10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.    20549
FORM 10-Q

(Mark One)
x     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE             SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended            June 30, 2001
OR
o     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE            SECURITIES EXCHANGE ACT OF 1934
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             (State or other jurisdiction of incorporation or organization)	63-0366371      (I.R.S. Employer Identification No.)
1200 Urban Center Drive, Birmingham, Alabama    35242 (Address of principal executive offices)    (Zip Code)
Registrant's telephone number including area code   (205) 298-3000

      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 for 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      

APPLICABLE ONLY TO CORPORATE ISSUERS:

      Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

               Class               
Common Stock, $1 Par Value Shares outstanding
    at June 30, 2001    
101,228,054

VULCAN MATERIALS COMPANY


FORM 10-Q
QUARTER ENDED JUNE 30, 2001

Contents

			Page No.
PART I	FINANCIAL INFORMATION
	Item 1.	Financial Statements Condensed Consolidated Balance Sheets Condensed Consolidated Statements of Earnings Condensed Consolidated Statements of Cash Flows Notes to Condensed Consolidated Financial Statements	1 2 3 4
	Item 2.	Management's Discussion and Analysis of Results    of Operations and Financial Condition	8
	Item 3.	Quantitative and Qualitative Disclosures About    Market Risk	14
PART II	OTHER INFORMATION
	Item 1.	Legal Proceedings	15
	Item 6.	Exhibits and Reports on Form 8-K	16
SIGNATURES			17

PART I.   FINANCIAL INFORMATION
Item 1.   Financial Statements
Vulcan Materials Company and Subsidiary Companies	(Thousands of Dollars)
Consolidated Balance Sheets (Condensed and unaudited)	June 30         2001	December 31         2000	June 30         2000
Assets Cash and cash equivalents Accounts and notes receivable:     Accounts and notes receivable, gross     Less: Allowance for doubtful accounts       Accounts and notes receivable, net Inventories:     Finished products     Raw materials     Products in process     Operating supplies and other       Inventories Deferred income taxes Prepaid expenses       Total current assets Investments and long-term receivables Property, plant and equipment:     Property, plant and equipment, cost     Less: Reserve for depr., depl., & amort.       Property, plant and equipment, net Goodwill Deferred charges and other assets       Total Liabilities and Shareholders' Equity Current maturities of long-term debt Notes payable Trade payables and accruals Other current liabilities       Total current liabilities Long-term debt Deferred income taxes Minority interest Other noncurrent liabilities Shareholders' equity       Total Current ratio	$       37,628  452,871         (9,653) 443,218  181,093  14,953  782          33,037  229,865  45,124          12,513  768,348  12,392  3,869,055    (1,858,914) 2,010,141  604,520           64,068   $ 3,459,469  $        1,320  214,541  171,501        129,112  516,474  922,801  287,772  97,652  131,573      1,503,197   $ 3,459,469  1.5	$       55,276  390,849         (8,982) 381,867  155,258  15,578  1,020          27,188  199,044  44,657          13,660  694,504  72,558  3,496,204    (1,647,570) 1,848,634  562,044           50,834   $ 3,228,574  $        6,756  270,331  181,317        113,827  572,231  685,361  268,797  103,626  127,063      1,471,496   $ 3,228,574  1.2	$       31,503  420,201        (8,332) 411,869  147,638  14,512  1,195          30,782  194,127  45,382          11,495  694,376  74,919  3,319,167    (1,581,107) 1,738,060  445,895           50,617   $ 3,003,867  $        7,837  150,335  147,205        136,623  442,000  682,106  262,992  108,997  117,816      1,389,956   $ 3,003,867  1.6

