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Why am I receiving these materials?

          This Proxy Statement is being sent to all shareholders of record as of the close of business on March 15, 2004 for delivery beginning April 14, 2004 in connection with the solicitation of proxies by the Board of Directors for use at the Annual Meeting of Shareholders. The meeting will be held at the Company's headquarters, 1200 Urban Center Drive, Birmingham, Alabama on May 14, 2004, at 9:00 a.m. local time.

Who can attend the Annual Meeting?

          Only shareholders of the Company as of the record date, March 15, 2004, their authorized representatives and invited guests of the Company will be able to attend the Annual Meeting.

Who is entitled to vote?

          All holders of record of the Company's Common Stock at the close of business on March 15, 2004 will be entitled to vote at the 2004 Annual Meeting. On the record date there were 102,064,111 shares outstanding. Each share is entitled to one vote on each matter properly brought before the meeting.

How do I vote if I am a registered shareholder?

          Proxies are solicited to give all shareholders who are entitled to vote on the matters that come before the meeting the opportunity to vote their shares whether or not they attend the meeting in person. If you are a registered holder, you can vote your proxy in one of the following manners:

          Choosing to vote via the Internet or calling the toll-free number listed on the proxy card will save the Company expense. Internet and telephone voting information is provided on the proxy card. A control number, located on the upper right of the proxy card, is used to verify your identity when voting via the Internet or by telephone. If you vote via the Internet or by telephone, please do not return a signed proxy card.

          If you choose to vote by mail, mark your proxy card enclosed with the Proxy Statement, date and sign it, and mail it in the postage-paid envelope.

          If you wish to vote in person, you can do so by ballot at the Annual Meeting.

How do I specify how I want my shares voted?

          If you are a registered shareholder, you can specify how you want your shares voted on each proposal by marking the appropriate boxes on the proxy card or indicating your vote on each proposal via the telephone or Internet. Please review the voting instructions on the proxy card and read the entire text of the proposals in this Proxy Statement prior to voting.

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          If your proxy card is signed and returned without specifying a vote or an abstention on a proposal, it will be voted according to the recommendation of the Board of Directors on that proposal. You may also choose to vote in favor of all Board recommendations via the telephone of Internet. The Board's recommendations are shown for each proposal on the proxy card and in this Proxy Statement.

How do I vote if I am a beneficial shareholder?

          If you are a beneficial shareholder, you have the right to direct your broker or nominee on how to vote the shares. You should complete a voting instruction card provided to you by your broker or nominee. If you wish to vote in person at the meeting, you must first obtain from the holder of record a proxy issued in your name.

What items will be voted upon at the Annual Meeting?

          At the Annual Meeting, the following items will be voted upon:

          The Board of Directors of the Company knows of no other matters that may be brought before the meeting. However, if any other matters are properly presented for action, it is the intention of the named proxies to vote on them according to their best judgment.

What are the Board of Directors' voting recommendations?

          For the reasons set forth in more detail later in this Proxy Statement, the Board of Directors recommends a vote FOR the election of each of the director candidates, FOR the approval of the Company's Restricted Stock Plan for Nonemployee Directors, and FOR the ratification of the appointment of Deloitte & Touche LLP as independent auditors for 2004.

How many votes are needed to have the proposals pass?

          A plurality of the votes cast at the meeting is required to elect directors. The affirmative vote of a majority of the votes cast is required for the adoption of the management proposal to approve the Restricted Stock Plan for Nonemployee Directors, and to ratify the appointment of Deloitte & Touche.

How are the votes counted?

          For purposes of determining the number of votes cast with respect to a particular matter, only those cast "For" or "Against" are included. Abstentions and broker non-votes are counted only for purposes of determining whether a quorum is present at the meeting, are not included in the vote totals, and thus will not affect the outcome of the vote.

How can I revoke my Proxy?

          You may revoke your proxy at any time before it is voted at the meeting by taking one of the following three actions: (i) by giving timely written notice of the revocation to the Secretary of the Company; (ii) by executing and delivering a proxy with a later date; (iii) by voting via the telephone or Internet at a later date (in which case only the last vote is counted); or (iv) by voting in person at the meeting.

Who counts the votes?

          Tabulation of proxies and the votes cast at the meeting is conducted by an independent agent and certified to by independent inspectors of election.

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Is my vote confidential?

          All proxies are held in confidence, unless the shareholder writes comments on the proxy and under certain other circumstances.

Who will pay for the costs involved in the solicitation of proxies?

          The Company will pay all costs of preparing, assembling, printing and distributing the proxy materials. Management has retained Georgeson Shareholder Communications Inc. to assist in soliciting proxies for a fee of $6,500, plus reasonable out-of-pocket expenses. The Company will, upon request, reimburse brokerage firms and others for their reasonable expenses incurred for forwarding solicitation material to beneficial owners of stock.

How do I contact a nonemployee director?

          Any shareholder wishing to contact any nonemployee director or the entire Board may do so by writing in care of Vulcan Materials Company, 1200 Urban Center Drive, Birmingham, Alabama 35242.

CORPORATE GOVERNANCE

          The Board of Directors has adopted Corporate Governance Guidelines, which are attached hereto as Appendix A. The Guidelines provide a framework for the governance of the Company and requires the Board and each of its committees to conduct an annual self-evaluation of their performance. The Guidelines build on practices which we have followed for many years and, we believe, demonstrate our continuing commitment to corporate governance excellence.

          Our Guidelines provide that a substantial majority of the members of the Board must meet the criteria for independence as required by applicable law and the New York Stock Exchange listing standards. The New York Stock Exchange listing standards require that only a simple majority of directors be independent. No director qualifies as independent unless the Board of Directors determines that the director has no direct or indirect material relationship with the Company. The Board has adopted Director Independence Criteria, attached hereto as Appendix B, to assist it in making determinations of independence.

          The Board has determined that all ten of our nonemployee directors are independent and meet the Director Independence Criteria. The only non-independent director is Mr. James, our Chief Executive Officer and Chairman.

          We have a Business Conduct Policy that applies to all of our employees and deals with a variety of corporate compliance issues, including, conflicts of interest, compliance with laws, confidentiality of company information, fair dealing and use of company assets. All employees are required to fill out a questionnaire annually regarding their personal compliance with the Business Conduct Policy and are encouraged to report any illegal or unethical behavior of which they are aware.

