10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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, 2002 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, including zip code, of registrant's principal executive offices) (205) 298-3000 (Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Common Stock, $1 par value		Name of each exchange on which registered 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 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     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 referenced in Part III of this Form 10-K or any amendment to this Form 10-K. [_] Indicate by check mark whether registrant is an accelerated filer (as defined in Rule 12b-2 of the Act)    Yes   X   No
Aggregate market value of voting stock held by non-affiliates as of June 28, 2002:				$4,429,081,667
Number of shares of common stock, $1.00 par value, as of February 28, 2003:				101,568,132
DOCUMENTS INCORPORATED BY REFERENCE
(1)	Portions of the registrant's Annual Report to Shareholders for the year ended December 31, 2002, are incorporated by reference into Parts I, II and IV of this Annual Report on Form 10-K.
(2)	Portions of the registrant's annual proxy statement for the annual meeting of its shareholders to be held on May 9, 2003, are incorporated by reference into Part III of this Annual Report on Form 10-K.

VULCAN MATERIALS COMPANY Annual Report On Form 10-K Fiscal Year Ended December 31, 2002 CONTENTS
Part	Item		Page
I	1 2 3 4	Business Properties Legal Proceedings Submission of Matters to a Vote of Security Holders	2 6 9 11
II	5 6 7 7A. 8 9	Market for the Registrant's Common Equity and Related    Stockholder Matters Selected Financial Data Management's Discussion and Analysis of Financial Condition    and Results of Operations Quantitative and Qualitative Disclosure About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and    Financial Disclosure	12 12 13 13 13 13
III	10 11 12 13 14	Directors and Executive Officers of the Registrant Executive Compensation Security Ownership of Certain Beneficial Owners and    Management Certain Relationships and Related Transactions Controls and Procedures	13 14 14 14 14
IV	15	Exhibits, Financial Statement Schedules, and Reports on    Form 8-K	14
	--	Signatures	19

PART I

Item 1.  Business

         Vulcan Materials Company, a New Jersey corporation incorporated in 1956, and its subsidiaries ("the Company," "Vulcan," "we" or "our") are principally engaged in the production, distribution and sale of construction materials ("Construction Materials") and industrial and specialty chemicals ("Chemicals"). Construction Materials and Chemicals are both reported as segments. Vulcan is the nation's largest producer of construction aggregates, a major producer of other construction materials and a major chemicals manufacturer, supplying chloralkali and other industrial and specialty chemicals.

Segment Information

     Construction Materials

         Our Construction Materials business consists of the production and sale of construction aggregates and other construction materials and related services. Construction aggregates include crushed stone, sand and gravel, rock asphalt, recrushed concrete and crushed slag (a by-product of blast iron and steel production). Aggregates are employed in virtually all types of construction, including highway construction and maintenance, and in the production of asphaltic and portland cement concrete mixes. Aggregates also are widely used as railroad track ballast. Construction aggregates constituted approximately 71% of the dollar volume of the Construction Materials segment's 2002 net sales, as compared to 70% in 2001 and 66% in 2000. The remaining sales in the Construction Materials segment result from other products and services including asphalt mix and related products, ready-mixed concrete, trucking services, water transportation services, paving const ruction, and several other businesses.

         Each type of aggregate is sold in competition with other types of aggregates and in competition with other producers of the same type of aggregates. Because of the relatively high transportation costs inherent in the business, competition generally is limited to the areas in proximity to production facilities. Noteworthy exceptions are the areas along the Mississippi, Tennessee-Tombigbee and James river systems and the Gulf Coast, which are served from remote quarries by rail, barge or ocean-going vessels. Our Construction Materials segment served markets in 27 states, the District of Columbia and Mexico. Shipments of all construction aggregates totaled approximately 217.3 million tons in 2002.

         In 2002, we spent approximately $43.4 million on acquisitions. These acquisitions included 5 aggregates facilities in Alabama, Illinois and Tennessee and 5 sales yards in Mississippi, Tennessee and Texas.

         At the end of 2002, we operated 220 aggregates production facilities located in 17 states and Mexico. These aggregates facilities included 162 crushed stone plants, 33 sand and gravel plants, 2 slag plants and 23 plants producing other aggregates (principally recycled concrete). Reserves largely determine the ongoing viability of an aggregates business. At the end of 2002, our estimated proven and probable aggregates reserves totaled 10.5 billion tons, sufficient to support an average life of approximately 48 years at current operating rates.

         In addition to our aggregates production facilities, we operated 64 truck, rail and water distribution yards, located in select market areas, for the sale of aggregates products. Our other facilities included 44 asphalt plants; 2 emulsified asphalt plants; 26 ready-mixed concrete plants; and another 26 operations related to paving construction, service and repair, and transportation operations.

         The key end-use customers for our aggregates products are heavy construction and paving contractors; residential and commercial building contractors; concrete products manufacturers; state, county and municipal governments; and railroads. We serve our customers by truck, rail and water distribution networks. During 2002, domestic and international operations served markets in 20 states, the District of Columbia and Mexico with a full line of aggregates, and 7 additional states with railroad ballast.

         Environmental and zoning regulations have made it increasingly difficult for the construction aggregates industry either to expand existing quarries or to develop new quarries in some markets. 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, we believe that future environmental control costs will not have a materially adverse effect upon our business. Furthermore, any future land use restrictions could make zoning and permitting more difficult. Any such restrictions, while curtailing expansion or acquisitions in certain areas, could potentially enhance the value of our reserves at existing locations.

         We believe that the Construction Materials segment's raw material reserves are sufficient for predicted production levels for the foreseeable future. We do not anticipate any material difficulties in either the number of sources or the availability of raw materials in the future.

         The Construction Materials segment strives to maintain a sufficient level of inventory of its aggregates to meet delivery requirements of its customers. The Construction Materials segment generally provides for standard payment terms similar to those customary for the construction aggregates industry. The terms generally provide for payment within 30 days of being invoiced.

     Chemicals

         The Chemicals segment is organized into two business units: Chloralkali, operating under the Vulcan Chemicals name, manages our line of chloralkali products and related businesses, and Performance Chemicals, operating under the Vulcan Performance Chemicals name, manages our specialty chemicals and services business.

         The Chemicals segment delivers its products upon receipt of orders or requests from customers. On occasion, when necessary to conform to regional industry practices, we have sold product under various payment terms.

         The Chloralkali business unit produces chlorine, caustic soda, hydrochloric acid, potassium chemicals and chlorinated organic chemicals, which are sold principally to the chemical processing, polymer, refrigerant, foam-blowing, food and pharmaceutical, pulp and paper, textile and water management industries. Vulcan Performance Chemicals offers specialty and custom chemical products, services, technologies and manufacturing capabilities for a variety of customer needs in a number of industries, including pulp and paper and water management.

         The Chloralkali Business. In the paper industry, caustic soda is used primarily in the kraft and sulfite pulping processes. Chlorine is used in potable water disinfection and sewage management, to remove impurities from recycled aluminum and as an ingredient to make other chlorinated products. Caustic soda and caustic potash (potassium hydroxide) are used in the production of soaps and detergents. Caustic soda also is used to demineralize water for steam production at electrical energy facilities and to remove sulfur from gas and coal. We supply hydrochloric acid to the energy industry for stimulation of oil and gas wells. Hydrochloric acid, caustic soda, caustic potash and methylene chloride are used by the food and pharmaceutical industries. Ethylene dichloride (EDC) is used in the manufacture of PVC. Perchloroethylene and methylene chloride are used in industrial cleaning applications. Pentachlorophenol is used as a wood preservativ e to extend the life of utility poles. The Chloralkali business unit's sales to the chemical processing industry serve companies that produce organic and inorganic chemical intermediates and finished products. Products sold in this market include hydrochloric acid, chlorine, caustic soda, caustic potash, potassium carbonate and various chlorinated hydrocarbons. Potassium carbonate is used in the manufacture of screen glass, rubber antioxidants, cleansers and other chemicals. We sell chloroform, methyl chloroform, perchloroethylene and other chlorinated hydrocarbons to the fluorocarbons market as feedstocks for manufacturing refrigerants.

         The Chloralkali business unit includes a joint venture with Mitsui & Co., Ltd., for the production and distribution of EDC. This joint venture is structured to take advantage of our manufacturing and marketing capabilities and Mitsui's access to global EDC markets. Mitsui, the world's leading EDC trader, purchases all of the EDC output of our Geismar facility.

         Underground reserves of salt, a basic raw material used by the Chloralkali business unit in the production of chlorine and caustic soda, are located near our Wichita, Kansas and Geismar, Louisiana plants. We own or lease salt reserves at Wichita and Geismar, as discussed in Item 2 below. We purchase salt for our Port Edwards, Wisconsin plant from a number of regional supply sources. Ethylene, methanol and vinyl chloride monomer, the other major raw materials used in the Chloralkali business unit, and various chemicals used as raw materials by Vulcan Performance Chemicals are purchased from several different suppliers. Sources of salt, ethylene, methanol, vinyl chloride monomer and various other raw material chemicals are believed to be adequate for our operations, and we do not anticipate any material difficulty in obtaining necessary raw materials.

         In the 1990s, the production of carbon tetrachloride and methyl chloroform for emissive uses was phased out to a large extent because of the ozone-depleting properties of these chemicals. In 2002, we completed a plant at our Geismar complex that produces HCC-240fa, a feedstock to make new environmentally-friendly fluorocarbons that will replace ozone-depleting hydrochlorofluorocarbons. Under long-term agreements, we supply HCC-240fa to Honeywell Fluorine Products Group for its plant which is also located in Geismar. The resulting foam-blowing agent offers environmental benefits over present ozone-depleting compounds and it exhibits comparable or superior insulation performance.

         The Performance Chemicals Business. In February 1999, we combined our specialty chemicals businesses into Vulcan Performance Chemicals. This business unit includes Callaway Chemical Company, Callaway's Mayo Division, Vulcan Performance Chemicals, Ltd., Vulcan Chemical Technologies, LLC and Vulcan's sodium chlorite business. Vulcan Performance Chemicals offers a blend of products, services, technologies and manufacturing capabilities for customers in a variety of industries, with emphasis on pulp and paper and water management. On March 1, 2002, Vulcan Performance Chemicals entered into alliance with Apollo Chemical pursuant to which Apollo will perform the sales and service functions of Vulcan Performance Chemicals' textile product line. In December 2002, we sold the Performance Chemicals business unit's municipal drinking water treatment business to Altivia Corporation. We have recently announced the sale of the Performance Chemicals business unit's waste water odor and corrosion control business to Altivia Corporation. We expect this transaction to close on March 31, 2003.

Financial Results by Business Segments

         Net sales, total revenues, segment earnings, identifiable assets and related financial data for each of our business segments for the three years ended December 31, 2002, are reported on pages 47 and 48 (Note 14 of the Notes to Consolidated Financial Statements) in our 2002 Annual Report to Shareholders, which are incorporated herein by reference.

Competition and Customers

         All of our 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 the Chemicals segment.

         We are the largest construction aggregates producer in the United States. We estimate that the top ten producers in the nation represent less than a third of the total national market, resulting in highly fragmented markets in some areas. Therefore, depending on the market, we compete with a number of large, national and small, local producers. Since construction aggregates are expensive to transport, the main competitive factor in the construction aggregates business is having a transportation advantage over competitors. We have a significant market presence in eight of the top ten metropolitan areas that demographers expect will experience the largest absolute growth in population in this decade. We also have facilities located on waterways and rail lines which substantially increase our geographic market reach through the availability of lower unit cost rail and water transportation.  The Construction Materials segment sells a small amount of construction aggregates outside of the United States. Nondomestic net sales in the Construction Materials segment were $4,422,000 in 2002, $5,519,000 in 2001 and $26,000 in 2000.

         Our Chemicals segment competes throughout the United States with numerous companies, including some of the nation's largest chemical companies, in the production and sale of our lines of chemicals. The segment competes principally on the basis of quality, price and technical support for our products. The segment also competes for sales to customers outside the United States primarily in Asia, South America and Europe. The segment's net sales to foreign customers were $33.8 million in 2002, $36.2 million in 2001 and $36.3 million in 2000.

         No material part of the business of either segment of Vulcan 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 Vulcan. Our products are sold principally to private industry. Although the majority of construction materials sales are used in public works, relatively insignificant sales are made directly to federal, state, county or municipal governments/agencies.

Research and Development Costs

         We conduct research and development activities for both of our business segments. The Construction Materials research and development facility is located in Birmingham, Alabama. The Chemicals research and development laboratories are located in Wichita, Kansas and Columbus, Georgia. In general, our research and development efforts are directed toward new and more efficient uses of our Construction Materials and Chemicals products as well as the manufacturing or processing of our Chemicals products. We spent approximately $1,240,000 in 2002, $1,202,000 in 2001 and $1,360,000 in 2000 on research and development activities for our Construction Materials segment. We spent approximately $7,402,000 in 2002, $7,177,000 in 2001 and $6,840,000 in 2000 on research and development activities for our Chemicals segment.

Environmental Costs and Governmental Regulation

         We estimate that capital expenditures for environmental control facilities in 2003 and 2004 will be approximately $13,154,000 and $8,938,000, respectively, for the Construction Materials segment, and $8,602,000 and $7,090,000, respectively, for the Chemicals segment.

         Certain operations of our Chemical segment 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 past practices 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. 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 a Corrective Measures Implementation ("CMI") by the facility owner, such as implementation of a cleanup plan developed by the EPA based on the RFI and CMS.

         We expect to incur RFI and CMS costs over the next several years at our Geismar and Wichita chemical manufacturing facilities. For each of these two 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, we have determined that our accrued reserves are adequate to cover such costs. The total costs which we may ultimately incur in connection with discharging our obligations under RCRA's corrective action requirements, however, cannot reasonably be estimated at this time.

         Our Construction Materials operations are subject to federal, state and local laws and regulations relating to the environment, health and safety, particularly air quality and dust control. In 1997, the Environmental Protection Agency ("EPA") promulgated changes to the National Ambient Air Quality Standards. These changes included modifying the existing PM10 standards, and introduced a new fine particulate PM2.5 standard (particles smaller than 2.5 microns in diameter). These revised standards will eventually affect many areas of the country by requiring a re-evaluation of whether the areas are in "attainment" with the new standards. However, testing jointly conducted by our leading industry trade association (National Stone, Sand and Gravel Association) and EPA has indicated that crushed stone, sand and gravel operations are not major sources of fine particulate (PM2.5) emissions. Because of this, we do not current ly believe that the costs associated with compliance with the new standards will have a material adverse effect on our operations.

Patents and Trademarks

         As of March 3, 2003, we own, have the right to use, or have made applications for approximately 75 patents which have been granted or are pending in the United States and various other countries, as well as some 23 trademarks registered or pending registration in the United States and other countries. These patents, patent applications and trademarks relate to our businesses, primarily, our Chemicals businesses. We believe our patents, patent applications and trademarks are valuable both individually and in the aggregate to our operations, but no such patents, patent applications or trademarks are material to the conduct of our business as a whole.

Other Information Regarding Vulcan

         Our principal sources of energy are electricity, natural gas and diesel fuel. We do not anticipate any material difficulty in obtaining the required sources of energy for our operations.

         In 2002, the Construction Materials segment employed an average of approximately 7,467 people. The Chemicals segment employed an average of approximately 1,466 people. Our corporate office employed an average of approximately 233 people. We consider our relationship with our employees to be good.

         Our financial results 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.

         We do not consider our backlog of orders to be material to, or a significant factor in, evaluating and understanding either of our business segments or our business considered as a whole.

Investor Information
        We are subject to the informational requirements of the Securities Exchange Act of 1934 (the "Exchange Act"). Therefore, we file periodic reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). You can access financial and other information at our website. The address is www.vulcanmaterials.com. We make available on our website, free of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC. In addition to accessing copies of our periodic reports online, you may request a copy of our Annual Report on Form 10-K, including financial statements, by writing to William F. Denson, III, Secretary, Vulcan Materials Company, 1200 Urban Center Driv e, Birmingham, Alabama 35242.

         Although the New York Stock Exchange's proposed rules requiring disclosure of some corporate governance documents on companies' websites are not yet effective, we have voluntarily provided such information. Our Corporate Governance Guidelines, the charters of our Audit Committee, Compensation Committee, and Governance Committee are available on our website at www.vulcanmaterials.com.

Item 2. Properties

Construction Materials

         We have 196 locations in the United States and Mexico in which we engage in the extraction of stone, sand and gravel. The following map shows the locations of our quarries and sand and gravel facilities.



         Our current estimate of approximately 10.5 billion tons of zoned and permitted aggregates reserves is approximately 0.2 billion tons more than the estimate reported at the end of 2001. We believe that the quantities of zoned and permitted reserves at our aggregates facilities are sufficient to result in an average life of approximately 48 years at present operating levels. See Note 1 to the table on page 8 for a description of our method employed for estimating the years of life of reserves.

         The foregoing estimates of reserves are of recoverable stone, sand and gravel of suitable quality for economic extraction, based on drilling and studies by our geologists and engineers, recognizing reasonable economic and operating restraints as to maximum depth of overburden and stone excavation.

         Of the 196 permanent reserve-supplied aggregates production facilities which we operate directly, or through joint ventures, 67 (representing 45% of total reserves) are located on owned land, 33 (representing 20% of total reserves) are on land owned in part and leased in part, and 96 (representing 35% of total reserves) are on leased land. While some of our leases run until reserves at the leased sites are exhausted, generally our leases have definite expiration dates which range from 2004 to 2104. Most of our leases have options to extend them well beyond their current terms by renewals at our discretion.

         Due to transportation costs, the marketing areas for most aggregates facilities in the construction aggregates industry are limited, often consisting of a single metropolitan area or one or more counties or portions thereof when transportation is by truck only. The following table provides specific information regarding our 10 largest active aggregates facilities determined on the basis of the quantity of aggregates reserves. None of the listed aggregates facilities contribute more than 5% to the revenues of our Construction Materials business.

Location of Quarry (nearest major metropolitan area)	Product	Average Annual Production Rate (millions of tons)	Estimated Years of Life At Average Rate of Production (1)	Nature of Interest	Lease Expiration Date, if Applicable
Playa Del Carmen, Mexico	Limestone	7.5	97.1	Owned	-
McCook (Chicago), Illinois	Limestone	8.3	65.7	Owned	-
Grayson (Atlanta), Georgia	Granite	1.6	Over 100	Owned	-
Rockingham (Charlotte), North Carolina	Granite	4.0	78.4	79% Leased 21% Owned	(2)
Gray Court (Greenville), South Carolina	Granite	1.0	Over 100	Owned	-
Warrenton, Virginia (Washington, D.C.)	Diabase	1.0	Over 100	Leased	(3)
Reed (Paducah), Kentucky	Limestone	8.0	26.6	Leased	(3)
Calera (Birmingham), Alabama	Limestone	3.1	57.2	Owned	-
Jack (Richmond), Virginia	Granite	.7	Over 100	66% Owned 34% Leased	(4)
Mount Misery (Hanover), Pennsylvania	Limestone	2.6	62.1	Owned	-

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(1)	Estimated years of life of aggregates reserves are based on the average annual rate of production of the facility 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 facility properties, changes in aggregates specifications required by major customers and passage of government regulations applicable to aggregates operations. Estimates also are revised when and if additional geological evidence indicates that a revision is necessary.
(2)	Leases expire as follows: 35% in 2025 and 65% in 2036.
(3)	Lease does not expire until reserves are exhausted. Surface rights at the Paducah, Kentucky facility are owned.
(4)	Renewable by us through 2059.

Chemicals

         Our Chloralkali business unit operates manufacturing facilities in 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 our Chloralkali business unit. The Port Edwards plant produces chlorine, caustic soda, muriatic acid, caustic potash and potassium carbonate. The Wichita facility manufactures sodium chlorite for Vulcan Performance Chemicals.

         All of the facilities at Wichita are located on a 2,004-acre tract of land which we own. We hold mineral rights for salt under two leases that are automatically renewable from year-to-year unless terminated by us and under several other leases which may be kept in effect so long as production from the underlying properties is continued. In addition, we own 280 acres of salt reserves and 108 acres of water reserves. We maintain 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 the plant's process steam requirements. We have placed this cogeneration facility in reserve and are purchasing most of our requirements for electric power from a local utility at favorable rates pursuant to a long-term agreement. Through a separate agreement with this utility, we operate our cogeneration unit upon the request of the utility at various times during the summer peak electricity demand period, selling the cogenerated electricity to the utility at profitable rates.

         The facilities at Geismar are located on a 2,185-acre tract of land which we own. We hold mineral rights for salt under a lease which may be extended, at our option, through 2037. Included in the facilities at the Geismar plant are the operations associated with the joint venture with Mitsui & Co., Ltd. and an electric power cogeneration facility which we own. The cogeneration facility supplies a majority of the electricity and process steam required by the Geismar plant, but not the joint venture facility. A long-term contract with the regional utility is in place to supply the additional electrical power requirements of the joint venture plant. We plan to put the Geismar cogeneration facility in reserve during 2003, and have a contract to receive power from a regional utility.

         The plant facilities at Port Edwards are located on a 34-acre tract of land, on which we own the surface rights. Currently, we purchase our salt and electrical power requirements for the Port Edwards facility from regional supply sources.

         Manufacturing facilities for chemicals produced by Vulcan Performance Chemicals (other than sodium chlorite which is produced at Wichita) are operated by our subsidiaries. Vulcan Performance Chemicals indirectly owns two production facilities in Columbus, Georgia and additional production facilities in Smyrna, Georgia; Dalton, Georgia and Shreveport, Louisiana. Vulcan Performance Chemicals also has an office and small production facility on leased property in Vancouver, British Columbia.

         Our Chemicals manufacturing facilities are designed to permit a high degree of flexibility as to raw material feedstocks, product mix and product ratios; therefore, actual plant production capacities vary according to these factors.

Other Properties

         The headquarters for the corporate staff, the staffs for the Construction Materials and Chemicals segments and the Southern and Gulf Coast Division of the Construction Materials segment are located in an office complex in Birmingham, Alabama. The majority of this office space is leased through December 31, 2013 and consists of approximately 189,000 square feet. The annual rental for each year in the initial 5 year period, the second 5 year period and the final 5 year period of the lease will be approximately $3.0 million, $3.2 million and $3.4 million, respectively. Additional space is leased in an adjacent building for a term of five years ending 2005. The square footage of this additional space is 6,995 and the base rent starts at $136,402 and increases to $159,393 by the end of the term.

Item 3.  Legal Proceedings

         In the course of our Construction Materials and Chemicals operations, we are subject to occasional governmental proceedings and orders pertaining to occupational safety and health or to protection of the environment, such as proceedings or orders relating to noise abatement, air emissions or water discharges. As part of our continuing program of stewardship in safety, health and environmental matters, we have been able to resolve such proceedings and to comply with such orders without any materially adverse effects on our business.

         We are also 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 our opinion, and that of our counsel, the disposition of these lawsuits will not adversely affect our consolidated financial position to a material extent. In addition to those lawsuits in which we are involved in the ordinary course of business, certain other legal proceedings are more specifically described below. It is our opinion that the disposition of these described lawsuits will not adversely affect our consolidated financial position to a material extent.

         We are involved in a number of cases as a result of our sale of the chemical product perchloroethylene. Among these cases is an action filed by the City of Modesto in state court in California. This claim arose from allegations of contamination of municipal water wells in the City of Modesto and alleges certain claims against us and other chemical manufacturers, distributors and dry cleaners. The trial in this case is set to begin September 29, 2003. Other cases involve claims of IBM employees who allege personal injury as a result of workplace exposure at IBM semiconductor manufacturing plants. We are named as a defendant, along with IBM and other chemical manufacturers, in approximately 16 lawsuits involving more than 230 plaintiffs in state court in New York. One of the plaintiff's claims has been settled without any participation by us. Thus far, settlement efforts on the remaining plaintiffs' claims have been unsuccessful. Additionally, we hav e been dismissed summarily from a number of the pending claims.

         We have been named as a defendant in multiple lawsuits filed in state court and federal district court in Louisiana. The lawsuits claim damages for various personal injuries allegedly resulting from releases of chemicals at our Geismar, Louisiana, chloralkali plant in 2001. To date, 87 lawsuits, involving approximately 3,015 named plaintiffs have been filed. All of the cases are in the discovery stage.

         In September 2001, we were named a defendant in a suit brought by the Illinois Department of Transportation ("IDOT"), in the Circuit Court of Cook County, Chancery Division, Illinois, alleging damage to a 0.9 mile section of Joliet Road that bisects our McCook Quarry in McCook, Illinois, a Chicago suburb. IDOT seeks damages to "repair, restore, and maintain" the road, or in the alternative, judgment for the cost to "improve and maintain other roadways to accommodate" vehicles that previously used the road. The complaint also requests that the court enjoin any McCook Quarry operations that will further damage the road. There are a number of possible resolutions of this litigation, including permanently rerouting the traffic or rebuilding the 0.9 mile section of Joliet Road. The traffic has been rerouted around this 0.9 mile section of Joliet Road for almost five years. Discovery is ongoing.

         We have been named as one of numerous defendants in 76 lawsuits in state court in Mississippi and Texas by over 1,814 plaintiffs alleging silicosis arising from exposure to industrial sand used for abrasive blasting which was marketed by us from 1988 to 1994. We are seeking dismissal from the cases in Mississippi due to the negligible amount of product sold in that state. The cases are in the early stages of discovery.

         In November 2002, we received a Directive and Notice to Insurers No. 2002-9 and Directive and Notice to Insurers No. 2002-10 (collectively, the "Directives") from the New Jersey Department of Environmental Protection ("NJDEP"). The NJDEP asserts in its Directives that the respondents named therein, including us, are strictly and jointly and severally liable under state law (specifically, the New Jersey Spill Compensation and Control Act, N.J.S.A 58:10-23.11) with respect to certain environmental conditions that allegedly affect two former asphalt plant sites. These two sites are referred to in the Directives as, respectively, the Roseland site, located in Essex County, New Jersey, and the Rockaway site, located in Morris County, New Jersey, (collectively, the "Sites"). The Directives purport to order us and the other respondents to pay the total amount of $452,000 within 30 days to reimburse costs that the NJDEP expects to incur in the future in connection with its cleanup of the Sites. Tarmac Minerals, Inc., whose stock we acquired in 2000, owned and operated these sites during the mid-1990's before selling them to the current owner. We never operated the sites.

         Note 11, Other Commitments and Contingent Liabilities on page 46 of our 2002 Annual Report to Shareholders is hereby incorporated by reference.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

         Certain of the matters and statements made herein or incorporated by reference into this Annual Report on Form 10-K constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. All such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect our intent, belief or current expectation. Often, forward-looking statements can be identified by the use of words such as "anticipates," "may," "believes," estimates," "projects," "expects," "intends," and words of similar import. In addition to the statements included in this Annual Report on Form 10-K, we may from time to time make other oral or written forward-looking statements. Forward-looking statements are not guarantees of future performance, and actual results could differ materially from those indicated by the forward-looking statements. All forward-looking statements involve certain assumptions, risks and uncertainties that could cause actual results to differ materially from those included in or contemplated by the statements. These assumptions, risks and uncertainties include, but are not limited to, general business conditions, including the timing or extent of any recovery of the economy, the highly competitive nature of each of the industries in which we operate, pricing of our products, weather and other natural phenomena, energy costs, the cost of hydrocarbon-based raw materials, the timing and amount of federal, state and local funding for infrastructure and the risks set forth in Item 3 "Legal Proceedings," Note 11 "Other Commitments and Contingent Liabilities," Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations," Item 7A "Quantitative and Qualitative Disclosures About Market Risk," and other risks and uncertainties. All such forward-looking statements may be affected by inaccurate assumptions or by known or unknown risks and uncertainties, and therefore the statements may turn out to be wrong. Consequently, we cannot guarantee the accuracy of the forward-looking statements. Actual future results may vary materially from currently anticipated results.

         All forward-looking statements are made as of the date of filing or publication. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Investors are advised, however, to consult any of our future disclosures in filings made with the Securities and Exchange Commission or in any of our press releases.

Item 4.  Submission of Matters to a Vote of Security Holders

         No matter was submitted to our security holders through the solicitation of proxies or otherwise during the fourth quarter of 2002.

Executive Officers of Registrant

         The names, positions and ages, as of March 1, 2003, of our executive officers are as follows:

Name	Position	Age
Donald M. James	Chairman and Chief Executive Officer	54
Guy M. Badgett, III	Senior Vice President-Construction Materials, East	54
William F. Denson, III	Senior Vice President, General Counsel and Secretary	59
Mark E. Tomkins	Senior Vice President, Chief Financial Officer and Treasurer	47
Robert A. Wason IV	Senior Vice President, Corporate Development	51
Ejaz A. Khan	Vice President, Controller and Chief Information Officer	45
Brad C. Rosenwald	President, Chloralkali Business Unit	50
Thomas R. Ransdell	President, Southwest Division	60
James W. Smack	President, Western Division	59

         The principal occupations of the executive officers during the past five years are set forth below:

         Donald M. James, was elected Chairman of the Board of Directors in May 1997. He became President and Chief Executive Officer in February 1997. Prior to that he served as President and Chief Operating Officer.

         Guy M. Badgett, III, was elected Senior Vice President, Construction Materials, East in February 1999. He was elected Chairman, Southern Division in May 1997. Prior to that he served as President, Southeast Division.

         William F. Denson, III, was elected Senior Vice President and General Counsel in May 1999. Prior to that date he served as Senior Vice President-Law. He has also served as Secretary since April 1981.

         Mark E. Tomkins was elected Senior Vice President and Chief Financial Officer in January 2001. He was also appointed Treasurer in May 2001. From August 1998 to January 2001 he served as Senior Vice President and Chief Financial Officer of Great Lakes Chemical Company where he was primarily responsible for finance, investor relations, strategic planning and information technology. From January 1997 to August 1998 he served as Vice President, Finance and Business Development Polymers Division of Great Lakes where he was responsible for finance, strategic planning and business development.

         Robert A. Wason IV was elected Senior Vice President, Corporate Development in December 1998. From 1996 until 1998 he served as President, Performance Systems Business Unit.

         Ejaz A. Khan was elected Vice President and Controller in February 1999. Prior to that he served as Controller. He was appointed as Chief Information Officer as well in February 2000.

         Brad C. Rosenwald was appointed President of the Chloralkali Business Unit in January 2002. Prior to that he served as Vice President, Manufacturing of the Chloralkali Business Unit.

         Thomas R. Ransdell has served as President, Southwest Division since 1994. He also served as President, Vulcan Gulf Coast Materials, Inc., from 1987 to May 1997.

         James W. Smack was appointed President of Western Division effective in January 1999. Prior to that time he served as President, Mideast Division.

PART II

Item 5.  Market for the Registrant's Common Equity and Related Stockholder Matters

         Our Common Stock is traded on the New York Stock Exchange (ticker symbol VMC). As of February 28, 2003, the number of shareholders of record was 3,930. The closing price of the Common Stock on the New York Stock Exchange on February 28, 2003, was $31.70. The prices in the following table represent the high and low sales prices for our Common Stock as reported on the New York Stock Exchange.

	Common Stock Prices		Dividends Declared
2002 First Quarter Second Quarter Third Quarter Fourth Quarter	High $48.92 49.95 44.35 38.24	Low $44.95 42.46 34.15 32.35	$.235  ..235 ..235 ..235
2001 First Quarter Second Quarter Third Quarter Fourth Quarter	$ 48.19 55.30 55.22 48.95	$ 40.75 43.60 37.50 40.46	$.225  ..225 ..225 ..225

         We paid dividends quarterly in 2002 in the total amount of $95,384,000, as compared with a total amount paid of $91,080,000 in 2001. On February 14, 2003, our Board of Directors authorized a quarterly dividend of $.245 per share of Common Stock payable March 10, 2003, to holders of record on February 28, 2003. This quarterly dividend represents a 4% increase over quarterly dividends paid in 2002.

         Our policy is to pay out a reasonable share of net cash provided by operating activities 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. The future payment of dividends, however, will be within the discretion of our Board of Directors and depends on our profitability, capital requirements, financial condition, growth, business opportunities and other factors which our Board of Directors may deem relevant.

         We had no unregistered sales of securities in the fourth quarter of 2002.

Item 6.  Selected Financial Data

         The selected statement of earnings, per share data and balance sheet data for each of the 5 years ended December 31, 2002, set forth below have been derived from our audited consolidated financial statements. The following data should be read in conjunction with our consolidated financial statements and notes to consolidated financial statements on pages 31 through 34 and 35 through 49 respectively, of our 2002 Annual Report to Shareholders, which are incorporated herein by reference.