See accompanying Notes to Condensed Consolidated Financial Statements

Vulcan Materials Company and Subsidiary Companies
	(Thousands of Dollars)
Consolidated Statements of Earnings	Three Months Ended              June 30		Six Months Ended             June 30
(Condensed and unaudited)	2001	2000	2001	2000
Net sales Delivery revenues   Total revenues Cost of goods sold Delivery costs   Cost of revenues Gross profit Selling, administrative and     general expenses Other operating costs Minority interest in losses     of a consolidated subsidiary Other income, net Earnings before interest     and income taxes Interest income Interest expense Earnings before income taxes Provision for income taxes	$  760,478      67,847  828,325  561,599      67,847  629,446  198,879  61,807  8,737  598        5,198  134,131  899       16,283  118,747       39,118	$  665,151      67,701  732,852  491,046      67,701  558,747  174,105  55,718  6,394  2,060        7,604  121,657  1,125       11,059  111,723       35,662	$ 1,329,607     119,137  1,448,744  1,045,217     119,137  1,164,354  284,390  120,719  16,899  5,974        3,688  156,434  2,593       31,640  127,387       42,038	$ 1,180,131     118,080  1,298,211  906,845     118,080  1,024,925  273,286  109,316  12,372  2,472       12,265  166,335  2,405       22,247  146,493       47,171
Net earnings	$  79,629	$  76,061	$  85,349	$  99,322
Basic net earnings per share Diluted net earnings per share	$  0.79  $  0.78	$  0.75  $  0.75	$  0.84  $  0.83	$  0.99  $  0.97
Average common shares outstanding      (thousands)	101,407	100,932	101,365	100,833
Average common shares outstanding,     assuming dilution (thousands)	102,652	102,000	102,454	101,942
Cash dividends per share     of common stock	$ 0.225	$ 0.210	$ 0.450	$ 0.420
Depreciation, depletion and     amortization deducted above	$ 69,919	$ 54,832	$ 136,917	$ 107,951
Effective tax rate	32.9%	31.9%	33.0%	32.2%

See accompanying Notes to Condensed Consolidated Financial Statements

Vulcan Materials Company and Subsidiary Companies
Consolidated Statements of Cash Flows	(Thousands of Dollars)      Six Months Ended            June 30
(Condensed and unaudited)	2001	2000
Operating Activities Net earnings Adjustments to reconcile net earnings to   net cash provided by operating activities:      Depreciation, depletion and amortization      Increase in assets before         effects of business acquisitions      Increase in liabilities before         effects of business acquisitions      Other, net         Net cash provided by operating activities	$   85,349  136,917  (70,070) 2,328       (16,256)    138,268	$   99,322  107,951  (105,557) 21,148      (8,068)    114,796
Investing Activities Purchases of property, plant and equipment Payment for business acquisitions, net of acquired cash Proceeds from sale of property, plant and equipment Withdrawal of earnings from nonconsolidated companies         Net cash used for investing activities	(174,475) (129,262) 12,658          -0-   (291,079)	(202,187) (36) 17,695         7,037   (177,491)
Financing Activities Net borrowings (payments) - commercial paper and   bank lines of credit Payment of short-term debt Payment of long-term debt Net proceeds from issuance of long-term debt Dividends paid Contributions from minority interest of consolidated subsidiary Other, net         Net cash provided by financing activities	(55,790) (6,118) - -0-  238,560  (45,505) - -0-         4,016      135,163	48,639  (5,768) (8,000) - -0-  (42,350) 41,019         7,824       41,364
Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	(17,648)      55,276  $    37,628	(21,331)      52,834  $    31,503

See accompanying Notes to Condensed Consolidated Financial Statements

VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in compliance with Form 10-Q instructions and thus do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, the statements reflect all adjustments, including those of a normal recurring nature, necessary to present fairly the results of the reported interim periods. The statements should be read in conjunction with the summary of accounting policies and notes to financial statements included in the Company's latest annual report on Form 10-K.

2.   Earnings Per Share (EPS)

The Company reports two separate earnings per share numbers, basic and diluted. Both are computed by dividing net earnings by the average common shares outstanding (basic EPS) or average common shares outstanding assuming dilution (diluted EPS) as detailed below (in thousands of shares):

	Three Months Ended     June 30		Six Months Ended     June 30
	2001	2000	2001	2000
Average common shares outstanding Dilutive effect of:     Stock options     Performance shares and other Average common shares   outstanding, assuming dilution	101,407 1,151          94  102,652	100,932 938         130  102,000	101,365 1,019          70  102,454	100,833 872       237  101,942

All dilutive common stock equivalents are reflected in the Company's earnings per share calculation; the Company had 1,500 and 967,177 antidilutive common stock equivalents as of June 30, 2001 and 2000, respectively.

