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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ | |
Filed by a Party other than the Registrant o | |
Check the appropriate box: |
o Preliminary Proxy Statement | |
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
þ Definitive Proxy Statement | |
o Definitive Additional Materials | |
o Soliciting Material Pursuant to §240.14a-12 |
Payment of Filing Fee (Check the appropriate box):
þ No fee required. | |
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
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o Fee paid previously with preliminary materials. |
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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Proposal 2. | To ratify the appointment of independent auditors for fiscal 2006. |
David G. Sisler | |
Senior Vice President, | |
General Counsel and Secretary |
• | SIGNING AND RETURNING THE ACCOMPANYING PROXY CARD. | |
• | VOTING BY TELEPHONE OR BY INTERNET. See the proxy card for instructions. |
• | VOTING IN PERSON AT THE MEETING (if you are a shareholder of record). |
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• EXHIBIT A — AUDIT COMMITTEE CHARTER | A-1 |
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• | Who Can Vote | |
• | How You Can Vote | |
• | Revoking Your Proxy | |
• | Required Votes | |
• | Other Matters to be Acted Upon at the Annual Meeting | |
• | Expenses of Solicitation |
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• | by submitting written notice of revocation to the Secretary of ElkCorp; | |
• | by submitting another proxy that is properly signed and dated after your previously submitted proxy; |
• | by voting in person at the Annual Meeting. |
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Amount and Nature of | Percent of | |||||||
Name | Beneficial Ownership(1) | Class | ||||||
Steven J. Demetriou | 1,000 | * | ||||||
James E. Hall | 316,775 | (2) | 1.56 | |||||
Thomas D. Karol | 291,199 | (3) | 1.42 | |||||
Dale V. Kesler | 37,430 | (4) | * | |||||
Shauna R. King | 5,430 | (5) | * | |||||
Michael L. McMahan | 18,446 | (6) | * | |||||
Richard A. Nowak | 252,977 | (7) | 1.23 | |||||
David W. Quinn | 49,430 | (2) | * | |||||
Gregory J. Fisher | 80,779 | (8) | * | |||||
Matti Kiik | 65,301 | (9) | * | |||||
David G. Sisler | 81,915 | (10) | * | |||||
All directors, director nominees, and executive officers as a group (14 persons) | 1,379,559 | (11) | 6.55 |
(1) | The listed persons have direct ownership and sole voting and investment power with respect to all shares in the table, except for (i) option shares as shown in notes (2) through (11); (ii) shares allocated to such persons’ accounts in the ESOP, as to which voting and investment power is shared; (iii) unvested restricted stock, as to which such persons have sole voting power but no investment power until vested; and (iv) certain shares that are treated as beneficially owned by such persons for purposes of this table, such as, but not limited to, shares which are held in the names of their spouses, minor or resident children, family partnerships, or by such persons as trustee or custodian. | |
(2) | Includes options currently exercisable for 43,450 shares. | |
(3) | Includes options currently exercisable or exercisable within sixty days for 188,897 shares. Options for one-half of such shares are held for the benefit of Mr. Karol’s ex-spouse pursuant to a domestic relations order. Also includes 18,804 shares of vested and unvested restricted stock for which transfer to Mr. Karol’s ex-spouse is pending pursuant to that order. Mr. Karol disclaims beneficial ownership of the portion of the options and the underlying shares and all shares of restricted stock that are held pending division or transfer pursuant to the domestic relations order. | |
(4) | Includes options currently exercisable for 34,450 shares. | |
(5) | Includes options currently exercisable for 2,950 shares. | |
(6) | Includes options currently exercisable for 16,450 shares. | |