	Year Ended December 31,
	2002	2001	2000	1999	1998
	(Amounts in millions, except per share data)
Net sales Total revenues Net earnings	$ 2,545.1 $ 2,796.6 $    169.9	$ 2,755.3 $ 3,020.0 $    222.7	$ 2,491.7 $ 2,744.6 $    219.9	$ 2,355.8 $ 2,607.8 $    239.7	$ 1,776.4 $ 1,969.8 $    255.9
Net earnings per:     Basic shares outstanding     Diluted shares outstanding	$1.67 $1.66	$2.20 $2.17	$2.18 $2.16	$2.38 $2.35	$2.54 $2.50
Total assets Long-term obligations Cash dividends declared per share	$ 3,448.2 $    857.8 $0.94	$ 3,413.3 $    906.3 $0.90	$ 3,250.4 $    685.4 $0.84	$ 2,839.5 $    698.9 $0.78	$ 1,658.6 $      76.5 $0.69

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations

         "Management's Discussion and Analysis of Results of Operations and Financial Condition" on pages 21 through 29 and "Financial Terminology" on page 50 of our 2002 Annual Report to Shareholders are incorporated herein by reference.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

         "Management's Discussion and Analysis of Results of Operations and Financial Condition" on page 26 of our 2002 Annual Report to Shareholders is incorporated herein by reference.

Item 8.  Financial Statements and Supplementary Data

         The following information relative to this item is included in our 2002 Annual Report to Shareholders on the pages shown below, which are incorporated herein by reference:

	Page
Consolidated Financial Statements	31-34
Notes to Consolidated Financial Statements	35-49
Management's Responsibility for Financial Reporting and Internal Control	30
Independent Auditors' Report	30
Net Sales, Total Revenues, Net Earnings and Earnings Per Share Quarterly Financial      Data for Each of the 2 Years Ended December 31, 2002 and 2001 (Unaudited)	59

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

         None.

PART III

Item 10.  Directors and Executive Officers of the Registrant

         On or before April 10, 2003, we will file a definitive proxy statement with the Securities and Exchange Commission pursuant to Regulation 14A (our "2003 Proxy Statement"). The information under the headings "Election of Directors," "Nominees for Election to the Board of Directors," "Directors Continuing in Office" and "Section 16(a) Beneficial Ownership Reporting Compliance" included in the 2003 Proxy Statement are incorporated herein by reference.

Item 11.  Executive Compensation

         The information under the headings "Compensation of Directors," "Executive Compensation," "Option Grants in 2002," "Report of the Compensation Committee," "Aggregated Option Exercises in 2002 and 2002 Option Values," "Reapproval of 1996 Long-Term Incentive Plan," "Shareholder Return Performance Presentation," "Retirement Income Plan," and "Change of Control Employment Agreements" included in our 2003 Proxy Statement is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The information under the headings "Stock Ownership of Certain Beneficial Owners" and "Stock Ownership of Management" and the "Equity Compensation Plans" included in our 2003 Proxy Statement are incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions

         None.

Item 14.  Controls and Procedures

         We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports we file with the SEC is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer within 90 days prior to the filing date of this report, with the participation of other management officials, evaluated the effectiveness of the design and operation of the disclosure controls and procedures. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are e ffective in timely alerting them to material information required to be included in our periodic Securities and Exchange Commission filings. No significant changes were made to our internal controls or other factors that could significantly affect these controls subsequent to the date of this evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART IV

Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

         (a) (1) Financial Statements

         The following financial statements are included in our 2002 Annual Report to Shareholders on the pages shown below and are incorporated herein by reference:

	Page
Consolidated Statements of Earnings	31
Consolidated Balance Sheets	32
Consolidated Statements of Cash Flows	33
Consolidated Statements of Shareholders' Equity	34
Notes to Consolidated Financial Statements	35-49
Management's Responsibility for Financial Reporting and Internal Control	30
Independent Auditors' Report	30
Net Sales, Total Revenues, Net Earnings and Earnings Per Share Quarterly Financial         Data for each of the 2 Years Ended December 31, 2002 and 2001 (Unaudited)	59

         (a) (2) Financial Statement Schedules

         The following financial statement schedule for the years ended December 31, 2002, 2001 and 2000 is included in Part IV of this report on the indicated page:

Schedule II Valuation and Qualifying Accounts and Reserves 17

         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, other than Exhibit (12) which is on page 18 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. See the Index to Exhibits which are on pages 23 and 24 of this report. The Exhibits listed in the accompanying Index to Exhibits are filed as part of this report.

         Information, financial statements and exhibits required by Form 11-K with respect to our 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, 2002, will be filed as one or more amendments to this Form 10-K on or before June 28, 2003, as permitted by Rule 15d-21 under the Securities Exchange Act of 1934.

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, 2002, 2001, and 2000 and for the years then ended, and have issued our report thereon dated January 31, 2003 (which report expresses an unqualified opinion and includes an explanatory paragraph related to the Company's change in its method of accounting for goodwill); such consolidated financial statements and report are included in your 2002 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedules of Vulcan Materials Company and its subsidiary companies, listed in Item 15. These consolidated financial statement schedules are 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 schedules, when considered in relation to the basic conso lidated financial statements taken as a whole, present fairly in all material respects the information shown therein.


/s/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

Birmingham, Alabama
January 31, 2003

Schedule II

VULCAN MATERIALS COMPANY AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVESFor the Years Ended December 31, 2002, 2001 and 2000
Amounts in Thousands

Column A	Column B	Column C	Column D	Column E		Column F
Description	Balance at Beginning of Period	Additions Charged to Costs and Expenses	Additions Charged to Other Accounts (4)	Deductions		Balance at End      Of Period
2002
Accrued Environmental Costs Accrued Reclamation Costs Doubtful Receivables Self-Insurance Reserves All Other (3)	$  13,406  26,091  6,903  19,037  8,423	$     345  7,148  4,636  24,760  4,058		$ 2,909  7,239  2,608  21,414  5,243	(1) (2)	$ 10,842  26,000  8,931  22,383  7,238
2001
Accrued Environmental Costs Accrued Reclamation Costs Doubtful Receivables Self-Insurance Reserves All Other (3)	$  13,777  23,963  8,982  19,113  8,848	$  1,707  8,738  8,184  18,695  4,241		$  2,078  6,610  10,263  18,771  4,666	(1) (2)	$ 13,406  26,091  6,903  19,037  8,423
2000
Accrued Environmental Costs Accrued Reclamation Costs Doubtful Receivables Self-Insurance Reserves All Other (3)	$  8,800  23,559  9,722  18,143  8,985	$     974  3,503  1,902  19,749  5,586	$  5,200	$ 1,197  3,099  2,642  18,779  5,723	(1) (2)	$ 13,777  23,963  8,982  19,113  8,848

(1)   Expenditures on environmental remediation 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
        individually insignificant.
(4)   Reserves established with acquisitions which increased goodwill.

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

	2002	2001	2000	1999	1998
Fixed charges:    Interest expenses before capitalization       credits    Amortization of financing costs    One-third of rental expense        Total fixed charges	$   57,846  298       23,455  $   81,599	$   64,026  494       24,340  $   88,860	$   54,236  348       21,668  $   76,252	$   53,022  267       20,798  $   74,087	$    7,224  93       13,668  $   20,985
Net earnings Provisions for income taxes Fixed charges Capitalized interest credits Amortization of capitalized interest    Earnings before income taxes as adjusted	$  169,876  67,247  81,599  (2,896)          767  $  316,593	$  222,680  101,373  88,860  (2,746)           754  $  410,921	$  219,893  92,345  76,252  (6,150)          686  $  383,026	$  239,693  111,868  74,087  (4,445)           693  $  421,896	$  255,908  118,936  20,985  (442)           715  $  396,102
Ratio of earnings to fixed charges	3.9	4.6	5.0	5.7	18.9

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 on March 28, 2003.

VULCAN MATERIALS COMPANY

By         /s/Donald M. James                                Donald M. James
   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/Donald M. James                   Donald M. James	Chairman, Chief Executive Officer and Director (Principal Executive Officer)	March 28, 2003
/s/Mark E. Tomkins                  Mark E. Tomkins	Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)	March 28, 2003
/s/Ejaz A. Khan                       Ejaz A. Khan	Vice President, Controller and Chief Information Officer (Principal Accounting Officer)	March 28, 2003
The following directors: Philip J. Carroll, Jr. Livio D. DeSimone Phillip W. Farmer H. Allen Franklin Ann McLaughlin Korologos Douglas J. McGregor James V. Napier Donald B. Rice Orin R. Smith	Director Director Director Director Director Director Director Director Director
By      /s/William F. Denson, III                        William F. Denson, III               Attorney-in-Fact		March 28, 2003

CERTIFICATIONS

I, Donald M. James, certify that:
1.       I have reviewed this annual report on Form 10-K of Vulcan Materials Company;

2.       Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.       Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of Vulcan Materials Company as of, and for, the periods presented in this annual report;

4.       Vulcan Materials Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Vulcan Materials Company and we have:

       a)       designed such disclosure controls and procedures to ensure that material information relating to Vulcan Materials Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

       b)      evaluated the effectiveness of Vulcan Materials Company's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

       c)      presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.       Vulcan Materials Company's other certifying officer and I have disclosed, based on our most recent evaluation, to Vulcan Materials Company's auditors and the audit committee of Vulcan Materials Company's Board of Directors:

       a)     all significant deficiencies in the design or operation of internal controls which could adversely affect Vulcan Materials Company's ability to record, process, summarize and report financial data and have identified for Vulcan Materials Company's auditors any material weaknesses in internal controls; and

       b)     any fraud, whether or not material, that involves management or other employees who have a significant role in the Vulcan Materials Company's internal controls; and

6.        Vulcan Materials Company's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

March 28, 2003

/s/ Donald M. James                    
Donald M. James
Chairman and Chief Executive Officer

I, Mark E. Tomkins, certify that:
1.        I have reviewed this annual report on Form 10-K of Vulcan Materials Company;

2.        Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.        Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of Vulcan Materials Company as of, and for, the periods presented in this annual report;

4.        Vulcan Materials Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Vulcan Materials Company and we have:

       a)        designed such disclosure controls and procedures to ensure that material information relating to Vulcan Materials Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

       b)       evaluated the effectiveness of Vulcan Materials Company's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

       c)        presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.        Vulcan Materials Company's other certifying officer and I have disclosed, based on our most recent evaluation, to Vulcan Materials Company's auditors and the audit committee of Vulcan Materials Company's Board of Directors:

       a)       all significant deficiencies in the design or operation of internal controls which could adversely affect Vulcan Materials Company's ability to record, process, summarize and report financial data and have identified for Vulcan Materials Company's auditors any material weaknesses in internal controls; and

       b)       any fraud, whether or not material, that involves management or other employees who have a significant role in the Vulcan Materials Company's internal controls; and

6.        Vulcan Materials Company's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

March 28, 2003

/s/ Mark E. Tomkins                    
Mark E. Tomkins
Senior Vice President, Chief Financial Officer and
Treasurer

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, 2002


OF


VULCAN MATERIALS COMPANY


FILED MARCH 28, 2003


Commission file number 1-4033

EXHIBIT INDEX Form 10-K Fiscal Year Ended December 31, 2002
Exhibit (3)(a)	Certificate of Incorporation (Restated 1988) as amended in 1989 and 1999 filed as Exhibit 3(a) to the Company's 1989 Form 10-K Annual Report and Exhibit 3(i) to the Company's 1999 Form 10-K Annual Report (File No. 1-4033).1
Exhibit (3)(b)	By-laws, as restated February 2, 1990, and as last amended February 14, 2003.
Exhibit (4)(a)	Distribution Agreement dated as of May 14, 1991, by and among the Company, Goldman, Sachs & Co., Lehman Brothers and Salomon Brothers Inc., filed as Exhibit 1 to the Form S-3 filed on May 2, 1991 (Registration No. 33-40284).1
Exhibit (4)(b)	Indenture dated as of May 1, 1991, by and between the Company and First Trust of New York (as successor trustee to Morgan Guaranty Trust Company of New York) filed as Exhibit 4 to the Form S-3 on May 2, 1991 (Registration No. 33-40284).1
Exhibit (4)(c)	Senior Debt Indenture between the Company and The Bank of New York as trustee, dated as of August 31, 2001 filed as Exhibit 4.1 to the Company's Registration Statement on Form S-3 filed on September 5, 2001 (Registration No. 333-67586). 1
Exhibit (4)(d)	Subordinated Debt Indenture between the Company and The Bank of New York as trustee, dated August 31, 2001 filed as Exhibit 4.3 to the Company's Registration Statement on Form S-3 filed on September 5, 2001 (Registration No. 333-67586). 1
Exhibit (10)(a)	The Management Incentive Plan of the Company, as amended.2
Exhibit (10)(b)	The Unfunded Supplemental Benefit Plan for Salaried Employees filed as Exhibit 10(d) to the Company's 1989 Form 10-K Annual Report (File No. 1-4033).1,2
Exhibit (10)(c)	Amendment to the Unfunded Supplemental Benefit Plan for Salaried Employees filed as Exhibit 10(c) to the Company's 2001 Form 10-K Annual Report (File No. 1-4033).1,2
Exhibit (10)(d)	The Deferred Compensation Plan for Directors Who Are Not Employees of the Company filed as Exhibit 10(d) to the Company's 2001 Form 10-K Annual Report (File No. 1-4033). 1,2
Exhibit (10)(e)	The 1996 Long-Term Incentive Plan of the Company filed as Exhibit 10(h) to the Company's 1995 Form 10-K Annual Report (File No. 1-4033).1,2
Exhibit (10)(f)	The Deferred Stock Plan for Nonemployee Directors of the Company filed as Exhibit 10(f) to the Company's 2001 Form 10-K Annual Report (File No. 1-4033).1,2
Exhibit (10)(g)	The Restricted Stock Plan for Nonemployee Directors of the Company filed as Exhibit 10(g) to the Company's 2001 Form 10-K Annual Report (File No. 1-4033).1,2
Exhibit (10)(h)	Executive Deferred Compensation Plan, as amended.2
Exhibit (10)(i)	Change of Control Employment Agreement Form.2
Exhibit (10)(j)	Change of Control Employment Agreement Form.2
Exhibit (10)(k)	Executive Incentive Plan of the Company filed as Exhibit (10)(n) to the Company's 2000 Form 10-K Annual Report (File No. 1-4033). 1,2
Exhibit (10)(l)	Supplemental Executive Retirement Agreement filed as Exhibit 10 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 (File No. 1-4033). 1,2
Exhibit (10)(m)	Rights Agent Agreement dated October 19, 1998 between Vulcan Materials Company and The Bank of New York, as amended.
Exhibit (12)	Computation of Ratio of Earnings to Fixed Charges for the five years ended December 31, 2002 (set forth on page 18 of this report).
Exhibit (13)	The Company's 2002 Annual Report to Shareholders.
Exhibit (21)	List of the Company's subsidiaries as of December 31, 2002.
Exhibit (23)	Consent of Deloitte & Touche LLP.
Exhibit (24)	Powers of Attorney.
Exhibit (99)(a)	Certification of Chief Executive Officer.
Exhibit (99)(b)	Certification of Chief Financial Officer.

         Information, financial statements and exhibits required by Form 11-K with respect to our 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, 2002, will be filed as one or more amendments to this Form 10-K on or before June 28, 2003, as permitted by Rule 15d-21 under the Securities Exchange Act of 1934.

¹Incorporated by reference.
²Management Contract or Compensatory Plan.

EX-3

Exhibit 3(b)
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 February 8, 2002 February 14, 2003

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 2 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	3 4 4 4 5 6 6 6 7
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	7 7 8 8 8 8 8 9 9 9 9 10 10 10 10 10 11 11 11
ARTICLE IV	Indemnification of Directors, Officers and Employees		11
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	13 13 13 13
ARTICLE VI	Miscellaneous
	Section 6.1 Section 6.2 Section 6.3 Section 6.4	Fiscal Year Corporate Seal Delegation of Authority Notices	14 14 14 15
ARTICLE VII	By-Laws and Their Amendments		15
ARTICLE VIII	National Emergency		15
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 12. 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 officers of the corporation, including 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. From time to time, the Board or the Chief Executive Officer may appoint one or more Assistants to any of such officers, and such one or more Assistant Secretaries, Assistant Treasurers, and Assistant Controllers as may be deemed appropriate. Any two or more offices may be concurrently held by the same person at the same time. The Chairman of the Board 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; provided, however, that any officer appointed by the Chief Executive Officer may be removed from office by the Chief Executive Officer.

           (b)    Term and Removal of Group, Division and Business Unit Officers. Group senior vice presidents and division and business unit chairmen and presidents shall serve at the pleasure of the Board of Directors. Group senior vice presidents and division and business unit chairmen and presidents may be removed from office, either with or without cause, at any time, by the Board of Directors. Other group, division and business unit officers shall serve at the pleasure of the Chief Executive Officer of the corporation. Any other group, division or business unit officer may be removed from office as a group, division or business unit 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.

EX-10

Exhibit 10(a)

VULCAN MATERIALS COMPANY
MANAGEMENT INCENTIVE PLAN
As Amended through December 13, 2002

1.          Name and Purpose

            The name of this plan is the "Vulcan Materials Company Management Incentive Plan" (the "Plan"), and its purpose is to promote the profitability of the Corporation by providing incentive rewards for those employees who contribute most to the operating progress and earning power of the Corporation.

2.          Definitions

            As used in the Plan, unless the context otherwise requires:

            (a)          "Administrative Guidelines" mean the guidelines approved from time to time by the Committee and the chief executive officer setting forth details with respect to the operation and administration of the Plan and the Awards thereunder, which Administrative Guidelines are not inconsistent with the terms of the Plan.

            (b)          "Annualized Base Salary" means the amount an Eligible Employee is entitled to receive as wages or salary on an annualized basis (based on a 365 day year), excluding all bonus, commissions, overtime, health additive and incentive compensation, payable by a Corporation, as consideration for the Eligible Employee's services to the Corporation, and including any base salary which has been earned but deferred.

            (c)          "Award" means the dollar amount payable to an Eligible Employee for a certain Plan Year.

            (d)          "Board of Directors" means the Board of Directors of the Company.

            (e)          "Change in Control" means the first to occur of any of the following events:

                      (1)          The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of Common Stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) a ny acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 2(e); or

                      (2)          Individuals who, as of the date of execution of this Plan, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

                      (3)          Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corpor ation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

                      (4)          Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

            (f)          "Committee" means the Compensation Committee of the Board of Directors.

            (g)          "Common Stock" means the common stock, par value $1.00 per share, of the Company.

            (h)          "Company" means Vulcan Materials Company, a New Jersey corporation, and any successor thereto.

            (i)          "Consolidated Net Earnings" for any Year means the sum of (1) the amount of net earnings (before any deduction for dividends) as reported in the Statement of Earnings, except that items which are classified therein as extraordinary items shall be excluded in the computation of Consolidated Net Earnings and (2) interest on long-term debt included in Net Capital, such interest to include charges or credits arising out of any premium or discount paid or received with respect to such debt, and such interest to be adjusted for the provision for federal and state income taxes attributable thereto.

            (j)          "Corporation" means the Company and its Subsidiaries.

            (k)          "Disability" means an Eligible Employee's termination due to a disability entitling him to long-term disability benefits under the applicable long-term disability plan of the Company or a Subsidiary, or, to the extent not eligible to participate in any Company-sponsored plan, under the guidelines of the Social Security Administration.

            (l)          "Eligible Employee" means a salaried employee of the Corporation who has been designated by the Committee or the chief executive officer as eligible for an Award for a certain Plan Year in accordance with Section 5, other than salaried employees who participate in the Company's Executive Incentive Plan.

            (m)          "Incentive Provision" means the annual incentive pool, denominated in dollars, as determined in accordance with Section 4.

            (n)          "Net Capital" for any Year means the sum of (1) long-term debt (comprising bonds, debentures and promissory notes having a maturity at the time of creation of more than one year), (2) issued capital stock, (3) capital in excess of par value and (4) earnings retained in the business and reserves created by appropriations therefrom, less the cost of treasury stock, all as shown in the Balance Sheet as of the end of the preceding Year, with appropriate prorated adjustments, as approved by the Public Accountants in accordance with the Plan, for any change during the Year arising from the increase or decrease of outstanding principal of long-term debt or from original issuance or redemption and retirement of capital stock.

            (o)          "Plan Year" means the Year for which Awards are being made.

            (p)          "Public Accountants" means the independent public accountants engaged by the Company from year to year for the purpose of submitting an opinion on the Corporation's Statement of Earnings and Balance Sheet.

            (q)          "Retirement" means a termination of an Eligible Employee's employment with the Company that entitles such Employee to immediate payment of a pension benefit under the Retirement Income Plan for Salaried Employees of Vulcan Materials Company or any successor plan.

            (r)          "Statement of Earnings" and "Balance Sheet" mean the consolidated statements of the Corporation's annual earnings and financial position certified by the Public Accountants and published from year to year in the Corporation's Annual Report to Shareholders.

            (s)          "Subsidiary" means any corporation or other entity, the majority of the outstanding voting stock or other ownership interest of which is owned, directly or indirectly, by the Company.

            (t)          "Target Bonus Amount" means the dollar amount derived by multiplying an Eligible Employee's Annualized Base Salary and the Eligible Employee's Target Bonus Percentage.

            (u)          "Target Bonus Percentage" means the percentage that is used to establish an Eligible Employee's Target Bonus Amount as set by the Committee or the chief executive officer for a Plan Year in accordance with Section 5.

            (v)          "Year" means the Corporation's fiscal year or period covered by a Statement of Earnings.

            In addition, certain other terms used herein have the definition given to them in the first place in which they are used.

3.          The Committee and Its Functions

            (a)          Administration. Subject to the terms of the Plan, full power and authority to interpret and administer the Plan are vested in the Committee; provided, however, the Committee may delegate the day-to-day administration of the Plan to an officer of the Company. The Committee shall have the power to adopt eligibility and other rules and regulations not inconsistent with the provisions of the Plan for the administration thereof, and to alter, amend or revoke any rule or regulation so adopted. From time to time during each Plan Year, the Committee shall submit to the Board of Directors preliminary or interim reports to the extent deemed necessary or appropriate by the Committee or upon the request of the Board of Directors.

            (b)          Binding Authority. Decisions of the Committee made in accordance with the Plan shall be final, conclusive and binding upon all parties, including the Corporation and the employees thereof; provided, however, that the Committee shall rely upon and be bound by the report of the Public Accountants for each Year with respect to the maximum amount available for credit to the Incentive Provision for such Year.

            (c)          Miscellaneous. No member of the Committee shall be eligible for Awards under the Plan. The Committee is authorized to conduct such consultations with officers and other executives of the Company and to engage or employ from time to time such counsel, advisers, consultants, accountants, analysts and other persons as it may deem necessary or expedient for the performance of the functions and duties authorized hereunder.

4.          Incentive Provision

            (a)          Determination of the Incentive Provision. As promptly as practicable after the end of each Plan Year, the Public Accountants shall determine in accordance with the Plan and certify in a report to the Committee the maximum amount available for credit to the Incentive Provision for such Plan Year, based upon the formula set forth in Section 4(b) below.

            (b)          Crediting of the Incentive Provision. The Committee or the Board of Directors shall credit to the Incentive Provision for each Plan Year (except for Years in which such credit is prohibited or limited by specific order of the Committee or Board of Directors) an amount that shall not exceed 10% of the Consolidated Net Earnings in excess of 6% of Net Capital for such Plan Year (as determined by the Public Accountants in accordance with Section 4(a) above); provided, however, that the Committee or the Board of Directors may in its sole discretion credit a lesser amount for any Plan Year.

5.          Eligibility for Participation in the Plan and Target Bonus Percentage

            (a)          Determination of Eligibility and Target Bonus Percentage. During the first quarter of each Plan Year, the Committee, in its sole discretion, shall determine the eligibility of and establish the Target Bonus Percentage for those salaried employees whose annual base salary is set by the Committee, and the chief executive officer of the Company shall determine the eligibility of and establish the Target Bonus Percentage for all other salaried employees. The designation or non-designation of an employee as an Eligible Employee will be decided by the Committee or the chief executive officer in its or his sole discretion with respect to each Plan Year and without regard to an employee having or not having been designated as an Eligible Employee in any prior Plan Year. Designation as an Eligible Employee in one Plan Year does not create a right or imply that the employee w ill be designated as an Eligible Employee in any other Plan Year. No members of the Board of Directors, except those who are salaried employees of the Corporation, may be designated as an Eligible Employee under the Plan.

            (b)          Changes of Prior Determinations. During the Plan Year, the Committee may approve changes in the Eligible Employees and the Target Bonus Percentage of the Eligible Employees whose annual base salary is determined by the Committee, and the chief executive officer may approve changes in the Eligible Employees and the Target Bonus Percentage of all other Eligible Employees of the Corporation.

            (c)          Report Recommending Award Allocations to Eligible Employees. As promptly as practicable after the end of each Plan Year, the chief executive officer of the Company shall compile and submit to the Committee a report listing the name, position and Target Bonus Percentage of each Eligible Employee (or proposed Eligible Employee) to be considered for allocation of an Award for such Plan Year.

6.          Allocation of Awards

            (a)          Allocation of Awards and Award Pools by the Committee. During the first quarter of the Year following the end of each Plan Year and after the Committee's receipt of the report referred to in Section 5(c) above, the Committee shall allocate individual Awards (if any) to those Eligible Employees whose annual base salary is determined by the Committee and establish an Award pool to be allocated by the chief executive officer of the Company among all other Eligible Employees. Any such allocations shall be made in the sole discretion of the Committee in accordance with the terms of the Plan; provided, however, that the Committee may, in the exercise of its discretion allocate no Awards or Award pools for a particular Plan Year. The total amount of all Awards and Award pools shall not exceed the total amount credited to the Incentive Provision for the most recently co mpleted Plan Year, as determined in accordance with Section 4 hereof.

            (b)          Allocation of Awards by the Chief Executive Officer. As soon as reasonably practicable after the establishment by the Committee of any Award pools, the chief executive officer of the Company shall allocate individual Awards, not to exceed the total amount of the Award pools authorized by the Committee, to the Eligible Employees, as the chief executive officer of the Company may in his sole discretion determine in accordance with the terms of the Plan.

            (c)          Considerations. Nothing contained in this Section 6 shall require the Committee or the chief executive officer of the Company to allocate all of the Awards for a Plan Year at one or the same time. Subject to the provisions of Sections 4, 5, and 6, the Eligible Employees for a given Plan Year shall be allocated Awards for such Plan Year in the individual amounts as the Committee or the chief executive officer of the Company in accordance with the Plan may in its or his sole discretion determine. Designation as an Eligible Employee and/or inclusion on the chief executive officer's report referred to in Section 5(c) does not give an individual a right or entitlement to be allocated an Award.

            (d)          Other Incentive Programs. The amount of any Award allocated to an Eligible Employee for all or part of a particular Year under a sales, production or other similar incentive plan or plans maintained by the Company or any Subsidiary shall be considered in determining the amount of any Award allocated to such Eligible Employee for the same Year under the Plan.

7.          Distribution of Awards

            (a)          General. Subject to the provisions of this Section 7 and to such other conditions and Administrative Guidelines as the Committee may in accordance with the Plan prescribe, an Award shall be paid to the Eligible Employee in cash, either in a lump sum or in installments, at such time or times, and subject to such other conditions, as the Committee or the chief executive officer of the Company may determine.

            (b)          Withholding. No later than the date as of which an amount first becomes includible in the gross income of an Eligible Employee for federal income tax purposes with respect to any Award under the Plan, the Corporation shall withhold any and all taxes required by any governmental authority to be withheld by the Company or a Subsidiary. The payment to any such governmental authority of an amount so withheld shall be deemed a payment of such amount to the Eligible Employee or his legal representatives.

            (c)          No Liability for Interest. Interest shall not be paid, and neither the Company nor the employing Subsidiary shall be liable for interest on, an Award (or portion of an Award) that is allocated, but not distributed.

8.          Change in Fiscal Year

            In the event of a change in the Corporation's fiscal year, the Plan shall continue, but there shall be a prorated adjustment of Net Capital to take into account the change in the fiscal year to a period of less than (or more than) 12 months. Thereafter, the Plan shall continue in effect and apply to each subsequent full fiscal year of the Corporation.

9.          Administrative Expenses

            All costs of the Plan, including any fees, retainers or other remuneration paid to members of the Committee as may from time to time be authorized by the Board of Directors, and all expenses incurred by the Committee or the Company in interpreting and administering the Plan, shall be borne by the Company and not charged against the Incentive Provision.

10.         Payments in the Event of a Change in Control

            (a)          General. Notwithstanding any other provision of the Plan, in the event of a Change in Control, Eligible Employees as of the date of such Change in Control shall be entitled to receive payment of Awards in accordance with this Section 10. For purposes of this Section 10, with respect to the applicable Plan Year, each individual whose employment terminated during such Plan Year as a result of Retirement, Disability or death and who was an Eligible Employee at the time of such termination shall be considered an Eligible Employee as of the date of such Change in Control and shall be entitled to a pro-rata Award (as determined under the applicable provisions of this Section 10), to the extent such individual has not previously received an Award with respect to the same period of service.

            (b)          Change in Control After Allocation of Awards for Plan Year. If a Change in Control occurs after Awards for a Plan Year have been allocated by the Committee or the chief executive officer of the Company in accordance with Section 6, but before the distribution of all or a portion of the Awards for that Plan Year, then such Awards as so allocated (or the unpaid portion thereof) shall be paid as promptly as practicable, but not more than 90 days, after such Change in Control.

            (c)          Change in Control After Plan Year Ends But Before Allocation of Awards. If a Change in Control occurs after the end of a Plan Year, but before Awards for such Plan Year have been allocated by the Committee or the chief executive officer of the Company in accordance with Section 6, each individual who was an Eligible Employee at the end of such Plan Year shall be paid an Award for such Plan Year at least equal to the greater of (A) the product of (x) the individual's Target Bonus Percentage multiplied by (y) the individual's Annualized Base Salary at the rate in effect as of the end of such Plan Year, or (B) the amount equal to the Award allocated to such Eligible Employee as determined in accordance with Sections 4, 5 and 6 of the Plan for such Plan Year based upon the Company's actual performance for such Plan Year; provided, however, that each individual whose emplo yment terminated during such Plan Year as a result of Retirement, Disability or death and who was an Eligible Employee at the time of such termination shall be paid an Award for such partial Plan Year determined in accordance with the foregoing and pro-rated based on a fraction, the numerator of which is the number of months (rounded to the nearest whole month) in such Plan Year through the date of such termination, and the denominator of which is 12. Awards provided for under this Section 10(c) shall be paid as promptly as practicable, but not more than 90 days, after such Change in Control.

            (d)          Change in Control Prior to the End of Plan Year. If a Change in Control occurs prior to the end of a Plan Year, then the following shall apply:

                        (1)          Eligible Employees Terminated During the Plan Year of the Change in Control Without Cause, for Good Reason or due to Death, Disability or Retirement.

                                    (i)            Without Cause or for Good Reason after the Change in Control. Each individual, (A) whose employment is terminated by the Company without Cause (as defined in the Vulcan Materials Company Change of Control Severance Policy) or (B) whose employment is terminated for Good Reason (as defined in the Vulcan Materials Company Change of Control Severance Policy) following the Change in Control and who was an Eligible Employee immediately before the date of the Change in Control, shall be paid, within 90 days following such termination of employment, an Award for such Plan Year at least equal to the product of (A) the individual's Target Bonus Percentage multiplied by (B) the individual's Annualized Base Salary at the rat e in effect immediately before the date of such termination (or, if higher, the Change in Control) and further multiplied by (C) a fraction, the numerator of which is the number of months (rounded to the nearest whole month) in such Plan Year through the date of such termination of employment, and the denominator of which is 12.

                                    (ii)            Due to Death, Disability or Retirement Prior to the Change in Control. Each individual, whose employment terminated prior to the Change in Control as a result of Retirement, Disability or death and who was an Eligible Employee at the time of such termination, shall be paid, within 90 days following the date of the Change in Control, an Award for such Plan Year at least equal to the product of (A) the individual's Target Bonus Percentage multiplied by (B) the individual's Annualized Base Salary at the rate in effect immediately before the date of such termination, and further multiplied by (C) a fraction, the numerator of which is the number of months (rounded to the nearest whole month) in such Plan Year through t he date of such termination of employment, and the denominator of which is 12.

                                    (iii)            Due to Death, Disability or Retirement after the Change in Control. Each individual, whose employment terminated during the Plan Year after the Change in Control as a result of Retirement, Disability or death and who was an Eligible Employee at the time of such termination, shall be paid, within 90 days following such termination of employment, an Award for such Plan Year at least equal to the product of (A) the individual's Target Bonus Percentage multiplied by (B) the individual's Annualized Base Salary at the rate in effect immediately before the date of such termination (or, if higher, the Change in Control) and further multiplied by (C) a fraction, the numerator of which is the number of months (rounded to t he nearest whole month) in such Plan Year through the date of such termination of employment, and the denominator of which is 12.