          The Board of Directors has adopted a Code of Ethics for the Chief Executive Officer and Senior Financial Officers. The Code of Ethics covers such topics as financial reporting, conflicts of interest and compliance with laws.

          Each of the Audit, Governance and Compensation Committees, whose functions are described in more detail beginning on page 8 below, have adopted a charter that has been approved by the Board of Directors.

          You can access our bylaws, Corporate Governance Guidelines, Business Conduct Policy and Code of Ethics for the Chief Executive Officer and Senior Financial Officers, at our website vulcanmaterials.com or by writing to us at: Corporate Secretary, Vulcan Materials Company, 1200 Urban Center Drive, Birmingham, Alabama 35242. We will provide any of these documents free of charge. Please note that the information contained on our website is not incorporated by reference in, or considered to be a part of, this Proxy Statement.

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          The Company's Board of Directors is divided into three classes for purposes of election. One class is elected at each Annual Meeting to serve a three-year term.

          The Board of Directors has nominated four persons for election as directors to serve three-year terms expiring in 2007 or until the director reaches mandatory retirement age, whichever is sooner. Mr. Smith will reach mandatory retirement age in 2006. Unless otherwise directed, proxies will be voted in favor of these four nominees. Should any of the nominees be unable to accept election, the proxies will be voted for the election of such other person or persons who is nominated by the Board of Directors on the recommendation of the Governance Committee. Each of the nominees has consented to serve if elected, and the Board of Directors has no reason to believe that any of the persons nominated will be unable to serve as a director.

          In 2003, the Board of Directors held five meetings. The Board of Directors has established six standing Committees which have the responsibilities set forth below. Each Committee, except the Executive Committee, is composed entirely of nonemployee directors. In 2003, each director attended more than 75% of the total number of meetings of the Board of Directors and meetings of the Committees of which he or she was a member. All Board members are encouraged to attend the Annual Meeting. Last year, all members of the Board attended the Annual Meeting, except for Mr. Carroll who was serving on a special commission in Iraq at the request of the U.S. Government.

          Each year at the May Board meeting, the Board designates a nonemployee Presiding Director, a position which is filled by rotation among the chairs of the key committees. The duties of the Presiding Director are delineated in our Corporate Governance Guidelines, which are available on our website at vulcanmaterials.com. The nonemployee directors met in executive session five times in 2003. The Chairman of the Audit Committee, Jim Napier, served as the Presiding Director at the executive sessions after the Annual Meeting in 2003. The Company encourages constructive communications from our shareholders. Shareholders interested in communicating directly with the Presiding Director or with the nonemployee directors as a group, may do so by writing to Presiding Director, Vulcan Materials Company, P. O. Box 385014, Birmingham, Alabama, 35238-5014. The shareholder communications will be forwarded to the Board in accordance with the Policy on Shareholder Communications with the Board of Directors, adopted by the independent directors in February 2004.

Executive Committee

          The Executive Committee has the same powers as the Board of Directors, except as limited by the New Jersey Business Corporation Act. In practice, the powers of the Executive Committee are exercised only for matters that arise between meetings of the Board of Directors. Members of the Executive Committee are Messrs. James (Chair), DeSimone, Napier, Rice and Smith and Ms. Korologos. The Executive Committee did not meet in 2003.

Audit Committee

          The Audit Committee advises the Board of Directors and management from time to time with respect to internal controls, systems and procedures, accounting policies and other significant aspects of the Company's financial management. The Audit Committee also monitors the preparation of the Company's quarterly and annual financial reports and supervises the relationship between the Company and its external auditors. The Audit Committee's function under its written charter is to appoint the independent accountants to audit the Company's financial statements and perform other services related to the audit; review the scope and results of the audit with the independent accountants; review with management and the independent accountants the Company's interim and year-end operating results; oversee the external reporting by the Company; consider the adequacy of the internal accounting and auditing procedures of the Company; evaluate the independence of the internal and external auditors; and approve and review any non-audit services to be performed by the independent accountants.

          All members of the Audit Committee are nonemployee directors and are "independent" and "financially literate" within the meaning of the listing standards of the New York Stock Exchange. Please review the Report of the Audit Committee on page 18 of this Proxy Statement. Members of the Audit Committee are Messrs. Napier (Chair), Farmer, Franklin, McGregor and Rice. The Audit Committee met seven times during 2003.

          The charter of the Audit Committee is on file with the Securities and Exchange Commission (the "SEC") as an appendix to the Company's Proxy Statement for the May 2003 Annual Meeting. It is also available on our website at vulcanmaterials.com. The Board of Directors has determined that Mr. Napier is an "audit committee financial expert" within the meaning of that term under the rules of the SEC. As discussed above, Mr. Napier is "independent" within the meaning of the listing standards of the New York Stock Exchange. He has served on the Company's Board of Directors since 1983 and on its Audit Committee since 1987. In the course of his career, Mr. Napier has acquired (i) an understanding of generally accepted accounting principles and financial statements, (ii) the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves, (iii) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of

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issues that can reasonably be expected to be raised by the Company's financial statements, (iv) an understanding of internal control over financial reporting, and (v) an understanding of audit committee functions.

Compensation Committee

          The Compensation Committee interprets and administers the Executive Incentive Plan, Management Incentive Plan and the 1996 Long-Term Incentive Plan. The Committee is comprised solely of nonemployee directors who are ineligible to participate in these plans and who are "independent" within the meaning of the listing standards of the New York Stock Exchange. The Compensation Committee also is responsible for determining and fixing the amount of compensation paid to each senior officer of the Company and each construction materials and chemicals division president ("Senior Executives"). In addition, it determines and fixes other benefits to be provided to such Senior Executives and certain other employees of the Company. It also makes recommendations to the Board of Directors concerning changes in the compensation of the directors. Members of the Compensation Committee are Messrs. Smith (Chair), Carroll, DeSimone and Napier. The Compensation Committee met three times during 2003. The charter of the Compensation Committee is available on our website at vulcanmaterials.com.

