SC 14D9

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14D-9

SOLICITATION/RECOMMENDATION STATEMENT UNDER

SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934

ELKCORP

(Name of Subject Company)

ELKCORP

(Name of Person Filing Statement)

Common Stock, Par Value $1.00 Per Share

(Title of Class of Securities)

287456107

(CUSIP Number of Class of Securities)

David G. Sisler

Senior Vice President, General Counsel and Secretary

ElkCorp

14911 Quorum Drive, Suite 600

Dallas, Texas 75254

(972) 851-0500

(Name, address and telephone number of person authorized to receive

notices and communications on behalf of the person filing statement)

WITH COPIES TO:

Mark Gordon, Esq.

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

(212) 403-1000

o  Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

TABLE OF CONTENTS

Item 1.  Subject Company Information	1
Item 2.  Identity and Background of Filing Person	2
Item 3.  Past Contacts, Transactions, Negotiations and Agreements	2
Item 4.  The Solicitation or Recommendation	4
Item 5.  Persons/Assets, Retained, Employed, Compensated or Used	13
Item 6.  Interests in Securities of the Company	14
Item 7.  Purposes of the Transaction and Plans or Proposals	14
Item 8.  Additional Information to be Furnished	15
Item 9.  Exhibits	20

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Item 1.   Subject Company Information.

Name and Address.  The name of the subject company is ElkCorp, a Delaware corporation (the “Company”). The address and telephone number of the Company’s principal executive office is 14911 Quorum Drive, Suite 600, Dallas, Texas 75254, (972) 851-0500.

Securities.  This Solicitation/Recommendation Statement on Schedule 14D-9 (this “Statement”) relates to the Company’s common stock, par value $1.00 per share (the “Shares”), including the associated Series A Participating Preferred Stock purchase rights (the “Rights”) issued pursuant to a Rights Agreement, dated as of July 7, 1998, between the Company (formerly Elcor Corporation) and ChaseMellon Shareholder Services, L.L.C., as Rights Agent, as amended on November 5, 2006, and December 18, 2006, and as may be further amended from time to time (the “Rights Agreement”). Unless the context requires otherwise, all references to the Shares include the Rights and all references to the Rights include the benefits that may inure to the holders of Rights pursuant to the Rights Agreement.

As of January 5, 2007, there were 20,624,468 Shares issued and outstanding, 1,339,999 Shares issuable upon or otherwise deliverable in connection with the exercise of outstanding options, 581,700 Shares subject to outstanding performance share awards, 66,007 Shares available for future awards under the Company’s equity incentive compensation plan and no shares of Preferred Stock issued and outstanding.

Item 2.   Identity and Background of Filing Person.

Name and Address.  The Company is filing this Statement. The information about the Company’s address and telephone number above under Item 1 is incorporated herein by reference. The Company’s website address is www.elkcorp.com. The information on the Company’s website should not be considered a part of this Statement.

Tender Offer.  This Statement relates to the tender offer by Building Materials Corporation of America, a Delaware corporation (“BMCA” or the “Offeror”), to purchase all of the outstanding Shares of the Company, including the associated Rights, at a price of $40.00 per Share, net to the seller in cash (subject to applicable withholding tax), without interest, on the terms and subject to the conditions set forth in the Offeror’s offer to purchase, dated December 20, 2006 (the “Offer to Purchase”), and the related letter of transmittal. The consideration offered per Share, together with all the terms and conditions of the Offeror’s tender offer, is referred to in this Statement as the “Tender Offer”.

The Tender Offer is disclosed in a Tender Offer Statement on Schedule TO filed by the Offeror with the Securities and Exchange Commission (the “Commission”) on December 20, 2006, as amended on January 3, 2007 and January 8, 2007 (the “Schedule TO”). The Offer to Purchase states that the Offeror intends, as soon as practicable after consummation of the Tender Offer, to have the Company consummate a second step merger (the “Proposed Merger”) in which each then outstanding Share (other than Shares acquired by the Offeror in the Tender Offer) will be converted into the right to receive an amount per Share equal to the highest price per Share paid by the Offeror pursuant to the Tender Offer, without interest. According to the Offer to Purchase, the Tender Offer is subject to a number of conditions, which are listed below under Item 8(a). The Offeror filed the required Notification and Report Forms under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) on November 6, 2006, and the relevant waiting period expired on December 6, 2006.

The Offer to Purchase states that the address of the principal executive office of the Offeror is 1361 Alps Road, Wayne, NJ 07470 and its telephone number is (201) 628-3000.

Item 3.   Past Contracts, Transactions, Negotiations and Agreements.

(a)  Arrangements with Executive Officers and Directors of the Company.

1. Cash Consideration Payable Pursuant to the Tender Offer.  If the Company’s directors and executive officers were to tender any Shares they own for purchase pursuant to the Tender Offer, they would receive the same cash consideration per Share on the same terms and conditions as the other shareholders of the Company. As of January 5, 2007, the Company’s directors and executive officers beneficially owned in the aggregate 460,753 Shares (excluding unvested options to purchase Shares and unvested shares of restricted stock). If the directors and

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executive officers were to tender all 460,753 Shares beneficially owned by them for purchase pursuant to the Tender Offer and those Shares were accepted for purchase and purchased by the Offeror, the directors and officers would receive an aggregate of $18,430,120.00 in cash. As discussed below under Item 4(c), to the knowledge of the Company, none of the Company’s executive officers, directors, affiliates or subsidiaries currently intends to tender Shares held of record or beneficially owned by such person for purchase pursuant to the Tender Offer.

In addition, if following completion of the Tender Offer, the Offeror were to own a majority of the Company’s outstanding Shares (a “Tender Offer Change of Control”), all unvested options to purchase Shares would vest automatically. As of January 5, 2007, the Company’s directors and executive officers held options to purchase 975,308 Shares in the aggregate, 181,776 of which were unvested, with exercise prices ranging from $11.3125 to $31.83 and an aggregate weighted exercise price of $24.32 per Share.

In addition, upon the Tender Offer Change of Control, each restricted Share, including each such Share held by directors and executive officers of the Company, will vest in full, and each performance share based on Shares, whether vested or unvested, including each such performance share held by executive officers, that is outstanding immediately prior to Tender Offer Change of Control will be deemed to be earned at the level set forth in the applicable plan and award agreement, and will become fully vested. As of January 5, 2007, the Company’s directors and executive officers held 114,306 unvested restricted Shares in the aggregate and 488,985 performance shares.

2. Cash Consideration Payable under the Terms of the Carlyle Merger Agreement.  Under the terms of the Carlyle Merger Agreement (as defined below under Item 8(b)), each option to purchase Shares granted under the employee and director stock plans of the Company, whether vested or unvested, that is outstanding immediately prior to the effective time of the Carlyle Merger (as defined below under Item 8(b)) will, upon completion of the Carlyle Merger, be cancelled and the holder of such option, including each director and executive officer, will receive an amount in cash equal to the product of (x) the excess, if any, of $38.00 over the exercise price per Share of such option multiplied by (y) the total number of Shares subject to such option. As of January 5, 2007, the Company’s directors and executive officers held options to purchase 975,308 Shares in the aggregate, 793,532 of which were vested and exercisable as of that date, with exercise prices ranging from $11.3125 to $31.83 and an aggregate weighted exercise price of $24.32 per Share. Of the unvested options, all 181,776 would vest automatically upon a change of control of the Company.

Immediately prior to completion of the Carlyle Merger, each restricted Share, including each such Share held by directors and executive officers, will vest in full and be converted into the right to receive $38.00. In addition, upon completion of the Carlyle Merger, each performance share based on Shares, whether vested or unvested, including each such performance share held by executive officers, that is outstanding immediately prior to completion of the Carlyle Merger will be deemed to be earned at the level set forth in the applicable plan and award agreement, will become fully vested and will entitle the holder thereof to receive, upon completion of the Carlyle Merger, an amount in cash equal to $38.00 in respect of each Share earned with respect to the performance shares. However, in connection with the Carlyle Merger, Carlyle (as defined below under Item 8(b)) has permitted management to defer taxation on performance shares by electing to defer the receipt of such shares to a date after consummation of the Carlyle Merger that is specified in the deferral election form. From the completion of the Carlyle Merger to the date that such deferred amounts are ultimately settled, Carlyle has agreed that, subject to the executive officer’s execution of a subscription agreement, the deferred amounts may be invested in shares of Parent (as defined below under Item 8(b)). As of January 5, 2007, the Company’s directors and executive officers held 114,306 unvested restricted Shares in the aggregate that will vest automatically upon a change of control of the Company and will vest with respect to 488,985 performance shares automatically upon a change of control.

3. Other.  Except as described in this Statement and on pages 12 through 23 of the Company’s Proxy Statement, dated September 22, 2006, sent by the Company to its shareholders in connection with the 2006 Annual Meeting of Shareholders of the Company (the “2006 Proxy Statement”), filed as Exhibit (e)(1) to this Statement, to the knowledge of the Company, as of the date of this Statement, there is no material agreement, arrangement or understanding, nor actual or potential conflict of interest between the Company or any of its affiliates and (1) the Company’s executive officers, directors or affiliates or (2) the Offeror or its executive officers, directors or affiliates.

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(b)  Arrangements with the Offeror.

Confidentiality Agreement.  On December 29, 2006, the Company entered into a confidentiality and standstill agreement (the “Confidentiality Agreement”) with BMCA and BMCA’s affiliate Heyman Investment Associates Limited Partnership (“Heyman Investment”) in connection with BMCA’s consideration of a possible negotiated transaction with the Company. Pursuant to the Confidentiality Agreement, the Company agreed to provide to BMCA and Heyman Investment certain confidential information regarding the Company, and BMCA and Heyman Investment agreed to keep such information confidential (subject to certain exceptions, including disclosure to representatives who agree to be bound by the terms of the Confidentiality Agreement and as required by law) and to use such information solely for the purpose of evaluating a possible acquisition of the Company.

The Confidentiality Agreement includes customary standstill provisions restricting the ability of BMCA, Heyman Investment and their affiliates and representatives to acquire more than an additional 2% of the Company’s common stock or to propose or seek to acquire control of the Company or to take certain other actions with respect to the Company, in each case unless invited to do so by the Company. These provisions terminate six months from the date of the agreement, or earlier under some circumstances. However, these standstill provisions do not apply to the Tender Offer or any other offer or proposal that provides for per share consideration that is not less than $40.00 per share and otherwise is on terms not materially less favorable to the Company’s shareholders than the Tender Offer.

The foregoing summary of the Confidentiality Agreement does not comport to be complete and is qualified in its entirety by reference to Exhibit (e)(6), which is incorporated herein by reference.

The Offeror remains subject to the Company’s Rights Agreement (see Item 1 above and Item 8(c) below).

Item 4.   The Solicitation or Recommendation.

(a)  Position of the Special Committee and the Board; Negotiations with BMCA.

Position of the Special Committee and the Board.  After careful consideration by a committee of the Board composed of all of the Company’s independent, non-management directors (the “Special Committee”) and the Board, including a thorough review of the Tender Offer with their outside legal and financial advisors, the Special Committee and, on the recommendation of the Special Committee, the Board, have determined to recommend that the Company’s shareholders reject the Tender Offer and not tender their Shares in the Tender Offer. Messrs. Karol and Nowak abstained from the Board’s action, as they did with respect to approval of the Carlyle Merger.

The Special Committee and the Board believe that the Tender Offer is excessively conditional and potentially illusory. Further, the financing commitments that the Offeror has publicly filed in connection with the Tender Offer are not applicable to a tender offer acquisition structure. Rather, the financing commitments provide for a secured financing to be funded at the time of consummation of a “one-step” merger following a vote of the Company’s shareholders. Such commitments, on the terms provided, are excessively conditional even as applied to an acquisition of the Company which would be structured as a “one-step” merger. In addition, certain recent statements made by Messrs. Heyman and Tafaro during the course of the Offeror’s due diligence investigation of the Company raise questions as to whether the Offeror’s desire to consummate the Tender Offer, its acquisition price for the Company or the structure of such a transaction remain subject to the results of its due diligence investigations. In view of the foregoing, and particularly in light of the high degree of assurance that the Carlyle Merger (as defined below under Item 8(b)) will be consummated, the Special Committee and the Board are continuing to recommend the Carlyle Merger Agreement (as defined below under Item 8(b)) at this time.

Negotiations with BMCA.  In order to obtain the most attractive transaction for its shareholders, the Company is in active negotiations with Mr. Heyman and the Offeror, to develop a transaction which would merit recommendation as superior to the Carlyle Merger. To this end, the Company has been and is continuing to provide Mr. Heyman and the Offeror with access to the Company, including facilities, documents and personnel, for an extensive due diligence investigation (including access to the information provided to Carlyle and other bidders, as well as to additional information not previously made available to Carlyle or other bidders), and has commented upon and engaged in discussions and negotiations concerning forms of a merger agreement and revised financing commitments relating to a possible negotiated transaction between the Company and the Offeror.

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The Special Committee and the Board reserve the right to revise the recommendation in the event that an acceptable agreement with the Offeror is reached, or if circumstances shall otherwise change. Any such change in the recommendation of the Special Committee or the Board will be communicated to shareholders as promptly as practicable in the event that such a determination were to be made. A letter communicating the Special Committee’s and the Board’s recommendation to holders of Shares and a press release relating to the recommendation to reject the Tender Offer are filed as Exhibits (a)(1) and (a)(2) to this Statement and are incorporated herein by reference.

(b)(1)  Reasons for the Recommendation.

In reaching their respective determinations to recommend that the Company’s shareholders reject the Tender Offer, the Special Committee and the Board each considered numerous factors in consultation with their outside legal and financial advisors and the Company’s senior management, including but not limited to the following:

The Tender Offer is Excessively Conditional.  The Tender Offer is subject to numerous conditions, which are listed below under Item 8(a), the satisfaction of some of the most important of which are at the “sole discretion” of the Offeror. In addition, the Offeror has reserved the right to amend the Tender Offer at any time in its sole discretion. The conditions to the Tender Offer include, among others:

•  No Material Adverse Change Condition.  The Offeror not becoming aware of any change, circumstance, event or effect that has or will have occurred (or any development that has or will have occurred involving prospective changes) that is materially adverse to the business, operations, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, or could reasonably be expected to have, in the sole discretion of the Offeror, a material adverse effect on the Company or the value of the Shares or, assuming consummation of the Tender Offer or the Proposed Merger, on the Offeror or any of its affiliates (the “No Material Adverse Change Condition”).

•  No Negative Events Condition.  There shall not have occurred and continue to exist certain negative events, including: a suspension of, or limitation on prices for, trading in securities on any national securities exchange or over-the-counter market in the United States; any extraordinary or material adverse changes in the price of the Shares, the financial markets or major share indices; commencement or material worsening of war or national or international crisis; and any change in the general political, market, economic or financial conditions in the United States or abroad that could have a “material effect on the business, financial condition or results of operations or prospects of the Company”.

•  Company Documents Condition.  The Offeror not becoming aware: (i) that any material contractual right of the Company or any of its subsidiaries shall be impaired or otherwise adversely affected, or that any material indebtedness of the Company or any of its subsidiaries shall become due, as a result of the Tender Offer or the Proposed Merger, (ii) of any covenant, term or condition in any of the instruments or agreements of the Company or any of its subsidiaries that, in the sole judgment of the Offeror, is or may be materially adverse to either the value of the Company or any of its subsidiaries or the value of the Shares to the Offeror or any other affiliate of the Offeror or the consummation of the Tender Offer or the Proposed Merger or (iii) that any filing with the Commission contained an untrue statement of a material fact or omitted to state a material fact.

•  No Competing Offers Condition.  No tender or exchange offer for any Shares shall have been made or publicly proposed to be made by any person, nor shall it have been publicly disclosed (or learned by the Offeror) that, among other things: any person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) shall have acquired or proposed to acquire beneficial ownership of more than 5% of any class or series of capital stock of the Company (including the Shares); any person, other than the Offeror or any of its affiliates, shall have made a public announcement reflecting an intent to acquire the Company or any assets or subsidiaries of the Company; or any person or group shall have entered into a definitive agreement or an agreement in principle or made a proposal with respect to a tender offer or exchange offer or a merger, consolidation or other business combination with or involving the Company or any of its subsidiaries (the “No Competing Offer Condition”).

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•  Regulatory Approval Condition.  All material approvals, permits, authorizations, favorable reviews or consents of governmental entities being obtained on terms satisfactory to the Offeror, in its sole discretion.

These conditions are broadly drafted, some are entirely inappropriate in any event (e.g., the No Competing Offer Condition) and some of the more important conditions provide the Offeror the sole discretion to make subjective determinations as to the occurrence of circumstances which would enable the Offeror not to consummate the Tender Offer. Further, the Offeror would have the right to declare a condition not satisfied even if the failure to be satisfied was caused by the action or inaction of the Offeror or any affiliate of the Offeror. Thus, the conditions create substantial uncertainty as to whether the Offeror would be required to consummate the Tender Offer, and appear inappropriate and non-customary for a transaction in which the Offeror has received and is continuing to receive extensive non-public information from the Company.

The Financing Commitments are Inapplicable to a Tender Offer and are Excessively Conditional Even for a Merger Structure.  The Tender Offer is not conditioned upon the receipt of financing. However, if the Offeror fails to obtain its financing, it could amend, delay or fail to consummate the Tender Offer. Accordingly, the Offeror’s financing commitments are of significant interest to the Company. The Special Committee and the Board identified a number of issues raised by the Offeror’s proposed financing, including:

•  The financing commitments publicly filed by BMCA in connection with the Tender Offer contemplate a single-step merger structure, rather than a two-step tender-offer-followed-by-merger structure. The letter states that if the Offeror determines to proceed with a tender offer, the financing commitment would be applicable to such a transaction “with changes to the terms thereof as are customary for such transactions and mutually agreed.” It is unclear how the terms would be changed, and there is no assurance that the Offeror and its lender would, in fact, reach mutual agreement on the required changes.

•  The sale of senior secured notes, or the drawing down of a bridge financing, which form a significant portion of the financing (and the receipt of which is a condition to receipt of the remainder of the financing), cannot be completed for a period of at least 21 days after delivery of certain financial information to the banks, plus a “customary” period to market and sell the securities, which is inconsistent with the announced timing for completion of the Tender Offer.

•  The Offeror intends to refinance its own debt in connection with the Tender Offer, and the financing cannot be completed without either obtaining the consent of BMCA’s noteholders or satisfying several conditions to defease the debt, including a condition that there is no default under BMCA’s debt. If the noteholders do not consent and the conditions to defeasance are not satisfied, then the financing will not be available.

•  The financing is subject to conditions that are overly broad and meaningfully less protective of the borrower than is customary or desirable for acquisition financings of this type. For example, the financing is conditioned upon the lead arrangers and lenders receiving and being reasonably satisfied with certain pro forma and projected financial information concerning the Offeror and its subsidiaries (including the Company, after giving effect to the acquisition), even though this information is currently available and could be provided to the lenders now so that the condition could be removed. Other conditions include: certain debt of the Offeror and all debt of the Company must be paid in full at closing and all security interests and guarantees in connection therewith must be terminated (which, with respect to the Company’s senior notes, would require delivery of a redemption notice prior to closing and is not required under the Carlyle Merger Agreement), all material governmental, third-party and judicial approvals necessary for the Tender Offer and related transactions must be obtained, there must exist no litigation with respect to the Tender Offer or the financing that could result in a material adverse effect, the credit facilities must obtain a rating from Standard & Poor’s Ratings Services and Moody’s Investor’s Services by closing, and all representations and warranties in the definitive financing documentation must be true as of the closing. These conditions do not appear in, or are more limited in, the financing commitments related to the Carlyle Merger. In addition, although both Carlyle’s and the Offeror’s financing commitments are conditional on agreement with their lenders on execution of definitive documentation and perfection of liens securing their secured credit facilities, such conditions in Carlyle’s financing commitments contain material qualifications that increase the likelihood that the financing for the Carlyle Merger will be obtained.

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Unclear Commitment from the Offeror to Complete the Tender Offer or Maintain the Offer Price.  The Tender Offer is not conditioned upon completion of due diligence. However, during meetings with the Company as part of the Offeror’s due diligence investigation of the Company, Mr. Heyman indicated that the Offeror would not be willing to amend the Tender Offer to make it less conditional until the Offeror had completed its due diligence investigations, and Mr. Tafaro stated that the Offeror required further diligence in order to make its decision and to determine value. These statements raise questions as to whether the Offeror’s desire to consummate the Tender Offer, its acquisition price for the Company or the structure of such a transaction remain subject to the results of its due diligence investigations. The Offeror’s due diligence investigations are ongoing, and it is possible that the Company’s concerns may be resolved or clarified in the near future, but as of the date of this Statement, there is no assurance that the Offeror will not seek to delay, amend or fail to consummate the Tender Offer or reduce the offer price based on the results of its due diligence investigations.

The Carlyle Merger is Highly Likely to be Completed.  The terms and conditions in the Carlyle Merger Agreement are substantially more specific and limited than those of the Tender Offer. For example, the definition of “Company Material Adverse Effect” in the Carlyle Merger Agreement is substantially more specific and limited than the scope of the No Material Adverse Change Condition, and the interpretation of this definition is not within the sole discretion of Carlyle. As a result, the Special Committee and the Board believe that there is a much higher degree of certainty that the Carlyle Merger will be completed than the Tender Offer.

The Special Committee and the Board also considered that in order for the Tender Offer to proceed, the Company would need to terminate the Carlyle Merger Agreement and pay Carlyle a termination fee of $29 million. In light of the conditionality of the Tender Offer and the other concerns described above and the high degree of the assurance of receiving the value offered by the Carlyle Merger, the Special Committee and the Board do not intend to recommend the Tender Offer or to terminate the Carlyle Merger Agreement so long as the Tender Offer fails to provide assurance that it would be completed on acceptable terms.

For the reasons described here, and above under “Position of the Special Committee and the Board”, the Special Committee and the Board recommend that the Company’s shareholders reject the Tender Offer and not tender their shares pursuant to the Tender Offer.

The foregoing discussion of the information and factors considered by the Special Committee and Board is not intended to be exhaustive. In view of the variety of factors and the amount of information considered, the Special Committee and Board did not find it practicable to provide specific assessments of, quantify or otherwise assign any relative weights to, the specific factors considered in determining to recommend that shareholders reject the Tender Offer. Such determination was made after consideration of all the factors taken as a whole. In addition, individual members of the Special Committee and Board may have given differing weights to different factors. Throughout their deliberations, the Special Committee and the Board consulted with their outside legal and financial advisors.