                        (2)          Eligible Employees Whose Employment Continues through the end of the Plan Year of the Change in Control. Each individual who was an Eligible Employee immediately before the date of the Change in Control and continues to be employed at the end of the Plan Year in which the Change in Control occurs shall be paid, within 90 days following the end of such Plan Year (whether or not still employed at the time of such payment), an Award for the Plan Year in which the Change in Control occurs at least equal to the greater of (A) the amount equal to the product of (x) the individual's Target Bonus Percentage multiplied by (y) the individual's Annualized Base Salary at the rate in effect immediately before the date of such Change in Control, or (B) the amount equal to the Award allocated to such Eligible Em ployee as determined in accordance with Sections 4, 5 and 6 of the Plan for such Plan Year based upon the Company's actual performance for such Plan Year.

                        (3)          Change of Control Before the Determination of Eligible Employees and Target Bonus Percentages for the Plan Year. Notwithstanding anything contained herein to the contrary, if a Change in Control occurs before the Committee or the chief executive officer of the Company has designated the Eligible Employees and Target Bonus Percentages for the Plan Year in accordance with Section 5, the Eligible Employees and Target Bonus Percentages designated by the Committee or the chief executive officer of the Company for the immediately preceding Plan Year shall be deemed to be the Eligible Employees and Target Bonus Percentages for the current Plan Year.

            (e)          Payment of Deferred Amounts. Upon a Change in Control, any positive employee balance remaining in the deferred bonus account of an Eligible Employee established pursuant to the Company's annual bonus or incentive plans shall be paid within 90 days after such Change in Control.

            (f)          No Duplication of Benefits. Depending upon the date on which a Change in Control occurs, an Eligible Employee may be entitled to receive an Award (or partial Award) under Section 10(b) or Section 10(c) and under Section 10(d). Anything to the contrary notwithstanding, in no event shall an Eligible Employee be paid an Award (or partial Award) under this Section 10, if payment thereof would be duplicative of amounts of annual incentive compensation with respect to the same period of service previously paid or payable to the Eligible Employee, whether pursuant to the terms of this Plan, another plan of the Corporation or an individual employment or severance agreement between the Eligible Employee and the Corporation, and any amounts payable under this Section 10 shall be reduced or offset by any such duplicate payments.

            (g)          Not a Limitation on Awards. This Section 10 is intended to establish the minimum Awards payable to Eligible Employees in the event of a Change in Control, and nothing in this Section 10 shall preclude the payment of Awards under the Plan that are larger than those guaranteed to be paid under this Section 10.

            (h)          Legal Fees. If an individual who is eligible for an Award or Awards under this Section institutes any legal action in seeking to obtain or enforce any right or benefit provided by this Section 10, the Company shall promptly reimburse such individual for all reasonable costs and expenses relating to such legal action, including reasonable attorney's fees and expenses incurred by such individual, unless a court or other finder of fact having jurisdiction thereof makes a determination that the individual's position was frivolous. The Company's obligations under this Section 10(h) shall survive the termination of this Plan.

11.         Termination, Suspension and Amendment

            The Board of Directors may terminate, suspend or amend the Plan at any time; provided, however, that no provision of the Plan or the Administrative Guidelines for the Plan relating to a Change in Control, nor any definition of any defined term used in any provision relating to a Change in Control, may be terminated, suspended or amended after the occurrence of a Change in Control. No such termination, suspension or amendment of the Plan shall adversely affect any right or obligation with respect to an Award theretofore allocated, or, after the occurrence of a Change in Control, an Eligible Employee or a Target Bonus Percentage theretofore designated, including, without limitation, the right to receive payment of Awards in accordance with Section 10 above.

12.         Unfunded Plan Status

            This Plan is intended to be an "unfunded" plan. All payments pursuant to the Plan shall be made from the general funds of the Corporation, and no special or separate fund shall be established or other segregation of assets made to assure payment. No employee or other person shall have under any circumstances any interest in any particular property or assets of the Corporation as a result of receiving or being eligible to receive an Award under the Plan. Notwithstanding the foregoing, the Company may (but shall not be obligated to) create one or more grantor trusts, the assets of which are subject to the claims of the Company's creditors, to assist it in accumulating funds to pay its obligations under the Plan.

13.         Miscellaneous

            (a)          No Liability. No Award shall become an obligation or liability of, or be recourse to, any member of the Committee, the Board of Directors, the chief executive officer of the Company or any other officer or employee of the Corporation.

            (b)          Employment Status. The Plan shall not constitute a contract of employment, and adoption of the Plan shall not confer upon any employee any right to continued employment, nor shall it interfere in any way with the right of the Corporation to terminate the employment of any employee at any time.

            (c)          Governing Law. The validity, interpretation, construction and performance of the Plan shall in all respects be governed by the laws of New Jersey, without reference to principles of conflict of law.

            (d)          Non-Transferable. Awards under the Plan are not transferable, except by will or by laws of descent and distribution.

            (e)          Successors. This Plan shall bind any successor of the Company, its assets or its businesses (whether direct or indirect, by purchase, merger, consolidation or otherwise), in the same manner and to the same extent that the Company would be obligated under this Plan if no succession had taken place. In the case of any transaction in which a successor would not by the foregoing provision or by operation of law be bound by this Plan, the Company shall require such successor expressly and unconditionally to assume and agree to perform the Company's obligations under this Plan, in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. The term "Company," as used in this Plan, shall mean the Company as hereinbefore defined and any successor or assignee to the business or assets which by reason hereof beco mes bound by this Plan.

            IN WITNESS WHEREOF, the Company has caused its duly authorized officers to execute this Vulcan Materials Company Management Incentive Plan this 13th day of December, 2002.

	VULCAN MATERIALS COMPANY
ATTEST: By:           /s/William F. Denson, III                            William F. Denson, III,                      Secretary	By:            /s/ Donald M. James                               Donald M. James       Chairman and Chief Executive Officer

EX-10

Exhibit (10)(h)

Vulcan Materials Company

Executive Deferred
Compensation Plan

As Amended Through February 14, 2003

CONTENTS
Article 1.	Establishment and Purpose	1
Article 2.	Definitions	1
Article 3.	Administration	4
Article 4.	Eligibility and Participation	5
Article 5.	Deferral Opportunities	6
Article 6.	Individual Accounts and Crediting of Investment Returns	10
Article 7.	Rabbi Trust	11
Article 8.	Change in Control	12
Article 9.	Beneficiary Designation	12
Article 10.	Withholding of Taxes	13
Article 11.	Amendment and Termination	13
Article 12.	Miscellaneous	13

Vulcan Materials Company
Executive Deferred Compensation Plan

Article 1. Establishment and Purpose

          1.1          Establishment. Vulcan Materials Company, a New Jersey corporation, hereby establishes, effective as of October 9, 1998, as amended through May 1, 2002 (the "Effective Date"), a deferred compensation plan for key management employees as described herein, which shall be known as the "Vulcan Materials Company Executive Deferred Compensation Plan" (the "Plan").

          1.2          Purpose. The primary purpose of the Plan is to provide eligible employees of the Company with the opportunity to defer a portion of their compensation in a tax-efficient manner. By adopting the Plan, the Company desires to enhance its ability to attract and retain management employees of outstanding competence.

Article 2. Definitions

          2.1          Definitions. Whenever used herein, the following terms shall have the meanings set forth below, and when the meaning is intended, the term is capitalized:

                    (a)          "Accrued Rabbi Trust Obligations" means the then current aggregate deferred compensation account balances of all Participants, consisting of each Participant's deferrals and the net investment gain or loss thereon.

                    (b)          "Annual Bonus" means any incentive award based on an assessment of performance, payable in cash by the Company to a Participant with respect to the Participant's services during a Plan Year. The Term "Annual Bonus" shall not include incentive awards that relate to a period exceeding one year. An Annual Bonus shall be deemed to be earned when the Participant performs the related services regardless of when it is paid.

                    (c)          "Base Salary" means all regular, basic wages, before reduction for amounts deferred pursuant to the Plan or any other plan of the Company, payable in cash to a Participant for services to be rendered during the Plan Year, exclusive of any Annual Bonus, Long-Term Incentive Awards, other special fees, awards, or incentive compensation, allowances, or amounts designated by the Company as payment toward or reimbursement of expenses.

                    (d)          "Board" or "Board of Directors" means the Board of Directors of the Company.

                    (e)          "Change in Control" means:

                              (1)          The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of Common Stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Compan y, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (3) of this Section 2.1(e); or

                              (2)          Individuals who, as of the Effective Date of this Plan, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or con sents by or on behalf of a Person other than the Board; or

                              (3)          Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Busines s Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

                              (4)          Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

                    (f)          "CEO" means the Chief Executive Officer of the Company.

                    (g)          "Code" means the Internal Revenue Code of 1986, as amended from time to time.

                    (h)          "Committee" means the Compensation Committee of the Board (or any other committee designated by the Board that is eligible to administer the Plan in accordance with Rule 16b-3 under the Exchange Act).

                    (i)          "Company" means Vulcan Materials Company and also includes any "Employing Company" as such term is defined in the Salaried Retirement Income Plan.

                    (j)          "Company Stock" means the common stock of the Company.

                    (k)          "Disability" shall have the meaning ascribed to such term in the Company's long-term disability plan or, if no plan is then in effect, shall mean the determination by the Committee that the physical or mental condition of a Participant renders such Participant unable to carry out his or her duties and obligations to the Company.

                    (l)          "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.

                    (m)          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

                    (n)          "Long-Term Incentive Aware" means a compensation vehicle that provides for the accumulation of value over a time period longer than one year, including, but not limited to, stock options, restricted stock, performance shares, and performance units; but the term shall not include this Plan, any other elective deferred compensation plan, or any tax-qualified or nonqualified retirement plan of the Company.

                    (o)          "Participant" means any key management employee of the Company who has been approved by the Committee for participation in the Plan under Section 4.1

                    (p)          "Payout Year" means the calendar year in which the payout contemplated by Section 5.4 is made or commences.

                    (q)          "Plan Year" means the calendar year.

                    (r)          "Rabbi Trust" means a grantor trust, as described in Section 677 of the Code, that is established by the Company as provided in Article 7.

                    (s)          "Rabbi Trust Agreement" meaning the instrument establishing the Rabbi Trust, as such instrument may be amended from time to time.

                    (t)          "Retirement" means a termination of a Participant's employment with the Company that entitles such Participant to immediate payment of a pension benefit under the Salaried Retirement Income Plan.

                    (u)          "Salaried Retirement Income Plan" means the Retirement Income Plan for Salaried Employees of Vulcan Materials Company, and any successor plan thereto.

          2.2          Gender and Number. Except where otherwise indicated by the context, any masculine term shall include the feminine, the plural shall include the singular, and the singular shall include the plural.

Article 3. Administration

          3.1          The Committee. The Plan shall be administered by the Committee. In no event shall any member of the Committee be a Participant.

          3.2          Authority of the Committee.

                    (a)          Subject to the terms of the Plan, the Committee shall have full power and discretionary authority (i) to select the employees who are eligible to participate in the Plan, (ii) to determine the terms and conditions of each Participant's participation in the Plan, (iii) to construe and interpret the Plan and any agreement or instrument entered into under the Plan, (iv) to establish, amend, and waive rules and regulations for the Plan's administration, (v) subject to the provisions of Article 11, to amend the Plan and any agreement or instrument entered into under the Plan or to terminate the Plan, (vi) to appoint and remove the trustee and the recordkeeper for the Rabbi Trust, and to direct the trustee and the recordkeeper with respect to their duties under the agreements pertaining to the Rabbi Trust, and (vii) to make any other determinations that may be necessary or advisable for the administration of the Plan.

                    (b)          To the extent permitted by law, the Committee (i) may delegate any or all of its authority granted under the Plan to one or more executives of the Company (provided that no executive of the Company who is a Participant shall exercise any discretion with respect to his own participation in the Plan) and (ii) may designate one or more individuals who are not Participants (but who may be employees of the Company) to carry out ministerial duties related to the administration of the Plan, except that the Committee shall not delegate responsibility for any matter involving a person subject to Section 16 of the Exchange Act if a decision by the Committee as to such matter would have the effect of exempting a transaction under the Plan from the application of Section 16(b) of the Exchange Act pursuant to Rule 16b-3 or any successor rule thereunder.

          3.3          Decisions Binding. All determinations and decisions of the Committee (or of any person to whom the Committee has delegated its authority) under the Plan, including questions of construction and interpretation, shall be final, conclusive, and binding on the employees of the Company, the Participants and their beneficiaries and estates. Whenever the Plan authorizes the Committee or any other person to exercise discretion with respect to any matter, such discretion may be exercised in the sole and absolute discretion of the Committee or such person, subject only to the terms of the Plan and applicable requirements of law.

Article 4. Eligibility and Participation

          4.1          Eligibility. Eligibility to participate in the Plan is limited to a select group of management or highly compensated employees consisting solely of key management employees who are nominated to participate in the Plan by the CEO and who are approved by the Committee.

          4.2          Participation.

                    (a)          Each employee approved for participation in the Plan by the Committee shall have the opportunity to defer the receipt of compensation otherwise payable to the Participant in accordance with the provisions of Article V. This opportunity shall continue in effect until the Participant is notified by the Committee that he has ceased to be eligible to make such deferrals.

                    (b)          The Committee may at any time and for any reason determine that a Participant no longer is eligible to make deferrals under Article V. Upon being notified in writing of the Committee's decision, such a Participant shall become an inactive Participant that retains all of the rights of a Participant under the Plan, except for the right to make further deferrals.

Article 5. Deferral Opportunities

          5.1          Amounts Which May Be Deferred.

                    (a)          An eligible Participant may irrevocably elect, prior to any Plan Year, to defer (i) up to 50% of his Base Salary earned during the Plan Year and (ii) up to 100% of his Annual Bonus for the Plan Year.

                    (b)          In the event that a Participant first becomes eligible to participate in the Plan after the beginning of a Plan Year (including the Plan Year in which the Effective Date occurs), the Committee may allow such Participant to elect to defer (i) up to 50% of his Base Salary earned subsequent to the date on which a valid Deferral Election Form (as described in Section 5.2) is received by the Company from the Participant and (ii) for the Plan Year ended December 31, 1998 only, up to 100% of his Annual Bonus for the entire Plan Year.

                    (c)          The Committee, in its discretion, also may permit the deferral of Long-Term Incentive Awards in accordance with such rules and regulations as the Committee may establish.

                    (d)          The special payment made in 2003 to discontinue a Participant's bonus bank (the "Bonus Bank Payment") shall not be treated as part of the Participant's Annual Bonus, and shall not be included in any deferral election the Participant has made with respect to his Annual Bonus. An eligible Participant may make a separate one-time election to defer any whole percentage up to 100% of his Bonus Bank Payment.

                    (e)          A Participant at all times shall be 100% vested in his deferrals under the Plan and all earnings thereon.

          5.2          Timing of Deferral Elections. Except as provided in the two following sentences, a Participant's election to defer compensation under the Plan shall be made within 30 calendar days before the beginning of the Plan Year in which the compensation to be deferred is earned. If a Participant is notified during a Plan Year that he is eligible to participate in the Plan for the remainder of the Plan year, such election shall be made within 30 calendar days following the date of such notification. A Participant's one-time election to defer the Bonus Bank Payment shall be made on or before February 14, 2003. All deferral elections shall be made by means of a "Deferral Election Form" that is executed by the Participant and delivered to the Company. The Deferral Election Form shall provide for the specification by an eligible Participant of:

                    (a)          the amount of compensation to be deferred during the Plan Year in accordance with the terms of Section 5.1;

                    (b)          the length of deferral of such deferred amounts, and the earnings thereon, in accordance with the terms of Section 5.3; and

                    (c)          the form of payout of such deferred amounts, and the earnings thereon, in accordance with the terms of Section 5.4.

          5.3          Length of Deferral.

                    (a)          Each Participant who makes a deferral election as to any Plan Year may elect the length of such deferral by designating a Payout Year. Such election shall be irrevocable except as otherwise provided in Section 5.5. The deferral of Base Salary and the deferral of the Annual Bonus in any Plan Year shall be considered separate deferral elections and each may be deferred to a different Payout Year. Deferral elections are subject to the following limitations, unless the Committee permits otherwise:

                              (i)          The Payout Year designated shall be no earlier than the second year following the end of the Plan Year in which the compensation deferred is earned; and

                              (ii)          The Payout Year shall not be later than the year following the Participant's 65th birthday.

All deferral elections are subject to Section 8(a), which requires an immediate lump-sum payment in the event of a Change in Control.

                    (b)          In the event that a deferral election is made and no Payout Year is designated, the Participant shall be deemed to have elected a deferral until the Payout Year following the year of the Participant's Retirement.

                    (c)          Notwithstanding the Payout Years designated by a Participant pursuant to this Section 5.3 or the form of payout elected by a Participant pursuant to Section 5.4, if at any time prior to the end of any deferral period a Participant's employment with the Company is terminated for any reason other than Retirement or Disability (including termination of employment by reason of the Participant's death), (i) all Payout Years shall be accelerated to the year following the year in which the termination of the Participant's employment occurs, and (ii) all deferred amounts, and the earnings thereon, for all Plan Years shall be paid to the Participant in a single lump-sum cash payment.

                    (d)          If the Internal Revenue Service determines that a Participant or beneficiary is subject to federal income tax on an amount credited to the Participant's account under the Plan before that amount would otherwise become payable under the Plan, the amount that is then subject to tax shall be paid to the Participant or beneficiary in a single lump-sum cash payment as soon as practicable after the Committee is notified or the Internal Revenue Service's determination.

          5.4          Form of Payout.

                    (a)          Each participant who makes a deferral election as to any Plan Year may elect as the form of payout either (i) a single lump-sum payment or (ii) up to fifteen approximately equal annual installment payments (such number to be specified by the Participant); provided that all compensation (whether Base Salary or Annual Bonus) deferred to a specific Payout Year (regardless of the Plan Year for which the compensation is deferred) shall be payable in the same form. Such election shall be irrevocable except as otherwise provided in Section 5.5. If no such election is made, then all deferred amounts, and the earnings thereon, shall be paid in the form of a single lump-sum payment. All deferral elections are subject to Section 8(a), which requires an immediate lump-sum payment in the event of a Change in Control

                    (b)          Lump-sum and installment payments shall be made on the following terms:

                              (i)          Lump-Sum Payment. Each payout to be made in the form of a single lump-sum payment shall be made in cash on or before the last business day of March in the Payout Year.

                              (ii)         Installment Payments. The first installment payment of a payout to be made in installments shall be made in cash on or before the last business day of March in the Payout Year. The remaining installment payments shall be made in cash each year thereafter, on or before the last business day of March of such year, until the entire balance of such Participant's applicable account has been paid in full. Earnings shall continue to accrue to the Participant's account during the payment period. The amount of each installment payment shall be equal to the balance remaining in the applicable account immediately prior to each such payment, multiplied by a fraction, the numerator of which is one, and the denominator of which is the number of installment payments remaining (inclu ding the installment payment immediately due).

                    (c)          Following the termination of the employment of a Participant due to Retirement or Disability, notwithstanding the forms of payout elected by a Participant pursuant to this Section 5.4 for all remaining Payout Years, if, on the date any lump-sum or installment payment is due, the payment to be made would cause the aggregate amount of all of the Participant's account balances under the Plan to fall below $50,000, then the amount due, and the remaining balance of each of the Participant's accounts, shall be paid to such Participant on such date in a single lump-sum cash payment.

                    (d)          Notwithstanding the provisions of this Section 5.4, if a Participant is a "covered employee" (within the meaning of Section 162(m)(3) of the Code) when a payment is scheduled to be made under the Plan, any portion of the payment that would be nondeductible under Section 162(m) of the Code (when considered with all other compensation that the Participant is expected to receive in the same taxable year) shall be deferred, and shall be paid on the earliest date on which it would be deductible under Section 162(m).

                    (e)          If the Company fails to make any payment due under the Plan within 90 days after it first becomes due, the Committee shall direct the trustee of the Rabbi Trust to make the payment from the Rabbi Trust (to the extent there are assets in the Rabbi Trust available to make the payment).

          5.5          Change in Deferral Election.

                    (a)          Postponement With Committee Consent. A Participant may petition the Committee to allow a change from the Payout Year he has previously elected to a later Payout Year, or to allow an increase in the number of payments he has previously elected, or both. The Participant's request may relate to all or any part of the Base Salary and Annual Bonus (and related investment returns) earned in the same calendar year, and may relate to all or any part of the amounts that are otherwise scheduled to be paid in the same Payout Year. The Committee may grant or refuse the Participant's request. The Committee may, in its sole discretion, suspend the Participant's right to make additional deferrals under the Plan for a period following the effective date of the change in the Participant's deferral election. Any change in a Participant's d eferral election shall be effective no earlier than twelve months after the request was granted, and shall not apply to any amount that was otherwise scheduled to be paid to the Participant before the effective date of the election. Once a Participant has changed the Payout Year, the number of payments, or both with respect to amounts earned in a single calendar year, the Participant may not make another change in the time or number of payments for amounts earned in the same calendar year. The Participant may, however, make other changes in the time or number of payments for amounts originally scheduled to be paid in the same Payout Year, provided that those amounts were earned in different calendar years.

                    (b)          Change With Early Payment Penalty. A Participant may elect to receive an early payout of all or any portion of the deferral amount, and the earnings thereon, with respect to any Payout Year in the form of a single lump-sum cash payment. As a penalty for early payout, the Participant shall forfeit an amount equal to 10% of the amount requested as a payout, such that the actual payment shall be equal to 90% of the amount by which the balance of the Participant's account for such Payout Year is reduced. Such payout shall be made as soon as practicable following the receipt of the Participant's request.

                    (c)          Change As a Result of Financial Hardship. If a Participant establishes, to the satisfaction of the Committee, severe financial hardship, the Committee may:

                               (i)          authorize the cessation of deferrals by such Participant;

                               (ii)         provide that all or a portion of the amounts previously deferred by the Participant shall immediately be paid in a single lump-sum cash payment;

                               (iii)        provide that all or a portion of the installments payable over a period of time shall be paid immediately in a single lump-sum cash payment; or

                               (iv)         provide for such other payment schedule as deemed appropriate by the Committee under the circumstances.

                    (d)          Hardship Criteria. Severe financial hardship will be deemed to exist in the event of an unanticipated emergency that is caused by the Participant's long and serious illness, impending bankruptcy, or a similar event that is beyond the control of the Participant and that would result in severe financial hardship to the Participant if cessation of deferrals or modified payments were not permitted. The amount distributed pursuant to Section 5.5(c) shall not exceed that amount which the Committee determines to be reasonably necessary for the Participant to meet the financial hardship at the time of distribution.

                    (e)          Other Criteria. The Committee's decision with respect to the manner, if at all, in which the Participant's future deferral opportunities shall cease, and/or the manner in which, if at all, the payment of deferred amounts to the Participant shall be modified, shall be final, conclusive, and not subject to appeal. If a Participant is a "covered employee" (within the meaning of Section 162(m)(3) of the Code), any change in the Participant's payout election shall be subject to the limitation described in Section 5.4(d).

Article 6. Individual Accounts and Crediting of Investment Returns

          6.1          Participant's Accounts.

                    (a)          The Company shall establish and maintain a separate bookkeeping account for each deferral made by a Participant, and the earnings thereon. Deferrals shall be credited to a Participant's account as of the date the amount deferred otherwise would have become due and payable to such Participant. Each Participant shall be furnished a statement of his deferred compensation account balances at least annually.

                    (b)          The establishment and maintenance of such deferred compensation accounts by the Company shall not be construed as entitling any Participant to any specific assets of the Company. The rights of Participants to receive any distribution under the Plan shall be an unsecured claim against the general assets of the Company.

          6.2          Investment Returns on Deferred Amounts.

                    (a)          All compensation deferred by a Participant pursuant to Section 5.1 shall be deemed invested, as directed by the Participant, in one or more of the investment alternatives made available from time to time by the Committee. Each such investment election shall be made (i) by means of the execution by the Participant and delivery to the Company of a "New Investment Election Form" or (ii) by means of such other methods as the Committee shall approve. The Committee shall specify the available investment alternatives and may adopt such rules and procedures for the allocation of deferrals among such investment alternatives as the Committee deems necessary or appropriate. An investment election shall be effective for all subsequent deferrals under the Plan until the Participant makes a new investment election.

                    (b)          A Participant shall be permitted, at any time and from time to time, to reallocate his deferred compensation account balances under the Plan among the investment alternatives then available, subject to right of the Committee to impose such restrictions on a Participant's ability to change investment elections as the Committee deems necessary or appropriate. The election of a Participant to reallocate account balances shall be made by means of a form provided to the Participant by the Committee for such purpose, and shall become effective as soon as practicable after a properly-executed form is received by the Committee from the Participant.

                    (c)          The balances of each Participant's deferred compensation accounts shall be credited with earning and charged with losses based upon the actual results that would have been achieved had such balances actually been invested pursuant to the investment elections of the Participant.

                    (d)          The Company shall have no obligation to invest the compensation deferred under the Plan, or the earnings thereon, in any of the investment alternatives selected by Participants.

          6.3          Charges Against Accounts. All payments made to a Participant under the Plan shall be charged against such Participant's accounts when and as made.

Article 7. Rabbi Trust

          7.1          Establishment of a Rabbi Trust. As soon as administratively practicable following the Effective Date, the Company shall establish an irrevocable Rabbi Trust to accumulate assets that will assist the Company in meeting its obligation under the Plan. The Rabbi Trust shall have an independent trustee that is selected by the Company. The trust agreement with respect to the Rabbi Trust shall provide that the assets of the Rabbi Trust shall at all times be specifically subject to the claims of the Company's general creditors in the event of the bankruptcy or insolvency (as defined by the Rabbi Trust Agreement) of the Company.

          7.2          Funding of the Rabbi Trust. The Company may contribute cash, Company Stock, or any other asset to the Rabbi Trust, as the Company deems appropriate. It is intended that the Rabbi Trust will hold assets with a value approximately equal to the Accrued Rabbi Trust Obligations.

Article 8. Change in Control

          8.1          Change In Control. Upon the occurrence of a Change in Control:

                    (a)          The Company shall, within ten business days after the Change in Control, accelerate all deferred amounts to the date of the Change in Control and pay all such deferred amounts, and the earnings thereon, to each Participant or Beneficiary in a single lump-sum cash payment.

                    (b)          The composition of the Committee immediately prior to the Change in Control shall not be changed after the Change in Control, except with the consent of a majority of the Continuing Directors. If, after the Change in Control, a member of the Committee resigns or is unable to serve due to death or disability, the remaining members of the Committee shall appoint a replacement.

                    (c)          The Company promptly shall reimburse a Participant for all legal fees and expenses reasonably incurred in successfully enforcing any right or benefit under the Plan.

Article 9. Beneficiary Designation

          9.1          Designation of Beneficiary. Each Participant may designate a beneficiary or beneficiaries who, upon the Participant's death, will receive the amounts that otherwise would have been paid to the Participant under the Plan. All such designations shall be signed by the Participant, and shall be in such form as is prescribed by the Committee. Each designation shall be effective as of the date delivered to the Committee (or to a Company employee appointed by the Committee to receive such designations); provided that the Committee must receive any beneficiary designation or change therein before the Participant's death. A Participant may change his beneficiary designation at any time and from time to time on such form as is prescribed by the Committee. In the event of the death of the Participant, the payment of all amounts deferred under the Plan, and the earnings thereon, shall be in accordance with the last written beneficiary designation signed and delivered by the Participant and not revoked.

          9.2          Payment to Beneficiary. If a Participant dies before the end of the deferral period for any amount under the Plan, the payment of that amount to the Participant's beneficiary or beneficiaries shall be made in a single lump-sum cash payment as provided in Section 5.3. If a Participant dies after installment payments have commenced, but before they have been completed, the remaining payments shall be made to the Participant's beneficiary or beneficiaries under the installment schedule elected by the Participant.

          9.3          Death of Beneficiary. In the event that all the beneficiaries of a Participant predecease the Participant, all amounts deferred under the Plan, and the earnings thereon, that would have been paid to the Participant under the Plan shall be paid in a single lump-sum cash payment to the Participant's estate, or to the person or persons designated in writing by the Participant's estate.

          9.4          Ineffective Designation. In the event a Participant does not designate a beneficiary, or for any reason such designation is ineffective, in whole or in part, the amounts that otherwise would have been paid to the Participant under the Plan shall be paid in a single lump-sum cash payment to the Participant's estate.

Article 10. Withholding of Taxes

          The Company shall have the right to either (i) require Participants to remit to the Company, or any person or entity designated by the Committee to administer the Plan, an amount sufficient to satisfy any applicable federal, state, and local income and employment tax withholding requirements or (ii) to deduct from any payment made pursuant to the Plan amounts sufficient to satisfy such withholding requirements.

Article 11. Amendment and Termination

          The Company has the right to amend, suspend, or terminate the Plan at any time by action of the Board of Directors, except that (i) no such amendment, suspension, or termination shall, without the written consent of a Participant, change the time or form of any payout under the Plan or otherwise adversely affect, in any material respect, such Participant's rights with respect to amounts theretofore deferred under the Plan, and the earnings thereon, and (ii) following a Change in Control, the Company shall not amend Section 5.4(e), Articles 3, 7 or 8, or this Article 11, and shall not amend any other provision of the Plan in a manner that would alter the effect of Section 5.4(e), Articles 3, 7 or 8, or this Article 11.

Article 12. Miscellaneous

          12.1          Employment. No provision of the Plan, nor any action taken by the Committee or the Company pursuant to the Plan, shall give or be construed as giving a Participant any right to be retained in the employ of the Company, or affect or limit in any way the right of the Company to terminate his employment.

          12.2          Notice. Any notice required or permitted to be given to the Committee or the Company under the Plan shall be sufficient if in writing and hand delivered, sent by registered or certified mail, or deliver in any other manner authorized by the Committee, to the Committee (or to a person designated by the Committee to receive such notices). Such notices, if mailed, shall be addressed to the principal executive offices of the Company. Notice to any Participant shall be given in any manner authorized by the Committee and, if mailed, shall be sent to the Participant's address as is set forth in the records of the Company.

          12.3          Unfunded Plan. This Plan is intended to be an unfunded plan for tax purposes and for purposes of Title I of ERISA. The Plan is intended primarily to provide deferred compensation benefits for "a select group of management or highly compensated employees" within the meaning of Sections 201, 301, and 401 of ERISA, and therefore is further intended to be exempt from the provisions of Parts 2, 3, and 4 of Title I of ERISA. The Committee may terminate the Plan for any or all Participants, subject to Article 11, in order to achieve and maintain these intended results.

          12.4          Successors. All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect merger or consolidation, the purchase of all or substantially all of the assets of the Company, or otherwise. The provision of the Plan with respect to each Participant shall be binding on such Participant's heirs, executors, administrators or other successors in interest.

          12.5          Nontransferability. The Committee may recognize the right of an alternate payee named in a domestic relations order to receive all or a portion of a Participant's benefit under the Plan, provided that (i) the domestic relations order would be a "qualified domestic relations order" within the meaning of Section 414(p) of the Code if Section 414(p) were applicable to the Plan, (ii) the domestic relations order does not purport to give the alternate payee any right to assets of the Company or its affiliates, and (iii) the domestic relations order does not purport to give the alternate payee any right to receive payments under the Plan before the Participant is eligible to receive such payments. Except as set forth in the preceding sentence with respect to domestic relations orders, and except as required under applicable federal, state, or local laws concerning the withholdi ng of tax, the rights of any Participant or beneficiary to amounts deferred under the Plan, and the earnings thereon, are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or any beneficiary, other than by will or by the laws of descent and distribution. In no event shall the Company make any payment under the Plan to any assignee or creditor of a Participant or beneficiary.

          12.6          Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

          12.7          Costs of the Plan. All costs of implementing and administering the Plan shall be borne by the Company.

          12.8          Governing Law. The Plan shall be governed by and construed in accordance with the laws of the state of New Jersey, without giving effect to any choice or conflict of law provision or rule.

          IN WITNESS WHEREOF, the Company has caused this Executive Deferred Compensation Plan to be executed for and in its name and its corporate seal to be hereto affixed and attested by its duly authorized Secretary this 14^th day of February, 2003.

	VULCAN MATERIALS COMPANY
ATTEST: By:           /s/William F. Denson, III                            William F. Denson, III,                      Secretary	By:            /s/ Donald M. James                               Donald M. James       Chairman and Chief Executive Officer

[SEAL]

EX-10

Exhibit 10(i)

FORM OF EMPLOYMENT AGREEMENT

          AGREEMENT by and between Vulcan Materials Company, a New Jersey corporation (the "Company") and (Named Executive - See Schedule A) (the "Executive"), dated as of the ___ day of __________, _____.

