def14a
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 |
EAGLE MATERIALS INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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)(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 (set forth the amount on which the filing fee is calculated and state how it was
determined): |
|
|
4) |
|
Proposed maximum aggregate value of transaction: |
|
|
5) |
|
Total fee paid: |
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. |
|
1) |
|
Amount Previously Paid: |
|
|
2) |
|
Form, Schedule or Registration Statement No.: |
|
|
3) |
|
Filing Party: |
|
|
4) |
|
Date Filed: |
EAGLE MATERIALS INC.
3811 Turtle Creek Blvd, Suite 1100
Dallas, Texas 75219-4487
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held July 27, 2006
To the stockholders of Eagle Materials Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Eagle Materials Inc. (the
Company) will be held in the Ballroom of the Melrose Hotel, located at 3015 Oak Lawn Avenue,
Dallas, Texas 75219 at 8:00 a.m., local time, on Thursday, July 27, 2006, for the following
purposes:
|
(1) |
|
Election of Directors. Holders of common stock, par value $0.01 per share
(Common Stock), will be asked to elect three Class III directors, each to hold office
for three years. |
|
|
(2) |
|
Ratification of the Appointment of Ernst & Young LLP. You will also be asked
to ratify the appointment of Ernst & Young LLP as the Companys independent auditors
for the fiscal year ending March 31, 2007. |
|
|
(3) |
|
Other Business. In addition, you may be asked to vote upon such other matters
as properly come before the annual meeting, or any adjournment thereof. |
The board of directors of the Company has fixed the close of business on June 2, 2006 as the
record date for the determination of stockholders entitled to notice of and to vote at the meeting
or any adjournment thereof. Only record holders of Common Stock at the close of business on the
record date are entitled to notice of and to vote at the annual meeting. A list of holders of
Common Stock will be available for examination by any stockholder at the meeting and, during the
ten-day period preceding the meeting date, at the executive offices of the Company located at 3811
Turtle Creek Blvd., Suite 1100, Dallas, Texas 75219-4487.
For further information regarding the matters to be acted upon at the annual meeting, I urge
you to carefully read the accompanying proxy statement. If you have more questions about these
proposals or would like additional copies of the proxy statement, please contact: Eagle Materials
Inc., Attention: James H. Graass, Secretary, 3811 Turtle Creek Blvd., Suite 1100, Dallas, Texas
75219-4487 (telephone: (214) 432-2000).
You are cordially invited to attend the annual meeting. Your vote is important. Whether or
not you expect to attend the annual meeting in person, please vote through the Internet or by
telephone or fill in, sign, date and promptly return the accompanying form of proxy in the enclosed
postage-paid envelope so that your shares may be represented and voted at the annual meeting. This
will not limit your right to attend or vote at the annual meeting. Your proxy will be returned to
you if you choose to attend the annual meeting and request that it be returned. Shares will be
voted in accordance with the instructions contained in the enclosed proxy, but if the proxies that
are signed and returned to us do not specify a vote on any proposal, the proxies will be voted
for the election of the nominees for director named in this proxy statement and for the
ratification of the appointment of Ernst & Young LLP as the Companys independent auditors for the
fiscal year ending March 31, 2007.
|
|
|
|
|
By Order of the Board of Directors |
|
|
|
|
|
JAMES H. GRAASS |
|
|
Executive Vice President, |
|
|
General Counsel and Secretary |
|
|
|
Dallas, Texas |
|
|
June 21, 2006 |
|
|
TABLE OF CONTENTS
EAGLE MATERIALS INC.
3811 Turtle Creek Blvd., Suite 1100
Dallas, Texas 75219-4487
INTRODUCTION
The accompanying proxy, mailed together with this proxy statement, is solicited by and on
behalf of the board of directors of Eagle Materials Inc., which we refer to in this proxy statement
as the Company, for use at the annual meeting of stockholders of the Company and at any
adjournment or postponement thereof. References in this proxy statement to we, us, our or
like terms also refer to the Company. This proxy statement and accompanying proxy were first
mailed to our stockholders on or about June 21, 2006.
Date, Time and Place of the Annual Meeting
The 2006 annual meeting of our stockholders will be held in the Ballroom of the Melrose Hotel,
located at 3015 Oak Lawn Avenue, Dallas, Texas 75219 at 8:00 a.m., local time, on Thursday, July
27, 2006.
Purposes of the Annual Meeting and Recommendations of our Board of Directors
At the meeting, action will be taken upon the following matters:
|
(1) |
|
Election of Directors. Holders of common stock, par value $.01 per share, will
be asked to elect three Class III directors, each to hold office for a term of three
years. |
|
|
|
|
Our board of directors recommends that you vote for the election of the three nominees
for director named in this proxy statement. |
|
|
(2) |
|
Ratification of the Appointment of Ernst & Young LLP. We are asking you to
ratify the appointment by our board of directors of Ernst & Young LLP as the Companys
independent auditors for the fiscal year ending March 31, 2007. |
|
|
|
|
Our board of directors recommends that you vote for the ratification of Ernst & Young
LLP as the Companys independent auditors for the fiscal year ended March 31, 2007. |
|
|
(3) |
|
Other Business. In addition, you may be asked to vote upon such other matters,
if any, as properly come before the annual meeting, or any adjournment thereof. |
Our board of directors does not know of any matters to be acted upon at the meeting other than
the matters set forth in items (1) and (2) above.
1
ABOUT THE MEETING
Who Can Vote
The record date for the determination of holders of the Companys Common Stock, par value $.01
per share (our Common Stock), entitled to notice of and to vote at the meeting, or any
adjournment or postponement of the meeting, is the close of business on June 2, 2006. In this
proxy statement, we refer to this date as the record date. As of the record date, there were
50,406,400 shares of our Common Stock issued and outstanding and entitled to vote at the meeting.
The holders of Common Stock will be entitled to one vote per share upon the election of
directors and each other matter that may properly be brought before the meeting or any adjournment
thereof. There is no cumulative voting. Our stock transfer books will not be closed in connection
with the meeting.
How Proxies Will be Voted
Shares represented by valid proxies will be voted at the meeting in accordance with the
directions given. If the enclosed proxy card is signed and returned without any direction given,
the shares will be voted for election of the nominees for director named in the proxy and the
ratification of the appointment of Ernst & Young LLP as the Companys independent auditors. The
board of directors does not intend to present, and has no information indicating that others will
present, any business at the annual meeting other than as set forth in the attached Notice of
Annual Meeting of Stockholders. However, if other matters requiring the vote of the Companys
stockholders come before the meeting, it is the intention of the persons named in the accompanying
form of proxy to vote the proxies held by them in accordance with their best judgment in such
matters.
How to Revoke Your Proxy
You have the unconditional right to revoke your proxy at any time prior to the voting thereof
by submitting a later-dated proxy, by attending the meeting and voting in person, or by written
notice to us addressed to: Eagle Materials Inc., Attention: James H. Graass, Secretary, 3811
Turtle Creek Blvd., Suite 1100, Dallas, Texas 75219-4487. No such revocation shall be effective,
however, unless and until received by the Company at or prior to the meeting.
Quorum and Required Vote
The presence at the meeting, in person or represented by proxy, of the holders of a majority
of the voting power of the shares of capital stock of the Company entitled to vote on any matter
shall constitute a quorum for purposes of such matter. Abstentions and broker non-votes will be
counted as present for the purpose of establishing a quorum. Each Class III director will be
elected by a plurality of votes cast at the meeting by holders of Common Stock. Abstentions and
broker non-votes will not affect the outcome of the election of directors. The affirmative vote of
the holders of a majority of the shares of Common Stock present in person or represented by proxy
at the meeting is required to ratify the appointment by our board of directors of Ernst & Young LLP
as our independent auditors for the fiscal year ending March 31, 2007. Abstentions and broker
non-votes will have the same effect as votes against the ratification of our accountants.
Expenses of Soliciting Proxies
The cost of soliciting proxies for the meeting will be borne by the Company. Solicitations
may be made on behalf of our board of directors by mail, personal interview, telephone or other
electronic means by officers and other employees of the Company, who will receive no additional
compensation therefor. To aid in the solicitation of proxies, we have retained the firm of
Georgeson Shareholder Communications, Inc., which will receive a fee of approximately $8,500.00, in
addition to the reimbursement of out-of-pocket expenses. We will request banks, brokers,
custodians, nominees, fiduciaries and other record holders to forward copies of this proxy
statement to persons on whose behalf they hold shares of Common Stock and to request authority for
the exercise of proxies by the record holders on behalf of those persons. In compliance with the
regulations of the Securities and Exchange Commission (SEC), and the New York Stock Exchange
(NYSE), we will reimburse such persons for reasonable expenses incurred by them in forwarding
proxy materials to the beneficial owners of our Common Stock.
2
How You Can Vote
You can vote your shares at the meeting or by telephone, over the Internet or by completing,
signing, dating and returning your proxy in the enclosed envelope.
OUR CAPITAL STOCK
Our outstanding capital stock consists solely of Common Stock. From January 30, 2004 until
April 11, 2006, we had two classes of common stock common stock, par value $.01 per share, which
we refer to as our Original Common Stock, and Class B common stock, par value $.01 per share,
which we refer to as our Class B Common Stock. Our Original Common Stock and our Class B Common
Stock were identical except for the right of holders of Class B Common Stock to elect at least 85%
of the members of our board of directors. The two classes of common stock were created in
connection with the spin-off (the Spin-Off) of the Company from its former parent, Centex
Corporation (Centex), which was completed on January 30, 2004. For additional information
regarding the Spin-off and related transactions, we refer you to the proxy statement that we filed
with the SEC on December 1, 2003 in connection with the special meeting of our stockholders held to
approve the reclassification of our capital stock in connection with the Spin-Off and certain other
matters.
On February 24, 2006, the Company completed a three-for-one stock split in the form of a 200%
stock dividend on all outstanding shares of our Original Common Stock and Class B Common Stock (the
Stock Split). All figures in this proxy statement involving number of shares, restricted stock
units and stock options granted before the Stock Split have been adjusted to reflect the Stock
Split.
On April 11, 2006, we completed a transaction to eliminate our dual class common stock
structure. On that day, at a special stockholders meeting, our stockholders approved an amendment
to our restated certificate of incorporation to exchange our Original Common Stock and our Class B
Common Stock into our new Common Stock. As a result of this transaction, all holders of our single
class of Common Stock now have identical rights in all matters properly brought before the
stockholders for a vote, including the election of directors.
Our Common Stock is listed on the NYSE under the symbol EXP.
ELECTION OF DIRECTORS AND RELATED MATTERS
General
Our board of directors is the ultimate decision-making body of the Company except with respect
to those matters reserved to our stockholders. The primary responsibilities of our board include:
|
|
|
the selection, compensation and evaluation of our Chief Executive Officer and
oversight over succession planning; |
|
|
|
|
oversight of our strategic planning; |
|
|
|
|
approval of all our material transactions and financings; |
|
|
|
|
providing assurance that processes are in place to promote compliance with law and
high standards of business ethics; |
|
|
|
|
advising management on major issues that may arise; and |
|
|
|
|
evaluating the performance of the board and its committees, and making appropriate
changes where necessary. |
Members of our board of directors are divided into three classes based on their term of office
(Class I, II and III). The directors in each such class hold office for staggered terms of three
years each. At present, we have three Class I directors, two Class II directors and three Class
III directors.