(7) | Includes options currently exercisable or exercisable within sixty days for 170,749 shares. | |
(8) | Includes options currently exercisable or exercisable within sixty days for 44,795 shares. | |
(9) | Includes options currently exercisable or exercisable within sixty days for 41,853 shares. |
(10) | Includes options currently exercisable or exercisable within sixty days for 63,953 shares. |
(11) | Includes options currently exercisable or exercisable within sixty days for 753,120 shares. |
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Name and Address of | Shares of | Percent | |||||||
Beneficial Owner | Common Stock | of Class | |||||||
Lord Abbett & Company, Inc. | 1,443,362 | (1) | 7.10 | ||||||
90 Hudson Street Jersey City, NJ 07302-3973 | |||||||||
Reich & Tang Capital Management | 1,237,150 | (2) | 6.09 | ||||||
600 Fifth Avenue, 8th Floor New York, NY 10020-2302 | |||||||||
Trustee for the ElkCorp Employee Stock Ownership Plan | 1,107,786 | (3) | 5.45 | ||||||
c/o ElkCorp 14911 Quorum Drive, Suite 600 Dallas, TX 75254-1491 |
(1) | According to Schedule 13F dated as of June 30, 2005. |
(2) | According to Schedule 13F dated as of June 30, 2005. Acts as investment advisor for various clients; has shared voting and investment power as to all such shares. Disclaims beneficial ownership of such shares. |
(3) | Has shared voting and investment power as to all such shares. |
• | Committees Established by the Board | |
• | Compensation Committee Interlocks and Insider Participation | |
• | Compensation of Directors | |
• | Audit Committee Report |
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ElkCorp Audit Committee | |
David W. Quinn, Chairman | |
James E. Hall | |
Dale V. Kesler | |
Shauna R. King | |
Michael L. McMahan |
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• | Election of Directors — General | |
• | Nomination of Directors | |
• | Directors Nominated for Election this Year for a Term Expiring in 2008 | |
• | Directors Continuing in Office |
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Steven J. Demetriou, 47 — | Chairman of the Board and Chief Executive Officer of Aleris International, Inc. |
Michael L. McMahan, 58 — | Independent Consultant |
Thomas D. Karol, 47 — | Chairman of the Board and Chief Executive Officer of ElkCorp |
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Dale V. Kesler, 66 — | Retired former Managing Partner, Arthur Andersen LLP, Dallas/ Fort Worth |
Term Expiring in 2007 |
James E. Hall, 70 — | Officer and Director of Chaparral Cars, Inc. and Partner of Condor Operating Company |
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FY2005 | FY2004 | |||||||
Audit Fees | $ | 360,971 | $ | 422,440 | ||||
Audit-Related Fees(1) | 411,462 | 57,380 | ||||||
Tax Fees(2) | 0 | 0 | ||||||
All Other Fees(2) | 0 | 0 | ||||||
TOTAL FEES | $ | 772,433 | $ | 479,820 |
(1) | Audit-related fees for fiscal 2005 include fees for Sarbanes-Oxley certification related attestation services ($379,641) and benefit plan audits ($31,821). Audit-related fees for fiscal 2004 include fees for benefit plan audits ($34,000) and Sarbanes-Oxley certification readiness advice ($23,380). The Audit Committee pre-approved 100 percent of these services. |
(2) | During the reported periods, the Company did not utilize Grant Thornton LLP or PricewaterhouseCoopers LLP for any services other than audit services and audit-related services. |
• | Compensation Committee Report |
• | Our Philosophy | |
• | Key Elements of Executive Compensation | |
• | Other Compensation | |
• | Summary of Factors Influencing Compensation for Fiscal 2005 | |
• | CEO Compensation | |
• | Tax Deductibility of Executive Compensation |
• | Performance Graphs | |
• | Summary Compensation Table | |
• | Long-term Incentive Plans — Awards in Fiscal 2005 | |
• | Option Grants in Fiscal 2005 | |
• | Aggregated Option Exercises During Fiscal 2005 and Values at June 30, 2005 | |
• | Stock/ Loan Balances | |
• | Equity Compensation Plan Information | |