          The Board of Directors of the Company (the "Board"), has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. Therefore, in order to accompl ish these objectives, the Board has caused the Company to enter into this Agreement.

          NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

          1.          Certain Definitions.

          (a)           The "Effective Date" shall mean the first date during the Change of Control Period (as defined in Section 1(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive's employment with the Company is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment.

          (b)          The "Change of Control Period" shall mean the period commencing on the date hereof and ending on the third anniversary of the date hereof; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof shall be hereinafter referred to as the "Renewal Date"), unless previously terminated, the Change of Control Period shall be automatically extended so as to terminate three years from such Renewal Date, unless at least 60 days prior to the Renewal Date the Company shall give notice to the Executive that the Change of Control Period shall not be so extended.

          2.          Change of Control. For the purpose of this Agreement, a "Change of Control" shall mean:

          (a)          The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or

          (b)          Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

          (c)          Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or al l or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incum bent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

          (d)          Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

          3.          Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the second anniversary of such date (the "Employment Period").

          4.          Terms of Employment.

          (a)          Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location.

                    (ii)          During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Execu tive's responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Company.

          (b)          Compensation. (i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary"), which shall be paid at a monthly rate, at least equal to twelve times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company and its affiliated companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed no more than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the term "affiliated companies" shall include any company controlled by, controlling or under common control with the Company.

                    (ii)          Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to the greater of (A) the average of the Executive's bonuses under the Company's Management Incentive Plan, or any comparable bonus under any predecessor or successor plan (the "Bonus Plan") for the last three full fiscal years prior to the Effective Date and (B) the Executive's annual bonus under the Bonus Plan, determined based on the target annual bonus percentage and the Annual Base Salary in effect with respect to the Executive immediately prior to the Effective Date for the fiscal year in which the Effective Date occurs (and, in all cases, annualized in the event that the Executive was not employed by the Company for t he whole of any such fiscal year) (the "Recent Annual Bonus"). Each such Annual Bonus shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus.

                    (iii)          Long-Term Incentives. During the Employment Period, the Executive shall be entitled to participate in all long-term incentive plans, practices, policies and programs applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to the Executive , those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

                    (iv)          Savings and Retirement Plans. During the Employment Period, the Executive shall be entitled to participate in all savings and retirement plans, practices, policies and programs applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

                    (v)          Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any t ime during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

                    (vi)          Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

                    (vii)          Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, including, without limitation, tax and financial planning services, payment of club dues, and, if applicable, use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

                    (viii)          Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

                    (ix)          Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

          5.          Termination of Employment.

          (a)          Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 12(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Ex ecutive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness or injury which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative.

          (b)          Cause. The Company may terminate the Executive's employment during the Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean:

                    (i)          the willful and continued failure of the Executive to perform substantially the Executive's duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive's duties, or

                    (ii)          the willful engaging by the Executive in illegal conduct which is materially and demonstrably injurious to the Company.

          For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the B oard at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.

          (c)          Good Reason. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall mean:

                    (i)          the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

                    (ii)          any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

                    (iii)          the Company's requiring the Executive to be based at any office or location other than as provided in Section 4(a)(i)(B) hereof or the Company's requiring the Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date;

                    (iv)          any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; or

                    (v)          any failure by the Company to comply with and satisfy Section 11(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive.

          (d)          Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of T ermination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder.

          (e)          Date of Termination. "Date of Termination" means (i) if the Executive's employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination and (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

          6.          Obligations of the Company upon Termination.

          (a)          Good Reason; Other Than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate the Executive's employment other than for Cause or Disability or the Executive shall terminate employment for Good Reason:

                    (i)          the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:

                              A.          the sum of (1) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the higher of (I) the Annual Bonus for the full fiscal year in which the Date of Termination occurs, determined based on actual individual and corporate performance through the Date of Termination, and (II) the Recent Annual Bonus (such higher amount being referred to as the "Highest Annual Bonus") and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365, to the extent not theretofore paid and (3) any compensation previously deferred by the Executive, including, without limitation, amounts credited to the "bonus bank" (the "Bonus Bank") pursuant to the Bonus Plan (less any administrative credits included in the Bonus Bank), and any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the "Accrued Obligations"); and

                              B.          the amount equal to the product of (1) three and (2) the sum of (x) the Executive's Annual Base Salary, (y) the Highest Annual Bonus and (z) the aggregate dollar value of the annual long-term incentive awards granted to the Executive as determined in accordance with the Company's policies and procedures for determining annual long-term incentive awards as in effect immediately prior to the Effective Date based on the Executive's Annual Base Salary and the Executive's annual long-term incentive award percentage in effect immediately prior to the Effective Date for the fiscal year in which the Effective Date occurs; and

                              C.          an amount equal to the excess of (a) the actuarial equivalent of the benefit under the Company's qualified defined benefit retirement plan (the "Retirement Plan") (utilizing actuarial assumptions no less favorable to the Executive than those in effect under the Company's Retirement Plan immediately prior to the Effective Date), and the Unfunded Supplemental Benefit Plan for Salaried Employees or its successor plan or any other excess or supplemental retirement plan in which the Executive participates (together, the "SERP") which the Executive would receive if the Executive's employment continued for three years after the Date of Termination assuming for this purpose that all accrued benefits are fully vested, and, assuming that the Executive's compensation in each of the three years is that required by Section 4(b)(i) and Section 4(b)(ii), over (b) the actuarial equivalent of the Executive's actual benefit (paid or payable), if any, under the Retirement Plan and the SERP as of the Date of Termination; and

                              D.          an amount equal to the additional Company matching contributions that would have been made on the Executive's behalf in the Company's Thrift Plan for Salaried Employees or any successor plan (the "Thrift Plan") (assuming continued participation on the same basis as immediately prior to the Effective Date), plus the additional amount of any benefit the Executive would have accrued under the SERP as a result of contribution limitations in the Thrift Plan, which the Executive would receive if the Executive's employment continued for three years after the Date of Termination, assuming for this purpose that the Executive's compensation in each of the three years is that required by Section 4(b)(i) and Section 4(b)(ii) and that the Company's matching contributions are determin ed pursuant to the applicable provisions of the Thrift Plan and the SERP, as in effect during the 12-month period immediately prior to the Effective Date; and

                    (ii)          for three years after the Executive's Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(v) of this Agreement if the Executive's employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families; provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until three years after the Date of Termination and to have retired on the last day of such period; and

                    (iii)          for three years after the Executive's Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue to provide to the Executive and/or the Executive's family fringe benefits at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(vii) of this Agreement if the Executive's employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families; and

                    (iv)          upon the Date of Termination, the Executive shall have the right and option to purchase the automobile which the Company was providing to the Executive immediately prior to the Date of Termination in accordance with the Company's practice for retiring employees as in effect immediately prior to the Effective Date; and

                    (v)          the Company shall, at its sole expense as incurred, provide the Executive with outplacement services the scope and provider of which shall be selected by the Executive in his sole discretion, provided that the aggregate cost of such services shall not exceed $50,000; and

                    (vi)          to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits").

          (b)          Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(b) shall include, without limitation, and the Executive's estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and affiliated companies to the estates and beneficiaries of peer executives of the Company and s uch affiliated companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive's estate and/or the Executive's beneficiaries, as in effect on the date of the Executive's death with respect to other peer executives of the Company and its affiliated companies and their beneficiaries.

          (c)          Disability. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(c) shall include, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disab ility, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies and their families.

          (d)          Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary through the Date of Termination, (y) the amount of any compensation previously deferred by the Executive, including, without limitation, amounts credited to the Bonus Bank pursuant to the Bonus Plan (less any administrative credits included in the Bonus Bank), and (z) Other Benefits, in each case to the extent theretofore unpaid. If the Executive voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations and the timely payment or provision of Other Be nefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

          7.          Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which the Executive may qualify, nor, subject to Section 12(f), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

          8.          Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, o r liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").

          9.          Certain Additional Payments by the Company.

          (a)          Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the Company or its affiliates to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (inclu ding any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 9(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $50,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payment, in the aggregate, to an amount (the "Reduced Amount") such that the receipt of the Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive a nd the Payments, in the aggregate, shall be reduced to the Reduced Amount.

          (b)          Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by Deloitte & Touche LLP or such other certified public accounting firm as may be designated by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm to make the det erminations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

          (c)          The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

                    (i)          give the Company any information reasonably requested by the Company relating to such claim,

                    (ii)          take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

                    (iii)          cooperate with the Company in good faith in order effectively to contest such claim, and

                    (iv)          permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdict ion and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other is sue raised by the Internal Revenue Service or any other taxing authority.

          (d)           If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 9(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance s hall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

          10.          Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an ass erted violation of the provisions of this Section 10 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement.

          11.          Successors.

          (a)          This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.

          (b)           This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

          (c)          The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

          12.          Miscellaneous.

          (a)          This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

          (b)          All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

          If to the Executive:

                    The most recent address on file at the Company

          If to the Company:

                    Vulcan Materials Company
                    P.O. Box 385014
                    Birmingham, Alabama 35238-5014
                    Attention: General Counsel

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

          (c)          The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

          (d)          The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

          (e)          The Executive's or the Company's failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

          (f)          The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is "at will" and, subject to Section 1(a) hereof, prior to the Effective Date, the Executive's employment and/or this Agreement may be terminated by either the Executive or the Company at any time prior to the Effective Date, in which case the Executive shall have no further rights under this Agreement; provided, that this Agreement may not be terminated by the Company if it is reasonably demonstrated by the Executive that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control. From and after the Effective Date this Agreement shall s upersede any other agreement between the parties with respect to the subject matter hereof.

          IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.

	[Named Executive]
	VULCAN MATERIALS COMPANY By:                                                             Name: Donald M. James Title: Chairman and Chief Executive Officer
Schedule A to Exhibit 10(i)
In accordance with Item 601(a)(4) of Regulation S-K, the following executive entered into an Employment Agreement substantially in the form as Exhibit 10(i). All agreements were substantially identical in all material respects except as to the name of the executive and the date of execution. Following is a list of executives who are party to such an agreement:
Guy M. Badgett, III Richard K. Carnwath Sherrod B. Clarke, Jr. John L. Holland J. Wayne Houston Ejaz A. Khan Ronald G. McAbee Thomas R. Ransdell Bradley C. Rosenwald Daniel F. Sansone Danny R. Shepherd James W. Smack Robert R. Vogel

EX-10

Exhibit 10(j)

FORM OF EMPLOYMENT AGREEMENT

          AGREEMENT by and between Vulcan Materials Company, a New Jersey corporation (the "Company") and (Named Executive - See Schedule A) (the "Executive"), dated as of the ___ day of __________, _____.

          The Board of Directors of the Company (the "Board"), has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. Therefore, in order to accompl ish these objectives, the Board has caused the Company to enter into this Agreement.

          NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

          1.          Certain Definitions.

          (a)          The "Effective Date" shall mean the first date during the Change of Control Period (as defined in Section 1(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive's employment with the Company is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment.

          (b)          The "Change of Control Period" shall mean the period commencing on the date hereof and ending on the third anniversary of the date hereof; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof shall be hereinafter referred to as the "Renewal Date"), unless previously terminated, the Change of Control Period shall be automatically extended so as to terminate three years from such Renewal Date, unless at least 60 days prior to the Renewal Date the Company shall give notice to the Executive that the Change of Control Period shall not be so extended.

          2.          Change of Control. For the purpose of this Agreement, a "Change of Control" shall mean:

          (a)          The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or

          (b)          Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

          (c)          Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or al l or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incum bent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

          (d)          Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

          3.          Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the second anniversary of such date (the "Employment Period").

          4.          Terms of Employment.

           a)          Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location.

                    (ii)          During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Execu tive's responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Company.

          (b)          Compensation. (i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary"), which shall be paid at a monthly rate, at least equal to twelve times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company and its affiliated companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed no more than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the term "affiliated companies" shall include any company controlled by, controlling or under common control with the Company.

                    (ii)          Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to the greater of (A) the average of the Executive's bonuses under the Company's Management Incentive Plan, or any comparable bonus under any predecessor or successor plan (the "Bonus Plan") for the last three full fiscal years prior to the Effective Date and (B) the Executive's annual bonus under the Bonus Plan, determined based on the target annual bonus percentage and the Annual Base Salary in effect with respect to the Executive immediately prior to the Effective Date for the fiscal year in which the Effective Date occurs (and, in all cases, annualized in the event that the Executive was not employed by the Company for t he whole of any such fiscal year) (the "Recent Annual Bonus"). Each such Annual Bonus shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus.

                    (iii)          Long-Term Incentives. During the Employment Period, the Executive shall be entitled to participate in all long-term incentive plans, practices, policies and programs applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to the Executive , those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

                    (iv)          Savings and Retirement Plans. During the Employment Period, the Executive shall be entitled to participate in all savings and retirement plans, practices, policies and programs applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.
(v) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

                    (vi)          Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

                    (vii)          Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, including, without limitation, tax and financial planning services, payment of club dues, and, if applicable, use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

                    (viii)          Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

                    (ix)          Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

          5.          Termination of Employment.

          (a)          Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 12(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Ex ecutive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness or injury which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative.

          (b)          Cause. The Company may terminate the Executive's employment during the Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean:

                    (i)           the willful and continued failure of the Executive to perform substantially the Executive's duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive's duties, or

                    (ii)          the willful engaging by the Executive in illegal conduct which is materially and demonstrably injurious to the Company.

          For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the B oard at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.

          (c)          Good Reason. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall mean:

                    (i)          the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

                    (ii)          any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at any office or location other than as provided in Section 4(a)(i)(B) hereof or the Company's requiring the Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date;

                    (iv)          any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; or

                    (v)          any failure by the Company to comply with and satisfy Section 11(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive. Anything in this Agreement to the contrary notwithstanding and except as set forth below, a termination by the Executive for any reason during the 30-day period immediately following the first anniversary of the Effective Date shall be deemed to be a termination for Good Reason for all purposes of this Agreement (the "30-day Window Trigger"); provided, however, that, in the event, a resolution is duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination, finding that, in the good faith opinion of such Incumbent Board, the Company is or will be the surviving corporation following the occurrence of a Change of Control event described in Section 2(c) hereof, the 30-day Window Trigger shall be inapplicable.< BR>
          (d)          Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of T ermination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder.

          (e)          Date of Termination. "Date of Termination" means (i) if the Executive's employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination and (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

          6.          Obligations of the Company upon Termination.

          (a)          Good Reason; Other Than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate the Executive's employment other than for Cause or Disability or the Executive shall terminate employment for Good Reason:

                    (i)          the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:

                              A.          the sum of (1) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the higher of (I) the Annual Bonus for the full fiscal year in which the Date of Termination occurs, determined based on actual individual and corporate performance through the Date of Termination, and (II) the Recent Annual Bonus (such higher amount being referred to as the "Highest Annual Bonus") and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365, to the extent not theretofore paid and (3) any compensation previously deferred by the Executive, including, without limitation, amounts credited to the "bonus bank" (the "Bonus Bank") pursuant to the Bonus Plan (less any administrative credits included in the Bonus Bank), and any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the "Accrued Obligations"); and

                              B.          the amount equal to the product of (1) three and (2) the sum of (x) the Executive's Annual Base Salary, (y) the Highest Annual Bonus and (z) the aggregate dollar value of the annual long-term incentive awards granted to the Executive as determined in accordance with the Company's policies and procedures for determining annual long-term incentive awards as in effect immediately prior to the Effective Date based on the Executive's Annual Base Salary and the Executive's annual long-term incentive award percentage in effect immediately prior to the Effective Date for the fiscal year in which the Effective Date occurs; and

                              C.          an amount equal to the excess of (a) the actuarial equivalent of the benefit under the Company's qualified defined benefit retirement plan (the "Retirement Plan") (utilizing actuarial assumptions no less favorable to the Executive than those in effect under the Company's Retirement Plan immediately prior to the Effective Date), and the Unfunded Supplemental Benefit Plan for Salaried Employees or its successor plan or any other excess or supplemental retirement plan in which the Executive participates (together, the "SERP") which the Executive would receive if the Executive's employment continued for three years after the Date of Termination assuming for this purpose that all accrued benefits are fully vested, and, assuming that the Executive's compensation in each of the three years is that required by Section 4(b)(i) and Section 4(b)(ii), over (b) the actuarial equivalent of the Executive's actual benefit (paid or payable), if any, under the Retirement Plan and the SERP as of the Date of Termination; and

                              D.          an amount equal to the additional Company matching contributions that would have been made on the Executive's behalf in the Company's Thrift Plan for Salaried Employees or any successor plan (the "Thrift Plan") (assuming continued participation on the same basis as immediately prior to the Effective Date), plus the additional amount of any benefit the Executive would have accrued under the SERP as a result of contribution limitations in the Thrift Plan, which the Executive would receive if the Executive's employment continued for three years after the Date of Termination, assuming for this purpose that the Executive's compensation in each of the three years is that required by Section 4(b)(i) and Section 4(b)(ii) and that the Company's matching contributions are determin ed pursuant to the applicable provisions of the Thrift Plan and the SERP, as in effect during the 12-month period immediately prior to the Effective Date; and

                    (ii)          for three years after the Executive's Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(v) of this Agreement if the Executive's employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families; provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until three years after the Date of Termination and to have retired on the last day of such period; and

                    (iii)          for three years after the Executive's Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue to provide to the Executive and/or the Executive's family fringe benefits at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(vii) of this Agreement if the Executive's employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families; and

                    (iv)          upon the Date of Termination, the Executive shall have the right and option to purchase the automobile which the Company was providing to the Executive immediately prior to the Date of Termination in accordance with the Company's practice for retiring employees as in effect immediately prior to the Effective Date; and
                    (v)          the Company shall, at its sole expense as incurred, provide the Executive with outplacement services the scope and provider of which shall be selected by the Executive in his sole discretion, provided that the aggregate cost of such services shall not exceed $50,000; and

                    (vi)          to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits").

          (b)          Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(b) shall include, without limitation, and the Executive's estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and affiliated companies to the estates and beneficiaries of peer executives of the Company and s uch affiliated companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive's estate and/or the Executive's beneficiaries, as in effect on the date of the Executive's death with respect to other peer executives of the Company and its affiliated companies and their beneficiaries.

          (c)          Disability. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(c) shall include, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disab ility, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies and their families.

          (d)          Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary through the Date of Termination, (y) the amount of any compensation previously deferred by the Executive, including, without limitation, amounts credited to the Bonus Bank pursuant to the Bonus Plan (less any administrative credits included in the Bonus Bank), and (z) Other Benefits, in each case to the extent theretofore unpaid. If the Executive voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations and the timely payment or provision of Other Be nefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

          7.          Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which the Executive may qualify, nor, subject to Section 12(f), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

          8.          Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, o r liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").

          9.          Certain Additional Payments by the Company

          (a)          Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the Company or its affiliates to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (inclu ding any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 9(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $50,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payment, in the aggregate, to an amount (the "Reduced Amount") such that the receipt of the Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive a nd the Payments, in the aggregate, shall be reduced to the Reduced Amount.

          (b)          Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by Deloitte & Touche LLP or such other certified public accounting firm as may be designated by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm to make the det erminations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

          (c)          The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

                    (i)          give the Company any information reasonably requested by the Company relating to such claim,

                    (ii)          take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

                    (iii)          cooperate with the Company in good faith in order effectively to contest such claim, and

                    (iv)          permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdict ion and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other is sue raised by the Internal Revenue Service or any other taxing authority.

          (d)          If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 9(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance sh all offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

          10.          Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an ass erted violation of the provisions of this Section 10 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement.

          11.          Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.

          (b)          This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

          (c)          The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

          12.          Miscellaneous.

          (a)          This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

          (b)          All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

          If to the Executive:

                    The most recent address on file at the Company

          If to the Company:

                    Vulcan Materials Company
                    P.O. Box 385014
                    Birmingham, Alabama 35238-5014
                    Attention: General Counsel

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

          (c)           The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

          (d)          The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

          (e)          The Executive's or the Company's failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

          (f)          The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is "at will" and, subject to Section 1(a) hereof, prior to the Effective Date, the Executive's employment and/or this Agreement may be terminated by either the Executive or the Company at any time prior to the Effective Date, in which case the Executive shall have no further rights under this Agreement; provided, that this Agreement may not be terminated by the Company if it is reasonably demonstrated by the Executive that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control. From and after the Effective Date this Agreement shall s upersede any other agreement between the parties with respect to the subject matter hereof.

          IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.

	[Named Executive]
	VULCAN MATERIALS COMPANY By:                                                               Name: Donald M. James Title: Chairman and Chief Executive Officer
Schedule A to Exhibit 10(j)
In accordance with Item 601(a)(4) of Regulation S-K, the following executives entered into an Employment Agreement substantially in the form as Exhibit 10(j). All agreements were substantially identical in all material respects except as to the name of the executive and the date of execution. Following is a list of executives who are party to such an agreement:
Donald M. James Mark E. Tomkins William F. Denson, III Robert A. Wason IV

EX-10

Exhibit (10)(m)

AMENDMENT
TO RIGHTS AGREEMENT

          This Amendment, dated as of July 15, 2002, is among Vulcan Materials Company, a New Jersey corporation (the "Company"), EquiServe Trust Company, N.A., fka First Chicago Trust Company of New York (the "Resigning Rights Agent") and The Bank of New York, a New York banking corporation (the "Successor Rights Agent"), and amends the Rights Agreement, dated as of October 19, 1998 (the "Rights Agreement"), between the Company and the Resigning Rights Agent.

RECITALS

          A.          The Company and the Resigning Rights Agent are currently parties to the Rights Agreement, under which the Resigning Rights Agent serves as Rights Agent.

          B.          The Resigning Rights Agent intends to resign as Rights Agent; the Company intends to appoint the Successor Rights Agent to succeed the Resigning Rights Agent as Rights Agent; the Successor Rights Agent wishes to accept appointment as successor Rights Agent; and the parties hereto wish to make certain changes to the Rights Agreement to facilitate this succession.

          NOW, THEREFORE, the Company, the Resigning Rights Agent and the Successor Rights Agent agree as follows:

1.        Resigning Rights Agent

          Pursuant to Section 21 of the Rights Agreement, the Resigning Rights Agent hereby notifies the Company that it is resigning as Rights Agent under the Rights Agreement, its resignation to be effective as of 12:00 a.m., New York time, July 15, 2002. The Company hereby accepts the resignation of the Resigning Rights Agent as Rights Agent and waives the requirement that 30 days' notice in writing of such resignation be provided by the Resigning Rights Agent.

2.        Appointment of Successor Rights Agent

          The Company hereby appoints the Successor Rights Agent as successor Rights Agent under the Rights Agreement, effective as of 12:01 a.m., New York time, July 15, 2002, and the Successor Rights agent hereby accepts such appointment, subject to all the terms and conditions of the Rights Agreement as amended hereby.

3.        Amendment to Rights Agreement

          The parties hereto agree that the Rights Agreement shall be amended as provided below, effective as of the date of this Amendment except as may otherwise be provided below:

          (a)          From and after the time that the appointment of the Successor Rights Agent as successor Rights Agent is effective, all references in the Rights Agreement (including all exhibits thereto) to the Resigning Rights Agent as Rights Agent shall be deemed to refer to the Successor Rights Agent as successor Rights Agent. From and after the effective date of this Amendment, all references in the Rights Agreement to the Rights Agreement shall be deemed to refer to the Rights Agreement as amended by this Amendment.

          (b)          Section 3(c) of the Rights Agreement is amended as of the time of appointment of the Successor Rights Agent as successor Rights Agent by adding the following immediately after the legend appearing therein:

On July 15, 2002, The Bank of New York succeeded EquiServe Trust Company, N.A., fka First Chicago Trust Company of New York as Rights Agent.

          (c)          Section 18(a) of the Rights Agreement is amended by adding the word "gross" between the words "without" and "negligence" and by adding the following sentence at the end thereof: "The Company's reimbursement and indemnification obligations described in this paragraph shall survive the termination of this Agreement."

          (d)          Section 20(c) of the Rights Agreement is amended by adding the word "gross" between the words "own" and "negligence."

          (e)          Section 26 of the Rights Agreement is amended by deleting the name and address of the Resigning Rights Agent and substituting therefor the following:

The Bank of New York
101 Barclay Street, Floor 12 West
New York, NY 10286
Attention: Stock Transfer Administration

          (f)          Section 31 of the Rights Agreement is amended by adding the following words at the end thereof: "provided, however, that the rights and obligations of the Rights Agent in its capacity as such shall be governed by and construed in accordance with the laws of the State of New York."

ATTEST: By:       /s/Amy M. Tucker                        Its:       Assistant Secretary	VULCAN MATERIALS COMPANY By:      /s/William F. Denson, III                       Its:       Senior Vice President and General Counsel
ATTEST: By:       /s/John I. Sivertsen                        Its:       Vice President	THE BANK OF NEW YORK By:       /s/Eon A. Canzius                                Its:            Vice President
ATTEST: By:       /s/Mary E. Garcia                        Its:       Account Manager	EQUISERVE TRUST COMPANY, N.A. By:       /s/Thomas F. Tighe                             Its:                  Director

VULCAN MATERIALS COMPANY

and

FIRST CHICAGO TRUST COMPANY OF NEW YORK

Rights Agent

Agreement

Dated as of October 19, 1998

TABLE OF CONTENTS
		Page Number
Section 1.	Definitions	1
Section 2.	Appointment of Rights Agent	6
Section 3.	Issue of Right Certificates	7
Section 4.	Form of Right Certificates	9
Section 5.	Countersignature and Registration	10
Section 6.	Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	11
Section 7.	Exercise of Rights; Purchase Price; Expiration Date of Rights	12
Section 8.	Cancellation and Destruction of Right Certificates	14
Section 9.	Availability of Preference Stock	14
Section 10.	Preference Stock Record Date	15
Section 11.	Adjustment of Purchase Price, Number of Shares or Number of Rights	16
Section 12.	Certificate of Adjusted Purchase Price or Number of Shares	27
Section 13.	Consolidation, Merger or Sale or Transfer of Assets or Earning Power	27
Section 14.	Fractional Rights and Fractional Shares	29
Section 15.	Rights of Action	31
Section 16.	Agreement of Right Holders	31
Section 17.	Right Certificate Holder Not Deemed a Stockholder	32
Section 18.	Concerning the Rights Agent	33
Section 19.	Merger or Consolidation or Change of Name of Rights Agent	33
Section 20.	Duties of Rights Agent	34
Section 21.	Change of Rights Agent	37
Section 22.	Issuance of New Right Certificates	39
Section 23.	Redemption	39
Section 24.	Exchange	40
Section 25.	Notice of Certain Events	42
Section 26.	Notices	44
Section 27.	Supplements and Amendments	44
Section 28.	Successors	45
Section 29.	Benefits of this Agreement	45
Section 30.	Severability	46
Section 31.	Governing Law	46
Section 32.	Counterparts	46
Section 33.	Descriptive Headings	46
Signatures		47
Exhibit A	Form of Certificate of Designations
Exhibit B	Form of Right Certificate
Exhibit C	Summary of Rights to Purchase Preference Stock

          Agreement, dated as of October 19, 1998, between Vulcan Materials Company, Inc., a New Jersey corporation (the "Company"), and First Chicago Trust Company of New York, as rights agent (the "Rights Agent").

          The Board of Directors of the Company has authorized and declared a dividend of one preference share purchase right (a "Right") for each Common Share (as hereinafter defined) of the Company outstanding on October 30, 1998 (the "Record Date"), each Right representing the right to purchase one one-hundredth of a Preference Share (as hereinafter defined), upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right with respect to each Common Share that shall become outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms are hereinafter defined).

          Accordingly, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

          Section 1.          Definitions. For purposes of this Agreement, the following terms have the meanings indicated:

          (a)          "Acquiring Person" shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 15% or more of the Common Shares of the Company then outstanding, but shall not include the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any Subsidiary of the Company, or any entity holding Common Shares for or pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person shall become an "Acquiring Person" as the result of an acquisition of Common Shares by the Company which, by reducing the number of Common Shares of the Company outstanding, increases the proportionate number of Common Shares of the Company beneficially owned by such Person to 15% or more of the Common Shares of the Company then outstanding; provided, however, that, if a Person shall become the Beneficial Owner of 15 % or more of the Common Shares of the Company then outstanding by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional Common Shares of the Company, then such Person shall be deemed to be an "Acquiring Person." Notwithstanding the foregoing, if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of Common Shares so that such Person would no longer be an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be an "Acquiring Person" for any purposes of this Agreement.

          (b)          "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement.

          (c)           "Associate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement.

          (d)           A Person shall be deemed the "Beneficial Owner" of and shall be deemed to "beneficially own" any securities:

                    (i)          which such Person or any of such Person's Affiliates or Associates beneficially owns, directly or indirectly;

                    (ii)          which such Person or any of such Person's Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights (other than these Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or exchange; or (B) the right to vote pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security if the agreement, arrangement or understanding to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); or

                    (iii)          which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person's Affiliates or Associates has any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(c)(ii)(B) hereof) or disposing of any securities of the Company.

          Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the phrase "then outstanding," when used with reference to a Person's Beneficial Ownership of securities of the Company, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person would be deemed to own beneficially hereunder.

          (e)          "Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

          (f)          "Close of Business" on any given date shall mean 5:00 P.M., New York City time, on such date; provided, however, that, if such date is not a Business Day, it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day.

          (g)          "Common Shares" when used with reference to the Company shall mean the shares of common stock, par value $1.00 per share, of the Company. "Common Shares" when used with reference to any Person other than the Company shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person.

          (h)          "Distribution Date" shall have the meaning set forth in Section 3(a) hereof.

          (i)          "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

          (j)          "Exchange Ratio" shall have the meaning set forth in Section 24(a) hereof.

          (k)          "Final Expiration Date" shall have the meaning set forth in Section 7(a) hereof.

          (l)          "NASDAQ" shall mean the National Association of Securities Dealers, Inc. Automated Quotation System.

          (m)          "Person" shall mean any individual, firm, corporation or other entity, and shall include any successor (by merger or otherwise) of such entity.

          (n)          "Preference Stock" shall mean shares of Series A Junior Participating Preference Stock without par value of the Company having the rights and preferences set forth in the Form of Certificate of Designations attached to this Agreement as Exhibit A.

          (o)          "Purchase Price" shall have the meaning set forth in Section 4 hereof.

          (p)          "Record Date" shall have the meaning set forth in the second paragraph hereof.

          (q)          "Redemption Date" shall have the meaning set forth in Section 7(a) hereof.

          (r)          "Redemption Price" shall have the meaning set forth in Section 23(a) hereof.

          (s)          "Right" shall have the meaning set forth in the second paragraph hereof.

          (t)          "Right Certificate" shall have the meaning set forth in Section 3(a) hereof.

          (u)           "Shares Acquisition Date" shall mean the first date of public announcement by the Company or an Acquiring Person that an Acquiring Person has become such.

          (v)           "Subsidiary" of any Person shall mean any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person.

          (w)           "Summary of Rights" shall have the meaning set forth in Section 3(b) hereof.

          (x)           "Trading Day" shall have the meaning set forth in Section 11(d) hereof.

          Section 2.          Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall, prior to the Distribution Date, also be the holders of the Common Shares of the Company) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable.

          Section 3.          Issue of Right Certificates. (a) Until the earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the tenth Business Day (or such later date as may be determined by action of the Board of Directors of the Company prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares of the Company for or pursuant to the terms of any such plan) of, or of the first public announcement of the intention of any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares of the Company for or pursuant to the terms of any such plan) to commence , a tender or exchange offer the consummation of which would result in any Person becoming the Beneficial Owner of Common Shares of the Company aggregating 15% or more of the then outstanding Common Shares of the Company (including any such date which is after the date of this Agreement and prior to the issuance of the Rights; the earlier of such dates being herein referred to as the "Distribution Date"), (x) the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for Common Shares of the Company registered in the names of the holders thereof (which certificates shall also be deemed to be Right Certificates) and not by separate Right Certificates, and (y) the right to receive Right Certificates will be transferable only in connection with the transfer of Common Shares of the Company. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rig hts Agent will, if requested, send) by first-class, insured, postage-prepaid mail, to each record holder of Common Shares of the Company as of the Close of Business on the Distribution Date, at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a "Right Certificate"), evidencing one Right for each Common Share so held. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates.

          (b)          On the Record Date, or as soon as practicable thereafter, the Company will send a copy of a Summary of Rights to Purchase Preference Stock, in substantially the form of Exhibit C hereto (the "Summary of Rights"), by first-class, postage-prepaid mail, to each record holder of Common Shares as of the Close of Business on the Record Date, at the address of such holder shown on the records of the Company. With respect to certificates for Common Shares of the Company outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof together with a copy of the Summary of Rights attached thereto. Until the Distribution Date (or the earlier of the Redemption Date or the Final Expiration Date), the surrender for transfer of any certificate for Common Shares of the Company outstanding on the Record Dat e, with or without a copy of the Summary of Rights attached thereto, shall also constitute the transfer of the Rights associated with the Common Shares of the Company represented thereby.

