SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
_____________________________TEXAS INDUSTRIES, INC._____________________________
(Name of Registrant as Specified In Its Charter)
___________________________ROBERT C. MOORE, SECRETARY___________________________
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
- - - ----------------------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - - ----------------------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:(1)
- - - ----------------------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - - ----------------------------------------------------------------------------------------------
/ / 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.
(1) Amount previously paid:
- - - ----------------------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- - - ----------------------------------------------------------------------------------------------
(3) Filing party:
- - - ----------------------------------------------------------------------------------------------
(4) Date filed:
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<FN>
- - - ------------------------
(1) Set forth the amount of which the filing fee is calculated and state how it
was determined.
[LOGO]
August 29, 1994
DEAR SHAREHOLDER:
You are cordially invited to attend the Annual Meeting of the Shareholders
of Texas Industries, Inc., to be held at 9:30 A.M. Central Daylight Time, on
Tuesday, October 18, 1994, at The Ballpark in Arlington, 1000 Ballpark Way,
Arlington, Texas.
The following Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the Meeting. During the Meeting, we will
also report on the operations of the Company. Our 1994 Annual Report accompanies
this Proxy Statement.
It is important that your shares be represented at the Meeting regardless of
the size of your holdings. If you are unable to attend in person, we urge you to
participate by voting your shares by proxy. You may do so by filling out and
returning the enclosed proxy card.
If you arrive early, you are invited to have coffee and meet informally with
the Directors.
Sincerely,
ROBERT D. ROGERS
PRESIDENT
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 18, 1994
The Annual Meeting of Shareholders of Texas Industries, Inc. (the
"Company"), will be held at The Ballpark in Arlington, 1000 Ballpark Way,
Arlington, Texas, on Tuesday, October 18, 1994, at 9:30 A.M. (C.D.T.) for the
following purposes:
1. To elect two (2) Directors to terms expiring in 1997.
2. To transact such other business that may properly come before the
Meeting or any adjournment thereof.
Only Shareholders of record at the close of business on August 22, 1994,
will be entitled to vote at the meeting. A list of such Shareholders will be
open to the examination of any Shareholder during ordinary business hours for a
period of ten days prior to the meeting, at the Executive Offices of the Company
at 7610 Stemmons Freeway, Dallas, Texas.
While you are encouraged to attend the meeting, you are requested to date,
sign and return promptly the accompanying proxy in the enclosed envelope
provided for that purpose.
By Order of the Board of Directors,
ROBERT C. MOORE
SECRETARY
Dallas, Texas
August 29, 1994
[LOGO]
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 18, 1994
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by and
on behalf of the Board of Directors of Texas Industries, Inc., a Delaware
corporation (the "Company"), of proxies in the accompanying form for exercise at
the Annual Meeting of Shareholders of the Company to be held on October 18,
1994, and at any adjournment thereof. The approximate date on which this Proxy
Statement and accompanying proxy were first sent to Shareholders is August 29,
1994.
The cost of soliciting proxies in the accompanying form has been, or will
be, borne by the Company. In addition to solicitation by mail, the Company will
request banks, brokers and other custodians, nominees, and fiduciaries to send
proxy material to the beneficial owners and to secure their voting instructions,
if necessary. The Company will reimburse them for their expenses in so doing.
Officers and regular employees of the Company may solicit proxies personally, by
telephone or telegrams from some Shareholders, if proxies are not promptly
received. In addition, the Company has retained Chemical Banking Corporation to
assist in the solicitation of proxies at a cost of $5,000 plus reasonable
out-of-pocket expenses.
OUTSTANDING VOTING STOCK AND QUORUM
The outstanding voting securities of the Company as of August 22, 1994, were
12,491,090 shares of the Common Stock of the Company and 5,976 shares of the $5
Cumulative Preferred Stock of the Company. Each share is entitled to one vote.
The presence at the Meeting, in person or by proxy, of the holders of a majority
of the issued and outstanding voting securities of the Company is necessary to
constitute a quorum to transact business.
VOTING OF PROXY
The proxy enclosed is designed to permit each Shareholder of record at the
close of business on August 22, 1994, to vote at the Annual Meeting and at any
adjournments thereof. Shares cannot be voted at the meeting unless the owner is
present or represented by proxy. Any proxy may be revoked prior to the voting by
notice in writing to the Secretary of the Company at the address stated above.
The shares represented by any unrevoked proxy in the accompanying form, if such
proxy is properly executed and returned, will be voted in accordance with the
specifications made thereon, or in the absence of such specifications, in
accordance with the Board of Directors' recommendations.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table furnishes information concerning all persons known to
the Company to beneficially own 5% or more of any class of voting stock of the
Company as of August 5, 1994.
