SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Check the appropriate box:
[XX] Preliminary Proxy Statement* * Revised
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or
240.14a-12
Valmont Industries, Inc.
_________________________________________________________________
(Name of Registrant as Specified In Its Charter)
Terry J. McClain
_________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[XX] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:________________________________________________________
2) Aggregate number of securities to which transaction
applies:________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):(1)
___________________________
(1) Set forth the amount on which the filing fee is calculated
and state how it was determined.
________________________________________________________________
4) Proposed maximum aggregate value of transaction:_______
_________________________________________________________________
5) Total fee paid:________________________________________
[XX] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
form or Schedule and the date of its filing.
1) Amount Previously Paid:________________________________
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4) Date Filed:____________________________________________
PRELIMINARY COPY
PROXY STATEMENT
FOR THE
APRIL 22, 1996
ANNUAL SHAREHOLDERS' MEETING
Dear Shareholder:
You are cordially invited to attend Valmont's Annual Meeting of
Shareholders on April 22, 1996, at 2:00 P.M. The meeting will be
held in the Lecture Hall of the Joslyn Art Museum at 2200 Dodge
Street in Omaha. You may enter the building through its main
entrance on the east side.
The formal meeting of Shareholders will be followed by a review
of operations for 1995 and the first quarter of 1996, as well as
our outlook for the future. Following the meeting, you are
invited to an informal reception where you can visit with the
Directors, Officers, and Business Unit Managers about the
activities of the Company.
If you cannot attend the meeting in person, please vote your
shares by proxy. Mark, sign and date the enclosed proxy card and
return it in the postage paid envelope. Your prompt return of
the card will help your Company avoid additional solicitation
costs. In person or by proxy, your vote is important.
I look forward to seeing you at our Annual Meeting.
Sincerely,
Robert B. Daugherty
Chairman of the Board
Proxy Statement for Valmont Industries, Inc.
Notice of Annual Meeting of Shareholders
Notice is hereby given that the Annual Meeting of Shareholders of
Valmont Industries, Inc., a Delaware corporation, will be held at
the Joslyn Art Museum, 2200 Dodge St., Omaha, Nebraska 68102, on
Monday, April 22, 1996, at 2:00 p.m. local time for the purpose
of:
(1) Electing three directors of the Company to three year
terms.
(2) Amending the Valmont 1988 Stock Plan.
(3) Approving the Valmont Executive Incentive Plan.
(4) Approving the Valmont 1996 Stock Plan.
(5) Amending the Certificate of Incorporation to eliminate
shareholder action without a meeting.
(6) Ratifying the appointment of Deloitte & Touche
LLP as independent accountants for fiscal 1996.
(7) Transacting such other business as may properly come
before the meeting.
Shareholders of record at the close of business on March 1, 1996
are entitled to vote at this meeting. If you do not expect to be
present at the Annual Meeting and wish your shares to be voted,
please sign, date and mail the enclosed proxy form.
By Order of the Board of Directors
Thomas P. Egan, Jr.
Secretary
Valley, Nebraska 68064
March 22, 1996
Proxy Statement
To Our Shareholders:
The Board of Directors of Valmont Industries, Inc. solicits your proxy in
the form enclosed for use at the Annual Meeting of Shareholders to be held
on Monday, April 22, 1996, or at any adjournments thereof.
At the close of business on March 1, 1996, the record date for shareholders
entitled to notice of and to vote at the meeting, there were outstanding
13,577,422 shares of the Company's common stock. There were no
preferred shares outstanding. All holders of common stock are entitled to
one vote for each share of stock held by them.
Shares of common stock represented by a properly signed and returned proxy,
including shares represented by broker non-votes or abstaining from voting,
will be treated as present at the meeting for the purpose of determining a
quorum. Directors are elected by a favorable vote of a plurality of the
shares of voting stock present and entitled to vote, in person or by proxy,
at the Annual Meeting. Accordingly, abstentions or broker non-votes as to
the election of directors will not affect the election of the candidates
receiving the plurality of votes.
The proposals to amend the Valmont 1988 Stock Plan, approve the Valmont
Executive Incentive Plan, approve the 1996 Valmont Stock Plan, and to
ratify accountants require the affirmative vote of a majority of shares
present in person or represented by proxy , w hile the proposal to
amend the Company's Certificate of Incorporation requires the affirmative
vote of a majority of shares entitled to vote . A bstentions
will have the same effect as a vote against these proposals. Broker
non-votes on the proposal to amend the Company's Certificate of
Incorporation will have the same effect as a vote against that proposal;
broker non-votes on any other proposal are treated as shares as to which
voting power has been withheld by the beneficial holders of those shares
and therefore will not be counted as votes for or against such proposals.
Any shareholder giving a proxy may revoke it before the meeting by mailing
a signed instrument revoking the proxy to: Corporate Secretary, Valmont
Industries, Inc., P.O. Box 358, Valley, Nebraska 68064. To be effective,
the revocation must be received by the Secretary before the date of the
meeting. A shareholder may, if he or she desires, attend the meeting in
person, and at that time withdraw his or her proxy and vote in person.
The cost of solicitation of proxies, including the cost of reimbursing
banks and brokers for forwarding proxies and proxy statements to their
principals, shall be borne by the Company. This proxy statement and proxy
card are being mailed to shareholders on or about March 22, 1996.
<TABLE>
Certain Shareholders
The following table sets forth, as of March 1, 1996, the number of shares
beneficially owned by (i) persons known to the Company to be beneficial
owners of more than 5% of the Company's outstanding common stock, (ii)
directors, nominees and named executive officers and (iii) all directors
and executive officers as a group.