          (c)          Certificates for Common Shares which become outstanding (including, without limitation, reacquired Common Shares referred to in the last sentence of this paragraph (c)) after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the following legend:

This certificate also evidences and entitles the holder hereof to certain rights as set forth in an Agreement between Vulcan Materials Company, and dated as of October 19, 1998, as it may be amended from time to time (the "Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of Vulcan Materials Company. Under certain circumstances, as set forth in the Agreement, such Rights (as defined in the Agreement) will be evidenced by separate certificates and will no longer be evidenced by this certificate. Vulcan Materials Company will mail to the holder of this certificate a copy of the Agreement without charge after receipt of a written request therefor. As set forth in the Agreement, Rights beneficially owned by any Person (as defined in the Agreement) who becomes an Acquiring Person (as defined in the Agreement) become null and void.

With respect to such certificates containing the foregoing legend, until the Distribution Date, the Rights associated with the Common Shares of the Company represented by such certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate shall also constitute the transfer of the Rights associated with the Common Shares of the Company represented thereby. In the event that the Company purchases or acquires any Common Shares of the Company after the Record Date but prior to the Distribution Date, any Rights associated with such Common Shares of the Company shall be deemed cancelled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares of the Company which are no longer outstanding.

          Section 4.          Form of Right Certificates. The Right Certificates (and the forms of election to purchase Preference Stock and of assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit B hereto, and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any applicable rule or regulation made pursuant thereto or with any applicable rule or regulation of any stock exchange or the National Association of Securities Dealers, Inc., or to conform to usage. Subject to the provisions of Section 22 hereof, the Right Certificates shall entitle the holders thereof to purchase such number of one one-hundredths of a Preference Share as shall b e set forth therein at the price per one one-hundredth of a Preference Share set forth therein (the "Purchase Price"), but the number of such one one-hundredths of a Preference Share and the Purchase Price shall be subject to adjustment as provided herein.

          Section 5.          Countersignature and Registration. The Right Certificates shall be executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its President, any of its Vice Presidents or its Treasurer, either manually or by facsimile signature, shall have affixed thereto the Company's seal or a facsimile thereof, and shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Right Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Righ ts Agent and issued and delivered by the Company with the same force and effect as though the individual who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any individual who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Agreement any such individual was not such an officer.

          Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office, books for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates.

          Section 6.          Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject to the provisions of Section 14 hereof, at any time after the Close of Business on the Distribution Date, and at or prior to the Close of Business on the earlier of the Redemption Date or the Final Expiration Date, any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates entitling the registered holder to purchase a like number of one one-hundredths of a Preference Share as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered hold er desiring to transfer, split up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the principal office of the Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates.

          Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company's request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

          Section 7.          Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) The registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein), in whole or in part, at any time after the Distribution Date, upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the principal office of the Rights Agent, together with payment of the Purchase Price for each one one-hundredth of a Preference Share as to which the Rights are exercised, at or prior to the earliest of (i) the Close of Business on December 31, 2008 (the "Final Expiration Date"), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the "Redemption Date"), or (iii) the time at which such Rights are exchanged as provided in Section 24 hereof.

          (b)          The Purchase Price for each one one-hundredth of a Preference Share purchasable pursuant to the exercise of a Right shall initially be $400.00, and shall be subject to adjustment from time to time as provided in Section 11 or 13 hereof, and shall be payable in lawful money of the United States of America in accordance with paragraph (c) below.

          (c)          Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly executed, accompanied by payment of the Purchase Price for the shares to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof by certified check, cashier's check or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of the Preference Stock certificates for the number of Preference Stock to be purchased and the Company hereby irrevocably authorizes any such transfer agent to comply with all such requests, or (B) requisition from the depositary agent depositary receipts representing such number of one one-hundredths of a Preference Share as are to be purchased (in which case certificates for the Preference Stock represented by such receipts shall be deposited by the transfer agent of the Preference Stock with such depositary agent) and the Company hereby directs such depositary agent to comply with such request; (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof; (iii) promptly after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder; and (iv) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right Certificate.

          (d)          In case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to registered holder of such Right Certificate or to such holder's duly authorized assigns, subject to the provisions of Section 14 hereof.

          Section 8.          Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Right Certificates to the Company, or shall, at the written request of the Company, destroy such cancelled Righ t Certificates, and, in such case, shall deliver a certificate of destruction thereof to the Company.

          Section 9.          Availability of Preference Stock. The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Preference Stock or any Preference Stock held in its treasury the number of shares of Preference Stock that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7 hereof. The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Preference Stock delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Preference Stock (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable shares.

          The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any Preference Stock upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary receipts for the Preference Stock in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or to deliver any certificates or depositary receipts for Preference Stock upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Compa ny's reasonable satisfaction that no such tax is due.

          Section 10.          Preference Stock Record Date. Each Person in whose name any certificate for Preference Stock is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preference Stock represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided, however, that, if the date of such surrender and payment is a date upon which the Preference Stock transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Preference Stock transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the ho lder of a Right Certificate shall not be entitled to any rights of a holder of Preference Stock for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

          Section 11.          Adjustment of Purchase Price, Number of Shares or Number of Rights. The Purchase Price, the number of shares of Preference Stock covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

          (a)          (i)          In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preference Stock payable in Preference Stock, (B) subdivide the outstanding Preference Stock, (C) combine the outstanding Preference Stock into a smaller number of Preference Stock or (D) issue any shares of its capital stock in a reclassification of the Preference Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adj usted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preference Stock transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right.

                    (ii)          Subject to Section 24 hereof, in the event any Person becomes an Acquiring Person, each holder of a Right shall thereafter have a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preference Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preference Stock, such number of Common Shares of the Company as shall equal the result obtained by (A) multiplying the then current Purchase Price by the number of one one-hundredths of a Preference Share for which a Right is then exercisable and dividing that product by (B) 50% of the then current per share market price of the Common Shares of the Company (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such eve nt. In the event that any Person shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to be afforded by the Rights.

          From and after the occurrence of such event, any Rights that are or were acquired or beneficially owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall be void, and any holder of such Rights shall thereafter have no right to exercise such Rights under any provision of this Agreement. No Right Certificate shall be issued pursuant to Section 3 hereof that represents Rights beneficially owned by an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be cancelled.

                    (iii)          In the event that there shall not be sufficient Common Shares issued but not outstanding or authorized but unissued to permit the exercise in full of the Rights in accordance with subparagraph (ii) above, the Company shall take all such action as may be necessary to authorize additional Common Shares for issuance upon exercise of the Rights. In the event the Company shall, after good faith effort, be unable to take all such action as may be necessary to authorize such additional Common Shares, the Company shall substitute, for each Common Share that would otherwise be issuable upon exercise of a Right, a number of Preference Stock or fraction thereof such that the current per share market price of one Preference Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as o f the date of issuance of such Preference Stock or fraction thereof.

          (b)          In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preference Stock entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preference Stock (or shares having the same rights, privileges and preferences as the Preference Stock ("equivalent preference stock")) or securities convertible into Preference Stock or equivalent preference stock at a price per Preference Share or equivalent preference share (or having a conversion price per share, if a security convertible into Preference Stock or equivalent preference stock) less than the then current per share market price of the Preference Stock (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preference Stock outstanding on such record date plus the number of shares of Preference Stock which the aggregate offering price of the total number of shares of Preference Stock and/or equivalent preference stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price and the denominator of which shall be the number of shares of Preference Stock outstanding on such record date plus the number of additional Preference Stock and/or equivalent preference stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights. Preference Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and, in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

          (c)          In case the Company shall fix a record date for the making of a distribution to all holders of the Preference Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in Preference Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then current per share market price of the Preference Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one Preference Share and the denominator of which shall be such then-current per share market price of the Preference Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and, in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

          (d)          (i)           For the purpose of any computation hereunder, the "current per share market price" of any security (a "Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days immediately prior to such date; provided, however, that, in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or Securities convertible into such shares, or (B) any subdivision, combination or reclassification of such Security and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, t he average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business, or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day.

                    (ii)          For the purpose of any computation hereunder, the "current per share market price" of the Preference Stock shall be determined in accordance with the method set forth in Section 11(d)(i). If the Preference Stock is not publicly traded, the "current per share market price" of the Preference Stock shall be conclusively deemed to be the current per share market price of the Common Shares as determined pursuant to Section 11(d)(i) hereof (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by one hundred. If neither the Common Shares nor the Preference Stock are publicly held or so listed or traded, "current per share market price" shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determi nation shall be described in a statement filed with the Rights Agent.

          (e)          No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one one-millionth of a Preference Share or one ten-thousandth of any other share or security as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment or (ii) the date of the expiration of the right to exercise any Rights.

          (f)          If, as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Preference Stock, thereafter the number of such other shares so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preference Stock contained in Section 11(a) through (c) hereof, inclusive, and the provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preference Stock shall apply on like terms to any such other shares.

          (g)          All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-hundredths of a Preference Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

          (h)          Unless the Company shall have exercised its election as provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c) hereof, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-hundredths of a Preference Share (calculated to the nearest one one-millionth of a Preference Share) obtained by (A) multiplying (x) the number of one one-hundredths of a share covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (B) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.

          (i)          The Company may elect, on or after the date of any adjustment of the Purchase Price, to adjust the number of Rights in substitution for any adjustment in the number of one one-hundredths of a Preference Share purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-hundredths of a Preference Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust t he number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, n ew Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein, and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement.

          (j)          Irrespective of any adjustment or change in the Purchase Price or in the number of one one-hundredths of a Preference Share issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-hundredths of a Preference Share which were expressed in the initial Right Certificates issued hereunder.

          (k)          Before taking any action that would cause an adjustment reducing the Purchase Price below one one-hundredth of the then par value, if any, of the Preference Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable Preference Stock at such adjusted Purchase Price.

          (l)          In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date of the Preference Stock and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Preference Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares upon the occurrence of the event requiring such adjustment.

          (m)          Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it, in its sole discretion, shall determine to be advisable in order that any consolidation or subdivision of the Preference Stock, issuance wholly for cash of any Preference Stock at less than the current market price, issuance wholly for cash of Preference Stock or securities which by their terms are convertible into or exchangeable for Preference Stock, dividends on Preference Stock payable in Preference Stock or issuance of rights, options or warrants referred to in Section 11(b) hereof, hereafter made by the Company to holders of the Preference Stock shall not be taxable to such stockholders.

          (n)          In the event that, at any time after the date of this Agreement and prior to the Distribution Date, the Company shall (i) declare or pay any dividend on the Common Shares payable in Common Shares, or (ii) effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares) into a greater or lesser number of Common Shares, then, in any such case, (A) the number of one one-hundredths of a Preference Share purchasable after such event upon proper exercise of each Right shall be determined by multiplying the number of one one-hundredths of a Preference Share so purchasable immediately prior to such event by a fraction, the numerator of which is the number of Common Shares outstanding immediately before such event and the denominator of which is the number of Common Shares outstanding immediately after such ev ent, and (B) each Common Share outstanding immediately after such event shall have issued with respect to it that number of Rights which each Common Share outstanding immediately prior to such event had issued with respect to it. The adjustments provided for in this Section 11(n) shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected.

          Section 12.          Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11 or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the Common Shares or the Preference Stock and the Securities and Exchange Commission a copy of such certificate and (c) if such adjustment occurs at any time after the Distribution Date, mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof.

          Section 13.          Consolidation, Merger or Sale or Transfer of Assets or Earning Power. In the event, directly or indirectly, at any time after a Person has become an Acquiring Person, (a) the Company shall consolidate with, or merge with and into, any other Person, (b) any Person shall consolidate with the Company, or merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the Common Shares shall be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property, or (c) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person other than the Company or one or more of its wholly-owned Subsidiaries, then, and in each such case, proper provision shall be made so that (i) each holder of a Right (except as otherwise provided herein) shall thereafter have the right to receive, upon the exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preference Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preference Stock, such number of Common Shares of such other Person (including the Company as successor thereto or as the surviving corporation) as shall equal the result obtained by (A) multiplying the then current Purchase Price by the number of one one-hundredths of a Preference Share for which a Right is then exercisable and dividing that product by (B) 50% of the then current per share market price of the Common Shares of such other Person (determined pursuant to Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or transfer; (ii) the issuer of such Common Shares shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such issuer; and (iv) such issuer shall take such steps (including, but not limited to, the reservation of a sufficient number of its Common Shares in accordance with Section 9 hereof) in connection with such consummation as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the Common Shares of the Company thereafter deliverable upon the exercise of the Rights. The Company shall not consummate any such consolidation, merger, sale or transfer unless, prior thereto, the Company and such issuer shall have executed and delivered to the Rights Agent a supplemental ag reement so providing. The Company shall not enter into any transaction of the kind referred to in this Section 13 if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights. The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers.

          Section 14.          Fractional Rights and Fractional Shares. (a) The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in ei ther case, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company. If on any such date no such market ma ker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of Directors of the Company shall be used.

          (b)          The Company shall not be required to issue fractions of Preference Stock (other than fractions which are integral multiples of one one-hundredth of a Preference Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preference Stock (other than fractions which are integral multiples of one one-hundredth of a Preference Share). Fractions of Preference Stock in integral multiples of one one-hundredth of a Preference Share may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it; provided that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preference Stock represented by such depositary receipts. In lieu of fraction al Preference Stock that are not integral multiples of one one-hundredth of a Preference Share, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one Preference Share. For the purposes of this Section 14(b), the current market value of a Preference Share shall be the closing price of a Preference Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise.

          (c)          The holder of a Right, by the acceptance of the Right, expressly waives such holder's right to receive any fractional Rights or any fractional shares upon exercise of a Right (except as provided above).

          Section 15.          Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Shares), may, in such holder's own behalf and for such holder's own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder's right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Rig ht Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement, and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement.

          Section 16.          Agreement of Right Holders. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:

          (a)          prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Shares;

          (b)          after the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the principal office of the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer; and

          (c)          the Company and the Rights Agent may deem and treat the person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Shares certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificate or the associated Common Shares certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary.

          Section 17.          Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preference Stock or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Rig ht or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof.

          Section 18.          Concerning the Rights Agent. The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder, and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense incurred without negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability in the premises.

          The Rights Agent shall be protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its administration of this Agreement in reliance upon any Right Certificate or certificate for the Preference Stock or Common Shares or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper person or persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof.

          Section 19.          Merger or Consolidation or Change of Name of Rights Agent. Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the stock transfer or corporate trust powers of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certifi cates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and, in case at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and, in all such cases, such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

          In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and, in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and, in all such cases, such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

          Section 20.          Duties of Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound:

          (a)          The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion.

          (b)          Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or the Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.

          (c)          The Rights Agent shall be liable hereunder to the Company and any other Person only for its own negligence, bad faith or willful misconduct.

          (d)          The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

          (e)          The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights (including the manner, method or amount thereof) provided for in Section 3, 11, 13, 23 or 24 hereof, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights evidenced by Righ t Certificates after actual notice that such change or adjustment is required); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Preference Stock to be issued pursuant to this Agreement or any Right Certificate or as to whether any Preference Stock will, when issued, be validly authorized and issued, fully paid and nonassessable.

          (f)          The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.

          (g)          The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Secretary or the Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such officer or for any delay in acting while waiting for those instructions.

          (h)          The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity.

          (i)          The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided that reasonable care was exercised in the selection and continued employment thereof.

          Section 21.          Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days' notice in writing mailed to the Company and to each transfer agent of the Common Shares or Preference Stock by registered or certified mail, and to the holders of the Right Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Shares or Preference Stock by registered or certified mail, and to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (which holder shall, with such notice, submit such holder's Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (A) a corporation organized and doing business under the laws of the United States or of the State of New York (or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in the State of New York), in good standing, having an office in the State of New York, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subjec t to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million or (B) is an affiliate of a corporation described in clause (A) of this sentence. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares or Preference Stock, and mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

          Section 22.          Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by the Board of Directors of the Company to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement.

          Section 23.          Redemption. (a) The Board of Directors of the Company may, at its option, at any time prior to such time as any Person becomes an Acquiring Person, redeem all but not less than all the then outstanding Rights at a redemption price of $.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the "Redemption Price"). The redemption of the Rights by the Board of Directors of the Company may be made effective at such time, on such basis and with such conditions as the Board of Directors of the Company, in its sole discretion, may establish.

          (b)          Immediately upon the action of the Board of Directors of the Company ordering the redemption of the Rights pursuant to paragraph (a) of this Section 23, and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Within 10 days after such action of the Board of Directors of the Company ordering the redemption of the Rights, the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry bo oks of the transfer agent for the Common Shares. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23 or in Section 24 hereof, and other than in connection with the purchase of Common Shares prior to the Distribution Date.

          Section 24.          Exchange. (a) The Board of Directors of the Company may, at its option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any adjustment in the number of Rights pursuant to Section 11(i) (such exchange ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors of the Company shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Shares for or pursuant to the ter ms of any such plan), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding.

          (b)          Immediately upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common Shares equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the Common Shares for Rights will be effected, and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

          (c)          In the event that there shall not be sufficient Common Shares issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall take all such action as may be necessary to authorize additional Common Shares for issuance upon exchange of the Rights. In the event the Company shall, after good faith effort, be unable to take all such action as may be necessary to authorize such additional Common Shares, the Company shall substitute, for each Common Share that would otherwise be issuable upon exchange of a Right, a number of shares of Preference Stock or fraction thereof such that the current per share market price of one Preference Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the date of issuance of such Preference Stock or frac tion thereof.

          (d)          The Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common Shares. In lieu of such fractional Common Shares, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional Common Shares would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole Common Share. For the purposes of this paragraph (d), the current market value of a whole Common Share shall be the closing price of a Common Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24.

          Section 25.          Notice of Certain Events. (a) In case the Company shall, at any time after the Distribution Date, propose (i) to pay any dividend payable in stock of any class to the holders of the Preference Stock or to make any other distribution to the holders of the Preference Stock (other than a regular quarterly cash dividend), (ii) to offer to the holders of the Preference Stock rights or warrants to subscribe for or to purchase any additional Preference Stock or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of the Preference Stock (other than a reclassification involving only the subdivision of outstanding Preference Stock), (iv) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or mo re transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares), then, in each such case, the Company shall give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, or distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the Common Shares and/or Preference Stock, if any such date is to be fixed, and such notice sh all be so given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to the record date for determining holders of the Preference Stock for purposes of such action, and, in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares and/or Preference Stock, whichever shall be the earlier.

          (b)          In case the event set forth in Section 11(a)(ii) hereof shall occur, then the Company shall, as soon as practicable thereafter, give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such event and the consequences of such event to holders of Rights under Section 11(a)(ii) hereof.

          Section 26.          Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:

                    Vulcan Materials Company
                    One Metroplex Drive
                    Birmingham, Alabama 35209
                    Attention: Corporate Secretary

Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows:

                    First Chicago Trust Company of New York
                    525 Washington Boulevard          
                    Suite 4660
                    Jersey City, New Jersey 07310
                    Attention: Tenders and Exchanges Department

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.

          Section 27.          Supplements and Amendments. The Company may from time to time supplement or amend this Agreement without the approval of any holders of Right Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or to make any other provisions with respect to the Rights which the Company may deem necessary or desirable, any such supplement or amendment to be evidenced by a writing signed by the Company and the Rights Agent; provided, however, that, from and after such time as any Person becomes an Acquiring Person, this Agreement shall not be amended in any manner which would adversely affect the interests of the holders of Rights. Without limiting the foregoing, the Company may at any time prior to such time as any Person becomes an Acquiring Person amend this Agreeme nt to lower the thresholds set forth in Sections 1(a) and 3(a) hereof to not less than the greater of (a) the sum of .001% and the largest percentage of the outstanding Common Shares then known by the Company to be beneficially owned by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any Subsidiary of the Company, or any entity holding Common Shares for or pursuant to the terms of any such plan) and (b) 10%.

          Section 28.          Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

          Section 29.          Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares).

          Section 30.          Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

          Section 31.          Governing Law. This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of New Jersey and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such state.

          Section 32.          Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

          Section 33.          Descriptive Headings. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested, all as of the day and year first above written.

Attest: By:       /s/Michael R. Mills                        Name: Michael R. Mills Title: Assistant Secretary	VULCAN MATERIALS COMPANY By:      /s/William F. Denson, III                       Name: William F. Denson, III Title: Senior Vice President-Law
Attest: By:       /s/Mary E. Garcia                         Name: Mary E. Garcia Title: Customer Service Officer	FIRST CHICAGO TRUST COMPANY OF NEW YORK By:        /s/Joanne Gorostiola                         Name: Joanne Gorostiola Title: Assistant Vice President

Exhibit A

FORM

of

CERTIFICATE OF AMENDMENT

to

THE CERTIFICATE OF INCORPORATION

of

VULCAN MATERIALS COMPANY

(Pursuant to subsection 14A:7-2(2) of the
New Jersey Business Corporation Act)

          It is hereby certified that:

          1.          The name of the corporation is Vulcan Materials Company (hereinafter called the "Corporation");

          2.          The Certificate of Incorporation of the Corporation (the "Certificate of Incorporation") is hereby amended so that the designation and number of shares of the class and series acted upon in the following resolutions, and the relative rights, preferences and limitations of such class and series, are as stated in such resolutions; and

          3.          The following resolutions were duly adopted by the Board of Directors of the Corporation as required by subsection 14A:7-2(3) of the New Jersey Business Corporation Act at a meeting duly called and held on October 9, 1998:

          RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Corporation (hereinafter called the "Board of Directors" or the "Board") in accordance with the provisions of the Certificate of Incorporation, the Board of Directors hereby creates a series of Preference Stock without par value of the Corporation (the "Preference Stock"), and hereby states the designation and number of shares, and fixes the relative rights, preferences, and limitations thereof as follows:

          Series A Junior Participating Preference Stock:

          Section 1.          Designation and Amount. The shares of such series shall be designated as "Series A Junior Participating Preference Stock" (the "Series A Preference Stock") and the number of shares constituting the Series A Preference Stock shall be 400,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series A Preference Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preference Stock.

          Section 2.          Dividends and Distributions.

          (A)          Subject to the rights of the holders of any shares of any series of Preference Stock (or any similar stock) ranking prior and superior to the Series A Preference Stock with respect to dividends, the holders of shares of Series A Preference Stock, in preference to the holders of Common Stock, par value $1.00 per share (the "Common Stock"), of the Corporation, and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preference Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preference Stock. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or les ser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preference Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

          (B)          The Corporation shall declare a dividend or distribution on the Series A Preference Stock as provided in paragraph (A) of this Section immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A Preference Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

          (C)          Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preference Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preference Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preference Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preference Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof.

          Section 3.          Voting Rights. The holders of shares of Series A Preference Stock shall have the following voting rights:

          (A)          Subject to the provision for adjustment hereinafter set forth, each share of Series A Preference Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preference Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immedia tely after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

          (B)          Except as otherwise provided herein, in any other Certificate of Designations creating a series of Preference Stock or any similar stock, or by law, the holders of shares of Series A Preference Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

          (C)          Except as set forth herein, or as otherwise provided by law, holders of Series A Preference Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

          Section 4.          Certain Restrictions.

          (A)          Whenever quarterly dividends or other dividends or distributions payable on the Series A Preference Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preference Stock outstanding shall have been paid in full, the Corporation shall not:

                    (i)          declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preference Stock;

                    (ii)          declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preference Stock, except dividends paid ratably on the Series A Preference Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

                    (iii)          redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preference Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preference Stock; or

                    (iv)          redeem or purchase or otherwise acquire for consideration any shares of Series A Preference Stock, or any shares of stock ranking on a parity with the Series A Preference Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

          (B)          The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

          Section 5.          Reacquired Shares. Any shares of Series A Preference Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preference Stock and may be reissued as part of a new series of Preference Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any other Certificate of Designations creating a series of Preference Stock or any similar stock or as otherwise required by law.

          Section 6.          Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preference Stock unless, prior thereto, the holders of shares of Series A Preference Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series A Preference Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preference Stock, except distributions made ratably on the Series A Preference Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preference Stock were entitled immediately prior to such event under the proviso in clause (1) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the n umber of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

          Section 7.          Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preference Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding share s of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preference Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

          Section 8.          No Redemption. The shares of Series A Preference Stock shall not be redeemable.

          Section 9.          Rank. The Series A Preference Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series of any other class of the Corporation's Preference Stock.

          Section 10.         Amendment. The Certificate of Incorporation of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Preference Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preference Stock, voting together as a single class.

          IN WITNESS WHEREOF, this Certificate of Amendment is executed on behalf of the Corporation this ____ day of _____________, 1998.

VULCAN MATERIALS COMPANY


By: _________________________________
Name: _______________________________
Title: ________________________________

Exhibit B
FORM OF RIGHT CERTIFICATE
Certificate No. R-	____ Rights
NOT EXERCISABLE AFTER DECEMBER 31, 2008 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT. Right Certificate VULCAN MATERIALS COMPANY

          This certifies that _______________, or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Agreement, dated as of October 19, 1998 (the "Agreement"), between Vulcan Materials Company, a New Jersey corporation (the "Company"), and First Chicago Trust Company of New York (the "Rights Agent"), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Agreement) and prior to 5:00 P.M., New York City time, on December 31, 2008 at the principal office of the Rights Agent, or at the office of its successor as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A Junior Participating Preference Stock without par value of the Company (the "Preference Stock"), at a purchase price of $400.00 per one one-hundredth of a Preference Share (the "Purchase Price"), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a Preference Share which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of October 30, 1998, based on the Preference Stock as constituted at such date. As provided in the Agreement, the Purchase Price and the number of one one-hundredths of a Preference Share which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events.

          This Right Certificate is subject to all of the terms, provisions and conditions of the Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Agreement are on file at the principal executive offices of the Company and the offices of the Rights Agent.

          This Right Certificate, with or without other Right Certificates, upon surrender at the principal office of the Rights Agent, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of Preference Stock as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised.

          Subject to the provisions of the Agreement, the Rights evidenced by this Right Certificate (i) may be redeemed by the Company at a redemption price of $.01 per Right or (ii) may be exchanged in whole or in part for Preference Stock or shares of the Company's Common Stock, par value $1.00 per share.

          No fractional Preference Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-hundredth of a Preference Share, which may, at the election of the Company, be evidenced by depositary receipts), but, in lieu thereof, a cash payment will be made, as provided in the Agreement.

          No holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preference Stock or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Agreement.

          This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

          WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of _________, 1998.

ATTEST: ______________________________________ Name: Title:	VULCAN MATERIALS COMPANY By: _____________________________________ Name: Title:
Countersigned: FIRST CHICAGO TRUST COMPANY OF NEW YORK By: _____________________________________ Name: Title:

Form of Reverse Side of Right Certificate FORM OF ASSIGNMENT (To be executed by the registered holder if such holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _______________hereby sells, assigns and transfers unto _____________ _________________________________________________________________________________________                                   (Please print name and address of transferee) this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ____________ Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.
Dated: ___________________	____________________________________ Signature
Signature Guaranteed:           Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States.           The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement).
	____________________________________ Signature
Form of Reverse Side of Right Certificate -- continued FORM OF ELECTION TO PURCHASE (To be executed if holder desires to exercise Rights represented by the Right Certificate.)
To: VULCAN MATERIALS COMPANY           The undersigned hereby irrevocably elects to exercise _________________ Rights represented by this Right Certificate to purchase the Preference Stock issuable upon the exercise of such Rights and requests that certificates for such Preference Stock be issued in the name of: Please insert social security or other identifying number __________________________________________________________________________________________                                         (Please print name and address) If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to: Please insert social security or other identifying number __________________________________________________________________________________________                                         (Please print name and address)
Dated: ___________________	____________________________________ Signature
Signature Guaranteed:           Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States.           The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement).
	____________________________________ Signature
NOTICE
The signature in the Form of Assignment or Form of Election to Purchase, as the case may be, must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.           In the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, the Company and the Rights Agent will deem the beneficial owner of the Rights evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement) and such Assignment or Election to Purchase will not be honored.

Exhibit C

SUMMARY OF RIGHTS TO PURCHASE
PREFERENCE SHARES

Introduction

          On October 9, 1998, the Board of Directors of Vulcan Materials Company (the "Company") declared a dividend of one preference share purchase right (a "Right") for each outstanding share of common stock, par value $1.00 per share, of the Company (the "Common Shares"). The dividend is payable on October 30, 1998 (the "Record Date") to the stockholders of record on that date. The description and terms of the Rights are set forth in an Agreement (the "Agreement") between the Company and First Chicago Trust Company of New York as Rights Agent (the "Rights Agent").

Purchase Price

          Each Right entitles the registered holder to purchase from the Company one one-hundredth of a share of Series A Junior Participating Preference Stock of the Company without par value (the "Preference Stock"), at a price of $400.00 per one one-hundredth of a Preference Share (the "Purchase Price"), subject to adjustment.

Flip-In

          In the event that any person or group of affiliated or associated persons acquires beneficial ownership of 15% or more of the outstanding Common Shares (an "Acquiring Person"), each holder of a Right, other than Rights beneficially owned by the Acquiring Person (which will thereafter be void), will thereafter have the right to receive upon exercise that number of Common Shares having a market value of two times the exercise price of the Right.

Flip-Over

          If the Company is acquired in a merger or other business combination transaction or 50% or more of its consolidated assets or earning power are sold after a person or group has become an Acquiring Person, each holder of a Right (other than Rights beneficially owned by Acquiring Person, which will be void) will thereafter have the right to receive that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two times the exercise price of the Right.

Distribution Date

          The distribution date is the earlier of

          (i)           10 days following a public announcement that a person or group of affiliated or associated persons have acquired beneficial ownership of 15% or more of the outstanding Common Shares; or

          (ii)          10 business days (or such later date as may be determined by action of the Board of Directors of the Company prior to such time as any person or group of affiliated persons becomes an Acquiring Person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 15% or more of the outstanding Common Shares.

Transfer and Detachment

          Until the Distribution Date, the Rights will be evidenced, with respect to any of the Common Share certificates outstanding as of the Record Date, by such Common Share certificate with a copy of this Summary of Rights attached thereto. Until the Distribution Date (or earlier redemption or expiration of the Rights), the Rights will be transferred with and only with the Common Shares, and transfer of those certificates will also constitute transfer of these Rights.

          As soon as practicable following the Distribution Date, separate certificates evidencing the Rights ("Right Certificates") will be mailed to holders of record of the Common Shares as of the close of business on the Distribution Date and such separate Right Certificates alone will thereafter evidence the Rights.

Exercisability

          The Rights are not exercisable until the Distribution Date. The Rights will expire on December 31, 2008 (the "Final Expiration Date"), unless the Final Expiration Date is extended or unless the Rights are earlier redeemed or exchanged by the Company, in each case, as described below.

Adjustments

          The Purchase Price payable, and the number of Preference Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution in the event of stock dividends, stock splits, reclassifications, or certain distributions with respect to the Preference Stock. The number of outstanding Rights and the number of one one-hundredths of a Preference Share issuable upon exercise of each Right are also subject to adjustment if, prior to the Distribution Date, there is a stock split of the Common Shares or a stock dividend on the Common Shares payable in Common Shares or subdivisions, consolidations or combinations of the Common Shares. With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional Preference Stock will be issued (other than fractions which are integral mu ltiples of one one-hundredth of a Preference Share, which may, at the election of the Company, be evidenced by depositary receipts) and, in lieu thereof, an adjustment in cash will be made based on the market price of the Preference Stock on the last trading day prior to the date of exercise.

Preference Stock

          Preference Stock purchasable upon exercise of the Rights will not be redeemable. Each Preference Share will be entitled to a minimum preferential quarterly dividend payment of $1 per share but will be entitled to an aggregate dividend of 100 times the dividend declared per Common Share. In the event of liquidation, the holders of the Preference Stock will be entitled to a minimum preferential liquidation payment of $100 per share but will be entitled to an aggregate payment of 100 times the payment made per Common Share. Each Preference Share will have 100 votes, voting together with the Common Shares. Finally, in the event of any merger, consolidation or other transaction in which Common Shares are exchanged, each Preference Share will be entitled to receive 100 times the amount received per Common Share. These rights are protected by customary antidilution provisions.

          The value of the one one-hundredth interest in a Preference Share purchasable upon exercise of each Right should, because of the nature of the Preference Stock' dividend, liquidation and voting rights, approximate the value of one Common Share.

Exchange

          At any time after any person or group becomes an Acquiring Person, and prior to the acquisition by such person or group of 50% or more of the outstanding Common Shares, the Board of Directors of the Company may exchange the Rights (other than Rights owned by the Acquiring Person, which will have become void), in whole or in part, at an exchange ratio of one Common Share, or one one-hundredth of a Preference Share (subject to adjustment).