AMOUNT AND NATURE
NAME AND ADDRESS TITLE OF OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER SECURITY OWNERSHIP OF CLASS
- - - ------------------------------------------------- ------------------- --------------------- ------------
Co-Steel, Inc. Common Stock 1,216,652 shares(1) 9.7%
Scotia Plaza
40 King Street West
Suite 5010
P.O. Box 130
Toronto, Ontario, Canada
M5H3Y2
Dietche & Field Advisors, Inc. Common Stock 814,000 shares(2) 6.5%
437 Madison Avenue
New York, NY 10022
FMR Corp. Common Stock 1,245,900 shares(3) 10.0%
82 Devonshire Street
Boston, Massachusetts 02109
Trimark Investment Management, Inc. Common Stock 752,835 shares(4) 6.0%
Scotia Plaza
40 King Street West
Suite 5200
Toronto, Ontario, Canada M5H3Z3
Gerald R. Heffernan $5 Cumulative 2,500 shares 41.8%
22 St. Clair Avenue E., Suite 1700 Preferred Stock
Toronto, Ontario, Canada M4T2S3
Sally M. Eldredge (Mrs.) $5 Cumulative 315 shares 5.3%
P.O. Box 539 Preferred Stock
Newport, New Hampshire 03773
KINSAT $5 Cumulative 551 shares 9.2%
Bankers Trust Co. Preferred Stock
P.O. Box 704
Church Street Station
New York, New York 10015
John C. McCrillis $5 Cumulative 315 shares 5.3%
P.O. Box 458 Preferred Stock
Newport, New Hampshire 03773
Merrill Lynch, Pierce $5 Cumulative 1,213 shares 20.2%
Fenner and Smith, Inc. Preferred Stock
P.O. Box 12006
Newark, New Jersey 07101
<FN>
- - - ------------------------
(1) Robert D. Rogers, Gordon E. Forward and Richard M. Fowler have sole voting
power as co-trustees under a Voting Trust which expires August 29, 1995,
and Co-Steel, Inc. has sole dispositive power.
(2) Based on Schedule 13G dated March 11, 1994 which indicates that Dietche &
Field Advisors, Inc. has sole voting and dispositive power over 814,000
shares.
(3) Based on Schedule 13G dated June 6, 1994 which indicates that FMR Corp. has
sole voting power over 48,900 shares and sole dispositive power over
1,245,900 shares.
(4) Based on Amendment 4 to Schedule 13G dated February 12, 1993 which
indicates that Trimark Investment Management, Inc. has sole voting and
dispositive power over 752,835 shares.
2
ELECTION OF DIRECTORS
The bylaws of the Company provide for a board of not less than three nor
more than twenty-one directors with the actual number to serve at any time to be
determined by resolution of the board. The bylaws further provide that the board
shall be divided into three classes, each class being as nearly equal in number
as possible. The three classes have staggered terms of three years. The terms of
office of two of the Directors expire at this Annual Meeting and the proxies
solicited hereby cannot be voted for a greater number of persons than the two
nominees named below. Unless otherwise indicated, all proxies that authorize the
persons named therein to vote for the election of directors will be voted for
the election of the nominees named below, each of which is presently a Director
of the Company. Directors are elected by plurality vote. If any of the nominees
named should not be available for election as a result of unforeseen
circumstances, it is the intention of the persons named in the proxy to vote for
the election of such substitute nominee, if any, as the Board of Directors may
propose.
NOMINEES FOR DIRECTORS
The following are nominees for election as directors of the Company for a
term of office expiring at the Annual Meeting of Shareholders in 1997 or until
their respective successors shall have been elected and qualified.
SERVED AS PROPOSED
PRINCIPAL OCCUPATION DIRECTOR TERM TO
NAME AGE DURING PAST FIVE YEARS SINCE EXPIRE
- - - --------------------------- --- -------------------------------------------------------- ------------- -----------
Gordon E. Forward.......... 58 President and Chief Executive Officer of Chaparral Steel 1991 1997
Company(a)
Ralph B. Rogers............ 84 Chairman of the Board of Directors of the Company(b) 1951 1997
CONTINUING DIRECTORS
The term of office for each of the continuing directors expires at the
Annual Meeting of Shareholders to be held in the year indicated below, or until
his or her successor shall have been elected and qualified.
