UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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TEXAS INDUSTRIES, INC.

 

(Name of Registrant as Specified in Its Charter)

SHAMROCK ACTIVIST VALUE FUND, L.P.

SHAMROCK ACTIVIST VALUE FUND IV, L.P.

SHAMROCK ACTIVIST VALUE FUND GP, L.L.C.

SHAMROCK PARTNERS ACTIVIST VALUE FUND, L.L.C.

SHAMROCK CAPITAL ADVISORS, INC.

SHAMROCK HOLDINGS OF CALIFORNIA, INC.

SHAMROCK HOLDINGS, INC.

STANLEY P. GOLD

DENNIS A. JOHNSON

MARJORIE L. BOWEN

GARY L. PECHOTA

 

 

(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

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1
Shamrock Capital Advisors, Inc.
The Case for Change at
Texas Industries, Inc.
(NYSE: TXI)

2
Shamrock Activist Value Fund, L.P. is:
•
Nominating three candidates for election to the nine-member Texas
Industries board of directors
•
Proposing three corporate governance shareholder proposals
We
believe
Texas
Industries
is
substantially
undervalued
due
to:
•
Operational underperformance
•
A history of over-promising and under-delivering
•
Inadequate management accountability
•
Poor shareholder communication
•
Poor governance policies and practices
2
Purpose
Our nominees will seek to improve management accountability and
implement appropriate corporate governance practices to improve
operational performance and restore shareholder value

3
We believe TXI is undervalued
because:
TXI
has
a
history
of
underperformance
•
TXI operating margins and return on invested capital (ROIC) consistently lag peers
•
TXI stock has underperformed its peers over a 1-year, 3-year, 5-year and 10-year period
Poor
shareholder
communication
•
A pattern of over-promising and under-delivering and a lack of transparent shareholder
communication
in
our
view
has
reduced
management
credibility
and
may
be
a
factor
in
TXI
trading at a discount to its peers
Board
and
management
interests
are
not
sufficiently
aligned
with
TXI’s
shareholders
•
The
board
has
unilaterally
implemented
three
successive
ten-year
“poison
pills”
without
communicating
the
need
for
a
“poison
pill”
or
seeking
shareholder
approval
•
The
Company’s
board
nominees
received
very
high
“withhold”
votes
in
the
2007
and
2008
director elections, which we believe is evidence of widespread stockholder discontent
•
We believe TXI’s
compensation policies are flawed
3

4
Make
operational
improvements
•
Goal is to improve returns on invested capital (ROIC) and operating margins
Promote
appropriate
management
oversight
and
accountability
•
Goal is to promote management accountability and appropriately link pay to performance
Review
strategic
alternatives
•
Our nominees will encourage the board to:
Perform a comprehensive strategic review
Carefully consider all capital allocation decisions
Promote
corporate
governance
improvements
•
Annual elections for all directors
•
Majority voting standard in uncontested director elections
•
Require shareholder approval of any “poison pill”
•
Eliminate all supermajority shareholder voting provisions from certificate of incorporation and
bylaws
•
Provide shareholders the right to call special meetings and act by written consent
•
Annual shareholder advisory vote on compensation
4
Shamrock’s nominees will seek to:

5
Southeastern Asset Management and Nassef
Sawiris
support our nominees and proposals
•
TXI shareholders representing 24.2% of the TXI outstanding shares have
publicly
announced
they
will
vote
“FOR”
our
nominees
and
governance
proposals
Southeastern Asset Management, Inc., 9.3% shareholder, announced
support on September 1
Nassef
Sawiris, 14.9% shareholder, announced support on September 17
•
In his letter publicly expressing support, Nassef
Sawiris
stated “the SAVF
director
nominees
and
their
three
resolutions
will
be
a
catalyst
for
improving
performance and governance at TXI and most importantly for increasing
shareholder value”

6
TXI’s
Record of Poor Performance
6

7
7
(1)
6/29/09
was
the
date
SAVF
announced
its
intent
to
nominate
three
candidates
to
the
TXI
Board
of
Directors.
(2)
TSR is total shareholder returns, cumulative and dividend adjusted, for periods ending 6/29/09.
(3)
TXI returns assume that Chaparral Steel spin-off shares were sold after the spin-off for $18.40 per share and the
proceeds were reinvested in TXI stock.
(4)
Peer group (VMC, MLM, EXP) was used by TXI Compensation Committee in determining director compensation as
per 2008 TXI proxy statement.  Peer group returns calculated as market capitalization weighted index.
Source: Capital IQ as of 6/29/09. 
TXI’s
stock has underperformed its peers over multiple
periods
(43%)
(39%)
6%
23%
(21%)
(30%)
29%
31%
(50%)
(40%)
(30%)
(20%)
(10%)
0%
10%
20%
30%
40%
1-YR TSR
3-YR TSR
5-YR TSR
10-YR TSR
TXI
Peer Group
TXI
Historical
Stock
Performance
Summary
as
of
6/29/09
(1)
(2)
(3)
(4)

