Oak Creek, Wisconsin, which was disposed of in the Muskego Landfill. Nevertheless, in January 1993, the Company received a CERCLA Section 106 UAO directing that the Company and 45 other respondents/PRPs perform certain initial remedial design and action work with respect to the Muskego Landfill. The Company and other PRPs formed a PRP Group to formulate allocations for certain of Waste Management's past response costs, a remedial design study for the first phase of remediation, and first phase remedial work. The Company subsequently paid its allocated share of the administrative costs for the PRP Group, the cost of the remedial design study, and the costs relating to past response efforts and the first phase of remediation. In June 1995, the Company received another CERCLA Section 106 UAO, dated June 6, 1995, wherein EPA purports to direct the Company, together with 55 other named respondents/PRPs, to submit a workplan for completing a remedial design and remedial action to implement cleanup of groundwater contamination at the Muskego Landfill. The Company believes that it can assert substantial legal and equitable defenses with respect to this most recent UAO. The Company's potential share of the ultimate cleanup cost, therefore, cannot be determined at this time. The Company does not, however, believe that its potential share, if any, of costs associated with the second remediation phase involving groundwater cleanup will adversely affect the consolidated financial position of the Company to a material extent. 6. The Company was notified in a March 1994 letter from EPA that it was deemed a CERCLA PRP by EPA with respect to the Jack's Creek/Sitkin Smelting Superfund Site in Mifflin County, Pennsylvania. The Company is among some 880 PRPs that EPA claims shipped to the Site a total of approximately 286 million pounds of material alleged to contain CERCLA hazardous substances, including shipments by the Company claimed by EPA to represent about 1.8 million pounds of that total amount. The RI/FS prepared by EPA's contractor favors a Site remedy with an estimated cost of $56.2 million. In addition, EPA claims that it has incurred investigation and response costs relating to the Site of just over $5 million, and the U.S. Department of the Interior has asserted a Site-related natural resources damage claim of approximately $2.2 million. State natural resource trustees have not formally asserted natural resource damage claims, although State trustee agencies have reportedly conducted evaluations of Site impacts on certain natural resources. Similarly, the Pennsylvania Department of Environmental Protection ("PADEP") has allegedly incurred costs for investigation and response at the Site, but has not yet formally asserted a claim for, or stated the total amount of, the costs allegedly incurred. Under the circumstances, the Company is not able to predict the probability of a favorable or unfavorable outcome, or the amount of potential loss in the event of any unfavorable outcome. 7. Lawsuits naming the Company have been filed in the District Courts of Jefferson and Ector counties, Texas, by individual plaintiffs alleging silicosis arising from exposure to industrial sand used for abrasive blasting which was marketed by the Company from 1988 to 1994. The Company is but one of from 20- 40 defendants named in each case. As of this date, 29 such cases are pending against the Company. At this time, the Company does not expect that settlements or adverse judgments, if any, will adversely affect the consolidated financial position of the Company to a material extent. 8. On August 30, 1995, a complaint was filed in the District Court of Nueces County, Texas, 214th Judicial District, by 144 individual plaintiffs against 93 defendants, including the Company. Plaintiffs allege personal injuries and damages arising from exposure to petroleum products, asbestos, chemicals, solvents, minerals, metals and other products in connection with plaintiffs' employment at the Corpus Christi Army Depot in Corpus Christi, Texas. Plaintiffs' ad damnum plea is for $100 Million in compensatory damages and "at least" $400 Million in punitive damages from all defendants. The Company has retained counsel and is currently defending the action. The Company does not believe that its potential share, if any, of costs related to this action will adversely affect the consolidated financial position of the Company to a material extent. 9. In 1987, the Company sold its former Neville Island, Pennsylvania, detinning facility to AMG Resources Corporation. Under the terms of the sale and subsequent agreements, the Company retained responsibility for the assessment of certain environmental conditions at the site, the preparation of a remediation plan to address such conditions for submission to appropriate environmental regulatory agencies, and the implementation of the approved remediation plan. In 1991, the Company prepared and submitted to the PADEP the results of an extensive site investigation. Subsequently, the Company's independent consultants prepared a remediation proposal, and in November 1994, the Company presented its remediation concept to PADEP representatives. At that time, PADEP indicated that it was potentially willing to consider the proposed remediation concept, and requested submission of certain additional information. PADEP further stated that it intended to negotiate and enter into a Consent Order setting forth the Company's remediation obligations at the site. In October 1995, the Company filed with the PADEP and Neville Township a Notice of Intent to Remediate the AMG site under certain applicable provisions of the Pennsylvania Land Recycling and Environmental Remediation Standards Act (Act 2). With PADEP's authorization, the Company subsequently implemented its remediation concept through a pilot remediation project which addressed soil contamination in an area of the Neville Island site where AMG was constructing a new recycling unit. Based on the results of the pilot remediation effort, the Company has proposed to conduct additional remediation activities under Act 2 to address the remainder of the AMG site, including lead conditions in soils and arsenic conditions in groundwater. Concurrently, PADEP, Vulcan and AMG are proceeding with negotiation of a consent order covering the remediation effort and the scope of subsequent monitoring to evidence the effectiveness of the remediation work. Under present circumstances, however, the Company can neither predict the probability of a favorable or unfavorable ultimate resolution of this matter nor the amount of costs, if any, in excess of current reserves. Note 9, Other Commitments and Contingent Liabilities on page 43 of the Company's 1995 Annual Report to Shareholders is hereby incorporated by reference. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to the Company's security holders through the solicitation of proxies or otherwise during the fourth quarter of 1995. ITEM 4a. EXECUTIVE OFFICERS OF THE REGISTRANT The names, positions and ages of the executive officers of the Company are as follows: NAME POSITION AGE Herbert A. Sklenar Chairman, Chief Executive Officer and Director 64 William J. Grayson, Jr. Vice Chairman and Director 65 Donald M. James President, Chief Operating Officer and Director 47 Peter J. Clemens, III Senior Vice President, West - Construction Materials Group 52 Guy K. Mitchell, Jr. Senior Vice President, East - Construction Materials Group 47 Michael J. Ferris President, Chemicals Division 51 R. Morrieson Lord Senior Vice President, Human Resources 65 William F. Denson, III Vice President-Law and Secretary 52 Daniel F. Sansone Vice President-Finance and Treasurer 43 Ejaz A. Khan Controller 39 The principal occupations of the executive officers during the past five years are set forth below: Herbert A. Sklenar was elected President and Chief Executive Officer in May 1986. He was elected to his present position in May 1992. William J. Grayson, Jr., was elected Vice Chairman effective March 7, 1995. He served as Executive Vice President, Construction Materials Group, prior thereto. Donald M. James was elected President, Chief Operating Officer and Director effective February 17, 1996. Mr. James joined the Company in December 1992 as Senior Vice President and General Counsel. Prior to joining the Company he was a partner in the law firm of Bradley, Arant, Rose & White. In January 1994, Mr. James was elected President of the Southern Division and in August 1995, he was also elected Senior Vice President, South, Construction Materials Group. Peter J. Clemens, III, served as Senior Vice President, Finance, until January 1, 1994, when he was appointed Senior Vice President-West, Construction Materials Group. Guy K. Mitchell, Jr., served as President, Chattanooga Division, until May 1991, when he was appointed Senior Vice President-East, Construction Materials Group. Michael J. Ferris was appointed President, Chemicals Division, in May 1987. R. Morrieson Lord was elected Senior Vice President, Human Resources, in April 1979. William F. Denson, III, has served continuously as Secretary since April 1981. He served as Assistant General Counsel until May 1992, when he was elected Vice President and Assistant General Counsel, and was elected Vice President-Law effective January 1, 1994. Daniel F. Sansone served as Controller until May 1991, when he was elected Vice President and Controller, and was elected Vice President-Finance and Treasurer effective January 1, 1994. Ejaz A. Khan served as Controller, Chemicals Division, until September 1995, when he was elected Controller of the Company. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS "Common Stock Market Prices and Dividends" on page 21 of the Company's 1995 Annual Report to Shareholders is incorporated herein by reference. ITEM 6. SELECTED FINANCIAL DATA "Selected Financial Data" on page 20 of the Company's 1995 Annual Report to Shareholders is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS "Management's Discussion and Analysis" on pages 24 through 31 and "Financial Terminology" on page 47 of the Company's 1995 Annual Report to Shareholders are incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following information relative to this item is included in the Company's 1995 Annual Report to Shareholders on the pages shown below, which are incorporated herein by reference: PAGE Financial Statements and Notes 34 Management's Responsibility for Financial Reporting and Internal Control 46 Independent Auditors' Report 46 Supplementary Information-Quarterly Financial Data (Unaudited) 32 With the exception of the aforementioned information and the information incorporated by reference in Items 1, 3, 5, 6, 7, 8 and 14, the Company's 1995 Annual Report to Shareholders is not deemed filed as part of this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE No information is required to be included herein pursuant to Item 304 of Regulation S-K. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Within 120 days of the close of the Company's fiscal year on December 31, 1995, the Company will file a definitive proxy statement with the Securities and Exchange Commission pursuant to Regulation 14A (the Company's "1996 Proxy Statement"). The information under the headings "Election of Directors," "Nominees for Election to the Board of Directors" and "Directors Continuing in Office" included in the 1996 Proxy Statement are incorporated herein by reference. For the information required by Item 401 of Regulation S-K concerning executive officers of the registrant, reference is also made to the information provided in Part I, Item 4a, of this Annual Report on Form 10-K. Based solely on a review of Forms 3 and 4 and amendments thereto furnished to the Company pursuant to Rule 240.16a-3(e) during 1995, and of Form 5 and amendments thereto furnished to the Company pursuant to Rule 240.16a-3(e) with respect to 1995, the Company has identified certain persons subject to Section 16(a) of the Securities Exchange Act of 1934 who failed to file on a timely basis required forms. Information concerning such failures under the heading "Compliance with the Securities Exchange Act" included in the Company's 1996 Proxy Statement is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information under the headings "Compensation of Directors," "Executive Compensation," "Shareholder Return Performance Presentation," "Retirement Income Plan" and "Employee Special Severance Plan" included in the Company's 1996 Proxy Statement is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information under the headings "Security Ownership of Certain Beneficial Owners" and "Security Holdings of Management" included in the Company's 1996 Proxy Statement is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS No information is required to be included herein pursuant to Item 404 of Regulation S-K, which requires disclosure of certain information with respect to certain relationships or related transactions of the directors and management. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) (1) FINANCIAL STATEMENTS The following financial statements are included in the Company's 1995 Annual Report to Shareholders on the pages shown below and are incorporated herein by reference: PAGE Consolidated Statements of Earnings 34 Consolidated Balance Sheets 35 Consolidated Statements of Cash Flows 36 Consolidated Statements of Shareholders' Equity 37 Notes to Financial Statements 38 Management's Responsibility for Financial Reporting and Internal Control 46 Independent Auditors' Report 46 Supplementary Information-Quarterly Financial Data (Unaudited) 32 (a) (2) FINANCIAL STATEMENT SCHEDULES The following financial statement schedule for the years ended December 31, 1995, 1994 and 1993 is included in Part IV of this report on the indicated pages: Schedule II Valuation and Qualifying Accounts and Reserves 19 Other schedules are omitted because of the absence of conditions under which they are required or because the required information is provided in the financial statements or notes thereto. Financial statements (and summarized financial information) of 50% or less owned entities accounted for by the equity method have been omitted because they do not, considered individually or in the aggregate, constitute a significant subsidiary. (a) (3) EXHIBITS The exhibits required by Item 601 of Regulation S-K and indicated below, other than Exhibits (11) and (12) which are on pages 20 and 21 of this report, are either incorporated by reference herein or accompany the copies of this report filed with the Securities and Exchange Commission and the New York Stock Exchange. Copies of such exhibits will be furnished to any requesting shareholder of the Company upon payment of the costs of copying and transmitting the same. EXHIBIT (3)(i) Certificate of Incorporation (Restated 1988) of the Company. Exhibit 3(a) to the Company's 1988 Form 10-K Annual Report is incorporated herein by reference (File No. 1-4033). EXHIBIT (3)(ii) By-laws of the Company, as restated February 2, 1990, and as last amended February 17, 1996. Exhibit (4) Exhibits 1 (Distribution Agreement by and among the Company, Goldman, Sachs & Co., Lehman Brothers and Salomon Brothers Inc) and 4 (Indenture by and between the Company and First Trust of New York (as successor trustee to Morgan Guaranty Trust Company of New York)) to the Form S-3 filed with the Securities and Exchange Commission by the Company on May 2, 1991, and registering $200,000,000 in debt securities is incorporated herein by reference. Form 8-K Report filed with the Securities and Exchange Commission by the Company on May 14, 1991, is incorporated herein by reference. The Company hereby agrees to furnish the Securities and Exchange Commission, upon request, all instruments defining the rights of holders of its other long-term debt or that of any of its consolidated subsidiaries. Exhibit (10)(a) The Management Incentive Plan of the Company, as last amended and restated. Exhibit 10(a) to the Company's 1989 Form 10-K Annual Report is incorporated herein by reference (File No. 1-4033).* Exhibit (10)(b) The 1991 Long-Range Performance Share Plan of the Company. Exhibit A to the Company's definitive proxy statement for the annual meeting of its shareholders held May 16, 1991 ("1991 Proxy Statement"), is incorporated herein by reference (File No. 1-4033).* Exhibit (10)(c) The Employee Special Severance Plan of the Company. Exhibit 10(g) to the Company's 1989 Form 10-K Annual Report is incorporated herein by reference (File No. 1-4033).* Exhibit (10)(d) The Plan for Directors Emeriti and Other Eligible Directors, as last amended and restated. Exhibit 10(c) to the Company's 1990 Form 10-K Annual Report is incorporated herein by reference (File No. 1-4033).* Exhibit (10)(e) The Unfunded Supplemental Benefit Plan for Salaried Employees. Exhibit 10(d) to the Company's 1989 Form 10-K Annual Report is incorporated herein by reference (File No. 1-4033).* Exhibit (10)(f) The 1983 Long-Term Incentive Plan, as last amended and restated. Exhibit 10(f) to the Company's 1989 Form 10-K Annual Report is incorporated herein by reference (File No. 1-4033).* Exhibit (10)(g) The Deferred Compensation Plan for Directors Who Are Not Employees of the Company, as last amended and restated on February 17, 1996. Exhibit (10)(h) The 1996 Long-Term Incentive Plan of the Company. Exhibit (10)(i) The Directors Deferred Stock Plan of the Company. Exhibit (11) Computation of Earnings Per Share for the five years ended December 31, 1995 (set forth on page 20 of this report). Exhibit (12) Computation of Ratio of Earnings to Fixed Charges for the five years ended December 31, 1995 (set forth on page 21 of this report). Exhibit (13) The Company's 1995 Annual Report to Shareholders. Exhibit (21) List of the Company's subsidiaries as of December 31, 1995. Exhibit (24) Powers of Attorney for all directors whose names are signed to this report pursuant to such Powers of Attorney. Exhibit (27) Financial Data Schedule (electronic filing only) Information, financial statements and exhibits required by Form 11-K with respect to the Company's Thrift Plan for Salaried Employees, Construction Materials Divisions Hourly Employees Savings Plan and Chemicals Division Hourly Employees Savings Plan, for the fiscal year ended December 31, 1995, will be filed as one or more amendments to this Form 10-K on or before June 28, 1996, as permitted by Rule 15d-21 under the Securities Exchange Act of 1934. * Management Contract or Compensatory Plan. (b) REPORTS ON FORM 8-K None. INDEPENDENT AUDITORS' REPORT Vulcan Materials Company: We have audited the consolidated financial statements of Vulcan Materials Company and its subsidiary companies as of December 31, 1995, 1994 and 1993 and for the years then ended, and have issued our report thereon dated February 2, 1996; such consolidated financial statements and report are included in your 1995 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of Vulcan Materials Company and its subsidiary companies, listed in Item 14. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements as a whole, presents fairly in all material respects the information shown therein. /s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP Birmingham, Alabama February 2, 1996 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. VULCAN MATERIALS COMPANY (Registrant) March 29, 1996 By /s/ H. A. Sklenar Date H. A. Sklenar Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. SIGNATURE TITLE DATE /s/ H. A. Sklenar Chairman, Chief Executive March 29, 1996 H. A. Sklenar Officer and Director (Principal Executive Officer) /s/ D. M. James President, Chief Operating March 29, 1996 D. M. James Officer and Director /s/ D. F. Sansone Vice President-Finance and Treasurer March 29, 1996 D. F. Sansone (Principal Financial Officer) /s/ E. A. Khan Controller March 29, 1996 E. A. Khan (Principal Accounting Officer) The following directors: Marion H. Antonini Director Livio D. DeSimone Director William J. Grayson, Jr. Director John K. Greene Director Richard H. Leet Director Douglas J. McGregor Director Ann D. McLaughlin Director James V. Napier Director Donald B. Rice Director Orin R. Smith Director By /s/ William F. Denson, III March 29, 1996 William F. Denson, III Attorney-in-Fact for each of the ten directors listed above EXHIBITS TO FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 OF VULCAN MATERIALS COMPANY FILED MARCH 29, 1996 COMMISSION FILE NUMBER 1-4033 EXHIBIT INDEX FORM 10-K FISCAL YEAR ENDED DECEMBER 31, 1995 EXHIBIT (3)(i) Certificate of Incorporation (Restated 1988) of the Company. Exhibit 3(a) to the Company's 1988 Form 10-K Annual Report is incorporated herein by reference (File No. 1-4033). EXHIBIT (3)(ii) By-laws of the Company, as restated February 2, 1990, and as last amended February 17, 1996. EXHIBIT (4) Exhibits 1 (Distribution Agreement by and among the Company, Goldman, Sachs & Co., Lehman Brothers and Salomon Brothers Inc) and 4 (Indenture by and between the Company and First Trust of New York (as successor trustee to Morgan Guaranty Trust Company of New York)) to the Form S-3 filed with the Securities and Exchange Commission by the Company on May 2, 1991, and registering $200,000,000 in debt securities is incorporated herein by reference. Form 8-K Report filed with the Securities and Exchange Commission by the Company on May 14, 1991, is incorporated herein by reference. The Company hereby agrees to furnish the Securities and Exchange Commission, upon request, all instruments defining the rights of holders of its other long-term debt or that of any of its consolidated subsidiaries. EXHIBIT (10)(a) The Management Incentive Plan of the Company, as last amended and restated. Exhibit 10(a) to the Company's 1989 Form 10-K Annual Report is incorporated herein by reference (File No. 1-4033).* EXHIBIT (10)(b) The 1991 Long-Range Performance Share Plan of the Company. Exhibit A to the Company's definitive proxy statement for the annual meeting of its shareholders held May 16, 1991 ("1991 Proxy Statement"), is incorporated herein by reference (File No. 1-4033).* EXHIBIT (10)(c) The Employee Special Severance Plan of the Company. Exhibit 10(g) to the Company's 1989 Form 10-K Annual Report is incorporated herein by reference (File No. 1-4033).* EXHIBIT (10)(d) The Plan for Directors Emeriti and Other Eligible Directors, as last amended and restated. Exhibit 10(c) to the Company's 1990 Form 10-K Annual Report is incorporated herein by reference (File No. 1-4033).* EXHIBIT (10)(e) The Unfunded Supplemental Benefit Plan for Salaried Employees. Exhibit 10(d) to the Company's 1989 Form 10-K Annual Report is incorporated herein by reference (File No. 1-4033).* EXHIBIT (10)(f) The 1983 Long-Term Incentive Plan, as last amended and restated. Exhibit 10(f) to the Company's 1989 Form 10-K Annual Report is incorporated herein by reference (File No. 1-4033).* EXHIBIT (10)(g) The Deferred Compensation Plan for Directors Who Are Not Employees of the Company, as last amended and restated on February 17, 1996. EXHIBIT (10)(h) The 1996 Long-Term Incentive Plan of the Company. EXHIBIT (10)(i) The Directors Deferred Stock Plan of the Company. EXHIBIT (11) Computation of Earnings Per Share for the five years ended December 31, 1995 (set forth on page 20 of this report). EXHIBIT (12) Computation of Ratio of Earnings to Fixed Charges for the five years ended December 31, 1995 (set forth on page 21 of this report). EXHIBIT (13) The Company's 1995 Annual Report to Shareholders. EXHIBIT (21) List of the Company's subsidiaries as of December 31, 1995. EXHIBIT (24) Powers of Attorney for all directors whose names are signed to this report pursuant to such Powers of Attorney. EXHIBIT (27) Financial Data Schedule (electronic filing only) Information, financial statements and exhibits required by Form 11-K with respect to the Company's Thrift Plan for Salaried Employees, Construction Materials Divisions Hourly Employees Savings Plan and Chemicals Division Hourly Employees Savings Plan, for the fiscal year ended December 31, 1995, will be filed as one or more amendments to this Form 10-K on or before June 28, 1996, as permitted by Rule 15d-21 under the Securities Exchange Act of 1934. * Management Contract or Compensatory Plan. EX-3.2 2 BY-LAWS BY - LAWS VULCAN MATERIALS COMPANY (Incorporated under the laws of the State of New Jersey) Restated: February 2, 1990 Amended: June 27, 1990 March 27, 1991 February 5, 1992 (eff. 5/11/92) May 11, 1992 December 8, 1992 February 12, 1993 March 5, 1995 February 17, 1996 I N D E X Page ARTICLE I Shareholders' Meetings Section 1.1 Annual Meetings. . . . . . . . . . . . . 1 Section 1.2 Special Meetings . . . . . . . . . . . . 1 Section 1.3 Notice and Purpose of Meetings . . . . . 1 Section 1.4 Quorum and Adjournments. . . . . . . . . 1 Section 1.5 Organization . . . . . . . . . . . . . . 2 Section 1.6 Voting . . . . . . . . . . . . . . . . . 2 Section 1.7 Selection of Inspectors. . . . . . . . . 3 Section 1.8 Duties of Inspectors . . . . . . . . . . 3 ARTICLE II Directors Section 2.1 Number, Qualification, Tenure, Term, Quorum, Vacancies, Removal (a) Number, Qualification and Tenure. . 4 (b) Term. . . . . . . . . . . . . . . . 4 (c) Quorum. . . . . . . . . . . . . . . 5 Section 2.2 Meetings of the Board of Directors . . . 5 Section 2.3 Committees of the Board of Directors . . 6 Section 2.4 Participation in Meetings by Means of Conference Telephone or Similar Instrument . . . . . . . . . . . . . . . 7 Section 2.5 Action of Board of Directors and Committees Without a Meeting . . . . . . 7 Section 2.6 Dividends. . . . . . . . . . . . . . . . 7 Section 2.7 Conflict of Interest . . . . . . . . . . 8 ARTICLE III Officers Section 3.1 (a) Corporate Officers. . . . . . . . . 8 (b) Group Officers. . . . . . . . . . . 8 (c) Division Officers . . . . . . . . . 9 Section 3.2 (a) Term and Removal of Officers of the Corporation . . . . . . . . . . 9 (b) Term and Removal of Group and Division Officers . . . . . . . . . 9 Section 3.3 (a) Chairman of the Board . . . . . . . 9 (b) Vice Chairman . . . . . . . . . . . 10 Section 3.4 President. . . . . . . . . . . . . . . . 10 Section 3.5 Vice Presidents. . . . . . . . . . . . . 10 Section 3.6 General Counsel. . . . . . . . . . . . . 10 Section 3.7 Secretary. . . . . . . . . . . . . . . . 11 Section 3.8 Treasurer. . . . . . . . . . . . . . . . 11 Section 3.9 Controller . . . . . . . . . . . . . . . 11 Section 3.10 Other Officers . . . . . . . . . . . . . 11 Section 3.11 Voting Corporation's Securities . . . . 11 ARTICLE IV Indemnification of Directors, Officers and Employees . . . . . . . . . . . . . . . . . . . . 12 ARTICLE V Certificates of Stock Section 5.1 Transfer of Shares . . . . . . . . . . . 14 Section 5.2 Transfer Agent and Registrar . . . . . . 14 Section 5.3 Fixing Record Date . . . . . . . . . . . 14 Section 5.4 Lost, Stolen or Destroyed Certificates . 14 ARTICLE VI Miscellaneous Section 6.1 Fiscal Year. . . . . . . . . . . . . . . 15 Section 6.2 Corporate Seal . . . . . . . . . . . . . 15 Section 6.3 Delegation of Authority. . . . . . . . . 15 Section 6.4 Notices. . . . . . . . . . . . . . . . . 15 ARTICLE VII By-Laws and Their Amendments . . . . . . . . . . . . . 