Governance Committee

          The Governance Committee is responsible for developing and implementing policies and practices relating to corporate governance, including monitoring implementation of our Corporate Governance Guidelines. The Committee also plans for the succession of the chief executive officer and other senior executives. The Committee also serves as the nominating committee as it is responsible for identifying and assessing candidates for the Board of Directors, including making recommendations to the Board regarding such candidates. In fulfilling its duties, the Governance Committee, among other things;

          In recommending director candidates to the Board, the Governance Committee Charter requires the Committee to select individuals who possess high ethical standards, integrity and sound business judgment. In its assessment of each potential candidate, the Governance Committee will review the candidate's experience, potential conflicts of interest, understanding of the Company's or related industries, financial acumen and such other factors the Committee determines are pertinent in light of the current needs of the Board. The Committee may also take into account the contribution of the candidate to the diversity of the Board of Directors, the ability of a candidate if elected a director to devote the time and effort necessary to fulfill his or her responsibilities as a Board member, and the needs of the Company given the range of talent and experience represented on the Board.

          This Committee is comprised solely of nonemployee directors who are "independent" within the meaning of listing standards of the New York Stock Exchange. Members of the Governance Committee are Messrs. DeSimone (Chair), Carroll, Farmer, Rice and Smith. The Governance Committee met four times during 2003. The charter of the Governance Committee is available on our website at vulcanmaterials.com.

          The Governance Committee will consider recommendations for director made by shareholders for 2005 if such recommendations are received in writing, addressed to the Committee, in care of the Secretary of the Company, at 1200 Urban Center Drive, Birmingham, Alabama 35242, by December 13, 2004. Recommendations by shareholders that are made in accordance with these procedures will receive equal consideration by the Governance Committee. Directors and members of management may also suggest candidates for director. In some cases, the Committee engages, for a fee, the services of a third party executive search firm to assist it in identifying and evaluating candidates for director.

Safety, Health and Environmental Affairs Committee

          The Safety, Health and Environmental Affairs ("SHE") Committee has the responsibility for reviewing our policies, practices and programs with respect to the management of safety, health and environmental affairs and monitoring our compliance with safety, health and environmental laws and regulations. Members of the SHE Committee are Ms. Korologos (Chair), and Messrs. Carroll, Franklin, McGregor, Smith and Trosino. The SHE Committee met three times during 2003.

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Finance and Pension Funds Committee

          The Finance and Pension Funds Committee has responsibility for overseeing our financial affairs and recommending to the Board of Directors financial policies and actions to accommodate our goals and operating strategies while maintaining a sound financial condition. Its functions include keeping informed about our financial condition, recommending a dividend policy, reviewing and recommending changes in the quarterly dividend payments, and evaluating and making recommendations concerning the appropriate mix of debt and equity, incurrence of long-term debt, and changes in the authorized limit of short-term debt. The Finance and Pension Funds Committee is also responsible for overseeing the funding and management of assets for pension plans sponsored by the Company. To fulfill these functions, it establishes funding policies and methods consistent with pension plan objectives and the Employee Retirement Income Security Act of 1974, selects and removes investment managers, and appoints trustees for the pension plans. Members of the Finance and Pension Funds Committee are Messrs. Rice (Chair), Farmer, McGregor, Napier and Trosino and Ms. Korologos. The Finance and Pension Funds Committee met three times in 2003.

          Members of the Board of Directors who are not employees of the Company are paid a retainer of $40,000 per year, plus a fee of $1,500 for each Board meeting attended.

          Each member of a committee who is not an employee of the Company is paid a fee of $1,500 for each committee meeting attended in person or by telephone and for each unanimous consent to action in lieu of meeting executed. In addition, each chairman of a committee who is not an employee of the Company is paid a fee of $5,000 per year for service as chairman of a committee.

          We have a Deferred Compensation Plan for Directors Who Are Not Employees of the Company (the "Directors' Deferred Compensation Plan") under which payment to nonemployee directors of their compensation as directors may be deferred for specified periods or until they cease to be directors. The deferred amounts, at the election of the director, either (i) are credited with interest at prescribed rates or (ii) are converted into stock units equivalent to the number of shares of the Company's common stock (based on the market price at the time of deferral) that could be purchased with the amount deferred. All stock-based deferred amounts are credited with additional stock units in amounts equal to dividends paid on the common stock. At the end of the deferral period, stock-based deferrals are settled in shares of the Company's common stock and interest-based deferrals are settled in cash. The Directors' Deferred Compensation Plan also provides that lump-sum payments of all deferred compensation would be made in stock or cash, as applicable, within 30 days if (i) there is a Change in Control (as defined in the Directors' Deferred Compensation Plan) and (ii) at any time after a Change in Control the participating director ceases to be a member of the Board of Directors, the Directors' Deferred Compensation Plan is terminated or the Company's capital structure is changed materially. The Directors' Deferred Compensation Plan was approved by the Company's shareholders in 1993.

          We also have a Restricted Stock Plan for Nonemployee Directors (the "Restricted Stock Plan"), which was approved by the Board of Directors in 1997. The Restricted Stock Plan was implemented to promote a greater identity of interests between our nonemployee directors and our shareholders through increasing ownership of our common stock by the nonemployee directors and to assist us in attracting and retaining qualified individuals to serve as nonemployee directors of the Company by affording them an opportunity to share in our future success. Under the Restricted Stock Plan, a number of restricted shares determined annually by the Board (the "Restricted Shares") is granted to each nonemployee director. On June 2, 2003, 1,000 Restricted Shares were issued to each nonemployee director serving on that date. The Restricted Shares are held in special restricted accounts by our transfer agent and the nonemployee directors have no right to receive the Restricted Shares until the restrictions imposed by the plan either lapse or are waived. Generally, the restrictions expire when the nonemployee director reaches age 70 (or the then current mandatory retirement age for directors), or the nonemployee director ceases to be a director before age 70 because of death or disability. However, our Chief Executive Officer has the power to waive restrictions in the event the nonemployee director fails to remain a director for any reason other than retirement at the mandatory age, death or disability. During the period the shares are restricted, the nonemployee directors have all of the rights and benefits of a shareholder with respect to the Restricted Shares, including the right to vote the shares and receive dividends on the shares, other than the right to sell, assign, pledge or otherwise transfer the Restricted Shares.