• | Change-in-Control (Severance) Agreements |
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Our Philosophy |
Key Elements of Executive Compensation |
• | Base Salary |
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• | Long-term Incentive Compensation |
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Other Compensation |
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Summary of Factors Influencing Compensation for Fiscal 2005 |
Factors Directly Influencing Amounts of Executive Compensation | ||||||||||||||||||||
Short-Term | ||||||||||||||||||||
Performance | ||||||||||||||||||||
Competitive | Continued Service | Long-term Increases | ||||||||||||||||||
Practices | Individual | Company | to Company | in Shareholder Value | ||||||||||||||||
Base Salary | X | X | ||||||||||||||||||
Profit-sharing Bonuses | X | X | ||||||||||||||||||
Stock Loans/ Restricted Stock | X | X | X | X | ||||||||||||||||
Stock Options | X | X | X | X | ||||||||||||||||
Performance Stock | X | X | X | X | ||||||||||||||||
Other | X | X | X |
CEO Compensation |
Tax Deductibility of Executive Compensation |
September 8, 2005 |
ElkCorp Compensation Committee | ||
Dale V. Kesler, Chairman | ||
James E. Hall | ||
Shauna R. King | ||
Michael L. McMahan | ||
David W. Quinn |
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Cumulative Total Return | ||||||||||||||||||||||||
6/00 | 6/01 | 6/02 | 6/03 | 6/04 | 6/05 | |||||||||||||||||||
ElkCorp | 100.00 | 89.06 | 121.36 | 100.94 | 108.23 | 129.99 | ||||||||||||||||||
Russell 2000 | 100.00 | 100.66 | 91.93 | 90.42 | 120.59 | 131.98 | ||||||||||||||||||
Dow Jones US Building Materials | 100.00 | 117.14 | 126.15 | 115.63 | 160.48 | 197.00 |
* | $100 INVESTED ON 6/30/00 IN STOCK OR INDEX — INCLUDING REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING JUNE 30. |
Cumulative Total Return | ||||||||||||||||||||||||||||||||||||||||||||
6/95 | 6/96 | 6/97 | 6/98 | 6/99 | 6/00 | 6/01 | 6/02 | 6/03 | 6/04 | 6/05 | ||||||||||||||||||||||||||||||||||
ElkCorp | 100.00 | 82.71 | 128.00 | 175.65 | 306.98 | 244.14 | 217.42 | 296.29 | 246.44 | 264.23 | 317.37 | |||||||||||||||||||||||||||||||||
Russell 2000 | 100.00 | 123.89 | 144.12 | 167.90 | 170.42 | 194.84 | 196.11 | 179.11 | 176.17 | 234.94 | 257.14 | |||||||||||||||||||||||||||||||||
Dow Jones US Building Mat. | 100.00 | 115.64 | 150.00 | 189.27 | 188.00 | 132.75 | 155.50 | 167.46 | 153.50 | 213.04 | 261.53 |
* | $100 INVESTED ON 6/30/95 IN STOCK OR INDEX — INCLUDING REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING JUNE 30. |
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Long-term Compensation | ||||||||||||||||||||||||||||||
Awards | ||||||||||||||||||||||||||||||
Securities | ||||||||||||||||||||||||||||||
Annual Compensation | Underlying Stock | |||||||||||||||||||||||||||||
Name and | Fiscal | Restricted | Options | All Other | ||||||||||||||||||||||||||
Principal Position(a) | Year | Salary | Bonus(b) | Stock ($)(c) | (# of Shares)(d) | Payouts(e) | Compensation(f) | |||||||||||||||||||||||
Thomas D. Karol | 2005 | $ | 615,000 | $ | 674,163 | $ | 1,435,578 | 31,803 | — | $ | 87,661 | |||||||||||||||||||
2004 | 565,000 | 379,782 | 189,858 | 135,500 | — | 68,955 | ||||||||||||||||||||||||
2003 | 495,000 | 145,627 | 72,942 | 100,160 | — | 96,077 | ||||||||||||||||||||||||
Richard A. Nowak | 2005 | $ | 435,000 | $ | 408,276 | $ | 792,530 | 17,028 | — | $ | 71,026 | |||||||||||||||||||
2004 | 400,000 | 224,060 | 112,190 | 94,185 | — | 61,914 | ||||||||||||||||||||||||
2003 | 340,000 | 90,933 | 45,458 | 46,060 | — | 80,900 | ||||||||||||||||||||||||
Gregory J. Fisher | 2005 | $ | 236,640 | $ | 148,231 | $ | 186,051 | 3,672 | — | $ | 32,100 | |||||||||||||||||||
2004 | 208,104 | 86,261 | 34,646 | 16,000 | — | 29,757 | ||||||||||||||||||||||||
2003 | 188,500 | 36,298 | 14,530 | 11,000 | — | 39,318 | ||||||||||||||||||||||||
Matti Kiik | 2005 | $ | 226,600 | $ | 134,845 | $ | 200,329 | 4,239 | — | $ | 34,185 | |||||||||||||||||||
2004 | 220,000 | 93,657 | 37,437 | 16,000 | — | 33,947 | ||||||||||||||||||||||||