16 ARTICLE VIII National Emergency . . . . . . . . . . . . . . . . . . 16 ARTICLE I Shareholders' Meetings SECTION 1.1. Annual Meetings (a) The annual meeting of the shareholders of the corporation may be held at such place within or without the State of New Jersey as may be fixed by the Board of Directors, at 10 a.m., local time, or at such other hour as may be fixed by the Board of Directors, on such day in April or May of each year as may be fixed by the Board of Directors, for the purpose of electing directors and for the transaction of such other business as may properly be brought before the meeting. (b) If the annual meeting for the election of directors is not held in one of the months set forth in Section 1.1(a), the Board of Directors shall cause the meeting to be held as soon thereafter as convenient. SECTION 1.2. Special Meetings (a) Special meetings of the shareholders may be called by the Board of Directors, the chairman of the Board of Directors or the chief executive officer. (b) Special meetings shall be held at such time and date and at such place as shall have been fixed by the Board of Directors, the chairman of the Board of Directors or by the chief executive officer. SECTION 1.3. Notice and Purpose of Meetings Written notice of the time, place and purpose or purposes of every meeting of shareholders shall be given, not less than ten nor more than 60 days before the meeting, either personally or by mail, to each shareholder of record entitled to vote at the meeting. SECTION 1.4. Quorum and Adjournments (a) A quorum at all meetings of shareholders shall consist of the holders of record of a majority of the shares of the issued and outstanding capital stock of the corporation, entitled to vote thereat, present in person or by proxy, except as otherwise provided by law or the Certificate of Incorporation. (b) A shareholders' meeting may be adjourned to another time or place, and, if no new record date is fixed, it shall not be necessary to give notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and at the adjourned meeting only such business is transacted as might have been transacted at the original meeting. If after the adjournment a new record date is fixed by the Board of Directors, notice of the adjourned meeting shall be given to shareholders of record on the new record date entitled to vote. Less than a quorum may adjourn the meeting as herein provided. SECTION 1.5. Organization Meetings of the shareholders shall be presided over by the chief executive officer, or, if he is not present, by a chairman to be chosen by a majority of the shareholders entitled to vote who are present in person or by proxy at the meeting. The Secretary of the corporation, or, in his or her absence, an Assistant Secretary, shall act as secretary of every meeting, but if neither the Secretary nor an Assistant Secretary is present, the meeting shall choose any person present to act as secretary of the meeting. SECTION 1.6. Voting (a) At all meetings of the shareholders the voting need not be by ballot, except that all elections for directors shall be by ballot, and except that the voting shall be by ballot on all other matters upon which voting by ballot is expressly required by the Certificate of Incorporation or by the laws of the State of New Jersey. (b) The poll at all elections of directors shall be open in accordance with the laws of the State of New Jersey. (c) Subject to the foregoing provisions, the right of any shareholder to vote at a meeting of shareholders shall be determined on the basis of the number of shares registered in his or her name on the date fixed as the record date for said meeting. (d) Except as otherwise provided by statute or these By-laws, any matter submitted to a vote of shareholders shall be viva voce unless the person presiding at the meeting determines that the voting shall be by ballot or unless the circumstances are such that the will of the holders of a majority of shares entitled to vote cannot be determined with certainty and the holder of a share entitled to vote or his or her proxy shall demand a vote by ballot. In either of such events a vote by ballot shall be taken. SECTION 1.7. Selection of Inspectors (a) The Board of Directors may in advance of any shareholders' meeting or any proposed shareholder action without a meeting appoint one or more inspectors to act at the meeting or any adjournment thereof or to receive consents of shareholders. If inspectors are not so appointed for a shareholders' meeting or shall fail to qualify, the person presiding at the shareholders' meeting may, and upon the request of any shareholder entitled to vote thereat shall, make such appointment. (b) In case any person appointed as inspector fails to appear or act, the vacancy may be filled by appointment made by the Board of Directors in advance of the meeting or at the meeting by the person presiding. (c) Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting or in tabulating consents with strict impartiality and according to the best of his or her ability. (d) No person shall be elected a director in an election for which he has served as an inspector. SECTION 1.8. Duties of Inspectors The inspectors shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting or the shares entitled to consent, the existence of a quorum, the validity and effect of proxies, and shall receive votes or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes or consents, determine the result, and do such acts as are proper to conduct the election or vote or consents with fairness to all shareholders. If there are three or more inspectors, the act of a majority shall govern. On request of the person presiding at the meeting or any shareholder entitled to vote thereat or of any officer, the inspectors shall make a report in writing of any challenge, question or matter determined by them. Any report made by them shall be prima facie evidence of the facts therein stated, and such report shall be filed with the minutes of the meeting. ARTICLE II Directors SECTION 2.1. Number, Qualification, Tenure, Term, Quorum, Vacancies, Removal (a) Number, Qualification and Tenure. The business and affairs of the corporation shall be managed by or under the direction of its Board of Directors, consisting of 12 persons. However, effective at 9:30 a.m., Central Daylight Time, on May 17, 1996, the Board of Directors shall consist of 11 persons. The number may, from time to time, be increased or decreased by resolution adopted by a majority of the entire Board of Directors, but the number shall not be less than nine nor more than 21. Any directorship to be filled by reason of an increase in the number of directors may be filled by the affirmative vote of two-thirds of the directors in office at the time. Directors shall be at least 25 years of age and need not be United States citizens or residents of New Jersey or shareholders of the corporation. Any outside director shall retire from the Board of Directors at the annual meeting next following their 70th birthday, regardless of the term for which they might have been elected; provided, howeer, that current outside directors who continue to serve until the annual meeting next following their 68th birthday shall have the option to retire then. Any outside director who ceases to hold the position with the business or professional organization with which such person was associated when most recently elected a director shall automatically be deemed to have offered his or her resignation as a director of the corporation, and the Director and Management Succession Committee shall make a recommendation to the Board of Directors with respect to such resignation; and, if the deemed offer to resign is accepted by the Board of Directors, such resignation shall be effective as of the next annual meeting of shareholders. Any inside director shall retire from the Board of Directors at the annual meeting next following his or her 65th birthday; provided, however, that any inside director who has served as chief executive officer of the corporation and who has been requested by the Board of Directors to do so shall serve until the next annual meeting following his or her 67th birthday, but not thereafter. An inside director is one who is or has been in the full-time employment of the corporation, and an outside director is any other director. (b) Term. Directors shall be divided into three classes, with the term of office of one class expiring each year. Except as otherwise provided in the Certificate of Incorporation or these By-laws, directors shall be chosen at annual meetings of the shareholders, and each director shall be chosen to serve until the third succeeding annual meeting of shareholders following his or her election and until his or her successor shall have been elected and qualified. (c) Quorum. A majority of the members of the Board of Directors then acting, but, in no event less than one-third of the entire Board of Directors, acting at a meeting duly assembled, shall constitute a quorum for the transaction of business. Directors having a personal or conflicting interest in any matter to be acted upon may be counted in determining the presence of a quorum. If at any meeting of the Board of Directors there shall be less than a quorum present, a majority of those present may adjourn the meeting, without further notice, from time to time until a quorum shall have been obtained. SECTION 2.2. Meetings of the Board of Directors (a) Meetings of the Board of Directors shall be held at such place within or without the State of New Jersey and at such time and date as may from time to time be fixed by the Board of Directors, or, if not so fixed, as may be specified in the notice of the meeting. A meeting of the Board of Directors shall be held without notice immediately after the annual meeting of the shareholders. (b) Regular meetings of the Board of Directors shall be held on such day of such months as may be fixed by the Board of Directors. At any regular meeting of the Board of Directors any business that comes before such meeting may be transacted except where special notice is required by these By-laws. (c) Special meetings of the Board of Directors may be held on the call of the chairman of the Board of Directors, the chief executive officer or any three directors. (d) Notice of each regular meeting of the Board of Directors, other than the meeting following the annual meeting of shareholders, shall be given not less than seven days before the date on which such regular meeting is to be held. Notice of each special meeting of the Board of Directors shall be given to each member of the Board of Directors not less than two days before the date upon which such meeting is held. Notice of any such meeting may be given by mail, telegraph, telephone, telex, facsimile transmission, personal service or by personally advising the director orally. Notice of a meeting of the Board of Directors may be waived in writing before or after the meeting. Meetings may be held at any time without notice if all the directors are present. Notice of special meetings of the Board of Directors shall specify the purpose or purposes of the meeting. Neither the business to be transacted nor the purpose or purposes of any meeting of the Board of Directors need be specified in the notice of regular meetings or in the waiver of notice of any regular or special meeting of the Board of Directors. (e) Notice of an adjourned meeting of the Board of Directors need not be given if the time and place are fixed at the meeting adjourning and if the period of adjournment does not exceed ten days in any one adjournment. SECTION 2.3. Committees of the Board of Directors (a) The Board of Directors, by resolution adopted by a majority of the entire Board of Directors, may appoint from among its members an Executive Committee and one or more other committees, each of which shall have at least three members. To the extent provided in such resolution each such committee shall have and may exercise all the authority of the Board of Directors, except as expressly limited by the New Jersey Business Corporation Act. (b) The Board of Directors, by resolution adopted by a majority of the entire Board of Directors, may: (1) fill any vacancy in any such committee; (2) appoint one or more directors to serve as additional members of any such committee; (3) appoint one or more directors to serve as alternate members of any such committee, to act in the absence or disability of members of any such committee with all the powers of such absent or disabled members; (4) abolish any such committee at its pleasure; and (5) remove any director from membership on such committee at any time, with or without cause. (c) The Executive Committee shall meet at such time or times, and at such place within or outside the State of New Jersey, as it shall designate or, in the absence of such designation, as shall be designated by the person or persons calling the meeting; and it shall make its own rules of procedure. Meetings may be held at any time without notice if all members of the Executive Committee are present, or if at any time before or after the meeting those not present waive notice of the meeting in writing. A majority of the members of the Executive Committee shall constitute a quorum thereof, but at any meeting of the Committee at which all the members are not present no action shall be taken except by the unanimous vote of those present. (d) Meetings of any committee may be called by the chairman of the Board of Directors, the chief executive officer, the chairman of the committee, by any two members of the committee or as provided in the resolution appointing the committee. Notice of such meeting shall be given to each member of the committee by mail, telegraph, telephone, telex, facsimile transmission, personal service or by personally advising the member orally. Said notice shall state the time and place of any meeting of any such committee and shall be fixed by the person or persons calling the meeting. (e) Actions taken at a meeting of any committee shall be reported to the Board of Directors at its next meeting following such committee meeting; except that, when the meeting of the Board of Directors is held within two days after the committee meeting, such report shall, if not made at the first meeting, be made to the Board of Directors at its second meeting following such committee meeting. SECTION 2.4. Participation in Meetings by Means of Conference Telephone or Similar Instrument Where appropriate communication facilities are available, any or all directors may participate in all or any part of a meeting of the Board of Directors or in a meeting of any committee of the Board of Directors by means of a conference telephone or any means of communication by which the persons participating in the meeting are able to hear each other as though he was or they were present in person at such meeting. Such participation without protesting prior to the conclusion of such participation the lack of notice of such meeting shall constitute a waiver of notice by such participating director or directors with respect to business transacted during such participation. SECTION 2.5. Action of Board of Directors and Committees Without a Meeting Any action required or permitted to be taken pursuant to authorization voted at a meeting of the Board of Directors or any committee of the Board of Directors may be taken without a meeting if, prior or subsequent to such action, all members of the Board of Directors or of such committee, as the case may be, consent thereto in writing and such written consents are filed with the minutes of the proceedings of the Board of Directors or committee. SECTION 2.6. Dividends Subject to the provisions of the laws of the State of New Jersey and the Certificate of Incorporation, the Board of Directors shall have full power to determine whether any and, if any, what part of any funds of the corporation shall be declared in dividends and paid to shareholders; the division of the whole or any part of such funds of the corporation shall rest wholly within the lawful discretion of the Board of Directors, and it shall not be required at any time, against such discretion, to divide or pay any part of such funds among or to the shareholders as dividends or otherwise, and the Board of Directors may fix a sum which may be set aside or reserved over and above the capital paid in of the corporation as working capital for the corporation or as a reserve for any proper purpose, and from time to time may increase, diminish and vary the same in its absolute judgment and discretion. SECTION 2.7. Conflict of Interest No contract or other transaction between the corporation and one or more of its directors, or between the corporation and any domestic or foreign corporation, firm or association of any type or kind in which one or more of its directors are directors or are otherwise interested, shall be void or voidable solely by reason of such common directorship or interest, or solely because such director or directors are present at the meeting of the Board of Directors or a committee thereof which authorizes or approves the contract or transaction, or solely because his or their votes are counted for such purpose, if any of the following is true: (1) the contract or other transaction is fair and reasonable as to the corporation at the time it is authorized, approved or ratified; or (2) the fact of the common directorship or interest is disclosed or known to the Board of Directors or committee and the Board of Directors or committee authorizes, approves, or ratifies the contract by unanimous written consent, provided at least one director so consenting is disinterested, or by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (3) the fact of the common directorship or interest is disclosed or known to the shareholders, and they authorize, approve or ratify the contract or transaction. The Board of Directors, by the affirmative vote of a majority of directors in office and irrespective of any personal interest of any of them, shall have authority to establish reasonable compensation of directors for services to the corporation as directors, officers or otherwise. ARTICLE III Officers SECTION 3.1 (a) Corporate Officers. Each year promptly after the annual meeting of the shareholders, the Board of Directors shall elect a Chairman of the Board, a President, one or more Vice Presidents, with such designations, if any, as it may determine, a General Counsel, a Secretary, a Treasurer, and a Controller, and from time to time may elect or appoint one or more Assistants to any of such officers, and such one or more Assistant Secretaries, Assistant Treasurers, and Assistant Controllers, and such other officers, agents, and employees, and with such designations, as it may deem proper. Any two or more offices may be concurrently held by the same person at the same time. The Chairman of the Board and the President shall be chosen from among the directors. (b) Group Officers. The chief executive officer of the corporation may appoint such officers of any group of the corporation as he may deem proper, except that group senior vice presidents may be appointed only by the Board of Directors. A group officer shall not be an officer of the corporation, and shall serve as an officer only of the group to which he is appointed, but a person who holds a group office may also hold a corporate office or a division office, or both. (c) Division Officers. The chief executive officer of the corporation may appoint such officers of any division of the corporation as he may deem proper, except that division chairmen and presidents may be appointed only by the Board of Directors. A division officer shall not be an officer of the corporation, and shall serve as an officer only of the division to which appointed, but a person who holds a division office may also hold a corporate office or a group office, or both. SECTION 3.2 (a) Term and Removal of Officers of the Corporation. The term of office of all officers shall be one year and until their respective successors are elected and qualify, but any officer may be removed from office, either with or without cause, at any time, by the affirmative vote of a majority of the members of the Board of Directors then in office. (b) Term and Removal of Group and Division Officers. Group senior vice presidents and division chairmen and presidents shall serve at the pleasure of the Board of Directors. Group senior vice presidents and division chairmen and presidents may be removed from office, either with or without cause, at any time, by the Board of Directors. Other group and division officers shall serve at the pleasure of the chief executive officer of the corporation. Any other group or division officer may be removed from office as a group or division officer, either with or without cause, at any time, by the chief executive officer of the corporation. SECTION 3.3. (a) Chairman of the Board. The Chairman of the Board may execute bonds, mortgages, and bills of sale, assignments, conveyances, and all other contracts, except those required by law to be otherwise signed and executed, or except when the signing and execution thereof when permitted by law shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation. The Chairman of the Board shall preside at all meetings of the Board of Directors. The Chairman of the Board shall serve as the chief executive officer of the corporation responsible to the Board of Directors for planning and directing the business of the corporation and for initiating and directing those actions essential to its profitable growth and development and shall perform such other duties as may be assigned to him by the Board of Directors. The Chairman of the Board shall serve as an ex officio member (nonvoting) of all committees of the Board of Directors of which he is not otherwise a member. (b) Vice Chairman. The Vice Chairman may execute bonds, mortgages, and bills of sale, assignments, conveyances, and all other contracts, except those required by law to be otherwise signed and executed, or except when the signing and execution thereof when permitted by law shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation. The Vice Chairman shall advise and counsel with the Chairman of the Board, and with other officers of the corporation on any or all activities in which the corporation may engage, and shall perform such other duties as may be assigned to him by the Chairman of the Board or the Board of Directors. SECTION 3.4. President The President may execute bonds, mortgages, and bills of sale, assignments, conveyances, and all other contracts, except those required by law to be otherwise signed and executed, or except when the signing and execution thereof when permitted by law shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation. The President shall serve as the chief operating officer of the corporation and, subject to the authority and direction of the Chairman of the Board, the President shall have general and active management of the operating affairs of the corporation and shall carry into effect the resolutions of the Board of Directors and the orders of the Chairman of the Board with respect to the operating affairs of the corporation. SECTION 3.5. Vice Presidents Each Vice President of the corporation may execute bonds, mortgages, bills of sale, assignments, conveyances, and all other contracts, except where required by law to be otherwise signed and executed. Each Vice President of the corporation shall perform such functions for the corporation as may be designated by the chief executive officer of the corporation, and shall carry into effect the resolutions of the Board of Directors and the orders of the chief executive officer of the corporation with respect to such functions. SECTION 3.6. General Counsel The General Counsel shall be the chief legal officer of the corporation and shall have overall responsibility for all legal affairs of the corporation. The General Counsel shall have management responsibility for the corporation's legal department and its relationships with outside counsel. The General Counsel's duties shall include providing legal advice to corporate and division officers, confirming compliance with applicable laws, overseeing litigation, reviewing significant agreements, participating in important negotiations, and selecting all outside counsel. He shall perform such other functions for the corporation as may be designated by the Board of Directors or the chief executive officer. SECTION 3.7. Secretary The Secretary shall keep or cause to be kept the minutes of all meetings of the shareholders, of the Board of Directors, of the Executive Committee, and unless otherwise directed by the Board of Directors, the minutes of meetings of other committees of the Board of Directors. He shall attend to the giving or serving of all notices required to be given by law or by the By-laws or as directed by the Board of Directors or the chief executive officer of the corporation. He shall have custody of the seal of the corporation and shall have authority to affix or cause the same or a facsimile thereof to be affixed to any instrument requiring the seal and to attest the same. He shall perform such other functions for the corporation as may be designated by the Board of Directors or the chief executive officer of the corporation. SECTION 3.8. Treasurer The Treasurer shall be responsible for safeguarding the cash and securities of the corporation and shall keep or cause to be kept a full and accurate account of the receipts and disbursements of the corporation. He shall perform such other functions for the corporation as may be designated by the Board of Directors or the chief executive officer of the corporation. SECTION 3.9. Controller The Controller shall be the principal accounting officer of the corporation, shall have supervision over the accounting records of the corporation and shall be responsible for the preparation of financial statements. He shall perform such other functions for the corporation as may be designated by the Board of Directors or by the chief executive officer of the corporation. SECTION 3.10. Other Officers The other officers of the corporation shall have such powers and duties as generally pertain to their respective offices as well as such powers and duties as from time to time may be designated by the Board of Directors or by the chief executive officer of the corporation. SECTION 3.11. Voting Corporation's Securities Unless otherwise ordered by the Board of Directors, the chief executive officer or his or her delegate, or, in the event of his or her inability to act, such other officer as may be designated by the Board of Directors to act in the absence of the chief executive officer shall have full power and authority on behalf of the corporation to attend and to act and to vote, and to execute a proxy or proxies empowering others to attend and to act and to vote, at any meetings of security holders of the corporations in which the corporation may hold securities, and at such meetings the chief executive officer or such other officer of the corporation, or such proxy, shall possess and