3
The following table shows the composition of our Board after the annual meeting, assuming the
election of the proposed slate of director nominees:
|
|
|
|
|
CLASS |
|
DIRECTORS |
|
|
Class I: Term expires at the 2007
|
|
Robert L. Clarke
|
|
|
annual meeting and every three years
|
|
Frank W. Maresh |
|
|
thereafter
|
|
Steven R. Rowley |
|
|
|
|
|
|
|
Class II: Term expires at the 2008 |
|
|
|
|
annual meeting and every three years
|
|
Laurence E. Hirsch |
|
|
thereafter
|
|
Michael R. Nicolais |
|
|
|
|
|
|
|
Class III: Term expires at the 2009
|
|
F. William Barnett |
|
|
annual meeting and every three years
|
|
O.G. Dagnan |
|
|
thereafter
|
|
David W. Quinn |
|
|
NYSE corporate governance rules require that our board of directors be comprised of a
majority of independent directors. Our board of directors has determined, upon the
recommendation of the corporate governance and nominating committee, which we sometimes
refer to as the nominating committee, that all members of our board of directors, other
than Messrs. Hirsch, Rowley and Quinn, are independent within the meaning of the
independence requirements of the Securities Exchange Act of 1934 (as amended, the Exchange
Act) and the corporate governance rules of the NYSE.
In determining that five of our directors are independent, our board of directors
considered the following facts:
|
|
|
Messrs. F. William Barnett, Robert L. Clarke and Frank W. Maresh have no
relationship with the Company or its management that potentially affects their
independence. |
|
|
|
|
Mr. O.G. Dagnan is a former Chief Executive Officer of the Company who
retired as an officer and employee of the Company in July 1999, and has had no
relationship with the Company since that time (other than his relationship as a
director). Mr. Dagnan was granted certain stock options by the Company during
the time he served as an executive officer, the last of which were exercised in
2002. Because of the length of time since his retirement from the Company, and
in light of the absence of any compensatory or other arrangements between the
Company and Mr. Dagnan since the date of his retirement (other than
compensation for his services as a director and for exercised stock options, as
described above), our board of directors has determined that Mr. Dagnan has no
material relationship with the Company. |
|
|
|
|
Mr. Michael R. Nicolais entered into an employment relationship with a
company owned by another member of our board of directors, Laurence E. Hirsch,
in 2004. In particular, in April 2004, Mr. Nicolais accepted employment as
president of Highlander Partners L.P. (Highlander), a newly formed private
investment partnership of which Mr. Laurence E. Hirsch, a director of the
Company, is the sole equity owner. In view of, among other things: (i) the
fact that Mr. Nicolais has never served as an officer or employee of the
Company or any of its parents or subsidiaries; (ii) the fact that the
employment relationship between Mr. Nicolais and Highlander commenced after the
completion of the Spin-Off and after the date Mr. Hirsch retired as an
executive officer and director of Centex, which is the former parent of the
Company; (iii) the fact that the investment services to be provided by Mr.
Nicolais to Highlander are largely unrelated to the Company (except to the
extent that such services may in the future involve investment services
relating to shares of our Common Stock held by Mr. Hirsch); and (iv) the
boards belief that Mr. Nicolais is able to act independently from the Company
and its management in connection with matters submitted to and considered by
our board of directors, our board determined in its business judgment that Mr.
Nicolais has no material relationship with the Company. |
4
Nominees
Each of the nominees listed below is currently a member of our board of directors. Each of
these nominees has been nominated by our corporate governance and nominating committee after
considering the criteria described below under the heading Corporate Governance and Nominating
Committee. We have no reason to believe that any of the listed nominees will become unavailable
for election, but if for any reason that should be the case, proxies may be voted for substitute
nominees. A plurality of votes cast by the holders of our Common Stock will be required to elect
the nominees for director.
Recommendation of the Board
Our board of directors recommends that holders of Common Stock vote for the election of the
nominees listed below to serve as Class III directors for a three-year term ending at our 2009
annual meeting of stockholders:
F. William Barnett
O.G. Dagnan
David W. Quinn
Set forth below is information about the nominees standing for election at our 2006 annual
meeting, as well as our continuing directors whose terms of office do not expire at the 2006 annual
meeting. The biographical information appearing below regarding the nominees for director and
continuing directors has been furnished to us by the respective nominees and directors:
Nominees for Directors Whose Terms Expire at our 2006 Annual Meeting
(Class III Directors)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
|
|
|
|
|
|
|
|
First |
|
Business Experience and Principal Occupation; |
Name |
|
Age |
|
Elected |
|
Directorships in Public Corporations and Investment Companies |
F. William Barnett
|
|
|
59 |
|
|
|
2003 |
|
|
Mr. Barnett currently chairs our compensation committee.
Mr. Barnett also serves on our corporate governance and
nominating committee. Mr. Barnett retired in 2003 from his
position as a director in the Dallas office of McKinsey &
Company, Inc., an international consulting firm, after 23
years of employment. Mr. Barnett is also a director of Papa
Johns International, Inc. |
|
|
|
|
|
|
|
|
|
|
|
O.G. Dagnan
|
|
|
66 |
|
|
|
1990 |
|
|
Mr. Dagnan served as our Chief Executive Officer from
January 1990 through his retirement in July 1999 and
chairman of our board of directors from January 1990 to
January 1994 and December 1997 through his retirement in
July 1999. Mr. Dagnan served as our President from January
1990 through December 1997, and as our Senior Vice President
Operations from August 1989 to January 1990. From 1980
until 1989, he was employed by Southwestern Portland Cement,
where he served as Vice President from 1982 to 1987 and as
Executive Vice President from 1987 to 1989. |
|
|
|
|
|
|
|
|
|
|
|
David W. Quinn
|
|
|
64 |
|
|
|
1994 |
|
|
Mr. Quinn has been a member of our board of directors since
1994. He has served as a director of Centex beginning in
1989, and served as Vice Chairman of the Board of Directors
of Centex from May 1996 to March 2002, as Executive Vice
President of Centex from February 1987 to May 1996 and Chief
Financial Officer of Centex from February 1987 until June
1997 and again from October 1997 until May 2000. |
5
Continuing Directors Whose Terms Expire at our 2007 Annual Meeting
(Class I Directors)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
|
|
|
|
|
|
|
|
First |
|
Business Experience and Principal Occupation; |
Name |
|
Age |
|
Elected |
|
Directorships in Public Corporations and Investment Companies |
Robert L. Clarke
|
|
|
63 |
|
|
|
1994 |
|
|
Mr. Clarke serves as chairman of the audit committee of our
board of directors. Mr. Clarke also serves on the
compensation committee of our board. He was a partner in
the law firm of Bracewell & Giuliani LLP (formerly known as
Bracewell & Patterson) from 1971 to December 1985, returned
to the firm as a partner in March 1992 and continues to
serve in that capacity. From December 1985 to February
1992, he was Comptroller of the Currency of the United
States. Mr. Clarke is also a director of First Investors
Financial Services, Inc., a consumer finance company, and a
director of Stewart Information Services Corporation, a land
title and property information services company. |
|
|
|
|
|
|
|
|
|
|
|
Frank W. Maresh
|
|
|
67 |
|
|
|
2004 |
|
|
Mr. Maresh has been a member of our board of directors since
2004 and serves on our audit committee and our compensation
committee. Mr. Maresh is a certified public accountant and
currently works as a consultant and serves as a board member
for several private enterprises. He is also a member of
the board of directors of Argonaut Group, Inc., where he
serves as chairman of the audit committee. From 1993 to
1999, Mr. Maresh served on the Texas State Board of Public
Accountancy, first as Chairman of the Major Case Committee
and then as Chairman of the Board. Prior to joining the
Texas State Board of Public Accountancy, Mr. Maresh worked
for KPMG from 1962 until 1993 in a variety of capacities,
including Vice Chairman of the Board of Directors of that
firms U.S. operations, as a member of KPMGs firm-wide
management committee, as Managing Partner of the
Southwestern United States region and as Managing Partner of
KPMGs Houston office. Mr. Maresh graduated from the
University of Texas with a masters in professional
accounting. |
|
|
|
|
|
|
|
|
|
|
|
Steven R. Rowley
|
|
|
53 |
|
|
|
2003 |
|
|
Mr. Rowley has been the Companys Chief Executive Officer
and a member of our board of directors since September 2003.
Mr. Rowley is also a member of the executive committee of
our board of directors. Mr. Rowley joined the Company in
1991 as a plant manager in its Nevada cement operations and
subsequently became Executive Vice President of the
Companys Illinois Cement Company subsidiary in June of
1995. Mr. Rowley was named the Companys Executive Vice
President Cement in 1998. In 2001, Mr. Rowleys
operational responsibilities were expanded to include
concrete and aggregates. Mr. Rowley was named the Companys
Chief Operating Officer in October 2002. |
Continuing Directors Whose Terms Expire at our 2008 Annual Meeting
(Class II Directors)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
|
|
|
|
|
|
|
|
First |
|
Business Experience and Principal Occupation; |
Name |
|
Age |
|
Elected |
|
Directorships in Public Corporations and Investment Companies |
Laurence E. Hirsch
|
|
|
60 |
|
|
|
1985 |
|
|
Mr. Hirsch has served as chairman of our board of directors
from July 1999 to the present and also served in that
capacity from January 1994 through December 1997. He was
our Chief Executive Officer from April 2003 through
September 2003. Mr. Hirsch is a member of the executive
committee of our board of directors. Until his retirement
on March 31, 2004, Mr. Hirsch served Centex in various
capacities, including as a director beginning in 1985, as
Chief Executive Officer beginning in July 1988 and as
chairman of its board of directors beginning in July 1991.
Mr. Hirsch also serves as a director of Belo Corp., a
diversified media company. Mr. Hirsch is also Chairman of
the Center for European Policy Analysis. |
|
|
|
|
|
|
|
|
|
|
|
Michael R. Nicolais
|
|
|
48 |
|
|
|
2001 |
|
|
Mr. Nicolais been a member of our board of directors since
2001 and serves on our audit committee and chairs our
corporate governance and nominating committee. In April
2004, Mr. Nicolais became president of Highlander Partners
L.P., an investment partnership. From August 2002 until
March 2004, Mr. Nicolais served as managing director of
Stephens, Inc., an investment banking firm. Prior to
joining Stephens, Inc., he was a partner in the private
investment firm of Olivhan Investments, L.P. from March 2001
until August 2002. From August 1986 to December 2000, he
was employed by Donaldson, Lufkin & Jenrette Securities
Corporations Investment Banking Division, most recently in
the position of Managing Director and co-head of that firms
Dallas office. |
6
Board Meetings and Attendance Records
During the Companys fiscal year ended March 31, 2006, our board of directors held four
regularly scheduled meetings and six special meetings. During such fiscal year one director missed
two special meetings. In accordance with our policy, we anticipate that all continuing directors
and nominees will attend our 2006 annual meeting. All such persons attended our 2005 annual
meeting. We strongly encourage all board members to attend our stockholder meetings. Our
non-employee directors (which currently constitute all our directors, except for Mr. Rowley) meet
immediately after all board meetings without management present. Mr. Hirsch presides at all
executive sessions of the non-employee directors.