3.   Effective Tax Rate

In accordance with accounting principles generally accepted in the United States of America, it is the Company's practice at the end of each interim reporting period to make a best estimate of the effective tax rate expected to be applicable for the full fiscal year. The rate so determined is used in providing for income taxes on a current year-to-date basis.

4.   Derivative Instruments

Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 133 (FAS 133), "Accounting for Derivative Instruments and Hedging Activities," as amended, which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities.

Natural gas used by the Company in its Chemicals segment is subject to price volatility caused by supply conditions, political and economic variables and other unpredictable factors. The Company uses over-the-counter commodity swap and option contracts to manage the volatility related to future natural gas purchases. These instruments have been designated as effective cash flow hedges in accordance with FAS 133. Accordingly, the fair value of the open contracts, which extend through December 2003, has been reflected as a component of other comprehensive loss of $12.9 million in the Company's consolidated balance sheet as of June 30, 2001. If market prices for natural gas remained at the June 30, 2001 level, $10.4 million of this total loss would be classified into earnings within the next twelve months. No cash flow hedges were discontinued and there was no impact to earnings due to hedge ineffectiveness during the quarter ended June 30, 2001.

5.   Comprehensive Income

Total comprehensive income is comprised primarily of net earnings and net unrealized gains and losses on cash flow hedges. Total comprehensive income for the three months ended June 30, 2001 and 2000 was $64.7 million and $76.0 million, respectively. Total comprehensive income for the six months ended June 30, 2001 and 2000 was $72.3 million and $99.2 million, respectively.

6.   New Accounting Standards

In July 2001 the Financial Accounting Standards Board (FASB) issued SFAS No. 141 "Business Combinations" (FAS 141) and SFAS No. 142 "Goodwill and Other Intangible Assets" (FAS 142). FAS 141 applies to all business combinations initiated after June 30, 2001 and requires the purchase method of accounting for business combinations, thereby, prohibiting the pooling-of-interest (pooling) method. Additionally, it requires the initial recognition of acquired intangible assets apart from goodwill and specifies disclosures regarding a business combination. FAS 142 will be effective for fiscal years beginning after December 15, 2001. Under this pronouncement, goodwill and intangible assets with indefinite lives will no longer be amortized but reviewed at least annually for impairment. Separable intangible assets that are not deemed to have indefinite lives will continue to be amortized over their useful lives with no set maximum life. In addition, the useful lives of recognized intangible assets acquired in transactio ns completed before July 1, 2001 will be reassessed and the remaining amortization periods adjusted accordingly.

The Company is currently evaluating the impact of adopting the new accounting standards on its consolidated financial statements. While the ultimate impact of the new standards is yet to be determined, goodwill amortization expense for the quarter ended June 30, 2001 was approximately $7 million.

7.   Segment Data

The Company's reportable segments are Construction Materials and Chemicals and are organized around their products and services. The accounting policies of the segments are the same as those described in the summary of significant accounting polices in the notes to the consolidated financial statements on Form 10-K. The Company's determination of segment earnings (a) recognizes equity in the income or losses of nonconsolidated companies as part of segment earnings; (b) reflects allocations of general corporate expenses and income to the segments; (c) does not reflect interest income or expense; and (d) is before income taxes. Allocations are based on average capital employed and net sales.

Because the majority of the Company's activities are domestic, sales and assets outside the United States are not material.