may exercise any and all rights and powers incident to the ownership of such securities, and which as the owner thereof the corporation might have possessed and exercised, if present. The Secretary or any Assistant Secretary may affix the corporate seal to any such proxy or proxies so executed by the chief executive officer or such other officer and attest the same. The Board of Directors by resolution from time to time may confer like powers upon any other person or persons. ARTICLE IV Indemnification of Directors, Officers and Employees (a) Subject to the provisions of this Article IV, the corporation shall indemnify the following persons to the fullest extent permitted and in the manner provided by and the circumstances described in the laws of the State of New Jersey, including Section 14A:3-5 of the New Jersey Business Corporation Act and any amendments thereof or supplements thereto: (i) any person who is or was a director, officer, employee or agent of the corporation; (ii) any person who is or was a director, officer, employee or agent of any constituent corporation absorbed by the corporation in a consolidation or merger, but only to the extent that (a) the constituent corporation was obligated to indemnify such person at the effective date of the merger or consolidation or (b) the claim or potential claim of such person for indemnification was disclosed to the corporation and the operative merger or consolidation documents contain an express agreement by the corporation to pay the same; (iii) any person who is or was serving at the request of the corporation as a director, officer, trustee, fiduciary, employee or agent of any other domestic or foreign corporation, or any partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise, whether or not for profit; and (iv) the legal representative of any of the foregoing persons (collectively, a "Corporate Agent"). (b) Anything herein to the contrary notwithstanding, the corporation shall not be obligated under this Article IV to provide indemnification (i) to any bank, trust company, insurance company, partnership or other entity, or any director, officer, employee or agent thereof or (ii) to any other person who is not a director, officer or employee of the corporation, in respect of any service by such person or entity, whether at the request of the corporation or by agreement therewith, as investment advisor, actuary, custodian, trustee, fiduciary or consultant to any employee benefit plan. (c) To the extent that any right of indemnification granted hereunder requires any determination that a Corporate Agent shall have been successful on the merits or otherwise in any Proceeding (as hereinafter defined) or in defense of any claim, issue or matter therein, the Corporate Agent shall be deemed to have been "successful" if, without any settlement having been made by the Corporate Agent, (i) such Proceeding shall have been dismissed or otherwise terminated or abandoned without any judgment or order having been entered against the Corporate Agent, (ii) such claim, issue or other matter therein shall have been dismissed or otherwise eliminated or abandoned as against the Corporate Agent, or (iii) with respect to any threatened Proceeding, the Proceeding shall have been abandoned or there shall have been a failure for any reason to institute the Proceeding within a reasonable time after the same shall have been threatened or after any inquiry or investigation that could have led to any such Proceeding shall have been commenced. The Board of Directors or any authorized committee thereof shall have the right to determine what constitutes a "reasonable time" or an "abandonment" for purposes of this paragraph (c), and any such determination shall be conclusive and final. (d) To the extent that any right of indemnification granted hereunder shall require any determination that the Corporate Agent has been involved in a Proceeding by reason of his or her being or having been a Corporate Agent, the Corporate Agent shall be deemed to have been so involved if the Proceeding involves action allegedly taken by the Corporate Agent for the benefit of the corporation or in the performance of his or her duties or the course of his or her employment for the corporation. (e) If a Corporate Agent shall be a party defendant in a Proceeding, other than a Proceeding by or in the right of the corporation, and the Board of Directors or a duly authorized committee of disinterested directors shall determine that it is in the best interests of the corporation for the corporation to assume the defense of any such Proceeding, the Board of Directors or such committee may authorize and direct that the corporation assume the defense of the Proceeding and pay all expenses in connection therewith without requiring such Corporate Agent to undertake to pay or repay any part thereof. Such assumption shall not affect the right of any such Corporate Agent to employ his or her own counsel or to recover indemnification under this By-law to the extent that he may be entitled thereto. (f) As used herein, the term "Proceeding" shall mean and include any pending, threatened or completed civil, criminal, administrative or arbitrative action, suit or proceeding, and any appeal therein and any inquiry or investigation which could lead to such action, suit or proceeding. (g) The right to indemnification granted under this Article IV shall not be exclusive of any other rights to which any Corporate Agent seeking indemnification hereunder may be entitled. ARTICLE V Certificates of Stock SECTION 5.1. Transfer of Shares Stock of the corporation shall be transferable in accordance with the provisions of Chapter 8 of the Uniform Commercial Code as adopted in New Jersey (N.J.S. 12A:8-101, et seq.) as amended from time to time, except as otherwise provided in the New Jersey Business Corporation Act. SECTION 5.2. Transfer Agent and Registrar The Board of Directors may appoint one or more transfer agents and one or more registrars of transfers and may require all stock certificates to bear the signatures of such transfer agent and registrar, one of which signatures may be a facsimile. SECTION 5.3. Fixing Record Date For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or allotment of any right, or for the purpose of any other action, the Board of Directors may fix, in advance, a date as the record date for any such determination of shareholders. Such date shall not be more than 60 nor less than ten days before the date of such meeting, nor more than 60 days prior to any other action. SECTION 5.4. Lost, Stolen or Destroyed Certificates (a) Where a certificate for shares has been lost, apparently destroyed, or wrongfully taken and the owner thereof fails to so notify the corporation or the transfer agent of that fact within a reasonable time after he has notice of it and the transfer agent or the corporation registers a transfer of the shares before receiving such a notification, the owner shall be precluded from asserting against the corporation any claim for registering the transfer of such shares or any claim to a new certificate. (b) Subject to the foregoing, where the owner of shares claims that the certificate representing shares has been lost, destroyed or wrongfully taken, the corporation shall issue a new certificate in place of the original certificate if the owner thereof requests the issue of a new certificate before the corporation has notice that the certificate has been acquired by a bona fide purchaser, makes proof in affidavit form, satisfactory to the Secretary or Assistant Secretary of the corporation and to its transfer agent, of his or her ownership of the shares represented by the certificate and that the certificate has been lost, destroyed or wrongfully taken; files an indemnity bond for an open or unspecified amount or if authorized in a specific case by the corporation, for such fixed amount as the chief executive officer, or a Vice President, or the Secretary of the corporation may specify, in such form and with such surety as may be approved by the transfer agent and the Secretary or Assistant Secretary of the corporation, indemnifying the corporation and the transfer agent and registrar of the corporation against all loss, cost and damage which may arise from issuance of a new certificate in place of the original certificate; and satisfies any other reasonable requirements imposed by the corporation or transfer agent. In case of the surrender of the original certificate, in lieu of which a new certificate has been issued, or the surrender of such new certificate, for cancellation, the bond of indemnity given as a condition of the issuance of such new certificate may be surrendered. ARTICLE VI Miscellaneous SECTION 6.l. Fiscal Year The fiscal year of the corporation shall begin on the first day of January in each year and shall end on the 31st day of December next following, unless otherwise determined by the Board of Directors. SECTION 6.2. Corporate Seal The corporate seal of the corporation shall have inscribed thereon the name of the corporation, the year 1956 and the words "Corporate Seal, New Jersey." SECTION 6.3. Delegation of Authority Any provision of these By-laws granting authority to the Board of Directors shall not be construed as indicating that such authority may not be delegated by the Board of Directors to a committee to the extent authorized by the New Jersey Business Corporation Act and these By-laws. SECTION 6.4 Notices In computing the period of time for the giving of any notice required or permitted for any purpose, the day on which the notice is given shall be excluded and the day on which the matter noticed is to occur shall be included. If notice is given by mail, telegraph, telex or facsimile transmission, the notice shall be deemed to be given when deposited in the mail, delivered to the telegraph or telex office or transmitted via facsimile transmitter, addressed to the person to whom it is directed at his or her last address as it appears on the records of the corporation, with postage or charges prepaid thereon; provided, however, that notice must be given by telegraph, telephone, telex, facsimile transmission, personal service or by personally advising the person orally when, as authorized in these By-laws, less than three days' notice is given. Notice to a shareholder shall be addressed to the address of such shareholder as it appears on the stock transfer records of the corporation. ARTICLE VII By-Laws and Their Amendments Subject to the rights, if any, of the holders of any series of Preference Stock then outstanding, the By-laws of the corporation shall be subject to alteration, amendment or repeal, and new By-laws not inconsistent with any provisions of the Certificate of Incorporation and not inconsistent with the laws of the State of New Jersey may be made, either by the affirmative vote of a majority of the votes cast at any annual or special meeting of shareholders by the holders of shares entitled to vote thereon, or, except with respect to By-laws adopted by the shareholders of the corporation which by their terms may not be altered, amended or repealed by the Board of Directors, by the affirmative vote of a majority of the whole Board of Directors at any regular or special meeting of the Board of Directors. ARTICLE VIII National Emergency For the purpose of this Article VIII a national emergency is hereby defined as any period following an enemy attack on the continental United States of America or any nuclear or atomic disaster as a result of which and during the period that communication or the means of travel among states in which the corporation's plants or offices are disrupted or made uncertain or unsafe. Persons not directors of the corporation may conclusively rely upon a determination by the Board of Directors of the corporation, at a meeting held or purporting to be held pursuant to this Article VIII that a national emergency as hereinabove defined exists regardless of the correctness of such determination. During the existence of a national emergency under the foregoing provisions of this Article VIII the following provisions shall become operative but no other provisions of these By- laws shall become inoperative in such event unless directly in conflict with this Article VIII or action taken pursuant hereto: (a) When it is determined in good faith by any director that a national emergency exists, special meetings of the Board of Directors may be called by such director and at any such special meeting two directors shall constitute a quorum for the transaction of business including without limiting the generality hereof the filling of vacancies among directors and officers of the corporation and the election of additional officers. The act of a majority of the directors present thereat shall be the act of the Board of Directors. If at any such special meeting of the Board of Directors there shall be only one director present such director present may adjourn the meeting from time to time until a quorum is obtained, and no further notice thereof need be given of any such adjournment. The director calling any such special meeting shall make a reasonable effort to notify all other directors of the time and place of such special meeting, and such effort shall be deemed to constitute the giving of reasonable notice of such special meeting and every director shall be deemed to have waived any requirement, of law or otherwise, that any other notice of such special meeting be given. The directors present at any such special meeting shall make reasonable effort to notify all absent directors of any action taken thereat, but failure to give such notice shall not affect the validity of the action taken at any such meeting. Any action taken at any such special meeting may be conclusively relied upon by all directors, officers, employees, and agents of, and all persons dealing with, the corporation. (b) The Board of Directors shall have the power to alter, amend, or repeal any Articles of these By-laws by the affirmative vote of at least two- thirds of the directors present at any special meeting attended by two or more directors and held in the manner prescribed in paragraph (a) of this Article, if it is determined in good faith by said two-thirds that such alteration, amendment or repeal would be conducive to the proper direction of the corporation's affairs. EX-10.G 3 DEF COMP NON EMP DIR SECOND AMENDMENT AND RESTATEMENT OF THE VULCAN MATERIALS COMPANY DEFERRED COMPENSATION PLAN FOR DIRECTORS WHO ARE NOT EMPLOYEES OF THE COMPANY 1. ELIGIBILITY AND PURPOSE Each member of the Board of Directors (the "Board") of Vulcan Materials Company (the "Company") who is not an employee of the Company or its subsidiaries shall be eligible to participate in the Vulcan Materials Company Deferred Compensation Plan for Directors Who Are Not Employees of the Company (the "Plan"). Any member of the Board who elects to participate in the Plan ("Director") shall thereby defer the receipt of all or any portion of the annual retainer, meeting and committee fees payable by the Company to such Director for serving as a member of the Board or one or more of its committees (the "Deferrable Compensation"). 2. DEFERRAL OF COMPENSATION A Director may elect to defer all or any portion of the Deferrable Compensation by executing a form prescribed by the Secretary of the Company and delivering such form to the Secretary prior to the first day of the calendar year for which the election is to be effective. In the calendar year that a Director first becomes eligible to participate in the Plan, such Director may elect to defer all or any portion of the Deferrable Compensation, provided that the election form is delivered to the Secretary within thirty (30) days after the Director first becomes eligible to participate in the Plan for such year. An election made in this manner will be applicable only to Deferrable Compensation earned after the effective date of the election. The amount of Deferrable Compensation deferred shall be paid or distributed to the Director in accordance with the provisions of Section 5 or Section 6, below. 3. DEFERRED COMPENSATION ACCOUNT The Company shall establish a deferred compensation account (the "Account") for the Director. As of the date payments of Deferrable Compensation otherwise would be made to the Director, the Company shall credit to the Account, in cash or stock equivalents, or a combination thereof, as hereinafter provided, that amount of the Deferrable Compensation which the Director has elected to defer. 4. CASH OR STOCK ELECTION (a) As of the date payments of Deferrable Compensation otherwise would be made to the Director, the amount due the Director shall be credited to the Account either as a cash allotment or as a stock allotment, or a portion to each, as the Director shall elect at the time the deferred election is made. (b) If a cash allotment is elected in whole or in part, the Account shall be credited with the dollar amount of the allotment. Interest (at the rate described below) on the Average Daily Balance (computed as described below) shall be credited to the Account as of the last day of each calendar month before and after the termination of the Director's service and after the Director's death until the total balance in the Account has been paid out in accordance with the provisions of Section 5 or Section 6, below. The interest rate for each calendar month shall be the composite 30-day offering rate for prime commercial paper placed through dealers (rated A-1 by Standard & Poor's Corporation or its successor and P-1 by Moody's Investors Service, Inc., or its successor) for the last business day of the immediately preceding calendar month as published by the Federal Reserve Bank of New York. The "Average Daily Balance" shall be the quotient obtained by dividing the sum of the closing balance in the Account at the end of each calendar day in a calendar month by the number of days in such calendar month. (c)(1)If a stock allotment is elected in whole or in part, the Account shall be credited with a stock equivalent that shall be equal to the number of full and fractional shares of the Company's Common Stock, par value $1.00 per share (the "Common Stock"), that could be purchased with the dollar amount of the allotment using the Average Closing Price (as defined below) of the Common Stock for the twenty (20) trading days ending on the day preceding the date the Account is so credited. The "Average Closing Price" of the Common Stock means the average of the daily closing prices for a share of the Common Stock for the applicable twenty (20) trading days on the Composite Tape for New York Stock Exchange Listed Stocks, or, if the Common Stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on which the Common Stock is listed, or, if the Common Stock is not listed on any such Exchange, the average of the daily closing bid quotations with respect to a share of the Common Stock for such twenty (20) trading days on the National Association of Securities Dealers, Inc., Automated Quotations System or any system then in use, or, if no such quotations are available, the fair market value of a share of the Common Stock as determined by a majority of the Board; provided, however, that if a Change in Control (as defined below) shall have occurred, then such determination shall be made by a majority of the Continuing Directors (as defined below). (2) The Account also shall be credited as of the payment date for each dividend on the Common Stock with additional stock equivalents computed as follows: The dividend paid, either in cash or property (other than Common Stock), upon a share of Common Stock to a shareholder of record shall be multiplied by the number of stock equivalents in the Account and the product thereof shall be divided by the Average Closing Price of the Common Stock for the twenty (20) trading days ending on the day preceding the dividend payment date. In the case of dividends payable in property, the amount paid shall be based on the fair market value of the property at the time of distribution of the dividend, as determined by a majority of the Board; provided, however, that if a Change in Control shall have occurred, then such determination shall be made by a majority of the Continuing Directors. (3) In the event of any change in the Common Stock, upon which the stock equivalency hereunder is based, by reason of a merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, or any other change in corporate structure, the number of shares credited to the Account shall be adjusted in such manner as a majority of the Board shall determine to be fair under the circumstances; provided, however, that if a Change in Control shall have occurred, then such determination shall be made by a majority of the Continuing Directors. 5. DISTRIBUTION (a) Except as otherwise provided in the Plan, at the Director's election, the balance in the Account shall be paid out to the Director when: (1) the Director ceases to hold office as a member of the Board; or (2) the period of years which the Director specified has elapsed from the date deferral of Deferrable Compensation commenced. Except as otherwise provided in the Plan, the balance in the Account shall be paid either in a lump sum or, at the Director's election, in monthly, quarterly, semiannual or annual installments, but such installments shall be payable over a period of years not to exceed ten (10) years (the "Payout Period") such election shall be made by executing a form prescribed by the Secretary of the Company and delivering such form to the Secretary at least thirty (30) days prior to the date payments are to begin in the case of the cash allotment portion of the Account, or, in the case of the stock allotment portion of the Account, six (6) months prior to the date payments are to begin. The amount of each installment shall be determined as of the first day of the period in which payment is to be made by dividing the then balance in the Account by the then remaining number of payment dates in the Payout Period. The lump sum or first periodic installment shall be paid by the Company as promptly as is convenient, but not more than sixty (60) days following the end of the calendar month in which one of the events referred to in this Section 5(a) occurs. (b) In the event of the death of the Director prior to distribution of the entire balance in the Director's Account, the balance in the Account shall be payable in a lump sum to (i) the surviving beneficiary (or surviving beneficiaries in such proportions as) the Director may have designated by notice in writing to the Company unrevoked by a later notice in writing to the Company or, in the absence of an unrevoked notice, (ii) the beneficiary (or beneficiaries in such proportions as) the Director may have designated by will or, if no beneficiary is designated, (iii) the legal representative of the Director's estate. (c) The provisions of the Plan shall apply to and be binding upon the beneficiaries, distributees and personal representatives and any other successors in interest of the Director. (d) Distribution of the cash in the Account shall be made in cash. Distribution of stock equivalents in the Account shall be made in cash in an amount equal to the number of stock equivalents to be distributed multiplied by the Average Closing Price of the Common Stock for the twenty (20) trading days ending on the day preceding the date of distribution. (e) The Company shall deduct from all distributions hereunder any taxes required to be withheld by the federal or any state or local government. 6. ACCELERATION OF DISTRIBUTION (a) "Change in Control" means: (1) The acquisition by any person, entity or "group," within the meaning of Section 13(d)(3) or (14)(d)(2) of the Exchange Act (excluding for this purpose, any employee benefit plan of the Company or any of its subsidiaries which acquires beneficial ownership of voting securities of the Company), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of either the then outstanding shares of Common Stock or the combined voting power of the Company's then outstanding voting securities, in one transaction or a series of transactions; provided, however, that, if prior to such an acquisition, a majority of the Continuing Directors determines that such acquisition shall not, for purposes of the Plan, be deemed a Change in Control, such acquisition shall not constitute a Change in Control hereunder; (2) Individuals who, as of the Effective Date (as defined below), constitute the Board (the "Continuing Directors") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director of the Company subsequent to the Effective Date whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the Continuing Directors (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened solicitation with respect to the election or removal of directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of the Plan, considered as though such person were a Continuing Director; or (3) Approval by the Board of (i) a merger, consolidation or reorganization of the Company in which, as a consequence of the transaction, either the Continuing Directors do not constitute a majority of the directors of the continuing or surviving corporation or any person, entity or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, controls 25% or more of the combined voting power of the continuing or surviving corporation; (ii) any sale, lease or other transfer, in one transaction or a series of transactions, of all or substantially all of the assets of the Company; or (iii) any plan or proposal for the liquidation or dissolution of the Company; provided, however, that, if at the time of such approval, a majority of the Continuing Directors determines that such merger, consolidation, reorganization, sale, lease, other transfer, liquidation or dissolution shall not, for purposes of the Plan, be deemed a Change in Control, such transaction shall not constitute a Change in Control hereunder, and, provided further, that, if a majority of the Continuing Directors so determines, a Change in Control shall not be deemed to occur until the consummation of any such transaction. (b) Notwithstanding any other provision of the Plan, if a Change in Control occurs and at any time after the occurrence of such Change in Control either of the following events occurs: (1) the Director ceases to hold office as a member of the Board; (2) the Plan is terminated, or (3) The Company's capital structure is changed materially; then the balance in the Account shall be payable in a lump sum to the Director. Such payment shall be made by the Company as promptly as practicable, but not more than thirty (30) days following the date on which the right to such payment arose. (c) Distribution shall be in accordance with Sections 5(b), 5(c), 5(d) and 5(e), above, except that distribution of stock equivalents in the Account shall be made in cash in an amount equal to the number of stock equivalents to be distributed multiplied by the greater of (i) the Average Closing Price of the Common Stock for the twenty (20) trading days ending on the day preceding the date on which the right to such distribution arose or (ii) the Average Closing Price of the Common Stock for the twenty (20) trading days ending on the day preceding the date of the Change in Control. (d) The Company shall promptly reimburse the Director for all legal fees and expenses reasonably incurred in successfully seeking to obtain or enforce any right or benefit provided under this Section 6. (e) This Section 6 may not be amended or modified after the occurrence of a Change in Control. 