SERVED AS
PRINCIPAL OCCUPATION DIRECTOR TERM TO
NAME AGE DURING PAST FIVE YEARS SINCE EXPIRE
- - - --------------------------- --- -------------------------------------------------------- ------------- -----------
Robert D. Rogers........... 58 President and Chief Executive Officer of the 1970 1995
Company(b)(c)
Ian Wachtmeister........... 61 Chairman and Chief Executive Officer of The Empire, AB, 1977 1995
Stockholm, Sweden
Gerald R. Heffernan........ 75 President, G.R. Heffernan Associates, Ltd., Toronto, 1986 1995
Ontario, Canada, since April 1990; Chairman of the
Board of Co-Steel Inc., Toronto, Ontario, Canada, from
January 1987 to April 1990; Director, Chaparral Steel
Company
Robert Alpert.............. 62 Chairman of the Board of Alpert Investment Corporation, 1975 1996
a financial services, real estate investment and
development firm, Dallas, Texas(c)
Richard I. Galland......... 78 Attorney at Law since January 1991; Of Counsel, Jones, 1974 1996
Day, Reavis and Pogue, a law firm, Dallas, Texas(d)
<FN>
- - - --------------------------
(a) Mr. Forward is a member of the Board of Directors of Chaparral Steel
Company.
(b) Mr. Robert D. Rogers is the son of Mr. Ralph B. Rogers.
(c) Messrs. Alpert and Rogers are members of the Board of Directors of
Consolidated Freightways, Inc. and Chaparral Steel Company.
(d) Mr. Galland is a member of the Board of Directors of D.R. Horton, Inc.
3
BOARD COMMITTEES, MEETINGS, ATTENDANCE AND FEES
The Board of Directors has an Audit Committee and a Compensation Committee
and the full Board of Directors acts in lieu of a Nominating Committee. The
Company's Compensation Committee, composed during the last fiscal year of
Directors Galland, Alpert and Forward, met once during the year. The
Compensation Committee recommends and approves the salaries of top management of
the Company and all stock option awards to key employees of the Company and its
subsidiaries. Its actions are subject to the review and approval of the Board of
Directors.
The Company's Audit Committee, composed during the last fiscal year of
Directors Alpert, Heffernan and Wachtmeister, met twice with the independent
public accountants during the year. The Audit Committee reviews the scope, plan
and results of the annual audit with the independent auditors; approves and
ratifies each professional service provided by the independent auditors;
considers the independence of the auditors; and reviews and approves all
non-audit fees paid to the independent auditors.
The Board, acting in lieu of a Nominating Committee, will consider nominees
for directors recommended by shareholders. Communications to the Board may be
addressed in care of the Company's Secretary at the Company's Executive Offices.
The Board of Directors met four times during the last fiscal year. Each
director attended more than 75 percent of the meetings of the Board of Directors
and the meetings of the committees on which he served.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company currently receive $15,000 per
year plus $1,000 for each day that a Board or Committee Meeting is attended.
Under a deferred compensation arrangement, such amount may be deferred in whole
or in part at the election of the Director. Compensation so deferred is
denominated in shares of the Company's Common Stock determined by reference to
the average market price during the thirty (30) trading days prior to the date
of the arrangement. Dividends are credited to the account in the form of common
stock at a value equal to the fair market value of the stock on the date of
payment of such dividend. The Company also reimburses Directors for travel,
lodging and related expenses they may incur in attending Board and Committee
meetings.
OTHER TRANSACTIONS
No reportable transactions occurred between the Company and any director,
nominee for director, officer or any affiliate of, or person related to, any of
the foregoing since the beginning of the Company's last fiscal year (June 1,
1993).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised exclusively of Directors who are not
officers or employees of the Company. Mr. Forward is President, Chief Executive
Officer and Director of Chaparral Steel Company, 81%-owned by the Company. The
President of the Company serves on the Compensation Committee of Chaparral Steel
Company. No other executive officer of the Company serves or has served on the
Compensation Committee or as a director of another company, one of whose
executive officers serves as a member of the Compensation Committee or as a
director of the Company.
4
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of August 5, 1994, the approximate number
of shares of Common Stock of the Company and common stock of Chaparral Steel
Company ("Chaparral") beneficially owned by each director, by each executive
officer named in the Summary Compensation Table and by all directors and
executive officers of the Company as a group.