Following is the comparative segment financial disclosure (amounts in millions):

SEGMENT FINANCIAL DISCLOSURE

	Three Months Ended        June 30		Six Months Ended        June 30
	2001	2000	2001	2000
NET SALES   Construction Materials   Chemicals      Total	$ 589.6    170.9  $ 760.5	$ 514.1    151.1  $ 665.2	$ 989.2    340.4  $ 1,329.6	$ 880.3    299.8  $ 1,180.1
TOTAL REVENUES   Construction Materials   Chemicals      Total	$ 648.3    180.0  $ 828.3	$ 567.7    165.2  $ 732.9	$ 1,086.0    362.7  $ 1,448.7	$ 970.7    327.5  $ 1,298.2
EARNINGS BEFORE INTEREST AND INCOME TAXES   Construction Materials   Chemicals      Total	$ 131.2     2.9  $ 134.1	$ 119.7      1.9  $ 121.6	$ 155.0     1.4  $ 156.4	$ 157.4      8.9  $ 166.3

	June 30    2001	Dec. 31    2000	June 30    2000
IDENTIFIABLE ASSETS   Construction Materials   Chemicals      Identifiable Assets   Investment in nonconsolidated affiliates   General corporate assets   Cash items        Total	$ 2,697.7       630.4  3,328.1  0.0  93.8         37.6  $ 3,459.5	$ 2,375.2       639.5  3,014.7  59.5  99.1         55.3  $ 3,228.6	$ 2,224.0       618.1  2,842.1  61.9  68.4         31.5  $ 3,003.9

8.   Supplemental Cash Flow Information

Supplemental information referable to the Consolidated Statements of Cash Flows for the six months ended June 30 is summarized below (amounts in thousands).

	2001	2000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW  INFORMATION   Cash paid during the period for:       Interest, net of amount capitalized       Income taxes	$ 25,305 13,573	$ 19,459 17,582
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING  AND FINANCING ACTIVITIES:   Liabilities and long-term debt assumed in business      acquisitions	$ 18,826	$  -0-

9.   Acquisition and New Debt Issuance

On February 7, 2001, the Company issued $240.0 million of five-year senior unsecured notes due February 1, 2006, with a coupon of 6.40%. The Company used approximately $121.1 million of the net proceeds from the sale of the notes to fund its acquisition of the ownership interest in the Crescent Market Companies from Empresas ICA Sociedad Controladora, S.A. de C.V. The acquisition was accounted for using the purchase method, and, accordingly, the purchase price was allocated to the remaining assets acquired and liabilities assumed based on their estimated fair values at the acquisition date.

Item 2.   Management's Discussion and Analysis of Results
                   of Operations and Financial Condition

GENERAL COMMENTS

Seasonality of the Company's Business

Results of any individual quarter are not necessarily indicative of results to be expected for the year due principally 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 when sales and earnings are substantially below the levels realized in all subsequent quarters of the year.


Segment Earnings

Segment earnings are earnings before net interest and income taxes and after allocation of corporate expenses and income, and after assignment of equity income or loss to the segments with which it is related in terms of products and services. Allocations are based on average capital employed and net sales.


Forward-Looking Statements

Certain matters discussed in this report contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These include general business conditions, competitive factors, pricing, weather, energy costs, cost of hydrocarbon-based raw materials, and other risks and uncertainties detailed in the Company's periodic reports.

The comparative analysis in this Management's Discussion and Analysis of Results of Operations and Financial Condition is based on net sales and cost of goods sold, which exclude delivery revenues and costs, and is consistent with the basis by which management reviews the Company's results of operations.

RESULTS OF OPERATIONS

Second Quarter 2001 as Compared with Second Quarter 2000

The Company's sales, pretax earnings and net earnings were at record levels for the second quarter. Net sales of $760.5 million and pretax earnings of $118.7 million increased 14% and 6%, respectively, from the $665.2 million and $111.7 million realized in the second quarter of 2000. Net earnings of $79.6 million and $0.78 per share (diluted) increased 5% and 4% over the $76.1 million and $0.75 per share achieved in the second quarter of 2000.