7. MISCELLANEOUS (a) The election to defer Deferrable Compensation, including, but not limited to, the allocation of the amount deferred between the cash allotment or the stock allotment portion of the Account, or a combination thereof, and the time and manner of distribution, shall be irrevocable as to amounts earned in the calendar year following the year in which the election is made, or, in the case of a Director who first becomes eligible to participate in the Plan during the calendar year, for the remaining part of the year in which the election is made, and also for any subsequent calendar year, unless a new election form reflecting a change or revocation of the deferral election or a change in the allocation of the amount deferred between the cash allotment or the stock allotment portion of the Account with respect to amounts earned in such subsequent calendar year is delivered to the Secretary of the Company not later than ten (10) days preceding the first day of the calendar year to which such change or revocation is applicable. (b) If the Director has elected to have the Account distributed in installments, the Director may notify the Company in writing at any time beginning more than six (6) months after termination of service as a director to transfer a portion or all of the Account held as a cash allotment to a stock allotment, or to transfer a portion or all of the Account held as a stock allotment to a cash allotment. Any amounts transferred from or to a stock allotment shall be computed in the manner provided in Section 4(c), above. (c) Neither the Director nor any other person shall have any interest in any fund or in any specific asset of the Company by reason of amounts credited to the Account of a Director hereunder, nor the right to exercise any of the rights or privileges of a shareholder with respect to any stock equivalents credited to the Account, nor the right to receive any distribution under the Plan except as and to the extent expressly provided for in the Plan. Distributions hereunder shall be made from the general funds of the Company, and the rights of the Director shall be those of an unsecured general creditor of the Company. The Company may establish a trust pursuant to a trust agreement and make contributions thereto for the purpose of assisting the Company in meeting its obligations hereunder. Any such trust agreement shall contain procedures to the following effect: (i) In the event of the insolvency of the Company, the trust fund will be available to pay the claims of any creditor of the Company to whom a distribution may be made in accordance with state and federal bankruptcy laws. The Company shall be deemed to be "insolvent" if the Company is subject to a pending proceeding as a debtor under the Federal Bankruptcy Code (or any successor federal statute) or any state bankruptcy code. In the event that the Company becomes insolvent, the Board and chief executive officer of the Company shall notify the trustee of the event as soon as practicable. Upon receipt of such notice, or if the trustee receives other written allegations of the Company's insolvency, the trustee shall cease making payments of benefits from the trust fund, shall hold the trust fund for the benefit of the Company's creditors, and shall take such steps as are necessary to determine within 30 days whether the Company is insolvent. In the case of the trustee's actual knowledge of or other determination of the Company's insolvency, the trustee will deliver assets of the trust fund to satisfy claims of the Company's creditors as directed by a court of competent jurisdiction. (ii) The trustee shall resume payments of benefits under the trust agreement only after the trustee has determined that the Company is not insolvent (or is no longer insolvent, if the trustee had previously determined the Company to be insolvent) or upon receipt of an order of a court of competent jurisdiction requiring such payment. If the trustee discontinues payment of benefits pursuant to clause (i), above, and subsequently resumes such payment, the first payment on account of a Director following such discontinuance shall include an aggregate amount equal to the difference between the payments which would have been made on account of such Director by the Company during any such period of discontinuance, plus interest on such amount at a rate equivalent to the net rate of return earned by the trust fund during the period of such discontinuance. (d) The interest of the Director under the Plan shall not be assignable by the Director or the Director's beneficiary or legal representative, either by voluntary assignment or by operation of law, and any assignment of such interest, whether voluntary or by operation of law, shall be ineffective to transfer the Director's interest; provided, however, that (i) the Director may designate a beneficiary to receive any benefit payable under the Plan upon death, and (ii) the legal representative of the Director's estate may assign the Director's interest under the Plan to the persons entitled to any benefit payable under the Plan upon the Director's death. (e) Except as provided in Section 6, above, the Company may amend, modify, terminate or discontinue the Plan at any time; provided, however, that no such action shall reduce the amounts credited to the Account of the Director immediately prior to such action, nor change the time, method or manner of distribution of such amount, including, without limitation, distribution in accordance with Section 6, above. (f) Nothing contained herein shall impose any obligation on the Company to continue the tenure of the Director beyond the term for which such Director may have been elected or shall prevent the removal of such Director. (g) This Plan shall be interpreted by and all questions arising in connection therewith shall be determined by a majority of the Board, whose interpretation or determination, when made in good faith, shall be conclusive and binding, unless a Change in Control shall have occurred, in which case such interpretation or determination shall be made by a majority of the Continuing Directors. (h) The effective date (the "Effective Date") of this Amendment and Restatement of the Plan shall be December 8, 1992. 8. ROLLOVER ELECTIONS Within thirty (30) days subsequent to the termination of the Vulcan Materials Company Plan for Directors Emeriti and Other Eligible Directors (the "Director Emeriti Plan"), a Director shall elect to have credited to his Account the net present value of the accrued benefit such Director would have received under the Director Emeritus Plan had it not terminated as to such director (the "Credit"). A Director may allocate all or any part of his Credit to either or both of the stock or cash allotment; provided, however, that to the extent a Director allocates his Credit to the stock allotment, that Director shall be prohibited from selling any shares of Common Stock for a period of six (6) months following such allocation without first obtaining the prior written consent of the Secretary of the Company. EX-10.H 4 LTIP VULCAN MATERIALS COMPANY 1996 LONG-TERM INCENTIVE PLAN Section 1. DEFINITIONS. As used in the Plan, the following terms shall have the meanings set forth below: (a) "Affiliate" shall mean (i) any entity that, directly or through one or more intermediaries, is controlled by the Company, or (ii) any entity in which the Company owns a significant equity interest, as determined by the Committee. (b) "Award" shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Share Award, Dividend Equivalent, or Other Stock-Based Award granted under the Plan. (c) "Award Agreement" shall mean any written agreement, contract, or other instrument or document evidencing any Award granted under the Plan. (d) "Award Period" shall mean the period beginning with the date an Award is granted and ending on the date set forth in the applicable Award Agreement. (e) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time and any rules or regulations promulgated thereunder. (f) "Committee" shall mean those members of the Compensation Committee of the Board of Directors of the Company (or any successor committee thereto), consisting in number of not less than the minimum number of directors required to satisfy the requirements of Rule 16b-3 of the Exchange Act and Section 162(m) of the Code, each of whom qualifies as a "disinterested person" within the meaning of Rule 16b-3 and an "outside director" within the meaning of Section 162(m) of the Code. (g) "Dividend Equivalent" shall mean any right granted under Section 6(e) of the Plan. (h) "Eligible Employee" shall mean any person who in accordance with Section 5 is eligible to receive an Award under the Plan. (i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. (j) "Fair Market Value" shall mean, with respect to any property (including, without limitation, any Shares or other securities), the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. (k) "Incentive Stock Option" shall mean an option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code (or any successor provision thereto). (l) "Non-Qualified Stock Option" shall mean any option not intended to be an Incentive Stock Option. (m) "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock Option. (n) "Other Stock-Based Award" shall mean any right granted under Section 6(f) of the Plan. (o) "Participant" shall mean any key salaried employee of the Company or of an Affiliate who is granted an Award under the Plan. (p) "Performance Share Award" shall mean any right granted under Section 6(d) of the Plan. (q) "Person" shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, or government or political subdivision thereof. (r) "Restricted Stock" shall mean any Shares granted under Section 6(c) of the Plan. (s) "Restricted Stock Unit" shall mean any right granted under Section 6(c) of the Plan that is denominated in Shares. (t) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Exchange Act or any successor rule or regulation thereto. (u) "Shares" shall mean the common shares of the Company, $1.00 par value, and such other securities or property as may become the subject of Awards pursuant to an adjustment made under Section 4(b) of the Plan. (v) "Stock Appreciation Right" shall mean any right granted under Section 6(b) of the Plan. Section 2. PURPOSE. The purpose of the Vulcan Materials Company (the "Company") 1996 Long-Term Incentive Plan (the "Plan") is to promote the long-term success of the Company by encouraging key employees of the Company and its Affiliates (as defined below) to acquire a proprietary interest in the growth and performance of the Company, and to enhance the ability of the Company and its Affiliates to attract and retain highly qualified individuals upon whom, in large measure, the sustained growth and profitability of the Company depend. Section 3. ADMINISTRATION. The Plan shall be administered by the Committee. Subject to the terms of the Plan and applicable law, the Committee shall have the authority to effectuate the purposes of the Plan. Without limiting the generality of the foregoing, the Committee shall have the exclusive right to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to each Participant; (iii) determine the number of Shares to be covered by an Award (or with respect to which payments, rights, or other matters are to be calculated in connection with an Award); (iv) determine the terms and conditions of an Award; (v) determine whether, to what extent, and under what circumstances an Award may be settled or exercised in cash, Shares, other securities, other Awards, or other property, or canceled, forfeited, or suspended, and the method or methods by which an Award may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) determine the rights of Participants in the events of death, disability, termination, change in control and the like; (viii) interpret and administer the Plan and any instrument or agreement relating to the Plan or an Award; (ix) establish, amend, suspend, or waive rules and regulations for the administration of the Plan; (x) appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (xi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time, and shall be final, conclusive, and binding upon all Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, any shareholder, and any employee of the Company or of any Affiliate. Section 4. SHARES AVAILABLE FOR AWARDS. (a) Shares Available. Subject to adjustment as provided in Section 4(b): i) Calculation of Number of Shares Available. The number of Shares available for granting Awards in each calendar year shall be .95% of the issued common shares of the Company (including treasury shares) as of the first day of each calendar year; provided, however, that in any calendar year the number of available Shares shall be increased by the number of Shares available under the Plan in previous years but not covered by Awards granted under the Plan in such years. Further, if any Shares covered by an Award granted under the Plan are forfeited, or if an Award denominated in Shares terminates without the delivery of Shares, then the Shares covered by such Award shall again be available for granting Awards under the Plan. Notwithstanding the foregoing, but subject to adjustment as hereinafter provided in Section 4(b), no more than 1,000,000 Shares shall be cumulatively available for delivery pursuant to the exercise of Incentive Stock Options and no more than one-third of the Shares available for Awards in any calendar year shall be available for grants of Restricted Stock or Restricted Stock Units. ii) Accounting for Awards. For purposes of this Section 4: A) if an Award is denominated in Shares, the number of Shares covered by such Award shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan; provided, however, that an Award denominated in Shares that operates in tandem with (whether granted simultaneously with or at a different time from) another Award denominated in Shares shall be deemed a single Award with respect to the number of Shares that are common to the respective Awards. B) Shares issuable pursuant to Awards that are not denominated in Shares shall be counted against and restored to the aggregate number of Shares available for granting Awards under the Plan in such amount and at such time as the Committee shall determine under procedures adopted by the Committee consistent with the purposes of the Plan. iii) Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares. (b) Adjustments. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits intended to be made available under the Plan, the Committee may, in such manner as it shall deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or property) which thereafter may be made the subject of Awards under the Plan, (ii) the number and type of Shares (or other securities or property) subject to outstanding Awards, and (iii) the grant, purchase, or exercise price with respect to any Award, or, if the Committee deems appropriate, make provision for a cash payment to the holder of an outstanding Award. Section 5. ELIGIBILITY. Any key salaried employee of the Company or an Affiliate, including a director of the Company or an Affiliate who is an employee, shall be eligible to receive Awards under the Plan. Section 6. AWARDS. (a) Options. The Committee is hereby authorized to grant Incentive Stock Options and Non-Qualified Stock Options to Eligible Employees with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine: i) Exercise Price. The exercise price per Share shall be determined by the Committee; provided, however, that such exercise price per Share shall not be less than the Fair Market Value of a Share on the date of grant of such Option. ii) Option Term. The term of each Option shall be fixed by the Committee, provided that in no event shall the term of an Incentive Stock Option exceed a period of ten (10) years. iii) Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, and the method or methods by which, and the form or forms (including, without limitation, cash, Shares, other Awards, or other property, or any combination thereof) in which payment of the exercise price may be made. iv) Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code (or any successor provision thereto). (b) Stock Appreciation Rights. The Committee is hereby authorized to grant Stock Appreciation Rights to Eligible Employees. Subject to the terms of the Plan and any applicable Award Agreement, one Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive, upon exercise thereof, the excess of (i) the Fair Market Value of one Share on the date of exercise or, if the Committee shall so determine in the case of any such Stock Appreciation Right other than one related to any Incentive Stock Option, at any time during a specified period before or after the date of exercise, over (ii) the grant price of the right as specified by the Committee, which shall not be less than the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right. Subject to the terms of the Plan and any applicable Award Agreement, the grant price, term, methods of exercise, methods of settlement, and any other terms and conditions of any Stock Appreciation Right shall be as determined by the Committee. The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation Right as it may deem appropriate. (c) Restricted Stock and Restricted Stock Units. i) Issuance. The Committee is hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units to Eligible Employees. ii) Restrictions. Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote the Restricted Stock or on the right to receive any dividend or other right or property), which restrictions may lapse at such time or times, in such installments or otherwise, as the Committee may deem appropriate; provided, however, that all Restricted Stock and Restricted Stock Units granted pursuant to the Plan shall be subject to at least a three-year vesting period. iii) Evidence of Award. Any Restricted Stock granted under the Plan may be evidenced in such manner as the Committee may deem appropriate, including, without limitation, book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of Restricted Stock, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock. Certificates for shares of Restricted Stock may be delivered to the Participant or held by the Company. (d) Performance Share Awards. The Committee is hereby authorized to grant Performance Share Awards to Participants. Subject to the terms of the Plan and any applicable Award Agreement, a Performance Share Award granted under the Plan (i) may be denominated or payable in cash, Shares (including, without limitation, Restricted Stock), other securities, other Awards, or other property, and (ii) shall confer on the holder thereof rights payable to, or exercisable by, the holder of the Performance Share Award, upon the achievement of such performance goals during such performance periods as the Committee shall establish based on earnings as reported or after deducting a charge reflecting the cost of capital, return on investment or total shareholder return of the Company or an Affiliate, or any division or operating unit thereof, as measured on an absolute basis, as compared to another performance period, or as compared to a group of comparison companies. Subject to the terms of the Plan and any applicable Award Agreement, the performance goals to be achieved during any performance period, the length of any performance period and the amount of any Performance Share Award granted shall be determined by the Committee. The equivalent Share value (if the performance goals are fully achieved) of each Performance Share Award granted shall be counted against the limitation set forth in Section 6(g)(v). (e) Dividend Equivalents. The Committee is hereby authorized to grant to holders of Awards the right to receive payments equivalent to dividends with respect to a number of Shares comprising such Award as determined by the Committee, and the Committee may provide that such amounts (if any) shall be deemed reinvested in additional Shares or otherwise reinvested. Subject to the terms of the Plan and any applicable Award Agreement, such Awards may have such terms and conditions as the Committee shall determine. (f) Other Stock-Based Awards. The Committee is hereby authorized to grant to Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as are deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of such Awards. Shares or other securities delivered pursuant to a purchase right granted under this Section 6(f) shall be purchased for such consideration, which may be paid by such method or methods and in such form or forms, including, without limitation, cash, Shares, other securities, other Awards, or other property, or any combination thereof, as the Committee shall determine. (g) General. i) Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted alone, in addition to or in tandem with any other Award or any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem with other Awards, or in addition to or in tandem with awards granted under any other plan of the Company or any Affiliate, may be granted either at the same time as or at a different time from the grant of such other Awards or awards. ii) Forms of Payment Under Awards. Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise, or payment of an Award may be made in such form or forms as the Committee shall determine, including, without limitation, cash, Shares, other securities, other Awards, or other property, or any combination thereof, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents in respect of installment or deferred payments. iii) Limits on Transfer of Awards. No Award, and no right under any such Award, shall be assignable, alienable, saleable, or transferable by a Participant other than by will or by the laws of descent and distribution, except as otherwise permitted by the Committee consistent with Rule 16b-3 and provided for in the governing Award Agreement. If so determined by the Committee, a Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant, and to receive any property distributable, with respect to any Award upon the death of the Participant. Each Award, and each right under any Award, shall be exercisable, during the Participant's lifetime, only by the Participant or, if permissible under applicable law, by the Participant's guardian or legal representative, except that any transferable Award may be exercised by a permitted transferee. No Award and no right under any such Award, may be pledged, alienated, attached, or otherwise encumbered, and any purported pledge, alienation, attachment, or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate. iv) Term of Awards. Subject to the terms of the Plan, the term of each Award shall be for such period as may be determined by the Committee. v) Limitation on Awards. The maximum number of Shares with respect to which Awards may be granted to any Participant in any year may not exceed 100,000 Shares. vi) Share Certificates. All certificates for Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares or other securities are then listed, and any applicable federal or state securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. Section 7. AMENDMENT AND TERMINATION. Except to the extent prohibited by applicable law: (a) Amendments to the Plan. The Board of Directors of the Company may amend, alter, suspend, discontinue, or terminate the Plan, including, without limitation, any amendment, alteration, suspension, discontinuation, or termination that would impair the rights of any Participant, or any other holder or beneficiary of any Award theretofore granted, without the consent of any shareholder of the Company, Participant, other holder or beneficiary of an Award, or other Person; provided, however, that, notwithstanding any other provision of the Plan or any Award Agreement, without the approval of the shareholders of the Company, no such amendment, alteration, suspension, discontinuation, or termination shall be made that would: i) increase the total number of Shares available for Awards under the Plan or increase the limitation on Awards set forth in Section 6(g)(v), except as provided in Section 4(b) hereof; or ii) modify the eligibility criteria set forth in Section 5; or iii) permit Options or Stock Appreciation Rights to be granted with per Share grant, purchase or exercise prices of less than the fair market value of a Share on the date of grant thereof. (b) Adjustments of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee shall be authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4(b) hereof) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits to be made available under the Plan. Notwithstanding any other provision of this Plan to the contrary, the Committee shall not have the discretion to make any modifications to outstanding Awards which are intended to satisfy the "performance-based" exception under Code Section 162(m) if such modifications would result in the loss of the ability to comply with such "performance-based" exception (e.g., with respect to such Awards, the Committee shall not be authorized to exercise discretion to increase awards). (c) Correction of Defects, Omissions, and Inconsistencies. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect. Section 8. GENERAL PROVISIONS. (a) No Rights to Awards. No Participant or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient. (b) Delegation. The Committee may delegate to one or more officers or managers of the Company or of any Affiliate, or a committee of such officers or managers, the authority, subject to the terms and limitations as the Committee shall determine, to grant Awards to, or to cancel, modify, waive rights with respect to, and to alter, discontinue, suspend, or terminate Awards held by Participants who are not subject to Section 16 of the Exchange Act or covered by Section 162(m) of the Code. (c) Withholding. The Company or any Affiliate shall be authorized to withhold from any Award granted or any payment due or transfer made under any Award or under the Plan the amount (in cash, Shares, other securities, other Awards, or other property) of withholding taxes due in respect of an Award, its exercise, or any payment or transfer under such Award or under the Plan and to take such other action as may be necessary or advisable to satisfy all obligations for the payment of such taxes. (d) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements. (e) No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate. The Company or an Affiliate may at any time dismiss a Participant from employment, free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement. (f) Severability. If any provision of the Plan or any Award Agreement is, or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person, or Award, and the remainder of the Plan and any such Award shall remain in full force and effect. (g) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate. (h) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be canceled, terminated, or otherwise eliminated. (i) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. Section 9. EFFECTIVE DATE OF THE PLAN. The Plan shall be effective as of the date of its approval by the shareholders of the Company. Section 10. TERM OF THE PLAN. No Award shall be granted under the Plan after May 1, 2006. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date, and the authority of the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award, or to waive any conditions or rights under any such Award, and the authority of the Board of Directors of the Company to amend the Plan, shall extend beyond such date. EX-10.I 5 DEF STK PLAN FOR NE DIR VULCAN MATERIALS COMPANY DEFERRED STOCK PLAN FOR NONEMPLOYEE DIRECTORS 1. DEFINITIONS. As used herein, the following terms shall have the meanings hereinafter set forth: (a) "Annual Meeting" means the Annual Meeting of the shareholders of the Company. (b) "Board" shall mean the Board of Directors of the Company. (c) "Company" shall mean Vulcan Materials Company, a New Jersey corporation. (d) "Deferred Stock Unit" means the equivalent of one Share, as established pursuant to this Plan. (e) "Directors Emeriti Plan" means the Vulcan Materials Company Plan for Directors Emeriti and Other Eligible Directors, as amended or restated from time to time. (f) "Exchange Act" means the Securities Exchange Act of 1934, as amended. (g) "Fair Market Value Per Share" means the average of the daily closing prices of a Share as reported on the New York Stock Exchange for the twenty (20) trading days prior to the date of determination, or if the Shares are not listed on such exchange, on the principal United States securities exchange registered under the Exchange Act on which the Shares are listed. (h) "Nonemployee Director" means any person who is a member of the Board and who is not, as of the date of an award under this Plan, an employee of the Company or any of its subsidiaries. (i) "Plan" means this Vulcan Materials Company Deferred Stock Plan for Nonemployee Directors, as it may be amended from time to time. (j) "Share" means a share of the Company's Common Stock, $1.00 par value. (k) "Stock Plan" means the Vulcan Materials Company Stock Plan for Nonemployee Directors. 2. PURPOSE AND EFFECTIVE DATE. The primary purpose of the Plan is to advance the interests of the Company and its shareholders by providing for the payment of a greater portion of the compensation of Nonemployee Directors in the form of equity by the grant to such directors of Deferred Stock Units under the terms set forth herein. By thus compensating Nonemployee Directors and increasing Nonemployee Directors' equity position in the Company, the Company seeks to attract, retain, compensate, and motivate those highly competent individuals upon whose judgment, initiative, leadership, and continued efforts the success of the Company in large measure depends and to align more closely the interests of the Nonemployee Directors with those of the shareholders of the Company. This Plan is designed to replace the Stock Plan and the Directors Emeriti Plan. The Stock Plan shall be terminated upon the Effective Date of this Plan. The Directors Emeriti Plan shall be phased out after adoption of this Plan as set forth below. New Nonemployee Directors shall not be permitted to participate in the Directors Emeriti Plan, and shall instead be permitted to participate in this Plan. Furthermore, current Nonemployee Directors who elect to terminate participation in the Directors Emeriti Plan after the adoption of this Plan shall be entitled to a larger annual grant pursuant to paragraph 6 below. The Plan shall be deemed adopted and shall become effective as of the date of its approval by the affirmative vote of the holders of a majority of the Shares of the Company voted in person or by proxy at the next Annual Meeting (the "Effective Date"). No grants of Deferred Stock Units shall be made unless and until such shareholder approval is obtained. 3. ELIGIBILITY. Each director who as of the date of any award made pursuant to the Plan is not an employee of the Company or any of its subsidiaries shall be eligible to participate in the Plan. 4. SHARES OF COMMON STOCK AVAILABLE. The number of Shares that may be issued pursuant to the Plan shall not exceed 100,000, subject to proportionate adjustment in the event of any stock split, reverse stock split, reorganization or recapitalization. 5. DEFERRED STOCK ACCOUNT. The Company shall establish a deferred stock account (an "Account") for each Nonemployee Director participating in the Plan. On each Award Date (as defined below) and on each Dividend Date (as defined below), as the case may be, the Company shall credit the Account with the number of Deferred Stock Units determined in accordance with paragraph 6 below. Distributions from a Nonemployee Director's Account shall be made in Shares upon the retirement of a Nonemployee Director, unless the distributions are accelerated in accordance with paragraphs 8 or 9 below. The value of the Deferred Stock Units is dependent upon the fair market value of the Shares on the date the Shares are distributed to the Nonemployee Director, and is therefore subject to market fluctuations in value until such distribution. 6. ANNUAL AWARDS. (a) On or prior to the Effective Date of the Plan, each Nonemployee Director shall make an irrevocable election to continue or discontinue participation in the Company's Directors Emeriti Plan. On the date that is six (6) months after the Effective Date and on June 1 of each year thereafter (an "Award Date"), the Company shall credit to the Account of (i) each Nonemployee Director who on or prior to the Effective Date has made an irrevocable election not to continue to participate in the Director's Emeriti Plan and (ii) each person who becomes a Nonemployee Director after the Effective Date, the number of Deferred Stock Units calculated by dividing an amount equal to forty percent (40%) of the annual retainer payable to Nonemployee Directors then in effect by the Fair Market Value Per Share as of the applicable Award Date. The Account of each Nonemployee Director who does not irrevocably elect on or prior to the Effective Date to discontinue his or her participation in the Directors Emeriti Plan shall be credited on each Award Date with the number of Deferred Stock Units calculated by dividing an amount equal to fifteen percent (15%) of the annual retainer payable to Nonemployee Directors then in effect by the Fair Market Value Per Share as of the Award Date. (b) At any time a balance is maintained in a Nonemployee Director's Account, there shall be credited to the Account of such Nonemployee Director additional Deferred Stock Units on each regular cash dividend payment date (a "Dividend Date"). The number of such additional Deferred Stock Units shall be determined by (i) multiplying the total number of Deferred Stock Units (including fractional Deferred Stock Units) credited to the Account immediately prior to the Dividend Date by the amount of the dividend and (ii) dividing the product by the Fair Market Value Per Share as of the day preceding the Dividend Date. (c) In the event of any change in the outstanding Shares upon which the stock equivalency hereunder is based, by reason of a merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, or any other change in corporate structure or in the event of any dividend that is paid in Shares or other property, the number of Deferred Stock Units credited to the Account shall be adjusted in such a manner as a majority of the Board shall determine to be fair under the circumstances; provided, however, that if a Change in Control shall have occurred, then such determination shall be made by a majority of the Continuing Directors. In the case of dividends payable in property, the amount paid shall be based on the fair market value of the property at the time of distribution of the dividend, as determined by a majority of the Board, or, in the event of a Change in Control, by a majority of the Continuing Directors. 7. DISTRIBUTION. (a) Except as otherwise provided herein, the balance of each Nonemployee Director's Account shall be paid to the Nonemployee Director, in a lump sum or in installments, as determined by the Nonemployee Director in accordance with paragraph 7(f) below, commencing at the beginning of the first quarter after the first Annual Meeting following the date that such director reaches the mandatory retirement age then in effect. (b) In the event of the death of the Nonemployee Director prior to such director's retirement or prior to the distribution of the entire balance in such director's Account, the entire balance in the Account as of the date of the Nonemployee Director's death shall be paid in Shares in a lump sum or in installments, as determined by the Nonemployee Director in accordance with paragraph 7(f) below, to the surviving beneficiary or beneficiaries as the Nonemployee Director may have designated by notice in writing to the Company or by will, or, if no beneficiaries are so designated, the legal representative of such director's estate. (c) If a Nonemployee Director shall become totally and permanently disabled, as determined by a majority of the Board, while he or she is a director of the Company, the entire balance in the Account as of the date of such total and permanent disability shall be paid to such Nonemployee Director, or his or her personal representative, in a lump sum or in installments, as determined by the Nonemployee Director in accordance with paragraph 7(f) below, within one hundred twenty (120) days of the date of such total and permanent disability. (d) If a Nonemployee Director ceases to be a director of the Company for any reason other than due to death or total and permanent disability, including, without limitation, the failure of such person to be re-elected as a director of the Company by the shareholders of the Company, the balance of such director's Account as of the date such person ceases to be a director of the Company shall be paid in a lump sum or in installments, as determined by the Nonemployee Director in accordance with paragraph 7(f) below, to such director within one hundred twenty (120) days of the date such person ceases to be a director of the Company. (e) All distributions of Deferred Stock Units made pursuant to this Plan shall be in Shares in an amount equal to the number of Deferred Stock Units held in the Account and to be distributed. On the date of any such distribution, the Company shall cause to be issued and delivered to such Nonemployee Director a stock certificate evidencing the Shares registered in the name of such Nonemployee Director, or such other person as the Nonemployee Director may designate. (f) All distributions of Shares in accordance with this paragraph 7 shall be made, at such director's election, either in a lump sum or in monthly, quarterly, semiannual or annual installments, provided, however, that such director shall have delivered to the Secretary of the Company a form specifying the director's election at least six (6) months prior to the date payments are to commence. In the event that such director fails to make a timely election, the distribution of Shares shall be made in a lump sum. Deferred Stock Units representing fractional Shares shall be paid in cash. (g) The provisions of this Plan shall apply to and be binding upon the beneficiaries, distributees, and personal representatives, and any other successors in interest of the Nonemployee Director. (h) The Company shall deduct from all distributions hereunder any taxes required to be withheld by the federal, state or local law. 8. ACCELERATION OF DISTRIBUTION. (a) "Change in Control" means: i) The acquisition by any person, entity or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding any employee benefit plan of the Company or any of its subsidiaries which acquires beneficial ownership of voting securities of the Company), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of either the then outstanding Shares or the combined voting power of the Company's then outstanding voting securities, in one transaction or a series of transactions; provided, however, that, if prior to such an acquisition, a majority of the Continuing Directors determines that such acquisition shall not, for purposes of the Plan, be deemed a Change in Control, such acquisition shall not constitute a Change in Control hereunder; ii) Individuals who, as of the date of a Change in Control, constitute the Board (the "Continuing Directors") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director of the Company subsequent to the Change in Control Date whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the Continuing Directors (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened solicitation with respect to the election or removal of directors of the Company, as such terms are used in Rule 14a-11 promulgated under the Exchange Act) shall be, for purposes of the Plan, considered as though such person were a Continuing Director; or iii) Approval by the Board of (i) a merger, consolidation or reorganization of the Company in which, as a consequence of the transaction, either the Continuing Directors do not constitute a majority of the directors of the continuing or surviving corporation or any person, entity or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, controls 25% or more of the combined voting power of the continuing or surviving corporation; (ii) any sale, lease or other transfer, in one transaction, or a series of related transactions, of all or substantially all of the assets of the Company; or (iii) any plan or proposal for the liquidation or dissolution of the Company; provided, however, that, if at the time of such approval, a majority of the Continuing Directors determines that such merger, consolidation, reorganization, sale, lease, other transfer, liquidation or dissolution shall not, for purposes of the Plan, be deemed a Change in Control, such transaction shall not constitute a Change in Control hereunder, and, provided further, that, if a majority of the Continuing Directors so determines, a Change in Control shall not be deemed to occur until the consummation of any such transaction. (b) Notwithstanding any other provision of the Plan, if a Change in Control occurs and at any time after the occurrence of such Change in Control either of the following events occurs: i) the Nonemployee Director ceases for any reason to be a director of the Company; or ii) the Plan is terminated; then the entire balance of the Account shall be payable in a lump sum to the director in Shares. Such payment shall be made by the Company as promptly as practicable, but not more than thirty (30) days following the date on which the right to such payment arose. (c) The Company shall promptly reimburse the director for all legal fees and expenses reasonably incurred in successfully seeking to obtain or enforce any right or benefit provided under this paragraph 8. (d) This paragraph 8 may not be amended or modified after the occurrence of a Change in Control. 9. NONTRANSFERABILITY OF DEFERRED STOCK UNITS. No Deferred Stock Units shall be transferred by a Nonemployee Director other than by will or the laws of descent and distribution, or, to the extent permitted by Rule 16b-3 under the Exchange Act, pursuant to a qualified domestic relations order as defined by the Internal Revenue Code of 1986, as amended (the "Code"). 10. AMENDMENT AND TERMINATION. Unless approved by the shareholders of the Company, no amendment of the Plan shall be effective which would (i) materially increase the maximum number of Shares that may be issued under the Plan, (ii) materially increase the benefits accruing to participants under the Plan, or (iii) materially modify the requirements as to eligibility for participation in the Plan. No amendment to the Plan shall materially and adversely affect any right of any Nonemployee Director with respect to any Deferred Stock Units theretofore credited without such Nonemployee Director's written consent. 11. TERM. The Plan shall continue in effect without limit unless and until the Board otherwise determines. 12. COMPLIANCE WITH SEC REGULATIONS. It is the Company's intent that the Plan comply with the provisions of Section 16 of the Exchange Act and the rules promulgated thereunder. To the extent that any provision of the Plan is later found not to be in compliance with Section 16 or such rules, such provision shall be deemed to be null and void. 13. MISCELLANEOUS. (a) Neither the Plan nor any action taken hereunder shall be construed as giving any Nonemployee Director any right to continue to serve as a director of the Company or otherwise to be retained in the service of the Company. (b) No Shares shall be issued hereunder unless and until counsel for the Company shall be satisfied such issuance will be in compliance with applicable federal, state and other securities laws and regulations. (c) The expenses of the Plan shall be borne by the Company. (d) Neither the Nonemployee Director nor any other person shall have any interest in any fund or in any specific asset of the Company by reason of amounts credited to the Account of such director, nor the right to exercise any of the rights or privileges of a shareholder with respect to any Deferred Stock Unit credited to such Account, nor the right to receive any distribution under the Plan except as expressly provided herein. Distributions hereunder shall be made from the general funds of the Company, and the rights of the director shall be those of an unsecured general creditor of the Company. (e) The Plan, the grant of Deferred Stock Units thereunder, and the obligation of the Company to deliver Shares, shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any governmental or regulatory agency or national securities exchange as may be required. The Company shall not be required to issue or deliver any certificates for Shares prior to the completion of any registration or qualification of such Shares under any federal or state law or any ruling or regulation of any governmental body or national securities exchange which the Company shall, in its sole discretion, determine to be necessary or advisable. (f) This Plan shall be interpreted by and all questions arising in connection therewith shall be determined by a majority of the Board, whose interpretation or determination, when made in good faith, shall be conclusive and binding, except in the event of a Change in Control, in which case such interpretation and determination shall be made by a majority of the Continuing Directors. EX-11 6 EARNINGS PER SHARE
EXHIBIT 11 VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES COMPUTATION OF EARNINGS PER SHARE For the Years Ended December 31 Amounts in Thousands, Except per Share Data 1995 1994 1993 1992 1991 Primary and fully diluted earnings: Average common shares outstanding.......... 35,544 36,450 36,757 37,590 38,052 Common share equivalents: Performance Share Plan................ 389 233 218 190 164 Total Shares.......................... 35,933 36,683 36,975 37,780 38,216 Net earnings before cumulative effect of accounting change.......................... $166,240 $97,976 $88,229 $90,980 $52,580 Cumulative effect of accounting change....... - - - 3,005 - Net earnings............................... $166,240 $97,976 $88,229 $93,985 $52,580 Primary and fully diluted earnings per share of common stock: Net earnings before cumulative effect of accounting change.......................... $4.63 $2.67 $2.39 $2.41 $1.38 Cumulative effect of accounting change....... - - - 0.08 - Net earnings............................... $4.63 $2.67 $2.39 $2.49 $1.38
EX-12 7 EARNINGS TO FIXED CHARGES
EXHIBIT 12 VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES For the Years Ended December 31 Amounts in Thousands 1995 1994 1993 1992 1991 Fixed charges: Interest expense before capitalization credits..$ 11,396 $ 10,699 $ 10,187 $ 10,441 $ 11,336 Amortization of financing costs................... 109 114 115 116 75 One-third of rental expense....................... 9,532 10,393 7,375 7,190 4,815 Total fixed charges........................$ 21,037 $ 21,206 $ 17,677 $ 17,747 $ 16,226 Net earnings......................................$ 166,240 $ 97,976 $ 88,229 90,980 $ 52,580 Provisions for income taxes......................... 92,181 47,930 36,993 39,746 20,867 Fixed charges....................................... 21,037 21,206 17,677 17,747 16,226 Capitalized interest credits........................ (297) (878) (1,016) (673) (131) Amortization of capitalized interest................ 1,031 997 882 792 840 Earnings before income taxes as adjusted...... $ 280,192 $ 167,231 $ 142,765 $ 148,592 $ 90,382 Ratio of earnings to fixed charges.................. 13.3 7.9 8.1 8.4 5.6
EX-13 8 ANNUAL REPORT Vulcan Materials Company 1995 Annual Report
Financial Review Selected Financial Data Amounts and shares in millions, except per share data 1995 1994 1993 1992 1991 Operations Net sales........................................................ $1,461.0 $1,253.4 $1,133.5 $1,078.0 $1,007.5 Gross profit..................................................... $ 416.3 $ 268.2 $ 246.7 $ 249.1 $ 212.1 As a percent of net sales.................................... 28.5% 21.4% 21.8% 23.1% 21.1% Interest expense................................................. $ 11.1 $ 9.8 $ 9.2 $ 9.8 $ 11.3 Net earnings before cumulative effect of accounting change....... $ 166.2 $ 98.0 $ 88.2 $ 91.0 $ 52.6 As a percent of average shareholders' equity................. 21.9% 13.6% 12.8% 13.3% 7.7% Cumulative effect of accounting change........................... $ - $ - $ - $ 3.0 $ - Net earnings..................................................... $ 166.2 $ 98.0 $ 88.2 $ 94.0 $ 52.6 Primary and fully diluted earnings per common share: Net earnings before cumulative effect of accounting change... $ 4.63 $ 2.67 $ 2.39 $ 2.41 $ 1.38 Cumulative effect of accounting change....................... $ - $ - $ - $ 0.08 $ - Net earnings................................................. $ 4.63 $ 2.67 $ 2.39 $ 2.49 $ 1.38 Effective tax rate............................................... 35.7% 32.8% 29.5% 30.4% 28.4% Operating income after taxes..................................... $ 173.4 $ 104.5 $ 93.3 $ 98.7 $ 59.5 As a percent of average capital employed..................... 16.6% 10.5% 9.7% 10.3% 6.1% Liquidity and Capital Resources Working capital.................................................. $ 184.7 $ 125.5 $ 161.8 $ 169.8 $ 149.8 Current ratio.................................................... 2.0 1.6 2.1 2.3 2.1 Net cash provided by continuing operations....................... $ 267.4 $ 209.2 $ 194.1 $ 199.1 $ 184.9 As a percent of long-term obligations (year end)............. 296.1% 214.8% 190.2% 185.6% 166.4% Ratio of earnings to fixed charges............................... 13.3 7.9 8.1 8.4 5.6 Total assets (year end).......................................... $1,215.8 $1,181.1 $1,078.6 $1,083.9 $1,073.1 Average capital employed: Short-term debt.............................................. $ 45.6 $ 39.4 $ 25.2 $ 24.1 $ 72.7 Long-term obligations........................................ 93.3 99.1 105.6 108.2 66.5 Other noncurrent liabilities................................. 144.7 135.0 140.4 138.4 155.7 Shareholders' equity......................................... 758.6 719.6 691.7 686.5 682.7 Total.................................................... $1,042.2 $ 993.1 $ 962.9 $ 957.2 $ 977.6 Long-term obligations (year end)................................. $ 90.3 $ 97.4 $ 102.0 $ 107.3 $ 111.1 As a percent of long-term capital............................ 8.7% 10.0% 10.9% 11.3% 11.8% Dividends declared and paid per common share..................... $ 1.46 $ 1.32 $ 1.26 $ 1.20 $ 1.20 Total common stock dividends..................................... $ 51.8 $ 48.1 $ 46.3 $ 45.1 $ 45.7 Common shares outstanding (year end)............................. 35.0 35.9 36.3 37.2 38.0
Segment Financial Data Amounts in millions Amount Percent of Company Total 1995 1994 1993 1992 1991 1995 1994 1993 1992 1991 Net Sales Construction Materials.............$ 884.7 $ 842.9 $ 756.7 $ 686.4 $ 648.1 61% 67% 67% 64% 64% Chemicals.......................... 576.3 410.5 376.8 391.6 359.4 39 33 33 36 36 Total......................$1,461.0 $1,253.4 $1,133.5 $1,078.0 $1,007.5 100% 100% 100% 100% 100% Earnings Before Interest Expense and Income Taxes Construction Materials.............$ 181.5 $ 162.5 $ 116.7 $ 88.3 $ 41.8 67% 104% 87% 63% 50% Chemicals.......................... 87.8 (7.3) 17.4 51.3 42.6 33 (5) 13 36 50 Segment earnings................... 269.3 155.2 134.1 139.6 84.4 100 99 100 99 100 Interest income, etc............... 0.2 0.5 0.3 0.9 0.3 ----- 1 ----- 1 ----- Total......................$ 269.5 $ 155.7 $ 134.4 $ 140.5 $ 84.7 100% 100% 100% 100% 100% Operating Income After Taxes Construction Materials.............$ 120.6 $ 108.8 $ 81.6 $ 65.3 $ 32.1 70% 104% 87% 66% 54% Chemicals.......................... 52.7 (4.7) 11.5 32.7 27.3 30 (4) 12 33 46 Interest income, etc............... 0.1 0.4 0.2 0.7 0.1 ----- ----- 1 1 ----- Total......................$ 173.4 $ 104.5 $ 93.3 $ 98.7 $ 59.5 100% 100% 100% 100% 100% Net Cash Provided by Continuing Operations Construction Materials.............$ 182.9 $ 182.5 $ 156.6 $ 141.9 $ 141.8 68% 87% 81% 71% 77% Chemicals.......................... 90.8 31.5 41.1 63.8 50.0 34 15 21 32 27 Interest expense, interest income, etc., net.............. (6.3) (4.8) (3.6) (6.6) (6.9) (2) (2) (2) (3) (4) Total......................$ 267.4 $ 209.2 $ 194.1 $ 199.1 $ 184.9 100% 100% 100% 100% 100% Property Additions Construction Materials.............$ 94.4 $ 69.3 $ 59.3 $ 56.5 $ 60.8 75% 43% 59% 57% 71% Chemicals.......................... 31.2 90.5 41.3 42.0 24.9 25 57 41 43 29 Total......................$ 125.6 $ 159.8 $ 100.6 $ 98.5 $ 85.7 100% 100% 100% 100% 100% Depreciation, Depletion and Amortization Construction Materials.............$ 72.0 $ 72.8 $ 74.3 $ 75.5 $ 80.4 65% 68% 72% 73% 73% Chemicals.......................... 38.7 33.9 28.5 27.8 29.3 35 32 28 27 27 Total......................$ 110.7 $ 106.7 $ 102.8 $ 103.3 $ 109.7 100% 100% 100% 100% 100% Average Capital Employed Construction Materials.............$ 681.5 $ 688.1 $ 707.4 $ 708.4 $ 748.4 65% 69% 73% 74% 77% Chemicals.......................... 353.9 294.0 248.5 226.4 226.1 34 30 26 24 23 Cash items......................... 6.8 11.0 7.0 22.4 3.1 1 1 1 2 ----- Total......................$1,042.2 $ 993.1 $ 962.9 $ 957.2 $ 977.6 100% 100% 100% 100% 100% Operating Income After Taxes as a Percent of Average Capital Employed Construction Materials............. 17.7% 15.8% 11.5% 9.2% 4.3% Chemicals.......................... 14.9 (1.6) 4.6 14.5 12.1 Interest income, etc. ............. 1.9 3.4 3.0 3.0 5.1 Total...................... 16.6% 10.5% 9.7% 10.3% 6.1% Definitions of certain financial terms used in this report are provided on page 47.