COMPANY CHAPARRAL
COMMON SHARES COMMON SHARES
------------------- -------------------
BENEFICIALLY BENEFICIALLY
OWNED** %(1) OWNED** %(2)
------------ ---- ------------ ----
Robert Alpert................................................................... 3,555(3) * 1,000 *
Melvin G. Brekhus............................................................... 5,112(3) * None *
Gordon E. Forward............................................................... 52,974(3) * 89,100(4) *
Richard M. Fowler............................................................... 41,332(3) * 36,100(4) *
Richard I. Galland.............................................................. 8,807(3) * 3,000 *
Gerald R. Heffernan(5)(6)....................................................... 111,000(3) * None *
Robert C. Moore................................................................. 13,167(3) * 16,600(4) *
Ralph B. Rogers(7).............................................................. 32,434 * 5,000 *
Robert D. Rogers(8)............................................................. 149,320(3) 1.2% 106,800(4) *
Tommy A. Valenta................................................................ 4,950(3) * None *
Ian Wachtmeister(9)............................................................. 3,371(3) * None *
All Directors and Executive Officers as a
Group (10 Persons)............................................................. 451,503(3) 3.6% 259,650(4) *
<FN>
- - - ------------------------
* Represents less than one percent (1%) of the total number of shares
outstanding.
** Except as indicated in the notes below, each person has the sole voting and
investment authority with respect to the shares set forth in the above
table.
(1) Based on the sum of (i) 12,490,749 shares of Common Stock, which on August
5, 1994, was the approximate number of shares outstanding, and (ii) the
number of shares subject to options exercisable by such person(s) within 60
days of such date.
(2) Based on the sum of (i) 29,679,900 shares of common stock, which on August
5, 1994, was the approximate number of shares outstanding, and (ii) the
number of shares subject to options exercisable by such person(s) within 60
days of such date.
(3) Includes, with respect to such person(s), shares of Common Stock subject to
options exercisable within 60 days of August 5, 1994, as follows: Robert D.
Rogers, 20,000 shares; Robert Alpert, 1,000 shares; Melvin G. Brekhus,
4,600 shares; Gordon E. Forward, 5,490 shares; Richard M. Fowler, 9,300
shares; Richard I. Galland, 1,000 shares; Gerald R. Heffernan, 1,000
shares; Robert C. Moore, 8,300 shares; Tommy A. Valenta, 4,600 shares; Ian
Wachtmeister, 1,000 shares; and all Directors and Executive Officers as a
group, 74,490 shares.
(4) Includes, with respect to such person(s), shares of common stock subject to
options exercisable within 60 days of August 5, 1994, as follows: Gordon E.
Forward, 74,000 shares; Richard M. Fowler, 35,000 shares; Robert C. Moore,
16,000 shares; Robert D. Rogers, 66,000 shares; and all Directors and
Executive Officers as a group, 193,000 shares.
(5) Mr. Heffernan owns 2,500 shares of $5 Preferred Stock, approximately 41.8%
of the class outstanding. See Security Ownership of Certain Beneficial
Owners.
(6) The wife of Mr. Heffernan owns 971 shares of Common Stock as to which he
disclaims beneficial ownership.
(7) The wife of Mr. Rogers owns 5,214 shares of Common Stock, as to which he
disclaims beneficial ownership.
(8) The wife of Mr. Rogers owns 4,000 shares of Chaparral common stock, as to
which he disclaims beneficial ownership.
(9) Includes 100 shares of Common Stock owned by the wife of Mr. Wachtmeister.
5
EXECUTIVE COMPENSATION
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended May 31, 1994, 1993 and 1992, of those persons who were, at May 31, 1994,
(i) the chief executive officer and (ii) the other four most highly compensated
executive officers of the Company.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
-------------------------------------------
ANNUAL COMPENSATION PAYOUTS
AWARDS ---------- ALL OTHER
NAME AND -------------------- ------------- LTIP COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) CLASS OF STOCK STOCK OPTIONS PAYOUTS($) ($)
- - - ------------------------------------- ---- --------- -------- -------------- ------------- ---------- ---------------
Robert D. Rogers(1) ................. 1994 631,916 -0- Company -0- -0- 22,635(4)
President and Chief Executive Chaparral
Officer 1993 567,696 -0- Company -0- -0- 22,501
Chaparral
1992 519,024 -0- Company -0- -0- 22,476
Chaparral
Richard M. Fowler(2) ................ 1994 190,000 43,130 Company 16,500 38,000 3,600(4)
Vice President -- Finance Chaparral
1993 180,000 43,200 Company -0- -0- 7,841
Chaparral
1992 180,000 -0- Company -0- -0- 3,600
Chaparral 25,000
Melvin G. Brekhus ................... 1994 140,000 31,780 Company -0- 28,000 3,892(4)
Vice President -- Cement Production 1993 118,333 28,400 Company 8,000 -0- 3,787
1992 110,000 -0- Company -0- -0- 3,591
Tommy A. Valenta .................... 1994 135,000 30,645 Company -0- 27,000 2,746(4)
Vice President -- North Texas 1993 112,500 27,000 Company 8,000 -0- 2,700
Concrete/Cement Marketing 1992 100,000 -0- Company -0- -0- 2,436
Robert C. Moore(3) .................. 1994 130,000 29,510 Company 11,500 26,000 3,200(4)
Vice President, General Counsel and Chaparral
Secretary 1993 120,000 28,800 Company -0- -0- 3,120
Chaparral
1992 120,000 -0- Company -0- -0- 3,185
Chaparral 15,000
<FN>
- - - ------------------------------
(1) Mr. Rogers is Chairman of the Board of Chaparral and participates in its
stock option program.