8
8
(1)
Source:  Capital IQ as of 6/29/09, the date SAVF announced its intent to nominate three candidates to the TXI
Board of Directors.
(2)
VMC had negative EPS and tangible book value as of 6/29/09.
(3)
VMC 5-year average P/TBV was not meaningful (18.7x) as of 6/29/09.
TXI
stock
traded
at
a
discount
to
its
peers
as
of
6/29/09
(1)
TXI
stock
has
historically
traded
at
the
lowest
multiples
in
its
peer
group
Price / EPS
Price
/
Tangible
Book
Value
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
Vulcan Materials
Texas Industries
Eagle Materials
Martin Marietta
Materials
Vulcan Materials
Texas Industries
Eagle Materials
Martin Marietta
Materials
0.0x
5.0x
10.0x
15.0x
20.0x
25.0x
Eagle Materials
Texas Industries
Vulcan Materials
Martin Marietta
Materials
Vulcan Materials
Texas Industries
Materials
Eagle Materials
ROIC
2.0%
4.0%
4.6%
10.5%
15.3%
9.7%
2.9%
ROIC
2.0%
4.0%
8.1%
4.6%
10.5%
15.3%
9.7%
2.9%
8.1%
NM
NM
NM
Martin Marietta

9
9
TXI margins have been among the lowest in its industry
Source: Capital IQ for the quarter ended 8/31/09.
We believe TXI’s
low relative margins illustrate the need for better
board oversight and management accountability
0%
5%
10%
15%
20%
Mitsubishi Materials
Texas Industries
CRH
Vulcan Materials
Italcementi
Eagle Materials
Cementos
Portland Valderrivas
CEMEX
HeidelbergCement
Holcim
Martin Marietta Materials
Titan Cement
Buzzi
Unicem
Lafarge
0%
5%
10%
15%
20%
25%
Mitsubishi Materials
Texas Industries
CRH
HeidelbergCement
CEMEX
Italcementi
Vulcan Materials
Martin Marietta Materials
Lafarge
Holcim
Buzzi
Unicem
Cementos
Portland Valderrivas
Eagle Materials
Titan Cement
LTM
EBIT
Margins
5-Year
Average
EBIT
Margins

0%
2%
4%
6%
8%
10%
10
10
TXI’s
return on invested capital has also been among
the lowest in its industry
Source: Capital IQ for the quarter ended 8/31/09.  ROIC is net operating profit after taxes divided by
average invested capital.
We believe the Company’s low relative ROIC demonstrates poor capital
allocation decisions
5-Year
Average
Return
on
Invested
Capital
LTM
Return
on
Invested
Capital
0%
5%
10%
15%
20%
Mitsubishi Materials
Texas Industries
Vulcan Materials
Cementos
Portland
Valderrivas
CEMEX
Eagle Materials
Italcementi
HeidelbergCement
Holcim
CRH
Titan Cement
Lafarge
Martin Marietta Materials
Buzzi
Unicem
Mitsubishi Materials
Lafarge
Texas Industries
HeidelbergCement
Holcim
CEMEX
Italcementi
CRH
Cementos
Portland
Valderrivas
Vulcan Materials
Martin Marietta Materials
Buzzi
Unicem
Titan Cement
Eagle Materials

11
Lack of Effective Board Oversight
11

12
12
Better board oversight over capital allocation is required
(1)
TXI FY 2009 10-K.
(2)
SAVF estimates.  Hunter expansion has not been completed so no additional production has come on line.  Oro
Grande
plant
is
“not
profitable”
according
to
TXI
CFO
Ken
Allen
in
the
Company’s
Q1’10
conference
call.
Source: SEC filings, TXI earnings conference call transcripts.
$427 million spent on Oro Grande expansion (2005-2008)
$294
million
spent
on
suspended
Hunter
expansion
(2007-2009)
(1)
+
$0 in profit
(2)
$55 million of capitalized interest (2005-2009)
+
Board has authorized management to spend $776 million on expansion
projects that have yielded no profit

13
13
•
TXI misjudged declining cement demand in its markets and was slow to
change course in response to the construction downturn
•
While competitors conserved capital to preserve balance sheet flexibility, TXI
incurred substantial leverage and expended significant cash on ill-timed
expansion projects, some of which are uncompleted and have been
indefinitely suspended
•
TXI has been slow to right-size its cost structure to match demand
TXI board and management misjudged the market
Delayed reaction to a severe market downturn demonstrates poor
business management and a lack of effective management oversight

14
Management has repeatedly failed to achieve publicly-stated objectives:
14
Source: TXI earnings conference call transcripts, SEC filings, and Capital IQ.
TXI has a history of over-promising and under-delivering
Issue
Announced
Management
Target
Reality
Underperformance
Oro Grande budget
$350 million
$427 million
$77 million (22%)
Oro Grande EBIT
$60 million
$0
$60 million (100%)
Company EBIT
margins
20%
5.2% (LTM)
$113
million
(74%)
(1)
Company EBITDA
potential
$383 million
$109 million
$274 million (72%)
(1)
SAVF calculation based on applying 20% margin to TXI revenue LTM as of quarter ended 8/31/09.