COMMON STOCK MARKET PRICES AND DIVIDENDS Range of Dividend Paid Common Stock Market Prices Per Share 1995 1994 High Low High Low 1995 1994 Quarter Ended March 31 $57-5/8 $48-1/8 $51-7/8 $45-1/2 $ .365 $ .33 June 30 58-3/4 54 48-1/2 44 .365 .33 September 30 60-3/8 51-3/4 54 44-7/8 .365 .33 December 31 58-7/8 52-1/2 56-1/2 46-1/2 .365 .33 $1.46 $1.32
The Company's common stock is traded on the New York Stock Exchange (ticker symbol VMC). As of January 31, 1996, the number of shareholders of record approximated 4,300. Dividends paid in 1995 totaled $51,848,000 as compared with $48,109,000 paid in 1994. On February 17, 1996, the Board of Directors authorized a quarterly dividend of 42 cents per common share payable March 8, 1996. The new quarterly dividend represents a 15.1% increase over quarterly dividends paid in 1995. During the last five years, the Company's dividend payout rate has averaged 32% of prior year free funds flow. The Company's policy is to pay out a reasonable share of free funds as dividends consistent, on average, with the payout record of past years, and consistent with the goal of maintaining debt ratios within prudent and generally acceptable limits. Additionally, management believes that purchases of the Company's stock frequently may represent an attractive long-term investment. Management intends to continue buying shares when appropriate based on prevailing market conditions and based on the Company's cash position and long-term capital requirements. MANAGEMENT DISCUSSION AND ANALYSIS Of Results of Operations and Financial Condition Vulcan is the largest producer of construction aggregates in the United States and is recognized as one of the nation's leading producers of chemicals. The following is a discussion and analysis of the results of operations and the financial condition of the Company. The discussion and analysis should be read in connection with the historical financial information included in the Consolidated Financial Statements and their notes. RESULTS OF OPERATIONS Vulcan's 1995 sales, net earnings and earnings per share were at record levels. Net earnings were $166.2 million, or $4.63 per share, as compared with 1994 net earnings and earnings per share of $98.0 million and $2.67, respectively. Sales in 1995 were $1.461 billion, up from the 1994 total of $1.253 billion. Pretax earnings totaled $258.4 million, up 77% from last year's amount of $145.9 million. CONSTRUCTION MATERIALS 1995 vs. 1994 Construction Materials sales were at a record level of $884.7 million, up 5% from the 1994 result of $842.9 million. The 1995 result reflects a 3% increase in shipments and a 5% rise in average unit selling prices of crushed stone, the segment's principal product. Of the total increase in sales of $41.8 million, $13.0 million was related to increased volume and $28.8 million was due to higher prices. Segment earnings of $181.5 million, which are before interest expense and income taxes, also were at a record level and were up 12% from 1994's record level of $162.5 million. This improvement reflects better operating results as well as significant gains from assets sales, primarily surplus land. The favorable effects of higher volume and prices were partially offset by higher operating costs. The cost increases were due mainly to the development of several new quarry sites and a significant project to redesign the segment's procurement process. For the year, gains from land sales were $14.2 million as compared with 1994 gains of $4.3 million. The 1994 earnings included a gain from the sale of the Company's industrial sand operation in Brady, Texas, which had been operated jointly by the Construction Materials and Chemicals segments. Accordingly, the gain resulting from the sale of the business was shared equally by the two segments. The Construction Materials segment's $2.1 million share of the pretax gain was offset by provisions associated with the shutdown of an operating facility. Results from the Crescent Market Project (the Company's joint venture to supply limestone from Mexico to the U.S. Gulf Coast market) improved again in 1995. Since the vast majority of its revenues are U.S. dollar denominated, and its functional currency is U.S. dollars, the Crescent Market Project has not been adversely impacted by recent fluctuations in the value of the Mexican peso. 1994 vs. 1993 Construction Materials sales in 1994 of $842.9 million were up 11% from the 1993 result of $756.7 million. This improvement reflected an 8% increase in crushed stone shipments and a 5% rise in average unit selling prices. Of the total increase of $86.2 million in sales, $58.8 million was related to increased volume and $27.4 million was due to higher prices. Construction Materials segment earnings of $162.5 million increased 39% from 1993's level of $116.7 million. The improvement reflected principally higher volumes and prices, partially offset by higher operating costs. Earnings also included the previously mentioned gains from the sale of surplus land and from the sale of the industrial sand business. Results from joint ventures also improved in 1994. CHEMICALS 1995 vs. 1994 Record 1995 sales of $576.3 million were up 40% from the 1994 level of $410.5 million. The increase was due to the recovery in caustic soda prices, higher prices for chlorinated organic products and the effects of acquisitions. The $165.8 million increase in sales reflects $53.1 million due to the effect of higher volume and $112.7 million due to higher prices. Excluding the effects of the Callaway Chemical acquisition on August 1, 1994, and the Rio Linda acquisition on June 1, 1995, sales increased 27%. Segment earnings reached a record of $87.8 million in 1995 as compared to last year's loss of $7.3 million. The increase reflects the effects of higher selling prices for caustic soda and chlorinated organic products. This was partially offset by higher raw material and maintenance costs. The 1995 results include a $7.1 million pretax charge referable to the Company's suspended joint venture soda ash project at Owens Lake, California. Costs incurred to date for engineering and in the pursuit of permitting were expensed. Current year results also included a $3.5 million environmental remediation provision. The loss in 1994 included that year's $7.0 million charge for remediation and the Chemicals $2.1 million share of the gain on the sale of the industrial sand business. 1994 vs. 1993 Chemicals 1994 sales of $410.5 million increased 9% from the 1993 level of $376.8 million, due entirely to the effects of acquisitions. Excluding acquisitions, sales decreased 4% due mainly to lower liquid caustic soda prices in the first half of the year. Average prices also declined for chlorinated organics as a group, but this decline was mitigated by improved prices for chlorine. The increase in volume resulted in a $36.6 million increase in sales, partially offset by a $2.9 million decrease from net lower prices. The Chemicals segment reported a loss for the year of $7.3 million as compared with 1993 earnings of $17.4 million. Within the segment's Chloralkali Business Unit, lower sales, higher raw materials prices, a $7.0 million environmental remediation provision and costs related to production outages at both major plants were the principal causes of the segment's earnings decline. ENVIRONMENTAL ISSUES In 1991 the Environmental Protection Agency issued a unilateral administrative order ("UAO") which directed the named respondents, including the Company and other potentially responsible parties ("PRP"), to clean up a now-closed third party waste disposal site to which the Chemicals segment last shipped waste materials in 1970. During the years 1986 through 1989, the Company recorded provisions totaling $28.8 million for environmental remediation at this site. In 1995 and 1994, the Company recorded additional provisions of $3.5 million and $7.0 million, respectively, for remedial actions at this site, for total provisions of $39.3 million. During 1995, the Company and the other participating PRPs completed active site remediation. Site capping and certain other remaining work under the UAO is expected to be completed in the second quarter of 1996. The Company believes that total provisions now recorded are adequate to cover its share of the anticipated remaining costs. Provisions for other environmental expenses for the last three years have not been material. In 1987 the Company discontinued its former Metals segment and recorded a loss on disposal that reflected provisions for phaseout costs, including the estimated cost of contractual liabilities associated with remediation of environmental conditions at several Metals plants. An additional provision for estimated remediation costs was recorded in 1989. The Company has made significant progress in addressing these contractual liabilities by completing several environmental remediation projects at certain of these Metals plants. Expenditures for these projects were within recorded provisions. While the Company believes its recorded provisions are adequate to address the remainder of these contractual liabilities and other liabilities associated with these operations, factors that might impact the adequacy of provisions include the results of further environmental testing, engineering analyses and planning and negotiations among interested parties. SELLING, ADMINISTRATIVE AND GENERAL Selling, administrative and general expenses of $159.8 million in 1995 increased 28% from the 1994 level of $125.0 million. This reflects principally the effects of Chemicals acquisitions, and, to a lesser extent, higher provisions for incentive plans and professional fees. In 1994 selling, administrative and general expenses were up 13% from the 1993 level. This increase reflects principally the effect of acquisitions by the Chemicals segment and higher provisions for stock-based incentive plans. NEW ACCOUNTING STANDARDS In 1995 the Financial Accounting Standards Board issued SFAS No. 123, Accounting for Stock-Based Compensation, which will be effective for fiscal years beginning after December 15, 1995. The new standard defines a fair value method of accounting for stock-based compensation. Under the fair value method, compensation is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. Pursuant to the new standard, companies are encouraged, but are not required, to adopt the fair value method of accounting for employee stock-based transactions. Companies also are permitted to continue to account for such transactions under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, but would be required to disclose in a note to the financial statements pro forma net income and earnings per share as if the company had applied the new method of accounting. The Company intends to continue to account for employee stock-based compensation under Opinion No. 25. Adoption of the new standard will have no effect on the Company's cash flows. The FASB recently issued SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, effective for financial statements for fiscal years beginning after December 15, 1995. The Company does not expect the adoption of the statement to have any initial material impact upon results of operations. INCOME TAXES The Company's 1995 effective tax rate was 35.7%, up from the 1994 rate of 32.8%. The increase reflects principally the relatively greater impact of higher Chemicals earnings which diluted the effect on the tax rate of statutory depletion referable to construction aggregates production. The effective tax rate increased in 1994 from the 1993 rate of 29.5%. The increase reflects principally the absence in 1994 of adjustments comparable to those made in 1993 to close out excess provisions referable to completed tax audits. OUTLOOK For 1996 the Company is assuming that GDP growth in the U.S. economy will continue throughout the year, but with notably weaker growth during the first half and stronger growth in the second half. The market for construction aggregates is expected to remain reasonably stable, overall, with demand for the year as a whole continuing relatively unchanged or down very slightly. The construction end-use outlook is mixed: demand should be strongest for "other public works" and non-residential buildings, whereas residential buildings may be the weakest sector. However, the outlook for residential construction probably is the hardest to call. Highway construction and maintenance should remain very close to 1995's level. Overall, for Vulcan's Construction Materials segment, 1996 earnings are expected to decline modestly from 1995's level as a result of slightly lower volume and lower gains from surplus land sales. Current market conditions for Chemicals' two business units - Chloralkali and Performance Systems - are relatively stable. Notwithstanding some recent softening in caustic prices, Chloralkali earnings should increase in 1996, reflecting principally the absence of significant unusual charges recorded in 1995. Owing to business development activities, mainly at Callaway Chemical Company, opportunities in each of the principal markets served by Performance Systems - pulp and paper, textiles and water treatment - should remain attractive in 1996. Performance Systems earnings should increase in 1996 for several reasons. These include: the impact of a full year's results from the 1995 acquisition of Rio Linda Chemical Company, improved margins at Callaway Chemical Company, and improved earnings resulting from the restructuring of Vulcan Peroxidation Systems and the sale of its equipment business. In view of all these prospects, the Chemicals segment is expected to achieve record sales and earnings again in 1996. For the Company as a whole, the current expectation is that 1996 earnings and earnings per share should approximate, or possibly exceed, the record 1995 results. LIQUIDITY AND CAPITAL RESOURCES CASH FLOWS Net cash provided by continuing operations amounted to $267.4 million in 1995, up 28% from 1994's total of $209.2 million. Net cash provided by the Chemicals segment increased by $59.3 million, principally as a result of sharply higher earnings and lower spending on acquisitions. Net cash provided by the Construction Materials segment of $182.9 million was virtually level compared with the prior year. The Company's long-standing ability to generate significant cash flows enabled it to fund capital requirements internally, reduce long-term debt, and return $101.9 million to shareholders through dividends and share purchases. Net cash provided by operations for each segment in each of the last three years, including the effect of working capital changes, is summarized below (amounts in millions): 1995 1994 1993 Construction Materials $182.9 $182.5 $156.6 Chemicals 90.8 31.5 41.1 Interest expense, interest income, etc., net (6.3) (4.8) (3.6) Total $267.4 $209.2 $194.1 Net cash used for investing activities totaled $106.4 million in 1995, down $68.0 million from the 1994 level. Cash expenditures for property, plant and equipment, including acquisitions, were $136.3 million in 1995, down $51.3 million, while cash investments of $1.9 million in associated companies was virtually the same as the prior year. Cash spending for acquisitions totaled $27.2 million compared with $87.6 million in 1994. Net cash used for financing activities amounted to $145.9 million in 1995, up $105.7 million from the prior year's $40.2 million. Interest-bearing debt was reduced $43.9 million in 1995 compared with a net increase of $36.6 million in 1994. No long-term debt was issued during 1995 or 1994. Purchases of the Company's common stock totaled $50.1 million in 1995, up sharply from the 1994 level of $28.6 million. The Company's policy is to pay out a reasonable share of free funds flow as dividends consistent, on average, with the payout record of past years, and consistent with the goal of maintaining debt ratios within prudent and generally acceptable limits. Additionally, management believes that purchases of the Company's stock frequently may represent an attractive long-term investment. Management intends to continue buying shares when appropriate based on prevailing market conditions and based on the Company's cash position and long-term capital requirements. Working Capital Working capital, exclusive of debt and cash items (cash, cash equivalents and short-term investments), totaled $174.8 million at December 31, 1995, up $8.2 million from the 1994 level. This increase compares with a working capital increase of $15.7 million in 1994 and a decrease of $5.7 million in 1993. The Company's overall current position is summarized below (dollar amounts in millions and as of year end): 1995 1994 1993 Working capital, exclusive of debt and cash items $174.8 $166.6 $150.9 Cash and cash equivalents 21.9 7.7 14.0 Short-term debt (10.6) (47.5) (1.7) Accrued interest (1.4) (1.3) (1.4) Total working capital (including debt and cash items) $184.7 $125.5 $161.8 Current ratio 2.0 1.6 2.1 Acid test ratio 1.1 .9 1.2 The increase in the current ratio from 1994 to 1995 is attributable to lower current liabilities, i.e., short-term borrowing of $3.6 million at year end 1995 as compared with $42.8 million at December 31, 1994. The reduction in the current ratio from 1993 to 1994 was due to higher current liabilities, mainly short-term borrowing which amounted to $42.8 million at year end 1994 as compared with none at December 31, 1993. PROPERTY ADDITIONS Property additions, including acquisitions, totaled $125.6 million in 1995, down 21% from the 1994 level of $159.8 million. The Company classifies its property additions into three categories based upon the predominant purpose of the project, as explained on page 47. The table below summarizes property additions by each category (amounts in millions): Project Purpose 1995 1994 1993 Replacement $ 69.0 $ 53.0 $ 48.7 Environmental control 8.4 3.9 7.1 Subtotal 77.4 56.9 55.8 Profit adding: Acquisitions 12.3 58.1 4.2 Other 35.9 44.8 40.6 Subtotal 48.2 102.9 44.8 Total $125.6 $159.8 $100.6 Total property additions were lower in 1995 due to less spending for acquisitions by the Chemicals segment. The increase in property additions in 1994 reflects higher spending for acquisitions by the Chemicals segment. Commitments for capital expenditures were $17.0 million at December 31, 1995. This included $11.9 million referable to various Chemicals projects. Cash flow for the next year is expected to be adequate to cover commitments. SHORT-TERM BORROWINGS AND INVESTMENTS During most of the years 1993 through 1995, the Company was in a net short-term borrowing position. Short-term borrowings in 1995 reached a maximum of $93.9 million, averaged $39.9 million and were $3.6 million at year end. Comparable 1994 amounts were $91.7 million, $36.0 million and $42.8 million, respectively. Details pertaining to short-term borrowings during the last three years (dollar amounts in millions) are as follows: 1995 1994 1993 Year end $ 3.6 $42.8 $ - Maximum outstanding $93.9 $91.7 $64.0 Average outstanding $39.9 $36.0 $25.5 Weighted average interest rate 6.4% 4.8% 3.2% The above interest rate averages were computed using daily outstanding principal amounts. The Company's policy is to maintain unused bank lines of credit and/or committed credit facilities at least equal to its outstanding commercial paper. Unsecured bank lines of credit totaling $130.0 million were maintained at the end of 1995. Standard & Poor's Corporation and Moody's Investors Services, Inc. have assigned ratings of A-1+ and P-1, respectively, to the Company's commercial paper. The investment of excess cash during the last three years (dollar amounts in millions) is shown below: 1995 1994 1993 Year end $16.0 $ - $ - Maximum invested $45.0 $45.1 $26.2 Average invested $ 3.5 $ 7.7 $ 7.2 Taxable-equivalent yield 7.1% 4.7% 3.3% LONG-TERM OBLIGATIONS During 1995 the Company reduced its total long-term obligations by $7.1 million to $90.3 million as compared with a net decrease of $4.6 million in 1994. During the three-year period ended December 31, 1995, long-term obligations decreased cumulatively by $17.0 million from the $107.3 million outstanding at December 31, 1992. During the same three year period, shareholders' equity, net of common stock purchases of $118.7 million and dividends of $146.3 million, increased by $96.5 million to $796.6 million. The Company's overall long-term capital position is shown in the following table (dollar amounts in millions and as of year end): 1995 1994 1993 Long-term debt $ 90.3 $ 97.4 $102.0 Other noncurrent liabilities 151.5 140.8 132.8 Shareholders' equity 796.6 731.6 703.0 Total long-term capital $1,038.4 $969.8 $937.8 Long-term debt as a percent of: Total long-term capital 8.7% 10.0% 10.9% Shareholders' equity 11.3% 13.3% 14.5% Net cash provided by continuing operations as a percent of long-term debt 296% 215% 190% Ratio of earnings to fixed charges 13.3 7.9 8.1 Although the future ratio of long-term obligations to total long-term capital will depend upon specific investment and financing decisions, management believes the Company's cash-generating capability, along with its financial strength and business diversification, can reasonably support a ratio of 25% to 30%. The actual ratio at the end of 1995 was 8.7%. The Company has made acquisitions from time to time and will continue actively to pursue attractive investment opportunities. If financing is required for this purpose, it may be accomplished temporarily on a short-term basis or by incurring long-term debt. Letters of intent to acquire Lion Industries and Mayo Chemical Company through the Chemicals segment have been announced. Subject to normal due diligence reviews and related negotiations, the Company plans to close these transactions by the second quarter of 1996. The Company's long-term borrowing requirements can be satisfied in either the public debt or private placement markets. The Company's medium-term notes issued in 1991 are rated AA- by Standard & Poor's and A1 by Moody's. COMMON STOCK During 1995 the Company purchased 947,908 shares of its common stock at a cost of $50.1 million, equal to an average price of $52.90 per share. The acquired shares are being held for general corporate purposes, including distributions under management incentive plans. The Company's decisions to purchase shares of common stock are made based upon the common stock's valuation and price, the Company's liquidity, its actual and projected needs for cash for investment projects and regular dividends, and the Company's debt level. The number and cost of shares purchased during each of the last three years is shown below: 1995 1994 1993 Shares purchased: Number 947,908 603,700 895,015 Total cost (millions) $50.1 $28.6 $40.0 Average cost $52.90 $47.39 $44.68 Shares in treasury at year end: Number 11,602,590 10,666,952 10,224,218 Average cost $37.34 $35.93 $35.03 The number of shares remaining under the current purchase authorization was 1,599,792 shares as of December 31, 1995. CAPITAL EMPLOYED During 1995 total average capital employed in continuing operations was $1,042.2 million, up $49.1 million from the 1994 average of $993.1 million. The latter figure reflects an increase of $30.2 million, or 3%, from the $962.9 million employed on average in 1993. Average capital employed in the Company's business segments is shown in the table below (amounts in millions): 1995 1994 1993 Construction Materials $ 681.5 $688.1 $707.4 Chemicals 353.9 294.0 248.5 Cash items 6.8 11.0 7.0 Total $1,042.2 $993.1 $962.9 The sources and deployment of the year-to-year increases in total average capital employed are shown below (amounts in millions; brackets indicate a decrease): 1994-95 1993-94 Sources: Short-term debt $ 6.2 $ 14.2 Long-term obligations (5.8) (6.5) Other noncurrent liabilities 9.7 (5.4) Shareholders' equity 39.0 27.9 Total $ 49.1 $ 30.2 Deployment: Construction Materials $ (6.6) $(19.3) Chemicals 59.9 45.5 Cash items (4.2) 4.0 Total $ 49.1 $ 30.2 During the period 1991 through 1995, total average capital employed in continuing operations has grown at an average annual compound rate of 2.0%, or by the cumulative amount of $127.3 million. During this period, interest-bearing debt has increased by $29.6 million and, as a percent of average capital employed, has increased from 12.0% to 13.3%. The following summary indicates the sources and deployment of the increase in average capital employed from 1991 to 1995 (amounts in millions): Amount of Increase % of (Decrease) Total Sources: Short-term debt $(16.5) (13)% Long-term obligations 46.1 36 Other noncurrent liabilities .6 1 Shareholders' equity 97.1 76 Total $127.3 100 % Deployment: Construction Materials $ 24.7 19 % Chemicals 125.0 98 Cash items (22.4) (17) Total $127.3 100 %
SUPPLEMENTARY INFORMATION - QUARTERLY FINANCIAL DATA Amounts in millions, except per share data First Second Third Fourth Total Quarter Quarter Quarter Quarter Year 1995 Net sales..............................................$294.4 $382.8 $422.0 $361.8 $1,461.0 Gross profit........................................... 58.8 113.2 133.8 110.5 416.3 Net earnings .......................................... 16.0 47.7 59.1 43.4 166.2 Primary and fully diluted earnings per share........... 0.44 1.32 1.64 1.23 4.63 1994 Net sales..............................................$216.9 $326.7 $360.4 $349.4 $1,253.4 Gross profit........................................... 21.0 77.4 90.4 79.4 268.2 Net earnings (loss).................................... (5.2) 33.7 37.6 31.9 98.0 Primary and fully diluted earnings (loss) per share.... (0.14) 0.92 1.02 0.87 2.67 1993 Net sales..............................................$214.1 $306.0 $331.4 $282.0 $1,133.5 Gross profit........................................... 29.7 74.0 85.1 57.9 246.7 Net earnings (loss).................................... (0.5) 31.6 36.6 20.5 88.2 Primary and fully diluted earnings (loss) per share.... (0.01) 0.84 0.99 0.57 2.39
Consolidated Statements of Earnings Vulcan Materials Company and Subsidiary Companies For the Years Ended December 31, 1995, 1994 and 1993 Amounts and shares in thousands, except per share data 1995 1994 1993 Net sales................................................$1,460,974 $1,253,360 $1,133,489 Cost of goods sold....................................... 1,044,710 985,198 886,764 Gross profit on sales.................................... 416,264 268,162 246,725 Selling, administrative and general expenses............. 159,829 125,036 111,085 Other operating costs.................................... 6,347 5,526 4,987 Other income, net Interest income........................................ 1,099 1,224 1,013 Other, net............................................. 18,333 16,903 2,727 Total other income, net..................... 19,432 18,127 3,740 Earnings before interest expense and income taxes........ 269,520 155,727 134,393 Interest expense (Note 4)................................ 11,099 9,821 9,171 Earnings before income taxes............................. 258,421 145,906 125,222 Provision for income taxes (Note 7) Current................................................ 86,437 41,339 37,460 Deferred............................................... 5,744 6,591 (467) Total provision for income taxes............ 92,181 47,930 36,993 Net earnings.............................................$ 166,240 $ 97,976 $ 88,229 Primary and fully diluted net earnings per share......... $4.63 $2.67 $2.39 Dividends per share...................................... $1.46 $1.32 $1.26 Average common and common equivalent shares outstanding.. 35,933 36,683 36,975 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