(b)(2)  Background

The Company continually reviews its strategic alternatives (including acquisitions by the Company), and from time to time has engaged in conversations with other industry participants and with investment bankers covering the building products industry. In July 2006, a company that has a division operating in the residential building products sector (“Participant 1”) and Mr. Thomas Karol, the Company’s chairman and chief executive officer, engaged in discussions initially concerning the possible sale of Participant 1’s building products division to the Company and later concerning a potential strategic combination of the Company and Participant 1. Intermittent preliminary discussions with Participant 1 continued over the next several weeks. In connection with these discussions, Mr. Karol worked with UBS Securities LLC (“UBS”) to prepare financial analyses of potential transactions between the Company and Participant 1. In mid-August, representatives of Carlyle, a global private investment firm, contacted Mr. Karol to indicate potential interest in acquiring the Company, possibly in connection with a contemporaneous acquisition by Carlyle of another industry participant. On August 15, Carlyle sent to the Company a letter outlining potential terms of an acquisition of the Company by Carlyle at an indicated price of $32.00 per share in cash, subject to due diligence and other conditions. On August 17, the Board met in Dallas to

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review the Company’s strategic alternatives, with UBS attending telephonically. At this meeting, the Board asked management and UBS to prepare a more detailed analysis of the Company’s strategic alternatives, and authorized management to continue discussions with Participant 1 concerning a stock-for-stock strategic transaction and to report back to the Board. The Board also determined to engage UBS to act as the Company’s financial advisor. After the Board meeting, the Company and Participant 1 entered into a confidentiality and standstill agreement and engaged in intermittent discussions.

On September 15, another company that operates in the residential roofing business (“Participant 2”) sent the Company a confidential preliminary proposal which contemplated an acquisition of the Company in a cash transaction at $37.00 per share. On September 18, Carlyle sent to the Company a letter reiterating its interest in a transaction at $32.00 per share in cash, and indicating a willingness to increase its valuation based on due diligence. On September 21, the Board met in Dallas, together with UBS and Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”), special outside legal advisor to the Company, to discuss the letters from Participant 2 and Carlyle and to review the Company’s strategic alternatives. Following presentations and discussion, and, in light of trends affecting the industry in which the Company participates and trends in the Company’s financial results, the Board determined to engage in a more extensive review of the Company’s strategic alternatives, including a possible merger or sale of the Company. In connection with this review, the Board instructed management and UBS to commence a non-public solicitation process to determine whether acquisition proposals higher than the $37.00 per share price indicated by Participant 2 could be obtained. Because the Board believed that leaks concerning this process could negatively affect the Company’s employees and the Company’s relationships with customers and suppliers, the Board instructed UBS to target only those potential acquirors deemed likely to have both the interest and ability to acquire the Company. Upon learning that the Company was commencing a formal process, Participant 1 indicated that it would participate only if the Company would work with Participant 1 on an exclusive basis, which the Company declined to do. The Board also established the Special Committee — consisting of all five of the Company’s independent, non-management directors — to oversee the process and to provide direction to management, UBS and Wachtell Lipton. Subsequent to this meeting, the Special Committee retained Citigroup Global Markets Inc. (“Citigroup”) as its financial advisor.

During the next several weeks, UBS contacted, on behalf of the Company, a number of strategic buyers (including Participant 2) and financial buyers (including Carlyle) deemed likely to have both the interest and ability to acquire the Company and taking into account the Board’s instruction to minimize the risk of leaks. Based on the advice of UBS, the Company did not contact BMCA and several other participants in the building materials industry because it was believed that these companies would either be uninterested, or unable to participate competitively for a variety of reasons, including, in the case of BMCA, the asbestos-related bankruptcy of its affiliate, G-I Holdings. Of the parties contacted, several executed confidentiality and standstill agreements and began conducting due diligence investigations of the Company. Participant 2 objected to a provision of the Company’s form of confidentiality and standstill agreement that would prohibit participants in the Company’s process from submitting further bids after a “winner” was chosen. It was the Company’s belief that such a provision was necessary to maximize the price obtained during the process by incentivizing the participants to make their highest and best offers during the process at a time when multiple parties were interested in acquiring the Company. After further discussions, Participant 2 executed a confidentiality and standstill agreement that included the previously disputed provision. During this period, the Board and Special Committee met periodically to monitor the status of the process.

On November 2, Robert B. Tafaro, the president and chief executive officer of BMCA, which is controlled and majority-owned by Samuel J. Heyman, contacted Mr. Karol to inform him that affiliates of Mr. Heyman had acquired in excess of 10% of the Company’s outstanding common stock and that BMCA would be interested in a business combination with the Company. Mr. Tafaro did not indicate any potential price range for such a transaction. On November 5, Mr. Karol, together with representatives of UBS and Wachtell Lipton, participated in a telephone call with Mr. Heyman, Mr. Tafaro and certain of their employees and outside legal counsel. During this call, Mr. Karol informed Messrs. Heyman and Tafaro that the Company was engaged in a confidential process that might lead to a sale of the Company and stated that Mr. Heyman’s and BMCA’s participation in the process would be welcomed. Mr. Karol offered to provide Mr. Heyman with access to the confidential materials being provided to other bidders, subject to execution of a confidentiality and standstill agreement in the same form

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executed by the other process participants. The following day, Mr. Tafaro sent a letter to Mr. Karol expressing a “strong interest” in a business combination with the Company at an all cash price to be negotiated, and stating that “we are willing, of course, to execute a customary confidentiality agreement.”

On November 6, the Company issued a press release announcing that the Company was engaged in a review of the Company’s strategic alternatives, which could include a possible merger or sale of the Company. The Company also announced that it had reduced the triggering threshold of its Rights Agreement to 10%, from 15% (with the proviso that any shareholder that beneficially owned 10% or more of the Company’s stock as of November 6 would not be deemed to have crossed the threshold unless or until such shareholder acquires beneficial ownership of additional shares of Company stock). The Company took this action in order to maintain control over the Company’s process, to limit BMCA’s advantage compared to other interested parties who had not purchased any shares and who had agreed to refrain from such purchases, and to reduce the risk that parties other than BMCA would be discouraged from participating in the process because of any further advantage BMCA might obtain by purchasing additional shares at less than the anticipated price of any potential sale or merger. That same day, BMCA issued a press release disclosing its interest in pursuing a business combination with the Company and, together with Mr. Heyman and certain affiliated entities, publicly filed an Ownership Statement on Schedule 13D disclosing Mr. Heyman’s and BMCA’s beneficial ownership of 10.36% of the common stock of the Company (as of November 1, 2006).

Over the next nine days, the Company, Wachtell Lipton and UBS discussed the confidentiality and standstill agreement with BMCA’s representatives. Mr. Heyman and BMCA expressed their unwillingness to sign an agreement in the same form that other participants had signed, objecting to certain of the standstill provisions and refusing to relinquish the right to submit bids after the conclusion of the process even if BMCA were not the high bidder. The Board strongly preferred including BMCA in the process but was not willing to grant preferential treatment to BMCA relative to any other participant. In this regard, the Board believed that the best possible result would be obtained for the Company’s shareholders by adhering to process rules that would incentivize all interested bidders to offer their respective highest and best offers during the process while multiple bidders were still involved. In determining not to make an exception for BMCA, the Board considered that BMCA would not be foreclosed from reconsidering its position and joining the process or from making a topping bid. The Board also considered that the Company had not granted similar accommodations to Participant 2, even though Participant 2 had made a written acquisition proposal at $37.00 per share.

On the evening of November 13, Mr. Karol, Richard A. Nowak, the Company’s president and chief operating officer, and David G. Sisler, the Company’s senior vice president and general counsel, and representatives of Wachtell Lipton and UBS met in Dallas with Messrs. Heyman and Tafaro and one of their employees. During this meeting, Mr. Heyman reiterated his and BMCA’s interest in acquiring the Company, and again expressed his unwillingness to agree to the standstill provisions of the confidentiality and standstill agreement. Mr. Heyman did not indicate any potential price range for a transaction. Mr. Karol suggested that Messrs. Heyman and Tafaro consider preempting the Company’s exploration process by making a proposal at a compelling price. Regarding the confidentiality and standstill agreement, Mr. Heyman stated that he and BMCA would be willing to proceed without access to non-public information. Mr. Heyman then stated that he would inform the Company of his proposed acquisition price within 48 hours, and then would give the Company the following “choice”: after receiving BMCA’s price, the Company could then decide either to allow BMCA to execute a confidentiality and standstill agreement in the form required by Mr. Heyman or, if the Company still remained unwilling to enter into a confidentiality and standstill agreement in the form required by Mr. Heyman, BMCA would proceed without confidential information.

However, rather than providing the Company with a proposed price, on November 15, BMCA publicly disclosed and shortly thereafter submitted to Mr. Karol and the Company’s Board, a letter stating that BMCA was prepared to enter into a merger agreement with the Company at a price of $35.00 cash per share. In the letter, BMCA objected to their exclusion from the ongoing sale process because of the Company’s insistence that BMCA agree to

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what it regarded as “onerous” standstill provisions. On November 16, the Company issued the following statement regarding BMCA’s announcement:

“The Board is firmly committed to a fair process that will yield the best result for all shareholders and the Company, and will evaluate and consider BMCA’s proposal in the context of the overall process and all other proposals received.

“Regarding BMCA’s unwillingness to execute a customary confidentiality and standstill agreement, several parties have already signed our form agreement and are actively participating in our process, including by submitting indications of interest. We have simply requested that BMCA do likewise and participate on a fair and even basis with other interested parties. A number of the assertions in BMCA’s letter are simply incorrect. Among other things, BMCA indicated no willingness to compromise on the terms of the agreement, insisting instead on preferential treatment not justified by their offer.

“We continue to invite BMCA’s participation in our process on a basis that enhances rather than reduces the likelihood of achieving the best possible result for our shareholders.”

Over the next several days, Wachtell Lipton and UBS continued to discuss the terms of the confidentiality and standstill agreement with BMCA’s counsel, including offering significant accommodations that the Board and the Special Committee believed would not undermine the goal of maximizing value for shareholders while providing BMCA and its affiliates assurance that the exploration process was bona fide. Thus, the Company’s representatives offered to free BMCA and its affiliates from all standstill restrictions in the event that the Company were to terminate its exploration of strategic alternatives without entering into any transaction. Nevertheless, BMCA remained unwilling to enter into an acceptable confidentiality and standstill agreement.

Over the next several weeks, participants in the Company’s process continued to conduct due diligence. On December 11, the deadline for submission of final bids, Carlyle submitted a proposal of $37.00 per share in cash and Participant 2 submitted a proposal of $37.25 per share in cash. The Carlyle proposal permitted the Company to continue to pay regular quarterly dividends of up to $0.05 per share per quarter, narrowing the value difference between the bids. In addition, the form of merger agreement submitted by Carlyle contained substantially fewer contingencies and posed substantially less risk of non-consummation than the form of merger agreement submitted by Participant 2. Carlyle’s bid contemplated that certain members of the Company’s current management would invest in, and agree to continue employment with, the Company following an acquisition by Carlyle. However, no specific terms were proposed. Also on December 11, Mr. Tafaro sent Mr. Karol a letter reporting that BMCA had obtained financing commitments for its $35.00 per share acquisition proposal and that the antitrust waiting period for its proposed acquisition had expired, and expressing an interest in negotiating a merger agreement.

Later on December 11, Mr. Tafaro contacted Mr. Karol, and, on December 12, a representative of BMCA contacted a representative of UBS. In each case, BMCA’s representative was informed that the Board would be informed of BMCA’s proposal.

On Wednesday, December 13, the Board met by telephone, together with representatives of Wachtell Lipton and UBS, to discuss the offers. Following presentations by Wachtell Lipton and UBS and discussion among the committee members, the Board determined that the bids from Carlyle and Participant 2 were too close to distinguish a clear winner, and directed Wachtell Lipton and UBS to seek revised bids from Carlyle and Participant 2. The Board set Saturday, December 16 at noon as the deadline for revised bids. The Board also instructed management to inform Carlyle that Carlyle should not, prior to the December 16 deadline, seek to discuss post-closing employment opportunities or to negotiate the terms, if any, by which members of the Company’s management would invest in or be employed by the Company following a Carlyle acquisition. Mr. Karol confirmed to the Board that no specific terms had been proposed by or discussed with Carlyle. At this juncture, the Board determined not to seek to open negotiations with BMCA. In reaching this determination, the Board considered that: (1) it had received proposals, including executed financing commitments and detailed forms of merger agreement from two bidders at or above $37.00 per share (compared to $35.00 per share from BMCA); (2) industry trends were deteriorating and the Company’s recent performance and anticipated second fiscal quarter results reflected those developments (information which was known to participants in the process but not to BMCA, since it had not received non-public information from the Company); (3) the two bidders in the process were expressing dissatisfaction that such process

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had not been brought to a close; and (4) the form of merger agreement provided by each bidder contained provisions which would enable BMCA or another bidder to prevail if it were to offer a superior transaction.

Thereafter, representatives of UBS and Wachtell Lipton contacted each of the bidders. Each bidder was told that it would need to increase its price if it wished to distinguish itself. Each bidder was also told of the deadline for revised bids and was advised of the material issues raised by their respective merger agreement forms.

In the morning of Friday, December 15, the Special Committee met by telephone. At this meeting, Citigroup discussed with the Special Committee certain financial matters pertaining to the Company, including certain revised financial forecasts prepared by the Company’s management.

On December 16, a representative of UBS spoke with a representative of Carlyle and communicated, among other things, currently-obtained information reflecting a weakness in the Company’s anticipated second fiscal quarter results. At the December 16 deadline for submission of final bids, Carlyle had submitted a revised offer of $38.00 per share in cash, together with committed financing and a revised merger agreement accommodating a significant majority of the Company’s previously-expressed concerns. Participant 2 did not submit a revised bid and had withdrawn its $37.25 offer.

Later on December 16, representatives of UBS and Wachtell Lipton contacted Carlyle and its outside counsel to inform them of certain remaining issues with Carlyle’s bid and proposed merger agreement form. In the morning of Sunday, December 17, Carlyle’s outside counsel delivered a revised form of merger agreement and related documents.

In the early evening of Sunday, December 17, the Board and the Special Committee met by telephone, together with representatives of UBS, Wachtell Lipton and Citigroup. Following a discussion by the full Board, Wachtell Lipton and UBS, the Special Committee met with representatives of Citigroup and Wachtell Lipton. Representatives of Citigroup discussed the financial terms of the Carlyle transaction with the Special Committee. After further discussion, the Special Committee determined to recommend and approve the proposed transaction, subject to acceptable resolution of the open issues. Shortly thereafter, the full Board reconvened. After a presentation by them, representatives of UBS informed the Board that UBS would be prepared to deliver an opinion, based upon and subject to the factors and assumptions to be set forth in such opinion, as to the fairness, from a financial point of view, of the $38.00 per share price. After further discussion, the Board determined that it unanimously supported the proposed transaction, and directed UBS and Wachtell Lipton to continue to negotiate with Carlyle to seek to resolve the remaining open points and to obtain assurance as to Carlyle’s understanding of the updated financial information communicated by UBS to Carlyle the previous day, which reflected a weakness in the Company’s anticipated second fiscal quarter results.

During the next several hours, representatives of UBS and Wachtell Lipton spoke several times to representatives of Carlyle and resolved the open merger agreement issues. Although Carlyle responded adversely to the weakness in the Company’s anticipated second fiscal quarter results, it ultimately determined to proceed to finalize the transaction at the $38.00 price following discussions with representatives of UBS. While these discussions were occurring, at approximately 8:45 p.m. on Sunday evening, Mr. Karol received a letter from Mr. Tafaro stating that BMCA would be commencing a tender offer to acquire all of the outstanding shares of the Company at a price of $35.00 per share. The letter stated that the offer “is not conditional on financing” but otherwise contained no details about the offer, such as conditions to consummation or BMCA’s financing.

Late on Sunday evening, Carlyle’s outside counsel provided Wachtell Lipton with a final, agreed form of merger agreement. Shortly before 1:00 a.m. on Monday, December 18, the directors reconvened telephonically as a combined meeting of the Special Committee and the full Board, together with representatives of UBS, Wachtell Lipton and Citigroup. Wachtell Lipton and UBS described for the Special Committee the resolution of all open issues relating to the proposed transaction. The Board also discussed the letter received from BMCA, but determined that the letter did not warrant delaying the certain, $38.00 per share Carlyle transaction. Also at the meeting, Citigroup rendered to the Special Committee its oral opinion, confirmed by delivery of a written opinion dated December 18, 2006, to the effect that, as of that date and based on and subject to the matters described in its opinion, the $38.00 per share cash merger consideration to be received by holders of the Company’s common stock in the Carlyle transaction was fair, from a financial point of view, to such holders. A representative of UBS

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then rendered orally to the Board UBS’s opinion, subsequently confirmed in writing, to the effect that, as of December 18, 2006, and based upon and subject to the factors and assumptions set forth in the opinion, the $38.00 per share cash merger consideration to be received by holders of the Company’s common stock in the Carlyle transaction was fair, from a financial point of view, to the holders of Company common stock. Following further discussion, the Special Committee, by unanimous vote of all of its members, approved the merger agreement and recommended that the full Board approve and adopt the merger agreement. Following receipt of this recommendation, the Board, by unanimous vote of all of its members (with Thomas D. Karol and Richard A. Nowak abstaining) adopted resolutions approving the execution, delivery and performance of the merger agreement and resolved to recommend that the shareholders of the Company vote to adopt the merger agreement.

Following the conclusion of the Board meeting, the parties executed the merger agreement. Shortly thereafter, the Company’s outside legal counsel sent an email and left a voicemail for representatives of BMCA stating that the Company would be making an announcement in the morning that would be relevant to BMCA’s plans to commence the $35.00 per share offer referenced in BMCA’s letter received earlier that evening. In the morning, the Company and Carlyle issued a press release announcing the Carlyle transaction.

In the evening of Monday, December 18, BMCA submitted a letter to the Board stating that BMCA “is raising its tender offer price from $35.00 to $40.00 per share cash consideration for all Elk shares.” The letter contained no further details about the offer, such as conditions to consummation or financing.

During the morning of Wednesday, December 20, the Board met telephonically with representatives of UBS and Wachtell Lipton for an update concerning BMCA’s letter. While this meeting was in progress, BMCA commenced the Tender Offer, including filing publicly the Schedule TO which contained information about the Tender Offer. In light of the availability of this additional information, the Board adjourned its meeting to later in the day. Later in the morning or early afternoon of December 20, Mr. Heyman contacted Mr. Karol and, among other things, invited Mr. Karol or the Company to call Mr. Heyman back to discuss BMCA’s offer. When the Board reconvened, Wachtell Lipton and UBS summarized the terms of the Tender Offer and related financing. Following discussion, the Board made the determination necessary under the Carlyle merger agreement to enable the Company to engage in discussions and negotiations with, and to provide non-public information to, BMCA. At the same time, the Board identified a number of concerns with the Tender Offer in its current form, particularly as to certainty of completion.

Later that day, in response to the Tender Offer and Mr. Heyman’s telephone call, Wachtell Lipton and UBS spoke with BMCA’s outside counsel to convey the Company’s specific concerns about the Tender Offer.

At approximately 11:15 p.m. on Sunday, December 24, BMCA’s outside counsel delivered to Wachtell Lipton a form of merger agreement between BMCA and the Company. In the morning of Tuesday, December 26, the Company’s outside legal counsel called BMCA’s legal counsel to convey the Company’s comments and concerns with BMCA’s proposed form of merger agreement.

Over the next several days, the parties negotiated the terms of a confidentiality and standstill agreement that would allow for the exchange of confidential information, including the disclosure schedules to the Carlyle merger agreement. In the evening of Friday, December 29, BMCA and the Company entered into a confidentiality agreement. This confidentiality agreement includes customary standstill provisions, but BMCA is exempt from and not subject to these standstill provisions in connection with the Tender Offer or any other offer or proposal that provides for per share consideration that is not less than $40.00 per share and is otherwise on terms not materially less favorable to the Company’s shareholders than the Tender Offer. Because of its concerns that provisions of the confidentiality agreement to be entered into with BMCA would be inconsistent with certain provisions of the Carlyle merger agreement, the Company requested a waiver from Carlyle of such merger agreement provisions. Prior to executing the confidentiality agreement with BMCA, the Company obtained such a waiver from Carlyle.

Later that Friday night, the Company’s outside counsel provided BMCA’s counsel with a mark-up of BMCA’s proposed form of merger agreement, reflecting the comments conveyed verbally on December 26.

BMCA was given access to due diligence materials and information the next day. BMCA has conducted extensive due diligence over the past nine days, including a management presentation conference call on Tuesday, January 2, 2007, involving Messrs. Heyman and Tafaro and their representatives, on the one hand, and Mr. Karol

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and representatives of Wachtell Lipton and UBS, on the other hand, and additional face-to-face meetings with the Company’s management on Saturday, January 6, 2007. In addition, BMCA has been given access to all of the data room materials made available to Carlyle and other bidders, and, in response to detailed requests from BMCA, the Company has provided BMCA with information and access to materials not previously made available to Carlyle or other bidders. Plant and facility tours are scheduled for the week of January 8. BMCA’s diligence activities are ongoing as of January 8, 2007.

On Wednesday, January 3, 2007, the Board and the Special Committee held a telephonic update call, together with UBS, Wachtell Lipton and Citigroup. In the afternoon of Friday, January 5, BMCA’s counsel sent to the Company a revised form of merger agreement and debt commitment letter responding to some but not all of the Company’s previously conveyed comments and concerns. On Saturday, January 6, 2007, the Company provided BMCA with written comments concerning BMCA’s financing commitments, and, on Sunday, January 7, Wachtell Lipton and UBS engaged in a discussion with BMCA’s outside legal counsel concerning BMCA’s revised draft merger agreement, the structure of BMCA’s proposed transaction, and the availability of financing for a transaction structured as a two-step tender offer-followed-by-merger.

Later on Sunday, January 7, 2007, the Board and the Special Committee met by telephone, together with representatives of UBS, Wachtell Lipton and Citigroup. Following a discussion by the full Board, the Special Committee met with representatives of Citigroup and Wachtell Lipton. After careful consideration, including a thorough review of the Tender Offer with its outside legal and financial advisors, the Special Committee determined to recommend to the Board the conclusions set forth above under Item 4(a) and, separately, the continuation of negotiations with Mr. Heyman and the Offeror. Following receipt of this recommendation, the Board, by unanimous vote of all of its members (with Thomas D. Karol and Richard A. Nowak abstaining), adopted resolutions reaching the conclusions set forth above under Item 4(a) and, separately, authorizing the continuation of negotiations with Mr. Heyman and the Offeror.