2003 | 198,792 | 44,952 | 15,418 | 12,000 | — | 42,763 | ||||||||||||||||||||||||
David G. Sisler | 2005 | $ | 226,022 | $ | 130,962 | $ | 200,235 | 4,278 | — | $ | 31,680 | |||||||||||||||||||
2004 | 221,048 | 91,627 | 36,766 | 16,000 | — | 31,102 | ||||||||||||||||||||||||
2003 | 209,480 | 46,231 | 16,555 | 13,465 | — | 39,898 |
(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 |
Amounts shown for Messrs. Nowak, Fisher and Kiik in fiscal 2003 represent all their compensation for that fiscal year from the Company and its subsidiaries. |
(b) | Bonus amounts in the summary compensation table were paid under the Company’s Incentive Cash Bonus Plan, except amounts paid to Messrs. Nowak, Fisher and Kiik, through fiscal 2003, were paid under the Elk Incentive Cash Bonus 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 Amended and Restated ElkCorp Equity Incentive Compensation Plan for fiscal 2005. Portions of the grants shown are the “bridge cycle” grants described in the Compensation |
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Committee Report included with this proxy statement. 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. As of June 30, 2005, 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, 48,182 shares ($1,375,596); Mr. Nowak, 26,929 shares ($768,823); Mr. Fisher, 7,062 shares ($201,620); Mr. Kiik, 7,896 shares ($225,431); and Mr. Sisler, 7,552 shares ($215,610). | ||
(d) | See the table below entitled “Option Grants in Fiscal 2005” for further information concerning fiscal 2005 option grants. | |
(e) | In fiscal 2005, the Company made performance stock awards for which payouts cannot occur before fiscal 2008, and then only if the Company achieves defined return-on-equity or total shareholder returns for a three-year performance cycle beginning July 1, 2004 and ending June 30, 2007. See “Long-term Incentive Plans — Awards in Fiscal 2005” 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: |
Year Ended June 30, | ||||||||||||
Name | 2005 | 2004 | 2003 | |||||||||
Thomas D. Karol | $ | 14,350 | $ | 14,000 | $ | 14,000 | ||||||
Richard A. Nowak | 14,350 | 14,000 | 14,000 | |||||||||
Gregory J. Fisher | 14,350 | 14,000 | 14,000 | |||||||||
Matti Kiik | 14,350 | 14,000 | 14,000 | |||||||||
David G. Sisler | 14,350 | 14,000 | 14,000 |
Year Ended June 30, | ||||||||||||
Name | 2005 | 2004 | 2003 | |||||||||
Thomas D. Karol | $ | 14,108 | $ | 14,108 | $ | 14,108 | ||||||
Richard A. Nowak | 20,944 | 24,514 | 27,528 | |||||||||
Gregory J. Fisher | 8,255 | 10,995 | 12,953 | |||||||||
Matti Kiik | 10,384 | 13,952 | 16,557 | |||||||||
David G. Sisler | 8,203 | 11,099 | 13,567 |
Year Ended June 30, | ||||||||||||
Name | 2005 | 2004 | 2003 | |||||||||
Thomas D. Karol | $ | 59,203 | $ | 40,847 | $ | 67,969 | ||||||
Richard A. Nowak | 35,732 | 23,400 | 39,372 | |||||||||
Gregory J. Fisher | 9,495 | 4,762 | 12,365 | |||||||||
Matti Kiik | 9,451 | 5,995 | 12,206 | |||||||||
David G. Sisler | 9,127 | 6,003 | 12,331 |
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Estimated Future Payouts | ||||||||||||||||||||
under Non-Stock Price-Based Plans | ||||||||||||||||||||
Number of Shares, | ||||||||||||||||||||
Units or Other | Performance or Other Period | Threshold | Target | Maximum | ||||||||||||||||
Name | Rights (#)(1) | Until Maturation or Payout | (# of Shares) (2) | (# of Shares) (2) | (# of Shares) (2) | |||||||||||||||
Thomas D. Karol | TSR | 7/1/2004 — 6/30/2007 | 0 | 15,450 | 23,175 | |||||||||||||||
ROE | 7/1/2004 — 6/30/2007 | 0 | 36,060 | 54,090 | ||||||||||||||||
Richard A. Nowak | TSR | 7/1/2004 — 6/30/2007 | 0 | 8,970 | 13,455 | |||||||||||||||
ROE | 7/1/2004 — 6/30/2007 | 0 | 20,920 | 31,380 | ||||||||||||||||
Gregory J. Fisher | TSR | 7/1/2004 — 6/30/2007 | 0 | 2,190 | 3,285 | |||||||||||||||
ROE | 7/1/2004 — 6/30/2007 | 0 | 5,120 | 7,680 | ||||||||||||||||
Matti Kiik | TSR | 7/1/2004 — 6/30/2007 | 0 | 2,020 | 3,030 | |||||||||||||||
ROE | 7/1/2004 — 6/30/2007 | 0 | 4,700 | 7,050 | ||||||||||||||||