CONSOLIDATED BALANCE SHEETS Vulcan Materials Company and Subsidiary Companies As of December 31, 1995, 1994 and 1993 Amounts in thousands 1995 1994 1993 Assets Current assets Cash and cash equivalents (Note 2)..............................$ 21,869 $ 7,717 $ 13,996 Accounts and notes receivable: Customers, less allowance for doubtful accounts: 1995, $8,176; 1994, $8,244; 1993, $7,284.................. 178,966 179,315 141,606 Other......................................................... 2,094 2,813 8,798 Inventories (Note 3)........................................... 126,801 112,481 105,017 Deferred income taxes........................................... 26,555 29,074 26,898 Prepaid expenses................................................ 5,836 5,398 6,298 Total current assets................................. 362,121 336,798 302,613 Investments and long-term receivables............................. 56,272 58,138 56,505 Property, plant and equipment, net (Note 4)....................... 698,033 701,757 657,785 Deferred charges and other assets (Note 8)........................ 99,368 84,451 61,648 Total ...............................................$1,215,794 $1,181,144 $1,078,551 Liabilities and Shareholders' Equity Current liabilities Current maturities of long-term debt............................$ 7,070 4,687 $ 1,671 Notes payable (Note 2).......................................... 3,569 42,779 - Trade payables and accruals..................................... 98,253 102,394 89,504 Accrued income taxes............................................ 22,262 19,423 14,450 Accrued salaries and wages...................................... 28,658 23,068 20,437 Accrued interest................................................ 1,300 1,415 1,356 Other accrued liabilities (Note 9).............................. 16,297 17,582 13,397 Total current liabilities............................ 177,409 211,348 140,815 Long-term debt (Note 5)........................................... 90,278 97,380 102,035 Deferred income taxes (Note 7).................................... 85,935 82,507 74,193 Deferred management incentive and other compensation (Note 8)..... 26,618 21,575 17,885 Other postretirement benefits (Note 8)............................ 32,717 29,835 27,377 Other noncurrent liabilities (Note 9)............................. 6,199 6,870 13,283 Other commitments and contingent liabilities (Note 9) Shareholders' equity Common stock, $1 par value...................................... 46,573 46,573 46,573 Capital in excess of par value.................................. 9,089 8,585 4,587 Retained earnings............................................... 1,174,171 1,059,779 1,009,912 Total................................................ 1,229,833 1,114,937 1,061,072 Less cost of stock in treasury.................................. 433,195 383,308 358,109 Total shareholders' equity........................... 796,638 731,629 702,963 Total................................................$1,215,794 $1,181,144 $1,078,551 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS Vulcan Materials Company and Subsidiary Companies For the Years Ended December 31, 1995, 1994 and 1993 Amounts in thousands 1995 1994 1993 OPERATIONS Net earnings ....................................................$ 166,240 $ 97,976 $ 88,229 Adjustments to reconcile net earnings to net cash provided by continuing operations: Depreciation, depletion and amortization................... 110,677 106,695 102,780 (Increase) decrease in assets before effects of business acquisitions: Accounts and notes receivable...................... 3,634 (21,188) 991 Inventories....................................... (11,899) 965 3,199 Deferred income taxes............................. 2,519 (2,176) (2,294) Prepaid expenses.................................. (362) 1,056 (1,085) Increase (decrease ) in liabilities before effects of business acquisitions: Accrued interest and income taxes................. (355) (84) (27) Trade payables, accrual, etc...................... (1,352) 16,457 5,906 Deferred income taxes............................ 3,428 8,314 1,810 Other noncurrent liabilities..................... 7,255 (266) (10,564) Issuance of common stock in connection with Performance Share Plan............................. 699 998 904 Other, net................................................. (13,126) 470 4,246 Net cash provided by continuing operations ............ 267,358 209,217 194,095 Net cash used for discontinued operations (Note 9)..... (902) (958) (1,077) Net cash provided by operations........................ 266,456 208,259 193,018 INVESTING ACTIVITIES Purchases of property plant and equipment........................ (109,174) (100,090) (95,977) Payment for business acquisitions................................ (27,172) (87,540) (4,507) Proceeds from sale of property, plant and equipment.............. 31,881 15,358 6,009 Net investment in nonconsolidated companies...................... (1,913) (2,112) (9,336) Net cash used for investing activities................. (106,378) (174,384) (103,811) FINANCING ACTIVITIES Net borrowings (payments) - commercial paper and bank lines of credit................ (39,211) 42,779 - Payment of short-term debt....................................... (4,687) (1,809) (1,184) Payment of long-term debt........................................ (32) (4,403) (3,414) Purchases of common stock (Note 10).............................. (50,148) (28,612) (39,986) Dividends paid................................................... (51,848) (48,109) (46,296) Net cash used for financing activities................. (145,926) (40,154) (90,880) Net decrease in cash and cash equivalents........................ 14,152 (6,279) (1,673) Cash and cash equivalents at beginning of year................... 7,717 13,996 15,669 Cash and cash equivalents at end of year.........................$ 21,869 $ 7,717 $ 13,996 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
Consolidated Statements of Shareholders' Equity Vulcan Materials Company and Subsidiary Companies For the Years Ended December 31, 1995, 1994 and 1993 Amounts and shares in thousands 1995 1994 1993 Shares Amount Shares Amount Shares Amount Common stock, $1 par value Authorized:160,000 shares Issued (no changes in 1995, 1994 and 1993)....................... 46,573 $ 46,573 46,573 $ 46,573 46,573 $ 46,573 Capital in excess of par value Balance at beginning of year....... 8,585 4,587 3,962 Shares issued in connection with the acquisition of business .... - 3,490 - Distributions under Performance Share Plan....................... 414 514 604 Distributions under Stock Plan for Non-employee Directors.......... 24 23 21 Other.............................. 66 (29) - Balance at end of year............. 9,089 8,585 4,587 Retained earnings Balance at beginning of year....... 1,059,779 1,009,912 967,979 Net earnings....................... 166,240 97,976 88,229 Cash dividends on common stock (51,848) (48,109) (46,296) Balance at end of year............. 1,174,171 1,059,779 1,009,912 Common stock held in treasury Balance at beginning of year....... (10,666) (383,308) (10,224) (358,109) (9,350) (318,402) Shares issued in connection with the acquisition of business .... - - 140 2,952 - Purchase of common shares.......... (948) (50,148) (604) (28,612) (895) (39,985) Distributions under Performance Share Plan...................... 11 247 21 442 20 270 Distributions under Stock Plan for Non-employee Directors.......... 1 14 1 19 1 8 Balance at end of year............. (11,602) (433,195) (10,666) (383,308) (10,224) (358,109) Total....................... $ 796,638 $ 731,629 $ 702,963 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the Company and all majority or wholly-owned subsidiary companies. All significant intercompany transactions and accounts have been eliminated in consolidation. Investments in joint ventures and the common stock of associated companies in which the Company has ownership interests of 20% to 50% are accounted for by the equity method. All other investments are carried at the lower of cost or market, and income is recorded as dividends are received or interest is earned. CASH EQUIVALENTS The Company classifies as cash equivalents all highly liquid securities with a maturity of three months or less at the time of purchase. INVENTORIES The Company uses the last-in, first-out (LIFO) method of valuation for most of its inventories because it results in a better matching of costs with revenues. Inventories, other than operating supplies, are stated at the lower of cost, as determined by the LIFO method, or market. Such cost includes raw materials, direct labor and production overhead. Substantially all operating supplies are carried at average cost, which does not exceed market. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are carried at cost less allowances for accumulated depreciation, depletion and amortization. The cost of properties held under capital leases is equal to the lower of the net present value of the minimum lease payments or the fair value of the leased property at the inception of the lease. DEPRECIATION, DEPLETION AND AMORTIZATION Depreciation is computed by the straight-line method at rates based upon the estimated service lives of the various classes of assets, which include machinery and equipment, buildings and land improvements. Amortization of capitalized leases is included with depreciation expense. Cost depletion on depletable quarry land is computed by the unit of production method based upon estimated recoverable units. Leaseholds are amortized over varying periods not in excess of applicable lease terms. OTHER COSTS Income is charged as costs are incurred for start-up of new plants and for normal recurring costs of mineral exploration, removal of overburden from active mineral deposits, and research and development. Repairs and maintenance are charged to costs and operating expenses. Renewals and betterments which add materially to the utility or useful lives of property, plant and equipment are capitalized. Environmental expenditures that pertain to current operations or relate to future revenues are expensed or capitalized consistent with the Company's capitalization policy. Expenditures that relate to an existing condition caused by past operations and do not contribute to future revenue are expensed. Environmental compliance costs include maintenance and operating costs with respect to pollution control facilities, the cost of ongoing monitoring programs and similar costs. Costs are expensed and accrued as liabilities when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated. These amounts are accrued no later than the feasibility study and/or when the Company commits to a formal plan of action. INCOME TAXES Annual provisions for income taxes are based primarily on reported earnings before income taxes and include appropriate provisions for deferred income taxes resulting from the tax effect of the difference between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes. In addition, such provisions reflect adjustments for the following items: Permanent differences, principally the excess of percentage depletion over the tax basis of depletable properties. An estimate of additional cost that may be incurred, including interest on deficiencies but excluding adjustments representing temporary differences, upon final settlement of returns after audit by various taxing authorities. Balances or deficiencies in prior year provisions that become appropriate as audits of those years progress. EARNINGS PER SHARE Primary and fully diluted earnings per share of common stock are computed by dividing net earnings by the weighted average number of common shares and common share equivalents outstanding during the year. Common share equivalents represent the number of shares contingently issuable under long-term performance share plans and the stock plan for non-employee directors. USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. CASH Bank lines of credit amounted to $130,000,000 at year end 1995 and 1994, and $70,000,000 at the end of 1993. At year end 1995 the Company did not have any commercial paper outstanding, but did have $3,400,000 in bank borrowings referable to a Canadian subsidiary. At the end of 1994, $35,000,000 was used to back up commercial paper outstanding and $7,800,000 was drawn down as bank borrowings. The lines were not in use at the end of 1993. All of the lines of credit extended to the Company in 1995, 1994 and 1993 were based on a commitment fee arrangement. The Company also maintained balances or paid fees to compensate its banks for certain services. The Company was in compliance with these informal compensation arrangements during all three years. Because the arrangements are evaluated on a twelve-month average basis, the Company does not consider any of its cash balances to be restricted as of any specific date. 3. INVENTORIES Inventories at December 31 are as follows (in thousands of dollars): 1995 1994 1993 Finished products $ 90,009 $ 77,721 $ 75,954 Raw materials 10,062 9,248 3,856 Products in process 979 622 965 Operating supplies and other 25,751 24,890 24,242 Total inventories $126,801 $112,481 $105,017 The above amounts include inventories valued under the last-in, first-out (LIFO) method totaling $97,959,000, $79,909,000 and $80,614,000 at December 31, 1995, 1994 and 1993, respectively. Estimated current cost exceeded LIFO cost at December 31, 1995, 1994 and 1993 by $36,899,000, $29,049,000 and $32,986,000, respectively. If all inventories valued at LIFO cost had been valued under the methods (substantially average cost) used prior to the adoption of the LIFO method, the approximate effect on net earnings would have been an increase of $4,784,000 ($.13 per share effect) in 1995, a decrease of $2,476,000 ($.07 per share effect) in 1994 and an increase of $387,000 ($.01 per share effect) in 1993. 4. PROPERTY, PLANT AND EQUIPMENT Balances of major classes of assets and allowances for depreciation, depletion and amortization at December 31 are as follows (in thousands of dollars): 1995 1994 1993 Land and land improvements $ 203,920 $ 206,457 $ 200,856 Buildings 77,732 76,629 62,995 Machinery and equipment 1,536,742 1,486,577 1,372,667 Leaseholds 6,483 6,471 5,575 Construction in progress 34,559 32,754 55,912 Total 1,859,436 1,808,888 1,698,005 Less allowances for depreciation, depletion and amortization 1,161,403 1,107,131 1,040,220 Property, plant and equipment, net $ 698,033 $ 701,757 $ 657,785 The Company capitalized interest cost of $297,000 in 1995, $878,000 in 1994 and $1,016,000 in 1993 with respect to qualifying construction projects. Total interest cost incurred before recognition of the capitalized amount was $11,396,000 in 1995, $10,699,000 in 1994 and $10,187,000 in 1993. 5. DEBT Long-term debt, exclusive of current maturities, at December 31 is summarized as follows (in thousands of dollars): 1995 1994 1993 Medium-term notes $ 71,000 $76,000 $ 80,000 6 5/8% pollution control revenue bonds 6,800 6,800 6,800 6 3/8% pollution control revenue bonds 5,800 5,800 5,800 Variable rate pollution control revenue bonds 1,200 3,000 3,350 Other notes 5,478 5,780 6,085 Total $ 90,278 $97,380 $102,035 Estimated fair value $101,782 $98,597 $114,372 In May 1991 the Company filed a shelf registration statement with the Securities and Exchange Commission for the registration of $200,000,000 principal amount of debt securities. The issuances of these medium-term notes in 1991 totaled $81,000,000. The dollar-weighted average maturity of the notes, as calculated from the dates of issuance, approximated 13 years. Maturities at the time of issuance ranged from three to thirty years with a maximum of $10,000,000 due in any one year. At that time, the weighted average interest rate on the notes was 8.53% with a range of 7.59% to 8.85%. The $71,000,000 in notes outstanding as of December 31, 1995 have a weighted average maturity of 10.0 years with a weighted average interest rate of 8.60%. The 6 5/8% pollution control revenue bonds issued on behalf of the Company in 1978 are payable in installments of $1,000,000 in the years 1998 and 1999 and installments of $1,200,000 in the years 2000-2003. The 7 7/8% and 8% pollution control revenue bonds issued in 1980 were refunded effective February 1, 1992, at an interest rate of 6 3/8%, and are now payable in 2012. The variable rate pollution control revenue bonds issued in 1984 are due in 1999 ($1,200,000). Other notes include $3,000,000 representing a fixed rate tax exempt industrial development bond issue which matures in 2011 and notes issued for businesses acquired. The aggregate principal payments for the five years subsequent to December 31, 1995 are: 1996-$7,074,000; 1997-$5,400,000; 1998-$6,565,000; 1999-$6,565,000; and 2000-$6,565,000. The Company is not subject to any contractual restrictions on the aggregate amount of its indebtedness or minimum working capital, or the amount it may expend for cash dividends and purchases of its stock. The estimated fair value amounts of long-term debt have been determined by discounting expected future cash flows using interest rates on U.S. Treasury bills, notes or bonds, as appropriate. For cash equivalents, accounts and notes receivable, current portion of deferred income taxes, accounts payable, accrued income taxes, accrued interest and other applicable accrued liabilities, the carrying amounts are a reasonable estimate of fair value. The fair value estimates presented are based on information available to management as of December 31, 1995, 1994 and 1993. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued since those dates. 6. OPERATING LEASES Total rental expense of nonmineral leases, exclusive of rental payments made under leases of one month or less, is summarized as follows (in thousands of dollars): 1995 1994 1993 Minimum rentals $17,234 $16,138 $ 7,600 Contingent rentals (based principally on usage) 11,205 11,212 10,021 Total $28,439 $27,350 $17,621 Future minimum operating lease payments under all leases with initial or remaining noncancellable lease terms in excess of one year, exclusive of mineral leases, at December 31, 1995 range from $2,045,000 to $9,826,000 annually through 2000 and aggregate $8,265,000 thereafter. Lease agreements frequently include renewal options and require that the Company pay for utilities, taxes, insurance and maintenance expense. Options to purchase also are included in some lease agreements. 7. INCOME TAXES The components of earnings before income taxes are as follows (in thousands of dollars): 1995 1994 1993 Domestic $253,991 $143,502 $123,932 Foreign 4,430 2,404 1,290 Total $258,421 $145,906 $125,222 Provisions for income taxes consist of the following (in thousands of dollars): 1995 1994 1993 Current: Federal $72,332 $34,194 $33,179 State and local 14,087 7,135 4,277 Foreign 18 10 4 Total 86,437 41,339 37,460 Deferred: Federal 4,861 5,953 (59) State and local 883 578 (408) Foreign - 60 - Total 5,744 6,591 (467) Total provision $92,181 $47,930 $36,993 The effective tax rate on income differs from the U.S. statutory rate due to the following: 1995 1994 1993 Federal statutory tax rate 35.0% 35.0% 35.0% Increase (decrease) in tax rate resulting from: Depletion (4.5) (7.2) (7.3) State and local income taxes, net of federal income tax benefit 3.8 3.4 2.0 Adjustment to net deferred income tax liability for enacted federal tax rate change - - 0.9 Miscellaneous items 1.4 1.6 (1.1) Effective tax rate 35.7% 32.8% 29.5% Deferred income taxes on the balance sheet result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax liability are as follows (in thousands of dollars): 1995 1994 1993 Deferred tax assets related to: Accrual for postretirement benefits $ 13,318 $12,123 $11,117 Accrual for environmental reclamation 1,604 5,902 8,675 Accounts receivable, principally allowance for doubtful accounts 3,592 3,780 3,075 Inventory adjustments 7,278 7,079 7,231 Pensions, incentives and deferred compensation 10,066 7,142 4,827 Other items 9,518 7,765 6,126 Total deferred tax assets 45,376 43,791 41,051 Deferred tax liabilities related to: Fixed assets, principally depreciation 98,821 92,120 83,175 Other items 5,935 5,259 5,171 Total deferred tax liabilities 104,756 97,379 88,346 Net deferred tax liability $ 59,380 $53,588 $47,295 8. PENSION, OTHER POSTRETIREMENT BENEFITS AND INCENTIVE COMPENSATION PLANS PENSION PLANS The Company sponsors three noncontributory, defined benefit pension plans. These plans cover substantially all employees other than those covered by union-administered plans. Normal retirement age is 65, but the plans contain provisions for earlier retirement. Benefits for the Salaried Plan and the Chemicals Hourly Plan are based on salaries or wages and years of service; the Construction Materials Hourly Plan provides benefits equal to a flat dollar amount for each year of service. Charges to earnings referable to company-administered pension plans totaled $1,187,000 in 1995, $3,088,000 in 1994 and $2,148,000 in 1993. Components of the net periodic pension charges are as follows (in thousands of dollars): 1995 1994 1993 Service cost - benefits earned during the period $ 8,665 $ 9,551 $ 8,286 Interest cost 18,019 17,167 16,195 Actual return on plan assets (51,744) (3,923) (32,280) Net amortization and deferral 26,247 (19,707) 9,947 Net periodic pension charge $ 1,187 $ 3,088 $ 2,148 The Company's qualified pension plans have assets in excess of the accumulated benefit obligation. Plan assets are composed primarily of marketable domestic and international equity securities, corporate and government debt securities and real estate. Unrecognized net plan assets at the implementation of SFAS No. 87, Employers' Accounting for Pensions, in 1986 are being amortized over the average of the covered employees' remaining service lives, which range from 12 to 16 years. The following table reconciles the funded status of all the Company's plans with the related amounts recognized in the Company's consolidated balance sheets at December 31 (in thousands of dollars): 1995 1994 1993 Actuarial present value of benefit obligations: Based on employment service to date and current salary levels: Vested $(174,436) $(134,409) $(139,958) Nonvested (7,143) (4,792) (5,927) Accumulated benefit obligation (181,579) (139,201) (145,885) Effect of projected future salary increases (83,011) (68,107) (85,297) Projected benefit obligation (264,590) (207,308) (231,182) Plan assets at fair market value 305,398 264,174 271,821 Plan assets in excess of projected benefit obligation 40,808 56,866 40,639 Unamortized portion of unrecognized net asset at implementation of SFAS No. 87 (13,225) (16,696) (20,167) Unrecognized net gain (26,057) (38,748) (16,395) Unrecognized prior service cost 8,148 9,151 9,308 Net prepaid pension cost $ 9,674 $ 10,573 $ 13,385 Annual net periodic pension charges and credits are calculated using plan assumptions as of the end of the prior year, whereas the funded status and related pension obligations are determined using the assumptions as of the end of the current year. Plan assumptions at December 31 were as follows: 1995 1994 1993 Discount rates used to determine the pension obligations 7.00% 8.50% 7.25% Discount rates used to determine the net periodic cost and other recognized gains - First 18 years 8.50 7.25 8.00 - Thereafter 8.50 7.25 6.75 Rates of increase in compensation levels (for salary-related plans) 4.25 5.00 5.50 Expected long-term rates of return on plan assets 8.25 8.25 8.25 The Company funds the pension trusts currently in amounts determined under the individual entry age level premium method, including benefit increases expected as a result of projected wage and salary increases occurring between the date of valuation and the individual retirement dates. Certain of the Company's hourly employees in unions are covered by multi-employer defined benefit pension plans. Contributions to these plans approximated $1,859,000 in 1995, $1,617,000 in 1994 and $1,637,000 in 1993. The actuarial present value of accumulated plan benefits and net assets available for benefits for employees in the union-administered plans are not determinable from available information. Seventeen percent of the labor force is covered by collective bargaining agreements and 7% are covered by labor agreements that expire within one year. POSTRETIREMENT PLANS In addition to pension benefits, the Company provides certain health care benefits and life insurance for some retired employees. Substantially all of the Company's salaried employees and, where applicable, hourly employees may become eligible for those benefits if they reach at least age 55 and meet certain service requirements while working for the Company. Generally, company-provided health care benefits terminate when covered individuals become eligible for Medicare benefits or reach age 65, whichever first occurs. The components of net periodic postretirement benefit charges and credits are as follows (in thousands of dollars): 1995 1994 1993 Service cost - benefits attributed to service during the period $1,965 $1,742 $1,536 Interest cost 3,558 2,919 2,792 Actual return on assets (158) (150) (136) Net amortization and deferral 209 329 178 Net periodic postretirement benefit cost $5,574 $4,840 $4,370 The Company funds the postretirement benefits plan each year through contributions to a trust fund for health care benefits and through payments of premiums to providers of life insurance. All assets of the plan relate to the life insurance and are composed of reserves held by the insurer. The following table sets forth the combined funded status of the plan and its reconciliation with the related amounts recognized in the Company's consolidated balance sheets at December 31 (in thousands of dollars): 1995 1994 1993 Accumulated postretirement benefit obligation: Retirees $(11,355) $(10,570) $(11,471) Fully eligible active plan participants (13,658) (11,934) (11,982) Other active plan participants (19,478) (18,439) (16,004) Total accumulated postretirement benefit obligation (44,491) (40,943) (39,457) Plan assets at fair market value 2,842 2,628 2,378 Accumulated postretirement benefit obligation in excess of plan assets (41,649) (38,315) (37,079) Unrecognized prior service cost 6 6 7 Unrecognized net loss 7,726 7,274 8,495 Accrued postretirement benefit cost $(33,917) $(31,035) $(28,577) Annual net periodic postretirement benefit charges and credits are calculated using plan assumptions as of the end of the prior year, whereas the funded status and related benefit obligations are determined using the assumptions as of the end of the current year. Plan assumptions at December 31 were as follows: 1995 1994 1993 Discount rates 7.00% 8.50% 7.25% Expected long-term rate of return on plan assets 7.00 7.00 7.00 Rate of increase in per capita claims cost - First year 10.00 12.00 13.00 - Ultimate rate 5.00 6.00 6.00 If the health care cost trend rates were increased 1.0% each year, the accumulated postretirement benefit obligation as of December 31, 1995 would have increased by $4,582,000 (or 10.3%) and the aggregate of the service and interest cost for 1995 would have increased by $580,000 (or 10.5%). INCENTIVE COMPENSATION PLANS The Company has incentive compensation plans under which awards are made to officers and other key employees. Expense provisions referable to the plans amounted to $13,374,000 in 1995, $7,494,000 in 1994 and $4,295,000 in 1993. The expense provisions for these plans reflect the cost of distributions payable currently as well as distributions that may be payable in future periods if certain conditions are satisfied. Expense provisions for certain of the plans also are affected by changes in the market value of the Company's common stock. In 1995, the Financial Accounting Standards Board issued SFAS No. 123, Accounting for Stock-Based Compensation, which will be effective for fiscal years beginning after December 15, 1995. The new standard defines a fair value method of accounting for stock-based compensation. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. Pursuant to the new standard, companies are encouraged, but are not required, to adopt the fair value method of accounting for employee stock-based transactions. Companies are also permitted to continue to account for such transactions under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, but would be required to disclose in a note to the financial statements pro forma net income and earnings per share as if the company had applied the new method of accounting. The Company intends to continue to account for stock-based compensation under Opinion No. 25. Adoption of the new standard will have no effect on the Company's cash flows. 