Construction Materials reported record second quarter sales of $589.6 million, up 15% from the 2000 second quarter of $514.1 million. Approximately two-thirds of the increase in net sales resulted from the addition of the Tarmac operations and the consolidation of the Crescent Market Companies. Aggregates shipments were up nearly 11% overall and 3% at the Company's legacy operations. Excluding the impact of freight to remote sales yards, aggregates prices increased 3%. Chemicals' second quarter net sales of $170.9 million were up 13% from the prior year's $151.1 million. Approximately three-quarters of this increase in net sales was attributable to the new chloralkali joint venture.

Earnings before interest and income taxes were $134.1 million as compared to $121.6 million in the same period last year. The Construction Materials segment reported record second quarter earnings of $131.2 million, up 10% from second quarter 2000's $119.7 million. The Chemicals segment reported second quarter earnings of $2.9 million, up $1.0 million from the 2000 second quarter of $1.9 million. The segment experienced improvements in caustic soda pricing which more than offset the effects of lower volume and higher costs for natural gas and hydrocarbon-based raw materials.

Selling, administrative and general expenses of $61.8 million increased 11% from the 2000 level due in part to the effects of the consolidation of the Crescent Market Companies and the addition of the Tarmac operations.

Minority interest income of $0.6 million reflected the minority partner's share of the Chloralkali joint venture's pretax loss.

Other income, net of other charges, was $5.2 million as compared with $7.6 million for the second quarter of 2000. This decrease was mostly attributable to the 2001 consolidation of the Crescent Market Companies and less significantly, lower gains from asset sales referable to Construction Materials.

Interest expense of $16.3 million increased $5.2 million from the second quarter of 2000 as the result of net increased borrowings to fund both the Tarmac acquisition and the purchase of the remaining interest in the Crescent Market Companies.

Year-to-Date Comparisons as of June 30, 2001 and June 30, 2000

Year-to-date, the Company's sales were a record while net earnings and earnings per share reflected a 14% decline from the first half of 2000. Net earnings were $85.3 million, or $.83 per share (diluted), as compared with 2000 earnings and earnings per share of $99.3 million and $.97 per share.

Net sales of $1.3 billion for the first six months of 2001 increased 13% from the first half 2000 total of $1.2 billion. Construction Materials sales of $989.2 million were up 12% from 2000's $880.3 million. Aggregates pricing increased 3% while volumes increased 7%, with new facilities accounting for all of the volume increase. Chemicals' first-half net sales of $340.4 million were up 14% from 2000's $299.8 million. Approximately four-fifths of this increase in sales was attributable to the new chloralkali joint venture.

Earnings before interest and income taxes were $156.4 million as compared to $166.3 million in the same period last year. The Construction Materials segment earned $155.0 million as compared to the prior year's $157.4 million. The year-to-date results were impacted by the first quarter accelerated spending to upgrade the Tarmac facilities acquired in October 2000 and lower gains from asset sales. Year-to-date the Chemicals segment reported earnings of $1.4 million, down $7.5 million from last year's earnings of $8.9 million. The segment's earnings benefit from improved caustic soda pricing was more than offset by the adverse effects of higher costs for natural gas and hydrocarbon-based raw materials and lower volume.

Selling, administrative and general expenses reflected a 10% increase when compared to the first half of 2000. This increase resulted primarily from consolidation of the Crescent Market Companies and the addition of the Tarmac operations.

Minority interest income of $6.0 million reflected the minority partner's share of the Chloralkali joint venture's pretax loss.

Other income, net of other charges, was $3.7 million as compared with $12.3 million for 2000. This decrease was attributable to this year's consolidation of the Crescent Market Companies and lower gains from asset sales referable to Construction Materials.

Interest expense of $31.6 million increased $9.4 million from 2000 as a result of net increased borrowings to fund both the Tarmac acquisition and the purchase of the remaining interest in the Crescent Market Companies.

On July 25, 2001, Donald M. James, Chairman and Chief Executive Officer, made certain statements concerning the Company's second quarter results, as follows:

"We are pleased with the Company's record performance for the second quarter of 2001. Our Construction Materials segment benefited from improvements in pricing and volumes for our core products. These outstanding results reflect our operating expertise and our strong competitive position across a broad range of geographic markets. Our Chemicals segment was impacted by continuing weakness in the manufacturing sector of the economy as well as higher year-over-year natural gas costs."