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          Dividends paid on Restricted Shares are credited to an account for each nonemployee director in the form of deferred stock units. The number of deferred stock units is determined by multiplying the per share dividend amount by the sum of (i) number of Restricted Shares previously granted to the nonemployee director upon which restrictions have not yet lapsed and (ii) the number of deferred stock units previously credited to such nonemployee director under the Restricted Stock Plan and dividing the product by the average daily closing price per share of common stock for the 20 trading days prior to the dividend payment date. The deferred stock units are settled in common stock of the Company upon the nonemployee director's termination of service.

          An amendment and restatement of the Restricted Stock Plan is being submitted to shareholders for approval at the Annual Meeting. See page 25 of this Proxy Statement.

          In 1996, the Company's shareholders approved a Deferred Stock Plan for Nonemployee Directors of the Company (the "Deferred Stock Plan"). Under the Deferred Stock Plan, each nonemployee director received an annual grant of deferred stock units calculated by dividing an amount equal to 40% of the annual retainer payable to nonemployee directors then in effect by the average daily closing price per share of the Company's common stock for the 20 trading days prior to the date of grant. Grants under the plan were discontinued in 1999. However, on each date on which a regular cash dividend is paid on the common stock, the account of each participating nonemployee director is credited with additional deferred stock units corresponding to the cash dividend paid on the number of shares of common stock evidenced by the deferred stock units credited to the account of each such nonemployee director.

          The entire balance of a nonemployee director's Deferred Stock account will be paid to the director, in either a lump sum or installments at the election of such director, in shares of the Company's common stock, upon the director's termination of service.

          The following is information regarding persons known to us to have beneficial ownership of more than 5% of the outstanding common stock of the Company, which is our only outstanding class of voting securities.

          The following table sets forth information, unless otherwise indicated, as of March 1, 2004, regarding beneficial ownership of our common stock by each of the directors, the chief executive officer and the four other most highly compensated executive officers and the directors and executive officers of the Company as a group. This total includes all stock-based holdings as set forth in the footnotes. This table indicates the alignment of the named individual's financial interest with the interests of our shareholders, because the value of the individual's total holdings will increase or decrease in line with the price of our common stock.

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          The following table sets forth information concerning the annual and long-term compensation for Mr. James and the four other executive officers who were the most highly compensated (based on combined salary and bonus) for the fiscal year ended December 31, 2003.

In February 2003 the Compensation Committee determined that the deferral feature should be eliminated from the administration of the annual incentive programs. As a result "Other Compensation" for 2002 for four of the five named employees includes a one-time payment representing the cumulative amount of mandatorily deferred incentives earned pursuant to the Executive or Management Incentive Plans for the years 1996 - 2001.

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          The following table sets forth each grant of stock options during 2003 to Mr. James and the other named executive officers:

          The following table sets forth for each of Mr. James and the other named executive officers the number and dollar value of unexercised options outstanding at December 31, 2003. No stock options were exercised by the named executive officers during 2003.

         The table below sets forth information regarding the number of shares of our common stock authorized for issuance under all of our equity compensation plans as of December 31, 2003.

         The Audit Committee of the Board of Directors is responsible for, among other things, reviewing the Company's financial statements with management and the Company's independent auditor. The Audit Committee acts under a written charter which is available on our website at vulcanmaterials.com. Each member of the Audit Committee qualifies as "independent" under the listing standards of the New York Stock Exchange.

          The Company's management is responsible for its internal controls, financial reporting process and compliance with laws and regulations and ethical business standards. The independent auditor is responsible for performing an independent audit of the Company's consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee is responsible for monitoring and overseeing these processes. The Audit Committee is also directly responsible, among other matters, for setting the compensation of the independent auditor. The Audit Committee also has the sole authority to appoint or replace the independent auditor.

          In connection with the fiscal 2003 audit, the Audit Committee has:

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          Aggregate fees billed to us for the fiscal years ended December 31, 2003 and 2002, by Deloitte & Touche, the member firms of Deloitte Touche Tohmatsu and their respective affiliates are as follows:

          The Compensation Committee of the Board of Directors (the "Committee"), is comprised entirely of nonemployee directors. The Committee establishes the compensation levels for all senior executives of the Company, including the Chief Executive Officer ("CEO") and the other executive officers named in the Summary Compensation Table. Under the direction of the Committee, the Company has developed and implemented performance-based compensation policies and plans that are intended to enhance the profitability of the Company and shareholder value by aligning closely the financial interests of the Company's executives with those of its shareholders.

Executive Compensation Program

          The Committee determines the amount and type of compensation that supports its objective of providing competitive compensation that:

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Compensation for the executives of the Company is comprised of three components:

          The Committee begins the process of establishing compensation for executives by reviewing data from general industry surveys conducted by executive compensation consultants. Based on these surveys, the Committee establishes a competitive target for each component of compensation for each executive position. The short-term and long-term incentive targets are expressed as a percentage of base salary for each executive. The surveys include some of the companies in the S&P 500 Index and Wilshire 5000 M&S Index. The performance of each of these indices is charted in the Shareholder Return Performance Presentation on page 22, below.

Base Salary

          The Committee reviews the salary of each executive in relation to the targeted base salary established for the executive's position. Salaries may be adjusted to reflect individual performance, increased responsibilities, and changes in the targeted base salary as derived from the general industry surveys.

Short-Term Cash Bonus under the Executive Incentive and Management Incentive Plans

          The Company has established an Executive Incentive Plan ("EIP") and a Management Incentive Plan ("MIP"). These Plans are intended to promote the success of the Company by providing annual cash incentives for those employees who lead the Company's efforts to improve the operating results and earnings of the Company. Economic Profit ("EP"), which is derived by subtracting a capital charge from net operating profit after taxes, is used as the financial measure of the Company's performance. It is the view of the Committee and management that EP is an effective indicator of business unit and Company performance. Annually, an EP performance goal is established for the Company and for each profit center or group by averaging the previous year's target and actual EP results. The EP performance goal for the Company is used to measure the CEO's performance and the EP performance goal of the applicable profit center or group is used for each participating executive.