(2) Mr. Fowler also serves as Senior Vice President -- Finance of Chaparral and
participates in Chaparral's profit sharing, stock option and performance
share programs. During 1993, he received no profit sharing payout. During
1994 and 1992, he received profit sharing payouts of $19,038 and $10,197,
respectively. In 1994, 1993 and 1992, he received increments of profit
sharing earned in 1989 but deferred, $309, $8,071 and $1,210, respectively.
Under the performance share program, he received dividends of $1,422 and
$2,612 in 1994 and 1992, respectively, and vested performance shares in the
amount of $68,108 were redeemed in 1993.
(3) Mr. Moore also serves as Vice President, General Counsel and Secretary of
Chaparral and participates in its profit sharing and stock option programs.
During 1993, he received no profit sharing payouts. During 1994 and 1992,
he received profit sharing payouts of $13,026 and $6,798 respectively.
(4) Vested and non-vested portion of amounts contributed and allocated by
employer to employee benefit plans.
6
On June 1, 1993, the Company entered into a three-year employment contract
with Mr. Robert D. Rogers, its President and chief executive officer. The
contract provides for a base salary of $300,000 plus an annual award of 10,816
shares of Common Stock, or the market value thereof. The contract also provides
for an annual incentive award equal to one percent of the Company's before tax
consolidated net income if such net income for the fiscal year equals 20% or
more of the average common shareholders equity for such year and an additional
one percent of such consolidated net income which is in excess of 20% of the
average common shareholders equity for such year.
The Company offers a Financial Security Plan for substantially all of its
senior managerial and executive employees, including officers of its
subsidiaries. The Plan includes disability benefits under certain circumstances
and death benefits payable to beneficiaries for a period of ten years or until
the participant would have attained age 65, whichever last occurs. Participants
who retire at or after attaining age 65 (age 60 in the case of executive
officers) will be entitled to a supplemental retirement benefit. In the event of
termination of employment under certain circumstances following a change in
control (as defined in the Plan), a participant will be deemed to be fully
vested in any supplemental retirement benefit, without reduction, provided by
the Plan.
1994 STOCK OPTION GRANTS
The following table sets forth certain information concerning options
granted during the fiscal year ended May 31, 1994 to each executive officer
named in the Summary Compensation table under the Company's stock option plans.
POTENTIAL REALIZABLE
VALUE OF ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
OPTIONS EXERCISE PRICE APPRECIATION
NO. OF GRANTED TO OR BASE FOR OPTION TERM(%)(2)
CLASS OF OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ---------------------
NAME STOCK GRANTED(1) 1994 SHARES($) DATE 0% 5% 10%
- - - ---------------------- --------- ---------- ------------ --------- ------------- --- ------- -------
Robert D. Rogers...... Company -- -- -- -- -- -- --
Richard M. Fowler..... Company 16,500 18.9% 24.0625 July 14, 2003 -0- 249,691 632,766
Melvin G. Brekhus..... Company -- -- -- -- -- -- --
Tommy A. Valenta...... Company -- -- -- -- -- -- --
Robert C. Moore....... Company 11,500 13.2% 24.0625 July 14, 2003 -0- 174,027 441,018
<FN>
- - - ------------------------
(1) Options become exercisable in annual installments beginning one year from
the date of grant.
(2) The dollar amounts under these columns are the result of calculation at 0%
and at the 5% and 10% rates set by the Securities and Exchange Commission
and are not intended to forecast possible future appreciation, if any, of
the price of the Company stock. The Company did not use an alternative
formula for a grant date value as it is not aware of any formula which will
determine with reasonable accuracy a present value based on future unknown
or volatile factors.
7
OPTION EXERCISES AND YEAR-END VALUES
The following table provides information concerning each option exercised
during the 1994 fiscal year ended May 31, 1994 by each of the named executive
officers and the value of unexercised options held by such executive officer on
May 31, 1994.