On
the
Oro
Grande,
California
expansion
•
Management Claim:
“In California, we are in the process of replacing 1.3
million tons of older, inefficient cement capacity with 2.3 million tons of
highly
efficient
annual
production…
expect
the
incremental
EBIT
to be
at
least
$60
million
or
in
terms
of
EBITDA,
$75
million. ”
–
Mel
Brekhus
(CEO), TXI Q3’08 Earnings Call (3/27/08)
•
Reality:
“You will recall that we have said many times that we expect
the new plant to have an incremental EBIT benefit of about $60
million annually ,
if
market
conditions
remain
stable.
That
benefit
assumed
that we would be able to sell roughly the full capacity of the plant at EBIT
margins of around 30%. With the softer market in California, today's
increased energy costs, and the chance of lower cement prices and
production,
we believe it will take us longer to reach the EBIT benefit
than we originally planned. ”
–
Mel Brekhus
(CEO), TXI Q4’08 Earnings Call
(7/10/08)
15
Source: TXI earnings conference call transcripts.
TXI has a history of over-promising and under-delivering
We

On
the
Hunter,
Texas
expansion
•
Analyst
Question:
“And
the
second
question
was,
obviously
the
risk
here
is
with
Texas
slowing,
you
bring
new
capacity
on
stream
in
12
months
or
18
months
time,
there's
a
risk
that
we
could
have
a
rerun
of
what's
happened
here
in
California. ”
–
Mike
Betts, JP Morgan Analyst, TXI Q1’09 Earnings Call (9/25/08)
•
Management
Claim:
“The
answer
is
that
at
current
demand
levels,
Texas
is
consuming
about
17.5
million
tons
of
cement
per
year.
It
can
produce
about
12
million.
We're
going
to come on line with our 1.4 million and CEMEX is going to come on with another
million.
So
that
makes
it
about
14.5
million,
which
means
that
if
demand
is
flat,
we're going to need to bring in 3 million tons of cement in the calendar year
2009. ”
–
Mel
Brekhus
(CEO),
TXI
Q1’09
Earnings
Call
(9/25/08)
•
Reality:
Finally,
we
have
recently
decided
to
delay
the
expansion
of
our
Central Texas cement plant beginning in our fourth quarter. We do not believe
the
market
will
require
additional
cement
during
the
near
term
or
afford
us
incremental earnings from that additional production…So whereas demand may have
been
17
million
tons
last
year,
it
is
going
to
be
more
likely
in
the
13
to
14
million
tons
this year in Texas.”
–
Mel Brekhus
(CEO), TXI Q2’09 Earnings Call (1/08/09)
16
Source: TXI earnings conference call transcripts.
TXI has a history of over-promising and under-delivering

On Margin Improvements
•
Management
Claim:
we
had
previously
set
a
goal
for
something
over 20% in terms of EBIT margins and with what's happened,
particularly in energy price spikes and softness out in California, we
haven't changed our goal at all. When you look at overall margins and
EBIT for cement businesses and for aggregate businesses and ready mix
businesses and you put them together, our
long-term
--
not
even
our
long-term goal but just our goal of reaching an EBIT margin of
something greater than 20% still
fits. ”
–
Richard
Fowler
(Fmr.
CFO),
TXI
Q4’08 Earnings Call (07/10/08)
•
Reality:
TXI’s
EBIT
margins
have
remained
well
below
20%
since
this
goal
was reiterated
17
FY 2006
FY 2007
FY 2008
FY 2009
Q1'10
TXI EBIT Margin
9.4%
13.5%
9.6%
4.9%
7.5%
Source: TXI earnings conference call transcripts and Capital IQ.
TXI has a history of over-promising and under-delivering
“…

18
18
(1)
Total cash compensation equals sum of salary, bonus and LTIP payout. Top 5 officers as per TXI proxy filings
in each fiscal year.
(2)
ROIC as per Capital IQ.
(3)
See p.7 for explanation of return calculations and sources.
Pay not proportionate to performance –
TXI should
improve its compensation practices
•
From 2003 to 2008, the company’s average
ROIC was 3.9%
(2)
, significantly below its
current cost of capital
•
Over the same time period, management’s
annual cash compensation grew at a CAGR of
25%
•
TXI should improve its compensation policies to
better align pay with performance
•
Short-term and long-term cash incentives are
based on return on equity (ROE) targets
Using ROE may reward management for
inappropriately increasing financial
leverage without necessarily improving
operating performance
TXI’s
ROE objectives are set relative to
the total U.S. manufacturing industry,
not the construction materials industry,
so in our view they are not an
appropriate measure of how TXI
performs against relevant peers
$0.5
$1.1
$0.9
$1.4
$2.4
$2.2
$0.6
$1.2
$1.6
$1.9
$2.4
$3.3
$3.0
$1.2
$1.7
$2.7
$2.7
$3.8
$5.7
$5.2
$1.8
$0
$1
$2
$3
$4
$5
$6
$7
FY 2003
FY 2004
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
TXI Top 5 Officers
Total
Cash
Compensation
($
in
millions)
(1)
CEO
Officers ex. CEO
(43%)
(39%)
6%
23%
(21%)
(30%)
29%
31%
(50%)
(40%)
(30%)
(20%)
(10%)
0%
10%
20%
30%
40%
1-YR TSR
3-YR TSR
5-YR TSR
10-YR TSR
TXI
Historical
Stock
Performance
Summary
as
of
6/29/09
(3)
TXI
Peer Group