Board Compensation
Board members who are not employees of the Company or any of its subsidiaries receive
compensation for their services valued at $135,000 per year, of which 50% must be received in the
form of an equity grant (stock options and restricted stock units (RSUs)). The equity grant is
comprised of 50% stock options to purchase Common Stock and 50% RSUs. Each non-employee director
may elect to receive the remaining compensation ($62,500) in cash or in additional equity (stock
options and RSUs), provided that each non-employee director who elects to receive the remaining
portion in additional equity will receive an additional $15,000 of equity awards. The exercise
price of the options is equal to the average of the high and low price of the Common Stock on the
New York Stock Exchange on the date of grant. The number of shares covered by the options is
determined by valuing the options on the date of grant using the Black-Scholes method. The options
are fully exercisable beginning on the date of grant and have a seven-year term. The number of
RSUs is determined by reference to the closing price for the Common Stock on the date of award.
The RSUs vest in full on the date of grant, but are not payable until the non-employee
directors service on the board terminates because of the directors death or the directors
retirement at age 70 (or older) or earlier with the consent of the Compensation Committee. In
addition, the shares of stock represented by the RSUs become payable upon a change in control. If
the directors service on the board terminates by reason other than retirement or death, the shares
will be forfeited.
The corporate governance and nominating committee chair receives $10,000 per year for chairing
the corporate governance and nominating committee. The audit committee and compensation committee
chairmen each receive $15,000 per year for chairing a board committee. In addition, the Chairman
of the Board receives $50,000 per year for his service as Chairman of the Board. Each chairman may
elect to receive such fees in the form of equity. All board members are reimbursed for reasonable
expenses of attending meetings. Directors who are employees of the Company or its subsidiaries
receive no compensation for board service.
Board Committees
The boards standing committees include the audit committee, the compensation committee, and
the corporate governance and nominating committee. The members of these committees are as follows:
|
|
|
|
|
|
|
|
|
Corporate Governance and |
Audit Committee |
|
Compensation Committee |
|
Nominating Committee |
Robert L. Clarke(1)
|
|
F. William Barnett(1)
|
|
F. William Barnett |
Frank W. Maresh
|
|
Robert L. Clarke
|
|
O.G. Dagnan |
Michael R. Nicolais
|
|
Frank W. Maresh
|
|
Michael R. Nicolais(1) |
|
|
|
(1) |
Chairman of the committee. |
Audit Committee
Our board has a separately-designated standing audit committee, composed of three independent
directors. The audit committee assists the board in fulfilling its responsibility to oversee the
integrity of our financial statements, our compliance with legal and regulatory requirements, the
qualifications and independence of our independent auditors and the performance of our internal
audit function and independent auditors. The audit committee is governed by an amended and
restated audit committee charter, a copy of which may be viewed on our website at
www.eaglematerials.com and will be provided free of charge upon written request to our Secretary at
our principal executive office.
7
Our board has determined that each member of the committee is independent within the meaning
of applicable (i) corporate governance rules of the NYSE and (ii) the requirements set forth in the
Exchange Act and the applicable SEC rules. In addition, our board has determined that each member
of the committee satisfies applicable NYSE standards for financial literacy and that, based on his
auditing and financial experience, including over thirty (30) years with KPMG, Mr. Maresh is an
audit committee financial expert within the meaning of the rules of the SEC.
During the last fiscal year, the audit committee held seven meetings, which were
attended by all committee members. Unless otherwise determined by the board, no member of the
committee may serve as a member of the audit committee of more than two other public companies.
The following are key functions and responsibilities of our audit committee:
|
|
|
to select, appoint, compensate, evaluate, retain and oversee the independent
auditors engaged for purposes of preparing or issuing an audit report or related work
or performing other audit, review, or attest services for us; |
|
|
|
|
to obtain and review, on a periodic basis, a formal written statement from our
independent auditors describing all relationships between our auditors and the Company
and engage in a dialogue with our auditors with respect to any disclosed relationships
or services that may impact the objectivity and independence of the auditors and to
recommend appropriate action in response to the reports to our board; |
|
|
|
|
to pre-approve all audit engagement fees and terms and all permissible non-audit
services provided to us by our independent auditors, in accordance with the committees
policies and procedures for pre-approving audit and non-audit services; |
|
|
|
|
to establish procedures for (i) the receipt, retention and treatment of complaints
received by the Company regarding accounting, internal accounting controls or auditing
matters and (ii) the confidential, anonymous submission by employees of the Company of
concerns regarding questionable accounting or auditing matters; |
|
|
|
|
to discuss our annual audited financial statements, quarterly financial statements
and other significant financial disclosures with management and our independent
auditors; |
|
|
|
|
to discuss with management the types of information to be disclosed and the types of
presentations to be made in our earnings press releases, as well as the financial
information and earnings guidance we provide to analysts and rating agencies; |
|
|
|
|
to annually review and assess its performance and the adequacy of its charter; |
|
|
|
|
to discuss policies with respect to risk assessment and risk management; and |
|
|
|
|
to prepare the report that is required to be included in our annual proxy statement
regarding review of financial statements and auditor independence. |
The audit committees report on our financial statements for the fiscal year ended March 31,
2006 is presented below under the heading Audit Committee Report.
The audit committee meets separately with our independent auditors and with members of our
internal audit staff outside the presence of the Companys management or other employees to discuss
matters of concern, to receive recommendations or suggestions for change and to exchange relevant
views and information.
Compensation Committee
Our boards compensation committee is composed of independent directors who meet the corporate
governance standards of the NYSE, qualify as non-employee directors within the meaning of Rule
16b-3(b)(3) of the Exchange Act and as outside directors within the meaning of the Internal
Revenue Code of 1986, as amended. Pursuant to its charter, which you may review on our web site at
www.eaglematerials.com (and a copy of which will be provided to you free of charge upon written
request to our Secretary at our principal executive office), the primary purposes of the committee
are to assist the board in discharging its responsibilities relating to compensation of the
Companys Chief Executive Officer and other senior executives and to direct the preparation of the
reports regarding executive compensation that the rules of the SEC require to be included in our
annual proxy statement.
The following are key functions and responsibilities of the compensation committee:
|
|
|
to periodically review and make recommendations to our board as to our general
compensation philosophy and structure, including reviewing the compensation programs
for senior executives and all benefit plans |
8
|
|
|
sponsored by the Company to determine whether they are properly coordinated and achieving
their intended purposes; |
|
|
|
|
to annually review and approve corporate goals and objectives relevant to the
compensation of our Chief Executive Officer, evaluate his or her performance as
measured against such goals and objectives and to set the salary and other cash and
equity compensation for our the Chief Executive Officer based on such evaluation; |
|
|
|
|
to review and, after the end of the fiscal year and in consultation with our Chief
Executive Officer, approve the compensation of our senior executives; |
|
|
|
|
to administer the Companys compensation plans for which it is named as plan
administrator, including the Companys Incentive Plan, as amended (the Incentive
Plan); |
|
|
|
|
to report on compensation policies and practices with respect to the Companys
executive officers as required by SEC rules; and |
|
|
|
|
to review and assess the performance of the committee and the adequacy of its
charter annually and recommend any proposed changes to the board. |
The compensation committees report for the fiscal year ended March 31, 2006 is presented
below under the heading Report of Compensation Committee on Executive Compensation.
The compensation committee meets as often as it deems appropriate, but no less than twice per
year. During the fiscal year ended March 31, 2006, the compensation committee held seven meetings,
which were attended by all committee members.
Corporate Governance and Nominating Committee
Our boards corporate governance and nominating committee is composed of independent directors
who meet the corporate governance standards of the NYSE. The primary purposes of this committee
are: (i) to advise and counsel our board and management regarding our governance including our
boards selection of directors; (ii) to develop and recommend to the board a set of corporate
governance principles for the Company; and (iii) to oversee the evaluation of our board and
management. Our corporate governance and nominating committee has adopted a written charter, which
you may review on our web site at www.eaglematerials.com and will be provided free of charge upon
written request to our Secretary at our principal executive office. Our board of directors has
also adopted corporate governance guidelines, a copy of which may be viewed on our website at
www.eaglematerials.com and which will be provided free of charge upon written request to our
Secretary at our principal executive office.
The following are certain key functions and responsibilities of our corporate governance and
nominating committee:
|
|
|
to develop, periodically review and recommend a set of corporate governance
principles for the Company to the board; |
|
|
|
|
to periodically review corporate governance matters generally and recommend action
to the board where appropriate; |
|
|
|
|
to review and assess the adequacy of its charter annually and recommend any proposed
changes to our board for approval; |
|
|
|
|
to monitor the quality and sufficiency of information furnished by management to our
board; |
|
|
|
|
to actively seek, recruit, screen, and interview individuals qualified to become
members of the board, and consider managements recommendations for director
candidates; |
|
|
|
|
to evaluate the qualifications and performance of incumbent directors and determine
whether to recommend them for re-election to the board; |
|
|
|
|
to establish and periodically re-evaluate criteria for board membership; |
|
|
|
|
to recommend to the board the director nominees for each annual stockholders meeting; and |
|
|
|
|
to recommend to the board nominees for each committee of the board. |
The committee initiates and oversees an annual evaluation of the effectiveness of the board
and each committee, as well as the composition, organization (including committee structure,
membership and leadership) and practices of the board. Among the criteria the corporate governance
and nominating committee uses in evaluating the suitability of individual nominees for director
(whether such nominations are made by management, a stockholder or otherwise) are their integrity,
experience, achievements, judgment, intelligence, personal character, ability to make independent
analytical
9
inquiries, willingness to devote adequate time to board duties and the likelihood that he or
she will be able to serve on the board for a sustained period. In connection with the selection of
nominees for director, due consideration will be given to our boards overall balance of
perspectives, backgrounds and experiences. During the fiscal year ended March 31, 2006, the
committee engaged a director search firm to assist in identifying and evaluating potential
nominees.
Members of the corporate governance and nominating committee, other members of the board or
executive officers may, from time to time, identify potential candidates for nomination to our
board. All proposed nominees, including candidates recommended for nomination by stockholders in
accordance with the procedures described below, will be evaluated in light of the criteria
described above and the projected needs of the board at the time. As set forth in the committees
charter, the committee may retain a search firm to assist in identifying potential candidates for
nomination to the board of directors.
The committee will consider candidates recommended by stockholders for election to our board.
A stockholder who wishes to recommend a candidate for evaluation by the committee should forward
the candidates name, business or residence address, principal occupation or employment and a
description of the candidates qualifications to the Chairman of the corporate governance and
nominating committee at the following address: Eagle Materials Inc., Attention: Secretary, 3811
Turtle Creek Boulevard, Suite 1100, Dallas, Texas 75219-4487.
Our Bylaws provide that, to be considered at the 2007 annual meeting, stockholder nominations
for the board of directors must be submitted in writing and received by our Secretary at the
executive offices of the Company during the period beginning on January 26, 2007 and ending April
27, 2007, and must contain the information specified by and otherwise comply with the terms of our
Bylaws. Any stockholder wishing to receive a copy of our Bylaws should direct a written request to
our Secretary at the Companys principal executive offices.