(c)  Intent to Tender.

To the Company’s knowledge, none of its directors, executive officers, affiliates or subsidiaries currently intends to sell or tender for purchase pursuant to the Tender Offer any Shares owned of record or beneficially owned.

Item 5.   Persons/Assets Retained, Employed, Compensated or Used

The Company has retained MacKenzie Partners, Inc. (“MacKenzie Partners”) to assist it in connection with communications with its shareholders with respect to the Tender Offer, to monitor trading activity in the Shares and to identify investors holding noteworthy positions in street name. The Company has agreed to pay customary compensation for such services and to reimburse MacKenzie Partners for its out-of-pocket expenses in connection with its engagement.

The Company has also agreed to indemnify MacKenzie Partners against certain liabilities arising out of or in connection with its engagement.

The Company has retained Sard Verbinnen & Co. LLC (“Sard Verbinnen”) as its public relations advisor in connection with the Tender Offer. The Company has agreed to pay customary compensation for such services and to reimburse Sard Verbinnen for its out-of-pocket expenses in connection with its engagement. The Company has also agreed to indemnify Sard Verbinnen against certain liabilities arising out of or in connection with its engagement.

UBS was retained by the Company to act as financial advisor in connection with the Board’s evaluation of possible strategic alternatives, which services have included advice with respect to the Carlyle Merger. In connection with such assignment, UBS is also advising the Board with respect to the Tender Offer. The Company has agreed to pay UBS customary compensation for its services, a portion of which became payable upon the rendering of its opinion and a significant portion of which is contingent upon a sale of the Company, including the consummation of the Tender Offer. The Company has also agreed to indemnify UBS and certain related persons against certain liabilities, including liabilities under the federal securities laws, relating to or arising out of its engagement. In the ordinary course of business, UBS, its successors and affiliates may hold or trade, for their own accounts and the accounts of customers, the Company’s securities and/or the securities of the Offeror, Parent (as

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defined below) and their respective affiliates, and, accordingly, may at any time hold a long or short position in such securities.

The Special Committee has retained Citigroup to act as its financial advisor in connection with a possible sale transaction involving the Company, which services have included financial advice with respect to the Carlyle Merger and the Tender Offer and the Proposed Merger. The Company has agreed to pay Citigroup customary compensation for its services, a portion of which became payable upon the rendering of its opinion in connection with the Carlyle Merger. The Company also has agreed to reimburse Citigroup for reasonable travel and other expenses incurred by Citigroup in performing its services, including reasonable fees and expenses of its legal counsel, and to indemnify Citigroup and certain related persons against certain liabilities, including liabilities under the federal securities laws, arising out of its engagement. In the ordinary course of business, Citigroup and its affiliates may actively trade or hold the securities of the Company and the Offeror for their own account or for the account of customers and, accordingly, may at any time hold a long or short position in those securities. In addition, Citigroup and its affiliates, including Citigroup Inc. and its affiliates, may maintain relationships with the Company, BMCA, Carlyle and their respective affiliates.

Except as otherwise noted in this Item 5, neither the Company nor any person acting on its behalf has employed, retained or agreed to compensate any person to make solicitations or recommendations to shareholders of the Company concerning the Tender Offer.

Item 6.   Interests in Securities of the Company

No transactions in the Shares have been effected during the past 60 days by the Company or, to the Company’s knowledge, by any of the Company’s directors, executive officers, affiliates or subsidiaries, other than purchases by the Company of 1,892 Shares through stock option exercises.

Item 7.   Purposes of the Transaction and Plans or Proposals

As described in further detail above under Item 3(b), the Company has entered into a confidentiality agreement with BMCA and Heyman Investment and is engaged in discussions or negotiations with BMCA concerning the Tender Offer and a possible negotiated transaction between BMCA and the Company, and has provided BMCA with access to non-public information with respect to the Company and its subsidiaries. Under the Carlyle Merger Agreement, the Company is permitted to take the foregoing actions only if the Board has determined that the Tender Offer or other acquisition proposals made by the Offeror or its affiliates may reasonably be expected to lead to a “superior proposal,” as defined in the Carlyle Merger Agreement. As discussed above under Item 4, on December 20, 2006, the Board adopted a resolution making the necessary determination. In addition, Carlyle provided a waiver with respect to the required form of confidentiality agreement. The Company is engaged, or may engage, in discussions or negotiations with Carlyle concerning any possible response Carlyle may wish to make to the Tender Offer.

The Board of Directors has determined that disclosure with respect to the possible terms of any transactions or proposals that might result from or be made during any of the negotiations referred to in this Item 7 might jeopardize continuation of any such negotiations. Accordingly, the Board of Directors has instructed management not to disclose the possible terms of any such transactions or proposals, or the parties thereto, unless and until an agreement in principle relating thereto has been reached or, upon the advice of counsel, as may otherwise be required by law.

Other than as described in this Item 7, the Company is not undertaking or engaged in negotiations in response to the Tender Offer that relate to: (i) a tender offer or other acquisition of the Company’s securities by the Company, any of its subsidiaries or any other person; (ii) an extraordinary transaction, such as a merger, reorganization or liquidation involving the Company or any of its subsidiaries; (iii) a purchase, sale or transfer of a material amount of assets of the Company or any of its subsidiaries; or (iv) a material change in the present dividend rate or policy, or indebtedness or capitalization of the Company.

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Item 8.   Additional Information to be Furnished

(a)  Tender Offer Conditions

The following information in this Item 8(a) is derived solely from the Offer to Purchase:

According to the Offer to Purchase, the Offeror may extend or amend the Tender Offer in its sole discretion. In addition, the Offeror is not be required to complete the Tender Offer if, in its sole judgment, any of the following events shall occur or shall be determined by the Offeror to have occurred, which, in the sole judgment of the Offeror, and regardless of the circumstances (including any action or inaction by the Offeror or any affiliate the Offeror) giving rise thereto, makes it inadvisable to proceed with the Tender Offer and/or accept the Shares for payment or pay for the Shares:

(1) there has been or will be any action taken, or any statute, rule, regulation, legislation, interpretation, judgment, order or injunction enacted, enforced, promulgated, amended, issued or deemed applicable to the Tender Offer, the Company, the Offeror or any of its affiliates, by any legislative body, court, government or governmental, administrative or regulatory authority or agency, domestic or foreign that, in the reasonable judgment of the Offeror, would be expected to, directly or indirectly:

•  make illegal or otherwise prohibit or materially delay consummation of the Tender Offer or the Proposed Merger or seek to obtain material damages or make materially more costly the making of the Tender Offer,

•  prohibit or materially limit the ownership or operation by the Offeror or any of its affiliates of all or any material portion of the business or assets of the Company or any of its subsidiaries taken as a whole or compel the Offeror or any of its affiliates to dispose of or hold separately all or any material portion of the business or assets of the Offeror or any of its affiliates or of the Company or any of its subsidiaries taken as a whole, or seek to impose any material limitation on the ability of the Offeror or any of its affiliates or of the Company to conduct its business or own such assets,

•  impose material limitations on the ability of the Offeror or any of its affiliates effectively to acquire, hold or exercise full rights of ownership of the Shares, including, without limitation, the right to vote any Shares acquired or owned by the Offeror or any of its affiliates, or to finance the purchase price of the Shares,

•  require divestiture by the Offeror or any of its affiliates of any Shares,

•  result in a material adverse effect on the Offeror, any of its affiliates or the Company or the value of the Shares,

•  result in a material diminution in the benefits expected to be derived by the Offeror or any of its affiliates as a result of the Tender Offer or any merger or other business combination involving the Company; or

(2) there has been or will be instituted or pending any action or proceeding by any governmental entity or third party seeking, or that would reasonably be expected to result in, any of the consequences referred to in the clauses of paragraph (1) above; or

(3) the Offeror shall become aware of any change, circumstance, event or effect that has or will have occurred (or any development that has or will have occurred involving prospective changes) that is materially adverse to the business, operations, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, or could reasonably be expected to have, in the sole discretion of the Offeror, a material adverse effect on the Company or the value of the Shares or, assuming consummation of the Tender Offer or the Proposed Merger, on the Offeror or any of its affiliates; or

(4) there has or will have occurred, and continues to exist:

•  any general suspension of, or limitation on prices for, trading in securities on any national securities exchange or in the over-the-counter market in the United States,

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•  any extraordinary or material adverse change in the price of the Shares or the financial markets or major stock exchange indices in the United States, or any change in the general political, market, economic or financial conditions in the United States or abroad that could have a material adverse effect on the business, financial condition or results of operations or prospects of the Company,

•  a change in the general financial, bank or capital market conditions which materially and adversely affects the ability of financial institutions in the United States to extend credit or syndicate loans,

•  a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States (whether or not mandatory),

•  a commencement of a war, armed hostilities, terrorist attack or other national or international crisis involving the United States or a material limitation (whether or not mandatory) by any governmental entity on the extension of credit by banks or other lending institutions, or

•  in the case of any of the foregoing existing at the time of the commencement of the Tender Offer, a material escalation or the worsening thereof; or

(5) except as and to the extent publicly disclosed in a report filed by the Company with the Commission prior to the date of the Offer to Purchase, the Company or any of its subsidiaries shall have, directly or indirectly:

•  split, combined or otherwise changed, or authorized or proposed a split, combination or other change of, the Shares or its capitalization,

•  acquired or otherwise caused a reduction in the number of, or authorized or proposed the acquisition or other reduction in the number of, outstanding Shares or other securities,

•  issued, distributed or sold, or authorized, proposed or announced the issuance, distribution or sale of, additional Shares (other than the issuance of Shares under the Company employee stock options outstanding prior to the date of the Offer to Purchase, in accordance with the terms of such stock options as publicly disclosed prior to the date of the Offer to Purchase), shares of any other class of capital stock, other voting securities or any securities convertible into or exchangeable for, or rights, warrants or options to acquire, any of the foregoing,

•  declared or paid, or proposed to declare or pay, any dividend or other distribution, whether payable in cash, securities or other property, on or with respect to any shares of the Company’s capital stock (except for regular quarterly cash dividends on the Shares not in excess of $0.05 per share having customary and usual record dates and payment dates),

•  altered or proposed to alter any material term of any outstanding security,

•  issued, distributed or sold, or authorized or proposed the issuance, distribution or sale of any debt securities or any securities convertible into or exchangeable for debt securities or any rights, warrants or options entitling the holder thereof to purchase or otherwise acquire any debt securities or incurred, or authorized or proposed the incurrence of, any debt other than in the ordinary course of business or any debt containing burdensome covenants,

•  authorized, recommended, proposed, entered into or announced its intention to enter into an agreement with respect to, or to cause, any merger (other than the Proposed Merger), consolidation, liquidation, dissolution, business combination, acquisition of assets or securities, disposition of assets, release or relinquishment of any material contractual or other right of the Company or any of its subsidiaries or any comparable event not in the ordinary course of business,

•  authorized, recommended, proposed or entered into, or announced its intention to authorize, recommend, propose or enter into, any agreement or arrangement with any person or group that, in the sole judgment of the Offeror, could adversely affect either the value of the Company or any of its subsidiaries or the value of the Shares to the Offeror or any of its affiliates,

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•  amended or proposed, adopted or authorized any amendment to the Charter or By-Laws of the Company or the articles or by-laws or any other organizational documents of any of its subsidiaries,

•  entered into any employment, severance or similar agreement, arrangement or plan with or for the benefit of any of its employees or entered into or amended any agreements, arrangements or plans so as to provide for increased or accelerated benefits to the employees as a result of or in connection with the transactions contemplated by the Tender Offer, the Proposed Merger or any other business combination, or

•  except as may be required by law, taken any action to terminate or amend any employee benefit plan (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended) of the Company or any of its subsidiaries; or

(6) the Offeror shall become aware:

•  that any material contractual right of the Company or any of its subsidiaries shall be impaired or otherwise adversely affected or that any material amount of indebtedness of the Company or any of its subsidiaries shall become accelerated or otherwise become due or become subject to acceleration prior to its stated due date, in any case, with or without notice or the lapse of time or both, as a result of or in connection with the Tender Offer or the consummation by the Offeror, the Company or any other affiliate of the Company of the Proposed Merger or any other business combination involving the Company and the Offeror or any of its affiliates,

•  of any covenant, term or condition in any of the instruments or agreements of the Company or any of its subsidiaries that, in the sole judgment of the Offeror, is or may be (whether considered alone or in the aggregate with other such covenants, terms or conditions) materially adverse to either the value of the Company or any of its subsidiaries or the value of the Shares to the Offeror or any other affiliate of the Offeror or the consummation by the Offeror of the Tender Offer or by the Offeror or any affiliate of the Offeror of the Proposed Merger or any other business combination (including, without limitation, any event of default that may occur as a result of or in connection with the Tender Offer or the Proposed Merger or any other business combination involving the Company, the Offeror or any non-competition, exclusivity, co-promotion or marketing or other arrangement), or

•  that any report, document, instrument, financial statement or schedule filed with the Commission contained, when filed, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading; or

(7) a tender or exchange offer for any Shares shall have been made or publicly proposed to be made by any person (including the Company or any of its subsidiaries or affiliates), or it shall have been publicly disclosed or the Offeror shall have otherwise learned that:

•  any person, entity (including the Company or any of its subsidiaries) or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) shall have acquired or proposed to acquire beneficial ownership of more than 5% of any class or series of capital stock of the Company (including the Shares) or any of its subsidiaries, through acquisition of stock, the formation of a group or otherwise, or shall have been granted any right, option or warrant, conditional or otherwise, to acquire beneficial ownership of more than 5% of any class or series of capital stock of the Company (including the Shares) or any of its subsidiaries, other than acquisitions of Shares for bona fide arbitrage purposes only,

•  any such person, entity or group that, prior to the date of the Offer to Purchase, had filed such a Schedule 13G with respect to the Company with the Commission, shall have acquired or proposed to acquire (other than acquisitions of Shares for bona fide arbitrage purposes only), through the acquisition of stock, the formation of a group or otherwise, beneficial ownership of additional shares of any class or series of capital stock of the Company (including the Shares) or any of its subsidiaries constituting 2% or more of any such class or series, or shall have been granted any

17

option, right or warrant, conditional or otherwise, to acquire beneficial ownership of shares of any class or series of capital stock of the Company (including the Shares) or any of its subsidiaries constituting 2% or more of any such class or series,

•  any person, other than the Offeror or any of its affiliates, shall have made a public announcement reflecting an intent to acquire the Company or any assets or subsidiaries of the Company,

•  any person or group shall have entered into a definitive agreement or an agreement in principle or made a proposal with respect to a tender offer or exchange offer or a merger, consolidation or the Company or any of its subsidiaries shall have (i) granted to any person or group proposing a merger or other business combination with or involving the Company or any of its subsidiaries or the purchase of securities or assets of the Company or any of its subsidiaries any type of option, warrant or right which, in the Offeror’s judgment, constitutes a “lock-up” device (including, without limitation, a right to acquire or receive any Shares or other securities, assets or business of the Company or any of its subsidiaries) or (ii) paid or agreed to pay any cash or other consideration to any party in connection with or in any way related to any such business combination or purchase; or

(8) any material approval, permit, authorization, favorable review or consent of any governmental entity (including those described or referred to in this Item 8(a)) shall not have been obtained on terms satisfactory to the Offeror, in its sole discretion; or

(9) (i) the Offeror or any of its affiliates shall have entered into a definitive agreement or announced an agreement in principle with respect to the Proposed Merger or any other business combination with the Company or any of its affiliates or the purchase of any material portion of the securities or assets of the Company or any of its subsidiaries, or (ii) the Offeror or any of its affiliates and the Company shall have agreed that the Offeror shall amend or terminate the Tender Offer or postpone the payment for Shares pursuant thereto.

In addition, according to the Offer to Purchase, the Tender Offer is conditioned upon:

(1) there being validly tendered and not withdrawn prior to the expiration of the Tender Offer such number of Shares that, when added to the Shares already beneficially owned by the Offeror, shall constitute a majority of the Shares outstanding, on a fully diluted basis (including, without limitation, all Shares issuable upon the exercise of any options, warrants, or rights (other than the Rights)), on the date the Tender Offer expires;

(2) the Offeror being satisfied, in its sole discretion, that, after consummation of the Tender Offer, Section 203 of the DGCL, will not prohibit for any period of time, or impose any shareholder approval requirement with respect to, the Proposed Merger or any other business combination involving the Company and the Offeror;

(3) the Rights issued under the Company’s Rights Agreement having been redeemed by the Board, or the Offeror being satisfied, in its sole discretion, that the Rights are invalid or otherwise inapplicable to the Tender Offer and the Proposed Merger; and

(4) the Offeror being satisfied, in its sole discretion, that the Tender Offer and the Proposed Merger have been approved for purposes of Article Thirteenth of the Company’s certificate of incorporation, or that the provisions of Article Thirteenth are otherwise inapplicable to the Tender Offer and the Proposed Merger.

(b)  The Carlyle Merger Agreement

On December 18, 2006, the Company entered into an Agreement and Plan of Merger (the “Carlyle Merger Agreement”) with CGEA Investor, Inc., a Delaware corporation (“Merger Sub”), and CGEA Holdings, Inc., a Delaware corporation (“Parent”).

Under the terms of the Carlyle Merger Agreement, Merger Sub will be merged with and into the Company (the “Carlyle Merger”), with the Company surviving the Carlyle Merger as a wholly owned subsidiary of Parent. Merger Sub and Parent are owned directly or indirectly by Carlyle Partners IV, L.P. (the “Sponsor”), an affiliate of The

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Carlyle Group (“Carlyle”). At the effective time of the Carlyle Merger, each outstanding Share, other than any Shares owned by Merger Sub, its affiliates, the Company or any shareholders who are entitled to and who properly exercise appraisal rights under Delaware law, will be cancelled and converted into the right to receive $38.00 in cash, without interest. Consummation of the Carlyle Merger is subject to certain conditions, including adoption of the Carlyle Merger Agreement by the Company’s shareholders, the absence of certain legal impediments to consummation of the Carlyle Merger and the expiration or termination of the required waiting period under the HSR Act. The parties filed the required Notification and Report Forms under the HSR Act on December 20, 2006, and received notice from the Federal Trade Commission of the early termination of the waiting period on January 3, 2007.

The foregoing summary of the Carlyle Merger Agreement does not purport to be complete and is qualified in its entirety by reference to Exhibit (e)(2), which is incorporated by reference herein.

(c)  Rights Agreement Amendments

On November 5, 2006, the Board approved an amendment to the Rights Agreement (the “First Amendment”). The Rights Agreement previously provided that, with certain exceptions, an “Acquiring Person” would be defined as any person or group of affiliated or associated persons that was the beneficial owner of 15% or more of the outstanding Shares. The First Amendment lowered the beneficial ownership threshold for an Acquiring Person to 10%, thereby providing that an Acquiring Person would be any person or group of affiliated or associated persons that was the beneficial owner of 10% or more of the outstanding Shares. The First Amendment included an exception for persons or groups of affiliated or associated persons who beneficially owned, as of November 5, 2006, 10% or more of the outstanding Shares, unless and until any such person or group acquired additional Shares after November 5, 2006. The foregoing description of the First Amendment does not purport to be complete and is qualified in its entirety by reference to Exhibit (e)(4), which is incorporated herein by reference.

On December 18, 2006, in connection with the Company’s execution of the Carlyle Merger Agreement, the Company and the Rights Agent executed an amendment to the Rights Agreement (the “Second Amendment”). The Second Amendment provides that, among other things, neither the execution of the Carlyle Merger Agreement nor the consummation of the Carlyle Merger or the other transactions contemplated by the Carlyle Merger Agreement will trigger the separation or exercise of the Rights or any adverse event under the Rights Agreement. In particular, neither Merger Sub, Parent, nor any of their respective affiliates or associates will be deemed to be an Acquiring Person (as defined in the Rights Agreement) solely by virtue of the approval, execution, delivery, adoption or performance of the Carlyle Merger Agreement or the consummation of the Carlyle Merger or any other transactions contemplated by the Carlyle Merger Agreement. The foregoing description of the Second Amendment does not purport to be complete and is qualified in its entirety by reference to Exhibit (e)(5), which is incorporated herein by reference.

(d)  Litigation

On December 19, 2006, Call4U, Ltd. filed a complaint (the “Call4U Complaint”) captioned Call4U, Ltd. v. Elkcorp., et al., C.A. No. 2623-N, in the Court of Chancery of the State of Delaware, New Castle County. The Call4U Complaint alleges that the plaintiff has brought the action on his own behalf and as a class action on behalf of all owners of the Company’s common stock and their successors in interest, except defendants and their affiliates, and names as defendants the Company, its directors, and Carlyle. The Call4U Complaint alleges that the director defendants breached their fiduciary duties in connection with the Company’s entry into the Carlyle Merger Agreement, and that Carlyle aided and abetted those breaches of duty, and seeks relief including, among other things, preliminary and permanent injunctions prohibiting consummation of the Carlyle Merger and an accounting for damages and profits. The foregoing description does not purport to be complete and is qualified in its entirety by reference to Exhibit (a)(4), which is incorporated herein by reference.

On December 27, 2006, William E. Wetzel filed a complaint (the “Wetzel Complaint”) captioned William E. Wetzel v. Thomas D. Karol, et al., Cause No. CC-06-18562-B, in the County Court of Dallas County at Law No. 2, Dallas County, Texas. The Wetzel Complaint alleges that it is a shareholder derivative action on behalf of the Company as nominal defendant, and names as defendants the Company’s directors and Carlyle. The Wetzel

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Complaint alleges that the director defendants breached their fiduciary duties and aided and abetted breaches of fiduciary duties in connection with the Company’s entry into the Carlyle Merger Agreement, and that Carlyle aided and abetted those breaches of duty, and seeks relief including, among other things, an injunction prohibiting consummation of the Carlyle Merger, declaratory relief, and imposition of a constructive trust upon any benefits improperly received by defendants. The foregoing description does not purport to be complete and is qualified in its entirety by reference to Exhibit (a)(5), which is incorporated herein by reference.

The Company believes that each of these lawsuits is without merit and intends to vigorously defend these actions.