19
19
TXI uses ROE in setting cash incentives
Other metrics should be used, such as ROIC,
given the capital intensive nature of the
business
Calculation methodology for calculating cash
incentives is not transparently defined
Disclosure should clearly define required
performance vs. selected metric and payout
levels at threshold, target and maximum
payouts
Annual bonus cash incentive payments are
uncapped
Annual bonus potential should be capped to
ensure proper risk vs. reward balance
Equity incentives have time-based vesting
Equity incentives should be performance
based with vesting tied to appropriate multi-
year performance goals
No holding period required for equity
incentives post-vesting
Should require holding a meaningful portion
of equity incentives for 2 to 3 years post
vesting
No clawback
Clawback should be implemented to recapture
incentive awards which were improperly
awarded due to executive misconduct or
fraud
TXI’s compensation policies are flawed
Current practice
Recommended practice

20
TXI’s
Record of Poor Shareholder
Communication
20

21
21
TXI’s
communication with the Street shows contempt
for shareholders
•
Meryl Witmer
(Eagle Capital Partners):
“And then just on the request by a 15% shareholder for a
Board seat and also his request to increase his share holdings… I'm just curious about your
rationale for not offering him a Board seat. I think you owe us more of an explanation than
one sentence in an 8-K . ”
•
Mel Brekhus
(CEO):
“No, Meryl, I disagree. And our statement in our 8 - K speaks for itself. ”
•
Meryl Witmer: “ What do you disagree with? That you owe us more of a statement? ”
•
Mel Brekhus: “ That's correct. ”
•
Meryl Witmer:
“That it’s just not in the interest of shareholders, but no rational logical explanation
about that?”
–
Meryl Witmer, Eagle Capital Partners
•
Mel Brekhus:
“ You have the explanation in front of you, maybe, if you don't, w e can send you
the 8-K.
But that's the only comment I'm going to make about that on this teleconference call.”
–
TXI Q1’09 Earnings Call (9/25/08)
The
“explanation
in
front
of”
shareholders?
•
“In response to the request of Mr. Nassef
Sawiris
disclosed in the Schedule 13D/A filed by NNS
Holding with the Securities and Exchange Commission on September
15, 2008, Texas Industries,
Inc. has communicated to him that its Board of Directors has considered his request and does not
believe it to be in the best long-term interest of all shareholders.“
–
TXI Form 8-K (9/25/08)
Source: SEC filings, TXI earnings conference call transcripts.  Emphasis added.

22
Is the board listening to the shareholders?
Proxy Year
Mel G.  Brekhus
David S. Coats
Thomas R. Ransdell
Robert D. Rogers
2008
Not up for election
49%
49%
Not up for election
2007
24%
Not up for election
Not up for election
25%
%
Votes
withheld
(1)
The board has never explained or responded to high withhold votes at
the 2007 and 2008 annual meetings
(1) Eugenio R. Clariond is not shown as he was appointed without a shareholder vote on January 15, 2009, after
the 2008 annual meeting, to replace Robert Alpert, a Company-nominated incumbent who was scheduled to
retire at the 2008 Annual Meeting after 33 years on the board.

23
Poor communication regarding TXI director elections
•
In
the
2008
director
election,
the
board
circumvented
the
normal
shareholder
election process by not including on its slate a director nominee to replace an
incumbent
director
who
the
board
publicly
announced
in
its
proxy
statement
for the 2008 Annual was retiring.  Instead, the board waited until months
after the 2008 director election to handpick a former TXI director as the
replacement director without a shareholder vote
•
TXI has never addressed or explained:
The high withhold votes from the 2007 and 2008 director elections
Why the board circumvented the normal director election process by not
including Eugenio Clariond
on its slate for the 2008 Annual Meeting

24
Is the board of directors dominated by Robert Rogers?
•
Robert D. Rogers has been a director of TXI for 40 years, following his father
who was a director for 46 years
•
Almost all of TXI’s
current directors have outside relationships with Mr. Rogers
that are unrelated to TXI
•
At a recent meeting with Shamrock representatives, Mr. Rogers acted as if he
called all the shots at TXI:
He
suggested
that
even
if
our
nominees
are
elected
to
the
board,
the
holdover incumbent directors would not cooperate with them and would
instead seek to isolate and marginalize them
When asked why the Governance Committee refused to meet with us or
any of our nominees, Mr. Rogers suggested (despite not even being a
member of the Governance Committee) there was no point because our
nominees
lacked
independence
–
apparently
because
they
were
nominated by a shareholder, and were not selected by Mr. Rogers or his
fellow incumbent directors

25
Shamrock Nominees (Election of Directors -
Proposal 1)
25

26
•
Our highly qualified nominees collectively have extensive experience in (i) finance and
capital
markets
(including
capital
allocation
matters),
(ii)
cement
operations
and     
(iii)
corporate
governance
matters
—
all
areas
in
which
we
believe
Texas
Industries
needs substantial improvement
Marjorie
L.
Bowen
is
a
former
Managing
Director
of
Houlihan
Lokey
Howard
&
Zukin
Dennis
A.
Johnson,
CFA
is
portfolio
manager
of
the
Shamrock
Activist
Value
Fund and a member of the Securities and Exchange Commission Investor
Advisory Committee
Gary
L.
Pechota
is
President
and
CEO
of
DT-Trak
Consulting,
Inc.
and
former
President and CEO of Giant Cement Holding, Inc
•
Detailed
information
regarding
the
background
and
qualifications
of
our
three
nominees
is
in Annex A of this presentation
26
Shamrock’s nominees are qualified to address key
concerns