David G. Sisler | TSR | 7/1/2004 — 6/30/2007 | 0 | 2,070 | 3,105 | |||||||||||||||
ROE | 7/1/2004 — 6/30/2007 | 0 | 4,840 | 7,260 |
(1) | Number of shares is variable as described in footnote 2 below. |
(2) | Fiscal 2005 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 equal to threshold. Performance and payouts based on ROE will be independent of performance and payouts based on TSR. |
Individual Grants | ||||||||||||||||||||||||
Number of | % of Total | Potential Realizable Value at Assumed | ||||||||||||||||||||||
Securities | Options | Annual Rates of Stock Price | ||||||||||||||||||||||
Underlying | Granted to | Exercise or | Appreciation for Option Terms(c)(d) | |||||||||||||||||||||
Options | Employees in | Base Price Per | ||||||||||||||||||||||
Name | Granted(a) | Fiscal 2005 | Share(b) | Expiration Date | 5% | 10% | ||||||||||||||||||
Thomas D. Karol | 31,803 | 48.0% | $ | 23.21 | 06/30/2014 | $ | 464,217 | $ | 1,176,417 | |||||||||||||||
Richard A. Nowak | 17,028 | 25.7% | 23.21 | 06/30/2014 | 248,552 | 629,879 | ||||||||||||||||||
Gregory J. Fisher | 3,672 | 5.5% | 23.21 | 06/30/2014 | 53,599 | 135,830 | ||||||||||||||||||
Matti Kiik | 4,239 | 6.4% | 23.21 | 06/30/2014 | 61,875 | 156,804 | ||||||||||||||||||
David G. Sisler | 4,278 | 6.5% | 23.21 | 06/30/2014 | 62,444 | 158,246 | ||||||||||||||||||
All Shareholders | N/A | N/A | N/A | N/A | $ | 295,949,066 | $ | 749,993,036 |
(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. |
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(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 $23.21, the exercise price of the option grants reflected in this table, and (ii) the number of outstanding shares on June 30, 2005. These gains may not be achieved. |
Number of Securities | Value of Unexercised In-the- | |||||||||||||||||||||||
Underlying Unexercised | Money Options At Fiscal | |||||||||||||||||||||||
Shares | Options at Fiscal Year-End | Year-End | ||||||||||||||||||||||
Acquired on | Value | |||||||||||||||||||||||
Name | Exercise | Realized* | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Thomas D. Karol | — | — | 125,164 | 240,299 | $ | 794,894 | $ | 1,244,544 | ||||||||||||||||
Richard A. Nowak | 17,528 | $ | 482,593 | 123,893 | 140,554 | 807,135 | 730,585 | |||||||||||||||||
Gregory J. Fisher | 4,020 | 85,104 | 34,541 | 28,614 | 217,457 | 146,956 | ||||||||||||||||||
Matti Kiik | 5,729 | 104,086 | 30,440 | 30,839 | 118,420 | 159,392 | ||||||||||||||||||
David G. Sisler | 2,391 | 72,365 | 50,917 | 33,791 | 291,561 | 177,483 |
* | Market value of underlying securities at exercise date minus the exercise price, not reduced for taxes, if any, payable upon exercise. |
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Number of securities | |||||||||||||
Number of securities | remaining available for | ||||||||||||
to be issued | Weighted-average | future issuance under equity | |||||||||||
upon exercise of | exercise price of | compensation plans | |||||||||||
outstanding options, | outstanding options, | (excluding securities | |||||||||||
Plan category | warrants and rights | warrants and rights | reflected in column(a)) | ||||||||||
(a) | (b) | (c) | |||||||||||
Equity compensation plans approved by security holders: | |||||||||||||
Incentive Stock Option Plan(1) | 1,204,221 | $ | 22.37 | 0 | |||||||||
Equity Incentive Compensation Plan(2) | 474,808 | $ | 22.69 | 1,475,713 | |||||||||
Equity compensation plans not approved by security holders | N/A | N/A | N/A | ||||||||||
Total | 1,679,029 | $ | 22.47 | 1,475,713 |
(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. |
• | 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; |
• | certain sales or transfers of 67% or more of the fair value of the Company’s operating assets or earning power. |
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• | Code of Conduct | |
• | Ethics in Financial Reporting | |
• | Section 16(a) Beneficial Ownership Reporting Compliance | |
• | Communications with the Company | |
• | Corporate Governance Guidelines and Committee Charters | |