No nominees for election to the board of directors at our 2006 annual meeting of stockholders
were submitted by stockholders or groups of stockholders owning more than 5% of our Common Stock.
During the fiscal year ended March 31, 2006, the corporate governance and nominating committee
held five meetings; one committee member missed one meeting.
How to Contact Our Board
You can communicate directly with our board of directors, a committee of the board, our
independent directors as a group, our Chairman of the Board or any other individual member of our
board of directors by sending the communication to Eagle Materials Inc., 3811 Turtle Creek Blvd.,
Suite 1100, Dallas, Texas 75219-4487, to the attention of the director or directors of your choice
(e.g., Attention: Chairman of the Board of Directors or Attention: All Independent Directors,
etc.). We will relay communications addressed in this manner as appropriate. Communications
addressed to the attention of the entire board are forwarded to the Chairman of the Board for
review and further handling.
10
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following list sets forth the names, ages as of the date of this proxy statement and
principal occupations of each person who was an executive officer of the Company during the fiscal
year ended March 31, 2006 who is not also a member of our board. All of these persons have been
elected to serve until the next annual meeting of our board or until their earlier resignation or
removal.
|
|
|
|
|
|
|
Name |
|
Age |
|
Title |
David B. Powers
|
|
|
56 |
|
|
Executive Vice President Gypsum
(Executive Vice President Gypsum
and President of American Gypsum Company since January
2005; Executive Vice President Marketing, Sales and
Distribution of American Gypsum Company from June 2002
through December 2004; Vice President, Customer
Service of USG Corporation from 2000 2002; Vice
President, Specialty Products and Architectural
Systems Business of USG Corporation from 1998 2000). |
|
|
|
|
|
|
|
Arthur R. Zunker, Jr.
|
|
|
62 |
|
|
Senior Vice President Finance and Treasurer
(Senior Vice President Finance and
Treasurer since January 1994; Senior Vice President
Administration from August 1984 to January 1994). |
|
|
|
|
|
|
|
James H. Graass
|
|
|
48 |
|
|
Executive Vice President, General Counsel and Secretary
(Executive Vice President and General Counsel since
November 2000; Mr. Graass was named Secretary of the
Company in July 2001). |
|
|
|
|
|
|
|
Gerald J. Essl
|
|
|
56 |
|
|
Executive Vice President Cement/Concrete and
Aggregates (Executive Vice President Cement/Concrete
and Aggregates since January 2003; President of Texas
Lehigh Cement Company from 1985 through December
2002). |
|
|
|
|
|
|
|
William R. Devlin
|
|
|
40 |
|
|
Vice President and Controller
(Vice President and Controller since October 2005;
Director of Internal Audit from September 2004 through
September 2005; Senior Manager of
PricewaterhouseCoopers LLP from July 1999 through
August, 2004). |
11
EXECUTIVE COMPENSATION
Compensation Tables
The following table sets forth the cash and non-cash compensation for each of the last three
fiscal years (or such shorter period during which the person was an executive officer) awarded to
or earned by any person who served as Chief Executive Officer of the Company during the preceding
fiscal year and the four other most highly compensated executive officers of the Company as of the
end of fiscal year 2006:
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Compensation |
|
|
|
|
|
|
|
|
|
|
Annual Compensation ($) |
|
|
Awards |
|
|
All Other Compensation ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
Restricted |
|
|
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual |
|
|
Stock |
|
|
Underlying |
|
|
Profit |
|
|
|
|
|
|
Other |
|
Name
and Principal |
|
Fiscal |
|
|
|
|
|
|
|
|
|
|
Compen- |
|
|
Units (3) |
|
|
Options (4) |
|
|
Sharing |
|
|
|
|
|
|
Compen- |
|
Position in Fiscal Year 2006 |
|
Year |
|
|
Salary |
|
|
Bonus (1) |
|
|
sation (2) |
|
|
($) |
|
|
(#) |
|
|
Plan (5) |
|
|
SERP (6) |
|
|
sation (7) |
|
|
|
|
|
|
|
|
|
|
Steven R. Rowley, |
|
|
2006 |
|
|
|
600,000 |
|
|
|
1,187,548 |
|
|
|
685 |
|
|
|
549,937 |
|
|
|
66,000 |
|
|
|
20,828 |
|
|
|
34,557 |
|
|
|
6,223 |
|
President and Chief |
|
|
2005 |
|
|
|
425,000 |
|
|
|
625,505 |
|
|
|
8,220 |
|
|
|
533,337 |
|
|
|
71,316 |
|
|
|
20,312 |
|
|
|
17,264 |
|
|
|
4,283 |
|
Executive Officer (8) |
|
|
2004 |
|
|
|
298,700 |
|
|
|
427,535 |
|
|
|
8,220 |
|
|
|
|
|
|
|
82,776 |
|
|
|
19,784 |
|
|
|
9,653 |
|
|
|
2,753 |
|
|
|
|
David B. Powers, |
|
|
2006 |
|
|
|
265,000 |
|
|
|
819,080 |
|
|
|
|
|
|
|
175,048 |
|
|
|
21,000 |
|
|
|
20,720 |
|
|
|
4,529 |
|
|
|
2,253 |
|
Executive
Vice President |
|
|
2005 |
|
|
|
184,625 |
|
|
|
131,266 |
|
|
|
5,200 |
|
|
|
|
|
|
|
|
|
|
|
16,592 |
|
|
|
2,253 |
|
|
|
1,611 |
|
Gypsum (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arthur R. Zunker, Jr., |
|
|
2006 |
|
|
|
227,535 |
|
|
|
564,085 |
|
|
|
685 |
|
|
|
125,110 |
|
|
|
15,000 |
|
|
|
21,025 |
|
|
|
1,298 |
|
|
|
1,099 |
|
Senior Vice
President |
|
|
2005 |
|
|
|
210,000 |
|
|
|
429,914 |
|
|
|
8,220 |
|
|
|
177,756 |
|
|
|
23,772 |
|
|
|
20,509 |
|
|
|
185 |
|
|
|
1,124 |
|
Finance and Treasurer |
|
|
2004 |
|
|
|
201,600 |
|
|
|
301,790 |
|
|
|
6,165 |
|
|
|
|
|
|
|
49,665 |
|
|
|
19,980 |
|
|
|
13 |
|
|
|
767 |
|
|
|
|
James H. Graass, |
|
|
2006 |
|
|
|
266,600 |
|
|
|
415,642 |
|
|
|
600 |
|
|
|
125,110 |
|
|
|
15,000 |
|
|
|
20,819 |
|
|
|
5,230 |
|
|
|
3,111 |
|
Executive Vice President, |
|
|
2005 |
|
|
|
250,000 |
|
|
|
257,561 |
|
|
|
3,300 |
|
|
|
145,462 |
|
|
|
19,452 |
|
|
|
20,302 |
|
|
|
3,113 |
|
|
|
2,918 |
|
General Counsel and
Secretary (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gerald J. Essl, |
|
|
2006 |
|
|
|
266,600 |
|
|
|
341,092 |
|
|
|
600 |
|
|
|
175,048 |
|
|
|
21,000 |
|
|
|
20,976 |
|
|
|
5,230 |
|
|
|
2,314 |
|
Executive
Vice President |
|
|
2005 |
|
|
|
250,000 |
|
|
|
359,920 |
|
|
|
7,200 |
|
|
|
177,756 |
|
|
|
23,772 |
|
|
|
20,459 |
|
|
|
2,888 |
|
|
|
1,911 |
|
Cement/Concrete and |
|
|
2004 |
|
|
|
207,000 |
|
|
|
305,594 |
|
|
|
7,200 |
|
|
|
|
|
|
|
49,665 |
|
|
|
19,931 |
|
|
|
6 |
|
|
|
949 |
|
Aggregates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Cash bonuses for services rendered in fiscal years 2006, 2005 and 2004 have been listed
in the year earned but were paid in the following fiscal year. |
|
(2) |
|
These amounts represent automobile allowance payments. |
|
(3) |
|
The values shown in this column relate to the restricted stock units relating to Common
Stock awarded to the named executive officers under our Incentive Plan. The values shown
were calculated by multiplying the number of restricted stock units awarded by the closing
price of our Common Stock on the NYSE on the date of the award. The total number of
restricted stock units awarded to the named executive officers during fiscal 2006 was as
follows: Mr. Rowley 18,699; Mr. Powers 5,952; Mr. Zunker 4,254; Mr. Essl 5,952; and
Mr. Graass 4,254. The vesting of these RSUs was subject to the satisfaction of certain
performance goals during fiscal 2006. On April 21, 2006 the Compensation Committee
determined that based on the Companys performance during fiscal 2006, 77.644% of the RSUs
granted in fiscal 2006 vested. As a result, a third of the vested shares were paid
immediately with one third payable on March 31, 2007 and the remaining third payable on
March 31, 2008. 22.356% of the shares were forfeited. (For the vestings of RSUs granted
for fiscal 2005, please refer to the Companys proxy statement for its 2005 annual meeting
of stockholders, filed with the SEC on June 27, 2005.) Under the terms of the RSU
agreements, grantees are paid dividend equivalents with respect to their vested but
unpaid RSUs. These dividend equivalents are paid in the form of additional vested RSUs in
an amount equal to the dividends that would have been paid on the shares covered thereby,
divided by the per share stock price on the dividend payment date. Any unvested or vested
and unpaid RSUs become payable upon a change in control. |
12
|
|
|
(4) |
|
Options shown in this table represent stock options granted under our Incentive Plan or
predecessor plans. The Company did not grant any stock appreciation rights (SARs) to any
of its executive officers during any of the periods covered by this table. Any unvested or
unexercisable options become exercisable upon a change in control. All stock option grants
made prior to the Stock Split have been adjusted to reflect the Stock Split, as required by
our Incentive Plan. |
|
(5) |
|
The amounts shown in this column represent Company contributions to, and forfeitures
allocated to, the account of the recipient under our profit sharing plan. All such amounts
are fully vested except for the amount shown for Mr. Powers who is 40% vested as of March
31, 2006. |
|
(6) |
|
The amounts shown in this column represent Company contributions to the account of the
recipient pursuant to our amended and restated supplemental executive retirement plan (the
SERP), an unfunded non-qualified plan for certain executives of the Company. All such
amounts are fully vested in such individuals except for the amount shown for Mr. Powers who
is 40% vested as of March 31, 2006. |
|
(7) |
|
Each of the named executives is a participant in our Salary Continuation Plan (the
SCP). Under the SCP, in the event of the death of a participating employee, such
employees beneficiary will receive one full year of base salary in the first year
following death and 50% of base salary each year thereafter until the date such employee
would have been 65 years of age, subject to a maximum amount. These amounts in the Summary
Compensation Table represent the premium costs to the Company of life insurance policies
obtained by the Company in connection with the SCP. |
|
(8) |
|
Mr. Rowley was elected as Chief Operating Officer of the Company in October 2002 and
was elected as President and Chief Executive Officer in September 2003. |
|
(9) |
|
Mr. Powers and Mr. Graass became executive officers in fiscal 2005. |
The following table describes stock options granted to the named executive officers for
fiscal year 2006.