Item 9.   Exhibits

Exhibit
Number		Description
	(a)(1)	Letter, dated January 8, 2007, to ElkCorp shareholders*
	(a)(2)	Press release issued by ElkCorp on January 8, 2007*
	(a)(3)	Press release issued by ElkCorp on December 20, 2006 (incorporated by reference to the Company’s Schedule 14D-9 filed with the Securities and Exchange Commission on December 20, 2006)
	(a)(4)	Complaint by Call4U against ElkCorp, its directors and Carlyle, filed December 19, 2006*
	(a)(5)	Complaint by William E. Wetzel against ElkCorp, its directors and Carlyle, filed December 27, 2006*
	(e)(1)	Excerpts from the Company’s Proxy Statement on Schedule 14A, dated September 22, 2006, relating to the Company’s 2006 Annual Meeting of Shareholders, filed with the Securities and Exchange Commission on September 18, 2006*
	(e)(2)	Agreement and Plan of Merger, dated as of December 18, 2006, by and among CGEA Holdings, Inc., CGEA Investor, Inc., and the Company (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 19, 2006)
	(e)(3)	Rights Agreement, dated as of July 7, 1998, between ElkCorp (formerly Elcor Corporation) and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated May 26, 1998)
	(e)(4)	Amendment to the Rights Agreement, dated as of November 5, 2006, by and between ElkCorp and Mellon Investor Services LLC (formerly known as ChaseMellon Shareholder Services, L.L.C.), as Rights Agent (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated November 6, 2006)
	(e)(5)	Second Amendment to Rights Agreement, dated as of December 18, 2006, by and between ElkCorp and Mellon Investor Services LLC (formerly known as ChaseMellon Shareholder Services, L.L.C.), as Rights Agent (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated December 18, 2006)
	(e)(6)	Confidentiality Agreement, dated December 29, 2007, among the ElkCorp, BMCA and Heyman Investment Associates Limited Partnership*

*  Filed herewith

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SIGNATURE

After due inquiry and to the best of my knowledge, I certify that the information set forth in this statement is true, complete and correct.

ELKCORP

By: /s/  Thomas D. Karol

Name: Thomas D. Karol

Title:  Chairman of the Board and

Chief Executive Officer

Dated: January 8, 2007

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EX-99.(A)(1)

Exhibit a(1)

14911 Quorum Drive

Suite 600

Dallas, Texas 75254

January 8, 2006

Dear Fellow Shareholders,

In the past few weeks, there have been several major developments concerning ElkCorp. On December 18, 2006, ElkCorp announced that it had entered into a definitive agreement to be acquired and taken private by The Carlyle Group. Under the terms of the agreement, ElkCorp shareholders would receive $38.00 in cash for each outstanding ElkCorp share. Completion of the proposed Carlyle transaction is subject to shareholder approval and other customary closing conditions.

On December 20, 2006, Building Materials Corporation of America (“BMCA”) commenced an unsolicited tender offer to acquire all of ElkCorp’s outstanding shares of common stock for $40.00 per share in cash (the “BMCA Tender Offer”), subject to numerous conditions. The terms and conditions of the BMCA Tender Offer were filed by BMCA on Schedule TO with the Securities and Exchange Commission on December 20, 2006. You may have already received soliciting materials from BMCA.

Enclosed with this letter is ElkCorp’s Solicitation/Recommendation Statement on Schedule 14D-9 filed today with the Securities and Exchange Commission. As described in greater detail in this document, your Board of Directors, on the recommendation of its Special Committee of independent, non-management directors and with the assistance of its legal and financial advisors, recommends that ElkCorp shareholders reject the BMCA Tender Offer and not tender their shares. The Board reached its determination based, among other factors, on its belief that the BMCA Tender Offer is excessively conditional, lacks appropriate financing and is potentially illusory.

ElkCorp is in active negotiations with BMCA and its affiliate, Mr. Samuel Heyman, to develop a transaction that would merit recommendation to our shareholders. To this end, ElkCorp has been providing, and continues to provide, BMCA and Heyman Investments with access to ElkCorp (including facilities, documents and personnel) to allow BMCA to conduct an extensive due diligence investigation, including access to the information provided to Carlyle and other bidders, as well as additional information not previously made available to Carlyle or other bidders. The Board therefore reserves the right to revise the recommendation in the event that an acceptable agreement with BMCA is reached or if circumstances otherwise change. We will update you as circumstances warrant.

Very truly yours,

Thomas D. Karol

Chairman of the Board and

Chief Executive Officer

Additional Information and Where to Find It.  In connection with the proposed merger with affiliates of The Carlyle Group, ElkCorp expects to file a proxy statement with the SEC. Investors and security holders are strongly advised to read the proxy statement when it becomes available because it will contain important information about the proposed Carlyle merger. Free copies of materials filed by ElkCorp are available at the SEC’s web site at www.sec.gov, or at the ElkCorp web site at www.elkcorp.com, and will also be available, without charge, by directing requests to ElkCorp, Investor Relations, 14911 Quorum Drive, Suite 600, Dallas, TX 75254-1491, telephone (972) 851-0472. ElkCorp and its directors, executive officers and other members of its management and employees may be deemed participants in the solicitation of proxies from its stockholders in connection with the proposed Carlyle merger. Information concerning the interests of ElkCorp’s participants in the solicitation, which may, in some cases, be different than those of ElkCorp stockholders generally, is set forth in ElkCorp’s proxy statements and Annual Reports on Form 10-K, previously filed with the SEC, and will be set forth in the proxy statement relating to the Carlyle merger when it becomes available.

EX-99.(A)(2)

Exhibit a(2)

ELKCORP BOARD RECOMMENDS REJECTION OF BMCA TENDER OFFER

In Negotiations With BMCA Regarding
Potential Acquisition of ElkCorp

DALLAS, January 8, 2007 — ElkCorp (NYSE: ELK), a manufacturer of premium roofing and building products, today announced that its Board of Directors, on the recommendation of its Special Committee of independent, non-management directors and with the assistance of its legal and financial advisors, has recommended that the Company’s shareholders reject the $40 per share cash tender offer from Building Materials Corporation of America (“BMCA”), which was submitted on December 20, 2006. The Board reached its determination based, among other factors, on its belief that the tender offer is excessively conditional, lacks appropriate financing and is potentially illusory. Complete information on the Board’s recommendation can be found in the Company’s Solicitation/Recommendation Statement on Schedule 14D-9 filed today with the Securities and Exchange Commission.

The Company noted, however, that it is in active negotiations with BMCA and its affiliate, Mr. Samuel Heyman, to develop a transaction that would merit recommendation to ElkCorp’s shareholders. To this end, ElkCorp has been providing, and continues to provide, BMCA and Heyman Investments with access to the Company (including facilities, documents and personnel) to allow BMCA to conduct an extensive due diligence investigation, including access to the information provided to Carlyle and other bidders, as well as additional information not previously made available to The Carlyle Group or other bidders.

ElkCorp announced on December 18, 2006 that it has agreed to be acquired by an affiliate of Carlyle in an all-cash merger transaction in which ElkCorp shareholders would receive $38.00 in cash for each outstanding ElkCorp share. The Special Committee and the Board continue to recommend the Carlyle transaction at this time.

###

About ElkCorp

ElkCorp, through its subsidiaries, manufactures Elk-brand premium roofing and building products (90% of consolidated revenue) and provides technologically advanced products and services to other industries. Its common stock is listed on the New York Stock Exchange (NYSE:ELK). www.elkcorp.com.

CONTACTS:
Investors	Media
ElkCorp	Sard Verbinnen & Co.
Stephanie Elwood	Jim Barron
(972) 851-0472	(212) 687-8080
or
MacKenzie Partners Inc.
Dan Burch or Bob Marese
(212) 929-5405

Forward Looking Statements. Statements made in this release, our website and in our other public filings and releases, which are not historical facts contain “forward-looking” statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may”, “target” and similar expressions. Factors that could cause actual results to differ materially include, but are not limited to, the following: costs, litigation, an economic downturn or changes in the laws affecting our business in those markets in which we operate. There can be no assurance that a merger or other transaction will take place or will increase shareholder value. The forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control. We caution investors that any forward-looking statements made by us are not guarantees of future performance. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments, except as required by law.

Additional Information and Where to Find It. In connection with the BMCA tender offer, ElkCorp has filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the Securities and Exchange Commission (the “SEC”). In connection with the proposed merger with affiliates of The Carlyle Group, ElkCorp expects to file a proxy statement with the SEC. Investors and security holders are strongly advised to read the Solicitation/Recommendation Statement because it contains important information about the BMCA tender offer. In addition, investors and security holders are strongly advised to read the proxy statement when it becomes available because it will contain important information about the proposed Carlyle merger. Free copies of materials filed by ElkCorp are available at the SEC’s web site at www.sec.gov, or at the ElkCorp web site at www.elkcorp.com, and will also be available, without charge, by directing requests to ElkCorp, Investor Relations, 14911 Quorum Drive, Suite 600, Dallas, TX 75254-1491, telephone (972) 851-0472. ElkCorp and its directors, executive officers and other members of its management and employees may be deemed participants in the solicitation of proxies from its stockholders in connection with the proposed Carlyle merger. Information concerning the interests of ElkCorp’s participants in the solicitation, which may, in some cases, be different than those of ElkCorp stockholders generally, is set forth in ElkCorp’s proxy statements and Annual Reports on Form 10-K, previously filed with the SEC, and will be set forth in the proxy statement relating to the Carlyle merger when it becomes available.

EX-99.(A)(4)

Exhibit (a)(4)

EFiled: Dec 19 2006 4:43 PM EST
Transaction ID 13241654

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY

CALL4U, LTD.,		)
		)
	Plaintiff,	)
v.		)
		)	C.A. No.
ELKCORP, THOMAS D. KAROL,		)
RICHARD A. NOWAK, STEVEN J.		)
DEMETRIOU, JAMES E. HALL, DALE V.		)
KESLER, SHAUNA R. KING, MICHAEL L.		)
MCMAHAN, and THE CARLYLE GROUP,		)
L.P.,		)
		)
	Defendants.	)

COMPLAINT

         Plaintiff, by its attorneys, alleges on information and belief, except for its own acts, which are alleged on knowledge, as follows:

     1. Plaintiff brings this action on behalf of the public stockholders of ElkCorp (“Elk” or the “Company”) seeking injunctive and other appropriate relief with respect to a proposed going-private transaction in which defendant The Carlyle Group, L.P. (“Carlyle”) seeks to acquire the Company at a price of $38.00 per share. The process employed by the Company’s directors, the above-named individual defendants, to sell Elk fails to maximize shareholder value because, among other things, at least one bonafide bidder, Building Materials Corporation of America (“BMCA”), has been excluded from actively participating in the sales process even though BMCA is offering $40 per share.

     2.   Plaintiff is, and has been at all relevant times, the owner of shares of Elk common stock.

     3.   Elk is a corporation organized and existing under the laws of the State of Delaware; maintains its principal corporate offices at 14911 Quorum Drive, Suite 600, Dallas, Texas 75254; and is primarily a manufacturer of building products. Specifically, it manufactures architectural roofing shingles, composite wood decking and railing products, non-woven fabric products and surface finishes, including hard chrome and other finishes designed to extend the life of steel machinery components operating in abrasive environments.

     4.   Defendant Carlyle, a private partnership, is based in Washington, D.C. and has offices in 16 countries. Carlyle is a global private equity firm with $44.3 billion under management.

     5.   Defendant Thomas D. Karol has served as Chairman of the Board and Chief Executive Officer of Elk since March 31, 2002; and as President and Chief Executive Officer of the Company beginning March 26, 2001.

     6.   Defendant Richard A. Nowak has served as President and Chief Operating Officer of the Company since March 31, 2002 and as Director since 2001. From September 24, 2001 until his election as President and Chief Operating Officer, Defendant Smith served as Executive Vice President of the Company.

     7.   Defendant Steven J. Demetriou has served as a Director of Elk since 2005.

     8.   Defendant James E. Hall has served as a Director of Elk since 1974.

     9.   Defendant Dale V. Kesler has served as a Director of Elk since 1998.

     10. Defendant Shauna R. King has served as a Director of Elk since 2004.

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     11. Defendant Michael L. McMahan has served as a Director of Elk since 2001.

     12. The individual defendants, as officers and/or directors of Elk, have a fiduciary relationship with plaintiff and the other public stockholders of Elk and owe them the highest obligations of good faith, fair dealing, loyalty and due care.

     13. Carlyle has aided and abetted the individual defendants in breaching their fiduciary duties owed to plaintiff and the other public stockholders of Elk, by participating in the proposed unfair going-private transaction and taking advantage of a skewed sales process.

CLASS ACTION ALLEGATIONS

     14. Plaintiff brings this action on his own behalf and as a class action on behalf of all owners of Elk common stock and their successors in interest, except Defendants and their affiliates (the “Class”).

     15. This action is properly maintainable as a class action for the following reasons:

          (a) the class is so numerous that joinder of all members is impracticable; Elk has approximately 20,590,000 million shares of common stock outstanding owned by hundreds, if not thousands, of geographically dispersed shareholders;

          (b) there are questions of law and fact that are common to the Class, including, inter alia, the following:

(i) Have the individual defendants breached their fiduciary duties owed by them to plaintiff and the others members of the Class; and

3

(ii) Is the Class entitled to injunctive relief or damages as a result of defendants’ wrongful conduct.

          (c) Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature;

          (d) Plaintiff’s claims are typical of those of the other members of the Class;

          (e) Plaintiff has no interests that are adverse to the Class;

          (f) The prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications for individual members of the Class and of establishing incompatible standards of conduct for Defendants; and

          (g) Conflicting adjudications for individual members of the Class might as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests.

CLAIM FOR RELIEF

     16. On December 18, 2006, Elk announced that it had signed a definitive agreement to be acquired by Carlyle in a transaction valued at approximately $1 billion.

     17. Under the terms of the transaction, each stockholder of Elk will receive $38.00 in cash for each outstanding Elk share.

     18. The amount offered is below the Company’s intrinsic fair value and is below the price of $40 per share currently being offered by BMCA. The unfairness of the Carlyle transaction has also been confirmed by the public markets. The price for Elk shares closed at $38.79 on December 18, 2006, following the announcement of the going

4

private transaction. The following day, December 19, 2006, the price of Elk shares continued to rise, trading above $40.90 per share.

     19. The management of the Company, led by Defendant Karol as Chief Executive Officer, has partnered with Carlyle in this transaction to take the Company private at a time that the Company is experiencing continued growth.

          (a) Total revenues for the Company have continued to increase in the past two years from $761,720,000 in 2005 to $929,790,000 in 2006.

          (b) The total assets for the Company have dramatically increased over the past four years from $381,430,000 in 2002, to $442,290,000 in 2003, to $480,710,000 in 2004, to $613,570,000 in 2005 and to $681,860,000 in 2006.

          (c) The total stockholder equity for the Company has continued to grow in each of the past three years from $176,090,000 in 2002, to $196,530,000 in 2003, to $215,040,000 in 2004, to $270,810,000 in 2005 and to $322,436,000 in 2006.

          (d) The gross profit for the Company has continued to expand over the past two years from $147,790,000 in 2005 to $170,540,000 in 2006.

     20. Recognizing the strength of the Company’s business, defendant Carlyle has launched a plan to acquire Elk’s business below the market price by acting in concert with the individual defendants to exclude other bidders from participating in the sales process.

     21. BMCA, a privately held corporation and a subsidiary of GAF Corporation (“GAF”), is one of the nation’s largest roofing manufacturers with annual sales of approximately $2 billion under the GAF name.

     22. On November 6, 2006, Heyman Investment Associates Ltd. Partnership (“Heyman”), which controls BMCA, revealed that, with an eye toward merging the two rival companies, it had acquired a 10.36% stake in Elk. In a letter to Elk advising of the significant benefits of combining the two companies, BMCA noted that, “We believe that a combination of our two companies provides Elk shareholders with the opportunity to

5

realize full value for their shares because of the unique synergies that exist between our two businesses which are an excellent fit for each other.”

     23. On November 6, 2006, Elk announced that its management and Board were engaged in a review of a possible merger or sale of the Company. Defendant Karol stated that: “Several parties have indicated interest in the Company, and our management and the Board believe that it is prudent to evaluate all opportunities for maximizing shareholder value.” The Board noted at that time that it did not intend on disclosing developments regarding its review of the auction process unless and until it approves a definitive transaction.

     24. In connection with the auction process, the Company also announced that on November 5, 2006 the Board had unilaterally adopted an amendment to its Shareholder Rights Agreement, or “poison pill.” The amendment reduced the beneficial ownership threshold at which the rights will become exercisable from 15% to 10%. That is, under the amendment, should any person or group acquire beneficial ownership of 10% or more of the Company’s common stock, all rights not held by the 10% stockholder become rights to purchase Elk common stock at a 50% discount. Any stockholder that beneficially owns 10% or more of the Company’s stock as of November 5, 2006 would not be deemed to have crossed the threshold under the terms of the amendment unless or until such stockholder acquires additional shares of the Company’s common stock.

     25. This amendment effectively blocks Heyman or BMCA from making any additional investment in the Company and precludes them from making an offer directly to the Company’s stockholders to purchase the shares of the Company without Board approval.

     26. This amendment to the Company’s Shareholder Rights Agreement was never approved by Elk’s stockholders. Nor were Elk stockholders given an opportunity to review the Board’s decision to effectively tie Heyman’s and BMCA’s hands with respect to the sale of the Company.

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     27. Moreover, it was only in early November 2006 that the Board first advised BMCA that its sale process had been underway for sometime and was expected to conclude by the end of November. BMCA was never invited into the sale process at inception and was expressly excluded from the sale process despite the fact that BMCA was a logical strategic merger partner and a bona fide bidder for the Company.

     28. The Company invited BMCA to participate in the auction process but only if BMCA entered into an onerous standstill agreement preventing BMCA from making a tender offer directly to Elk stockholders. Additionally, under the terms of the agreement, the Company would be permitted to terminate the process and discussions with BMCA for any reason at any time, while BMCA would be prevented, for a period of two years, from submitting an offer directly to Elk stockholders.

     29. Notwithstanding these onerous requirements, on November 16, 2006, BMCA made an offer to enter into a merger agreement with Elk for $35.00 per share in cash. Such merger was not conditioned upon financing but was subject to Hart-Scott-Rodino approval, the rescission of Elk’s poison pill, and other customary conditions.

     30. Moreover, BMCA stated that because it was excluded from the auction process, its offer was based upon publicly available information; however, should Elk decide to share confidential information with BMCA as it did with Carlyle, it would consider increasing its offer price.

     31. Rather than engaging in discussions with BMCA, Elk’s management redoubled their efforts to sell the Company in a management-led buyout to Carlyle.

     32. On December 18, 2006, the Company announced that it had entered in a definitive merger agreement with Carlyle for $38 per share.

     33. In response, the following day, on December 19, 2006, BMCA increased its offer to $40 per share.

7

     34. In a letter to the Company dated December 19, 2006, BMCA stated:

     This is to advise you that BMCA is raising its tender offer price from $35 to $40 per share cash consideration for all Elk shares.

     We were surprised and disappointed by your announcement today that you have agreed to a leveraged buyout for Elk involving management participation, as this was done without once contacting us regarding our proposal to buy Elk or providing an opportunity for BMCA to bid. As you know, BMCA advised Elk more than four weeks ago, on November 15th, that BMCA was in a position to consider increasing its $35 per share price. Finally, instead of encouraging BMCA to maximize the value of its offer, to add insult to injury, your advisors attempted, in a 3:49 AM email on Monday morning, to persuade us to defer making the tender offer to your shareholders that we had informed you about on Sunday night. How could these actions possibly he in the interests of Elk shareholders?

     While you have not communicated the details of your leveraged buyout, we trust that you have not agreed to anything that would prevent us from competing economically and in effect preclude a higher offer for your shareholders. Finally, our offer is obviously superior to the Elk leveraged buyout in both price and the fact that BMCA’s offer is a tender offer, not subject to regulatory clearance, and, barring any undue delay on the part of Elk, should close in January 2007.

     35. Elk’s agreement to be acquired by defendant Carlyle Group is the result of an unfair process that has prevented Elk stockholders from maximizing the value of their shares.

     36. The Individual Defendants have initiated an active sales process and, thus, have assumed enhanced duties to maximize shareholder value. By continuing to exclude BMCA from the auction process and favoring an inferior offer for the Company, the individual defendants are breaching their fiduciary duties to the public stockholders of Elk in a sale of the Company.

     37. Plaintiff and the other members of the Class will be irreparably harmed as a result of defendants’ unlawful actions. Unless defendants are enjoined by the Court, the individual defendants will continue to breach their fiduciary duties owed to plaintiff and the other members of the Class.

8

     38. Plaintiff and the other members of the Class have no adequate remedy at law.

     39. WHEREFORE, plaintiff demands judgment against defendants jointly and severally, as follows:

          (A) declaring this action to be a class action and certifying plaintiff as the Class representative and its counsel as Class counsel;

          (B) enjoining, preliminarily and permanently, the proposed buy-out;

          (C) directing the individual defendants to deploy the poison pill only in a manner most effective for maximizing shareholder value;

          (D) in the event that the transaction is consummated prior to the entry of this Court’s final judgment, rescinding it or awarding plaintiff and the Class rescissory damages;

          (E) directing that defendants account to plaintiff and the other members of the Class for all damages caused by them and account for all profits and any special benefits obtained as a result of their breaches of their fiduciary duties;

          (F) awarding plaintiff the costs of this action, including a reasonable allowance for the fees and expenses of Plaintiff’s attorneys and experts; and

          (G) granting plaintiff and the other members of the class such further relief as the Court deems just and proper.

ROSENTHAL, MONHAIT & GODDESS, P.A.
By:	/s/ Joseph A. Rosenthal
	Joseph A. Rosenthal (Del. Bar No. 234)
	Carmella P. Keener (Del. Bar No. 2810)
	919 N. Market Street, Suite 1401
	P.O. Box 1070
	Wilmington, DE 19899
	(302) 656-4433
	Attorneys for Plaintiff

9

OF COUNSEL:

Eduard Korsinsky, Esquire
ZIMMERMAN, LEVI & KORSINSKY, LLP
39 Broadway, Suite 1601
New York, New York 10006
(212) 363-7500

10

EX-99.(A)(5)

Exhibit (a)(5)

No. 06.06.18562 - - B

WILLIAM E. WETZEL, Derivatively on	§	IN THE COUNTY COURT
Behalf of ELKCORP,	§
	§
Plaintiff,	§	AT LAW NO. 2
	§
	§
vs.	§
	§	DALLAS COUNTY, TEXAS
THOMAS D. KAROL, RICHARD A.	§
NOWAK, DALE V. KESLER, JAMES E.	§
HALL, SHAUNA R. KING, STEVEN J.	§
DEMETRIOU, MICHAEL L. CMAHAN	§
and THE CARLYLE GROUP,	§
Defendants,	§
	§
— and —	§
	§
ELKCORP, a Delaware corporation,	§
	§
Nominal Defendant.	§

SHAREHOLDER DERIVATIVE PETITION FOR BREACH OF FIDUCIARY DUTY

     Plaintiff, by his attorneys, alleges as follows:

     Pursuant to Rule 190.4 of the Texas Rules of Civil Procedure, plaintiff would show that discovery is intended to be conducted under Level 3 of this rule due to the complexity of this case.