• | Next Year’s Annual Meeting |
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• | The integrity of financial information provided by the Corporation to any governmental body or the public is essential to the long-term success of the Corporation. It necessitates that the Committee provide review of the Corporation’s published financial statements and related reports, as well as the Corporation’s systems of internal controls regarding finance, accounting, financial reporting, compliance and ethics, and the Corporation’s auditing, accounting and financial reporting process generally. | |
• | The Committee should foster adherence to the Corporation’s policies, procedures and practices at all levels and should encourage continuous improvement of them. | |
• | The Corporation’s independent auditors are ultimately accountable to and will report directly to the Committee. | |
• | The Corporation’s internal audit function is accountable to and will ultimately report to the Committee. |
• | the director is not disqualified from independence under applicable Securities and Exchange Commission (SEC) or New York Stock Exchange (NYSE) standards, and any applicable laws, regulations, and rules, as amended from time to time; and | |
• | the director is free of any other direct or indirect relationship with the Corporation or its subsidiaries that is reasonably likely to interfere with the director’s exercise of his or her independent judgment |
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based on the corporate merits of a subject before the Board rather than extraneous considerations or influences. |
• | select, appoint, evaluate, retain, terminate and replace the Corporation’s independent auditors (subject, if the Committee so determines or it is required by NYSE standards or law, to shareholder ratification); | |
• | review the planned scope and arrangements for annual audits; | |
• | obtain and review, at least annually, a report by the Corporation’s independent auditors describing: the firm’s internal quality-control procedures; any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm; and, any steps taken to deal with any such issues; |
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• | ensure that the independent auditors submit on a periodic basis to the Committee a formal written statement delineating all relationships between the auditors and the Corporation, actively engage in a dialogue with the auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the auditors, and recommend that the Board take appropriate action in response to the reports from the auditors to satisfy itself of the auditors’ independence; | |
• | establish policies for audit partner rotation on no more than a five-year cycle, and periodically evaluate whether or not audit firm rotation is required or appropriate; | |
• | review any report made by the Corporation’s independent auditors pursuant to Section 10A(k) of the Exchange Act (critical accounting policies, potential alternative treatments and material written communications between the independent auditors and management); | |
• | review with auditors and management recent FASB, SEC or other agency pronouncements that may impact the Corporation’s accounting, financial reporting, or internal controls; | |
• | discuss anything else about audit procedures or findings that GAAS or other applicable standards, rules or regulations require the independent auditors to discuss with the Committee, or vice versa; | |
• | review with the Corporation’s independent auditors any audit problems or difficulties and any significant findings and recommendations of auditors, and management’s response; | |
• | resolve any disagreements between management and Corporation’s independent auditors regarding financial reporting; and | |