          The Committee may adjust the amount of an award to each executive based on the extent to which the EP goal for the Company, profit center or group was satisfied and the related performance of each executive. However, payments to executives who participate in the EIP may not exceed the maximum individual amounts allowable under the EIP.

          Total incentive payments under the EIP in any year cannot exceed 4% of consolidated net earnings in excess of 6% of net capital for the prior year. Total payments under the MIP in any year cannot exceed 10% of consolidated net earnings in excess of 6% of net capital for the prior year. The payments made for 2003 were below the maximum allowable under both the EIP and the MIP.

Long-Term Equity-Based Incentives under the 1996 Long-Term Incentive Plan ("LTIP")

          The purpose of the LTIP is to further the long-term growth in profitability of the Company by offering long-term incentives to those executives who will be largely responsible for such growth. The LTIP authorizes the use of a variety of equity-based incentive awards, including nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, deferred stock units, and other stock-based incentives. The amount of the award to an executive is based on the Company's performance as compared to targets established for total shareholder return, earnings per share and return on investment, although the Committee has some discretion in setting the awards in accordance with the LTIP.

          In 2003, awards were made in the form of nonqualified stock options, performance share units and deferred stock units. The nonqualified stock options have a ten-year term and vest in equal amounts over years one through five, unless accelerated due to retirement, death or disability. The exercise price of the stock options is equal to the market price of the Company's common stock on the date of the grant. Therefore, the options will have value only if the Company's stock price increases, resulting in a commensurate benefit for the Company's shareholders. Performance share units ("PSUs") fully vest and are paid, if earned, three years from the date of grant unless

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accelerated due to death, disability or retirement. The amount earned is determined by the Company's three-year average Total Shareholder Return performance relative to the three-year average Total Shareholder Return performance of a comparison group of companies and the EP performance of the business segments. Payments are made in a combination of cash and stock. Deferred stock units ("DSUs") have a ten-year term and vest in equal amounts in years six through ten. The common stock represented by the DSUs is mandatorily deferred until after the tenth year, unless accelerated due to retirement at age 62 or older or the death or disability of the participant. All unvested DSUs are forfeited and not paid if a participant is terminated for reasons other than retirement at age 62 or older, death or disability. Dividend equivalents are accrued in the form of additional DSUs. Each participant has the right to defer payment of the shares beyond the tenth year up to retirement.

Chief Executive Officer Compensation

          The compensation for Donald M. James, Chairman and Chief Executive Officer consists of the same components and is established by the same process as described for the other executives. A significant portion of Mr. James' compensation is at risk by being tied to quantifiable measures of the Company's performance. These measures include economic profit, total shareholder return, earnings per share and return on investment. Qualitative measures used to evaluate Mr. James' performance include ethical business conduct, management succession planning, and his leadership in directing the execution of strategic initiatives.

          In February 2003, the Committee increased the base salary portion of Mr. James' compensation by 4.9% based on their assessment of Mr. James' leadership in the Company's continuing pursuit of cost control and efficiency, the acquisition and opening of new sites in the Construction Materials segment, and his pursuit of strategic alternatives for the Company's businesses resulting in the divestiture of the Performance Chemicals business.

          Also in February 2003, the Committee awarded Mr. James a grant of 145,000 nonqualified stock options, 37,000 PSUs and 43,000 deferred stock units. In making these awards, the Committee considered competitive market practice and the Company's performance for the five-year period ending in 2002 against a comparison group of 41 companies, the S&P 500 Index and the Wilshire 5000 M&S Index. As compared to the selected Company comparison group, the Company ranked in the 85th percentile with respect to total return to shareholders, the 71st percentile in return on investment, and in the 76th percentile in EPS growth. The Company's five-year total return to shareholders was 4.0% compared to the S&P's return of -0.6% and the Wilshire M&S Index return of -8.8%.

          The cash bonus paid to Mr. James for 2003 under the EIP was 63% of the maximum allowable and 115% of his target bonus. This payment was based primarily on the extent to which the Company achieved the pre-established EP goal for the year 2003.

Compliance with Internal Revenue Code Section 162(m)

          Section 162(m) of the Internal Revenue Code prohibits a public corporation from taking a deduction for compensation paid to its chief executive officer or any of its four other highest paid executive officers in excess of $1 million. Internal Revenue Service ("IRS") regulations exempt certain "qualified performance-based compensation" from the application of the Section 162(m) limitation. It is the Committee's understanding that payments pursuant to the Executive Incentive Plan and all grants made under the LTIP, except for deferred stock units, qualify as qualified performance-based compensation, as defined in the IRS regulations. The deferred stock units are not counted towards the $1 million cap for purposes of calculating the 162(m) limitation until the units are paid.

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          The following graph and table compare the performance of the Company's common stock to that of the Standard & Poor's 500 Stock Index ("S&P 500") and the Wilshire Materials and Services Sector Index ("Wilshire 5000 M&S") for the period commencing December 31, 1998, and ending December 31, 2003. The Wilshire 5000 M&S is a market capitalization weighted sector containing the public equities of firms in the Materials and Services sector as defined by Wilshire Associates, Incorporated. The Materials and Services sector includes the Company and approximately 1,100 other corporations, some of which are in the mining and chemicals industries. The sector is one of nine sectors that make up the Wilshire 5000 Index. The graph assumes that the index value of the investment in our common stock was 100 on December 31, 1998, and that all dividends have been reinvested.

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          The Retirement Income Plan for Salaried Employees (the "Retirement Plan") provides benefits under a funded noncontributory defined benefit plan and covers most salaried employees, including all executive officers. Under the Retirement Plan, normal retirement benefits are paid commencing at age 65 (or later actual retirement) based on the participant's years of benefit service under the Retirement Plan and the average of the highest 36 consecutive months of eligible earnings. Eligible earnings under the Retirement Plan include an employee's salary and any awards under our Executive Incentive Plan and Management Incentive Plan, as reflected in the "Salary" and "Bonus" columns of the Summary Compensation Table. Contributions by the Company to the Retirement Plan in 2003 totaled $10,570,000.

