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Martin Marietta Sends Letter to Vulcan Shareholders


Martin Marietta Materials is sending a letter to the shareholders of Vulcan Materials Co. along with definitive proxy materials related to Vulcan's 2012 annual meeting, scheduled for June 1, 2012. Martin Marietta is soliciting votes for the four independent director candidates nominated by Martin Marietta to serve on the Vulcan Board of Directors as the class up for election at Vulcan's 2012 annual meeting.

The principal purpose of Martin Marietta's solicitation is to elect directors who will bring “a fresh, independent perspective into the Vulcan Boardroom regarding Martin Marietta's business combination proposal,” according to Martin Marietta Materials.

“We firmly believe that a combination of Martin Marietta and Vulcan makes a great deal of strategic and financial sense,” said Ward Nye, president and chief executive officer of Martin Marietta. “Together we will have greater scale and operational efficiency, increased geographic reach, an outstanding asset base, best-in-class management and a solid platform to grow and create further value for shareholders. Vulcan shareholders deserve the opportunity to have their voices heard on this value-enhancing combination, which offers them an upfront premium, the return of a meaningful dividend and the opportunity to participate, through their approximately 58 percent ownership, in the long-term upside of the combined company. We are confident that our proposal provides significantly more value and less risk to Vulcan shareholders than Vulcan on a standalone basis.”

Following is the first part of a letter being mailed to all Vulcan shareholders with Martin Marietta's definitive proxy statement:

April 26, 2012

Vulcan Shareholders: You Have An Important Decision To Make
Regarding The Future Of Your Investment

Dear Vulcan Shareholder:

I am writing to you with the important news that you will now have the opportunity to bring a fresh perspective to the Board of Directors of YOUR company at Vulcan's upcoming Annual Meeting on June 1.

As you may know, Martin Marietta has commenced a tax-free exchange offer to Vulcan shareholders offering 0.50 of a Martin Marietta share for every Vulcan share. This represents a substantial premium to Vulcan's pre-announcement trading price, provides for an immediate meaningful increase in dividends paid to you and allows Vulcan shareholders the opportunity, through their approximately 58 percent ownership in the combined company, to participate in the long-term value creation of this compelling combination. The proposed combination would create a company with one of the industry's strongest balance sheets (a significant “de-risking” of the current Vulcan balance sheet) and would allow for an immediate restoration of a meaningful quarterly dividend of $0.20 a share, twenty times the penny a share dividend Vulcan is paying now.

Martin Marietta continues to believe that it can achieve $200 to $250 million of annual cost synergies as a result of the combination. With respect to the purported savings programs announced by Vulcan since Dec. 12, 2011, Martin Marietta believes that Vulcan's programs will be far from fully effective, at best, for several years, and not necessarily sustainable, although they may result in some level of cost reductions during this period. Martin Marietta's belief is based on Martin Marietta's understanding of the design and attempted implementation to date of Vulcan's programs and Martin Marietta's experience in implementing its own fully operational management reporting system. Moreover, Martin Marietta believes that Vulcan's senior management lacks demonstrated capability and discipline to be credible to deliver Vulcan's “hope plan” on a standalone basis, leaving Vulcan shareholders exposed to substantial execution risk.

Despite the clear and compelling business logic behind our proposal and the urging of major shareholders, the Vulcan Board has rejected our offer and refuses to even discuss it with us. But you now have an opportunity to communicate your wishes directly to the Vulcan Board. We believe the quickest path for Vulcan shareholders to realize the benefits of a combination is to elect independent directors to the Vulcan Board. To this end, we have commenced a proxy solicitation to elect four new, highly qualified and independent directors who we believe are neither beholden to Vulcan Chairman and CEO Don James nor entrenched in opposing a business combination with Martin Marietta. These four directors, who would constitute a minority of the Vulcan Board if elected, also are independent of Martin Marietta and would owe a fiduciary obligation only to Vulcan and you, the Vulcan shareholders.”