• | pre-approve all audit engagement fees and terms and pre-approve all non-audit services provided to the Corporation by its independent auditors (subject to the de minimis exceptions for certain non-audit services set forth in Section 10A(i)(1)(B) of the Exchange Act); provided, that the Committee may delegate to one or more subcommittees the authority to grant approvals of audit and permitted non-audit services. |
• | review the Corporation’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and discuss the annual audited financial statements and quarterly financial statements of the Corporation and other significant financial disclosures with management and the independent auditors of the Corporation, including without limitation the Corporation’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and any other matters required to be reviewed under applicable legal, regulatory or NYSE requirements; | |
• | review and discuss earnings press releases to be issued by the Corporation, as well as financial information and earnings guidance provided to analysts and rating agencies; | |
• | consider and discuss with management, as appropriate, the activities, organizational structure and qualifications of internal auditors; | |
• | review and discuss routine reports of internal auditors; | |
• | review and discuss any reports of independent auditors, internal auditors and management on accounting and financial reporting errors, fraud or defalcations, illegal acts and non-compliance with the Corporation’s Policy on Legal and Ethical Compliance/ Conflicts of Interest/ Gifts/ Political |
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Contributions (General Policy Letter D-2) (as it may be modified from time to time, “Code of Conduct”); | ||
• | as appropriate, obtain advice and seek assistance from outside legal, accounting or other advisors; | |
• | review management’s internal control report and the independent auditor’s attestation related thereto; | |
• | discuss policies with respect to risk assessment and risk management; | |
• | meet separately, periodically, with management, with internal auditors (or other personnel responsible for the internal audit function) and with independent auditors; | |
• | discuss any matters required to be discussed by Statement on Auditing Standards No. 61, as it may be amended; | |
• | set clear hiring policies for employees or former employees of the independent auditors, including such minimum “cooling off period” or other procedures necessary, under standards of the Public Company Accounting Oversight Board, SEC, NYSE or other regulatory agencies or self-regulatory organizations, to preserve the independence of auditors and members of the Committee; | |
• | when requested by the Board or the General Counsel of the Corporation, review with the Board or the General Counsel the Corporation’s Code of Conduct, Code of Ethics for financial officers and the chief executive officer, and loss contingencies or other matters that may have a material effect on the financial condition or results of operations of the Corporation or its compliance policies; and | |
• | perform such other appropriate functions which from time to time may be assigned by the Board of Directors. |
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UNLESS OTHERWISE INSTRUCTED HEREON, IT IS INTENDED THAT THE PROXIES WILL VOTE THE SHARES FOR ITEMS 1 AND 2.
Please | o | |
Mark Here | ||
for Address | ||
Change or | ||
Comments | ||
SEE REVERSE SIDE |
1. | ELECTION OF DIRECTORS | |||
Nominees: | ||||
Messrs. 01 Steven J. Demetriou, 02 Michael L. McMahan, and 03 Richard A. Nowak | ||||
FOR all Nominees | WITHHOLD | |||
(except any Nominees | AUTHORITY | |||
noted below) | for all Nominees | |||
o | o | |||
To vote against any individual Nominee, write that Nominee’s name on the line below. | ||||
2. | RATIFICATION OF GRANT THORNTON LLP AS AUDITORS FOR FISCAL 2006 | FOR o | AGAINST o | ABSTAIN o | ||||
Signature Signature Date
Please date and sign exactly as name appears on this proxy. Joint owners should each sign. If held by a corporation, please sign full corporate name by duly authorized officer. Executors, administrators, trustees, etc. should give full title as such.