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
NUMBER OF YEAR END YEAR END(1)
SHARES ------------------ -------------------
CLASS OF ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME STOCK EXERCISE REALIZED($) UNEXERCISABLE UNEXERCISABLE
- - - ------------------------------------- ------------ ----------- ----------- ------------------ -------------------
Robert D. Rogers..................... Company 56,243 473,044 20,000/30,000 358,700/538,050
Chaparral -0- -- 66,000/24,000 --
Richard M. Fowler.................... Company 16,872 87,980 4,000/22,500 37,260/193,046
Chaparral -0- -- 35,000/15,000 --
Melvin G. Brekhus.................... Company -0- -- 2,000/11,000 18,630/103,425
Tommy A. Valenta..................... Company -0- -- 2,000/11,000 18,630/103,425
Robert C. Moore...................... Company -0- -- 4,000/17,500 37,260/151,484
Chaparral -0- -- 16,000/9,000 --
<FN>
- - - ------------------------
(1) Computed based upon the difference between aggregate fair market value and
aggregate purchase price.
8
PERFORMANCE GRAPH
The Company has two major business segments -- a cement/concrete segment
operating under Texas Industries, Inc., and a steel segment operating under
Chaparral Steel Company, an 81%-owned subsidiary of the Company. The Company's
consolidated financial statements include the accounts of Chaparral. The
following chart compares the Company's cumulative total stockholder return on
its Common Stock for the five-year period ended May 31, 1994, with the
cumulative total return of the Standard & Poor's 500 Composite Stock Price Index
(the "S&P Stock"), the Standard & Poor's Steel Index (the "S&P Steel Group") and
a Cement Peer Group comprised of the Giant Group, Ltd., LaFarge Corporation,
Lone Star Industries, Inc., Medusa Corp. and Southdown, Inc. (the "Cement Peer
Group"). These comparisons assume the investment of $100 on May 31, 1989 and the
reinvestment of dividends.
TEXAS INDUSTRIES, INC.
FISCAL YEAR-END 1994
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Texas Industries,
Inc. S&P 500 S&P Steel Group Cement Peer Group
1989 100 100 100 100
1990 74 117 95 115
1991 72 130 86 85
1992 81 143 99 97
1993 78 160 149 99
1994 111 166 168 137
9
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is composed of three
non-employee directors. The Committee establishes the general compensation
policies of the Company and the compensation plans for executive officers. It
also administers the Company's Stock Option Plan. The Company's Benefit plans,
such as the Company's Retirement Plan and group insurance plan, are administered
by the Company's Human Resources Department.
GENERAL. The objective of the Company's management compensation program is
to (i) attract and retain highly qualified and productive individuals; (ii)
motivate such individuals; and (iii) align their interests with those of the
Company's shareholders by building long-term value and thereby improving the
return to the Company's shareholders. The program provides for competitive base
salaries, annual bonus opportunities, long-term incentives in the form of a
rolling three-year incentive plan, stock options and competitive benefits
including health, life and disability insurance, vacation, a Financial Security
Plan and a savings and defined contribution retirement plan. Typically,
executives receive annual performance reviews. Such reviews cover considerations
such as revenue generated, operating profit, return on assets, cost
improvements, operational efficiency, safety, customer service, and cooperation
with other employees, depending on the responsibilities of the executive. Only
the Chief Executive Officer of the Company is subject to an employment
agreement. All other executives are employed as employees at will.
COMPENSATION ELEMENTS. The executive officers' total compensation
opportunities consist of three basic elements -- salaries, annual incentives and
long-term incentives. Annual and long-term incentives are a significant portion
of total compensation and are strongly linked to financial performance.
SALARIES. Approximately 45% of the total compensation opportunity for an
executive other than the chief executive is composed of salary. Salaries of the
Company's executive officers are determined by the chief executive officer
within the general compensation policies established by the Committee.
Subjective criteria, such as the impact the executive has on the Company, the
skills and experience required by the job, individual performance and internal
equities are considered in determining salary levels. Quantitative relative
weights are not assigned to the different criteria nor is a mathematic formula
followed. Salaries are also reviewed periodically and compared to industry and
geographic salary surveys to assure that they are in line with competitive
market levels. During the year, the salaries of the Vice President -- Cement
Production and the Vice President -- North Texas Concrete/ Cement Marketing were
increased to what was considered to be an appropriate level based on the
criteria mentioned above. Also during the year, the Company eliminated certain
perquisites and adjusted the compensation of the affected executives
accordingly. The Company may at times suspend or limit salary increases when
operating performance of the Company will not support such increases.
ANNUAL INCENTIVES. For fiscal year 1994, the Company adopted business unit
incentive plans for executives and employees (other than the chief executive
officer and those participating in production incentive plans) of the Company's
cement/concrete segment. The primary criterion for incentive payments under the
plan was the achievement of specified levels of rate of return on assets for
each of the four business units, and overall for the entire segment, with a
threshold level below which no incentives were paid. Target incentive levels are
not established for individual executives, rather they are the same for all
executives to foster a team based approach. In 1994, the threshold levels were
exceeded by three of the four business units and by the entire cement/concrete
segment enabling executive officers to earn an annual incentive equal to 22.7%
of their salaries. Approximately 10% of the total compensation opportunity for
an executive is based on an annual incentive.