Redemption

          At any time prior to any person or group becoming an Acquiring Person, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption Price"). The redemption of the Rights may be made effective at such time on such basis with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.

Amendments

          The terms of the Rights may be amended by the Board of Directors of the Company without the consent of the holders of the Rights, including an amendment to lower certain thresholds described above to not less than the greater of (i) the sum of .001% and the largest percentage of the outstanding Common Shares then known to the Company to be beneficially owned by any person or group of affiliated or associated persons and (ii) 10%, except that from and after such time as any person or group of affiliated or associated persons becomes an Acquiring Person no such amendment may adversely affect the interests of the holders of the Rights.

Rights and Holders

          Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends.

Further Information

          A copy of the Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated ______________, 1998. A copy of the Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Agreement, which is hereby incorporated herein by reference.

EX-13

Exhibit (13)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Vulcan is the nation's foremost producer of construction aggregates, a major producer of asphalt and ready-mixed concrete and a chemicals manufacturer, producing chloralkali and other industrial chemicals. We operate through two business segments: Construction Materials and Chemicals. The following is a discussion and analysis of the results of operations and the financial condition of the Company. This discussion and analysis should be read in connection with the historical financial information included in the consolidated financial statements and their notes.

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 on which management reviews the Company's results of operations.

Results of Operations
2002 vs. 2001Vulcan's 2002 net sales of $2.545 billion were down 8% from the 2001 record of $2.755 billion. Net earnings were $169.9 million, or $1.66 per diluted share, as compared with net earnings and diluted earnings per share of $222.7 million and $2.17, respectively, in 2001. Earnings before interest and income taxes equaled $309.1 million, down 19% from last year's amount of $380.9 million. Sales volume and earnings in both segments were negatively impacted by economic weakness, particularly in private nonresidential construction and in the industrial manufacturing sector.

Excluding the accounting change related to the mandatory adoption of Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets" (FAS 142), and the resulting impairment of Performance Chemicals' goodwill of $20.5 million, 2002 earnings before cumulative effect of accounting change and diluted earnings before cumulative effect of accounting change per share were $190.4 million and $1.86, respectively. As FAS 142 also eliminated the amortization of goodwill, excluding goodwill amortization in 2001 would have resulted in prior-year adjusted net earnings of $244.8 million, or $2.39 per diluted share. In summary, the impact of the adoption of FAS 142 was slightly favorable to net earnings as the elimination of goodwill amortization more than offset the goodwill impairment charge.

2001 vs. 2000
Vulcan's 2001 net sales of $2.755 billion were at a record level, up 11% from the 2000 total of $2.492 billion. Net earnings and diluted earnings per share were $222.7 million and $2.17, respectively. The comparable 2000 net earnings and diluted earnings per share were $219.9 million and $2.16, respectively. The 2001 increase in earnings was attributable to the Construction Materials segment, as the Chemicals segment's loss was essentially the same as the prior year's. Earnings before interest and income taxes equaled $380.9 million, up 7% from 2000's amount of $355.6 million.

Construction Materials
2002 vs. 2001Net sales in the Construction Materials segment of $1.981 billion were down 6% from the 2001 record of $2.114 billion. Aggregates shipments of 217 million tons decreased 8% from the 2001 level, while the average unit selling price increased approximately 2.5%. The reduction in volume was due mainly to the significant weakness in private nonresidential construction.

Segment earnings, which are before interest and income taxes, of $383.2 million for 2002 declined 4% from the record $400.5 million in 2001. This shortfall was primarily due to the reduced volume, offset in part by improved pricing and the elimination of goodwill amortization. This information is summarized below (in millions of dollars):

Construction Materials 2002 vs. 2001
2001 earnings	$400
Aggregates	(30)
Elimination of goodwill amortization	23
Asphalt	(4)
All other	(6)
2002 earnings	$383

Segment earnings as a percentage of net sales remained steady as pricing improvements, cost control and the elimination of goodwill amortization for 2002 offset the effects of the lower volume. The Company continued to achieve operating cost reductions at the former Tarmac and CalMat operations.

2001 vs. 2000
For the ninth consecutive year, Construction Materials' net sales were at record levels. Net sales for 2001 totaled $2.114 billion, up 12% from the 2000 result of $1.886 billion. Record aggregates shipments of 237 million tons increased 7% over the record 2000 level, while the average unit selling price of aggregates rose 3%. Aggregates shipments from our legacy operations increased more than 1%.

Segment earnings, which are before interest and income taxes, rose to a record level of $400.5 million, up 7% from 2000's $375.7 million. Higher aggregates pricing and volume combined with improvements in pricing for asphalt led to this favorable result. Selling, administrative and general costs increased due primarily to the effect of the consolidation of the Crescent Market Companies, the full-year effect of the Tarmac operations and higher bad debt charges. This information is summarized below (in millions of dollars):

Construction Materials 2001 vs. 2000
2000 earnings	$376
Aggregates*	20
Asphalt	29
Selling, administrative and general	(24)
All other	(1)
2001 earnings	$400
* Excludes Tarmac/Crescent Market Companies acquisitions.

Chemicals
2002 vs. 2001
Net sales for 2002 totaled $564.5 million, down 12% from the 2001 result of $641.7 million. Pricing for caustic soda was down approximately 50% compared with 2001. Continued softness in the industrial sector of the economy resulted in lower pricing and volume for most chlorinated organic products. At a loss of $74.1 million, segment earnings were down significantly from the 2001 loss of $19.6 million. The 2002 results included approximately $16 million in higher plant costs due primarily to increased spending for plant reliability, efficiency and maintenance. The $14.0 million favorable Performance Chemicals' charges comparison is due to the recording of charges in 2001 referable to certain underperforming operations and marketing arrangements. The Company's joint venture with Mitsui showed improved results due to increased ethylene dichloride (EDC) sales price, improved efficiencies and increased volume for all products. Additionally, the Company commenced commercial operation of a new plant to produce the feedstock for a non-ozone depleting foam-blowing agent replacing a product phased out by the Montreal Protocol. This information is summarized below (in millions of dollars):

Chemicals 2002 vs. 2001
2001 earnings	$(20)
Lower caustic soda pricing	(62)
Lower natural gas costs	13
Increased plant costs	(16)
Lower chlorinated organic pricing	(12)
Performance Chemicals' charges	14
Improved joint venture results	6
Elimination of goodwill amortization	4
All other	(1)
2002 earnings	$(74)

2001 vs. 2000Net sales of $641.7 million for 2001 were up 6% from the 2000 level of $605.8 million. This growth in net sales reflected the full-year effect of the Chloralkali joint venture and higher caustic soda prices. For the year, Chemicals' loss of $19.6 million approximated the prior year's results. The impact of higher caustic soda pricing was offset primarily by the effects of higher natural gas costs and soft demand for most of the segment's products, due to weak demand from the industrial sector of the economy. The $17.0 million favorable Performance Chemicals' charges resulted from a comparison of charges in 2001 referable to certain underperforming operations and marketing arrangements with charges in 2000, including an arbitration assessment against the Company's subsidiary, Vulcan Chemical Technology, Inc. This information is summarized below (in millions of dollars):

Chemicals 2001 vs. 2000
2000 earnings	$(20)
Higher caustic soda pricing	65
Higher natural gas costs	(21)
Increased plant costs	(16)
Lower chlorinated products pricing and volume, net	(30)
Performance Chemicals' charges	17
All other	(15)
2001 earnings	$(20)

Selling, Administrative and General
Selling, administrative and general expenses of $236.2 million in 2002 decreased 4% from the 2001 level of $245.2 million. This decrease resulted primarily from lower bad debt charges and overhead reduction initiatives in the Chemicals segment. In 2001, selling, administrative and general expenses were up 13% from the 2000 level. This increase resulted primarily from the effect of the consolidation of the Crescent Market Companies, the addition of the Tarmac operations and higher bad debt charges, reflecting the adverse economic climate in the industrial sector of the economy.

Other Operating Costs
Other operating costs of $12.1 million in 2002 decreased $21.7 million from the 2001 level of $33.8 million, primarily due to the elimination of goodwill amortization pursuant to the adoption of FAS 142. In 2001, other operating costs were up $7.6 million from the 2000 level, reflecting higher amortization of goodwill referable to acquisitions.

Minority Interest
Minority interest income of $2.5 million and $8.5 million in 2002 and 2001, respectively, was referable to the minority partner's share of the loss for the Chloralkali joint venture. The $6.0 million decrease in minority interest income was a result of improvement in the Company's joint venture due to increased EDC sales price, improved efficiencies and increased volumes for all products.

Other Income
In 2002, other income, net of other charges, was $14.0 million compared with the 2001 amount of $2.0 million. This increase was primarily due to higher current-year gains on asset sales and prior-year charges related to our Performance Chemicals business unit. In 2001, other income, net of other charges, decreased $5.3 million from the 2000 level. This decrease was due primarily to the consolidation of the Crescent Market Companies in 2001. Prior to this consolidation, the Company's share of the Crescent Market Companies' earnings was reported under the equity method in other income.

Interest Expense
Interest expense was $55.0 million in 2002 compared with the 2001 amount of $61.3 million. This decrease reflected a reduction in interest-bearing debt outstanding during the period. In 2001, interest expense increased $13.2 million from the 2000 level. This increase resulted from increased borrowings referable to acquisitions: the fourth-quarter 2000 Tarmac acquisition and the first-quarter 2001 purchase of the remaining interest in the Crescent Market Companies.

Income Taxes
The Company's effective tax rate was 26.1% for the year, down from 31.3% in 2001. The lower rate includes the favorable effect of statutory depletion, a lower state tax rate and the impact of the elimination of goodwill amortization. The effective rate increased in 2001 from the 2000 rate of 29.6%. This increase reflected principally a lesser impact of adjustments to prior-year accruals.

2003 Outlook
Construction Materials
The near-term outlook for Construction Materials is mixed. While highway spending is expected to be flat with 2002 levels and residential construction is expected to remain strong, private nonresidential construction is expected to remain weak. As a result, we expect aggregates demand to be down slightly in 2003.

The sixth and final year of the current federal highway bill (TEA-21) was authorized and signed by the President in February 2003 at $31.6 billion. This authorization level represents an increase of over 45% from TEA-21's initial year in 1998. Even with the success of TEA-21, our nation's highway system will require additional funding to preserve current safety and physical conditions. Over the last decade, highway usage has continued to escalate and road conditions have continued to deteriorate. The next federal highway six-year reauthorization bill is due to begin October 1, 2003.

Chemicals
Demand in the industrial manufacturing sector of the economy remains soft and the recent escalation in energy costs has increased uncertainty as to the timing of a recovery. An economic recovery in the industrial manufacturing sector along with further reduction of domestic chloralkali capacity should result in improved product demand and higher pricing for caustic soda and chlorine. We will continue to address plant efficiencies as well as manufacturing and overhead costs.

Overall
As a result of the economic uncertainty in 2003, it is difficult to predict earnings. In each quarter's earnings press release, we will continue to give quarterly and annual earnings guidance on both a segment and earnings per share basis. Additionally, we will update our guidance if new information indicates earnings per share, on either a quarterly basis or an annual basis, are likely to be outside the last Company-issued range.

Liquidity and Capital Resources
Cash Flows
The Company believes that it has sufficient financial resources, including cash provided by operating activities and open lines of credit, to meet business requirements in the future including capital expeditures, dividend payments, potential future acquisitions and debt service obligations.

Net cash provided by operating activities equaled $461.5 million in 2002, down $58.1 million from the 2001 record level due primarily to lower earnings in the Chemicals segment. Net cash provided by the Construction Materials segment decreased to $487.3 million, while net cash provided by the Chemicals segment declined $49.8 million to $5.6 million.

Cash expenditures for property, plant and equipment, excluding acquisitions, equaled $248.8 million in 2002, which was $38.1 million below the 2001 level. Cash spending for acquisitions, including amounts referable to working capital and other items, totaled $43.4 million compared with $138.8 million in 2001.

The Company's policy is to pay out a reasonable share of net cash provided by operating activities as dividends, consistent on average with the payout record of past years, as well as with the goal of maintaining debt ratios within prudent and generally acceptable limits.

Working Capital
Working capital, the excess of current assets over current liabilities, totaled $492.0 million at December 31, 2002, up $106.5 million from the 2001 level. The 2002 increase resulted primarily from a $69.9 million increase in cash and a reduction in federal income tax liability, partially offset by an increase in current debt of $17.8 million. This compares with an increase of $263.2 million in 2001, primarily attributable to a reduction in notes payable of $226.5 million due to the conversion of short-term debt to long-term debt. In 2000, working capital decreased $115.8 million due primarily to the increase in notes payable resulting from the issuance of commercial paper to fund the Tarmac acquisition.

The current ratio increased to 2.7 at year-end 2002, compared with 2.1 for the prior year end and 1.2 for 2000. The 2002 increase was due primarily to an increase in cash and cash equivalents and a decrease in current liabilities, while the 2001 increase was due primarily to a reduction in commercial paper borrowing and an increase in cash.

Capital Expenditures
Capital expenditures totaled $249.6 million in 2002, down $38.6 million from the 2001 level of $288.2 million. As explained on page 50, Vulcan classifies its capital expenditures into three categories based on the predominant purpose of the project. In 2002, replacement projects accounted for the majority of spending in the Construction Materials segment. In the Chemicals segment, $22.9 million was spent for profit-adding projects, primarily for completion of the new HCC-240fa feedstock plant at Geismar, Louisiana. This plant produces the feedstock for a new non-ozone depleting hydrofluorocarbon used in a variety of foam-blowing applications. Total spending for this plant, which was completed in mid-2002, was $46.8 million. Commitments for capital expenditures were $28.3 million at December 31, 2002. The Company expects to fund these commitments using internally generated cash flow.

Acquisitions
In 2002, the combined purchase prices of acquisitions amounted to $43.4 million, down $95.4 million from the prior year. Acquisitions completed during 2002 included the addition of five aggregates facilities in Alabama, Illinois and Tennessee and five sales yards in Mississippi, Tennessee and Texas. The 2001 acquisitions included the Company's purchase of its partner's interests in the Crescent Market Companies for $121.1 million. Other 2001 acquisitions included the addition of two aggregates facilities in Tennessee and two recycling facilities in Illinois.

Short-term Borrowings and Investments
The Company was a net short-term investor throughout all but one month of 2002 and ended the year in a short-term investing position. Combined commercial paper and bank borrowing reached a maximum of $43.9 million, and amounted to $37.3 million at year end, virtually all of which was attributable to financing by the Chloralkali joint venture. Combined commercial paper and bank borrowing in 2001 reached a peak of $306.7 million, and amounted to $43.9 million at year end. Comparable 2000 combined commercial paper and bank borrowing peaked at $350.3 million, and amounted to $270.3 million at year end.

The Company's policy is to maintain committed credit facilities at least equal to its outstanding commercial paper. Unsecured bank lines of credit totaling $355.0 million were maintained at the end of 2002, of which only $0.3 million was in use. In addition, the Chloralkali joint venture had an uncommitted bank credit facility in the amount of $45.0 million outstanding at year-end 2002, of which $37.0 million was drawn.

During 2000, the Company financed the Tarmac acquisition by incurring short-term debt, principally commercial paper.

The Company's commercial paper is rated A-1/P-1 by Standard & Poor's and Moody's Investors Service, Inc., respectively.

Long-term Obligations
During 2002, the Company reduced its total long-term obligations by $48.5 million to $857.8 million, compared with a net increase of $220.9 million in 2001. The 2002 decrease was due primarily to $41.3 million of debt reclassifications from long-term to short-term. The 2001 increase was due primarily to the issuance of $240.0 million of long-term debt. Long-term debt payments were $7.4 million in 2002 and zero in 2001. During the three-year period ended December 31, 2002, long-term obligations increased cumulatively by $158.9 million from the $698.9 million outstanding at December 31, 1999. At year end, the Company's long-term borrowings reflected weighted-average interest rates of 6.24% in 2002, 6.29% in 2001 and 6.32% in 2000.

During the same three-year period, shareholders' equity, net of dividends of $271.3 million, increased by $373.3 million to $1.697 billion.

In the future, the ratio of total debt to total capital will depend upon specific investment and financing decisions. Nonetheless, management believes the Company's cash-generating capability, combined with its financial strength and business diversification, can comfortably support a ratio of 30% to 35%. The actual ratio at the end of 2002 was 35.6%, down from 37.6% at the end of 2001. The Company has made acquisitions from time to time and will continue to pursue attractive investment opportunities. These acquisitions could be funded by using internally generated cash flow, incurring debt or issuing equity instruments.

In January 2002, the Company reduced its outstanding long-term debt by purchasing $7.0 million of its $250.0 million five-year notes (5.75% coupon rate, maturing in April 2004) at 103.5% of par value. Additionally, in January and February 2002, respectively, the Company exercised call options to retire two fixed-rate bond issues: (1) $3.0 million of 7.50% coupon bonds maturing in 2011 and (2) $5.8 million of 6.375% coupon bonds maturing in 2012.

In February 2001, the Company issued $240.0 million of five-year senior unsecured notes due February 2006 with a coupon of 6.40%. The Company used some of the net proceeds from the sale of the notes to fund the acquisition of its partner's interests in the Crescent Market Companies. The remaining net proceeds from the sale of the notes were used to retire commercial paper indebtedness and for general corporate purposes.

Standard & Poor's and Moody's rate the Company's public long-term debt at the A+/A1 level, respectively. Both rating agencies have assigned a negative outlook to the long-term debt ratings.

Contractual Obligations and Contingent Credit Facilities
The Company's obligations to make future payments under contracts as of December 31, 2002 are summarized in the table below (in millions of dollars):

	Payments Due by Year
	Total	2003	2004 - 2005	2006 - 2007	Thereafter
Cash Contractual Obligations
Short-term debt:
Principal payments	$37.3	$37.3	$       -	$       -	$       -
Interest payments	0.7	0.7	-	-	-
Long-term debt:
Principal payments	896.3	41.6	252.7	273.3	328.7
Interest payments	235.7	56.0	84.7	51.3	43.7
Operating leases	109.2	19.0	30.9	20.5	38.8
Mineral royalties	80.4	9.5	15.3	9.2	46.4
Unconditional purchase obligations:
Capital	28.4	28.4	-	-	-
Noncapital*	109.0	30.2	43.8	15.8	19.2
Total cash contractual obligations	$1,497.0	$222.7	$427.4	$370.1	$476.8
* Noncapital unconditional purchase obligations relate primarily to transportation and electrical contracts.

The Company has a number of contracts containing commitments or contingent obligations that are not material to the Company's earnings. These contracts are discrete in nature, and it is unlikely that the various contingencies contained within the contracts would be triggered by a common event. The future payments under these contracts are not included in the table set forth above.

The Company's contingent credit facilities existing as of December 31, 2002 are summarized in the table below (in millions of dollars):

	Amount and Year of Expiration
	Total Facilities	2003	2004 - 2005	2006 - 2007	Thereafter
Contingent Credit Facilities
Lines of credit	$400.0	$250.0	$       -	$150.0	$       -
Standby letters of credit	27.0	27.0	-	-	-
Total contingent credit facilities	$427.0	$277.0	$       -	$150.0	$       -

Bank lines of credit amounted to $400.0 million, of which $250.0 million expires in 2003 and $150.0 million in 2007. Only $37.3 million of the lines of credit was in use at the end of 2002. The Company expects to renew the one-year credit lines expiring in 2003 in full, and continue to maintain the $150.0 million maturing in 2007. Virtually all standby letters of credit are renewable annually at the option of the beneficiary.

The Company uses its commercial banks to issue standby letters of credit to secure its obligations to pay or perform when required to do so pursuant to the requirements of an underlying agreement or the provision of goods and services. The standby letters of credit listed below are irrevocable-cancelable only at the option of the beneficiary who is authorized to draw drafts on the issuing bank up to the face amount of the standby letter of credit in accordance with its terms. Because banks consider letters of credit as contingent extensions of credit, the Company is required to pay a fee for them until they expire or are cancelled.

The Company's financial standby letters of credit as of December 31, 2002 are summarized in the table below (in millions of dollars):

	Amount	Term	Maturity
Standby Letters of Credit
Risk management requirement for insurance claims	$17.5	One year	Renewable annually
Payment surety required by utilities	5.3	One year	Renewable annually*
Contractual reclamation/restoration requirements	4.2	One year	Renewable annually*
Total standby letters of credit	$27.0
* All standby letters of credit are renewable annually with the exception of $0.4 million, which expires in 2003.

Common Stock
During 2002, 2001 and 2000, the Company did not purchase any shares of its common stock. Previously 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 on the common stock's valuation and price, the Company's liquidity and debt level, and its actual and projected needs for cash for investment projects and regular dividends. The amount, if any, of future share purchases will be determined by management from time to time based upon various factors, including those listed above.

Shares in treasury at year end are shown below:

	2002	2001	2000
Number	38,148,071	38,384,750	38,661,373
Average cost	$15.13	$15.08	$15.02

The number of shares remaining under the current purchase authorization of the Board of Directors was 8,473,988 as of December 31, 2002.

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 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 values of these contracts were as follows: December 31, 2002 - $3.9 million favorable; December 31, 2001 - $13.3 million unfavorable; and December 31, 2000 - $6.3 million favorable. As a result of a hypothetical 10% reduction in the price of natural gas, the Company would experience a potential decline in the fair value of the underlying commodity swap and option contracts based on the fair value at December 31, 2002 of approximately $2.6 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 December 31, 2002, the estimated fair market value of these debt instruments was $973.8 million as compared to a book value of $899.4 million. The effect of a hypothetical decline in interest rates of 1% would increase the fair market value of the liability by approximately $32.4 million.

New Accounting Standards
In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 143, "Accounting for Asset Retirement Obligations" (FAS 143). FAS 143 requires the liability associated with asset retirement obligations to be recorded at fair value when incurred and the associated asset retirement obligation costs to be capitalized as part of the carrying value of the long-lived assets. FAS 143 is required to be adopted for fiscal years beginning after June 15, 2002. The Company adopted the new rules on asset retirement obligations on January 1, 2003. Application of the new rules is expected to result in an increase in long-term assets of $44.3 million; an increase in long-term liabilities of $63.1 million; and a cumulative effect of adoption that will reduce net earnings and shareholders' equity by $18.8 million.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets" (FAS 144). FAS 144 supersedes SFAS No. 121, "Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of" (FAS 121), and amends Accounting Principles Board Opinion No. 30, "Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions" (APB 30). FAS 144 requires that long-lived assets that are to be disposed of by sale be measured at the lower of carrying value or fair value less costs to sell. FAS 144 retains the fundamental provisions of FAS 121 for (a) recognition and measurement of the impairment of long-lived assets to be held and used and (b) measurement of long-lived assets to be disposed of by sale. FAS 144 also retains the requirement of APB 30 that companies report discontinued operations separately from continuing operations but extends that reporting to a component of an entit y that has been or will be disposed of. This statement was adopted effective January 1, 2002. There was no material impact on the Company's consolidated financial statements resulting from the adoption of FAS 144.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" (FAS 146). FAS 146 supersedes Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)" (EITF 94-3). FAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized at its fair value when the liability is incurred. Under EITF 94-3, a liability is recognized at the date an entity commits to an exit plan. The provisions of FAS 146 will be effective for any exit or disposal activities initiated after December 31, 2002.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" (FIN 45). FIN 45 addresses the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees. FIN 45 also clarifies the requirements related to the recognition of a liability by a guarantor at the inception of a guarantee for the guarantor's noncontingent obligations associated with such guarantee. The disclosure requirements of this Interpretation are effective for financial statements of periods ending after December 15, 2002 whereas the initial recognition and measurement provisions are applicable on a prospective basis for guarantees issued or modified after December 31, 2002.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-based Compensation - Transition and Disclosure, an Amendment of FASB Statement No. 123" (FAS 148). FAS 148 amends SFAS No. 123, "Accounting for Stock-based Compensation" (FAS 123), and provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. Additionally, FAS 148 amends the disclosure requirements of FAS 123 to require prominent disclosures in both annual and interim financial statements of the method of accounting for stock-based employee compensation and the related pro forma disclosures when the intrinsic value method per Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25), continues to be used. The Company is currently evaluating whether to voluntarily adopt the fair value method or to continue the intrinsic value method of accounting for stock-based employee compensation. The annual disclosure provis ions of FAS 148 are effective for this fiscal year ended December 31, 2002 and have been adopted by the Company. The Company will adopt the interim disclosure provisions of FAS 148 beginning in the quarter ending March 31, 2003.

Critical Accounting Policies
The Company follows certain significant accounting policies when preparing its consolidated financial statements. A summary of these policies is included in Note 1 to the consolidated financial statements on pages 35 through 38. The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities at the date of the financial statements. The Company evaluates these estimates and judgments on an ongoing basis and bases its estimates on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from these estimates.

The Company believes the following critical accounting policies require the most significant judgments and estimates used in the preparation of its consolidated financial statements.

Pension and Other Postretirement BenefitsThe Company follows the guidance of SFAS No. 87, "Employers' Accounting for Pensions," and SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," when accounting for pension and postretirement benefits. Under these accounting standards, assumptions are made regarding the valuation of benefit obligations and the performance of plan assets. Delayed recognition of differences between actual results and expected or estimated results is a guiding principle of these standards. This delayed recognition of actual results allows for a smoothed recognition of changes in benefit obligations and plan performance over the working lives of the employees who benefit under the plans. The primary assumptions are as follows:

- Discount Rate - The discount rate is used in calculating the present value of benefits, which is based on projections of benefit payments to be made in the future.

- Expected Return on Plan Assets - Management projects the future return on plan assets based principally on prior performance. These projected returns reduce the net benefit costs the Company will record currently.

- Rate of Compensation Increase (for salary-related plans) - For salary-related plans management projects employees' annual pay increases, which are used to project employees' pension benefits at retirement.

- Rate of Increase in the Per Capita Cost of Covered Health Care Benefits - Management projects the expected increases in the cost of covered health care benefits.

During 2002, the Company made changes to its assumptions related to the discount rate, the rate of compensation increase (for salary-related plans) and the rate of increase in the per capita cost of covered health care benefits. Management consults with its actuaries when selecting each of these assumptions.

In selecting the discount rate, the Company considers fixed-income security yields, specifically AA-rated corporate bonds. At December 31, 2002, the Company decreased the discount rate for its plans from 7.25% to 6.75% as a result of decreased yields for long-term AA-rated corporate bonds.

In estimating the expected return on plan assets, the Company considers past performance and future expectations for the types of investments held by the plan as well as the expected long-term allocation of plan assets to these investments. At December 31, 2002, the Company made no change in the expected 8.25% return on plan assets.

In projecting the rate of compensation increase, the Company considers past experience in light of movements in inflation rates. At December 31, 2002, the Company decreased the assumed rate of compensation increase from 4.25% to 4.0% for its plans.

In selecting the rate of increase in the per capita cost of covered health care benefits, the Company considers past performance and forecasts of future health care cost trends. At December 31, 2002, the Company increased its previously assumed rate of increase in the per capita cost of covered health care benefits. The previously assumed rate was 5.0% for 2002 and beyond. The new assumed rates of increase are 8% for 2003, decreasing ratably until reaching 5% in 2006 and beyond.

A variance in the assumptions listed above would have an impact on the projected benefit obligations, the accrued other postretirement benefit liabilities, and the annual net periodic pension and other postretirement benefit cost. The following table reflects the sensitivities associated with a change in certain assumptions (in millions of dollars):

	(Favorable) Unfavorable
	0.5% Increase		0.5% Decrease
	Increase (Decrease) in Benefit Obligation	Increase (Decrease) in Benefit Cost	Increase (Decrease) in Benefit Obligation	Increase (Decrease) in Benefit Cost
Actuarial Assumptions
Discount rate:
Pension	$(27.5)	$(3.5)	$29.0	$3.7
Other postretirement benefits	(2.5)	(0.3)	2.8	0.3
Expected return on plan assets	not applicable	(2.7)	not applicable	2.7
Rate of compensation increase (for salary-related plans)	9.0	1.9	(8.8)	(1.8)
Rate of increase in the per capita cost of covered health care benefits	2.9	0.3	(2.5)	(0.3)

For the year ended December 31, 2002, the pension plans' fair value of assets declined from $469.0 million to $388.9 million due to the decline in the equity markets and payment of benefits. This decline will be reflected in the calculation of pension expense for 2003 through the calculation of the "market-related value," which recognizes changes in fair value averaged on a systematic basis over five years. This change combined with the other actuarial assumptions for discount rate, expected return on plan assets and rate of compensation increase, as well as other actuarial gains and losses, leads the Company to expect that the net periodic pension income of $2.85 million recognized in 2002 will become a periodic pension expense of approximately $7.3 million in 2003.

In addition to normal cash payments made for pension benefits under the unfunded plan, the Company expects to make contributions to the pension plans relating to fiscal year 2003. The amount of these contributions has not yet been determined.

For additional information regarding pension and other postretirement benefits, see Note 9.

Environmental Compliance
The Company incurs environmental compliance costs, particularly in its Chemicals segment. These costs include maintenance and operating costs for pollution control facilities, the cost of ongoing monitoring programs, the cost of remediation efforts and other similar costs. Environmental expenditures that pertain to current operations or that 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 that do not contribute to future revenues are expensed. Costs associated with environmental assessments and remediation efforts are accrued when management determines that a liability is probable and the cost can be reasonably estimated. Accrual amounts may be based on engineering cost estimations, recommendations of third-party consultants, or costs associated with past compliance efforts that were similar in nature and scope. The Safety, Health and Environmental Affairs Management Comm ittee reviews and approves cost estimates, including key assumptions, for accruing environmental compliance costs; however, a number of factors, including adverse agency rulings and encountering unanticipated conditions as remediation efforts progress, may cause actual results to differ materially from accrued costs.

Claims and Litigation
The Company is involved with claims and litigation, including items covered under its self-insurance program. The Company uses both internal and outside legal counsel to assess the probability of loss. The Company establishes an accrual when the claims and litigation represent a probable loss and the cost can be reasonably estimated. Additionally, legal fees associated with these matters are accrued at the time such claims are made. Significant judgment is used in determining the timing and amount of the accruals for probable losses, and the actual liability could differ materially from the accrued amounts.

Impairment of Long-lived Assets Excluding Goodwill
The Company evaluates the carrying value of long-lived assets, including intangible assets subject to amortization, when events and circumstances warrant such a review. The carrying value of long-lived assets is considered impaired when the anticipated undiscounted cash flows from such assets are less than their carrying value. In that event, a loss is recognized equal to the amount by which the carrying value exceeds the fair value of the long-lived assets. The Company's estimate of net future cash flows is based on the Company's historical experience and assumptions of future trends, which may be different from the actual results.

Special Note Regarding Forward-looking Information
Our disclosures and analysis in this report contain forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. Specifically, forward-looking statements are set forth in the "Looking Forward" section of the Letter to Shareholders and the section of Management's Discussion and Analysis entitled "2003 Outlook." Whenever possible, we have identified these forward-looking statements by words such as "anticipates," "may," "believes," "estimates," "projects," "expects," "intends" and words of similar import. Forward-looking statements involve certain assumptions, risks and uncertainties that could cause actual results to differ materially from those projected. These risks, assumptions and uncertainties include, but are not limited to, those associated with general business conditions including the timing or extent of any recovery of the economy; the highly competitive nature of the industries in which the Company operates; pricing; weather and other natur al phenomena; energy costs; costs of hydrocarbon-based raw materials; the timing and amount of federal, state and local funding for infrastructure; and other risks and uncertainties. We undertake no obligation to publicly update any forward-looking statements, as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our future filings with the Securities and Exchange Commission or in any of our press releases.

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 accounting principles generally accepted in the United States of America appropriate in the circumstances, and based on our knowledge they fairly present in all material respects our 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.

Our Company maintains an internal control structure that based on our knowledge provides reasonable assurance that our Company's financial statements, books and records accurately reflect our Company's financial condition, results of operations and cash flows, and that our Company's assets are safeguarded from loss or unauthorized use. This internal control structure includes well-defined and well-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.

Our Company's independent auditors, Deloitte & Touche LLP, consider the internal control structure as a part of their audits of our Company's financial statements and provide an independent opinion as to the fairness of the presentation of those statements. Their report is presented below.

Your Board of Directors pursues its oversight role for the financial statements and internal control structure in major part through the Audit Committee, which is composed of six outside directors. In addition, the full Board regularly reviews detailed management reports covering all aspects of the Company's financial affairs. The Audit 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 Audit Committee also meets on these matters with the internal and independent auditors without the presence of management representatives.

/s/ Mark E. TomkinsMark E. Tomkins
Senior Vice President, Chief Financial Officer and Treasurer

/s/ Ejaz A. KhanEjaz A. Khan
Vice President, Controller and Chief Information Officer

January 31, 2003

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, 2002, 2001 and 2000, 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 auditing standards generally accepted in the United States of America. 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, 2002, 2001 and 2000, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 16 to the consolidated financial statements, in 2002, the Company changed its method of accounting for goodwill to conform to Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets."