INTRODUCTION

     1. This is a shareholder derivative action on behalf of ElkCorp (“ElkCorp” or the “Company”) against its Board of Directors and The Carlyle Group (“Carlyle”) for breaches of fiduciary duty and other violations of state law arising out of the defendants’ efforts to sell ElkCorp at an inadequate and unfair price via a grossly unfair process designed to favor Carlyle to the detriment of the Company. The Individual Defendants have prematurely caused the Company to enter into an Agreement and Plan of Merger (“Merger Agreement”) with Carlyle pursuant to a sale process which was not designed to protect the interests of ElkCorp or its shareholders

     2. Beginning in November 2006, Heyman Investment Associates Limited Partnership, on behalf of Building Materials Corporation of America (collectively, “BMCA”), began communicating with defendant Thomas D. Karol (“Karol”), ElkCorp’s Chairman and Chief Executive Officer, regarding BMCA’s preliminary interest in exploring a business combination with the Company in a transaction favorable to ElkCorp and its shareholders. On November 6, 2006, BMCA announced its acquisition of 10.36% of the Company’s common stock in a Schedule 13D filing with the Securities and Exchange Commission (“SEC”).

     3. In furtherance of their efforts to extract personal benefits for themselves, the Individual Defendants failed to disclose BMCA’s offers to the public as well as ElkCorp’s shareholders.

     4. On November 16,2006, after defendant Karol refused to respond to BMCA’s earlier overtures regarding an offer or otherwise negotiate in good faith with BMCA for the benefit of

SHAREHOLDER DERIVATIVE PETITION — Page 1

ElkCorp and its shareholders, BMCA was forced to publicly announce its initial offer to purchase ElkCorp’s for $35.00 per share. As described in detail herein, the Individual Defendants failed to properly consider this offer to purchase ElkCorp.

     5. On December 18, 2006, after repeatedly refusing to negotiate in good faith, the Individual Defendants announced that they had caused ElkCorp to agree to be acquired by Carlyle for $38.00 per share (the “Proposed Acquisition”). Rather than acting in the best interests of ElkCorp and its shareholders, the Individual Defendants refused to negotiate in good faith with all interested suitors and instead sought out a buyer that would acquiesce to their personal demands to the detriment of ElkCorp and its shareholders. Indeed, as described in detail herein, the Individual Defendants continually failed to engage in a fair process to explore potential business alternatives for the Company. The Company has suffered harm as a result of the Individual Defendants’ actions.

     6. On December 20, 2006, BMCA announced it would raise its offer to purchase ElkCorp to $40.00 per share. However, as a result of improper contractual terms agreed to in the Merger Agreement, the Individual Defendants have precluded ElkCorp from considering this superior proposal for its assets and defendant Carlyle has knowingly aided and abetted the Individual Defendants in their ongoing breaches of fiduciary duty.

     7. In pursuing their unlawful plan to sell ElkCorp via an unlawful and unfair process, each of the defendants violated applicable law by directly breaching and/or aiding the other defendants’ breaches of their fiduciary duties of loyalty, due care, independence, good faith and fair dealing. Absent immediate judicial intervention, the defendants will continue to breach their fiduciary duties and the Company and its shareholders will be irreparably harmed. This action seeks equitable relief only.

SHAREHOLDER DERIVATIVE PETITION — Page 2

JURISDICTION AND VENUE

     8. This Court has jurisdiction over each of the defendants because they conduct business in, reside in and/or are citizens of Texas. Certain of the defendants are residents and citizens of Texas, including defendants Karol, Kesler, Hall, McMahan and Nowak. ElkCorp is incorporated under the laws of the State of Delaware and its principal place of business is located at 14911 Quorum Drive, Suite 600, Dallas, TX 75254. Moreover, many of the defendants reside in this county and the conduct at issue took place in this county. Venue is proper in this Court because defendants’ wrongful acts arose in and emanated from this county.

PARTIES

     9. Plaintiff William E. Wetzel at all times relevant hereto has been a stockholder of ElkCorp.

     10. Nominal party ElkCorp is a Delaware corporation with its principal place of business at 14911 Quorum Drive, Suite 600, Dallas, TX 75254. The Company, through its subsidiaries, primarily manufactures and sells roofing and composite building products in the United States and Canada. It manufactures and sells steep-slope and low-slope architectural shingles, as well as related accessory and ventilation products, including starter-strip products.

     11. Defendant Thomas D. Karol (“Karol”) is, and at all relevant times was, Chairman of the Board and Chief Executive Officer of ElkCorp. Karol can be served with process at 5414 Lobello Drive, Dallas, TX 75229.

     12. Defendant Richard A. Nowak (“Nowak”) is, and at all relevant times was, President, Chief Operating Officer and a director of ElkCorp. Nowak can be served with process at 310 Oak Trail Drive, Lewisville, TX 75077.

SHAREHOLDER DERIVATIVE PETITION — Page 3

     13. Defendant Dale V. Kesler (“Kesler”) is, and at all relevant times was, a director of ElkCorp. Kesler also serves as a director of Aleris International, Inc., where defendant Demetriou currently serves as Chairman of the Board and CEO. Kesler can be served with process at 6708 Dartbrook Drive, Dallas, TX 75240.

     14. Defendant James E. Hall (“Hall”) is, and at all relevant times was, a director of ElkCorp. Hall can be served with process at 6605 S State Highway 349, Midland, TX 79706.

     15. Defendant Shauna R. King (“King”) is, and at all relevant times was, a director of ElkCorp. King can be served with process at 2310 Ridge Road, North Haven, CT 06473.

     16. Defendant Steven J. Demetriou (“Demetriou”) is, and at all relevant times was, a director of ElkCorp. Demetriou also serves as Chairman of the Board and CEO of Aleris International, Inc., where defendant Kesler serves as a director. Demetriou can be served with process at 8950 Antelope Run, Novelty, OH 44072.

     17. Defendant Michael L. McMahan (“McMahan”) is, and at all relevant times was, a director of ElkCorp. McMahan can be served with process at 5 Random CV, Austin, TX 78738.

     18. The defendants named in ¶¶ 11-17 are sometimes collectively referred to herein as the “Individual Defendants.”

     19. Defendant Carlyle is a Washington, D.C.-based private global investment firm that originates, structures and acts as lead equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, and growth capital financings. Carlye currently has more than $46.9 billion under management. Carlyle aided and abetted the Individual Defendants in their breaches of fiduciary duty. Carlyle can be served with process at 1001 Pennsylvania Avenue NW, Washington, DC 20004.

SHAREHOLDER DERIVATIVE PETITION — Page 4

     20. By virtue of their positions as directors and/or officers of ElkCorp, the Individual Defendants have, and at all relevant times had, the power to control and influence, and did control and influence and cause ElkCorp to engage in the practices complained of herein.

DEFENDANTS’ FIDUCIARY DUTIES

     21. The Individual Defendants, because of their positions of control and authority as directors or officers of ElkCorp, were able to and did, directly and indirectly, control the wrongful acts complained of herein. Because of their advisory, executive, managerial, and directorial positions with ElkCorp, each of the defendants had access to adverse non-public information about the financial condition, operations and future business prospects of ElkCorp.

     22. At all material times hereto, each of the defendants was the agent of each of the other defendants and of ElkCorp, and was at all times acting within the course and scope of said agency.

     23. To discharge their duties, the officers and directors of ElkCorp were required to exercise reasonable and prudent supervision over the management, policies, practices and controls of the financial affairs of ElkCorp. By virtue of such duties, the officers and directors of ElkCorp were required, among other things, to:

          (a) manage, conduct, supervise and direct the business affairs of ElkCorp in accordance with applicable laws, rules and regulations and the charter and bylaws of ElkCorp;

          (b) neither violate nor knowingly permit any officer, director or employee of ElkCorp to violate applicable laws, rules and regulations;

          (c) take reasonable steps to thwart efforts by Carlyle or the other Individual Defendants to usurp ElkCorp’s assets or corporate benefits;

SHAREHOLDER DERIVATIVE PETITION — Page 5

          (d) establish a mechanism to ensure that ElkCorp and its assets were managed prudently and responsibly and that neither the Individual Defendants nor Carlyle used their control over ElkCorp to obtain any personal benefit for themselves; and

          (e) refrain from using their status as directors and officers to the detriment of the shareholders and the Company.

CONSPIRACY, AIDING AND ABETTING, AND CONCERTED ACTION

     24. In committing the wrongful acts alleged herein, each of the defendants has pursued, or joined in the pursuit of, a common course of conduct, and acted in concert with and conspired with one another, in furtherance of their common plan or design. In addition to the wrongful conduct herein alleged as giving rise to primary liability, the defendants further aided and abetted and/or assisted each other in breach of their respective duties as herein alleged.

     25. During all relevant times hereto, the defendants, and each of them, initiated a course of conduct which was designed to and did: (i) enable the Individual Defendants to obtain substantial personal benefits; (ii) fail to disclose material information about the sales process, including defendants’ failure to negotiate in good faith with BMCA because of its unwillingness to agree to a standstill agreement; and (iii) permit Carlyle to attempt to acquire ElkCorp on unfair terms. In furtherance of this plan, conspiracy and course of conduct, defendants, and each of them, took the actions as set forth herein.

     26. Each of the defendants herein aided and abetted and rendered substantial assistance in the wrongs complained of herein. In taking such actions, as particularized herein, to substantially assist the commission of the wrongdoing complained of, each defendant acted with knowledge of the primary wrongdoing, substantially assisted the accomplishment of that wrongdoing, and was aware of his or her overall contribution to, and furtherance of, the wrongdoing. The defendants’ acts of

SHAREHOLDER DERIVATIVE PETITION — Page 6

aiding and abetting included, inter alia, the acts each of them are alleged to have committed in furtherance of the conspiracy, common enterprise and common course of conduct complained of herein.

DERIVATIVE AND DEMAND EXCUSED ALLEGATIONS

     27. Plaintiff brings this action derivatively in the right and for the benefit of ElkCorp to redress injuries suffered and to be suffered by ElkCorp as a result of the breaches of fiduciary duty and other violations of law by the defendants.

     28. Plaintiff is an owner of ElkCorp common stock and was an owner of ElkCorp common stock at all times relevant hereto. Plaintiff will adequately and fairly represent the interests of the Company and its shareholders in enforcing and prosecuting its rights. Plaintiff has retained counsel experienced in these types of actions to prosecute claims on the Company’s behalf.

     29. Any demand made by plaintiff to the ElkCorp Board to institute this action is excused. Based on all the allegations in this Petition and defendants’ actions to date, including their repeated acts of entrenchment, including refusal to protect the interests of ElkCorp and its shareholders by responding in good faith to value-maximizing alternatives for the Company, such demand would be a futile and useless act. Each of the members of the Board have directly participated in the wrongs complained of herein, which disables them from acting independently, objectively or in good faith to advance the interests of ElkCorp or respond to a demand by shareholders. The Board consists of seven directors, each of whom are defendants herein. Defendants Karol and Nowak, by virtue of their position as Chairman and CEO and President and COO of ElkCorp, respectively, maintain complete control over any decisions required to be made by the Board, including any action to be taken in response to a demand made by shareholders. The

SHAREHOLDER DERIVATIVE PETITION — Page 7

Board and senior management are not disinterested or independent as detailed herein and set forth below:

          (a) Each of the defendants served on the ElkCorp Board during the relevant period and as Board members each was charged with oversight and operation of the Company and the conduct of its business affairs. Each of the defendants has breached the fiduciary duties owed to ElkCorp and its shareholders by, among other things, failing to take reasonable steps to protect and advance the interests of the Company in furtherance of their plan to advance their own interests and/or those of senior ElkCorp management at the expense of and to the detriment of ElkCorp and its public stockholders. For example, defendants have stated that: (i) the Company’s management team, including its officers and directors have negotiated to ensure they remain in place; and (ii) the defendants are refusing to solicit additional proposals for the Company.

          (b) Rather than responding in good faith to offers to purchase ElkCorp, management and the Board acted to protect and promote their personal interests and ensure themselves ongoing control over ElkCorp and thereby ensure their continued ability to receive the benefits of their positions as senior insiders and/or directors of ElkCorp.

          (c) Even though certain defendants claim to be independent directors because they are not directly employed by the Company, none of these defendants are truly independent because they each have personal and/or professional conflicts of interest with other members of the Board. For example, defendants Kesler and Demetriou serve together as directors of another company, Aleris International, Inc. As a result of these long-standing personal and professional relationships, demand on the Board would be futile.

          (d) As more fully detailed herein, the Board participated in, approved and/or permitted the wrongs alleged herein to have occurred and participated in efforts to conceal or

SHAREHOLDER DERIVATIVE PETITION — Page 8

disguise those wrongs from ElkCorp’s shareholders or recklessly and/or negligently disregarded the wrongs complained of herein. Its members are, therefore, not disinterested parties.

     30. The defendants named herein have not exercised and cannot exercise independent or objective judgment in deciding whether to bring this action or whether to vigorously prosecute this action because each of the Board members has participated in and/or acquiesced to the misconduct alleged herein.

     31. The members of the Board have demonstrated their unwillingness to act in compliance with federal or state law or sue themselves and/or their fellow directors and allies in the top ranks of the corporation for failure to do so, as they have developed professional relationships with their fellow board members who are their friends and with whom they have entangling financial alliances, interests and dependencies, and therefore, they are not able to and will not vigorously prosecute any such action.

     32. ElkCorp’s senior insiders and directors named as defendants herein have shown their interests to be antagonistic to ElkCorp and this lawsuit as they have refused to consider in good faith options to maximize shareholder value for ElkCorp and its shareholders. The members of the Board have not and will not authorize a suit against themselves as such a suit would require these defendants to expose themselves to a huge personal liability to ElkCorp, as, due to the particular language of currently utilized directors’ and officers’ liability insurance policies (i.e., the insured vs. insured exclusion), such an action would not be an insured claim.

     33. The underlying misconduct of defendants is not a product of a valid exercise of business judgment, and can not be properly ratified by the Board.

     34. Plaintiff has not made any demand on shareholders of ElkCorp to institute this action since such demand would be a futile and useless act for the following reasons:

SHAREHOLDER DERIVATIVE PETITION — Page 9

          (a) ElkCorp is a publicly traded company with approximately 20 million shares outstanding, and thousands of shareholders;

          (b) Making demand on such a number of shareholders would be impossible for plaintiff who has no way of finding out the names, addresses or phone numbers of shareholders;

          (c) Making demand on all shareholders would force plaintiff to incur huge expenses, assuming all shareholders could be individually identified;

          (d) As alleged herein, the Individual Defendants, who collectively constitute the entire Board, have systematically breached their fiduciary duties by engaging in a course of conduct which could not have been an exercise of good faith business judgment; and

          (e) There is a substantial likelihood that the Individual Defendants will be held personally liable for their breaches of fiduciary duties, and therefore the directors are incapable of independently and disinterestedly considering a demand to commence this action.

     35. The Company’s directors’ and officers’ liability insurance coverage prohibits directors from bringing suits against each other. Thus, if the Individual Defendants caused the Company to sue its officers and directors for the liability asserted in this case, they would not be insured for that liability. They will not do this to themselves. The Company’s officers’ and directors’ liability insurance was purchased and paid for with corporate funds for the protection of the corporation. This derivative action does not trigger the “insured vs. insured” exclusion, and therefore only this derivative action can obtain a recovery from the Company’s officers’ and directors’ insurance for the benefit of the corporation.

SHAREHOLDER DERIVATIVE PETITION — Page 10

FACTUAL ALLEGATIONS

     36. ElkCorp primarily manufactures and sells roofing and composite building products in the United States and Canada. It manufactures and sells steep-slope and low-slope architectural shingles, as well as related accessory and ventilation products, including starter-strip products.

The Defendants Amend ElkCorp’s Shareholder Rights Plan on the Eve of a Bona Fide Offer by BMCA

     37. On November 6, 2006, at 7:01 a.m., the Individual Defendants caused the Company to issue a press release entitled “Elkcorp Management and Board Engaged in Review of Strategic Alternatives,” which stated:

ElkCorp announced today that its management and Board of Directors are engaged in a review of the Company’s strategic alternatives, which could include a possible merger or sale of the Company. The Company has retained UBS Investment Bank to assist in this process.

     Thomas D. Karol, Chairman and Chief Executive Officer of ElkCorp, said, “ElkCorp’s strong market position, healthy balance sheet and our plan for continued growth in all three of our platforms clearly position us as a leader in the building products industry. That said, several third parties have indicated interest in the Company, and our management and the Board believe that it is prudent to evaluate all opportunities for maximizing shareholder value.” Karol added, “We are committed to doing what we believe is best for the Company and its shareholders and have engaged financial advisors to assist us in a thoughtful and comprehensive process.”

     The Company has not set a definitive timetable for completion of its evaluation and further there can be no assurances that the evaluation process will result in any transaction. The company does not intend to disclose developments regarding its evaluation of strategic alternatives unless and until its Board of Directors approves a definitive transaction.

     In connection with the strategic review, ElkCorp’s Board of Directors has adopted an amendment to the Company’s Shareholder Rights Agreement to reduce, effective today, the beneficial ownership threshold at which the rights will become exercisable from 15% to 10%. Any shareholder that beneficially owns 10% or more of the Company’s stock as of today will not be deemed to have crossed the threshold unless or until such shareholder acquires beneficial ownership of additional Company stock.

SHAREHOLDER DERIVATIVE PETITION — Page 11

BMCA Purchases A 10.36% Stake in ElkCorp

     38. The Individual Defendants’ timing of the Amendment to the Rights Agreement was adopted in violation of the defendants’ fiduciary duties as it was designed to impair shareholder value and impede any effort by BMCA to acquire ElkCorp on terms more favorable to ElkCorp or its public shareholders. This was confirmed just one hour after the Individual Defendants issued a release when, at 8:15 a.m., BMCA filed a Schedule 13D with the SEC indicating BMCA had previously acquired a 10.36% interest in ElkCorp. The Schedule 13D stated that the purpose of BMCA’s ElkCorp purchases was “to obtain an equity position in [ElkCorp] and facilitate a possible business combination between [ElkCorp] and BMCA. After a series of communications with [ElkCorp], on November 6, 2006, BMCA submitted a letter to Thomas D. Karol, Chairman of the Board and Chief Executive Officer of [ElkCorp] indicating its interest in pursuing a business combination of with [ElkCorp].” The November 6, 2006 letter followed a November 5, 2006 in person meeting which was cancelled in favor of a teleconference during which BMCA made its willingness and ability to purchase ElkCorp well known. BMCA filed as an exhibit to its Schedule 13D a letter directed to defendant Karol:

November 6, 2006                    

Mr. Thomas D. Karol
Chairman of the Board and Chief Executive Officer
ElkCorp
14911 Quorum Drive, Suite 600
Dallas, Texas 75254-1491

Dear Tom:

     As we advised you last week and again on our Sunday conference call, we have a strong interest in pursuing a business combination with Elk at an all cash price to be negotiated. We believe that a combination of our two companies provides Elk shareholders with the opportunity to realize full value for their shares because of the unique synergies that exist between our two businesses which are an excellent fit for each other. For this same reason, the combination will provide significant benefits to Elk customers and employees.

SHAREHOLDER DERIVATIVE PETITION — Page 12

     As you know, in addition to the extremely difficult operating environment we in the roofing industry now confront — resulting from unprecedented asphalt costs, margin erosion, and excess inventories — the industry faces significant long-term challenges as well. It is now readily apparent that, in the last few years, aberrational demand from weather-related events temporarily obscured the impact of higher costs and slowing industry growth, especially in the maturing market for laminated shingles. In our view, consolidation is the only logical response to these conditions.

     We have always held Elk and its employees in the highest regard, having known each other as competitors, suppliers, and friends. In recent months, we have carefully studied this combination and believe that Elk and BMCA are uniquely complementary. The limited overlap among customers and distribution channels, as well as the geographic fit of our companies’ respective facilities, offer an opportunity to enhance the combined company’s competitive position by achieving economies of scale and improving our ability to respond to customer needs to a degree that would not be available to either company on a stand-alone basis or with any other partner.

     As a combined company, we would lead the industry as the lowest-cost roofing manufacturer in the country, able to deliver product quickly and efficiently to customers in every section of the country. Our customers would also benefit from access to the most comprehensive product offering in roofing, the industry’s oldest and most developed contractor programs, and two of the industry’s most trusted and respected brand names. Finally, bringing together our companies’ world-class employees, who have driven exceptional innovation and strong historical growth at both our companies, will ensure that the combined company competes effectively in the marketplace whatever challenges we face going forward.

     We have invested a significant amount of time and money in the evaluation of a transaction between our companies. Since our companies have known each other for many years, we are quite familiar with your business, as we know that you are with ours. With your cooperation, after conducting reasonable confirmatory due diligence, we expect to be in a position to promptly provide an appropriate offer to you and your shareholders. As discussed on our conference call, we are willing, of course, to execute a customary confidentiality agreement. In addition, you should know that as a result of our discussions with lenders, we are confident that satisfactory financing for the transaction is readily available and our offer will not be subject to a financing contingency.

     Finally, you should be aware that we and our advisers have thoroughly considered the antitrust implications of this transaction, and we are highly confident that there will not be any antitrust impediments to completion. In that regard, we are filing today a Hart-Scott-Rodino notification with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice.

     We are sorry that the New York Marathon prevented our meeting in person yesterday, but we appreciated the opportunity to present our proposal by teleconference instead. I look forward to our continued discussions.

SHAREHOLDER DERIVATIVE PETITION — Page 13

Sincerely,                              

/s/ Robert B. Tafaro                              

     39. Despite the existence of a “series of communications” between ElkCorp and BMCA prior to November 6, 2006, the Individual Defendants concealed these earlier communications from ElkCorp’s shareholders and the public to the detriment of ElkCorp and consistently imposed demands upon BMCA designed to ensure that the Individual Defendants would have sufficient time to maximize their own personal interests in connection with the sale of ElkCorp, rather than those of the Company or its shareholders.

     40. On November 16, 2006, BMCA filed an amended Schedule 13D which contained a second letter to defendant Karol which stated in relevant part:

November 15, 2006                    

Mr. Thomas D. Karol
Chairman of the Board and Chief Executive Officer
ElkCorp
14911 Quorum Drive, Suite 600
Dallas, Texas 75254-1491

Dear Tom:

     It was good meeting with you, your colleagues, and advisors on Monday evening in Dallas, and I appreciate your accommodating the meeting on such short notice.