          Under Section 415 of the Code, the maximum annual benefit allowable under the Retirement Plan for an employee retiring at age 65 in 2003 is $160,000, an amount which may change each year in accordance with a determination made by the Internal Revenue Service. In addition, Section 401 of the Code limits the amount of an employee's compensation which may be taken into account under the Retirement Plan to $200,000, an amount which also is subject to change each year in accordance with a similar determination. Therefore, we have an Unfunded Supplemental Benefit Plan for Salaried Employees (the "Supplemental Plan") which enables us to pay to any person designated by the Compensation Committee whose pension under the Retirement Plan has been reduced as a result of the limitations imposed by Sections 401 and 415 of the Code an amount equal to the difference between the amount the person would have received under the Retirement Plan had there been no limitations and the amount the person will receive under the Retirement Plan after giving effect to the limitations.

          The Supplemental Plan is unfunded and amounts due the employees covered thereby are considered to be our general obligations; however, the Supplemental Plan contains provisions which allow for the funding of a rabbi trust to help ensure the payment of benefits under the Supplemental Plan upon the occurrence of a Change of Control of the Company (as defined in the Supplemental Plan).

          The Supplemental Plan provides for the vesting of excess retirement benefits in the same manner that benefits vest under the Retirement Plan, which is after five years. In addition, the Supplemental Plan provides for an acceleration of the payment of excess retirement benefits in connection with a Change of Control of the Company (as defined in the Supplemental Plan).

          Assuming continuance of the Retirement Plan and the Supplemental Plan in their present form, annual benefits payable to participating employees (including executive officers) following retirement, in specific salary classifications and with the continuous years of benefit service indicated, are shown in the table below. Each amount in the table is based on the benefit applicable on December 31, 2003, to an employee retiring at age 65 payable in the form of a single life annuity, and is not subject to further reduction for Social Security or any other offset amounts.

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          The benefit service accruals used to determine benefits under the Retirement Plan as of December 31, 2003, for Mr. James and the four other executive officers named in the Summary Compensation Table are shown below.

          Mr. James also is entitled to benefits under a Supplemental Executive Retirement Agreement ("SERA") which provides an additional retirement benefit based on the formula in the Retirement Plan using his actual years of service multiplied by 1.2. The maximum benefit service provided by the combination of the SERA and the Retirement Plan is 40 years. The SERA is an unfunded, noncontributory defined benefit plan.

          The Company has entered into change of control agreements with each of the named executives and with certain other key executives. Each of the agreements has an initial three-year term, which on each anniversary of the execution of the agreement is extended for an additional year unless we notify the executive otherwise at least 60 days prior to the anniversary date (the "Covered Period"). If a Change of Control occurs during the Covered Period, the agreement is activated (the date of such Change of Control being referred to as the "Effective Date"). From the Effective Date, the Company agrees to employ the executive for a two-year period generally on terms (including salary, bonus, participation in long-term incentive, savings and retirement and welfare benefits plans and fringe benefits) no less favorable than were provided to the executive prior to the Change of Control. A "Change of Control" includes (1) the acquisition by any individual or group (other than from the Company) of beneficial ownership of 20% or more of the outstanding common stock, (2) a change in at least a majority of the Board members (other than generally as approved by the incumbent Board members) or (3) certain business combination transactions.

          If, during the two-year period, the Company terminates the executive's employment (other than for cause or due to death or disability) or the executive terminates his employment for good reason (and, in the case of Mr. James, he terminates his employment for any reason during the 30-day period following the first anniversary of a Change of Control transaction in which the Company is not the survivor), the executive will be entitled to receive: (1) a payment in cash equal to three times the sum of (a) the executive's then current annual base salary, (b) the higher of the executive's Recent Annual Bonus (as defined by the agreement) and the annual bonus for the year in which the date of termination occurs, and (c) the value of the executive's annual long-term incentive award; (2) accrued but unpaid compensation (including a pro rata portion of the executive's bonus for the year in which the termination occurs (or, if higher, the executive's Recent Annual Bonus) and accrued vacation pay); (3) an amount equal to the actuarial present value of the additional pension benefits the executive would have received under our qualified and supplemental retirement plans if he had continued to be employed by the Company for an additional three years; and (4) an amount equal to the additional matching contributions the executive would have received under our qualified and non-qualified savings plans if he had continued to be employed by the Company for an additional three years. The executive also will be entitled to receive (1) a continuation of welfare and fringe benefits for three years and (2) Company-paid outplacement services in an amount up to $50,000. In addition, subject to certain limitations, the agreements provide that the executive is entitled to receive a payment in an amount sufficient to make the executive whole for any excise tax on excess parachute payments imposed under Section 4999 of the Code.

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          The shareholders of the Company are being asked to approve the Amended and Restated Restricted Stock Plan for Nonemployee Directors (the "Plan"), a copy of which is annexed to this Proxy Statement as Appendix C. This Plan was initially approved by the Board in July 1997, and the first grant under the Plan was made in November 1997. The Amended and Restated Restricted Stock Plan differs from the plan adopted in 1997 only in the creation of an expiration date of May 13, 2009; the institution of a maximum allowable share limit of 100,000; and the requirement that all waivers of restrictions under the Plan be made by the Chief Executive Officer with the consent of the Compensation Committee. The Plan is designed to make equity-based awards to the nonemployee directors, of which the Company currently has 10, in order to promote a greater identity of interests between the directors and the other shareholders, and to assist the Company in attracting and retaining qualified individuals to serve as directors by affording them an opportunity to share in the future successes of the Company. The Plan comports with the Company's objective to increase the equity-based portion of the directors' compensation.

          The following summary description of the material terms of the Plan is qualified in its entirety by reference to the full text of the Plan, which is attached hereto as Appendix C.

          The Plan provides that the number of shares that may be issued pursuant to the Plan shall not exceed 100,000, subject to adjustment in the event of any stock split, reorganization or recapitalization. Each year at the annual Board meeting, the Board will determine the number of restricted shares to be granted to each Board member. The next grant of the restricted shares would be made, subject to shareholder approval of the Plan, on June 1, 2004. Since the size of the annual grant is wholly within the discretion of the Compensation Committee, the benefits or amounts to be received under the Plan are not determinable.