/s/ Deloitte & Touche LLP Deloitte & Touche LLP
Birmingham, Alabama
January 31, 2003

Consolidated Statements of Earnings
Vulcan Materials Company and Subsidiary Companies

For the years ended December 31	2002	2001	2000
Amounts and shares in thousands, except per share data
Net sales	$2,545,086	$2,755,291	$2,491,744
Delivery revenues	251,491	264,699	252,850
Total revenues	2,796,577	3,019,990	2,744,594
Cost of goods sold	2,004,094	2,105,837	1,908,057
Delivery costs	251,491	264,699	252,850
Cost of revenues	2,255,585	2,370,536	2,160,907
Gross profit	540,992	649,454	583,687
Selling, administrative and general expenses	236,223	245,216	216,978
Other operating costs	12,105	33,816	26,220
Minority interest in losses of a consolidated subsidiary	2,486	8,483	7,843
Other income, net	13,979	1,984	7,315
Earnings before interest and income taxes	309,129	380,889	355,647
Interest income	3,481	4,444	4,678
Interest expense	54,950	61,280	48,087
Earnings before income taxes	257,660	324,053	312,238
Provision for income taxes
Current	23,958	70,366	55,386
Deferred	43,289	31,007	36,959
Total provision for income taxes	67,247	101,373	92,345
Earnings before cumulative effect of accounting change	190,413	222,680	219,893
Cumulative effect of accounting change	(20,537)	-	-
Net earnings	$169,876	$222,680	$219,893
Basic net earnings per share:
Earnings before cumulative effect of accounting change	$1.87	$2.20	$2.18
Cumulative effect of accounting change	$(0.20)	$      -	$      -
Net earnings per share	$1.67	$2.20	$2.18
Diluted net earnings per share:
Earnings before cumulative effect of accounting change	$1.86	$2.17	$2.16
Cumulative effect of accounting change	$(0.20)	$      -	$      -
Net earnings per share	$1.66	$2.17	$2.16
Dividends per share	$0.94	$0.90	$0.84
Weighted-average common shares outstanding	101,709	101,445	101,037
Weighted-average common shares outstanding, assuming dilution	102,515	102,497	102,012
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	2002	2001	2000
Amounts in thousands, except per share data
Assets
Current assets
Cash and cash equivalents	$170,728	$100,802	$55,276
Accounts and notes receivable:
Customers, less allowance for doubtful accounts:                                   2002 $8,931; 2001 $6,903; 2000 $8,982	306,581	333,639	342,910
Other	25,545	6,424	38,957
Inventories	239,586	228,415	199,044
Deferred income taxes	37,698	53,040	44,657
Prepaid expenses	9,550	7,632	13,660
Total current assets	789,688	729,952	694,504
Investments and long-term receivables	15,964	13,352	72,558
Property, plant and equipment, net	1,976,053	2,000,030	1,848,634
Goodwill	575,791	588,562	562,044
Deferred charges and other assets	90,725	81,360	72,681
Total	$3,448,221	$3,413,256	$3,250,421
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt	$41,641	$17,264	$6,756
Notes payable	37,298	43,879	270,331
Trade payables and accruals	122,053	153,619	181,317
Accrued salaries and wages	41,145	44,138	44,877
Accrued interest	14,505	15,020	9,224
Accrued self-insurance reserves	15,578	14,100	14,412
Other accrued liabilities	25,489	56,475	45,314
Total current liabilities	297,709	344,495	572,231
Long-term debt	857,757	906,299	685,361
Deferred income taxes	345,181	318,545	268,797
Deferred management incentive and other compensation	39,952	36,997	34,210
Other postretirement benefits	61,228	58,189	55,048
Other noncurrent liabilities	56,750	49,313	59,652
Total liabilities	1,658,577	1,713,838	1,675,299
Minority interest in a consolidated subsidiary	92,658	95,144	103,626
Other commitments and contingent liabilities (Note 11)
Shareholders' equity
Common stock, $1 par value	139,705	139,705	139,705
Capital in excess of par value	41,555	35,638	28,359
Retained earnings	2,090,319	2,015,809	1,884,269
Accumulated other comprehensive income (loss)	2,438	(8,083)	-
Total	2,274,017	2,183,069	2,052,333
Less cost of stock in treasury	577,031	578,795	580,837
Total shareholders' equity	1,696,986	1,604,274	1,471,496
Total	$3,448,221	$3,413,256	$3,250,421
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	2002	2001	2000
Amounts in thousands
Operating Activities
Net earnings	$169,876	$222,680	$219,893
Adjustments to reconcile net earnings to net cash provided      by operating activities:
Depreciation, depletion and amortization	267,676	278,209	232,365
Cumulative effect of accounting change	20,537	-	-
(Increase) decrease in assets before effects of                                business acquisitions:
Accounts and notes receivable	26,465	43,168	(31,775)
Inventories	(7,545)	(15,628)	(8,448)
Deferred income taxes	15,342	(8,383)	8,274
Prepaid expenses	(1,918)	6,786	(3,021)
Investments and long-term receivables	(2,613)	220	(8,721)
Deferred charges and other assets	(11,227)	(10,702)	(7,634)
Increase (decrease) in liabilities before effects of business                                acquisitions:
Accrued interest and income taxes	(16,261)	9,836	(11,288)
Trade payables and other accruals	(52,370)	(41,148)	13,414
Deferred income taxes	29,647	43,292	17,947
Other noncurrent liabilities	10,946	(12,894)	6,259
Other, net	12,947	4,146	2,378
Net cash provided by operating activities	461,502	519,582	429,643
Investing Activities
Purchases of property, plant and equipment	(248,778)	(286,854)	(340,409)
Payment for businesses acquired, net of acquired cash	(43,445)	(138,794)	(265,081)
Proceeds from sale of property, plant and equipment	25,888	38,990	62,349
Withdrawal of earnings from nonconsolidated companies	-	-	13,227
Net cash used for investing activities	(266,335)	(386,658)	(529,914)
Financing Activities
Net borrowings (payments) - commercial paper and bank lines of credit	(6,582)	(226,450)	168,635
Payment of short-term debt	(17,264)	(6,765)	(6,075)
Payment of long-term debt	(7,427)	-	(8,000)
Net proceeds from issuance of long-term debt	-	238,560	-
Dividends paid	(95,384)	(91,080)	(84,765)
Contribution from minority interest of consolidated subsidiary	-	-	35,648
Other, net	1,416	(1,663)	(2,730)
Net cash provided by (used for) financing activities	(125,241)	(87,398)	102,713
Net increase in cash and cash equivalents	69,926	45,526	2,442
Cash and cash equivalents at beginning of year	100,802	55,276	52,834
Cash and cash equivalents at end of year	$170,728	$100,802	$55,276
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	2002		2001		2000
Amounts and shares in thousands, except per share data
	Shares	Amount	Shares	Amount	Shares	Amount
Common stock, $1 par value
Authorized: 480,000 shares in 2002, 2001 and 2000
Issued at beginning of year	139,705	$139,705	139,705	$139,705	139,705	$139,705
Issued at end of year	139,705	139,705	139,705	139,705	139,705	139,705
Capital in excess of par value
Balance at beginning of year		35,638		28,359		17,854
Distributions under stock-based                   incentive plans, net of tax benefit		5,917		7,279		9,437
Treasury stock issued for acquisition		-		-		1,068
Balance at end of year		41,555		35,638		28,359
Retained earnings
Balance at beginning of year		2,015,809		1,884,269		1,749,212
Net earnings		169,876		222,680		219,893
Cash dividends on common stock		(95,384)		(91,080)		(84,765)
Other		18		(60)		(71)
Balance at end of year		2,090,319		2,015,809		1,884,269
Accumulated other comprehensive    income (loss), net of taxes
Fair value adjustment to cash flow hedges:
Balance at beginning of year		(8,083)		-		-
Cumulative effect of accounting change		-		3,828		-
Fair value adjustment to cash flow                         hedges, net of reclassification                         adjustment		10,521		(11,911)		-
Balance at end of year		2,438		(8,083)		-
Common stock held in treasury
Balance at beginning of year	(38,385)	(578,795)	(38,661)	(580,837)	(38,970)	(583,118)
Treasury stock issued for acquisition	-	-	-	-	32	232
Distributions under stock-based incentive                   plans	237	1,764	276	2,042	277	2,049
Balance at end of year	(38,148)	(577,031)	(38,385)	(578,795)	(38,661)	(580,837)
Total		$1,696,986		$1,604,274		$1,471,496
Reconciliation of comprehensive income:
Net earnings		$169,876		$222,680		$219,893
Other comprehensive income (loss)		10,521		(8,083)		-
Total comprehensive income		$180,397		$214,597		$219,893
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1.    Summary of Significant Accounting Policies
Nature of Operations
Vulcan Materials Company (the "Company"), a New Jersey corporation, is the nation's foremost producer of construction aggregates; primarily crushed stone, sand and gravel. We are also a major manufacturer of chemicals, producing chloralkali and other industrial and specialty chemicals.

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 which the Company has ownership interests of 20% to 50% are accounted for by the equity method.

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
Inventories and supplies are stated at the lower of cost or market. 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. Such cost includes raw materials, direct labor and production overhead. Substantially all operating supplies are carried at average cost.

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 (ranging from 3 to 30 years) 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 on estimated recoverable units.

Leaseholds are amortized over varying periods not in excess of applicable lease terms.

Goodwill
Goodwill represents the excess of the cost of net assets acquired in business combinations over their fair value. Prior to 2002, goodwill was amortized on a straight-line basis over periods ranging from 15 to 30 years. Starting in 2002, goodwill is no longer amortized but reviewed for impairment annually, or more frequently if certain indicators arise. Additional disclosures regarding the Company's adoption of Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets" (FAS 142), are presented in Note 16.

Fair Value of Financial Instruments
The carrying values of the Company's cash equivalents, accounts and notes receivable, trade payables, accrued expenses and notes payable approximate their fair values because of the short-term nature of these instruments. Additional fair value disclosures for derivative instruments and interest-bearing debt are presented in Notes 4 and 5, respectively.

Derivative Instruments
The Company uses derivative instruments, primarily commodity swap and option contracts, to manage volatility related to natural gas prices. The Company does not use derivative financial instruments for speculative or trading purposes.

Impairment of Long-lived Assets Excluding Goodwill
The Company evaluates the carrying value of long-lived assets, including intangible assets subject to amortization, when events and circumstances warrant such a review. The carrying value of long-lived assets is considered impaired when the anticipated undiscounted cash flows from such assets are less than their carrying value. In that event, a loss is recognized equal to the amount by which the carrying value exceeds the fair value of the long-lived assets. The Company periodically reviews the appropriateness of the estimated useful lives of its long-lived assets.

Revenue Recognition
Revenue is recognized at the time a sale transaction is completed, as evidenced by transfer of title, and collectibility of the sales proceeds is reasonably assured. Total revenues include sales of products to customers, net of any discounts, and third-party delivery costs billed to customers.

Other Costs
Costs are charged to earnings as incurred for the start-up of new plants and for normal recurring costs of mineral exploration, removal of overburden from active mineral deposits, and research and development. Research and development costs totaled $8,642,000 in 2002, $8,379,000 in 2001 and $8,200,000 in 2000.

Repairs and maintenance are charged to costs and operating expenses. Renewals and betterments that add materially to the utility or useful lives of property, plant and equipment are capitalized.

Stock-based Compensation
For the years ended December 31, 2002, 2001 and 2000, the Company utilized three types of stock-based employee compensation - deferred stock units, stock options and performance share awards - all of which are described more fully in Note 10. The Company accounts for these plans under the intrinsic value recognition and measurement principles of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25), and related interpretations. Compensation expense for the deferred stock unit awards is recognized in net earnings ratably over their 10-year maximum vesting life based on the market value of the Company's underlying common stock on the date of grant. There is no compensation expense recognized in net earnings for the stock options, as all options granted had an exercise price equal to the market value of the Company's underlying common stock on the date of grant. Performance share awards were granted through 1995, with vesting occurring through 2000 as these awards v ested over five years. Compensation expense for performance share awards was recognized in net earnings over their 5-year vesting life based on the underlying market value of the Company's common stock through award payment. The pro forma effect on net earnings and earnings per share if the Company had applied the fair value recognition provision of SFAS No. 123, "Accounting for Stock-based Compensation" (FAS 123), to stock-based employee compensation for the years ended December 31 is illustrated below (amounts in thousands, except per share data):

	2002	2001	2000
Net earnings, as reported	$169,876	$222,680	$219,893
Add: Total stock-based employee compensation expense included in reported net earnings under intrinsic value based method for all awards, net of related tax effects	576	234	2,106
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects	(5,442)	(4,461)	(3,797)
Pro forma net earnings	$165,010	$218,453	$218,202
Earnings per share:
Basic - as reported	$1.67	$2.20	$2.18
Basic - pro forma	$1.62	$2.15	$2.16
Diluted - as reported	$1.66	$2.17	$2.16
Diluted - pro forma	$1.61	$2.13	$2.14

Pension and Other Postretirement Benefits
The Company follows the guidance of SFAS No. 87, "Employers' Accounting for Pensions," and SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," when accounting for pension and postretirement benefits. Under these accounting standards, assumptions are made regarding the valuation of benefit obligations and the performance of plan assets. Delayed recognition of differences between actual results and expected or estimated results is a guiding principle of these standards. This delayed recognition of actual results allows for a smoothed recognition of changes in benefit obligations and plan performance over the working lives of the employees who benefit under the plans. The primary assumptions are as follows:

- Discount Rate - The discount rate is used in calculating the present value of benefits, which is based on projections of benefit payments to be made in the future.

- Expected Return on Plan Assets - Management projects the future return on plan assets based principally on prior performance. These projected returns reduce the net benefit costs the Company will record currently.

- Rate of Compensation Increase (for salary-related plans) - For salary-related plans management projects employees' annual pay increases, which are used to project employees' pension benefits at retirement.

- Rate of Increase in the Per Capita Cost of Covered Health Care Benefits - Management projects the expected increases in the cost of covered health care benefits.

For additional information regarding pension and other postretirement benefits, see Note 9.

Insurance
The Company is self-insured for losses related to workers' compensation up to $1,000,000 per occurrence, and automotive and general/product liability up to $2,000,000 per occurrence. The Company has excess coverage on a per occurrence basis beyond these deductible levels. Losses under these self-insurance programs are accrued based upon the Company's estimates of the liability for claims using certain actuarial assumptions from the insurance industry and based on the Company's experience.

Environmental Compliance
The Company incurs environmental compliance costs, particularly in its Chemicals segment. These costs include maintenance and operating costs for pollution control facilities, the cost of ongoing monitoring programs, the cost of remediation efforts and other similar costs. Environmental expenditures that pertain to current operations or that 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 that do not contribute to future revenues are expensed. Costs associated with environmental assessments and remediation efforts are accrued when management determines that a liability is probable and the cost can be reasonably estimated. Accrual amounts may be based on engineering cost estimations, recommendations of third-party consultants, or costs associated with past compliance efforts that were similar in nature and scope. The Safety, Health and Environmental Affairs Management Comm ittee reviews and approves cost estimates, including key assumptions, for accruing environmental compliance costs; however, a number of factors, including adverse agency rulings and encountering unanticipated conditions as remediation efforts progress, may cause actual results to differ materially from accrued costs.

Claims and Litigation
The Company is involved with claims and litigation, including items covered under its self-insurance program. The Company uses both internal and outside legal counsel to assess the probability of loss. The Company establishes an accrual when the claims and litigation represent a probable loss and the cost can be reasonably estimated. Additionally, legal fees associated with these matters are accrued at the time such claims are made. Significant judgment is used in determining the timing and amount of the accruals for probable losses, and the actual liability could differ materially from the accrued amounts.

Minority Interest
In 2000, the Company completed and put into operation the facilities for its Chloralkali joint venture with Mitsui & Co. The joint venture expanded the Company's ethylene dichloride (EDC) production and added a new chloralkali plant. Minority interest reflected in the accompanying Consolidated Statements of Earnings consists of the minority partner's share of the Chloralkali joint venture's earnings or loss.

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

Comprehensive Income
The Company reports comprehensive income in its Consolidated Statements of Shareholders' Equity. Comprehensive income represents charges and credits to equity from nonowner sources. Comprehensive income is composed of two subsets: net earnings and other comprehensive income (loss). Included in other comprehensive income (loss) for the Company are cumulative fair value adjustments to cash flow hedges pertaining to its commodity swap and option contracts to purchase natural gas.

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

	2002	2001	2000
Weighted-average common shares outstanding	101,709	101,445	101,037
Dilutive effect of:
Stock options	677	980	849
Other	129	72	126
Weighted-average common shares outstanding, assuming dilution	102,515	102,497	102,012

All dilutive common stock equivalents are reflected in the Company's earnings per share calculations. Antidilutive common stock equivalents as of December 31 were as follows: 2002 - 4,077,550; 2001 - 2,152; and 2000 - 962,885.

Recent Accounting Pronouncements
In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 143, "Accounting for Asset Retirement Obligations" (FAS 143). FAS 143 requires the liability associated with asset retirement obligations to be recorded at fair value when incurred and the associated asset retirement obligation costs to be capitalized as part of the carrying value of the long-lived assets. FAS 143 is required to be adopted for fiscal years beginning after June 15, 2002. The Company adopted the new rules on asset retirement obligations on January 1, 2003. Application of the new rules is expected to result in an increase in long-term assets of $44,341,000; an increase in long-term liabilities of $63,153,000; and a cumulative effect of adoption that will reduce net earnings and shareholders' equity by $18,812,000.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets" (FAS 144). FAS 144 supersedes SFAS No. 121, "Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of" (FAS 121), and amends Accounting Principles Board Opinion No. 30, "Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions" (APB 30). FAS 144 requires that long-lived assets that are to be disposed of by sale be measured at the lower of carrying value or fair value less costs to sell. FAS 144 retains the fundamental provisions of FAS 121 for (a) recognition and measurement of the impairment of long-lived assets to be held and used and (b) measurement of long-lived assets to be disposed of by sale. FAS 144 also retains the requirement of APB 30 that companies report discontinued operations separately from continuing operations but extends that reporting to a component of an entit y that has been or will be disposed of. This statement was adopted effective January 1, 2002. There was no material impact on the Company's consolidated financial statements resulting from the adoption of FAS 144.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" (FAS 146). FAS 146 supersedes Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)" (EITF 94-3). FAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized at its fair value when the liability is incurred. Under EITF 94-3, a liability is recognized at the date an entity commits to an exit plan. FAS 146 also establishes that the liability should initially be measured and recorded at fair value. The provisions of FAS 146 will be effective for any exit or disposal activities initiated after December 31, 2002.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" (FIN 45). FIN 45 addresses the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees. FIN 45 also clarifies the requirements related to the recognition of a liability by a guarantor at the inception of a guarantee for the guarantor's noncontingent obligations associated with such guarantee. The disclosure requirements of this Interpretation are effective for financial statements of periods ending after December 15, 2002 whereas the initial recognition and measurement provisions are applicable on a prospective basis for guarantees issued or modified after December 31, 2002.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-based Compensation - Transition and Disclosure, an Amendment of FASB Statement No. 123" (FAS 148). FAS 148 amends FAS 123 and provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. Additionally, FAS 148 amends the disclosure requirements of FAS 123 to require prominent disclosures in both annual and interim financial statements of the method of accounting for stock-based employee compensation and the related pro forma disclosures when the intrinsic value method per APB 25 continues to be used. The Company is currently evaluating whether to voluntarily adopt the fair value method or to continue the intrinsic value method of accounting for stock-based employee compensation. The annual disclosure provisions of FAS 148 are effective for this fiscal year ended December 31, 2002. The Company will adopt the interim disclosure provisions of FAS 148 begin ning in the quarter ending March 31, 2003.

Use of Estimates in the Preparation of Financial Statements
The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities at the date of the financial statements. The Company evaluates these estimates and judgments on an ongoing basis and bases its estimates on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Actual results may differ from these estimates under different assumptions or conditions.

Reclassifications
Certain items previously reported in specific financial statement captions have been reclassified to conform with the 2002 presentation.

Note 2.    Inventories
Inventories at December 31 are as follows (in thousands of dollars):

	2002	2001	2000
Finished products	$189,378	$176,940	$155,258
Raw materials	10,191	13,284	15,578
Products in process	486	564	1,020
Operating supplies and other	39,531	37,627	27,188
Total inventories	$239,586	$228,415	$199,044

The above amounts include inventories valued under the LIFO method totaling $156,005,000, $143,531,000 and $129,237,000 at December 31, 2002, 2001 and 2000, respectively. Estimated current cost exceeded LIFO cost at December 31, 2002, 2001 and 2000 by $48,662,000, $44,620,000 and $39,836,000, 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 $1,913,000 ($0.02 per share effect) in 2002, an increase of $2,940,000 ($0.03 per share effect) in 2001 and an increase of $2,880,000 ($0.03 per share effect) in 2000.

Note 3.    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):

	2002	2001	2000
Land and land improvements	$693,891	$681,330	$634,982
Buildings	126,888	122,768	108,520
Machinery and equipment	3,197,646	3,011,781	2,644,619
Leaseholds	6,555	6,627	6,355
Construction in progress	73,563	121,448	101,728
Total	4,098,543	3,943,954	3,496,204
Less allowances for depreciation,      depletion and amortization	2,122,490	1,943,924	1,647,570
Property, plant and equipment, net	$1,976,053	$2,000,030	$1,848,634

The Company capitalized interest costs of $2,896,000 in 2002, $2,746,000 in 2001 and $6,150,000 in 2000 with respect to qualifying construction projects. Total interest costs incurred before recognition of the capitalized amount were $57,846,000 in 2002, $64,026,000 in 2001 and $54,237,000 in 2000.

Note 4.    Derivative Instruments
Effective January 1, 2001, the Company adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" (FAS 133), as amended, which established accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. The cumulative effect of adopting this statement in 2001 was $6,276,000 reflected in other comprehensive income, net of income tax expense of $2,448,000, related to the Company's natural gas over-the-counter commodity swap and option contracts.

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 2004, has been reflected as a component of accumulated other comprehensive income of $3,906,000, less income taxes of $1,468,000, in the Company's consolidated financial statements as of December 31, 2002. If market prices for natural gas remained at the December 31, 2002 level, net earnings of $2,852,000 would be classified into pretax earnings within the next 12 months. Comparatively, the Company's consolidated financial statements as of December 31, 2001 reflected the fair value of the open contracts as a component of accumulated other comprehensive loss of $13,307,000, less an income tax benefit of $5,224,000.

During the year ended December 31, 2002, the Company elected to terminate early certain of its natural gas swaps. The fair value of such swaps, which totaled $471,000 favorable as of the termination date, will continue to be reported within accumulated other comprehensive income and will be reclassified into earnings as the forecasted transaction impacts earnings. There was no impact to earnings due to hedge ineffectiveness during the 12 months ended December 31, 2002 and 2001.

Note 5.    Credit Facilities, Notes Payable and Long-term Debt
Notes payable at December 31 is summarized as follows (in thousands of dollars):

	2002	2001	2000
Commercial paper	$          -	$          -	$249,130
Bank borrowings	37,255	43,879	21,201
Other notes payable	43	-	-
Total notes payable	$37,298	$43,879	$270,331

At the end of 2002 and 2001, the Company had no commercial paper outstanding. At year-end 2000, the Company had $249,130,000 of commercial paper outstanding at a weighted-average interest rate of 6.57%.

The Company had in place unused committed lines of credit with a group of banks that provide for borrowings of up to $350,000,000, of which $200,000,000 expires March 2003 and the remaining $150,000,000 expires March 2007. The Company expects to renew the one-year credit facility expiring March 2003 in full with no substantive changes in terms, conditions or covenants. Interest rates are determined at the time of borrowing based on current market conditions.

As of December 31, 2002, the Company's Chloralkali joint venture had an uncommitted bank line of credit with a foreign bank in the amount of $45,000,000, of which $37,000,000 was drawn. The interest rate on this note is a floating rate based on the London Interbank Offered Rate (LIBOR) plus 35 basis points. As a joint venture partner, the Company guaranteed a portion of the amounts borrowed under the credit line on a several basis, which reflects its pro rata ownership interest (51%). At December 31, 2002, the Company's Chloralkali joint venture was in compliance with the minimum net worth covenant contained in the attendant credit agreement.

A foreign subsidiary of the Company maintains a credit line with a foreign bank, which provides for short-term borrowings up to $5,000,000. At December 31, 2002, $255,000 was outstanding under this agreement and bears interest at a rate of 2.89%. The comparable year-end amounts and interest rates for 2001 and 2000 were $879,000 at 2.35% and $1,201,000 at 5.88%, respectively.

Other notes of $43,000 were issued in 2002 to acquire land.

All lines of credit extended to the Company in 2002, 2001 and 2000 were based solely on a commitment fee, thus no compensating balances were required. In the normal course of business, the Company maintains balances for which it is credited with earnings allowances. To the extent the earnings allowances are not sufficient to fully compensate banks for the services they provide, the Company pays the fee equivalent for the differences.

Long-term debt at December 31 is summarized as follows (in thousands of dollars):

	2002	2001	2000
6.40% 5-year notes issued 2001	$240,000	$240,000	$-
5.75% 5-year notes issued 1999	243,000	250,000	250,000
6.00% 10-year notes issued 1999	250,000	250,000	250,000
Private placement notes*	120,574	122,112	123,741
Medium-term notes	33,000	38,000	43,000
Tax-exempt bonds	8,200	17,000	17,000
Other notes	6,897	9,485	10,691
Unamortized discount	(2,273)	(3,034)	(2,315)
Total debt excluding notes payable	$899,398	$923,563	$692,117
Less current maturities of long-term debt	41,641	17,264	6,756
Total long-term debt	$857,757	$906,299	$685,361
Estimated fair value of long-term debt	$932,148	$934,569	$675,767
*Includes a purchase accounting adjustment. The stated principal amount of the private placement notes is $115,000,000.

During 2002, the Company purchased $7,000,000 of its $250,000,000 five-year notes with a 5.75% coupon rate maturing in April 2004 for 103.5% of par value, resulting in a $7,000,000 reduction in the principal balance of these notes. The premium from par on this early retirement of debt was fully expensed in 2002.

During 2001, the Company accessed the public debt market by issuing $240,000,000 of five-year notes with a 6.40% coupon maturing in February 2006. The discount from par recorded on these notes is being amortized over the lives of the notes.

During 1999, the Company accessed the public debt market by issuing $500,000,000 of 5-year and 10-year notes in two related series (tranches) of $250,000,000 each. The 5.75% coupon notes mature in April 2004 and the 6.00% notes mature in April 2009. The combined discount from par recorded on these notes is being amortized over the lives of the notes.

In 1999, the Company purchased all the outstanding common shares of CalMat Co. The private placement notes were issued by CalMat in December 1996 in a series of four tranches at interest rates ranging from 7.19% to 7.66%. Principal payments on the notes begin in December 2003 and end December 2011. The Company entered into an agreement with the noteholders effective February 1999 whereby it guaranteed the payment of principal and interest.

During 1991, the Company issued $81,000,000 of medium-term notes ranging in maturity from 3 to 30 years, and in interest rates from 7.59% to 8.85%. The $33,000,000 in notes outstanding as of December 31, 2002 have a weighted-average maturity of 8.3 years with a weighted-average interest rate of 8.74%.

The $8,200,000 of tax-exempt bonds consists of variable-rate obligations maturing in 2009. During 2002, the Company called and redeemed two fixed-rate bond issues: (1) $3,000,000 of 7.50% coupon bonds maturing in 2011 and (2) $5,800,000 of 6.375% coupon bonds maturing in 2012.

Other notes of $6,897,000 were issued at various times to acquire land or businesses.

The aggregate principal payments of long-term debt, including current maturities, for the five years subsequent to December 31, 2002 are: 2003 - $41,641,000; 2004 - $249,372,000; 2005 - $3,367,000; 2006 - $272,693,000; and 2007 - $616,000.

The Company's debt agreements do not subject it to contractual restrictions with regard to working capital or the amount it may expend for cash dividends and purchases of its stock. Pursuant to a provision in the Company's bank credit facility agreements, the percentage of consolidated debt to total capitalization must be less than 60%. The total debt to total capitalization ratio was 35.6% as of December 31, 2002; 37.6% as of December 31, 2001; and 39.5% as of December 31, 2000.

The estimated fair value amounts of long-term debt have been determined by discounting expected future cash flows based on interest rates on U.S. Treasury bills, notes or bonds, as appropriate. The fair value estimates presented are based on information available to management as of December 31, 2002, 2001 and 2000. 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.

Note 6.    Operating Leases
Total rental expense under operating leases primarily for machinery and equipment, exclusive of rental payments made under leases of one month or less, is summarized as follows (in thousands of dollars):

	2002	2001	2000
Minimum rentals	$33,448	$33,515	$28,511
Contingent rentals (based principally on usage)	16,454	15,667	16,223
Total	$49,902	$49,182	$44,734

Future minimum operating lease payments under all leases with initial or remaining noncancelable lease terms in excess of one year, exclusive of mineral leases, at December 31, 2002 are payable as follows: 2003 - $19,046,000; 2004 - $17,051,000; 2005 - $13,898,000; 2006 - $11,634,000; 2007 - $8,869,000; and aggregate $38,682,000 thereafter. Lease agreements frequently include renewal options and require that the Company pay for utilities, taxes, insurance and maintenance expense. Options to purchase are also included in some lease agreements.

Note 7.    Accrued Environmental and Reclamation Costs
The Company's Consolidated Balance Sheets as of December 31 include accrued environmental cleanup costs by segment, as follows: Chemicals 2002 - $3,298,000, 2001 - $5,766,000 and 2000 - $5,919,000; Construction Materials 2002 - $7,544,000, 2001 - $7,640,000 and 2000 - $7,858,000. The accrued environmental cleanup costs in the Construction Materials segment relate primarily to the former CalMat and Tarmac facilities acquired in 1999 and 2000, respectively.

The Company's Consolidated Balance Sheets as of December 31 include accrued land reclamation costs for the Construction Materials segment of $26,000,000 in 2002, $26,091,000 in 2001 and $23,963,000 in 2000. The Company accrues the estimated cost of reclamation over the life of the reserves based on tons sold in relation to total estimated tons. These accrued costs relate to the acquired CalMat facilities. Effective January 1, 2003, these costs will be accounted for under the provisions of FAS 143.

Note 8.    Income Taxes
The components of earnings before income taxes are as follows (in thousands of dollars):

	2002	2001	2000
Domestic	$250,108	$312,891	$308,271
Foreign	7,552	11,162	3,967
Total	$257,660	$324,053	$312,238

Provision (benefit) for income taxes consists of the following (in thousands of dollars):

	2002	2001	2000
Current:
Federal	$14,788	$59,754	$48,585
State and local	6,704	9,574	6,592
Foreign	2,466	1,038	209
Total	23,958	70,366	55,386
Deferred:
Federal	45,813	25,532	28,841
State and local	(3,130)	5,348	8,146
Foreign	606	127	(28)
Total	43,289	31,007	36,959
Total provision	$67,247	$101,373	$92,345

The effective income tax rate varied from the federal statutory income tax rate due to the following:

	2002	2001	2000
Federal statutory tax rate	35.0%	35.0%	35.0%
Increase (decrease) in tax rate resulting from:
Depletion	(8.8)	(7.0)	(7.1)
State and local income taxes, net of federal                     income tax benefit	0.9	3.0	3.0
Amortization of goodwill	-	1.7	1.5
Miscellaneous items	(1.0)	(1.4)	(2.8)
Effective tax rate	26.1%	31.3%	29.6%

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):

	2002	2001	2000
Deferred tax assets related to:
Postretirement benefits	$23,473	$23,102	$21,880
Reclamation and environmental accruals	10,358	11,714	10,748
Accounts receivable, principally allowance for doubtful accounts	3,205	4,611	4,845
Inventory adjustments	5,803	5,212	5,745
Deferred compensation, vacation pay and incentives	18,898	19,520	18,180
Other items	15,980	20,475	16,141
Total deferred tax assets	77,717	84,634	77,539
Deferred tax liabilities related to:
Fixed assets	351,689	313,105	273,623
Pensions	17,896	16,288	10,703
Other items	15,615	20,746	17,353
Total deferred tax liabilities	385,200	350,139	301,679
Net deferred tax liability	$307,483	$265,505	$224,140

The above amounts are reflected in the accompanying Consolidated Balance Sheets as follows (in thousands of dollars):

	2002	2001	2000
Deferred income taxes:
Current assets	$(37,698)	$(53,040)	$(44,657)
Deferred liabilities	345,181	318,545	268,797
Net deferred tax liability	$307,483	$265,505	$224,140

Note 9.    Benefit 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 one out of four union groups in the Chemicals Hourly Plan are based on salaries or wages and years of service; the Construction Materials Hourly Plan and three union groups in the Chemicals Hourly Plan provide benefits equal to a flat dollar amount for each year of service.