     In response to your invitation to put our best foot forward, we want you to know that BMCA is prepared, based upon publicly available information, to enter into a merger agreement with Elk providing cash consideration for all outstanding Elk common shares of $35 per share. The merger would not be conditioned upon financing but would be subject to Hart-Scott-Rodino approval, the rescission of Elk’s poison pill, and other customary conditions.

     As we have pointed out, we believe that BMCA is the highest and best merger partner for Elk given BMCA’s leading position in the industry and the unique synergies which exist between our businesses. Because of our position in the industry, we are well aware of the significant benefits of a merger between our Companies as well as the difficult current operating environment and significant long term challenges we both now confront.

SHAREHOLDER DERIVATIVE PETITION — Page 14

     Again, we are proceeding based upon publicly available information, and should Elk decide to share confidential information with BMCA, we would hope to see evidence of additional value that would enable BMCA to increase its price.

     BMCA’s proposal provides a compelling opportunity for Elk shareholders to realize significant value for their shares in an all cash transaction with no significant regulatory hurdles anticipated. It should be noted that the proposed price represents an approximate 40% premium over Elk’s closing price on November 3rd ($25.18 per share), the trading day immediately preceding BMCA’s filing of its 13D and Elk’s announcement of its sale process, and a meaningful premium over Elk’s current trading price.

     As we provided you and your colleagues and advisers with a “heads up” at our Monday night meeting and again earlier today, we are proceeding along this line only after Elk and its advisors have chosen to exclude us from the on-going sale process because of their insistence that we enter into what we regard as an onerous standstill agreement. The proposed agreement would unreasonably tie BMCA’s hands and prevent us under any circumstances from making an offer directly to shareholders.

     By way of background, in our teleconference on Sunday, November 5th, you agreed that Elk would include BMCA as part of its ongoing sale process and provide us, subject to a confidentiality agreement, with due diligence similar to that which Elk had already provided other bidders. You indicated further that the process had been underway for sometime and that you were expecting to complete it by the end of November. Parenthetically, we still do not understand why we were not invited into the sale process at inception given the fact that BMCA would have had to be considered Elk’s most logical strategic merger partner.

     Shortly after the November 5th conference, your advisors provided BMCA with confidentiality and standstill agreements, the latter containing unreasonable demands concerning our Elk ownership position and BMCA’s future course of action. By way of example, under Elk’s proposed agreement, it could terminate the process and discussions with our Company for any reason at any time while preventing us, for a period of two years, from submitting our offer directly to Elk shareholders.

     In addition, under the Elk proposal, as your advisors have acknowledged, the Company reserved the right to change the rules of the process at any time, notwithstanding the fact that this could have the effect of creating an unlevel playing field and all this while BMCA would be obligated to stand still. We had similar objections to other provisions which would operate to prevent us from submitting an offer to shareholders under other circumstances as well. Although we continued to seek throughout the past week a reasonable compromise, your advisors reiterated that your Company had little or no flexibility.

SHAREHOLDER DERIVATIVE PETITION — Page 15

     At our meeting in Dallas on Monday night, we stated that we could simply not see our way clear, as a substantial Elk shareholder, to enter into the standstill agreement that your advisors had proffered. We further went on to indicate that it was Elk’s choice as to whether BMCA would proceed as part of your process or outside the process while BMCA stated that it was its strong preference to participate in the process believing that course to be in the interests of both companies. Based upon Elk’s decision, you and your advisors have left us no alternative but to proceed in this fashion.

     We reiterate our interest in a friendly transaction and remain open to any further discussion that you and your advisors wish to pursue.

     All the best.

Sincerely,                              

/s/ Robert B. Tafaro                              

     41. The November 16, 2006 filing further confirmed that the Individual Defendants were continuing to demand that BMCA agree to a “handcuff/standstill” provision which would ensure that BMCA would either agree to the personal demands of the Individual Defendants or be precluded from making an offer superior to that of a merger partner selected by the Individual Defendants.

     42. Later the same day, the Individual Defendants issued their response to BMCA’s offer via a press release, stating in relevant part:

ElkCorp today issued the statement below in response to BMCA’s amended 13D filing and letter in which BMCA proposes to acquire ElkCorp for $35 per share in cash. As announced on November 6, ElkCorp’s Board of Directors is engaged in a review of the Company’s strategic alternatives and has retained UBS Investment Bank to assist in this process.

*       *       *      

     “The Board is firmly committed to a fair process that will yield the best result for all shareholders and the Company, and will evaluate and consider BMCA’s proposal in the context of the overall process and all other proposals received.

     “Regarding BMCA’s unwillingness to execute a customary confidentiality and standstill agreement, several parties have already signed our form agreement and are actively participating in our process, including by submitting indications of interest. We have simply requested that BMCA do likewise and participate on a fair and even basis with other interested parties. A number of the assertions in BMCA’s

SHAREHOLDER DERIVATIVE PETITION — Page 16

letter are simply incorrect. Among other things, BMCA indicated no willingness to compromise on the terms of the agreement, insisting instead on preferential treatment not justified by their offer.

     “We continue to invite BMCA’s participation in our process on a basis that enhances rather than reduces the likelihood of achieving the best possible result for our shareholders.”

     As previously disclosed, the Company has not set a definitive timetable for completion of its evaluation and further there can be no assurances that the evaluation process will result in any transaction.

     43. ElkCorp’s stock price has consistently traded above $35.00 per share since the November 16, 2006 announcement regarding BMCA’s offer.

     44. On December 17, 2006, BMCA informed defendant Karol that it was commencing its tender offer for the Company’s outstanding shares for $35 per share:

December 17, 2006                    

Mr. Thomas D. Karol
Chairman of the Board and Chief Executive Officer
ElkCorp
14911 Quorum Drive, Suite 600
Dallas, Texas 75254-1491

Dear Tom:

     We are today announcing that we will be commencing a tender offer for all outstanding Elk common shares at $35 per share. As you know, we have already received antitrust clearance and this offer is not conditional on financing.

     Tom, BMCA has been both open and direct in all its dealings with you, your colleagues, and outside advisors. Notwithstanding, Elk has refused to enter into discussions with us regarding our merger proposal or provide confidential information as it has with other bidders. Most recently, on Tuesday, December 12th, our representatives contacted your financial advisors, UBS, seeking guidance on how best to proceed. UBS informed us that BMCA’s merger proposal was scheduled to be considered at an Elk Board meeting on December 13th and that they would be in a position to provide us with guidance in a call immediately after the meeting. Instead, we have heard nothing from your advisors, and they have since “gone off the air.”

     You should know that, in light of the above, you have given us no choice but to take our offer directly to shareholders. Please be assured that we continue to stand

SHAREHOLDER DERIVATIVE PETITION — Page 17

ready to negotiate a definitive merger agreement directly with Elk, if it so chooses, and we believe this to be in the best interests of Elk, its shareholders and employees.

     All the best.

Sincerely,                              

/s/ Robert B. Tafaro                              

The Defendants Agree to Sell ElkCorp
to Defendant Carlyle

     45. On December 18, 2006, the Individual Defendants issued a press release on behalf of the Company titled, “ElkCorp Agrees to Be Acquired by the Carlyle Group,” which stated in relevant part:

ElkCorp, a manufacturer of premium roofing and building products, today announced it has entered into a definitive agreement to be acquired and taken private by global private equity firm The Carlyle Group in an all-cash transaction valued at approximately $1.0 billion, including the assumption of approximately $173 million of net debt.

     Under the terms of the agreement, ElkCorp shareholders will receive $38.00 in cash for each outstanding ElkCorp share. This represents a premium of approximately 51% over ElkCorp’s closing share price on November 3, 2006, the last trading day before ElkCorp announced that its Board of Directors and management were conducting a review of the Company’s strategic alternatives.

     In a separate agreement, Carlyle has agreed to partner with Hood Companies, Inc. and its subsidiary Atlas Roofing Corporation, a leading manufacturer of commercial roofing products as well as residential roofing materials. Financial terms of this transaction were not disclosed. Following the closing of the Elk transaction, Carlyle expects to merge Elk and Atlas, creating a leading player in both residential and commercial roofing. However, completion of the Elk transaction is not contingent upon completion of the Hood/Atlas transaction.

     Thomas D. Karol, Chairman and Chief Executive Officer of ElkCorp, said, “Following a comprehensive evaluation process, which included reviewing a number of offers from interested third parties, the board and management concluded that Carlyle’s offer was the best way to deliver maximum value to our shareholders. We are eager to work with Carlyle to grow our business and see the combination with Atlas as a tremendous opportunity to expand both companies. Looking to the future, our customers should rest assured that quality and innovation will remain the cornerstone of our company.”

SHAREHOLDER DERIVATIVE PETITION — Page 18

     Glenn Youngkin, Carlyle Managing Director and Head of the Global Industrial team, said, “ElkCorp is a premier building products company with a continued bright future. We look forward to working with Thomas Karol and his team and the Atlas team to bring the companies to their next level of growth and profitability.”

     The transaction is expected to be completed by the first quarter of 2007, and is subject to shareholder approval, regulatory approvals, and customary closing conditions. It is not subject to financing. The transaction will be financed through a combination of equity and debt financing, with the debt financing committed by Bank of America Securities, LLC and Merrill Lynch & Co., Inc.

     ElkCorp’s Board of Directors, which established a Special Committee to oversee the review process, approved the agreement and has recommended that ElkCorp’s shareholders vote in favor of the transaction. UBS Investment Bank is acting as financial advisor to the company. Citigroup Global Markets Inc. is financial advisor to the Special Committee. Wachtell, Lipton, Rosen & Katz is legal advisor for ElkCorp.

     46. While Carlyle’s offer represents an increase of approximately 8.5% over BMCA’s initial $35.00 per share offer for the Company, Carlyle’s $38.00 per share materially undervalues ElkCorp. In fact, on the day Carlyle’s offer was announced, ElkCorp’s stock price closed at $38.81.

BMCA Raises Its Offer for ElkCorp

     47. Later in the day on December 18, 2006, BMCA sent a letter to the Individual Defendants which stated:

December 18, 2006                    

Board of Directors
ElkCorp
14911 Quorum Drive, Suite 600
Dallas, Texas 75254-1491

Ladies and Gentlemen:

     This is to advise you that BMCA is raising its tender offer price from $35 to $40 per share cash consideration for all Elk shares.

     We were surprised and disappointed by your announcement today that you have agreed to a leveraged buyout for Elk involving management participation, as this was done without once contacting us regarding our proposal to buy Elk or providing an opportunity for BMCA to bid. As you know, BMCA advised Elk more

SHAREHOLDER DERIVATIVE PETITION — Page 19

than four weeks ago, on November 15th, that BMCA was in a position to consider increasing its $35 per share price. Finally, instead of encouraging BMCA to maximize the value of its offer, to add insult to injury, your advisors attempted, in a 3:49 AM email on Monday morning, to persuade us to defer making the tender offer to your shareholders that we had informed you about on Sunday night. How could these actions possibly be in the interests of Elk shareholders?

     While you have not communicated the details of your leveraged buyout, we trust that you have not agreed to anything that would prevent us from competing economically and in effect preclude a higher offer for your shareholders. Finally, our offer is obviously superior to the Elk leveraged buyout in both price and the fact that BMCA’s offer is a tender offer, not subject to regulatory clearance, and, barring any undue delay on the part of Elk, should close in January 2007.

     Please advise us how you wish to proceed.

     All the best.

Sincerely,                    

/s/ Robert B. Tafaro                    

     48. On receipt of news of this higher offer, ElkCorp’s market capitalization increased by 5%. In fact, in the two trading days following BMCA’s announced tender offer for $40.00 per share, ElkCorp has traded well-above $40.00, reaching as high as $41.40.

     49. The Individual Defendants issued a statement in response to BMCA’s offer, which is facially superior to the Carlyle offer accepted by the Individual Defendants as “adequate,” stating:

ElkCorp, a manufacturer of premium roofing and building products, today confirmed it has received notice of an unsolicited cash tender offer to purchase all of ElkCorp’s outstanding shares for $40 per share from Building Materials Corporation of America (BMCA).

     The Board of Directors, consistent with its fiduciary duties and the Company’s obligations under its existing merger agreement with The Carlyle Group, will review the offer and make a recommendation to ElkCorp’s shareholders. The Board urges ElkCorp’s shareholders not to take any action with respect to the tender offer until the Board makes its recommendation.

     50. The Individual Defendants caused ElkCorp to enter into an Agreement and Plan of Merger with Carlyle which prohibits the Company from “shopping” the Company via a fair process.

SHAREHOLDER DERIVATIVE PETITION — Page 20

Section 5.3 of the Merger Agreement specifically prohibits the Company from responding to public offers or proposals to the Board to acquire over 50% of the Company’s securities — effectively precluding BMCA’s superior offer from being considered precisely because it is public in nature. The Individual Defendants further granted Carlyle a three-day Right of First Refusal in the event that a superior offer was presented to the Board.

     51. Section 7.3 of the Merger Agreement agreed to by the Individual Defendants is a provision for the payment of a “Termination Fee” of $29 million to Carlyle in the event the Company terminates the Merger Agreement. This “termination fee” grossly exceeds the Company’s available cash of $9.34 million as reported on its Form 10-Q for the first quarter 2007.

     52. The adoption of the unlawful provisions in §5.3 and §7.3 of the Merger Agreement, combined with defendants’ refusal to negotiate in good faith in connection with the sale of ElkCorp, confirms that defendants’ actions were designed to protect and advance their own interests in breach of the Individual Defendants’ fiduciary duties owed to the Company and its public shareholders.

FIRST CAUSE OF ACTION

Claim for Breach of Fiduciary Duties

     53. Plaintiff repeats and realleges each allegation set forth herein.

     54. Plaintiff brings this cause of action derivatively on behalf of ElkCorp against all Individual Defendants.

     55. The Individual Defendants are fiduciaries of ElkCorp and are obligated to conduct the business of the Company with loyalty, candor and independence and in good faith. This cause of action is asserted based upon the defendants’ acts in violation of Delaware law, which acts constitute a breach of fiduciary duty and waste of the Company’s corporate assets.

SHAREHOLDER DERIVATIVE PETITION — Page 21

     56. The defendants have violated the fiduciary duties of care, loyalty, candor and independence owed to ElkCorp, have engaged in unlawful self-dealing, and have acted to put their personal interests and/or the interests of Carlyle ahead of the interests of ElkCorp.

     57. The Individual Defendants have violated their fiduciary duties by agreeing to the Proposed Acquisition without regard to the fairness of the Proposed Acquisition to ElkCorp. By the acts, transactions and courses of conduct alleged herein, the Individual Defendants, individually and acting as part of a common plan usurped ElkCorp’s assets for themselves. As demonstrated by the allegations above, defendants knowingly or recklessly failed to exercise the care required, and breached their duties of loyalty, good faith, candor and independence owed to ElkCorp because, among other reasons, they took steps to distort and undermine the sales process and ensure that ElkCorp’s senior insiders and Carlyle had an unfair advantage, by, among other things:

          (a) failing to solicit other potential acquirors or alternative transactions;

          (b) ignoring or not protecting against the numerous conflicts of interest resulting from the directors’ own interrelationships or connection with the Proposed Acquisition; and

          (c) failing to disclose all material information regarding ElkCorp in connection with the Proposed Acquisition.

     58. By reason of the foregoing acts, practices and course of conduct, the Individual Defendants have failed to exercise ordinary care and diligence in the exercise of their fiduciary obligations toward ElkCorp. As a result of the actions of the defendants, ElkCorp and its shareholders have been damaged.

     59. If the Proposed Acquisition is not enjoined, ElkCorp’s public shareholders will be deprived of the opportunity to meaningfully exercise their franchise or receive the substantial gains

SHAREHOLDER DERIVATIVE PETITION — Page 22

they would otherwise realize if an active auction or open bidding process with “strategic” buyers was allowed to occur.

     60. As a result of defendants’ unlawful actions, ElkCorp and its public shareholders are being harmed in that they will be precluded from receiving fair value for ElkCorp’s assets and business.

     61. In addition, defendants, in their roles as executives and/or directors of the Company, participated in the acts alleged herein and/or acted in gross disregard of the facts and/or failed to exercise due care to prevent the unlawful conduct.

     62. Each of the defendants, individually and collectively, have breached and/or aided and abetted breaches of fiduciary duties owed to ElkCorp and its shareholders.

     63. As a direct and proximate result of the defendants’ conduct, ElkCorp will suffer irreparable harm if the Proposed Acquisition proceeds.

SECOND CAUSE OF ACTION

Claim for Abuse of Control

     64. Plaintiff repeats and realleges each allegation set forth herein.

     65. Plaintiff brings this cause of action derivatively on behalf of ElkCorp against all Individual Defendants.

     66. The Individual Defendants’ conduct constituted an abuse of their ability to control and influence ElkCorp for which they are legally responsible.

     67. As a direct and proximate result thereof, ElkCorp will be irreparably harmed.

PRAYER FOR RELIEF

     WHEREFORE, plaintiff demands preliminary and permanent equitable relief in favor of the Company and against defendants as follows:

SHAREHOLDER DERIVATIVE PETITION — Page 23

     A. Declaring and decreeing that the Proposed Acquisition was entered into in breach of the fiduciary duties of defendants and is therefore unlawful and unenforceable;

     B. Declaring and decreeing that the no-shop and termination fee provisions were entered into in breach of the fiduciary duties of the Individual Defendants and are therefore unlawful and unenforceable;

     C. Enjoining defendants, their agents, counsel, employees and all persons acting in concert with them from consummating the Proposed Acquisition on the terms proposed;

     D. Directing the Individual Defendants to exercise their fiduciary duties to obtain a transaction which is in the best interests of ElkCorp and its shareholders;

     E. Rescinding, to the extent already implemented, the Proposed Acquisition or any of the terms thereof;

     F. Imposition of a constructive trust, in favor of plaintiff, on behalf of the Company, upon any benefits improperly received by defendants as a result of their wrongful conduct;

     G. Awarding plaintiff the costs and disbursements of this action, including reasonable attorneys’ and experts’ fees; and

     H. Granting such other and further equitable relief as this Court may deem just and proper.

DATED: December 26, 2006	PROVOST & UMPHREY LAW FIRM, LLP
	JOE KENDALL
	State Bar No. 11260700
	WILLIE C. BRISCOE
	State Bar No. 24001788
	/s/ Joe Kendall
	JOE KENDALL

SHAREHOLDER DERIVATIVE PETITION — Page 24

3232 McKinney Avenue, Suite 700

Dallas, TX 75204

Telephone: 214/744-3000

214/744-3015 (fax)

LERACH COUGHLIN STOIA GELLER

     RUDMAN & ROBBINS LLP

DARREN J. ROBBINS

RANDALL J. BARON

655 West Broadway, Suite 1900

San Diego, CA 92101

Telephone: 619/231-1058

619/231-7423 (fax)

Attorneys for Plaintiff

SHAREHOLDER DERIVATIVE PETITION — Page 25

EX-99.(E)(1)

Exhibit (e)(1)

EXECUTIVE COMPENSATION

•  Compensation Committee Report

•  Our Philosophy

•  Key Elements of Executive Compensation

•  Other Compensation

•  Summary of Factors Influencing Compensation for Fiscal 2006

•  CEO Compensation

•  Tax Deductibility of Executive Compensation

•  Performance Graphs

•  Summary Compensation Table

•  Option Grants in Fiscal 2006

•  Aggregated Option Exercises During Fiscal 2006 and Values at June 30, 2006

•  Stock/Loan Balances

•  Equity Compensation Plan Information

•  Change-in-Control (Severance) Agreements

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors, which is governed by a charter that is published on the Company’s website, is responsible for providing advice and recommendations to the Board and establishing the policies which govern executive compensation programs of the Company. The Committee also establishes compensation for officers of the Company and makes grants of awards under the 2004 Amended and Restated ElkCorp Equity Incentive Compensation Plan (the “2004 Plan”). The Committee consists entirely of directors determined by the Board to be independent and free from interlocks with other companies’ boards of directors and compensation committees that could create conflicts of interest. In fiscal 2006, as in other recent years, the Committee utilized the services of an independent third-party compensation consultant to assist it in performing its responsibilities.

Our Philosophy

Our philosophy, and the Board’s philosophy, is to offer key executive officers a competitive compensation package that is tied to the performance and contribution of the executive, as well as the overall success of the Company. The Company directly links executive and shareholder interests through equity-based plans and plans that reward the executive when the Company achieves specific operating results. We intend to motivate and reward executives for performance that enhances shareholder value, and to retain executives who are critical to the long-term success of the Company. The Committee and Board seek an appropriate balance between short- and long-term incentives in reviewing and approving compensation programs and individual compensation awards.

Key Elements of Executive Compensation

In fiscal 2006, the key elements of compensation the Company paid to its executives were base salary, cash profit-sharing awards made in the form of dollar-denominated performance units, restricted stock grants, performance stock awards, stock options, and, as to executives who were not ElkCorp executive officers, stock loans under the Company’s Stock/Loan Plan. The Company intends for each element of compensation to provide a distinct set of incentives to the executive.

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•   Base Salary

The Committee approves and recommends ratification to the Board of base salaries of the Company’s executive officers. We base our determination on our subjective evaluation of whether the proposed base salary is appropriate in relation to salaries in the Company’s compensation peer group for the equivalent position and to the executive’s individual performance.

Prior to approving salaries for fiscal 2006 and recommending ratification to the Board, we reviewed a survey of competitive salaries paid by other companies in the Company’s compensation peer group. Our independent consulting firm developed the survey. Our independent compensation consultants selected our peer group from their database of companies with revenues comparable to the Company’s. The Company used the survey data to establish the range of compensation for each executive, with the mid-point in that range being close to the median salary for the executive’s position within the compensation peer group. The executive’s progress in the applicable salary rate range generally depends upon their individual skills, abilities and performance.

We also reviewed the Company’s annual performance evaluations for its executive officers. The executive officer’s immediate superior completed this annual performance review based on their evaluation of the executive’s achievement of individual strategic and operational goals, and fulfillment of established position requirements and expectations. The Committee conducted the evaluation of the Chairman of the Board and Chief Executive Officer and of the President and Chief Operating Officer by obtaining a performance review from their direct reports in addition to the Committee’s and Board’s own evaluations. None of the evaluations contained specific weighting of factors for determining overall job performance, but did contain numerical grading of the executive’s performance as to each “quality requirement,” a goal established for that executive at the beginning of the fiscal year as part of the Company’s strategic planning.