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 12:00 P.M. Central Time on October 18, 2005.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
Internet | Telephone | Mail | ||||||
http://www.proxyvoting.com/elk-ep | 1-866-540-5760 | Mark, sign and date | ||||||
Use the Internet to vote your proxy. | Use any touch-tone telephone to | your proxy card | ||||||
Have your proxy card in hand when | OR | vote your proxy. Have your proxy | OR | and | ||||
you access the web site. | card in hand when you call. | return it in the | ||||||
enclosed postage-paid | ||||||||
envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
Table of Contents
ElkCorp
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 25, 2005, 10:00 A.M., CENTRAL TIME
ElkCorp Corporate Headquarters
14911 Quorum Drive, Suite 600, Dallas, Texas 75254-1491
The undersigned, revoking all prior proxies, hereby appoints Thomas D. Karol, Richard A. Nowak and David G. Sisler, or any one of them, with full power of substitution, as proxies to represent and vote as designated hereon all shares of common stock which the undersigned would be entitled to vote at the Annual Meeting of Shareholders of ElkCorp dated October 25, 2005 and at any adjournment(s) thereof (collectively, the “Meeting”), with all the powers the undersigned would possess if personally present and voting thereat, (a) as instructed on the reverse side with respect to the matters more fully described in the Proxy Statement dated September 16, 2005, and (b) in their discretion upon other matters which properly come before the Meeting.
PLEASE SEE REVERSE SIDE
Address Change/Comments (Mark the corresponding box on the reverse side) |
Table of Contents
UNLESS OTHERWISE INSTRUCTED HEREON, IT IS INTENDED THAT THE PROXIES WILL VOTE THE SHARES FOR ITEMS 1 AND 2.
Please | o | |
Mark Here | ||
for Address | ||
Change or | ||
Comments | ||
SEE REVERSE SIDE |
1. | ELECTION OF DIRECTORS | |||
Nominees: | ||||
Messrs. 01 Steven J. Demetriou, 02 Michael L. McMahan, and 03 Richard A. Nowak | ||||
FOR all Nominees | WITHHOLD | |||
(except any Nominees | AUTHORITY | |||
noted below) | for all Nominees | |||
o | o | |||
To vote against any individual Nominee, write that Nominee’s name on the line below. | ||||
2. | RATIFICATION OF GRANT THORNTON LLP AS AUDITORS FOR FISCAL 2006 | FOR o | AGAINST o | ABSTAIN o | ||||
Signature Signature Date
Please date and sign exactly as name appears on this proxy. Joint owners should each sign. If held by a corporation, please sign full corporate name by duly authorized officer. Executors, administrators, trustees, etc. should give full title as such.
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 P.M. Eastern Time
the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
Internet | Telephone | Mail | ||||||
http://www.proxyvoting.com/elk | 1-866-540-5760 | Mark, sign and date | ||||||
Use the Internet to vote your proxy. | Use any touch-tone telephone to | your proxy card | ||||||
Have your proxy card in hand when | OR | vote your proxy. Have your proxy | OR | and | ||||
you access the web site. | card in hand when you call. | return it in the | ||||||
enclosed postage-paid | ||||||||
envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
Table of Contents
ElkCorp
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 25, 2005, 10:00 A.M., CENTRAL TIME
ElkCorp Corporate Headquarters
14911 Quorum Drive, Suite 600, Dallas, Texas 75254-1491
The undersigned, revoking all prior proxies, hereby appoints Thomas D. Karol, Richard A. Nowak and David G. Sisler, or any one of them, with full power of substitution, as proxies to represent and vote as designated hereon all shares of common stock which the undersigned would be entitled to vote at the Annual Meeting of Shareholders of ElkCorp dated October 25, 2005 and at any adjournment(s) thereof (collectively, the “Meeting”), with all the powers the undersigned would possess if personally present and voting thereat, (a) as instructed on the reverse side with respect to the matters more fully described in the Proxy Statement dated September 16, 2005, and (b) in their discretion upon other matters which properly come before the Meeting.
PLEASE SEE REVERSE SIDE
Address Change/Comments (Mark the corresponding box on the reverse side) |