LONG-TERM INCENTIVES. Long-term incentives are provided under a rolling
three-year executive incentive plan and the Company's stock option plan. The
Compensation Committee annually recommends for Board of Directors approval an
executive incentive plan for the ensuing three fiscal years of the Company. To
realize an annual incentive award under the plan, the Company must reach or
10
surpass a return on assets threshold for the cement/concrete segment for the
three-year period. If the minimum three-year threshold is reached, an executive
can earn an incentive award ranging from 10% to 120% or more of the executive's
base salary, based on the rate of return on assets achieved and the
recommendation of the chief executive officer based on this subjective
evaluation of the executive's individual performance. The Committee believes
that the rolling three-year plans focuses plan participants on growth and
profitability for the Company. The return on asset threshold established by the
Committee for the rolling three years ending with the Company's 1994 fiscal year
was achieved and the Company's executive officers were awarded incentive
payments equal to 20% of their salaries.
The Committee believes that ownership of the Company's stock is an important
element of its executive compensation program. When granted under the Company's
Stock Option Plan, stock options have exercise prices of not less than 100% of
the fair market value of the Company's Common Stock, on the date of grant,
become exercisable 20% after one year, 40% after two years, 60% after three
years, 80% after four years and 100% five years after grant, and all expire not
more than ten years after grant. Unlike cash, the value of a stock option award
will not be immediately realized and will be dependent on the market value of
the Common Stock in the future; thus, the option not only provides the executive
an incentive for years after it has been awarded but ties this incentive program
directly into increasing shareholder value. Stock options also strengthen the
ability of the Company to attract, motivate and retain executives of superior
capability required to achieve the Company's business objectives in an intensely
competitive environment. Options are granted under guidelines established under
the general compensation policies of the Company. An executive is targeted to
have between two to four times annual salary in accumulated options priced at
the time of grant. Approximately 45% of the executive officer's total
compensation opportunity consists of long-term incentives.
CHIEF EXECUTIVE OFFICER COMPENSATION. The Chief Executive Officer's
compensation was established after a review of the salaries of chief executive
officers of similar companies in the Company's lines of business and on other
companies of comparable sales and capitalization, and contains both a base
component and an incentive based on the consolidated results of the Company's
steel and cement/concrete business segments. The Chief Executive Officer did not
earn an incentive award in fiscal year 1994. The Chief Executive Officer's base
compensation was higher in 1994 than 1993 because of the difference in the
market value of the stock component of his base compensation.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Section 162(m) of the Internal
Revenue Code generally limits the corporate deduction to $1 million for
compensation paid to a person who on the last day of fiscal years beginning on
or after January 1, 1994 is either the Chief Executive Officer or among the four
most highly compensated officers other than the Chief Executive Officer, except
for qualified performance-based compensation. The Company's Stock Option Program
currently qualifies as performance-based compensation under IRS transition
rules. The annual and medium term incentive plans and the Chief Executive
Officer's incentive are based on performance measures but do not qualify as
performance-based under proposed tax regulations. At this time, it is not
anticipated that any Company executive will receive any compensation in 1995 in
excess of the limit. Therefore, during 1994, the Committee did not take action
to comply with such limit.
RICHARD I. GALLAND, Chairman
ROBERT ALPERT, GORDON E. FORWARD
11
SECTION 16 COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 generally requires
the Company's directors and executive officers and persons who own more than 10%
of a registered class of the Company's equity securities ("10% owners") to file
with the Securities and Exchange Commission and the New York Stock Exchange
initial reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company. Directors, executive officers and
10% owners are required by the Securities and Exchange Commission regulation to
furnish the Company with copies of all Section 16(a) forms they file. To the
Company's knowledge, based solely on review of copies of such reports furnished
to the Company and written transaction reports of its Directors and executive
officers that no other reports were required to be filed during the 1994 fiscal
year, all Section 16(a) filing requirements applicable to its Directors,
executive officers and 10% owners were complied with, except that Ralph B.
Rogers filed a late report covering the gift of shares of the Company's Common
Stock.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young were the Company's independent auditors for the last fiscal
year and will continue to be for the current year. A representative of Ernst &
Young will attend the Shareholders' Meeting; and although such representative
does not intend to make a statement to the Shareholders, he will be available to
respond to any relevant questions of the Shareholders.