•   Cash Profit-Sharing

We believe that a significant portion of annual compensation for each executive officer should be linked solely to the Company’s short-term financial performance. Accordingly, in fiscal 2006 the Company made profit-sharing payments structured as dollar-denominated performance unit awards under the 2004 Plan. These awards resulted in payouts of quarterly cash profit-sharing bonuses when the Company achieved operating income that brought its return on equity within a specified percentile range of returns generated by other NYSE companies. Management, the Committee and the full Board each certifies the Company’s actual quarterly performance versus the threshold, target and maximum levels established at the beginning of the fiscal year for profit-sharing purposes.

Under the Company’s profit-sharing plan, each officer and eligible employee is assigned a “profit-sharing percentage” that is recommended by the Company and approved by the Committee based on a subjective evaluation of the executive’s position with the Company and potential to impact Company performance. The Compensation Committee also approves, subject to Board ratification, return on equity (ROE) bands equal to specific percentiles of the ROE of other NYSE companies over the previous three years. For fiscal 2006, it approved three performance bands: a minimum threshold ROE (ROE(Min)) equal to the 32nd percentile of NYSE companies, a target ROE (ROE(Target)) equal to the 68th percentile of NYSE companies, and a maximum ROE (ROE(Max)) equal to the 84th percentile of NYSE companies. The ROE was converted to equivalent operating income before profit-sharing payments for purposes of profit-sharing calculations for ElkCorp and each operating subsidiary. We generally exclude asset write-downs and gains and losses from extraordinary transactions from the calculation of operating income for profit-sharing purposes, but not operating income or losses from discontinued operations, based on what results are within the reasonable control of the Company’s management.

If ROE(Min) for the fiscal year is not met, no cash profit-sharing will be paid. If ROE(Target) is met for the fiscal year, the annual cash profit sharing amount is equal to the executive’s annual salary multiplied by his or her profit sharing percentage. If ROE(Max) is met or exceeded, the annual cash profit sharing amount is equal to the executive’s annual salary multiplied by twice his or her profit-sharing percentage. Payments are prorated for performance between ROE(Min) and ROE(Max), according to the percentage beyond ROE(Min) of ROE(Target) achieved, or percentage beyond ROE(Target) of ROE(Max) achieved, as applicable. The annual cash profit-sharing amount is paid in quarterly “progress” installments, but payments for performance above target are not paid until after the end of the fiscal year.

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For fiscal 2006, in accordance with its ROE performance of 16.8 percent, the Company made cash profit-sharing payments to its executive officers at 131.05 percent of target.

•  Long-term Incentive Compensation

In fiscal 2006 the Committee engaged an independent third party compensation consultant to perform a marketplace compensation analysis and issue recommendations. The consultant recommended and the Committee determined that it would be in the best interests of the Company and its shareholders to continue its long-term compensation program first established in fiscal 2004 and 2005. The Committee decided to continue to maintain annual salary and bonus opportunity at levels approximating the market 50th percentile, and levels of long-term incentive compensation benchmarked to the market 62nd percentile, with the same mix of vehicles utilized in fiscal 2005 to provide that long-term compensation to executive officers. Further, our Compensation Committee maintained its existing stock ownership retention guidelines for our directors and officers, which provides that each individual director and officer is expected to retain no less than fifty percent, on an after-tax basis, of the Common Stock they acquire by way of equity incentive compensation awards. This guideline applies to all awards made from and after fiscal 2005, and will be enforced through the Committee’s potential reduction of future awards if an officer is out of compliance with the retention requirement.

Since shareholder approval of the 2004 Plan, the Committee has made and the Board has ratified awards to executive officers of a combination of options vesting over three years and performance stock on a three-year performance cycle. No payouts will occur for those performance stock awards until the end of the respective three-year performance cycles, and then only if performance warrants the payout by exceeding the minimum “threshold” performance measures we approved as part of the awards, as described below under “Performance Stock.” New performance cycles have been established so that the ends of such cycles will be “laddered” going forward.

          º  Stock Loans/Restricted Stock

During fiscal 2006, the Company continued to maintain its Stock/Loan Plan for more limited purposes than it was used historically. Under the Stock/Loan Plan, the Company granted to certain key employees other than executive officers of ElkCorp the right to obtain a loan from the Company, the proceeds of which must be used to purchase the Company’s Common Stock or applied to recent Company stock purchases. Since April 2002, the Company has not made stock loans to ElkCorp’s executive officers. As a result of the Sarbanes-Oxley Act of 2002, which contained broad personal loan prohibitions, the Stock/Loan Plan is no longer a viable benefit program for these executive officers. In fiscal 2006, the Committee continued its modified practice of awarding restricted stock grants, under the 2004 Plan and its predecessor plan, in place of stock loans to ElkCorp executive officers. These awards had a value substantially equivalent to the value of the stock loans they would have received but for the prohibition. Accordingly, at the end of each fiscal quarter in which profit-sharing occurs, an ElkCorp officer will be entitled to a restricted stock award with a value equal to a specific percentage of the cash profit-sharing payment he or she receives for the same quarter. The value of the restricted stock award is divided by the then market price of the stock (with no discount for restrictions) to derive the number of shares of restricted stock awarded for the quarter. Fiscal 2006 restricted stock awards will vest ratably over five years with continued service to the Company or its subsidiaries.

Like cash profit-sharing bonuses, restricted stock grants depend upon the Company’s achievement of short-term earnings targets. By operation of its formula, the Company makes larger restricted stock grants the better its short-term operating earnings. As with profit-sharing, restricted stock awards are not made if short-term operating earnings do not attain the threshold level. Unlike the case with cash profit-sharing bonuses, however, the executive will realize a benefit that also varies according to long-term factors — continued service to the Company, which is necessary for vesting to occur, and increases in shareholder value over the period the executive holds Company restricted stock.

          º  Stock Options

In fiscal 2006, we made awards of incentive and nonqualified stock options to Company executives under the predecessor plan to the 2004 Plan. These awards were ratified by the Board. The value of restricted stock awards

14

that will be made for the fiscal year if the Company achieves target performance is deducted from an officer’s total long-term incentive compensation award value, and the remainder of the long-term incentive compensation award value is split 25/75 between stock options and performance stock. As a result, Company officers received 25 percent of their fiscal 2006 long-term incentive compensation award value (net of restricted stock opportunity assuming target performance, as described above) in the form of stock options. We use the Black-Scholes option pricing model as part of a calculation of the number of option shares with the intended value. Stock options we awarded to executives in fiscal 2006 will have a ten-year term and become exercisable ratably over three years of continued service to the Company or its subsidiaries, with an option price equal to the market value on date of grant.

          º  Performance Stock

Performance stock consists of shares of Common Stock issued to executive officers only if and when the Company achieves pre-defined performance for the defined performance cycle. Company officers received 75 percent of their fiscal 2006 long-term incentive compensation award value (net of restricted stock opportunity assuming target performance, as described above) in the form of performance stock award agreements. The performance stock award agreements issued in fiscal 2006 contained a three-year performance cycle ending June 30, 2008. Payouts of Common Stock pursuant to those awards will range from none to 150 percent of the target number of shares, depending on the performance of the Company. If the Company achieves less than the defined “threshold” performance for that performance cycle, there will be no stock distributed to the executive under that award. If we achieve the defined “target” level of performance, we would make payouts equal to the target number of shares. If the Company exceeded the target level of performance, payouts would exceed the target number of shares, up to a maximum payout of 150 percent of the target number of shares, depending on the increment beyond target performance achieved.

Although the Committee has the flexibility under the 2004 Plan to adjust performance measures in the future, its fiscal 2006 awards were performance stock in the form of shares of Common Stock earned 70 percent based on the Company’s return on beginning equity (ROE) relative to the NYSE and 30 percent based on the Company’s total shareholder return (TSR), or stock price appreciation plus dividends, relative to the NYSE. The Committee utilized historical NYSE ROE performance for the three-year period preceding the beginning of the performance cycle in establishing standards of ROE performance for that cycle. TSR of the Company will be measured relative to the NYSE over the performance cycle. For ROE and TSR awards both, the threshold for payout is the 50th percentile of NYSE companies for the measurement period, the target payout will be earned at performance equal to the 62nd percentile and the maximum payout will be earned if the Company achieves the 84th percentile or greater. Performance and payouts based on ROE will be independent of performance and payouts based on TSR.

Other Compensation

We also believe that to retain high quality executive talent, the Company must maintain a competitive package of compensatory employee benefit and welfare plans. The Company’s executives currently are eligible to participate in the Company’s 401(k) plan, employee stock ownership plan, a deferred compensation plan and other employee benefit and welfare programs that are generally available to employees. The Company establishes these programs based primarily on its subjective evaluation of competitive practices at similar companies who compete with the Company for personnel.

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Summary of Factors Influencing Compensation for Fiscal 2006

The table below summarizes the performance and other factors directly influencing the amounts of the Company’s executive compensation for fiscal 2006:

	Factors Directly Influencing Amounts of Executive Compensation
									Long-term
							Continued		Increases
							Service		in
	Competitive		Short-Term Performance				to		Shareholder
	Practices		Individual		Company		Company		Value
Base Salary		ü		ü
Profit-sharing Bonuses		ü				ü
Stock Loans/Restricted Stock		ü				ü		ü		ü
Stock Options		ü						ü		ü
Performance Stock		ü				ü		ü		ü
Other		ü						ü		ü

Although base salary and cash profit-sharing bonuses are directly linked to short-term individual and Company performance, respectively, rather than long-term increases in shareholder value, many short-term performance goals are part of the Company’s long-term strategic plan, which is designed to result in long-term increases in shareholder value.

CEO Compensation

We approve and recommend the CEO’s compensation to the Board, with each component determined according to the criteria described above. In fiscal 2006, the Committee evaluated Mr. Karol’s performance utilizing a review by the Board and Mr. Karol’s direct reports. The Committee also evaluated competitive compensation data developed by its independent compensation consultant.

We believe that Mr. Karol’s salary is competitive in relation to salaries of chief executive officers within the Company’s compensation peer group.

Mr. Karol’s cash profit-sharing bonus and restricted stock awards in fiscal 2006 were calculated using the application of a formula to a target amount as described above in the Cash Profit-Sharing section of this report. His cash profit-sharing percentage in fiscal 2006 was 70 percent of salary and his restricted stock percentage was 60 percent of cash profit-sharing.

In fiscal 2006, we applied the ordinary methodology in determining Mr. Karol’s long-term incentive compensation, which was made 75 percent in the form of performance stock and 25 percent in the form of stock option awards, after deducting his target opportunity to earn restricted stock in fiscal 2006 from the total dollar value of fiscal 2006 long-term incentive compensation approved for Mr. Karol.

Tax Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code limits the deductibility of compensation paid to the named executive officers to $1 million per officer in any one year. Compensation which qualifies as performance-based compensation is not taken into account for purposes of this limitation. The Company intends to take the position that all compensation paid during fiscal year 2006, including amounts associated with the Company’s Equity Incentive Compensation Plan, is deductible for federal income tax purposes. Should the compensation level of any named executive officer exceed $1 million for purposes of Internal Revenue Code Section 162(m), the Committee and Board will determine whether such compensation is appropriate, but may be influenced by factors other than full tax deductibility.

September 7, 2006

ElkCorp Compensation Committee

Shauna R. King, Chair

Stephen J. Demetriou

James E. Hall

Dale V. Kesler

Michael L. McMahan

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Performance Graphs

The graphs below compare the cumulative total shareholder return on our Common Stock, including reinvestment of dividends, for the last five and ten fiscal years with the cumulative total return of the Russell 2000 Stock Index and the Dow Jones Building Materials Index over the same periods.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

AMONG ELKCORP, THE RUSSELL 2000 INDEX

AND THE DOW JONES US BUILDING MATERIALS & FIXTURES INDEX

Cumulative Total Return
	6/01		6/02		6/03		6/04		6/05		6/06
ElkCorp		100.00		136.28		113.35		121.53		145.97		142.85
Russell 2000		100.00		91.33		89.83		119.80		131.12		150.23
Dow Jones US Building Materials & Fixtures		100.00		107.69		98.71		137.00		168.18		183.93

*  $100 INVESTED ON 6/30/01 IN STOCK OR INDEX — INCLUDING REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING JUNE 30.

COMPARISON OF 10 YEAR CUMULATIVE TOTAL RETURN*

AMONG ELKCORP, THE RUSSELL 2000 INDEX

AND THE DOW JONES US BUILDING MATERIALS & FIXTURES INDEX

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Cumulative Total Return
	6/96		6/97		6/98		6/99		6/00		6/01		6/02		6/03		6/04		6/05		6/06
ElkCorp		100.00		154.76		212.36		371.12		295.16		262.86		358.21		297.94		319.45		383.69		375.49
Russell 2000		100.00		116.33		135.53		137.56		157.27		158.30		144.57		142.20		189.64		207.56		237.81
Dow Jones US Building Materials & Fixtures		100.00		129.72		163.67		162.57		114.80		134.47		144.81		132.74		184.23		226.15		247.34

*  $100 INVESTED ON 6/30/96 IN STOCK OR INDEX — INCLUDING REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING JUNE 30.

The preceding graphs are presented in accordance with SEC requirements. You are cautioned against drawing any conclusions from this information, as past results do not necessarily indicate future performance. The graphs in no way reflect a forecast of future financial performance.

Despite any statement in any of our filings with the SEC that might incorporate part or all of any future filings with the SEC by reference, the Compensation Committee Report and performance graphs included with this proxy statement are not incorporated by reference into any such filings.

Summary Compensation Table

The following table contains information about the compensation for the last three fiscal years of each person who served as chief executive officer during fiscal 2006 and each of the four other most highly compensated executive officers of ElkCorp (referred to below as the named executive officers), based on salary and bonus for fiscal 2006.

							Long-term Compensation
							Awards
									Securities
									Underlying
									Stock
Name									Options
and							Restricted		(#				All
Principal	Fiscal		Annual Compensation				Stock		of				Other
Position(a)	Year		Salary		Bonus(b)		($)(c)		Shares)(d)		Payouts(e)		Compensation(f)
Thomas D. Karol		2006	$	627,000	$	575,178	$	345,074		35,550		—	$	119,030
		2005		615,000		674,163		1,435,578		31,803		—		87,661
		2004		565,000		379,782		189,858		135,500		—		68,955
Richard A. Nowak		2006	$	464,000	$	364,843	$	182,490		21,447		—	$	79,749
		2005		435,000		408,276		792,530		17,028		—		71,026
		2004		400,000		224,060		112,190		94,185		—		61,914
Gregory J. Fisher		2006	$	264,922	$	138,873	$	55,558		4,674		—	$	37,850
		2005		236,640		148,231		186,051		3,672		—		32,100
		2004		208,104		86,261		34,646		16,000		—		29,757
Matti Kiik		2006	$	233,398	$	116,229	$	46,422		4,044		—	$	34,052
		2005		226,600		134,845		200,329		4,239		—		34,185
		2004		220,000		93,657		37,437		16,000		—		33,947
David G. Sisler		2006	$	261,389	$	130,169	$	50,744		4,350		—	$	37,733
		2005		226,022		130,962		200,235		4,278		—		31,680
		2004		221,048		91,627		36,766		16,000		—		31,102

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(a) Capacities in which each named executive officer served during the last fiscal year:

Thomas D. Karol	Chairman of the Board and Chief Executive Officer
Richard A. Nowak	President and Chief Operating Officer
Gregory J. Fisher	Senior Vice President, Chief Financial Officer and Controller
Matti Kiik	Senior Vice President, Research and Development
David G. Sisler	Senior Vice President, General Counsel and Secretary

(b)	Bonus amounts in the summary compensation table were paid under the 2004 Amended and Restated ElkCorp Equity Incentive Compensation Plan (2004 Plan).
(c)	Number of shares multiplied by closing market price on date of grant. Restricted stock awards are shown above in the fiscal year they were earned, but some of the above grants were made in the quarter following that in which they were earned. The awards shown in the summary compensation table were made under the 2004 Plan for fiscal 2006. Portions of the grants shown for fiscal 2005 are “bridge cycle” grants made to transition from the Company’s former long-term incentive compensation program to the current program, by providing incentive pay over the three-year period from the commencement date of the new program to the end of the first three-year performance cycle of performance stock awards. Other grants were made in substitution for new loans to named executive officers under the Stock/Loan Plan, which were discontinued during fiscal 2003. Restricted stock grants made in lieu of stock loans under the Company’s Stock/Loan Plan vest in 20 percent increments over five years, and “bridge cycle” restricted stock grants vest in 331/3 percent increments over three years, with continued service to the Company. All restricted stock grants are thus subject to a risk of forfeiture. Any dividends payable on our Common Stock will be paid on all shares of restricted stock reflected in the table, and all shares of restricted stock may be voted by the grantee, whether the shares are vested or unvested. As of June 30, 2006, the aggregate number of shares of unvested restricted stock held by the named executive officers, and the dollar value of such shares, was as follows: Mr. Karol, 31,851 shares ($884,502); Mr. Nowak, 22,993 shares ($638,516); Mr. Fisher, 6,430 shares ($178,561); Mr. Kiik, 6,633 shares ($184,198); and Mr. Sisler, 6,445 shares ($178,978).
(d)	See the table below entitled “Option Grants in Fiscal 2006” for further information concerning fiscal 2006 option grants.
(e)	In fiscal 2006, the Company made performance stock awards for which payouts cannot occur before fiscal 2009, and then only if the Company achieves defined return-on-equity or total shareholder returns for a three-year performance cycle beginning July 1, 2005 and ending June 30, 2008. See “Long-term Incentive Plans — Awards in Fiscal 2006” below.
(f)	Amounts in this column represent contributions by the Company to the ElkCorp Employees’ 401(k) Savings Plan and Employee Stock Ownership Plan, prior years’ loans forgiven under the Stock/Loan Plan (discontinued for executive officers in fiscal 2003) and supplemental retirement benefits summarized as follows:

Company Contributions to Employees’ 401(k) Savings Plan and Employee Stock Ownership Plan:

	Year Ended June 30,
Name	2006		2005		2004
Thomas D. Karol	$	14,700	$	14,350	$	14,000
Richard A. Nowak		14,700		14,350		14,000
Gregory J. Fisher		14,700		14,350		14,000
Matti Kiik		14,700		14,350		14,000
David G. Sisler		14,700		14,350		14,000

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Loans Forgiven Under the Stock/Loan Plan:

	Year Ended June 30,
Name	2006		2005		2004
Thomas D. Karol	$	14,108	$	14,108	$	14,108
Richard A. Nowak		9,541		20,944		24,514
Gregory J. Fisher		4,415		8,255		10,995
Matti Kiik		4,993		10,384		13,952
David G. Sisler		4,635		8,203		11,099

Supplemental Retirement Benefits Contributed:

	Year Ended June 30,
Name	2006		2005		2004
Thomas D. Karol	$	90,222	$	59,203	$	40,847
Richard A. Nowak		55,508		35,732		23,400
Gregory J. Fisher		18,735		9,495		4,762
Matti Kiik		14,359		9,451		5,995
David G. Sisler		18,398		9,127		6,003

Long-term Incentive Plans — Awards in Fiscal 2006

	Number		Performance
	of		or		Estimated Future Payouts
	Shares,		Other		under Non-Stock Price-Based Plans
	Units		Period		Threshold		Target		Maximum
	or		Until		(#		(#		(#
	Other		Maturation		of		of		of
	Rights		or		Shares)		Shares)		Shares)
Name	(#)(1)		Payout		(2)		(2)		(2)
Thomas D. Karol		TSR		7/1/2005 — 6/30/2008		0		33,830		50,745
		ROE		7/1/2005 — 6/30/2008		0		14,500		21,750
Richard A. Nowak		TSR		7/1/2005 — 6/30/2008		0		20,410		30,615
		ROE		7/1/2005 — 6/30/2008		0		8,750		13,125
Gregory J. Fisher		TSR		7/1/2005 — 6/30/2008		0		4,450		6,675
		ROE		7/1/2005 — 6/30/2008		0		1,900		2,850
Matti Kiik		TSR		7/1/2005 — 6/30/2008		0		3,850		5,775
		ROE		7/1/2005 — 6/30/2008		0		1,650		2,475
David G. Sisler		TSR		7/1/2005 — 6/30/2008		0		4,140		6,210
		ROE		7/1/2005 — 6/30/2008		0		1,770		2,655

(1)

Number of shares is variable as described in footnote 2 below.

(2)

Fiscal 2006 awards were performance stock in the form of agreements for contingent issuance of shares of Common Stock, earned 70 percent based on the Company’s return on beginning equity (ROE) relative to the NYSE and 30 percent based on the Company’s total shareholder return (TSR), or stock price appreciation plus dividends, relative to the NYSE. The Compensation Committee utilized historical NYSE ROE performance for the three-year period preceding the beginning of the performance cycle in establishing standards of ROE performance for that cycle. TSR of the Company will be measured relative to the NYSE over the performance cycle. For ROE and TSR awards both, the threshold for payout is the 50th percentile of NYSE companies for the measurement period, the target payout will be earned at performance equal to the 62nd percentile and the maximum payout will be earned if the Company achieves the 84th percentile or greater. Payouts for performance between threshold and target, or between target and maximum, will be a prorated number of shares between the applicable levels in the above table. No payouts will be made for performance less than or

20

equal to threshold. Performance and payouts based on ROE will be independent of performance and payouts based on TSR.

Option Grants in Fiscal 2006

	Individual Grants
			%
			of
			Total
			Options
	Number		Granted		Exercise
	of		to		or
	Securities		Employees		Base				Potential Realizable Value at Assumed
	Underlying		in		Price				Annual Rates of Stock Price
	Options		Fiscal		Per		Expiration		Appreciation for Option Terms(c)(d)
Name	Granted(a)		2006		Share(b)		Date		5%		10%
Thomas D. Karol		35,550		45.3%	$	28.39		06/30/2015	$	634,721	$	1,608,508
Richard A. Nowak		21,447		27.3%		28.39		06/30/2015	$	382,922	$	970,398
Gregory J. Fisher		4,674		6.0%		28.39		06/30/2015	$	83,451	$	211,481
Matti Kiik		4,044		5.1%		28.39		06/30/2015	$	72,203	$	182,976
David G. Sisler		4,350		5.5%		28.39		06/30/2015	$	77,666	$	196,822
All Shareholders		N/A		N/A		N/A		N/A	$	365,297,411	$	925,735,357

(a)	Options become exercisable 331/3 percent per year on the first through the third anniversary dates of the grant. Options granted were for a term of ten years, subject to earlier termination upon certain terminations of employment. Upon the optionee’s death, permanent and total disability, retirement after age 62 or a change in control of the Company, all options reflected in this table would become immediately exercisable.
(b)	All options reflected in this table were granted at market value at date of grant. The exercise price may be paid in cash, delivery of already owned shares or a combination of cash and shares.
(c)	Gains are reported net of the option exercise price, but before any taxes associated with the exercise. These gains are calculated based on the stated assumed compounded rates of appreciation as set by the SEC for disclosure purposes. Actual gains, if any, on stock option exercises are dependent on the future performance of the Common Stock and overall stock market conditions, as well as the option holder’s continued employment through the period over which options become exercisable in increments. The amounts reflected in this table may not be achieved.
(d)	The potential realizable value for all shareholders on Common Stock is calculated over a period of ten years, based on (i) a beginning stock price of $28.39, the exercise price of the option grants reflected in this table, and (ii) the number of outstanding shares on June 30, 2006. These gains may not be achieved.