          At the time of the grant, a certificate representing the number of restricted shares granted will be registered in the name of each nonemployee director, but held by the Company's transfer agent. The director has the right to vote the shares and receive dividends on the shares (which are deferred, as discussed below). The restrictions on the shares lapse when the director reaches the mandatory retirement age of 70, and the director has remained a director of the Company until his or her retirement, or if the director ceases to be a director before the mandatory retirement date due to death or disability. If the restrictions do not expire or are not waived, as discussed below, then the restricted shares will be forfeited and the director's rights to the shares will terminate. A waiver of restrictions may be made by the Compensation Committee, upon recommendation of the Chief Executive Officer, if they determine the waiver is in the best interests of the Company.

          Under the Plan, the dividends payable on the restricted shares are deferred. On each dividend date, the Company will credit each director's deferred stock account with a number of deferred stock units equal to the dividend amount divided by the fair market value per share. The balance in a director's deferred stock unit account will be paid to the director in shares of the Company's common stock upon the director's death, disability, retirement, or termination of service for any reason, regardless of whether or not the restricted shares are paid or are forfeited.

          The Plan is administered by the Compensation Committee. The Company's Board of Directors has the authority to amend, suspend or terminate the Plan in whole or in part at any time. If applicable laws or exchange listing requirements provide that an amendment must be approved by the shareholders of the Company, such amendment shall not be effective until it receives the necessary shareholder approval. No amendment to the Plan may materially and adversely affect any right of any nonemployee director to restricted shares or deferred stock units previously granted or credited to such director, without the director's consent.

          The nonemployee directors are not taxed on the restricted shares until the restrictions lapse and are not taxed on the corresponding dividends until shares of common stock are distributed in respect of the deferred stock units.

          On March 31, 2004, the closing price of the Company's common stock was $47.44 per share.

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The table below shows the value of the awards made pursuant to the Restricted Stock Plan in 2003:

          The Audit Committee, which is comprised solely of nonemployee directors, has appointed Deloitte & Touche LLP, a firm of independent public accountants, as independent auditors for the year 2004. The function of the independent auditors is to audit our accounts and records; to report on the consolidated balance sheet, the related statements of consolidated earnings, consolidated shareholders' equity and consolidated statements of cash flows of the Company and its subsidiaries; and to perform such other appropriate accounting services as may be required by the Audit Committee. Although shareholder ratification is not required, the Board of Directors has determined that it would be desirable to request an expression from the shareholders as to whether or not they concur in this appointment. If a majority of the shares voting at the Annual Meeting fails to ratify the selection of Deloitte & Touche LLP as independent auditors, the Audit Committee will consider the selection of another independent certified public accounting firm.

          The firm of Deloitte & Touche LLP, or its predecessors, has audited our financial statements since 1956. A representative of that firm will be present at the Annual Meeting and will be given an opportunity to make a statement and to respond to appropriate questions.

          Some banks and brokers may be participating in the practice of "householding" proxy statements and annual reports. This means that only one copy of this Proxy Statement or our Annual Report may have been sent to multiple shareholders in your household. We will promptly deliver a separate copy of either document to you if you write or call us at the following address or phone number: Vulcan Materials Company, P.O. Box 385014, Birmingham, Alabama 35238-5014, Attention: Mark D. Warren, Director, Investor Relations, phone: (205) 298-3220. If you want to receive separate copies of our Annual Report and Proxy Statement in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank or broker, or you may contact us at the above address and phone number.

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          Under Section 16(a) of the Securities Exchange Act of 1934, as amended, each of our directors and executive officers, and any beneficial owner of more than 10% of our common stock, is required to file with the Securities and Exchange Commission (the "SEC") initial reports of beneficial ownership of our common stock and reports of changes in beneficial ownership of the common stock. Such persons also are required by SEC regulations to furnish us with copies of all such reports. Based solely on our review of the copies of such reports furnished to us for the year ended December 31, 2003, and on the written representations made by such persons that no other reports were required, we believe that during the year ended December 31, 2003, all filing requirements applicable to our officers, directors and shareholders were filed in a timely manner except that one Form 4 filed on behalf of Livio D. DeSimone, a director, which related to a payout under the Directors' Deferred Compensation Plan, was filed late.

          To be eligible for consideration for inclusion in our Proxy Statement and form of proxy for our 2005 Annual Meeting, a shareholder's proposal must be received by us at our principal office no later than December 13, 2004. Proposals should be addressed to William F. Denson, III, Secretary, P. O. Box 385014, Birmingham, Alabama 35238-5014. Proposals received after that date will not be eligible for inclusion in the 2005 Proxy Statement.

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1.          Director Qualifications

          The Board shall be comprised of a substantial majority of "independent" directors, as that term is defined from time to time by the listing standards of the New York Stock Exchange (NYSE). The Board believes it should never have more than two management directors.

          The Governance Committee is responsible for reviewing with the Board, on an annual basis, the requisite skills and characteristics of new Board members as well as the composition of the Board as a whole. This assessment will include members' qualification as independent, as well as consideration of diversity, age, skills, and experience in the context of the needs of the Board. Nominees for directorship will be selected by the Governance Committee in accordance with the policies and principles in its charter. The invitation to join the Board should be extended by the Board itself, through the Chairman of the Governance Committee and the Chairman of the Board. As an alternative to term limits, the Governance Committee will review and reassess each existing director's qualifications, skills, independence and competence prior to recommending such director to the Board for renomination. In making its assessment, the Governance Committee shall also consider the director's past attendance at meetings and participation in and contributions to the activities of the Board.

          When a director's principal occupation or business association changes substantially during his or her tenure as a director, that director shall tender his or her resignation for consideration by the Governance Committee. The Governance Committee will recommend to the Board whether to accept the resignation.

          Directors are expected to commit appropriate time to properly fulfill their duties and responsibilities to the Company. Directors should advise the Chairman of the Board and the Chairman of the Governance Committee in advance of accepting an invitation to serve on another public company board. No director may be nominated to a new term if he or she would be age 70 or older at the time of the election.

          The Board believes that it should generally have no less than 9 and no more than 12 directors.