ANNUAL REPORT
A copy of the Company's Annual Report for the fiscal year ended May 31,
1994, is being mailed to each Shareholder of record along with the proxy
material, but is not to be considered as a part of the proxy soliciting
materials.
1995 SHAREHOLDER PROPOSALS
Proposals of Shareholders intended to be presented at the next Annual
Meeting of Shareholders presently scheduled for October 17, 1995, must be
received by the Secretary of the Company not later than May 1, 1995, to be
eligible for inclusion in the proxy statement and form of proxy relating to that
meeting.
OTHER MATTERS
At the date of this Proxy Statement, the Board of Directors was not aware
that any matters not referred to in this Proxy Statement would be presented for
action at the Meeting. If any other matters should come before the Meeting, the
persons named in the accompanying proxy will have the discretionary authority to
vote all proxies in accordance with their best judgment.
By Order of the Board of Directors,
ROBERT C. MOORE
SECRETARY
12
FOR SHARES OF COMMON STOCK
TEXAS INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS OCTOBER 18, 1994
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints ROBERT ALPERT, GERALD R. HEFFERNAN and
ROBERT D. ROGERS, or any of them, attorneys and proxies, with power of
substitution and revocation, to vote, as designated on the reverse side
hereof, all shares of stock which the undersigned is entitled to vote, with
all powers which the undersigned would possess if personally present, at the
Annual Meeting (including all adjournments thereof) of shareholders of Texas
Industries, Inc. to be held on Tuesday, October 18, 1994 at 9:30 A.M. at The
Ballpark in Arlington, 1000 Ballpark Way, Arlington, Texas.
(THIS PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE)
See Reverse
Side
/X/ PLEASE MARK
YOUR VOTES
AS THIS
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS JUST SIGN
BELOW; NO BOXES NEED TO BE CHECKED
------------
COMMON
- - - -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1
- - - -------------------------------------------------------------------------------
Item 1 - Election of Directors (see reverse).
FOR all nominees
(except as specified
below)
/ /
WITHHOLD AUTHORITY
to vote for all nominees
listed at right
/ /
Gordon E. Forward and Ralph G. Rogers to serve in a class of directors with a
term expiring 1997.
(Instruction: To withhold authority to vote for an individual nominee write that
nominee's name on the space provided below.)
________________________________________________________________________________
Item 2 - To transact such other business that may properly come before the
meeting.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned. In the absence of such instructions this proxy will be voted
FOR the nominees listed in Item 1 and FOR the Proposal in Item 2.
- - - --------------------------------------------------------------------------------
Signature(s)_________________________________________ Dated:____________, 1994
(Sign exactly as name(s) appear above. If shares are held jointly each holder
should sign. If signing for estate, trust or corporation, title or capacity
should be stated.)
Please date, sign and return this Proxy in the enclosed business envelope.
FOR SHARES OF $5 CUMULATIVE PREFERRED STOCK
TEXAS INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS OCTOBER 18, 1994
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints ROBERT ALPERT, GERALD R. HEFFERNAN and ROBERT
D. ROGERS, or any of them, attorneys and proxies, with power of substitution
and revocation, to vote, as designated on the reverse side hereof, all shares
of stock which the undersigned is entitled to vote, with all powers which the
undersigned would possess if personally present, at the Annual Meeting
(including all adjournments thereof) of shareholders of Texas Industries, Inc.
to be held on Tuesday, October 18, 1994 at 9:30 A.M. at The Ballpark in
Arlington, 1000 Ballpark Way, Arlington, Texas.
(THIS PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE)
See Reverse
Side
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' ----- PLEASE MARK
RECOMMENDATIONS JUST SIGN BELOW; NO BOXES NEED | X | YOUR VOTES
TO BE CHECKED ----- AS THIS
-----------------------------
$5 CUMULATIVE PREFERRED STOCK
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1
Item 1 - Election of Directors (see reverse).
FOR all nominees WITHHOLD AUTHORITY Gordon E. Forward and
(except as specified to vote for all nominees Ralph B. Rogers to serve
below) listed at right in a class of directors
----- ----- with a term expiring 1997.
| | | |
----- -----
(Instruction: To withhold authority to vote for an individual nominee write
that nominee's name on the space provided below.)
- - - -------------------------------------------------------------------------------
Item 2 - To transact such other business that may properly come before the
meeting.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned. In the absence of such instructions this proxy will be
voted FOR the nominees listed in Item 1 and FOR the Proposal in Item 2.
Signature(s)_________________________________________ Dated:____, 1994
(Sign exactly as name(s) appear above. If shares are held jointly each
holder should sign. If signing for estate, trust or corporation, title or
capacity should be stated.)
Please date, sign and return this Proxy in the enclosed business envelope.