Aggregated Option Exercises During Fiscal 2006 and Values at June 30, 2006

The following table contains information about ElkCorp stock options that the named executive officers exercised during fiscal 2006, and the number and aggregate dollar value of stock options that named executive officers held at the end of fiscal 2006. In accordance with SEC rules, values are calculated by subtracting the total

21

exercise price from the fair market value of the underlying Common Stock, which is deemed to be $27.77 per share, the closing price of the Common Stock on the NYSE on June 30, 2006.

									Value of Unexercised
									In-the-Money
									Options
	Shares				Number of Securities				at
	Acquired				Underlying Unexercised				Fiscal
	on		Value		Options at Fiscal Year-End				Year-End
Name	Exercise		Realized*		Exercisable		Unexercisable		Exercisable		Unexercisable
Thomas D. Karol		—		—		121,949		104,283	$	610,521	$	310,935
Richard A. Nowak		11,340	$	245,586		159,409		115,145		780,641		400,427
Gregory J. Fisher		1,500		22,345		43,296		23,033		222,186		75,414
Matti Kiik		15,220		220,475		26,633		23,470		51,229		79,363
David G. Sisler		—		—		63,953		25,105		323,872		85,002

*  Market value of underlying securities at exercise date minus the exercise price, not reduced for taxes, if any, payable upon exercise.

Stock/Loan Balances

The named executive officers have outstanding loans from the Company under the Stock/Loan Plan described in the Compensation Committee Report included with this proxy statement. Participation in the Stock/Loan Plan was discontinued for all ElkCorp executive officers effective July 30, 2002, but then existing loans remained outstanding in accordance with their terms. Stock/Loans bear interest at a rate equal to the applicable mid-term federal rate established by the Internal Revenue Service. Such loans, including interest, are forgiven in increments with employees’ continued service to the Company or its subsidiaries. No named executive officer had a loan balance of $60,000 or more at any time in fiscal 2006, or thereafter.

Equity Compensation Plan Information

The following table presents information as of June 30, 2006 with respect to compensation plans under which equity securities were authorized for issuance by the Company.

					Number of
					securities remaining
	Number of				available for
	securities to				future issuance
	be issued		Weighted-average exercise		under equity
	upon exercise		price of		compensation plans
	of outstanding		outstanding options,		(excluding securities
	options, warrants		warrants and		reflected in
Plan category	and rights		rights		column(a))
	(a)		(b)		(c)
Equity compensation plans approved by security holders:
Incentive Stock Option Plan(1)		887,486	$	23.19		0
Equity Incentive Compensation Plan(2)		535,872	$	23.79		359,053
Equity compensation plans not approved by security holders		N/A		N/A		N/A
Total		1,423,358	$	23.41		359,053

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(1)	Represents the 1998 Elcor Corporation Incentive Stock Option Plan and the incentive stock option plan it restated.
(2)	Represents the 2004 Plan and the equity incentive compensation plan it restated.

Change-in-Control (Severance) Agreements

ElkCorp has entered into severance agreements with certain officers and employees, including each of the named executive officers. ElkCorp intends for the agreements to protect the Company and its shareholders, as well as these officers and employees, in the event of a threatened or actual change in control of the Company. The agreements are designed to reinforce these officers’ and employees’ dedication to the Company’s best interests before and after such a transaction, and would reduce the likelihood that these officers and employees would leave the Company prematurely. In structuring and deciding upon the level of benefits, the Compensation Committee and Board utilized, among other things, a survey prepared by the Company’s outside counsel of competitive practices within the Company’s peer group based on public filings.

The agreements provide for severance benefits upon certain terminations of employment within three years after a change in control of the Company. Change in control events under the employment agreements include:

•  the acquisition of 40% or more of the Company’s outstanding voting securities;

•  certain mergers or consolidations;

•  the approval by the Company’s shareholders of a plan of dissolution or liquidation;

or •  certain sales or transfers of 67% or more of the fair value of the Company’s operating assets or earning power.

Under the agreements, if the officer’s or employee’s employment with the Company or its subsidiary is terminated within three years of a change in control under certain circumstances, the officer or employee will be entitled to receive a lump-sum severance payment equal to two times (except for Messrs. Karol and Nowak who would receive 2.99 times) the highest annual cash compensation they received in any calendar year during the three-year period immediately preceding termination, plus all outstanding loans under the Company’s Stock/Loan Plan would be forgiven in full. In addition, under the agreements, for a period of two years following a change in control (three years for Messrs. Karol and Nowak), the officers and employees would be entitled to medical, disability and life insurance coverage at a cost to the officer or employee of no more than 120% of the amount the officer or employee paid for such benefits immediately prior to the change in control.

In addition, upon a change in control, under the 2004 Plan and predecessor plans, all options and shares of restricted stock held by officers and employees under the plans, including the named executive officers, would become immediately vested, and the maximum payout of shares of Common Stock would be paid on any outstanding performance stock award agreements.

OTHER MATTERS

•  Code of Conduct

•  Ethics in Financial Reporting

•  Section 16(a) Beneficial Ownership Reporting Compliance

•  Communications with the Company

23

EX-99.(E)(6)

Exhibit (e)(6)

ElkCorp
14911 Quorum Drive
Suite 600
Dallas, TX 75254

December 29, 2006

CONFIDENTIAL

Heyman Investment Associates Limited Partnership
Building Materials Corporation of America
1361 Alps Road
Wayne, NJ 07470

Ladies and Gentlemen:

          You have requested information from ElkCorp (the “Company”), in connection with your consideration of a possible negotiated transaction between the Company and you (the “Transaction”). As a condition to furnishing such information to you, you agree, as set forth below, to treat confidentially any information (whether prepared by the Company, its Representatives or otherwise, whether in oral, written, electronic or other form, and whether prepared before, on or after the date hereof) that the Company or its Representatives, furnish to you or your Representatives (such information being collectively referred to herein as the “Evaluation Material”) and to take or abstain from taking certain other actions set forth herein. The term “Evaluation Material” shall be deemed to include, without limitation, notes, analyses, compilations, summaries, data, studies, interpretations, forecasts, records, memoranda or other documents or information prepared by you or your Representatives which contain, reflect or are based on, in whole or in part, any Evaluation Material. The term “Evaluation Material” shall not be deemed to include information that (i) is already in your possession, provided that such information is not known by you to be subject to another confidentiality agreement with or other obligation of secrecy to the Company or another party, (ii) becomes generally available to the public other than as a result of a disclosure by you or your Representatives, (iii) becomes available to you on a non-confidential basis from a source other than the Company or its Representatives, provided that you do not have reason to believe that such source is bound by a confidentiality agreement with or other obligation of secrecy to the Company or another party, or (iv) you can demonstrate was independently developed by you or on your behalf without violation of any of your obligations hereunder and without reference to any Evaluation Material. Upon the execution of this letter, the Company shall promptly begin facilitating access to diligence materials in response to reasonable requests in connection with your consideration of a Transaction. It is the intent of the Company not to deny you, in connection with your consideration of a Status Quo Offer, access to substantially the same Evaluation Material as was made available to the counterparties to the CGEA Agreement (as defined below), including the guarantor, taking into account, however, that the timing of your review and substance of your requests may differ from those of those counterparties.

          You hereby agree that the Evaluation Material will be used by you or your Representatives solely for the purpose of evaluating a possible acquisition by you of the Company, will not be used in any way directly or indirectly detrimental to the Company, or for any other purpose, and will be kept confidential by you and your Representatives and will not be disclosed by you or any of your Representatives to any other person; provided, however, that any of such information may be disclosed to your Representatives who (i) need to know such information for the sole purpose of evaluating any such possible transaction between the Company and you, (ii) are informed by you of the confidential nature of such information and (iii) agree to keep such information confidential and to be bound by this letter agreement to the same extent as if they were parties hereto. You hereby agree that you will be responsible for any breach of this letter agreement by your Representatives, and that the Company shall be entitled to directly enforce such agreements (it being understood that such responsibility shall be in addition to and not by way of limitation of any right or remedy the Company may have against your Representatives with respect to such breach). You understand that some Evaluation Material deemed competitively sensitive may, and Evaluation Material related to product pricing shall, if provided, be designated for review solely by your outside advisors or by those of your employees whose responsibilities do not include contacting customers or potential customers or the determination of product pricing, and you agree to, and to cause your Representatives to, abide by such designation.

          In addition, without the prior written consent of the Company, you will not, and will cause your Representatives not to, discuss with or offer to any third party an equity participation in a possible transaction or any other form of joint acquisition by you and such third party, or enter into any agreement relating to the foregoing.

          In the event that you or your Representatives receive a request to disclose all or any part of the information contained in the Evaluation Material under the terms of a valid and effective subpoena or order issued by a court of competent jurisdiction or by a governmental body or are required by applicable law, rule or regulation to disclose such Evaluation Material in connection with your pending offer, you agree (x) in the case of such a request, to (i) to the extent permitted by law, promptly notify the Company in writing of the existence, terms and circumstances surrounding such a request, so that it may seek an appropriate protective order and/or waive your compliance with the provisions of this letter agreement (and, if the Company seeks such an order, to provide such cooperation as the Company shall reasonably request) and (ii) if such protective order or other remedy is not obtained or the Company waives compliance with the provisions of this letter agreement, and if disclosure of such information is required in the opinion of your counsel, who shall be reasonably satisfactory to the Company, disclose only that portion of the Evaluation Material that is legally required to be disclosed in the opinion of such counsel and exercise your reasonable best efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to such of the disclosed information which the Company so designates, and (y) in the case of such a requirement to promptly notify the Company of any such required disclosure and to reasonably cooperate with the Company to agree on the nature of such disclosure; provided, that in the absence of such an agreement, you may disclose such of the Evaluation Material as would be required in the opinion of your counsel, who shall be reasonably satisfactory to the Company, to be disclosed in a proxy statement of the Company for a merger by an acquiror possessing such Evaluation Material.

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          During the course of your evaluation, all inquiries and other communications in connection with a possible negotiated Transaction are to be made directly to Thomas Karol, Chief Executive Officer of the Company, or through UBS Investment Bank (primary contact: Lee Lebrun, 212.821.4269), or Wachtell, Lipton, Rosen & Katz (“WLRK”) (primary contact: Mark Gordon, 212.403.1343). Until the Standstill Termination Date (as defined below) except with the express written permission of the Company, you will not, and will cause your Representatives not to, initiate or maintain contact with any officer (other than Mr. Karol or Mr. Richard Nowak, the Chief Operating Officer of the Company), employee, agent, or affiliate of the Company or any of its subsidiaries regarding the Company or any of its subsidiaries or their respective operations, assets, prospects or finances, or seek any information from such person, in each case in connection with a possible Transaction. Subject to your compliance with the restrictions of the next paragraph (when applicable to you), you may contact directors of the Company in connection with a possible Transaction.

          You hereby acknowledge that the Evaluation Material is being furnished to you in consideration of your agreement, and you hereby agree, subject to the following paragraph, that from the date hereof until the earlier of: (A) six (6) months from the date of this letter agreement, (B) if the Company advances the Company Proposal Date (as defined below) to a date that is earlier than six months from the date of this letter agreement, the fifth business day prior to such new, earlier Company Proposal Date, or (C) the amendment, waiver or modification of the CGEA Agreement in a manner materially adverse to the holders of the Company’s common stock, including but not limited to by reducing the Merger Consideration, increasing the conditions to closing or extending the time for performance (such earlier date, the “Standstill Termination Date”), unless specifically invited in writing by the Company, neither you nor any of your Representatives will in any manner, directly or indirectly: (a) effect or seek, offer or propose (whether publicly or otherwise) to effect, or participate in, facilitate or encourage any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, (i) any acquisition of any securities (or beneficial ownership thereof), or rights or options to acquire any securities (or beneficial ownership thereof), or any assets, indebtedness or businesses of the Company or any of its subsidiaries, other than acquisitions not in excess of, in the aggregate, 2% of such securities, (ii) any tender offer or exchange offer, merger or other business combination involving the Company, any of the subsidiaries or assets of the Company or the subsidiaries constituting a significant portion of the consolidated assets of the Company and its subsidiaries, (iii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries, or (iv) any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission) or consents to vote any voting securities of the Company, including soliciting consents or taking other action with respect to the calling of a special meeting of the Company’s shareholders; (b) form, join or in any way participate in a “group” (as defined under the Exchange Act) with respect to the Company; (c) otherwise act, alone or in concert with others, to seek representation on or to control or influence the management, Board of Directors or policies of the Company or to obtain representation on the Board of Directors of the Company; (d) disclose or direct any person to disclose, any intention, plan or arrangement inconsistent with the foregoing; (e) take any action that could reasonably be expected to result in a request to disclose all or any part of the information contained in the Evaluation Material by a court of competent jurisdiction or by a governmental body; or (f) advise, assist or encourage or direct any person to advise, assist or encourage any other persons in connection with any of the

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foregoing. You also agree during such period not to request the Company or any of its Representatives, directly or indirectly to amend or waive any provision of this paragraph (including this sentence). The Company has publicly announced that advance notice of any shareholder proposals for business to be conducted at the Company’s 2007 annual meeting of stockholders must be given by a proposing shareholder by August 1, 2007. Such deadline is referred to herein as the “Company Proposal Date”.

          The preceding paragraph notwithstanding, (1) you will not be deemed to be in breach of the preceding paragraph by virtue of the maintenance, amendment and/or extension by you or your affiliates of the offer (the “Offer”) made by and referred to in the Offer to Purchase (the “Offer to Purchase”) filed as an exhibit to the Tender Offer Statement on Schedule TO filed by Building Materials Corporation of America with the Securities and Exchange Commission on December 20, 2006, or the announcement, commencement or maintenance by you or your affiliates of a new acquisition offer, whether by way of a tender or exchange offer, merger or otherwise (a “New Offer”); provided that the terms of the Offer or the New Offer (including any extension or amendment thereof) shall in no event (A) provide for a per share consideration that is less than the Offer price in effect on the date of this letter agreement or (B) otherwise contain terms and conditions that in the aggregate are materially less favorable to the Company’s shareholders than the terms and conditions set forth in the Offer to Purchase, provided that an extension of the expiration date of the Status Quo Offer shall not be deemed to be an adverse change (an Offer or New Offer made and/or proposed and/or maintained in good faith and meeting the terms of this proviso, a “Status Quo Offer”); and (2) you will not be deemed to be in breach of the preceding paragraph by virtue of the taking of any action otherwise prohibited by such provisions so long as any such action is taken during the time that such Status Quo Offer is pending and open.

          In consideration of the Evaluation Material being furnished to you, you also hereby agree that, for the period of two years from the date hereof, neither you nor any of your Representatives will solicit for employment, or employ, any of the officers or employees of the Company or its affiliates without obtaining the prior written consent of the Company; provided, however, that you and your Representatives may engage in general solicitations (and employ pursuant to such solicitations) for employees in the ordinary course of business and consistent with past practice and that you and your Representatives may solicit or employ any officer or employee of the Company or its affiliates six months after such person’s employment with the Company or its affiliate, as the case may be, has terminated.

          You understand that neither the Company nor any of its Representatives have made or make any representation or warranty as to the accuracy or completeness of the Evaluation Material and that nothing contained in any discussions between the Company or any of its Representatives and you or any of your Representatives shall be deemed to constitute a representation or warranty. You agree that neither the Company nor its Representatives shall have any liability to you or any of your Representatives resulting from the use or content of the Evaluation Material or from any action taken or any inaction occurring in reliance on the Evaluation Material, except as may be included in any definitive agreement which provides for any transaction between the Company and you.

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          At the request of the Company in its sole discretion and for any reason, or on your own initiative if you decide not to proceed with a possible transaction, you will promptly (and in no event later than five business days after the request therefor) deliver to the Company or destroy (including, to the extent practicable, expunging all such Evaluation Material from any computer, word processor or other device containing such information) all Evaluation Material (whether prepared by the Company or its Representatives), including all documents, memoranda, notes and other writings whatsoever prepared by you or your Representatives based on the information in the Evaluation Material, and cause your Representatives to do the same and you shall provide the Company with written confirmation of destruction. Notwithstanding the foregoing, you and your Representatives may retain one copy if and to the extent required in order to satisfy any law, rule or regulation to which you are subject. The return or destruction of the Evaluation Material notwithstanding, you and your Representatives will continue to be bound by your obligations of confidentiality and other obligations hereunder.

          You hereby acknowledge that you are aware, and that you will advise your Representatives who are informed as to the matters which are the subject of this letter agreement, that the United States securities laws prohibit any person who has received from an issuer material, non-public information concerning the matters which are the subject of this letter agreement from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.

          It is further understood and agreed that no failure or delay by any party in exercising any right, power or privilege under this letter agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder. This letter agreement represents the entire understanding of the parties with respect to the matters referred to in this letter agreement and supersedes all prior understandings, written or oral, between the parties with respect to such matters.

          Each party agrees that unless and until a definitive written agreement between the Company and you with respect to a transaction, if any, has been executed by the Company and you, neither the Company nor you will be under any legal obligation of any kind whatsoever, under any theory of contract, detrimental reliance, fraud or otherwise, with respect to any transaction by virtue of this letter agreement or any written or oral expression with respect to such transactions by any of the Company’s or your Representatives. The Company and you each expressly agrees that no negotiations, presentation or exchange of drafts, preliminary agreements with respect to any particular provisions in draft contracts, press releases, disclosures or other statements, oral or written, by mutual consent or otherwise, by either or both parties, execution of any letter of intent, or agreement in principle, or similar document, no action by any Representative of either the Company or you, and no resolution or authorization by the Board of Directors or any committee of the Company will evidence an intent to be bound unless and until a mutually agreed upon definitive written agreement is finally completed and duly executed. The Company’s and your respective disavowals and agreements in this paragraph will not be waived by any course of dealing prior to the due execution of a mutually agreed upon definitive written agreement. You further acknowledge and agree that (i) the Company shall have no obligation to authorize or to pursue, discuss or negotiate with you or any other party any

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transaction referred to in the first paragraph of this letter agreement, (ii) you understand that the Company has not, as of the date hereof, authorized any such transaction and (iii) the Company reserves the right, in its sole and absolute discretion, to reject all proposals and to terminate discussions and negotiations with you at any time. The agreements set forth in this letter agreement may be modified or waived only by a separate writing between the Company and you expressly so modifying or waiving such agreements.

          The parties hereto acknowledge that money damages are an inadequate remedy for breach of this letter agreement because of the difficulty of ascertaining the amount of damage that will be suffered by the Company in the event that this agreement is breached. Therefore, you agree that the Company may obtain specific performance of this agreement and injunctive or other equitable relief as a remedy for any such breach, and you further waive any requirement for the securing or posting of any bond in connection with any such remedy. Such remedy shall not be deemed to be the exclusive remedy for your breach of this letter agreement, but shall be in addition to all other remedies available at law or equity to the Company. If any term, provision, covenant or restriction of this letter agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this letter agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

          As used in this letter agreement, (i) the term “person” will be interpreted broadly to include, without limitation, the media (electronic, print or otherwise), the Internet, any governmental representative or authority or any corporation, company, group, partnership, limited liability company, other entity or individual, (ii) the term “Representatives,” used with respect to a person, shall include its affiliates and the directors, officers, employees, representatives, agents, attorneys, accountants, financial advisors and other advisors, and banks and other debt financing sources of or to such person or its affiliates, but, without the prior written consent of the Company, shall exclude any potential source of equity capital, (iii) the term “affiliate” when used with respect to a person, shall have the meaning given to it in Rule 12b-2 under the Exchange Act, (iv) the term “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and (v) the term “change of control” shall mean (a) a sale or transfer of all or substantially all of the assets or stock of the Company or (b) a merger or other business combination to which the Company is a party, except for a merger or other business combination where the Company is the surviving corporation and, after giving effect to such merger, the holders of the Company’s outstanding capital stock (on a fully-diluted basis) immediately prior to the merger will own, immediately following the merger, capital stock holding a majority of the voting power of the Company.

          This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the principles of conflicts of laws thereof. You irrevocably submit to (i) the exclusive jurisdiction of New York state courts and any federal court sitting in the City and State of New York for purposes of any suit, action or other proceeding arising out of this letter agreement, or of the transactions contemplated hereby, that is brought by or against you, and (ii) the exclusive venue of such suit, action or proceeding in the City and State of New York.

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          Except as provided in the following sentence, this letter agreement and all obligations of the parties hereunder shall terminate two (2) years from the date hereof. Notwithstanding anything in this letter agreement to the contrary, you agree that all of your obligations will survive and continue: (a) with respect to Evaluation Material other than Trade Secret Technology Information, for a period of three (3) years from the date hereof, and (b) with respect to Trade Secret Technology Information for so long as such information retains its status as a trade secret. For Purposes of this Agreement: “Trade Secret Technology Information” means Evaluation Material without regard to form which is not commonly known-by or available to the public and which information (i) relates to proprietary inventions, know-how, technology, processes or products of the company, (ii) derives economic value, actual or potential, from not being known to and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use, (iii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy, and (iv) is designated as a trade secret by the Company to you by labeling such written information “trade secret” or designating oral information or information conveyed by observation as “trade secret” in writing within thirty (30) days after disclosure of the trade secret to you.

[Signature page follows]

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          If you are in agreement with the foregoing, please so indicate by signing and returning one copy of this letter agreement, which will constitute our agreement with respect to the matters set forth herein.

Very truly yours, ElkCorp
By:	/s/ Thomas Karol
	Name:	Thomas Karol
	Title:	CEO

Confirmed and Agreed to:

HEYMAN INVESTMENT ASSOCIATES LIMITED PARTNERSHIP
By:	/s/Samuel J. Heyman
	Name: Samuel J. Heyman
	Title: General Partner
BUILDING MATERIALS CORPORATION OF AMERICA
By:	/s/ Robert Tafaro
	Name: Robert Tafaro
	Title: President & CEO