2.          Director Responsibilities

          The basic responsibility of the directors is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its shareholders. In discharging that obligation, directors should be entitled to rely on the honesty and integrity of the Company's senior executives and its outside advisors and auditors. The directors shall also be entitled to have the Company purchase reasonable directors' and officers' liability insurance on their behalf, to the benefits of indemnification to the fullest extent permitted by law and the Company's charter, by-laws and any indemnification agreements, and to exculpation as provided by state law and the Company's charter.

          Directors are expected to attend Board meetings and meetings of committees on which they serve, and to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. Information and data that are important to the Board's understanding of the business to be conducted at a Board or committee meeting should generally be distributed in writing to the directors before the meeting, and directors should review these materials in advance of the meeting.

          The Board has no policy with respect to the separation of the offices of Chairman and the Chief Executive Officer. The Board believes that this issue is part of the succession planning process and that it is in the best interests of the Company for the Board to make a determination when it elects a new chief executive officer.

          The non-management directors will meet in executive sessions without management in conjunction with regularly scheduled Board meetings. The non-management directors may meet without management at such other times as determined by the presiding director. The position of presiding director for the executive sessions shall rotate annually among the chairpersons of the Board's Audit, Compensation, Finance and Pension Funds, Governance, and Safety, Health and Environmental Affairs Committees. The annual rotation date shall be the date

Adopted by the Board of Directors
on March 30, 2004

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of the Company's annual shareholders meeting. The presiding director or his or her designee shall be responsible for taking appropriate minutes of each executive session. The presiding director shall also be responsible for serving as a liaison between the independent directors and the Chairman. In the absence of the Chairman, the presiding director shall preside at regular sessions of the Board. If requested by major shareholders, the presiding director shall be available for consultation and direct communication.

The Chairman and presiding director will establish the meeting schedule and agenda for each Board meeting. The presiding director will approve the agenda and meeting schedule to assure that there is sufficient time for discussion of the agenda items, and will review and approve the sending of all other information to the other Board members. At the beginning of the year the Chairman and presiding director will establish a schedule of agenda subjects to be discussed during the year (to the degree this can be foreseen). Each Board member is free to suggest the inclusion of items on the agenda. Each Board member is free to raise at any Board meeting subjects that are not on the agenda for that meeting. The Board will review the Company's long-term strategic plans and the principal issues that the Company will face in the future during at least one Board meeting each year.

The Board believes that the management speaks for the Company. Individual Board members may, from time to time, meet or otherwise communicate with various constituencies that are involved with the Company. But it is expected that Board members would do this with the knowledge of the management and, absent unusual circumstances or as contemplated by the committee charters, only at the request of management.

3.          Board Committees

The Board will have at all times an Audit Committee, a Compensation Committee and a Governance Committee. All of the members of these committees will be independent directors under the criteria established by the New York Stock Exchange, and in the case of the Audit Committee by the Sarbanes-Oxley Act. Committee members will be appointed by the Board upon recommendation of the Governance Committee with consideration of the desires of individual directors. It is the sense of the Board that consideration should be given to rotating committee members periodically, but the Board does not feel that rotation should be mandated as a policy.

Each committee will have its own charter, adopted by the Board. The charters will set forth the purposes, goals and responsibilities of the committees as well as qualifications for committee membership, procedures for committee member appointment and removal, committee structure and operations and committee reporting to the Board. The charters will also provide that each committee will annually evaluate its performance.

The Chairman of each committee, in consultation with the committee members, will determine the frequency and length of the committee meetings consistent with any requirements set forth in the committee's charter. The Chairman of each committee, in consultation with the appropriate members of the committee and management, will develop the committee's agenda. At the beginning of the year each committee will establish a schedule of agenda subjects to be discussed during the year (to the degree these can be foreseen). The schedule for each committee will be furnished to all directors.

The Board and each committee have the power to hire independent legal, financial or other advisors as they may deem necessary, without consulting or obtaining the approval of any officer of the Company in advance.

The Board may, from time to time, establish or maintain additional committees as necessary or appropriate.

4.           Director Access to Officers and Employees

Directors have full and free access to officers and employees of the Company. Any meetings or contacts that a director wishes to initiate may be arranged through the CEO or the Secretary or directly by the director. The directors will use their judgment to ensure that any such contact is not disruptive to the business operations of the Company and will, to the extent not inappropriate, copy the CEO on any written communications between a director and an officer or employee of the Company.

The Board welcomes regular attendance at each Board meeting of senior officers of the Company.

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5.          Director Compensation

The form and amount of director compensation will be determined by the Compensation Committee in accordance with the policies and principles set forth in its charter, and the Compensation Committee will conduct at least biennially a review of director compensation. The Compensation Committee will consider that directors' independence may be jeopardized if director compensation and perquisites exceed customary levels, if the Company makes substantial charitable contributions to organizations with which a director is affiliated, or if the Company enters into consulting contracts with (or provides other indirect forms of compensation to) a director or an organization with which the director is affiliated.

6.          Director Orientation and Continuing Education

All new directors must participate in the Company's Orientation Program, which should be conducted within two months of the annual meeting at which new directors are elected. This orientation will include presentations by senior management to familiarize new directors with the Company's strategic plans, its significant financial, accounting and risk management issues, its compliance programs, its Business Conduct Policy, its principal officers, and its internal and independent auditors. In addition, the Orientation Program will include visits to Company headquarters and, to the extent practical, certain of the Company's significant facilities. All other directors are also invited to attend the Orientation Program.

7.          CEO Evaluation and Management Succession

The Compensation Committee, based on input from the entire Board, shall conduct an annual review of the CEO's performance. The Board of Directors will review the Compensation Committee's report in order to ensure that the CEO is providing the best leadership for the Company in the long- and short-term.

The Governance Committee should make an annual report to the Board on succession planning. The entire Board will work with the Governance Committee to nominate and evaluate potential successors to the CEO and other senior officers. The CEO should at all times make available his or her recommendations and evaluations of potential successors, along with a review of any development plans recommended for such individuals.

8.          Annual Performance Evaluation

The Board of Directors will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. The Governance Committee will receive comments from all directors and report annually to the Board with an assessment of the Board's performance. This will be discussed with the full Board following the end of each fiscal year. The assessment will focus on the Board's contribution to the Company and specifically focus on areas in which the Board or management believes that the Board could improve.


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