27
Make
operational
improvements
•
Our nominees will seek improvements to returns on invested capital (ROIC) and operating
margins
Promote
appropriate
management
oversight
and
accountability
•
Our nominees will call for strict management accountability and appropriate linkage of
management pay to performance
Review
strategic
alternatives
•
Our nominees will encourage the board to:
Perform a comprehensive strategic review
Carefully consider all capital allocation decisions
Recommend
corporate
governance
improvements
•
Annual elections for all directors
•
Majority voting standard in uncontested director elections
•
Require shareholder approval of any “poison pill”
•
Eliminate all supermajority shareholder voting provisions from certificate of incorporation and
bylaws
•
Provide shareholders the right to call special meetings and act by written consent
•
Annual shareholder advisory vote on compensation
27
Shamrock’s nominees will seek to:

28
Shamrock Shareholder Proposals
(1)
28
(1)
The full text of the three Shamrock proposals is in Annex B of this presentation.

29
29
Classified board
Annual elections for all directors
Plurality voting in director elections
Majority vote in all uncontested director
elections
“Poison pills”
implemented by board
without shareholder approval
“Poison pills”
submitted to shareholders
for approval
Supermajority shareholder voting
standards
Simple majority voting on all
shareholder matters
Shareholders cannot call a special
meeting or act by written consent
Shareholders should have the right to
call special meetings and act by written
consent
No shareholder “say on pay”
Annual shareholder advisory vote on
compensation
Current policy
SAVF Recommendation
TXI has a number of shareholder-unfriendly corporate
governance policies
Our three shareholder proposals allow shareholders to tell the board 
they want corporate governance improvements

30
TXI should make appropriate corporate governance
improvements
•
Our three proposals request that the board of directors:
Declassify
the
board
and
require
all
directors
to
be
accountable
to
the
shareholders
annually
by
standing
for
election
every
year
(Proposal
3
-
Board Declassification Resolution)
Institute majority voting in uncontested director elections and require
that any incumbent who does not receive a majority of the votes cast
on his or her election resign from the board, effective immediately
(Proposal 4 -
Majority Voting Resolution)
Obtain
shareholder
approval
of
all
“poison
pill”
rights
plans
(Proposal
5
-
Shareholder Vote on Poison Pills Resolution)
•
We believe the financial performance of Texas Industries is impacted by its
corporate
governance
policies
and
the
level
of
accountability
of
the
board
of
directors and management to its shareholders
TXI’s
opposition to our three proposals demonstrates the incumbent
board endorses poor corporate governance policies. 
Whose interests are they protecting?

31
Board Declassification Resolution (Proposal 3)
31

32
Board Declassification Resolution (Proposal 3)
•
TXI’s
classified board currently provides directors with three-year terms,
meaning an individual director is only accountable to shareholders every third
year
•
We believe the right to hold directors accountable through annual elections is
a fundamental shareholder right and a touchstone of corporate democracy
•
Directors should stand on their individual records each and every year
•
TXI shareholders cannot act by written consent, cannot call shareholder
meetings,
and
cannot
remove
directors
without
cause.
Therefore,
director
elections are the only way shareholders can hold TXI directors accountable
•
Shamrock’s three nominees have agreed that if they are elected to
the board of directors, they will forego the second and third years of
their unexpired terms and voluntarily stand for election at the 2010
Annual Meeting of Shareholders, if the board of directors is
declassified and all other incumbent directors also commit to annual
director elections commencing with the 2010 Annual Meeting

33
Majority Voting Resolution (Proposal 4)
33

34
•
We believe plurality voting in the election of directors is a fundamentally flawed system, does
not promote true corporate democracy, and allows unpopular incumbents who receive even
one vote to be re-elected
•
TXI’s
plurality voting standard ensures that TXI’s
nominees are automatically elected to the
board in any uncontested election, regardless of performance
•
By
contrast,
a
majority
voting
standard
in
uncontested
elections
means
a
candidate
cannot
be
elected or remain in office unless the holders of a majority of the votes cast believe the
nominee has done (or in the case of a new nominee, will do) a good job representing the
shareholders’
interests
•
Majority voting, coupled with a requirement that incumbents who do not get a majority vote
must resign effective immediately, is an important corporate governance feature that promotes
director accountability
•
We also believe that majority voting in uncontested elections augments the director
accountability
we
believe
would
result
if
Texas
Industries’
board
were
declassified
and
annual
director elections were implemented, as requested in our Board Declassification Resolution
(Proposal 3)
Majority Voting Resolution (Proposal 4)