Additionally, Mr. James made certain statements pertaining to the outlook for 2001, as follows:

"Our Construction Materials segment continues to benefit from the strength in public sector spending, especially on highways and infrastructure. Total aggregates shipments are expected to increase approximately 8 percent for the year, with shipments at legacy operations up approximately 2 percent. In line with recent trends, we expect pricing for aggregates to increase 3 to 4 percent. Consistent with previous guidance, our Construction Materials segment should deliver full year earnings of $425 to $450 million.

"With respect to Chemicals, while natural gas prices have recently begun to moderate, weakness in the economy in general, and the manufacturing sector in particular, may continue to impact the segment. As a result of this economic uncertainty, we are limiting our full year earnings projection for the Chemicals segment to $10 to $20 million.

"Overall, we are pleased that our Construction Materials segment is expected to achieve its eighth consecutive year of record earnings. We anticipate full year earnings per share of $2.45 to $2.65, with third quarter earnings in the range of $0.90 to $1.00."

LIQUIDITY AND CAPITAL RESOURCES

Working Capital

Working capital, exclusive of debt and cash items, totaled $445.7 million at June 30, 2001, $92.4 million over the 2000 year-end amount of $353.3 million. This increase resulted primarily from the Company's purchase of its partner's interest in the Crescent Market Companies and the resulting consolidation of these companies. Previously, the Crescent Market Companies were reported on the equity method. Working capital at June 30, 2001 increased $53.5 million from the same date last year. This increase from second quarter 2000 resulted from both the fourth quarter 2000 Tarmac acquisition and the aforementioned first quarter 2001 Crescent Market Companies purchase.

The Company's current ratio, which is based on all components of working capital, including cash and debt items, was 1.5 as of June 30, 2001. This compares to the 1.2 ratio at year-end 2000 and the 1.6 ratio at June 30, 2000. The increase in the current ratio from the prior year-end resulted primarily from a $80.8 million reduction in commercial paper borrowings.

Cash Flows

Net cash provided by operating activities totaled $138.3 million in the first half of 2001, up from the $114.8 million generated in the same period last year. This $23.5 million increase in cash provided reflected higher depreciation, depletion and amortization charges resulting from the acquisition of Tarmac and the Crescent Market Companies offset in part by lower earnings. Net cash used for investing activities of $291.1 million increased $113.6 million from the year-to-date 2000 total of $177.5 million due primarily to payments for the acquisitions noted above. Net cash provided by financing activities of $135.2 million increased $93.8 million from the $41.4 million net cash provided by financing activities in the first half of 2000. This increase resulted from the issuance of $240.0 million of long-term debt in the first quarter net of the year-to-date $55.8 million combined reduction in commercial paper and bank borrowing.

Cash and cash equivalents, which totaled $37.6 million at June 30, 2001, were down $6.1 million from a year ago.

Short-term Borrowings

Short-term borrowings of $214.5 million as of June 30, 2001 consisted of notes payable to banks totaling $46.2 million and commercial paper of $168.3 million. The prior year amount, $150.3 million, consisted of notes payable to banks of $10.5 million and commercial paper of $139.8 million.

Long-term Obligations

As of June 30, 2001, long-term obligations were 31.4% of long-term capital and 61.4% of shareholders' equity. The corresponding second quarter 2000 percentages were 26.6% and 49.1%.

Item 3.   Quantitative and Qualitative Disclosure
                  About Market Risk

The Company is exposed to certain market risks arising from transactions that are entered into in the normal course of business. In order to manage or reduce this market risk, the Company occasionally utilizes derivative financial instruments.

