VULCAN MATERIALS COMPANY
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 7, 2008
VULCAN MATERIALS COMPANY
(Exact name of registrant as specified in its charter)
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New Jersey
(State or other jurisdiction
of incorporation)
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001-33841
(Commission File Number)
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20-8579133
(IRS Employer
Identification No.) |
1200 Urban Center Drive
Birmingham, Alabama 35242
(Address of principal executive offices) (zip code)
Registrants telephone number, including area code:
(205) 298-3000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligations of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
On February 7, 2008, the Compensation Committee of the Board of Directors of Vulcan Materials
Company (the Company) approved for each of the named executive officers to be included in the
Companys 2008 proxy statement (the NEOs), (i) the annual base salaries, effective March 1, 2008,
(ii) the short term incentive payments (cash performance bonus) for 2007, payable in March 2008,
and (iii) the short term target bonus percentages for the 2008 fiscal year. The compensation for
the CEO was ratified by the Board of Directors. The Compensation Committee also authorized the
payment of previously granted Performance Share Units for the three year period ended December 31,
2007.
Salary and Cash Bonus
Each of the NEOs participates in either the Companys Executive Incentive Plan (EIP) or its
Management Incentive Plan (MIP). No executive may participate in both plans concurrently. Under
these plans, participating executives are entitled to earn an annual cash incentive award to the
extent established financial objectives are achieved. Total incentive payments
to executive officers participating in the EIP in any year cannot exceed 4% of consolidated net
earnings in excess of 6% of net capital for the prior year. For annual bonuses payable for the
Companys fiscal year 2008, 40% of the maximum amount available for payment has been allocated to
the Chief Executive Officer and 15% of the maximum amount available for payment has been allocated
to each of the other participants (Bonus Caps). Total payments under the MIP in any year cannot
exceed 10% of consolidated net earnings in excess of 6% of net capital for the prior year.
The Compensation Committee has selected Economic Profit (EP), which is defined as operating
income after current taxes less a charge for capital employed, as the financial performance
objective for determining awards under the EIP and MIP. A target EP is established by the
Compensation Committee annually at its February meeting based on the average of last years actual
EP and last years target EP for the Company as well as each of its divisions, subject to certain
adjustments, including the effects of certain long-term investment projects. The target EP
represents the amount of EP that must be earned in order for a target bonus to be paid. The
target bonus is expressed as a percentage of base salary and established for each named executive
officer based on market surveys of similar-sized industrial companies. An executive can earn from
zero up to an amount equal to his Bonus Cap, depending on the actual EP results for the year. If
the EP performance relative to the EP target (for the Company or its business units as applicable
for the particular executive officer) is not met, then the executives bonus would be reduced in
accordance with a predetermined schedule. In the case of the NEOs other than the Chief Executive
Officer, the Chief Executive Officer can adjust the actual bonus to be paid to the NEOs subject to
the EIP individual Bonus Caps, based on:
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the individual performance of the executive |
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the safety, health and environmental performance record of the Company and its Divisions |
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consistent above target performance for 3 or more years |
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successful implementation of Vulcan strategic objectives |
The Compensation Committee likewise determines the actual bonus payable to the Chief Executive
Officer based on his performance, subject to the restraints and caps set forth above.
For each NEO, the following table sets forth (i) the 2008 base salary effective March 1, 2008, (ii)
the cash bonus to be paid such executive in March 2008 based on 2007 performance, and (iii) the
target bonus opportunity for the 2008 fiscal year.
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Target 2008 |
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Annual Bonus |
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Opportunity |
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New Base Salary |
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as a |
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Effective March 1, |
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Percentage of |
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Named Executive |
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Title |
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2008 |
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Base Salary |
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2007 Bonus |
Donald M. James
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Chairman and Chief Executive Officer
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$ |
1,250,000 |
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100 |
% |
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$ |
2,900,000 |
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Guy M. Badgett, III
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Senior Vice President, Construction Materials
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496,000 |
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65 |
% |
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660,000 |
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Daniel F. Sansone
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Senior Vice President, Chief Financial Officer
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500,000 |
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70 |
% |
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660,000 |
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Ronald G. McAbee
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Senior Vice President, Construction Materials West
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400,000 |
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65 |
% |
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564,000 |
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William F. Denson, III
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Senior Vice President, General Counsel
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397,000 |
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55 |
% |
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484,000 |
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Long-Term Incentive Award Payments
The Compensation Committee also authorized payments to the NEOs for the Performance Share Units
previously granted pursuant to the Companys 1996 Long-Term Incentive Plan. The payments were based
on internal performance measures along with changes in the market value of our common stock and
total shareholder return versus a preselected comparison group.
The following table sets forth the amount earned for the previously granted Performance Share Units
for the period ending December 31, 2007. Note that the value will be paid in shares of the
Companys common stock.
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Performance |
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Named Executive |
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Title |
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Period |
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Original Grant |
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Units Earned |
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Value ($) |
Donald M. James
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Chairman and Chief Executive Officer
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1/1/2005 12/31/2007
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36,000 |
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71,568 |
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5,035,882 |
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Guy M. Badgett, III
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Senior Vice President, Construction Materials
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1/1/2005 12/31/2007
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4,300 |
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8,548 |
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601,480 |
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Daniel F. Sansone
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Senior Vice President, Chief Financial Officer
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1/1/2005 12/31/2007
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4,300 |
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8,548 |
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601,480 |
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Ronald G. McAbee
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Senior Vice President, Construction Materials West
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1/1/2005 12/31/2007
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2,500 |
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4,970 |
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349,714 |
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William F. Denson, III
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Senior Vice President, General Counsel
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1/1/2005 12/31/2007
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2,600 |
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5,169 |
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363,717 |
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Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
The Board of Directors amended the Company's By-Laws effective February 8, 2008, to allow the
Board to waive the mandatory retirement age for a director if the Board determines such a waiver is
in the best interest of the Company and its shareholders.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits:
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Exhibit No. |
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3(ii)
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Amended and Restated By-Laws of Vulcan Materials Company effective as of February 8, 2008. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed by the undersigned, thereunto duly authorized.
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VULCAN MATERIALS COMPANY
(Registrant)
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By: |
/s/ William F. Denson, III
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Dated: February 13, 2008 |
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William F. Denson, III |
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