35
Shareholder Vote on Poison Pills Resolution
(Proposal 5)
35

36
Shareholder Vote on Poison Pills Resolution (Proposal 5)
•
TXI’s
board
has
adopted
three
successive
10-year
shareholder
rights
plans
(“poison
pills”)
without
shareholder
approval:
first poison pill unilaterally adopted in 1986
second poison pill unilaterally adopted in 1996
third poison pill unilaterally adopted on October 17, 2006
•
We believe the shareholders should have the right to decide whether a poison pill
benefits them
•
We believe poison pills should not be adopted or maintained without shareholder
approval, except in rare circumstances
•
Statutory protections (such as Section 203 of the Delaware General Corporation Law,
which TXI has not opted out of) already provide significant protections from hostile
advances
•
No Vote = No Transparency. Because the board unilaterally adopted each of these poison
pills, it did not clearly and transparently explain to shareholders the necessity of a poison
pill or how it enhances shareholder value

37
Annexes and Additional Information
37

38
Annex A
38

39
Shamrock’s Nominees (page 1 of 3)
•
                                  Ms. Bowen worked at Houlihan Lokey Howard & Zukin from May 1989 until
January 2008, where she was a Managing Director, the National Director of the firm’s fairness
opinion practice, and was one of five members of the firm’s Financial Advisory Services
Committee, which is responsible for managing the firm’s Financial Advisory Services practice. 
During her tenure at Houlihan Lokey, Ms. Bowen advised corporations, directors and other
fiduciaries on a broad range of corporate finance transactions and other matters, including, among
other things, evaluating strategic alternatives, strategies for maximizing shareholder value, debt
and equity reorganizations, asset sales, financings, corporate governance matters, and mergers
and acquisitions transactions.  Since July 2009, Ms. Bowen has served as an independent director
for Euramax International, Inc., an international producer of aluminum, steel, vinyl, copper and
fiberglass products for original equipment manufacturers, distributors, contractors and home
centers in North America and Western Europe. Since October 2008, Ms. Bowen has served as an
independent director for Vertis, Inc., a provider of targeted print advertising and direct marketing
solutions to retail and consumer services companies. Since April 2008, Ms. Bowen has served as
an independent director and the Chair of the Audit Committee of Global Aviation Holdings, Inc.,
the parent company of World Airways, Inc. and North American Airlines, Inc., both U.S.-
certificated air carriers providing transportation services for the U.S. military, major international
passenger and cargo carriers, international freight forwarders and international leisure tour
operators. Ms. Bowen graduated with a B.A., cum laude, from Colgate University in 1987, and
obtained her M.B.A, with a concentration in finance, from the University of Chicago in 1989.
Marjorie L. Bowen :

40
Shamrock’s Nominees (page 2 of 3)
•
                                         Since July 2008, Mr. Johnson has served as a Managing Director of
Shamrock Capital Advisors, Inc. (“SCA”), the investment advisor for the Shamrock Activist Value
Fund, a Vice President of Shamrock Partners Activist Value Fund, L.L.C., and the portfolio
manager of the Shamrock Activist Value Fund, where he has primary responsibility for portfolio
investment decisions for the Shamrock Activist Value Fund.  Prior to joining SCA, Mr. Johnson was
the Senior Portfolio Manager in charge of all global corporate governance activities for the
California Public Employees’ Retirement System (CalPERS) from September 2005 until July 2008.
Prior to joining CalPERS, Mr. Johnson was a Managing Director of Citigroup Global Markets, Inc.
from April 1994 until May 2005. Mr. Johnson served as the Chair of the Board of Directors of the
Council of Institutional Investors from April 2008 until July 2008.  Mr. Johnson was a member of
the Board of Directors for the National Association of Corporate Directors (NACD), Northern
California Chapter, from September 2006 to July 2008, and was a member of NACD’s “Blue
Ribbon Commission” on Board of Directors and Shareholder Communications.  Mr. Johnson also
has testified before the U.S. Congress on various investor and corporate governance subjects. 
Mr. Johnson currently is a member of the SEC Investor Advisory Committee and is a member of
the Board of Directors of Mattel Children’s Hospital at UCLA.  Mr. Johnson received his B.A. in
Economics from the Virginia Military Institute in 1981, his M.S. in Finance from the Virginia
Commonwealth University in 1985, and is a Chartered Financial Analyst (CFA) Charterholder.
Dennis
A.
Johnson,
CFA :