To date, the Company has used commodity swap and option contracts to reduce its exposure to fluctuations in prices for natural gas. The fair value of these contracts was $12.9 million, reflected as a component of other comprehensive loss as of June 30, 2001. As a result of a 10% reduction in the price of natural gas, the Company would experience a potential loss in the fair value of the underlying commodity swap and option contracts based on the fair value at June 30, 2001 of approximately $4.3 million.

The Company is exposed to interest rate risk due to its various long-term debt instruments. Because substantially all of this debt is at fixed rates, a decline in interest rates would result in an increase in the fair market value of the liability. At June 30, 2001, the estimated fair market value of these debt instruments was $935.3 million as compared to a book value of $924.1 million. The effect of a hypothetical decline in interest rates of 1% would increase the fair market value of the liability by approximately $40.7 million.

PART II.    OTHER INFORMATION

Item 1.   Legal Proceedings

As previously reported in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, the Company has been named as a defendant in various lawsuits claiming damages for personal injuries allegedly resulting from releases of chemicals at the Company's Geismar, Louisiana, chloralkali plant earlier this year. Twenty-four lawsuits, involving a total of 620 named plaintiffs, have now been filed. Of the cases filed, 12 seek to certify a class. Based on the information currently available to it, the Company does not believe that the ultimate resolution of these suits will have a materially adverse impact on the Company.

The Company also previously reported on the Company's Annual Report on Form 10-K for the year ended December 31, 2000, that a determination was made against the Company in an arbitration proceeding in California involving the termination of a distributor by the Company's subsidiary, Vulcan Chemicals Technology, Inc. The Company and its subsidiary filed suit in the United States District Court for the Western District of Virginia challenging the award, as the underlying distribution agreement provided that it would be construed under Virginia law. The Superior Court in Sacramento California entered an award confirming the award on June 1, 2001, which the Company has appealed. The Federal District Court for the Western District of Virginia entered an order on July 19, 2001, granting the motion of the Company and its subsidiary to vacate the arbitration award and remanded the matter for further proceedings. The plaintiff filed a notice of appeal of this order with the United States Court of Appeals for the Four th Circuit and filed a motion with the district court to stay the order pending the appeal.

Item 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits

Exhibit 3(ii) - By-Laws of the Company, as amended

(b)  Reports on Form 8-K

The Company filed a Current Report on Form 8-K on January 31, 2001, pursuant to which the Company reported under item 5 the January 22, 2001, release of its fourth quarter and year 2000 results of operations with a copy of the press release attached.

The Company filed a Current Report on Form 8-K on February 7, 2001, pursuant to which the Company reported under item 5 the execution on February 2, 2001 of an Underwriting Agreement and related Pricing Agreement with Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wachovia Securities, Inc., Banc of America Securities LLC, and Banc One Capital Markets, Inc. in connection with the offer and sale of $240,000,000 aggregate principal amount of the Company's 6.40% Notes due 2006.

The Company filed a Current Report on Form 8-K on March 8, 2001, pursuant to which the Company reported under item 5 the March 6, 2001 press release showing the effect of an arbitration award upon 2000 earnings per share with a copy of the press release and the corresponding revisions of the financial statements for fiscal year 2000.

SIGNATURES

Pursuant to the requirements 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

Date        August 7, 2001     

                                 
E. A. Khan
Vice President, Controller and Chief Information Officer

                                
M. E. Tomkins
Senior Vice President and Chief Financial Officer

EX-3

BY-LAWS VULCAN MATERIALS COMPANY (Incorporated under the laws of the State of New Jersey)
Restated: Amended:	February 2, 1990 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 May 17, 1996 February 14, 1997 February 12, 1999 July 14, 2000 May 11, 2001 July 13, 2001