Option/SAR Grants in Last Fiscal Year (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential Realizable Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at Assumed Annual Rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Stock Price |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appreciation for Option |
|
|
Individual Option Grants (2) |
|
Term |
|
|
|
|
|
|
% of Total |
|
|
|
|
|
|
|
|
|
|
Number of |
|
Options |
|
|
|
|
|
|
|
|
|
|
Securities |
|
Granted to |
|
|
|
|
|
|
|
|
|
|
Underlying |
|
Employees |
|
Exercise |
|
|
|
|
|
|
|
|
Options |
|
in Fiscal |
|
Price |
|
Expiration |
|
|
|
|
Name |
|
Granted (#) |
|
Year |
|
($/Sh) (3) |
|
Date |
|
5% ($) |
|
10% ($) |
|
|
|
Steven R. Rowley |
|
|
66,000 |
|
|
|
22.1 |
% |
|
$ |
29.0767 |
|
|
June 9, 2012 |
|
$ |
781,255 |
|
|
$ |
1,820,656 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David B. Powers |
|
|
21,000 |
|
|
|
7.0 |
% |
|
$ |
29.0767 |
|
|
June 9, 2012 |
|
$ |
248,581 |
|
|
$ |
579,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arthur R. Zunker, Jr. |
|
|
15,000 |
|
|
|
5.0 |
% |
|
$ |
29.0767 |
|
|
June 9, 2012 |
|
$ |
177,558 |
|
|
$ |
413,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James H. Graass |
|
|
15,000 |
|
|
|
5.0 |
% |
|
$ |
29.0767 |
|
|
June 9, 2012 |
|
$ |
177,558 |
|
|
$ |
413,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gerald J. Essl |
|
|
21,000 |
|
|
|
7.0 |
% |
|
$ |
29.0767 |
|
|
June 9, 2012 |
|
$ |
248,581 |
|
|
$ |
579,300 |
|
|
|
|
(1) |
|
Amounts set forth in the table reflect the number and value of shares and options only.
The Company has issued no SARs. The number of options granted and the exercise price of
such options have been adjusted to reflect the Stock Split that occurred on February 24,
2006, as required by our Incentive Plan. |
|
(2) |
|
These options were granted under our Incentive Plan and represent options to purchase
shares of our Common Stock. The vesting of the options is subject to the Companys
achievement of certain performance conditions. Forty-five percent (45%) of such grants
vest based on the Companys three year average earnings before interest and taxes (EBIT),
which is calculated at the end of each of fiscal 2006, 2007 and 2008. The vesting of
forty-five percent (45%) of the options vest based on certain operational metrics set by
our compensation committee. The vesting of the remaining ten percent (10%) is based upon
the achievement of a net debt-to-capitalization ratio within a certain range. At the end
of fiscal 2006, 77.644% of these stock options vested based on achievement of certain of
the performance criteria referenced above. One-third of such vested options became
exercisable immediately, one-third at March 31, 2007 and one-third at March 31, 2008. The
remaining unvested stock |
13
|
|
|
|
|
options were forfeited. Under the terms of the option agreements all unvested shares and
vested but unexercisable shares become immediately exercisable upon a change in control, as
defined in the stock option agreement. |
|
(3) |
|
Under our Incentive Plan, the exercise price is set at the average of the high and low
price for shares of Common Stock as reported on the NYSE for the date of grant. |
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities |
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Unexercised |
|
Value of Unexercised |
|
|
Shares |
|
Value |
|
Options/SARs |
|
In-the-Money Options/SARs |
|
|
Acquired on |
|
Realized |
|
at Fiscal Year-End (#) |
|
at Fiscal Year-End ($) (2) |
Name |
|
Exercise (#) |
|
($) |
|
Exercisable |
|
Unexercisable |
|
Exercisable |
|
Unexercisable |
Steven R. Rowley |
|
|
|
|
|
|
|
|
|
|
371,130 |
|
|
|
82,334 |
|
|
$ |
18,962,835 |
|
|
$ |
3,391,176 |
|
David B. Powers |
|
|
|
|
|
|
|
|
|
|
19,902 |
|
|
|
16,269 |
|
|
$ |
972,416 |
|
|
$ |
669,557 |
|
Arthur R. Zunker, Jr. |
|
|
40,804 |
|
|
$ |
1,822,946 |
|
|
|
18,914 |
|
|
|
30,001 |
|
|
$ |
741,532 |
|
|
$ |
1,323,652 |
|
James H. Graass |
|
|
|
|
|
|
|
|
|
|
283,185 |
|
|
|
75,706 |
|
|
$ |
15,072,218 |
|
|
$ |
3,759,321 |
|
Gerald J. Essl |
|
|
|
|
|
|
|
|
|
|
56,819 |
|
|
|
32,923 |
|
|
$ |
2,682,452 |
|
|
$ |
1,424,233 |
|
|
|
|
(1) |
|
Amounts set forth in the table reflect the number and value of options only. The
Company has issued no SARs. The exercisable/unexercisable amounts in this table take into
account vesting determinations confirmed by the compensation committee of the board of
directors after March 31, 2006 as such determinations related to the attainment of
performance criteria relating to our fiscal year ended March 31, 2006. |
|
(2) |
|
Represents the difference between the closing price of Common Stock on the NYSE for
March 31, 2006 of $63.76 per share and the exercise price of such options. |
Report of Compensation Committee on Executive Compensation
Under its charter, the compensation committee (the Committee) assists the board in
discharging its responsibilities relating to the compensation of our Chief Executive Officer
(CEO) and the other senior executive officers who are required to make disclosures under Section
16 of the Securities Exchange Act of 1934, as amended (such other officers, our Senior Executive
Officers). In particular, the Committee is charged with the responsibility to: (i) annually
review and approve corporate goals and objectives relevant to the compensation of our CEO, evaluate
his performance as measured against such goals and objectives and to set the salary and other cash
and equity compensation for our CEO based on such evaluation; and (ii) review and approve the
compensation of our Senior Executive Officers. See Board
Committees Compensation Committee
above. The Committee also administers our Incentive Plan and is authorized under that plan to
grant cash awards (including annual bonuses) and equity awards (including options and restricted
stock) to officers and other key employees and those of our subsidiaries. The Committee is also
authorized under the Incentive Plan to grant equity awards (including options and restricted stock)
to our non-employee directors. The Committee is comprised of three independent directors. The
Committees charter may be found at www.eaglematerials.com. This report describes the policies and
principles that shape the structure of our executive compensation program.
Our executive compensation program is structured to achieve the following objectives:
|
|
|
to attract, retain and motivate highly qualified, energetic and talented executives; |
|
|
|
|
to create an incentive to increase stockholder returns by establishing a direct and
substantial link between individual compensation and certain financial and operational
measures that have a direct effect on stockholder values; and |
|
|
|
|
to create substantial long-term compensation opportunities for individual executive
officers based on long-term corporate performance. |
14
To achieve its compensation objectives for fiscal 2006, the executive compensation program
used a combination of short-term and long-term elements: (i) annual salary, (ii) annual incentive
bonus and (iii) long-term incentive compensation in the form of stock options and restricted stock
units (RSUs). In addition, our Senior Executive Officers are eligible to receive other benefits,
such as medical benefits and profit sharing plan contributions, that are generally available to our
other employees, and contributions under our Supplemental Executive Retirement Plan (SERP) that
are accrued for the Senior Executive Officers and certain other officers of the Company and its
subsidiaries.
In structuring the specific components of executive compensation, the Committee was guided by
the following principles:
|
|
|
overall annual compensation over the applicable business cycle should be targeted to
be above the median for similar positions with similarly-sized companies that engage in
one or more of the businesses in which we engage, although in any particular fiscal
year overall compensation for a position could be more or less than the median; |
|
|
|
|
a significant portion of the executives compensation
should be at risk that is,
dependent upon the individuals performance and our financial performance; |
|
|
|
|
The executives annual incentive bonus should be structured to drive the achievement
of operational, strategic or financial objectives during the fiscal year; and |
|
|
|
|
a significant portion of compensation should be in the form of long-term incentive
compensation that creates rewards for long-term sustained corporate performance and the
achievement of our operational and strategic objectives. |
The Committee begins the annual process of establishing compensation for the CEO and the
Senior Executive Officers by engaging a compensation consultant to conduct a compensation survey of
similarly sized companies in similar industries. Based in part on these surveys, the Committee
establishes the target level of overall compensation for each position. This target is generally
set to be within a reasonable range of the median level of the surveyed companies. In addition,
the Committee uses this survey to guide it in establishing the components of executive
compensation: salaries, annual incentive bonus opportunity and long term compensation award.
Base Salary
At the time the base salaries for fiscal 2006 for the CEO and other Senior Executive Officers
were established, the Committee was responsible for reviewing and approving the base salary level
for the CEO and recommending to the board the base salary level for the Senior Executive Officers
(during fiscal 2006 the Committees charter was amended to provide that the Committee was
responsible for reviewing and approving the compensation of both the CEO and the Senior Executive
Officers). In keeping with its philosophy that a significant portion of the executives
compensation be at risk, for fiscal 2006 the Committee set the base salary level for the CEO and
recommended that the Board approve the base salary levels for the Senior Executive Officers at or
below the median salary of the companies reviewed in the compensation survey.
Annual Incentive Bonus
The Committee is also responsible for approving the annual incentive bonus for the CEO and, in
consultation with the CEO, approving the annual incentive bonuses for the Senior Executive
Officers. The Eagle Materials Inc. Annual Salaried Incentive Compensation Program for fiscal 2006
was structured to create financial incentives and rewards for executive officers that are directly
related to corporate performance during the fiscal year and the achievement by the executive of
certain goals and objectives set at the beginning of the fiscal year. Under this program, a
percentage of consolidated earnings before interest and taxes (EBIT) is designated as a pool for
bonuses, with each participating executive being assigned a percentage of such pool. For fiscal
2006, 1.2% of EBIT was allocated for annual incentive bonuses for executives. At the end of the
fiscal year, the pool is divided, and bonuses are paid among the executives participating in the
program in accordance with such percentages, subject to reduction based on the executives
individual performance relative to his/her goals and objectives. The amount of the bonus paid to
an executive is based on the level of our EBIT, the percentage of the pool designated for such
executive and an assessment of such executives performance. For fiscal 2006, Messrs. Rowley,
Zunker and Graass were participants in the Eagle Materials Inc. Annual Salaried Incentive
Compensation Program.
15
During fiscal 2006, Mr. Essl and Mr. Powers participated in the annual incentive compensation
program established for their operating divisions. Under these programs a percentage of the
division operating earnings is allocated to the bonus pool with each participating employee
assigned a percentage of the pool representing the maximum bonus opportunity. At the end of the
fiscal year, bonuses are paid among participating employees in accordance with such percentage,
subject to reduction based on the employees individual performance relative to his or her
previously established goals and objectives.
The Committee believes these programs are consistent with the Companys compensation
philosophy in that they place a significant portion of the executives compensation at risk. In
these instances a significant portion of the executives total compensation is dependent upon the
performance of the Company (or its operating divisions) and the individuals performance. Under
this structure, the individual executives annual incentive bonus compensation will exceed a median
level when the operating earnings of the Company (or its operating divisions) are high and the
individual achieves a significant part of his or her goals and objectives.