The following tables set forth the combined funded status of the plans and their reconciliation with the related amounts recognized in the Company's consolidated financial statements at December 31 (in thousands of dollars):

	2002	2001	2000
Change in benefit obligation:
Benefit obligation at beginning of year	$373,263	$350,815	$323,530
Service cost	16,443	15,064	14,819
Interest cost	28,133	25,937	24,579
Amendments	3,889	2,565	3,114
Actuarial (gain) loss	22,970	(2,884)	2,015
Benefits paid	(18,119)	(18,234)	(17,242)
Benefit obligation at end of year	$426,579	$373,263	$350,815
Change in plan assets:
Fair value of assets at beginning of year	$468,972	$553,115	$502,621
Actual return on plan assets	(62,814)	(66,886)	66,985
Employer contribution	908	977	751
Benefits paid	(18,119)	(18,234)	(17,242)
Fair value of assets at end of year	$388,947	$468,972	$553,115
Funded status	$(37,632)	$95,709	$202,300
Unrecognized net transition asset	-	-	(957)
Unrecognized net actuarial (gain) loss	39,731	(95,767)	(210,436)
Unrecognized prior service cost	16,110	14,509	13,694
Net amount recognized	$18,209	$14,451	$4,601
Amounts recognized in the Consolidated Balance Sheets:
Prepaid benefit cost	$47,378	$43,767	$39,764
Accrued benefit liability	(29,169)	(29,316)	(35,163)
Net amount recognized	$18,209	$14,451	$4,601
Components of net periodic pension income:
Service cost	$16,443	$15,064	$14,819
Interest cost	28,133	25,937	24,579
Expected return on plan assets	(42,451)	(41,645)	(36,973)
Amortization of transition asset	-	(957)	(1,721)
Amortization of prior service cost	2,288	1,750	2,198
Recognized actuarial gain	(7,263)	(9,022)	(7,725)
Net periodic pension income	$(2,850)	$(8,873)	$(4,823)
Weighted-average assumptions as of December 31:
Discount rate	6.75%	7.25%	7.25%
Expected return on assets	8.25%	8.25%	8.25%
Rate of compensation increase (for salary-related plans)	4.00%	4.25%	4.25%

Plan assets are composed primarily of marketable domestic and international equity securities and corporate and government debt securities. The Company sponsors an unfunded, nonqualified pension plan which is included in the tables above. The projected benefit obligation, accumulated benefit obligation and fair value of assets for this plan were: $19,322,000, $15,184,000 and $0 as of December 31, 2002; $14,367,000, $10,115,000 and $0 as of December 31, 2001; and $16,516,000, $10,850,000 and $0 as of December 31, 2000.

Certain of the Company's hourly employees in unions are covered by multiemployer defined benefit pension plans. Contributions to these plans approximated $5,702,000 in 2002, $5,844,000 in 2001 and $5,930,000 in 2000. 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. Twenty-eight percent of the hourly labor force were covered by collective bargaining agreements. Of the hourly workforce covered by collective bargaining agreements, 24% were covered by agreements that expire in 2003.

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 following tables set forth the combined funded status of the plans and their reconciliation with the related amounts recognized in the Company's consolidated financial statements at December 31 (in thousands of dollars):

	2002	2001	2000
Change in benefit obligation:
Benefit obligation at beginning of year	$55,207	$56,212	$54,320
Service cost	2,458	2,364	1,991
Interest cost	3,916	3,883	3,766
Amendments	-	(3,159)	(2,271)
Actuarial (gain) loss	2,391	(1,461)	1,123
Benefits paid	(3,107)	(2,632)	(2,717)
Benefit obligation at end of year	$60,865	$55,207	$56,212
Change in plan assets:
Fair value of assets at beginning of year	$  -	$3,507	$3,488
Actual return on plan assets	-	(348)	119
Amendments	-	(3,159)	-
Benefits paid	-	-	(100)
Fair value of assets at end of year	$  -	$  -	$3,507
Funded status	$(60,865)	$(55,207)	$(52,705)
Unrecognized net (gain) loss	1,390	(1,001)	(134)
Unrecognized prior service cost	(1,753)	(1,981)	(2,209)
Net amount recognized	$(61,228)	$(58,189)	$(55,048)
Amounts recognized in the Consolidated Balance Sheets:
Accrued postretirement benefits	$(61,228)	$(58,189)	$(55,048)

	2002	2001	2000
Components of net periodic postretirement benefit cost:
Service cost	$2,458	$2,364	$1,991
Interest cost	3,916	3,883	3,766
Expected return on plan assets	-	(245)	(244)
Amortization of prior service cost	(228)	(228)	(213)
Net periodic postretirement benefit cost	$6,146	$5,774	$5,300

During 2001, the Company used the assets available for retiree life insurance to purchase policies for retirees covered under the program.

The weighted-average discount rates used as of December 31, 2002, 2001 and 2000 were 6.75%, 7.25% and 7.25%, respectively. For measurement purposes, an 8% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2003, decreasing ratably until reaching 5% in 2006 and beyond.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. If the health care cost trend rates were increased 1% each year, the accumulated postretirement benefit obligation as of December 31, 2002 would have increased by $5,819,000, and the aggregate of the service and interest cost for 2002 would have increased by $663,000. Similarly, if the health care cost trend rates were decreased 1% each year, the accumulated postretirement benefit obligation as of December 31, 2002 would have decreased by $5,064,000, and the aggregate of the service and interest cost for 2002 would have decreased by $605,000.

Pension and Other Postretirement Benefits Assumptions
During 2002, the Company made changes to its assumptions related to the discount rate, the rate of compensation increase (for salary-related plans) and the rate of increase in the per capita cost of covered health care benefits. Management consults with its actuaries when selecting each of these assumptions.

In selecting the discount rate, the Company considers fixed-income security yields, specifically AA-rated corporate bonds. At December 31, 2002, the Company decreased the discount rate for its plans from 7.25% to 6.75% as a result of decreased yields for long-term AA-rated corporate bonds.

In estimating the expected return on plan assets, the Company considers past performance and future expectations for the types of investments held by the plan as well as the expected long-term allocation of plan assets to these investments. At December 31, 2002, the Company made no change in the expected 8.25% return on plan assets.

In projecting the rate of compensation increase, the Company considers past experience in light of movements in inflation rates. At December 31, 2002, the Company decreased the assumed rate of compensation increase from 4.25% to 4.0% for its plans.

In selecting the rate of increase in the per capita cost of covered health care benefits, the Company considers past performance and forecasts of future health care cost trends. At December 31, 2002, the Company increased its previously assumed rate of increase in the per capita cost of covered health care benefits. The previously assumed rate was 5.0% for 2002 and beyond. The new assumed rates of increase are 8% for 2003, decreasing ratably until reaching 5% in 2006 and beyond.

Defined Contribution Plans
The Company sponsors four defined contribution plans, which cover substantially all salaried and nonunion hourly employees. Expense recognized in connection with these plans equaled $7,100,000, $9,456,000 and $11,934,000, respectively, for 2002, 2001 and 2000.

Note 10.    Incentive Plans
Stock-based Compensation Plans
The Company's 1996 Long-term Incentive Plan authorizes the granting of stock-based awards to key salaried employees of the Company and its affiliates. The Plan permits the granting of stock options (including incentive stock options), stock appreciation rights, restricted stock and restricted stock units, performance share awards, dividend equivalents and other stock-based awards (such as deferred stock units) valued in whole or in part by reference to or otherwise based on common stock of the Company. The number of shares available for awards is 0.95% of the issued common shares of the Company (including treasury shares) as of the first day of each calendar year, plus the unused shares that are carried over from prior years.

Deferred stock unit awards were granted beginning in 2001 with the accrual of dividend equivalents starting one year after grant of the underlying stock unit award. These awards vest ratably over years 6 through 10 from the date of grant. The Company granted 98,100 and 102,600 deferred stock units in 2002 and 2001, respectively, with vesting beginning in 2007 and 2008. Expense provisions referable to these awards amounted to $924,000 in 2002, $383,000 in 2001 and $0 in 2000.

Stock options issued during the years 1996 through 2002 were granted at the fair market value of the stock on the date of the grant. They vest ratably over 5 years and expire 10 years subsequent to the grant. There were no expense provisions referable to these awards, as all options granted had an exercise price equal to the market value of the Company's underlying common stock on the date of grant.

Performance share awards were granted through 1995 under a predecessor plan. As of December 31, 2002, none of these awards were outstanding and no further payments were due. These awards were based on the achievement of established performance goals, and the majority of the awards vested over five years. Expense provisions referable to these awards amounted to $0 in 2002, $0 in 2001 and $3,451,000 in 2000. Expense provisions were affected by changes in the market value of the Company's common stock and performance versus a preselected peer group.

The Company uses the intrinsic value method per APB 25 in accounting for its stock-based compensation. Pro forma information regarding net earnings and earnings per share is required by FAS 123 and FAS 148, and has been determined as if the Company had accounted for its stock-based compensation under the fair value method of those statements. The fair values for performance share and deferred stock unit awards were based on a discounted fair market value of the Company's stock at grant date. The fair value for options was estimated at the date of the grant using a Black-Scholes option pricing model with the following weighted-average assumptions for the years ended December 31, 2002, 2001 and 2000 as presented below:

	2002	2001	2000
Risk-free interest rate	4.73%	4.85%	6.78%
Dividend yields	1.96%	2.00%	1.98%
Volatility factors of the expected market price of the    Company's common stock	23.25%	23.82%	25.54%
Weighted-average expected life of the option	7 years	5 years	5 years

The pro forma disclosure is presented in tabular format in Note 1.

A summary of the Company's stock option activity; related information as of December 31, 2002, 2001 and 2000; and changes during each year is presented below:

	2002		2001		2000
	Shares	Weighted-Average Exercise Price	Shares	Weighted-Average Exercise Price	Shares	Weighted-Average Exercise Price
Outstanding at beginning of year	5,940,125	$34.80	5,157,958	$32.16	4,092,846	$28.96
Granted at fair value	1,066,400	$45.92	1,093,600	$44.93	1,238,000	$42.34
Exercised	(204,571)	$21.72	(247,338)	$22.49	(88,048)	$22.04
Forfeited	(54,450)	$41.46	(64,095)	$42.41	(84,840)	$36.87
Outstanding at year end	6,747,504	$36.90	5,940,125	$34.80	5,157,958	$32.16
Options exercisable at year end	3,711,409	$30.99	2,945,545	$27.96	2,117,758	$24.71
Weighted-average grant date   fair value of each option   granted during the year	$8.37		$7.26		$8.25

The following table summarizes information about stock options outstanding and exercisable at December 31, 2002:

	Options Outstanding			Options Exercisable
Range of Exercise Price	Number of Shares	Weighted-Average Remaining Contractual Life (Years)	Weighted-Average Exercise Price	Number of Shares	Weighted-Average Exercise Price
$18.58-$21.31	1,701,319	3.75	$20.06	1,701,319	$20.06
$29.20-$32.95	853,730	5.10	$32.94	709,925	$32.94
$38.39-$42.48	1,157,640	7.12	$42.33	465,180	$42.34
$43.71-$47.44	3,034,815	7.84	$45.34	834,985	$45.08
Total/Average	6,747,504	6.34	$36.90	3,711,409	$30.99

Cash-based Compensation Plans
The Company has incentive plans under which cash awards may be made annually to officers and key employees. Expense provisions referable to these plans amounted to $7,561,000 in 2002, $6,893,000 in 2001 and $8,546,000 in 2000.

Note 11.    Other Commitments and Contingent Liabilities
The Company has commitments in the form of unconditional purchase obligations as of December 31, 2002. These include commitments for the purchase of property, plant and equipment of $28,393,000 and commitments for noncapital purchases of $109,020,000. The commitments for the purchase of property, plant and equipment are due in 2003; the commitments for noncapital purchases are due as follows: 2003, $30,205,000; 2004-2005, $43,804,000; 2006-2007, $15,831,000; and aggregate $19,180,000 thereafter. Expenditures under the noncapital purchase commitments totaled $100,752,000 in 2002, $106,837,000 in 2001 and $60,284,000 in 2000.

The Company has commitments in the form of contractual obligations related to its mineral royalties as of December 31, 2002 in the amount of $80,448,000, due as follows: 2003, $9,470,000; 2004-2005, $15,332,000; 2006-2007, $9,155,000; and aggregate $46,491,000 thereafter. Expenditures under the contractual obligations related to mineral royalties totaled $36,711,000 in 2002, $35,265,000 in 2001 and $35,246,000 in 2000.

The Company uses its commercial banks to issue standby letters of credit to secure its obligations to pay or perform when required to do so pursuant to the requirements of an underlying agreement or the provision of goods and services. The standby letters of credit listed below are irrevocable-cancelable only at the option of the beneficiary who is authorized to draw drafts on the issuing bank up to the face amount of the standby letter of credit in accordance with its terms. Because banks consider letters of credit as contingent extensions of credit, the Company is required to pay a fee for them until they expire or are cancelled.

The Company's financial standby letters of credit as of December 31, 2002 are summarized in the table below (in millions of dollars):

	Amount	Term	Maturity
Standby Letters of Credit
Risk management requirement for insurance claims	$17.5	One year	Renewable annually
Payment surety required by utilities	5.3	One year	Renewable annually*
Contractual reclamation/restoration requirements	4.2	One year	Renewable annually*
Total standby letters of credit	$27.0
* All standby letters of credit are renewable annually with the exception of $0.4 million, which expires in 2003.

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, with respect to 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.

Note 12.    Shareholders' Equity
A total of 42,511,981 shares has been purchased at a cost of $608,423,000 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 the current purchase authorization was 8,473,988 as of December 31, 2002. No shares were purchased in 2002, 2001 or 2000.

Note 13.    Other Comprehensive Income (Loss)
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income," which established new rules for the reporting of comprehensive income and its components in the financial statements. Comprehensive income includes charges and credits to equity that are not the result of transactions with shareholders. Comprehensive income is comprised of two subsets: net earnings and other comprehensive income (loss). Other comprehensive income (loss) for the Company is comprised of fair value adjustments to cash flow hedges pertaining to its commodity swap and option contracts to purchase natural gas. The Company adopted this pronouncement in the first quarter of 1998. However, prior to 2001, there was no material impact on the Company's financial reporting resulting from this adoption. The components of other comprehensive income (loss) are presented in the Consolidated Statements of Shareholders' Equity, net of applicable taxes.

The amount of income tax (expense) benefit allocated to each component of other comprehensive income (loss) at December 31, 2002 and 2001 is summarized as follows (in thousands of dollars):

	Before-Tax Amount	Tax (Expense) Benefit	Net-of-Tax Amount
December 31, 2002
Other comprehensive income (loss), net of taxes:
Fair value adjustment to cash flow hedges	$28,902	$(11,237)	$17,665
Less reclassification adjustment for losses included in net earnings	(11,689)	4,545	(7,144)
Total other comprehensive income, net of taxes	$17,213	$(6,692)	$10,521
December 31, 2001
Other comprehensive income (loss), net of taxes:
Cumulative effect of accounting change	$6,276	$(2,448)	$3,828
Fair value adjustment to cash flow hedges	(25,859)	10,120	(15,739)
Less reclassification adjustment for gains included in net earnings	6,276	(2,448)	3,828
Net fair value adjustment to cash flow hedges	(19,583)	7,672	(11,911)
Total other comprehensive loss, net of taxes	$(13,307)	$5,224	$(8,083)

Note 14.    Segment Data
The Company's reportable segments are organized around products and services and continue to be Construction Materials and Chemicals. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company's determination of segment earnings (a) recognizes equity in the earnings or losses of nonconsolidated companies as part of segment earnings; (b) reflects allocations of general corporate expenses to the segments; (c) does not reflect interest income or expense; and (d) is before income taxes.

The Construction Materials segment produces and sells aggregates and related products and services in seven regional divisions. These divisions have been aggregated for reporting purposes. During 2002, this segment served markets in 20 states, the District of Columbia and Mexico with a full line of aggregates, and 7 additional states with railroad ballast. Customers use aggregates primarily in the construction and maintenance of highways, streets and other public works and in the construction of housing and commercial, industrial and other nonresidential facilities.

The Chemicals segment is organized into two business units: Chloralkali and Performance Chemicals. The Chloralkali business unit produces and sells chlorine, caustic soda, hydrochloric acid, potassium chemicals and chlorinated organic chemicals principally to the chemical processing, polymer, refrigerant, foam-blowing, food and pharmaceutical, pulp and paper, textile and water management industries. The Performance Chemicals business unit offers specialty and custom chemical products, services, technologies and manufacturing capabilities for a variety of customer needs in a number of industries, including pulp and paper and water management. These business units have been aggregated for reporting purposes.

Because the majority of the Company's activities are domestic, assets outside the United States are not material. The Construction Materials segment sells a relatively small amount of construction aggregates outside the United States. Nondomestic net sales in the Construction Materials segment were $4,422,000 in 2002, $5,519,000 in 2001 and $26,000 in 2000. The Chemicals segment sells to customers outside the United States primarily in Asia, South America and Europe. This segment's net sales to foreign customers were $33,786,000 in 2002, $36,213,000 in 2001 and $36,274,000 in 2000.

Segment Financial Disclosure

Amounts in millions	2002	2001	2000
Net Sales
Construction Materials	$1,980.6	$2,113.6	$1,885.9
Chemicals	564.5	641.7	605.8
Total	$2,545.1	$2,755.3	$2,491.7
Total Revenues
Construction Materials	$2,175.9	$2,331.9	$2,083.8
Chemicals	620.7	688.1	660.8
Total	$2,796.6	$3,020.0	$2,744.6
Earnings (Loss) Before Interest and Income Taxes
Construction Materials	$383.2	$400.5	$375.7
Chemicals	(74.1)	(19.6)	(20.1)
Total	$309.1	$380.9	$355.6
Identifiable Assets
Construction Materials	$2,635.9	$2,624.7	$2,404.9
Chemicals	579.8	626.0	655.9
Identifiable assets	3,215.7	3,250.7	3,060.8
Investment in nonconsolidated companies	1.6	1.4	59.5
General corporate assets	60.2	60.4	74.8
Cash items	170.7	100.8	55.3
Total	$3,448.2	$3,413.3	$3,250.4
Depreciation, Depletion and Amortization
Construction Materials	$204.8	$212.5	$177.6
Chemicals	62.9	65.7	54.8
Total	$267.7	$278.2	$232.4
Capital Expenditures
Construction Materials	$206.7	$230.6	$213.5
Chemicals	42.9	57.6	132.9
Total	$249.6	$288.2	$346.4
Net Sales by Product
Construction Materials
Aggregates	$1,397.8	$1,483.0	$1,248.1
Asphaltic products and placement	304.7	342.8	328.5
Ready-mixed concrete	181.8	186.2	201.6
Other	96.3	101.6	107.7
Total	$1,980.6	$2,113.6	$1,885.9
Chemicals
Chloralkali-Inorganic	$198.0	$264.8	$192.0
Chloralkali-Organic	215.9	213.5	238.8
Performance Chemicals	150.6	163.4	175.0
Total	$564.5	$641.7	$605.8

Note 15.    Supplemental Cash Flow Information
Supplemental information referable to the Consolidated Statements of Cash Flows is summarized below (in thousands of dollars):

	2002	2001	2000
Cash payments:
Interest (exclusive of amount capitalized)	$55,465	$55,484	$49,253
Income taxes	39,177	57,408	70,615
Noncash investing and financing activities:
Amounts referable to business acquisitions:
Liabilities assumed	1,573	30,505	16,742
Fair value of stock issued	-	-	1,300
Debt issued in purchase of assets, net of liabilities	-	-	3,421

Note 16.    Transitional Disclosure for Adoption of FAS 142
On January 1, 2002, the Company adopted FAS 142 and, accordingly, discontinued goodwill amortization. Adjusted results assuming the elimination of goodwill amortization are summarized below (amounts in thousands, except per share data):

	2002	2001	2000
Net Earnings
As reported	$169,876	$222,680	$219,893
Goodwill amortization (net of taxes)	-	22,146	18,044
Adjusted net earnings	$169,876	$244,826	$237,937
Basic Net Earnings Per Share
As reported	$1.67	$2.20	$2.18
Goodwill amortization (net of taxes)	-	0.22	0.18
Adjusted net earnings	$1.67	$2.42	$2.36
Diluted Net Earnings Per Share
As reported	$1.66	$2.17	$2.16
Goodwill amortization (net of taxes)	-	0.22	0.18
Adjusted net earnings	$1.66	$2.39	$2.34

In connection with the adoption of FAS 142, the Company was required to complete the first step of the two-step goodwill impairment test by June 30, 2002. In so doing, the Company identified three reporting units, as defined by the statement: Construction Materials, Chloralkali Chemicals and Performance Chemicals. The Company determined the carrying value of each reporting unit by assigning assets and liabilities, including goodwill, to those reporting units as of January 1, 2002. Further, the Company determined the fair value of the reporting units using present value techniques.

Impairment was indicated in the Performance Chemicals reporting unit since its carrying value exceeded its fair value. This impairment resulted from the secular deterioration in business conditions facing the specialty chemical industry. With this indication of impairment, the Company completed step two of the process by allocating the fair value of the reporting unit to its assets and liabilities. The Company engaged an independent third party to assist in determining the fair value of the reporting unit and in allocating such fair value to the individual assets and liabilities. As a result of completing step two of the impairment test, the Company determined that the goodwill in the Performance Chemicals reporting unit of $30,240,000 was fully impaired as of January 1, 2002. Accordingly, a net-of-tax transition adjustment totaling $20,537,000 was recorded as a cumulative effect of accounting change as of January 1, 2002.

The changes in the carrying amount of goodwill for each reportable segment for the year ended December 31, 2002 are as follows (amounts in thousands):

	Construction Materials	Chemicals	Total
Goodwill as of December 31, 2001	$557,947	$30,615	$588,562
Transitional impairment charge	-	(30,240)	(30,240)
Goodwill of acquired businesses	18,756	-	18,756
Purchase price allocation adjustments	(1,287)	-	(1,287)
Goodwill as of December 31, 2002	$575,416	$375	$575,791

Note 17.    Acquisitions
In 2002, the Company acquired the following for a cost of approximately $43,445,000, which was paid in cash:

SRM Aggregates, Inc. - three sales yards in Mississippi and related equipment.

U.S. Aggregates, Inc. - two aggregates facilities in Alabama and Tennessee; one sales yard in Tennessee; ready-mix equipment; and two parcels of land in Tennessee.

Fleet Capital Corporation and LaSalle National Leasing - certain equipment previously leased to U.S. Aggregates related to the above-mentioned facilities in Alabama and Tennessee.

Nolichuckey Sand Co. Inc. - stock of sand and gravel company owning two aggregates facilities in Tennessee.

Builder's Sand & Gravel, Inc. - one aggregates facility in Illinois.

Transit Mix Concrete & Materials Company (d/b/a Trinity Aggregate Distribution Company) - assets and inventory located at a sales yard in Texas.

All of these 2002 acquisitions related to the Company's Construction Materials segment. Goodwill recognized in these transactions totaled $18,756,000. Acquisition goodwill in the amount of $4,818,000 will not be deductible for income tax purposes. The remaining goodwill related to 2002 acquisitions is expected to be fully deductible for income tax purposes.

In 2001, the Company acquired all of its former joint venture partner's interests in the Crescent Market Companies for $121,100,000. Tarmac was acquired in 2000 for $226,900,000 plus related working capital. In addition, at various dates during 2001 and 2000 the Company acquired several smaller companies. The combined acquisition purchase prices for these years were approximately $18,000,000 and $11,000,000, respectively. With the exception of the Crescent Market Companies and Tarmac acquisitions, funds for the purchases were primarily provided by either internally generated cash flows or stock issuances. The amount by which the total cost of these acquisitions exceeded the fair value of the net assets acquired, including identifiable intangibles, was recognized as goodwill.

All the 2002, 2001 and 2000 acquisitions described above were accounted for as purchases and, accordingly, the results of operations of the acquired businesses are included in the accompanying consolidated financial statements from their respective dates of acquisition. Had the businesses been acquired at the beginning of fiscal 2002 and 2001, respectively, on a pro forma basis, revenue, net earnings and earnings per share would not differ materially from the amounts reflected in the accompanying consolidated financial statements for 2002 and 2001.

Goodwill and the allowances for pre-2002 amortization at December 31 are as follows (in thousands of dollars):

	2002	2001	2000
Goodwill	$646,502	$681,289	$627,896
Less allowances for amortization	70,711	92,727	65,852
Goodwill, net	$575,791	$588,562	$562,044

FINANCIAL TERMINOLOGY

Acquisitions
The sum of net assets (assets less liabilities, including acquired debt) obtained in a business combination. Net assets are recorded at their fair value at the date of the combination, and include tangible and intangible items.

Capital Employed
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 debt. Average capital employed is a 12-month average.

Capital Expenditures
Capital expenditures include capitalized replacements of and additions to property, plant and equipment, including capitalized leases, renewals and betterments. Capital expenditures exclude the property, plant and equipment obtained by business acquisitions. Each segment's capital expenditures include allocated corporate amounts.

The Company classifies its capital expenditures into three categories based on 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, to improve products, etc.

Capital expenditures classified as environmental control do not reflect those expenditures for environmental control activities, including industrial health programs, that 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.

Cash Items
The sum of cash, cash equivalents and short-term investments.

EBIT
Earnings before interest and income taxes.

Net Sales
Total customer revenues for the Company's products and services excluding delivery revenues, net of discounts, if any.

Ratio of Earnings to Fixed Charges
The sum of earnings from continuing operations 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 net interest and income taxes and after allocation of corporate expenses and income, and after assignment of equity income to the segments with which it is related in terms of products and services. Allocations are based on average capital employed and net sales.

Shareholders' Equity
The sum of common stock (less the cost of common stock in treasury), capital in excess of par value, retained earnings and accumulated other comprehensive income (loss), as reported in the balance sheet. Average shareholders' equity is a 12-month average.

Short-term Debt
The sum of current interest-bearing debt, including current maturities of long-term debt and interest-bearing notes payable.

Total Debt as a Percent of Total Capital
Total debt is the sum of notes payable, current maturities and long-term debt. Total capital is the sum of total debt and shareholders' equity.

Total Shareholder Return
Average annual rate of return using both stock price appreciation and quarterly dividend reinvestment. Stock price appreciation is based on a point-to-point calculation, using end-of-year data.

Net Sales, Total Revenues, Net Earnings And Earnings Per Share
Vulcan Materials Company and Subsidiary Companies

Amounts in millions, except per share data	2002	2001
Net Sales
First quarter	$534.5	$569.1
Second quarter	681.4	760.5
Third quarter	714.3	766.0
Fourth quarter	614.9	659.7
Total	$2,545.1	$2,755.3
Total Revenues
First quarter	$587.1	$620.4
Second quarter	747.7	828.3
Third quarter	785.8	843.1
Fourth quarter	676.0	728.2
Total	$2,796.6	$3,020.0
Gross Profit
First quarter	$90.3	$85.5
Second quarter	161.7	198.9
Third quarter	170.6	211.9
Fourth quarter	118.4	153.2
Total	$541.0	$649.5
Net Earnings (Loss)
First quarter	$(8.9)	$5.7
Second quarter	65.4	79.6
Third quarter	76.8	92.2
Fourth quarter	36.6	45.2
Total	$169.9	$222.7
Basic Earnings (Loss) Per Share
First quarter	$(0.09)	$0.06
Second quarter	0.64	0.79
Third quarter	0.75	0.91
Fourth quarter	0.36	0.44
Full year	$1.67	$2.20
Diluted Earnings (Loss) Per Share
First quarter	$(0.09)	$0.06
Second quarter	0.64	0.78
Third quarter	0.75	0.90
Fourth quarter	0.36	0.44
Full year	$1.66	$2.17

EX-21

Exhibit (21)

VULCAN MATERIALS COMPANY
SUBSIDIARIES
As of December 31, 2002
(Active Subsidiaries Only)

Entity	State or Other Jurisdiction of Incorporation or Organization	% Owned Directly or Indirectly By Vulcan
Subsidiaries:
Atlantic Granite Company	South Carolina	66-2/3
Azusa Rock, Inc.	California	100
Calizas Industriales del Carmen, S.A. de C.V.	Mexico	100
Callaway Chemical Company	New Jersey	100
CalMat Co.	Delaware	100
CalMat Co. of New Mexico	New Mexico	100
CalMat Leasing Co.	Arizona	100
Goodman Road Properties, LLC	North Carolina	100
MedTex Lands, Inc.	Texas	100
Nolichuckey Sand Co., Inc.	Tennessee	100
Palomar Transit Mix, Co.	California	100
R.C. Fulfer Company, Inc	Texas	100
Rancho Piedra Caliza, S.A. de C.V.	Mexico	100
Rapica Servicios Tecnicos Y Administrativos, S.A. de C.V.	Mexico	100
RECO Transportation, LLC	Delaware	100
Servicios Integrales, Gestoria Y Administracion, S.A. de C.V.	Mexico	100
Soportes Tecnicos Y Administrativos, S.A. de C.V.	Mexico	100
Statewide Transport, Inc.	Texas	100
Triangle Rock Products, Inc.	California	100
Vulcan Aggregates Company, LLC	Delaware	100
Vulcan Chemical Technologies, LLC	Delaware	100
Vulcan Chemicals Investments, LLC	Delaware	100
Vulcan Chloralkali, LLC	Delaware	51
Vulcan Construction Materials, LLC	Delaware	100
Vulcan Construction Materials, LP	Delaware	100
Vulcan Gulf Coast Materials, Inc.	New Jersey	100
Vulcan International Holdings ApS	Denmark	100
Vulcan International Holdings II ApS	Denmark	100
Vulcan Lands, Inc.	New Jersey	100
Vulcan Performance Chemicals, Ltd.	British Columbia	100
Vulica Shipping Company, Limited	Bahamas	100
Wanatah Trucking Co., Inc.	Indiana	100
Western Environmental Contracting, Inc.	California	100

EX-23

Exhibit (23)

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement No. 333-67586 on Form S-3 and Registration Statements No. 333-40394, 333-99805,and 333-99807 on Form S-8 of Vulcan Materials Company of our reports dated January 31, 2003 (which reports express an unqualified opinion and include an explanatory paragraph related to the Company's change in its method of accounting for goodwill) appearing in and incorporated by reference in the Annual Report on Form 10-K of Vulcan Materials Company for the year ended December 31, 2002 and to the reference to us under the heading "Experts" in the Prospectus, which is part of these Registration Statements.

/s/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

Birmingham, Alabama
March 28, 2003

EX-24

Exhibit (24)

POWER OF ATTORNEY

         The undersigned director of Vulcan Materials Company, a New Jersey corporation, hereby nominates, constitutes and appoints William F. Denson, III, and Amy M. Tucker, and each of them, the true and lawful attorneys of the undersigned to sign the name of the undersigned as director to the Annual Report on Form 10-K for the year ended December 31, 2002 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 21st day of March, 2003.

/s/ Philip J. Carroll, Jr.                     
     Philip J. Carroll, Jr.

/s/ Livio D. DeSimone                     
     Livio D. DeSimone

/s/ Phillip W. Farmer                       
     Phillip W. Farmer

/s/ H. Allen Franklin                       
     H. Allen Franklin

/s/ Ann McLaughlin Korologos      
    Ann McLaughlin Korologos

/s/ Douglas J. McGregor                
     Douglas J. McGregor

/s/ James V. Napier                       
    James V. Napier

/s/ Donald B. Rice                         
     Donald B. Rice

/s/ Orin R. Smith                          
     Orin R. Smith

EX-99

Exhibit 99(a)
Certificate of Chief Executive Officer of Vulcan Materials Company Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Donald M. James, Chairman and Chief Executive Officer of Vulcan Materials Company, certify that the Annual Report on Form 10-K (the "Report") for the year ended December 31, 2002, filed with the Securities and Exchange Commission on the date hereof:
(i)	fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
(ii)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Vulcan Materials Company.
		/s/Donald M. James                                 Donald M. James Chairman and Chief Executive Officer March 28, 2003

Exhibit 99(b)
Certificate of Chief Financial Officer of Vulcan Materials Company Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Mark E. Tomkins, Senior Vice President and Chief Financial Officer of Vulcan Materials Company, certify that the Annual Report on Form 10-K (the "Report") for the year ended December 31, 2002, filed with the Securities and Exchange Commission on the date hereof:
(i)	fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
(ii)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Vulcan Materials Company.
		/s/Mark E. Tomkins                                Mark E. Tomkins Senior Vice President and Chief Financial Officer March 28, 2003