INDEX
ARTICLE I	Shareholders' Meetings		Page
	Section 1.1 Section 1.2 Section 1.3 Section 1.4 Section 1.5 Section 1.6 Section 1.7 Section 1.8	Annual Meetings Special Meetings Notice and Purpose of Meetings Quorum and Adjournments Organization Voting Selection of Inspectors Duties of Inspectors	1 1 1 1 2 2 3 3
ARTICLE II	Directors
	Section 2.1 Section 2.2 Section 2.3 Section 2.4 Section 2.5 Section 2.6 Section 2.7	Number, Qualification, Tenure, Term, Quorum, Vacancies, Removal (a) Number, Qualification and Tenure (b) Term (c) Quorum Meetings of the Board of Directors Committees of the Board of Directors Participation in Meetings by Means of Conference Telephone or Similar Instrument Action of Board of Directors and Committees Without a Meeting Dividends Conflict of Interest	4 4 5 5 6 7 7 7 8
ARTICLE III	Officers
	Section 3.1 Section 3.2 Section 3.3 Section 3.4 Section 3.5 Section 3.6 Section 3.7 Section 3.8 Section 3.9 Section 3.10 Section 3.11 Section 3.12 Section 3.13 Section 3.14 Section 3.15	(a) Corporate Officers (b) Group Officers (c) Division and Business Unit Officers (a) Term and Removal of Officers of the Corporation (b) Term and Removal of Group and Division Officers (a) Chairman of the Board (b) Vice Chairman Chief Executive Officer Chief Operating Officer President Chief Administrative Officer Vice Presidents General Counsel Associate General Counsel Secretary Treasurer Controller Other Officers Voting Corporation's Securities	8 8 9 9 9 9 9 10 10 10 10 11 11 11 11 12 12 12 12
ARTICLE IV	Indemnification of Directors, Officers and Employees		13
ARTICLE V	Certificates of Stock
	Section 5.1 Section 5.2 Section 5.3 Section 5.4	Transfer of Shares Transfer of Agent and Registrar Fixing Record Date Lost, Stolen or Destroyed Certificates	15 15 15 15
ARTICLE VI	Miscellaneous
	Section 6.1 Section 6.2 Section 6.3 Section 6.4	Fiscal Year Corporate Seal Delegation of Authority Notices	16 16 16 16
ARTICLE VII	By-Laws and Their Amendments		17
ARTICLE VIII	National Emergency		17

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 m inutes 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 10 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, however, 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 69th 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 and Business Unit Officers. The chief executive officer of the corporation may appoint such officers of any division or business unit of the corporation as he may deem proper, except that division and business unit chairmen and presidents may be appointed only by the Board of Directors. A division or business unit officer shall not be an officer of the corporation, and shall serve as an officer only of the division or business unit to which appointed, but a person who holds a division or business unit 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 perform such other duties as may be assigned to him by the Board of Directors.

           (b)    Vice Chairman. 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.    Chief Executive Officer

           The Chief Executive Officer 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 Chief Executive Officer shall be 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.

           SECTION 3.5.    Chief Operating Officer

           The Chief Operating Officer 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 Chief Operating Officer shall, subject to the authority and direction of the Chief Executive Officer, 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 Chief Executive Officer with respect to the operating affairs of the corporation.

           SECTION 3.6.    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 perform such other duties as may be delegated to him by the Board of Directors or the Chief Executive Officer.

           SECTION 3.7.    Chief Administrative Officer

           The Chief Administrative Officer shall be the chief administrative officer of the corporation and shall supervise and manage the administrative affairs of the corporation. He shall supervise and direct those officers and agents of the corporation who are engaged in the administrative affairs of the corporation. He shall perform such functions for the corporation as may be designated by the chief executive officer or the chief operating officer, and shall carry into effect the resolutions of the Board of Directors and the orders of the chief executive officer or the chief operating officer with respect to such functions.

           SECTION 3.8.    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 3.9.    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 3.10.    Associate General Counsel

           The Associate General Counsel shall be the deputy chief legal officer who shares legal department management responsibilities with and reports to the general counsel and who acts for him under certain circumstances. The Associate General Counsel supervises all other attorneys in the department, including other managing attorneys. He shall perform such other functions for the corporation as may be designated by the Board of Directors, the chief executive officer or the general counsel.

           SECTION 3.11.    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 3.12.    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 3.13.    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 3.14.    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 3.15.    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 o r 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 shal l 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 sto ck 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 speci al 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.