Long-term Compensation
Consistent with the Committees philosophy of linking compensation to the Companys
performance, our equity compensation program has been structured to link the vesting of equity
awards to the achievement by the Company of specific performance levels. During fiscal 2006, the
Committee granted stock options and RSUs to the CEO and to all of the Senior Executive Officers.
The level of stock options and RSUs granted to each such senior executive was based on the
compensation survey mentioned above and was targeted to be within a reasonable range of the median
level of long-term compensation for such position. Fifty percent (50%) of the value of such awards
was in the form of RSUs with the other fifty percent (50%) in the form of stock options. The
assumed value of the stock options was based on a Black-Scholes valuation while the RSUs were
valued by reference to the closing stock price on the date of grant. The Committee makes its
grants to the named executive officers once a year, typically at the Committee meeting that occurs
in the early part of the fiscal year which is customarily held in May.
For fiscal 2006, the Committee decided to make awards of RSUs and stock options vest based on
three different operating and financial performance criteria. The RSUs and stock options awarded
to each of the Senior Executive Officers vest based on the attainment of goals related to EBIT (45%
of the award), operational criteria (such as average line speeds in our wallboard plants, average
clinker production rate in our cement plants, and safety performance) (45% of the award), and
balance sheet improvement (maintaining a target net debt-to-capitalization ratio) (10% of the
award). The awards tied to EBIT could vest during a three-year period after the grant, and the
awards tied to operational excellence and balance sheet improvement could vest during a one-year
period after the grant. Any RSU and stock option awards not vested after the three-year or
one-year period, as applicable, will be forfeited. These differing vesting criteria provide a
strong incentive to award recipients to focus on promoting both operational excellence and
financial performance. The Committee believes that these awards properly align the interests of
our executives with the interests of our stockholders by linking their long-term compensation with
goals that are directly relevant to stockholder value. In order for these stock options and RSUs
to fully vest, the Company must achieve a superior three-year average EBIT and must meet stringent
operational performance goals and improve the Companys balance sheet during fiscal 2006. Except
for certain options granted to certain employees at the time of hire, almost all of the options and
all of the RSUs granted by the Company to its officers and key employees have been granted under
performance oriented programs. For a discussion of the vesting of the RSU awards and stock option
grants made in fiscal year 2006, please refer to footnote 3 under Executive Compensation
Compensation Tables Summary Compensation Table on page 12 of this proxy statement and to
footnote 2 under Executive Compensation Compensation Tables Option/SAR Grants in Last Fiscal
Year on pages 13 and 14 of this proxy statement.
All of the named executives participated in the Companys long-term incentive compensation
program.
SERP
In fiscal year 1995, the board approved the SERP for certain employees participating in the
profit sharing plan. Pursuant to the Internal Revenue Code, the Internal Revenue Service sets a
limit (currently $220,000) on the amount of annual compensation that may be considered in
determining, for the account of an eligible participant, our contribution to the profit sharing
plan. The SERP was established to eliminate the adverse treatment that higher-salaried employees
receive under such rule by funding balances for each participant in an amount equal to the
additional contribution that he or she would have received under the profit sharing plan had 100%
of his or her annual salary been eligible for a profit sharing contribution. Contributions accrued
under the SERP for the benefit of the named executive officers vest under the same
16
terms and conditions as the profit sharing plan. Bonuses paid to participants are not
included in making calculations for contributions made or accrued to recipients accounts under
either the profit sharing plan or the SERP.
Limitations on Tax Deductibility of Compensation
Section 162(m) of the Internal Revenue Code generally disallows a tax deduction for public
corporations for compensation over $1,000,000 paid in any fiscal year to the corporations chief
executive officer and four other most highly compensated executive officers. However, this law
exempts performance-based compensation from the deduction limit if certain requirements are met.
Awards of annual incentive compensation pursuant to the Eagle Materials Inc. Annual Salaried
Incentive Compensation Program and long-term incentive compensation are made to the CEO and certain
Senior Executive Officers under Eagles Incentive Plan, a compensation plan that has been approved
by the Committee and by our stockholders and otherwise meets the other performance-based criteria
under Section 162(m). Accordingly, such awards are exempt from the limit described above. All
other compensation paid to the CEO and the other Senior Executive Officers was below the limit
described above. The Committee will take appropriate action in the future as it determines to be
advisable to minimize any future impacts of this limitation on the Company.
CEO Compensation
General. The Committee established Mr. Rowleys salary for fiscal 2006 in May of
2005. The level of Mr. Rowleys base salary was based on a compensation survey of similarly sized
companies in similar industries and was targeted to be at or below the median of the base salaries
of chief executive officers of comparably sized companies in similar industries. In addition, the
Committee considered the Companys operating performance and Mr. Rowleys individual performance as
Chief Executive Officer during fiscal 2005.
Annual Salaried Incentive Compensation Program. Like the other executives, Mr.
Rowley participates in the Eagle Materials Inc. Annual Salaried Incentive Compensation Program.
Mr. Rowleys annual salary incentive bonus payment for fiscal 2006 was based on Mr. Rowleys
participation percentage in the corporate pool (40%), the level of our EBIT for fiscal 2006 and Mr.
Rowleys performance relative to the objective and subjective goals approved by the Committee at
the beginning of the fiscal year. The Committee believes Mr. Rowley largely achieved these goals
and objectives. In particular, the Committee considered the following factors (among others) in
assessing Mr. Rowleys performance over the past fiscal year: (i) Mr. Rowleys leadership in
guiding the Company to excellent operational and financial performance; (ii) the continuation of
the implementation of the Companys strategic expansion strategy as evidenced by: (a) the
completion of a cement storage dome at the Companys Illinois Cement plant, (b) the successful
on-time, ahead-of-budget construction of a majority of the expansion of production capacity at the
Companys Illinois Cement plant, (c) the commencement of construction of a new synthetic gypsum
wallboard plant in South Carolina, and (d) the development of the major capital projects relating
to the expansion and modernization of the Companys Mountain Cement and Nevada Cement plants; (iii)
the successful communication of the Companys long-term goals and opportunities to the Companys
stockholders and the investment community, and (iv) the continued development of a solid team and
organizational structure at the Company.
Long-Term Compensation. In fiscal 2006, Mr. Rowley received the same type of
equity awards as the Senior Executive Officers and other officers. The level of awards for Mr.
Rowley was based in part on the compensation survey described above and was targeted to be within a
reasonable range of the median level of long term compensation for CEOs at similarly sized
companies in similar industries. The method of the valuation of the awards was the same as that
used for Senior Executive Officers and other officers.
Compensation Committee
F. William Barnett, Chairman
Robert L. Clarke
Frank W. Maresh
Compensation Committee Interlocks and Insider Participation
None.
17
Performance Graph
The following graph compares the yearly change in the cumulative total stockholder return on
the Companys Common Stock during the five fiscal years ended March 31, 2006 with the Russell 2000
Index, which is a regularly published small-cap index, and the Dow Jones Building Materials and
Fixtures Index (the DJ Building Materials Index), which is a regularly published construction
products industry index. The comparison assumes (i) $100 was invested on March 31, 2001 in each of
the Companys Common Stock, the Russell 2000 Index and the DJ Building Materials Index, and (ii)
the reinvestment of all dividends.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Total Return |
|
|
|
2001 |
|
|
2002 |
|
|
2003 |
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
Eagle Materials Inc. |
|
$ |
100 |
|
|
$ |
142 |
|
|
$ |
130 |
|
|
$ |
236 |
|
|
$ |
330 |
|
|
$ |
789 |
|
|
|
|
Russell 2000 Index |
|
$ |
100 |
|
|
$ |
114 |
|
|
$ |
83 |
|
|
$ |
136 |
|
|
$ |
144 |
|
|
$ |
181 |
|
|
|
|
Dow Jones
Building Materials
& Fixtures Index |
|
$ |
100 |
|
|
$ |
116 |
|
|
$ |
83 |
|
|
$ |
139 |
|
|
$ |
173 |
|
|
$ |
212 |
|
COMPARATIVE CUMULATIVE TOTAL RETURN
18
STOCK OWNERSHIP
Management
We encourage stock ownership by our directors, officers and employees to align their interests
with your interests as stockholders. The following table shows the beneficial ownership of our
Common Stock, as of the record date for the annual meeting by: (a) each director (and each nominee
for election to the board of directors), (b) each of the named executive officers in the Summary
Compensation Table under Executive Compensation on page 12 and (c) by all directors, nominees and
executive officers of the Company as a group (13 persons). Except as otherwise indicated, all
shares are owned directly, and the owner of such shares has the sole voting and investment power
with respect thereto.
Amount and Nature of Beneficial Ownership (1)
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
Shares |
|
Percentage of |
|
|
Beneficially |
|
Common |
|
|
Owned (2) |
|
Stock |
F. William Barnett |
|
|
24,387 |
|
|
|
* |
|
Robert L. Clarke |
|
|
94,226 |
|
|
|
* |
|
O.G. Dagnan |
|
|
60,474 |
|
|
|
* |
|
Gerald J. Essl |
|
|
71,190 |
|
|
|
* |
|
James H. Graass |
|
|
286,664 |
|
|
|
* |
|
Laurence E. Hirsch |
|
|
695,448 |
|
|
|
1.36 |
% |
Frank W. Maresh |
|
|
7,836 |
|
|
|
* |
|
Michael R. Nicolais |
|
|
47,157 |
(3) |
|
|
* |
|
David B. Powers |
|
|
21,443 |
|
|
|
* |
|
David W. Quinn |
|
|
30,174 |
|
|
|
* |
|
Steven R. Rowley |
|
|
450,028 |
(4) |
|
|
* |
|
Arthur R. Zunker, Jr. |
|
|
23,968 |
|
|
|
* |
|
All current directors,
nominees and executive
officers as a group (13
persons) |
|
|
1,815,329 |
|
|
|
3.54 |
% |
|
|
|
|
|
Less than 1% |
|
(1) |
|
For purposes of this table, beneficial ownership is determined in accordance with
Rule 13d-3 under the Exchange Act, pursuant to which a person is deemed to have beneficial
ownership of shares of our stock that the person has the right to acquire within 60 days.
For purposes of computing the percentage of outstanding shares of the Companys stock held
by each person or group of persons named in the table, any shares that such person or
persons have the right to acquire within 60 days are deemed to be outstanding, but are not
deemed to be outstanding for the purpose of computing the percentage ownership of any other
persons. |
|
(2) |
|
Amounts include the following shares of Common Stock that may be acquired upon exercise
of stock options: Mr. Barnett 24,387 shares; Mr. Clarke 68,972 shares; Mr. Dagnan
11,913 shares; Mr. Essl 56,819 shares; Mr. Graass 283,185 shares; Mr. Hirsch 22,485
shares; Mr. Maresh 7,836 shares; Mr. Nicolais 37,403 shares; Mr. Powers 19,902
shares; Mr. Rowley 371,130 shares; Mr. Quinn 11,913 shares; Mr. Zunker 18,914 shares;
and all directors and executive officers of the Company as a group (13 persons) 936,490
shares. In addition, this table includes shares of Common Stock that are held for the
account of participants as of June 2, 2006, pursuant to the common stock fund of the
Companys profit sharing and retirement plans, as follows: Mr. Rowley 3,898 shares; Mr.