9. OTHER COMMITMENTS AND CONTINGENT LIABILITIES In 1987 the Company formed three jointly owned companies with Industrias ICA, S.A. de C.V., ("Indica"), a principal member of Grupo ICA, one of Mexico's leading diversified industrial entities, to develop and operate a limestone quarry on Mexico's Yucatan Peninsula and to import Mexican crushed stone for sale along the U.S. Gulf Coast (the "Crescent Market Project"). The shareholder agreements for these three companies provide that each sponsor will contribute its share of the equity required to fund the project. The Company's share of $68,608,000 had been contributed as of December 31, 1995; Indica contributed a substantially equal pro rata amount. Two of the jointly owned companies have entered into term loan agreements which have current balances totaling $47,801,000. The Company and Indica have agreed to guarantee these loans on a several and pro rata basis equal to approximately 50% each. Certain of the loan guarantees will be terminated if and when the project meets defined financial tests. In addition, the Company has approximately $3,700,000 outstanding from the three companies at December 31, 1995 as its share of loans to the project. The carrying amount of net assets of these entities located outside the United States was $42,959,000 as of December 31, 1995. Other commitments of the Company include the purchase of property, plant and equipment approximating $17,044,000 at December 31, 1995. The Company is a defendant in various lawsuits incident to the ordinary course of business. It is not possible to determine with precision the probable outcome or the amount of liability, if any, under these lawsuits; however, in the opinion of the Company and its counsel, the disposition of these lawsuits will not adversely affect the consolidated financial statements of the Company to a material extent. The Company received a letter from the United States Environmental Protection Agency ("EPA") in May 1985 regarding remedial actions at a chemical waste site in Ascension Parish, Louisiana (the "Reber Site"). Records indicate that the Company generated a portion of the waste placed at the site, and the Company therefore was deemed by the EPA to be a potentially responsible party ("PRP") with respect to the site under the Comprehensive Environmental Response, Compensation and Liability Act. On February 5, 1991, the EPA issued a unilateral administrative order ("UAO") which directed the named respondents, including the Company and other PRPs, to clean up the site. During 1995, the Company and the other participating PRPs completed active site remediation. Site capping and certain other remaining work required under the UAO is expected to be completed in the second quarter of 1996. The Company is continuing to make payments from its accrued reserve to fund its allocated share under the Agreement of costs associated with remediating the Reber site. The Company believes that total provisions now recorded are adequate to cover its share of the anticipated remaining costs. The Company's consolidated balance sheets as of December 31 include accrued environmental cleanup costs for the Chemicals segment of $2,765,000 for 1995, $12,867,000 for 1994 and $19,100,000 for 1993. In 1987 the Company discontinued its former Metals segment and recorded a loss on disposal that reflected provisions for phaseout costs, including the estimated cost of contractual liabilities associated with remediation of environmental conditions at several Metals plants. An additional provision for estimated phaseout costs was recorded in 1989. The Company has made significant progress in addressing these contractual liabilities by completing several environmental remediation projects at certain of these Metals plants. Expenditures for these projects were within recorded provisions. While the Company believes its recorded provisions are adequate to address the remainder of these contractual liabilities and other liabilities associated with these operations, factors that might impact the adequacy of provisions include the results of further environmental testing, engineering analyses and planning, and negotiations among interested parties. Current liabilities reported on the Company's consolidated balance sheets include accrued provisions for discontinued operations in the following amounts as of December 31: $1,805,000 in 1995, $2,649,000 in 1994 and $1,583,000 in 1993. In addition, other noncurrent liabilities include $493,000 each in 1995 and 1994 and $2,650,000 in 1993 referable to discontinued operations. 10. COMMON STOCK A total of 12,051,571 shares has been purchased at a cost of $442,671,000 pursuant to a common stock purchase plan initially authorized by the Board of Directors in July 1985 and increased in subsequent years, and pursuant to a tender offer during the period November 5, 1986 through December 4, 1986. The number of shares remaining under purchase authorizations is 1,599,792 shares. 11. SEGMENT DATA Operations in the Company's Construction Materials segment principally involve the production and sale of crushed aggregates and related products and services. Sales are in 14 states located in the southeast, midwest and southwest regions of the United States. Customers primarily use crushed aggregates in the construction and maintenance of highways, roads and streets and in the construction of housing and nonresidential, commercial and industrial facilities. The Chemicals segment, through its Chloralkali Business Unit, produces and sells basic industrial and specialty chemicals, including chlorine, caustic soda and chlorinated organic chemicals. Principal markets for these chemicals include pulp and paper, energy, food and pharmaceuticals, textiles, water treatment, and chemical processing. The Performance Systems Business Unit provides specialty process aids for the pulp and paper and textile industries and furnishes the municipal, industrial and environmental water treatment markets with chemicals and services. Products are principally marketed throughout the United States, but are also exported to Mexico, the Far East and Western Europe. Segment data referable to net sales to unaffiliated customers, property additions, and depreciation, depletion and amortization are provided in Segment Financial Data on pages 56 and 57. The Company's determination of segment earnings recognizes equity in the income or losses of nonconsolidated affiliates as part of segment earnings and also reflects allocations of general corporate expenses to the segments. SFAS No. 14, Financial Reporting for Segments of a Business Enterprise, does not provide for the inclusion of these items in "operating profit or loss of reportable segments." The net amounts of those items were expenses of $22,533,000 in 1995, $14,110,000 in 1994 and $15,542,000 in 1993. Segment earnings are reconciled with earnings before income taxes as follows (in thousands of dollars): 1995 1994 1993 Segment Earnings: Construction Materials $181,528 $162,505 $116,689 Chemicals 87,792 (7,349) 17,400 269,320 155,156 134,089 Interest income, etc. 200 571 304 Interest expense (11,099) (9,821) (9,171) Earnings before income taxes $258,421 $145,906 $125,222 Identifiable assets by segment at December 31 are as follows (in thousands of dollars): 1995 1994 1993 Construction Materials $ 690,044 $ 678,793 $ 670,079 Chemicals 395,487 389,491 288,720 Total identifiable assets 1,085,531 1,068,284 958,799 Investment in nonconsolidated affiliates 50,780 53,902 51,054 General corporate assets 57,614 51,241 54,702 Cash items 21,869 7,717 13,996 Total assets $1,215,794 $1,181,144 $1,078,551 12. SUPPLEMENTAL CASH FLOW INFORMATION Supplemental information referable to the Consolidated Statements of Cash Flows is summarized below (amounts in thousands): 1995 1994 1993 Cash payments: Interest (exclusive of amount capitalized) $11,214 $ 9,762 $ 9,198 Income taxes 85,324 36,846 41,393 Noncash investing and financing activities: Amounts referable to business acquisitions: Liabilities assumed 1,382 12,198 - Fair value of stock issued - 6,443 - 13. CALLAWAY CHEMICAL ACQUISITION On August 1, 1994, the Company acquired the net assets and business of Callaway Chemical Company from Exxon Chemical Company. In a related transaction, the Company also acquired the net assets and business of Comcor Chemicals Limited from Exxon Corporation's affiliated Canadian company, Imperial Oil Limited. The Company paid cash for the assets acquired. The purchase price paid for all assets, including net working capital, was approximately $82,000,000. Funds for the purchase price were primarily obtained by the Company through issuance and sale of short-term notes. On a pro forma basis, as if the assets and businesses had been acquired at the beginning of each fiscal year, consolidated revenues of the Company would have increased by $51,800,000 in 1994 and $84,900,000 in 1993. On a pro forma basis, net income and earnings per share would not differ materially with amounts reflected in the Company's consolidated financial statements. Pro forma results do not purport to be indicative of results of operations which may be obtained in the future. MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING AND INTERNAL CONTROL The Shareholders of Vulcan Materials Company: Vulcan's management acknowledges and accepts its responsibility for all the information contained in the financial statements and other sections of this report. The statements were prepared in conformity with generally accepted accounting principles appropriate in the circumstances and we believe they reflect fairly the Company's financial position, results of operations and cash flows for the periods shown. The financial statements necessarily reflect our informed judgments and estimates of the expected outcome of numerous current events and transactions. The Company maintains an internal control structure which we believe provides reasonable assurance that the Company's financial statements, books and records accurately reflect the Company's financial condition, results of operations and cash flows and that the Company's assets are safeguarded from loss or unauthorized use. This internal control structure includes well-defined and communicated policies and procedures, organizational structures that provide for appropriate separations of responsibilities, high standards applied in the selection and training of management personnel, and adequate procedures for properly assessing and applying accounting principles, including careful consideration of the accuracy and appropriateness of all significant accounting estimates. Vulcan also has an internal audit function that continually reviews compliance with established policies and procedures. The Company's independent auditors, Deloitte & Touche LLP, consider the internal control structure as a part of their audits of the Company's financial statements and provide an independent opinion as to the fairness of the presentation of those statements. Their report is presented below. The Board of Directors pursues its oversight role for the financial statements and internal control structure in major part through the Audit Review Committee, which is composed of five outside directors. In addition, the full Board regularly reviews detailed management reports covering all aspects of the Company's financial affairs. The Audit Review Committee meets periodically with management, the independent auditors and the internal auditors to review the work of each and to ensure that each is properly discharging its responsibilities. To ensure independence, the Committee also meets on these matters with the internal and independent auditors without the presence of management representatives. /s/ D. F. Sansone D. F. Sansone Vice President, Finance /s/ E. A. Khan E. A. Khan Controller February 2, 1996 INDEPENDENT AUDITORS' REPORT The Shareholders of Vulcan Materials Company: We have audited the accompanying consolidated balance sheets of Vulcan Materials Company and its subsidiary companies as of December 31, 1995, 1994, and 1993, and the related consolidated statements of earnings, shareholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Vulcan Materials Company and its subsidiary companies at December 31, 1995, 1994 and 1993, and the results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles. /s/ Deloitte & Touche LLP Deloitte & Touche LLP Birmingham, Alabama February 2, 1996 FINANCIAL TERMINOLOGY Capital employed For the Company; the sum of interest-bearing debt, other noncurrent liabilities and shareholders' equity; for a segment: the net sum of the segment's assets, current liabilities, and allocated corporate assets and current liabilities, exclusive of cash items and short-term debt Cash items The sum of cash, cash equivalents and short-term investments Common shareholders' The sum of common stock (less the cost of common equity stock in treasury), capital in excess of par value and retained earnings, as reported in the balance sheet Long-term capital The sum of long-term debt, other noncurrent liabilities and shareholders' equity Operating income from For the Company: net earnings from continuing continuing operations operations plus the after-tax cost of interest after taxes expense; for a segment: segment earnings less the segment's computed share of the consolidated provision for income taxes Property additions * Capitalized replacements of and additions to property, plant and equipment (and such asses of businesses acquired), including capitalized leases, renewals and betterments; each segment's property additions include allocated corporate amounts Ratio of earnings to The sum of earnings from continuing operations fixed charges before income taxes, amortization of capitalized interest and fixed charges net of interest capitalization credits, divided by fixed charges. Fixed charges are the sum of interest expense before capitalization credits, amortization of financing costs and one-third of rental expense. Segment earnings Earnings before interest expense and income taxes and after allocation of corporate expenses and income, other than "interest income, etc," (principally interest income earned on cash items and gains or losses on corporate financing transactions), and after assignment of equity income to the segments with which it is related in terms of products and services. Allocations are based primarily on one or a combination of the following factors: average gross investment, average equity and sales. Short-term debt The sum of current interest-bearing debt, including current maturities of long-term debt and interest-bearing notes payable * The Company classifies its property additions into three categories based upon the predominant purpose of the project expenditures. Thus, a project is classified entirely as a replacement if that is the principal reason for making the expenditure even though the project may involve some cost saving and/or capacity improvement aspects. Likewise, a profit-adding project is classified entirely as such if the principal reason for making the expenditure is to add operating facilities at new locations (which occasionally replace facilities at old locations), to add product lines, to expand the capacity of existing facilities, to reduce costs, to increase mineral reserves or to improve products, etc. Property additions classified as environmental control expenditures do not reflect those expenditures for environmental control activities, including industrial health programs, which are expensed currently. Such expenditures are made on a continuing basis and at significant levels in each of the Company's segments. Frequently, profit-adding and major replacement projects also include expenditures for environmental control purposes. EX-21 9 SUBSIDIARIES
VULCAN MATERIALS COMPANY SUBSIDIARIES AS OF DECEMBER 31, 1995 STATE OR OTHER % OWNED JURISDICTION OF DIRECTLY OR INCORPORATION OR INDIRECTLY ENTITY ORGANIZATION BY VULCAN Subsidiaries Atlantic Granite Company* South Carolina 33 1/3 Birmingham Slag Company* Alabama 100 BRT Transfer Terminal, Inc. Kentucky 100 Calizas Industriales del Carmen, S.A. de C.V. Mexico 49 Callaway Chemical Company New Jersey 100 Callaway Chemical Limited British Columbia 100 Dixie Sand and Gravel Company* Tennessee 100 Knoxville Mack Distributors, Inc.* Tennessee 100 Lambert Bros., Inc.* Tennessee 100 Midsouth Machine and Service Company Tennessee 100 Peroxidation Systems GmbH Germany 100 Reco Transportation, Inc. Kentucky 100 Rio Linda Chemical Co., Inc. Delaware 100 Statewide Transport, Inc. Texas 100 Vulcan/ICA Distribution Company (Partnership) Texas 51 Vulcan Gulf Coast Aggregates, Inc. New Jersey 100 Vulcan Gulf Coast Materials, Inc. New Jersey 100 Vulcan International, Ltd. U.S. Virgin Islands 100 Vulcan Lands, Inc. New Jersey 100 Vulcan Peroxidation Systems Inc. New Jersey 100 Vulcan Soda Ash Company California 100 VULICA Shipping Company, Limited Bahamas 50 Wanatah Trucking Co., Inc. Indiana 100 Wesco Contracting Company* Tennessee 100 White's Mines, Inc.* Texas 100 *Inactive
EX-24.1 10 POWERS OF ATTORNEY POWER OF ATTORNEY The undersigned director of Vulcan Materials Company, a New Jersey corporation, hereby nominates, constitutes and appoints William F. Denson, III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of the undersigned to sign the name of the undersigned as director to the Report on Form 10-K for the year ended December 31, 1995 of said corporation to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and to any and all amendments to said report. The undersigned hereby grants to said attorneys full power of substitution, resubstitution and revocation, all as fully as the undersigned could do if personally present, hereby ratifying all that said attorneys or their substitutes may lawfully do by virtue hereof. IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company has executed this Power of Attorney this 1st day of February, 1996. /s/ Marion H. Antonini Marion H. Antonini EX-24.2 11 POWERS OF ATTORNEY POWER OF ATTORNEY The undersigned director of Vulcan Materials Company, a New Jersey corporation, hereby nominates, constitutes and appoints William F. Denson, III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of the undersigned to sign the name of the undersigned as director to the Report on Form 10-K for the year ended December 31, 1995 of said corporation to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and to any and all amendments to said report. The undersigned hereby grants to said attorneys full power of substitution, resubstitution and revocation, all as fully as the undersigned could do if personally present, hereby ratifying all that said attorneys or their substitutes may lawfully do by virtue hereof. IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company has executed this Power of Attorney this 1st day of February, 1996. /s/ Livio D. DeSimone Livio D. DeSimone EX-24.3 12 POWERS OF ATTORNEY POWER OF ATTORNEY The undersigned director of Vulcan Materials Company, a New Jersey corporation, hereby nominates, constitutes and appoints William F. Denson, III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of the undersigned to sign the name of the undersigned as director to the Report on Form 10-K for the year ended December 31, 1995 of said corporation to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and to any and all amendments to said report. The undersigned hereby grants to said attorneys full power of substitution, resubstitution and revocation, all as fully as the undersigned could do if personally present, hereby ratifying all that said attorneys or their substitutes may lawfully do by virtue hereof. IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company has executed this Power of Attorney this 1st day of February, 1996. /s/ William J. Grayson, Jr. William J. Grayson, Jr. EX-24.4 13 POWERS OF ATTORNEY POWER OF ATTORNEY The undersigned director of Vulcan Materials Company, a New Jersey corporation, hereby nominates, constitutes and appoints William F. Denson, III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of the undersigned to sign the name of the undersigned as director to the Report on Form 10-K for the year ended December 31, 1995 of said corporation to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and to any and all amendments to said report. The undersigned hereby grants to said attorneys full power of substitution, resubstitution and revocation, all as fully as the undersigned could do if personally present, hereby ratifying all that said attorneys or their substitutes may lawfully do by virtue hereof. IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company has executed this Power of Attorney this 1st day of February, 1996. /s/ John K. Greene John K. Greene EX-24.5 14 POWERS OF ATTORNEY POWER OF ATTORNEY The undersigned director of Vulcan Materials Company, a New Jersey corporation, hereby nominates, constitutes and appoints William F. Denson, III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of the undersigned to sign the name of the undersigned as director to the Report on Form 10-K for the year ended December 31, 1995 of said corporation to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and to any and all amendments to said report. The undersigned hereby grants to said attorneys full power of substitution, resubstitution and revocation, all as fully as the undersigned could do if personally present, hereby ratifying all that said attorneys or their substitutes may lawfully do by virtue hereof. IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company has executed this Power of Attorney this 5th day of February, 1996. /s/ Richard H. Leet Richard H. Leet EX-24.6 15 POWERS OF ATTORNEY POWER OF ATTORNEY The undersigned director of Vulcan Materials Company, a New Jersey corporation, hereby nominates, constitutes and appoints William F. Denson, III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of the undersigned to sign the name of the undersigned as director to the Report on Form 10-K for the year ended December 31, 1995 of said corporation to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and to any and all amendments to said report. The undersigned hereby grants to said attorneys full power of substitution, resubstitution and revocation, all as fully as the undersigned could do if personally present, hereby ratifying all that said attorneys or their substitutes may lawfully do by virtue hereof. IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company has executed this Power of Attorney this 1st day of February, 1996. /s/ Douglas J. McGregor Douglas J. McGregor EX-24.7 16 POWERS OF ATTORNEY POWER OF ATTORNEY The undersigned director of Vulcan Materials Company, a New Jersey corporation, hereby nominates, constitutes and appoints William F. Denson, III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of the undersigned to sign the name of the undersigned as director to the Report on Form 10-K for the year ended December 31, 1995 of said corporation to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and to any and all amendments to said report. The undersigned hereby grants to said attorneys full power of substitution, resubstitution and revocation, all as fully as the undersigned could do if personally present, hereby ratifying all that said attorneys or their substitutes may lawfully do by virtue hereof. IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company has executed this Power of Attorney this 5th day of February, 1996. /s/ Ann McLaughlin Ann McLaughlin EX-24.8 17 POWERS OF ATTORNEY POWER OF ATTORNEY The undersigned director of Vulcan Materials Company, a New Jersey corporation, hereby nominates, constitutes and appoints William F. Denson, III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of the undersigned to sign the name of the undersigned as director to the Report on Form 10-K for the year ended December 31, 1995 of said corporation to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and to any and all amendments to said report. The undersigned hereby grants to said attorneys full power of substitution, resubstitution and revocation, all as fully as the undersigned could do if personally present, hereby ratifying all that said attorneys or their substitutes may lawfully do by virtue hereof. IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company has executed this Power of Attorney this 1st day of February, 1996. /s/ James V. Napier James V. Napier EX-24.9 18 POWERS OF ATTORNEY POWER OF ATTORNEY The undersigned director of Vulcan Materials Company, a New Jersey corporation, hereby nominates, constitutes and appoints William F. Denson, III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of the undersigned to sign the name of the undersigned as director to the Report on Form 10-K for the year ended December 31, 1995 of said corporation to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and to any and all amendments to said report. The undersigned hereby grants to said attorneys full power of substitution, resubstitution and revocation, all as fully as the undersigned could do if personally present, hereby ratifying all that said attorneys or their substitutes may lawfully do by virtue hereof. IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company has executed this Power of Attorney this 1st day of February, 1996. /s/ Donald B. Rice Donald B. Rice EX-24.10 19 POWERS OF ATTORNEY POWER OF ATTORNEY The undersigned director of Vulcan Materials Company, a New Jersey corporation, hereby nominates, constitutes and appoints William F. Denson, III, and E. Starke Sydnor, and each of them, the true and lawful attorneys of the undersigned to sign the name of the undersigned as director to the Report on Form 10-K for the year ended December 31, 1995 of said corporation to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and to any and all amendments to said report. The undersigned hereby grants to said attorneys full power of substitution, resubstitution and revocation, all as fully as the undersigned could do if personally present, hereby ratifying all that said attorneys or their substitutes may lawfully do by virtue hereof. IN WITNESS WHEREOF, the undersigned director of Vulcan Materials Company has executed this Power of Attorney this 1st day of February, 1996. /s/ Orin R. Smith Orin R. Smith EX-27 20
5 This schedule contains summary financial information extracted from the Consolidated Statement of Earnings for the twelve months ended December 31, 1995, and the Consolidated Balance Sheet as of December 31, 1995 and is qualified in its entirety by reference to such financial statements. 1000 YEAR DEC-31-1995 DEC-31-1995 21869 0 187142 8176 126801 362121 1859436 1161404 1215794 177409 90278 0 0 46573 750065 1215794 1460974 1460974 1044710 1044710 6347 983 11099 258421 92181 166240 0 0 0 166240 4.63 4.63
EX-99 21 SCHEDULE II
SCHEDULE II VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 Amounts in Thousands Column A Column B Column C Column D Column E Column F Balance at Additions Charged To Balance at Beginning Costs and Other End Description Of Period Expenses Accounts Deductions Of Period Reserves deducted from assets to which they apply: 1995 Accrued Environmental Costs........ $12,867 $3,998 $14,100 $ 2,765 Doubtful Receivables............... 8,243 984 $18 1,069 8,176 All Other (3)...................... 2,005 1,395 1994 Accrued Environmental Costs........ $19,100 $7,833 $14,066 (1) $12,867 Doubtful Receivables............... 7,284 $1,001 $70 112 (2) 8,243 All Other (3)...................... 2,428 2,005 1993 Accrued Environmental Costs........ $26,530 $ (110) $ 7,320 (1) $19,100 Doubtful Receivables............... 6,814 1,237 767 (2) 7,284 All Other (3)...................... 5,078 2,428 (1) Expenditures on environmental remendiation projects (2) Write-offs of uncollected accounts and worthless notes, less recoveries (3) Valuation and qualifying accounts and reserves for which additions, deductions and balances are not individually significant
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