41
:
Since
December
2007,
Mr.
Pechota
has
served
as
President
and
CEO
of
DT-Trak
Consulting,
Inc.,
a
medical
coding,
billing
and
data
entry
services
company.
From
May
2005
until
December
2007,
Mr.
Pechota
was
a
private
investor.
Mr.
Pechota
was
the
Chief
of
Staff
of
the
National
Indian
Gaming
Commission
from
August
2003
until April 2005, responsible for, among other things, coordinating the activities of the Administrative, Audit,
Enforcement and Management Contract Divisions of the Commission and presenting their views to the Chairman of
the
Commission.
Mr.
Pechota
served
as
President
of
Giant
Group
Ltd.’s
cement
operations
(Keystone
Cement
Company from May 1992 until September 1994 and Giant Cement Company from January 1993 until September
1994).
Mr.
Pechota
joined
Giant
Group
Ltd.’s
cement
operations
in
mid-1992
as
its
cement
operations
were
approaching insolvency, successfully led the restructuring of its cement operations, and completed a $140 million
IPO
of
its
cement
operations
in
September
1994.
Mr.
Pechota
served
as
the
Chairman
of
Giant
Cement
Holding,
Inc.
from September 1994 until November 1999, and served as its President and CEO from September 1994 until
December
2001.
In
1999,
Forbes
magazine
recognized
Giant
Cement
Holding,
Inc.
as
one
of
Forbes’
Best
Small
Companies, based on its most recent annual and five year financial performance, including sales and profit growth,
return
on
equity
and
stock
performance.
In
1999,
Mr.
Pechota
planned
and
executed
the
sale
of
Giant
Cement
Holding,
Inc.
to
Cementos
Portland
for
$343
million.
Mr.
Pechota
also
was
the
President
and
CEO
of
Dacotah
Cement
from January 1983 until May 1992, the Vice President of Finance for Madera Pacific, Inc. from April 1981 until
January
1983,
and
was
an
Audit
Supervisor
with
the
Ernst
and
Whinney
accounting
firm
from
May
1975
until
April
1981.
Mr.
Pechota
is
a
former
Chairman
and
member
of
the
Finance
Committee
of
the
Portland
Cement
Association,
currently
serves
as
a
director
and
the
member
of
the
Audit
Committee
of
Insteel
Industries,
Inc.
(Nasdaq:
IIIN),
one
of the largest manufacturers of steel wire reinforcing products for concrete construction applications, and is a
director and a member of the Audit Committee of Black Hills Corporation (NYSE: BKH), an energy company
operating
in
utilities
and
non-regulated
energy.
Mr.
Pechota
was
formerly
a
member
of
the
Compensation
Committee
of
Black
Hills
Corp.
from
May
2007
until
May
2009.
Mr.
Pechota
received
his
B.S.
in
Business
and
Social
Science
from Black Hills State University in 1971, received his M.B.A. with an emphasis in Business-Finance from the
Stanford University Graduate School of Business in 1974, and is a Certified Public Accountant (currently inactive).
Shamrock’s Nominees (page 3 of 3)
•
Gary
L.
Pechota

42
Annex B
42

43
The
Board
Declassification
Resolution
(Proposal
3):
•
“ RESOLVED , that the shareholders of Texas Industries, Inc. (the “Company”) hereby
request that the Board of Directors take all necessary actions to amend the Company’s
bylaws to declassify the Board of Directors and promptly institute annual elections of all
directors.”
The
Majority
Voting
Resolution
(Proposal
4):
•
“ RESOLVED , that the shareholders of the Company hereby request that the Board of
Directors amend the Company’s bylaws and take all other necessary steps to provide that,
in each uncontested election for the Board of Directors, each director shall be elected by a
majority of the votes cast with respect to that director, and further that any incumbent
director who fails to receive such a majority vote in favor of their re-election in an
uncontested election shall be required to resign from the Board of Directors, effective
immediately.
A
‘contested
election’
for
these
purposes
means
any
election
of
directors
in
which
the
number
of
candidates
standing
for
election
exceeds
the
number
of
seats
on
the
Board of Directors to be filled through the election.”
Text of Shamrock’s Proposals (page 1 of 2)

44
The
Shareholder
Vote
on
Poison
Pills
Resolution
(Proposal
5):
•
“ RESOLVED , that the shareholders of the Company hereby request that the Board of
Directors take all necessary action (a) to submit the Company’s rights agreement (the
“Rights Agreement”), dated as of November 1, 2006, between the Company and Mellon
Investor Services LLC (f/k/a
ChaseMellon
Shareholder Services, L.L.C.), to a vote of the
Company’s shareholders no later than the 2010 Annual Meeting of Shareholders and, (b) if
the holders of at least a majority of the outstanding voting stock do not affirmatively vote
to ratify the Rights Agreement at such meeting, to promptly redeem all outstanding
preferred stock purchase rights issued under the Rights Agreement and terminate the
Rights Agreement, and not thereafter adopt or extend any rights agreement or similar plan
unless
such
adoption
or
extension
is
approved
by
the
affirmative
vote
of
the
holders
of
a
majority of the outstanding voting stock of the Company within no more than twelve
months after the date of such adoption or extension.”
Text of Shamrock’s Proposals (page 2 of 2)

45
Annex C
45

46
About Shamrock Capital Advisors, Inc.
•
Shamrock Capital Advisors, Inc. (“SCA”) is the manager of Shamrock
Activist Value Fund, L.P. and its parallel fund, Shamrock Activist Value Fund
IV, L.P., (collectively the “Shamrock Activist Value Fund”, or “SAVF”).  SCA
is a subsidiary of Shamrock Holdings, Inc.
•
SCA manages funds with 5 distinct strategies with total capital under
management of $1.5 billion
•
The Shamrock Activist Value Fund holds 2.8 million shares of TXI,
representing approximately 10.2% of the outstanding TXI common stock
•
The Shamrock Activist Value Fund combines a deep value focus with
shareholder activism
•
The Shamrock Activist Value Fund has $810 million in committed capital
from major public pension funds and the Roy E. Disney family
46