Graass 347 shares; and all directors, nominees and executive officers of the Company as a
group (13 persons) 4,379 shares. These amounts do not include the following number of
RSUs granted to the non-employee directors during fiscal 2006 (including dividend
equivalent units): Mr. Barnett 2,373 RSUs; Mr. Clarke 2,373 RSUs; Mr. Dagnan 2,156
RSUs; Mr. Hirsch 2,878 RSUs; Mr. Maresh 971 RSUs; Mr. Nicolais 971 RSUs; and Mr. Quinn
2,156 RSUs. Additionally, these amounts do not include the following number of RSUs
granted to the non-employee directors during fiscal 2005 (including dividend equivalent
units): Mr. Barnett 2,908 RSUs; Mr. Clarke 2,908 RSUs; Mr. Dagnan 1,453 RSUs; Mr.
Hirsch 4,069 RSUs; Mr. Maresh 1,453 RSUs; Mr. Nicolais 1,453 RSUs; and Mr. Quinn
1,453 RSUs. |
|
(3) |
|
Includes 1,366 shares of Common Stock owned by Mr. Nicolais wife; does not include
1,110 shares of Common Stock in trust for their two children (555 shares each child), of
which shares Mr. Nicolais has disclaimed beneficial ownership. Mr. Nicolais wife is
trustee of the trust. |
19
|
|
|
(4) |
|
Includes 45,000 shares of Common Stock issued to Mr. Rowley on September 18, 2003
pursuant to a restricted stock award. |
Certain Beneficial Owners
The following table sets forth information as of June 2, 2006 regarding the only persons we
know of that beneficially own more than five percent of our Common Stock:
|
|
|
|
|
|
|
|
|
Name and Address |
|
Number of Shares |
|
Percentage of |
of Beneficial Owner |
|
Beneficially Owned |
|
Common Stock |
Baron Capital Group Inc. (1)
767 Fifth Avenue,
New York, NY 10153 |
|
|
3,108,000 |
|
|
|
6.17 |
% |
|
|
|
Atticus Management LLC (2)
152 West 57th St., 45th Floor,
New York, NY 10019 |
|
|
2,921,100 |
|
|
|
5.80 |
% |
|
|
|
AXA Assurances I.A.R.D. Mutuelle (3)
26, rue Drouot
75009 Paris, France |
|
|
2,097,399 |
|
|
|
4.16 |
% |
|
|
|
FMR Corp (4)
82 Devonshire Street,
Boston, MA 02109 |
|
|
2,069,478 |
|
|
|
4.11 |
% |
|
|
|
Wellington Management Company, LLP (5)
75 State Street,
Boston, MA 02109 |
|
|
1,854,969 |
|
|
|
3.68 |
% |
|
|
|
Carlson Capital, L.P. (6)
2100 McKinney Avenue, Suite 1600
Dallas, TX 75201 |
|
|
1,786,995 |
|
|
|
3.55 |
% |
|
|
|
Massachusetts Financial Services Company (7)
500 Boylston Street,
Boston MA 02116 |
|
|
1,611,900 |
|
|
|
3.20 |
% |
|
|
|
The Vanguard Group, Inc. (8)
100 Vanguard Blvd.,
Malvern, PA 19355 |
|
|
1,543,239 |
|
|
|
3.06 |
% |
|
|
|
Batterymarch Financial Management, Inc. (9)
200 Clarendon Street,
Boston, MA 02116 |
|
|
1,473,408 |
|
|
|
2.92 |
% |
|
|
|
Systematic Financial Management, L.P. (10)
200 Clarendon Street,
Boston, MA 02116 |
|
|
1,162,695 |
|
|
|
2.31 |
% |
|
|
|
Barclays Global Investors, N.A. (11)
45 Fremont Street,
San Francisco, CA 94105 |
|
|
1,024,629 |
|
|
|
2.03 |
% |
|
|
|
(1) |
|
Based solely on the information contained in the Schedule 13G/A of Baron Capital Group
Inc. filed with the SEC on February 13, 2006, with respect to shares of Common Stock owned
as of December 31, 2005 and after giving effect to the April 11, 2006 transaction described
on page 3 of this proxy statement (the Recombination), but calculating the percentage
shown by dividing the number of such shares by the total number of shares of Common Stock
issued and outstanding on the record date. According to the Schedule 13G/A, Baron Capital
Group Inc. had shared power to vote or to direct the vote of 3,033,000 shares of Common
Stock and shared dispositive power over all of 3,108,000 shares. |
20
|
|
|
(2) |
|
Based solely on the information contained in the Schedule 13G/A of Atticus Management
LLC filed with the SEC on February 14, 2006, with respect to shares of Common Stock owned
as of December 31, 2005 and after giving effect to the Recombination, but calculating the
percentage shown by dividing the number of such shares by the total number of shares of
Common Stock issued and outstanding on the record date. According to the Schedule 13G/A,
Atticus Management LLC had sole power to vote or to direct the vote of 2,921,100 shares of
Common Stock and sole dispositive power over all of 2,921,100 shares. |
|
(3) |
|
Based solely on the information contained in the Schedule 13G of AXA Assurances
I.A.R.D. Mutuelle filed with the SEC on February 14, 2006, with respect to shares of Common
Stock owned as of December 31, 2005 and after giving effect to the Recombination, but
calculating the percentage shown by dividing the number of such shares by the total number
of shares of Common Stock issued and outstanding on the record date. According to the
Schedule 13G, AXA Assurances I.A.R.D. Mutuelle had sole power to vote or to direct the vote
of 1,059,801 shares of Common Stock and sole dispositive power over all of 2,097,399 shares |
|
(4) |
|
Based solely on the information contained in the Schedule 13G of FMR Corp. filed with
the SEC on May 10, 2006, with respect to shares of Common Stock owned as of April 30, 2006,
but calculating the percentage shown by dividing the number of such shares by the total
number of shares of Common Stock issued and outstanding on the record date. According to
the Schedule 13, FMR Corp. had sole power to vote or to direct the vote of 96,300 shares of
Common Stock and sole dispositive power over all of 2,069,478 shares. |
|
(5) |
|
Based solely on the information contained in the Schedule 13G/A of Wellington
Management Company, LLP filed with the SEC on February 14, 2006, with respect to shares of
Common Stock owned as of December 31, 2005 and after giving effect to the Recombination,
but calculating the percentage shown by dividing the number of such shares by the total
number of shares of Common Stock issued and outstanding on the record date. According to
the Schedule 13G/A, Wellington Management Company had shared power to vote or to direct the
vote of 1,609,719 shares of Common Stock and shared dispositive power over all of 1,840,569
shares. |
|
(6) |
|
Based solely on the information contained in the Schedule 13G of Carlson Capital, L.P.
filed with the SEC on February 14, 2006, with respect to shares of Common Stock owned as of
December 31, 2005 and after giving effect to the Recombination, but calculating the
percentage shown by dividing the number of such shares by the total number of shares of
Common Stock issued and outstanding on the record date. According to the Schedule 13G,
Carlson Capital, L.P. had sole power to vote or to direct the vote of 1,786,995 shares of
Common Stock and sole dispositive power over all of 1,786,995 shares. |
|
(7) |
|
Based solely on the information contained in the Schedule 13G of Massachusetts
Financial Services Company filed with the SEC on February 8, 2005, with respect to shares
of Common Stock owned as of December 31, 2004 and after giving effect to the Recombination,
but calculating the percentage shown by dividing the number of such shares by the total
number of shares of Common Stock issued and outstanding on the record date. According to
the Schedule 13G, Massachusetts Financial Services Company had sole power to vote or to
direct the vote of 1,611,900 shares of Common Stock and sole dispositive power over all of
1,611,900 shares. |
|
(8) |
|
Based solely on the information contained in the Schedule 13G of The Vanguard Group,
Inc. filed with the SEC on February 13, 2006, with respect to shares of Common Stock owned
as of December 31, 2005 and after giving effect to the Recombination, but calculating the
percentage shown by dividing the number of such shares by the total number of shares of
Common Stock issued and outstanding on the record date. According to the Schedule 13G, The
Vanguard Group, Inc. had sole power to vote or to direct the vote of 43,320 shares of
Common Stock and sole dispositive power over all of 1,543,239 shares. |
|
(9) |
|
Based solely on the information contained in the Schedule 13G of Batterymarch Financial
Management, Inc. filed with the SEC on February 15, 2006, with respect to shares of Common
Stock owned as of December 31, 2005 and after giving effect to the Recombination, but
calculating the percentage shown by dividing the number of such shares by the total number
of shares of Common Stock issued and outstanding on the record date. According to the
Schedule 13G, Batterymarch Financial Management, Inc. had shared power to vote or to direct
the vote of 1,473,408 shares of Common Stock and shared dispositive power over all of
1,473,408 shares. |
|
(10) |
|
Based solely on the information contained in the Schedule 13G/A of Systematic Financial
Management, L.P. filed with the SEC on February 14, 2006, with respect to shares of Common
Stock owned as of December 31, 2005 and after giving effect to the Recombination, but
calculating the percentage shown by dividing the number of such |
21
|
|
|
|
|
shares by the total number of shares of Common Stock issued and outstanding on the record
date. According to the Schedule 13G/A, Systematic Financial Management, L.P. had sole power
to vote or to direct the vote of 928,245 shares of Common Stock and sole dispositive power
over all of 1,162,695 shares. |
|
(11) |
|
Based solely on the information contained in the Schedule 13G of Barclays Global
Investors, N.A. filed with the SEC on January 26, 2006, with respect to shares of Common
Stock owned as of December 31, 2005 and after giving effect to the Recombination, but
calculating the percentage shown by dividing the number of such shares by the total number
of shares of Common Stock issued and outstanding on the record date. According to the
Schedule 13G, Barclays Global Investors, N.A. had sole power to vote or to direct the vote
of 854,529 shares of Common Stock and sole dispositive power over all of 1,024,629 shares. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Companys directors and executive officers, and
persons who beneficially own more than 10% of a registered class of the Companys equity
securities, to file initial reports of ownership, reports of changes in ownership and annual
reports of ownership with the SEC and the NYSE. These persons are required by SEC regulations to
furnish the Company with copies of all Section 16 forms that they file with the SEC.
Based solely on our review of the copies of such forms we received with respect to fiscal 2006
or written representations from certain reporting persons, the Company believes that its directors
and executive officers, and persons who beneficially own more than 10% of a registered class of the
Companys equity securities, have complied with all filing requirements of Section 16(a) for fiscal
2006 applicable to such persons.
Code of Conduct
The Company has adopted a code of conduct, called Eagle Ethics, that applies to all of the
Companys employees, including the Companys officers. Eagle Ethics also applies to the board of
directors. The Companys code of conduct is designed to deter wrongdoing and to promote:
|
|
|
honest and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional relationships; |
|
|
|
|
compliance with applicable governmental laws, rules and regulations; |
|
|
|
|
the prompt internal reporting of violations of the code of conduct to an appropriate
person or persons identified in the code of conduct; and |
|
|
|
|
accountability for adherence to the code of conduct. |
All of the Companys employees and directors are required to certify to the Company, on an
annual basis, that they have complied with the Companys code of conduct without exception or, if
they have not so complied, to list the exceptions.