47
Annex D
47

48
We believe in TXI’s
long-term potential
We seek to improve operational performance, management
accountability and corporate governance practices in order to maximize
shareholder value
•
We believe this is not the right time to sell, but it is time to end the status quo at TXI
Most industry participants are currently focused on deleveraging and divesting assets
•
TXI continues to experience a depressed level of earnings
We believe TXI’s stock is trading at a large discount to the estimated replacement value of its
assets (103% - 138%)
We believe TXI’s stock is trading at an even larger discount to its strategic value based on
normalized earnings potential (120% - 187%)
•
To restore value to TXI shares, we believe TXI must achieve its earnings potential.  To do this: 
TXI management needs to be held accountable for its unsatisfactory performance
The TXI board must engage in proactive oversight
Our three nominees, who possess the necessary skills, judgment, independence and energy,
should be elected to the board
•
We do not believe that this management under the current board can return TXI to normalized
industry levels of profitability

49
49
(1)
$275/ton cement replacement cost estimate from J.P. Morgan Building Materials report (4/22/09), p.287. 
$330/ton cement replacement cost estimate from Longbow Research Construction Materials report (8/4/08), p. 6.
(2)
Aggregate reserves includes 40 million cubic yards of expanded shale and clay, with estimated density of 0.49
metric tons/cubic yard based on estimates from the Expanded Shale, Clay and Slate Institute.
(3)
Aggregate and ready-mix concrete replacement cost estimates from Longbow Research Construction Materials
report (8/4/08), p. 6.
(4)
Net debt includes $50 million to complete the Hunter expansion, based on estimated $40-60 million of deferred
expenditures as per TXI 2009 10-K, p. 20.
TXI’s
stock trades at less than half of what we believe to
be the replacement cost of its assets…
TXI Replacement Cost Analysis
($ and metric tons in millions)
Low
High
Cement Capacity (tons)
7.2
7.2
Replacement
Cost
Per
Unit
of
Capacity
($/ton)
(1)
$275
$330
Replacement Cost of TXI Cement Capacity
$1,970.9
$2,365.0
Aggregate
Reserves
(tons)
(2)
816.0
816.0
Replacement
Cost
Per
Unit
of
Reserves
($/ton)
(3)
$0.9
$0.9
Replacement Cost of TXI Aggregate Reserves
$719.6
$719.6
# of Ready-Mix Concrete Plants
61
61
Replacement
Cost
Per
RMC
Plant
(3)
$3.0
$3.0
Replacement Cost of TXI Cement Capacity
$183.0
$183.0
TXI Replacement Cost
$2,873.5
$3,267.6
Net
Debt
including
unamortized
discount
(4)
(577.1)
(577.1)
Total TXI Net Replacement Cost
$2,296.4
$2,690.5
Diluted Shares Outstanding
28.7
28.7
Total TXI Net Replacement Cost Per Share
$80.14
$93.80
Share Price as of 10/02/09
$39.41
$39.41
Premium to Current Price
103.3%
138.0%

50
50
…and a steep discount to what we believe to be its
strategic value based on its normalized earnings power
(1)
Based on industry precedent transactions during past 10 years.
(2)
TXI management Investor Presentation as of 10/1/09.
(3)
Net debt includes $50 million to complete the Hunter expansion, based on estimated $40-60 million of deferred
expenditures as per TXI 2009 10-K, p. 20.
TXI Strategic Value Analysis
($ in millions, except per share values)
Low
High
Exit Multiple
(1)
8.0x
10.0x
EBITDA
Potential
Per
TXI
Management
(2)
$383.0
$383.0
Total Enterprise Value
$3,064.0
$3,830.0
Less:
Net
Debt
incl.
unamortized
discount
(3)
(577.1)
(577.1)
Equity Value
$2,486.9
$3,252.9
Diluted Shares Outstanding
28.6
28.8
Value Per Share
$86.85
$112.97
Share Price as of 10/02/09
$39.41
$39.41
Premium to Current Price
120.4%
186.6%

The Shamrock Activist Value Fund, L.P. has filed its definitive proxy materials
for the 2009 Annual Meeting of Texas Industries Shareholders with the
Securities and Exchange Commission (the “SEC”).  Copies of all proxy materials
Shamrock Activist Value Fund, L.P. files with the SEC are available without
charge at the SEC’s
website at www.sec.gov
and its definitive proxy materials
also may be obtained without charge at http://www.shamrock-txiproxy.com. 
Information regarding why Shamrock Activist Value Fund, L.P. believes Texas
Industries shareholders should vote the WHITE proxy card “FOR”
its three
director nominees and “FOR”
its three shareholder proposals is contained in
Shamrock Activist Value Fund, L.P.’s definitive proxy statement. 
Shamrock Activist Value Fund, L.P. urges you to vote the WHITE proxy card
“FOR”
its three highly-qualified nominees and “FOR”
its three shareholder
resolutions. Please discard and do not return any proxy card that may be sent
to you by or on behalf of Texas Industries.  If you have already
voted a proxy
card solicited by Texas Industries, you have every right to change your vote by
voting using the WHITE proxy card. 
Shareholders who need assistance voting their shares may contact
MacKenzie
Partners, Inc., Shamrock Activist Value Fund, L.P.’s proxy solicitor by calling
(800) 322-2885 or e-mailing to savf-txi@mackenziepartners.com.
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