The Company has posted the text of its code of conduct on its Internet website at
www.eaglematerials.com (click on Investor Relations, then on Corporate Governance, then on
Code of Ethics and then on Eagle Ethics). Additionally, the Company will provide without
charge a copy of the code of conduct to any person upon written request to our Secretary at our
principal executive office.
CERTAIN TRANSACTIONS
In connection with the Spin-off, the Company entered into an administrative services agreement
with Centex. Under the terms of this agreement, Centex Service Company (CSC), a subsidiary of
Centex, provided the Company with employee benefits administration, legal, public/investor
relations and certain other services. The terms of this agreement ended on December 31, 2005. For
fiscal year 2006, the payment by the Company to CSC for services rendered under this agreement was
$269,110. Laurence E. Hirsch and Timothy R. Eller, who are present or former directors of the
Company, were directors and executive officers of CSC at the time the administrative services
agreement was entered into with Centex.
22
For additional information regarding the foregoing agreements and transactions, we refer you
to the Companys definitive proxy material on Schedule 14A, filed with SEC on December 1, 2003.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP (Ernst & Young) audited the Companys financial statements for the fiscal
years ended March 31, 2004, 2005 and 2006.
Ernst & Young reports directly to our audit committee. The audit committee has adopted
policies and procedures for pre-approving all audit and permissible non-audit services performed by
Ernst & Young. Under these policies, the audit committee pre-approves the use of audit and
specific permissible audit-related and non-audit services up to certain dollar limits. Other audit
and permissible non-audit services that exceed a $50,000 threshold must be pre-approved separately
by the audit committee, or, for such services that do not exceed $50,000, by a member of the audit
committee. Any such member must report the pre-approval at the next audit committee meeting. In
determining whether or not to pre-approve services, the audit committee determines whether the
service is a permissible service under the SECs rules, and, if permissible, the potential effect
of such services on the independence of Ernst & Young.
The following table sets forth the various fees for services provided to the Company by Ernst
& Young in the fiscal years ended March 31, 2006 and 2005, all of which services have been approved
by the audit committee:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year |
|
Audit Fees (1) |
|
Audit Related Fees |
|
Tax Fees |
|
All Other Fees |
|
Total |
2006 |
|
$ |
589,000 |
|
|
$ |
122,900 |
(2) |
|
|
|
|
|
|
|
|
|
$ |
711,900 |
|
2005 |
|
$ |
755,265 |
|
|
$ |
95,000 |
(3) |
|
|
|
|
|
|
|
|
|
$ |
850,265 |
|
|
|
|
(1) |
|
Includes fees for the annual audit and quarterly reviews, accounting and financial
reporting consultations regarding generally accepted accounting principles. |
|
(2) |
|
Includes fees for benefit plan audits and consent for proxy statement for special
stockholders meeting. |
|
(3) |
|
Includes fees for benefit plan audits. |
23
AUDIT COMMITTEE REPORT
To the Board of Directors of Eagle Materials Inc.:
We have reviewed and discussed with management Eagle Materials Inc.s audited financial
statements as of and for the fiscal year ended March 31, 2006.
We have discussed with the independent auditors the matters required to be discussed by
Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended by
Statement on Auditing Standards No. 90, Audit Committee Communications, by the Auditing Standards
Board of the American Institute of Certified Public Accountants.
We have received and reviewed the written disclosures and the letter from the independent
auditors required by Independence Standards Board Standard No. 1, Independence Discussions with
Audit Committees, as amended by the Independence Standards Board, and have discussed with the
auditors the auditors independence. We have also considered whether the auditors provision of
non-audit services to Eagle Materials Inc. and its affiliates is compatible with the auditors
independence.
Based on the reviews and discussions referred to above, we recommend to the Board of Directors
that the financial statements referred to above be included in Eagle Materials Inc.s Annual Report
on Form 10-K for the year ended March 31, 2006.
Audit Committee
Robert L. Clarke, Chairman
Frank W. Maresh
Michael R. Nicolais
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Ernst & Young acted as our independent auditors to audit our books and records for fiscal year
2006, and the audit committee has appointed Ernst & Young as our independent auditors for fiscal
year 2007, subject to ratification by our stockholders.
We believe ratification of this appointment is good corporate practice because the audit of
our books and records is a matter of importance to our stockholders. If our stockholders do not
ratify the appointment, our audit committee will reconsider whether or not to retain Ernst & Young,
but still may elect to retain them. Even if the appointment is ratified, the audit committee, in
its discretion, may change the appointment at any time during the year if it determines that such a
change would be in our best interests and the best interests of our stockholders.
Representatives of Ernst & Young are expected to be present for the annual meeting, with the
opportunity to make a statement if they choose to do so, and will be available to respond to
appropriate questions from our stockholders.
Recommendation of the Board
Our board unanimously recommends a vote for the ratification of the appointment by our board
of directors of Ernst & Young as the Companys auditors for fiscal year ended March 31, 2007.
OTHER MATTERS WHICH MAY BE PRESENTED FOR ACTION AT THE MEETING
Our board of directors does not intend to present for action at this annual meeting any matter
other than those specifically set forth in the Notice of Annual Meeting of Stockholders. If any
other matter is properly presented for action at the meeting, it is the intention of persons named
in the proxy to vote thereon in accordance with their judgment pursuant to the discretionary
authority conferred by the proxy.
24
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Next years annual meeting of stockholders is scheduled to be held on July 26, 2007. In order
to be considered for inclusion in the Companys proxy material for that meeting, stockholder
proposals must be received at our executive offices, addressed to the attention of the Secretary,
not later than February 20, 2007.
For any proposal that is not submitted for inclusion in our proxy material for the 2007 annual
meeting of stockholders but is instead sought to be presented directly at that meeting, Rule
14a-4(c) under the Securities Exchange Act of 1934 permits the Companys management to exercise
discretionary voting authority under proxies it solicits unless the Company is notified about the
proposal on or before April 27, 2007, and the stockholder satisfies the other requirements of Rule
14a-4(c). Our Bylaws provide that, to be considered at the 2007 annual meeting, a stockholder
proposal must be submitted in writing and received by our Secretary at the executive offices of the
Company during the period beginning on January 26, 2007 and ending April 27, 2007, and must contain
the information specified by and otherwise comply with our Bylaws. Any stockholder wishing to
receive a copy of our Bylaws should direct a written request to our Secretary at the Companys
principal executive office.
FORM 10-K
Stockholders entitled to vote at the meeting may obtain a copy of the Companys Annual Report
on Form 10-K for the fiscal year ended March 31, 2006, including the financial statements required
to be filed with the SEC, without charge, upon written or oral request to Eagle Materials Inc.,
Attention: James H. Graass, Secretary, 3811 Turtle Creek Blvd., Suite 1100, Dallas, Texas
75219-4487, (214) 432-2000.
|
|
|
|
|
By Order of the Board of Directors |
|
|
|
|
|
JAMES H. GRAASS |
|
|
Executive Vice President, |
|
|
General Counsel and Secretary |
|
|
|
Dallas, Texas |
|
|
June 21, 2006 |
|
|
25
|
|
|
|
|
|
|
Please
|
o |
|
|
|
Mark Here |
|
|
|
for Address |
|
|
|
Change or |
|
|
|
Comments |
|
|
|
SEE REVERSE SIDE |
|
The Board of Directors recommends that you vote FOR the election of the nominees in Item 1 and
FOR the Proposal in Item 2.
|
|
|
|
|
|
|
|
|
|
|
|
|
1. |
|
Election of
Directors
listed below. |
|
FOR all nominees |
|
WITHHOLD AUTHORITY |
|
|
|
|
listed below |
|
to vote for all |
|
|
|
|
(except as marked |
|
nominees listed |
|
|
|
|
to the contrary) |
|
below |
|
|
|
|
|
|
o |
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write the nominees name in the space provided below.)
01 F. William Barnett, 02 O.G. Dagnan and 03 David W. Quinn
THIS
PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED AT
THE ANNUAL MEETING.
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN |
2.
|
|
Ratify the appointment of Ernst & Young LLP as independent auditors for fiscal year 2007. |
|
o |
|
o |
|
o |
|
|
|
|
|
|
|
|
|
3.
|
|
In their discretion, on
such other business as may properly be brought before the meeting or any adjournment thereof.
|
|
|
|
|
|
|
|
|
|
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2 and, at the discretion of the named
proxies, upon such other business as may properly be brought before the meeting or any adjournment thereof. By executing this proxy, the undersigned hereby revokes prior
proxies relating to the meeting. |
|
|
|
|
|
|
|
|
|
Dated: |
|
, 2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature |
|
|
|
|
|
|
|
|
|
|
Signature |
|
|
|
|
|
|
|
|
|
|
NOTE: please sign as name appears
hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title. |
5 FOLD AND DETACH HERE 5
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM 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/exp
|
|
|
|
|
|
1-866-540-5760
|
|
|
|
|
|
Mark, sign and date |
|
|
Use the internet to vote your proxy.
Have your proxy card in hand when you access the web site.
|
|
|
OR
|
|
|
Use any touch-tone telephone to
vote your proxy. Have your proxy card in hand when you call.
|
|
|
OR
|
|
|
your proxy card
and 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.
|
|
|
|
|
EAGLE MATERIALS INC. |
|
|
|
|
|
COMMON STOCK |
|
|
|
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
|
|
|
|
Annual Meeting of stockholders - July 27, 2006 |
|
|
|
|
|
|
The undersigned hereby appoints James H. Graass and Steven R. Rowley (acting unanimously or, if only one be present, by that one alone), and each of them, proxies, with
full power of substitution to each, to vote , as specified on the reverse side, at the Annual Meeting of Stockholders of Eagle Materials Inc. to be held July 27, 2006, or any
adjournment thereof, all shares of Common Stock of Eagle Materials
Inc. registered in the name of the undersigned a the close of
business on June 2, 2006.
|
|
|
|
|
|
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED ON THE BALLOT ON THE REVERSE SIDE, BUT IF NO INSTRUCTIONS ARE
INDICATED, THEN THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2. THE
PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTER REFERRED TO
IN ITEM 3.
|
|
|
|
|
|
|
By execution of this proxy, you hereby
acknowledge receipt herewith of the Notice of Annual Meeting and
Proxy Statement for the July 27, 2006
Annual Meeting. |
|
|
|
READ, EXECUTE AND DATE REVERSE SIDE AND MAIL IN THE ENCLOSED ENVELOPE. |
|
|
|
|
|
|
|
|
|
|
|
Address
Change/Comments (Mark the corresponding box on the
reverse side) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
You can now access your Eagle Materials Inc. account online.
Access your Eagle Materials Inc. stockholder account online via Investor ServiceDirect® (ISD).
Mellon Investor Services LLC, Transfer Agent for Eagle Materials Inc., now makes it easy and convenient to get current
information on your stockholder account.
|
|
|
|
|
|
|
View account status |
|
View payment history for dividends |
|
|
|
|
|
|
|
View certificate history |
|
Make address changes |
|
|
|
|
|
|
|
View book-entry information |
|
Obtain a duplicate 1099 tax form |
|
|
|
|
|
|
|
|
|
Establish/change your PIN |
Visit us on the web at http://www.melloninvestor.com
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
Investor ServiceDirect® is a registered trademark of Mellon Investor Services LLC