<CAPTION>
Amount and Nature
Name and Address of of Beneficial Ownership Percent
Beneficial Owner March 1, 1996 (1) of Class (2)
___________________________________________________________________
<S> <C> <C>
Robert B. Daugherty 3,550,784 26.2%
c/o Valmont Industries, Inc.
Valley, Nebraska
Charles M. Harper 38,000 ---
Allen F. Jacobson 16,000 ---
Lloyd P. Johnson 6,000 ---
John E. Jones 5,000 ---
Thomas F. Madison 12,000 ---
Walter Scott, Jr. 26,000 ---
Robert G. Wallace 8,000 ---
Mogens C. Bay 201,932 1.5%
Gary L. Cavey 47,513 ---
Terry J. McClain 50,050 ---
Joseph M. Goecke 92,853 ---
All Executive Officers and Directors
As Group (20 persons) 4,485,380 33.0%
<FN>
(1) Includes shares which the executive officers have, or within 60
days of March 1, 1996 will have, the right to acquire through presently
exercisable stock options, as follows: 93,200, 33,700, 19,700 and
16,000 shares for Messrs. Bay, Cavey, McClain and Goecke, respectively; and
316,524 shares for all executive officers and directors as a group.
(2) Unless otherwise indicated, beneficial ownership of any named
individual does not exceed 1% of the outstanding shares of the class.
</TABLE>
Election of Directors
The Company's Board of Directors is composed of nine members, divided into
three classes. Each class serves for three years on a staggered term
basis. Of the nine current Directors of the Company, seven are not
employees of the Company. Mr. Daugherty and Mr. Bay are currently employed
by the Company, such employment constituting their principal occupation for
at least the last five years.
Three Directors have terms of office that expire at the 1996 Annual
Meeting. They have been nominated by the Board of Directors for reelection
for a three-year term.
These nominees are:
Mogens C. Bay
John E. Jones
Walter Scott, Jr.
Unless authority to vote for directors is withheld, it is intended that the
shares represented by the enclosed proxy will be voted for the election of
the nominees named above. In the event any of such nominees becomes
unavailable for election, the proxy holders will have discretionary
authority to vote the proxies for a substitute. The Board of Directors has
no reason to believe that any such nominee will be unavailable to serve.
Nominees For Election - Terms Expire 1999:
Mogens C. Bay, Age 47, President and Chief Executive Officer of the Company
since August, 1993 and Director of the Company since October, 1993. From
November, 1990 to August, 1993 served as President and Chief Operating
Officer of the Irrigation Division of the Company.
Served as Director of Company continuously since October 1993.
Valmont Stock: 201,932 shares
John E. Jones, Age 61, Retired Chairman, President and Chief Executive
Officer of CBI Industries, Inc. since January 1996. Chairman, President
and Chief Executive Officer of CBI Industries, Inc. from June 1989 to
January 1996. Director, Allied Products Corporation, Amsted Industries
Incorporated, Interlake Corporation and NICOR Inc.
Served as Director of Company continuously since April 1993
Valmont Stock: 5,000 shares
Walter Scott, Jr., Age 64, Chairman of the Board, President and Director of
Peter Kiewit Sons', Inc.; Director, Berkshire Hathaway, Inc., Burlington
Resources, Inc., California Energy Company, ConAgra, Inc., C-TEC
Corporation, FirsTier Financial, Inc. and MFS Communications Co., Inc.
Served as Director of Company continuously since April 1981.
Valmont Stock: 26,000 shares
Continuing Directors - Terms Expire 1998:
Charles M. Harper, Age 68, Chairman of the Board and Director of RJR
Nabisco Holdings Corp. since May 1993; Chief Executive Officer May 1993 to
December 1995. Chairman of the Board and Director of Nabisco Holdings
Corp. since January 1995. Chairman of the Board of ConAgra, Inc. 1981 -
May 1993, and Chief Executive Officer of ConAgra 1976 - September 1992;
Director, ConAgra, Inc., E.I. DuPont de Nemours & Co., Inc., Norwest
Corporation and Peter Kiewit Sons', Inc.
Served as Director of Company continuously since April 1979.
Valmont Stock: 38,000 shares
Lloyd P. Johnson, Age 65, Retired Chairman of Norwest Corporation since May
1995. Chairman of Norwest Corporation from January 1989 to May 1995
and Chief Executive Officer of Norwest Corporation from January
1989 to January 1993. Director, Norwest Corporation, Cargill,
Incorporated, Musicland Stores Corporation; Trustee, Minnesota Mutual Life
Insurance Company; Member, Advisory Board of Directors, Minnegasco.
Served as Director of Company continuously since June 1991.
Valmont Stock: 6,000 shares
Thomas F. Madison, Age 60, President, MLM Partners since January 1993; Vice
Chairman and Office of CEO of Minnesota Mutual Life Insurance Company
February 1994 - August 1994; President - Markets, U S WEST Communications
June 1987 - December 1992; Director, Alexander & Alexander Insurance
Advisory Board, Communications Holdings, Inc., Eltrax Systems, Inc., LHS
Health Systems, Minnegasco Advisory Board, Span Link.
Served as Director of Company continuously since June 1987. Valmont Stock:
12,000 shares
Continuing Directors - Terms Expire 1997:
Robert B. Daugherty, Age 74, Chairman of the Board and Director of the
Company; Director, KN Energy, Inc. and Peter Kiewit Sons', Inc.
Served as Director of Company continuously since March 1947.
Valmont Stock: 3,550,784 shares
Allen F. Jacobson, Age 69, Retired Chairman and Chief Executive Officer of
3M Company; Director, 3M Company, Abbott Laboratories, Deluxe Corporation,
Mobil Corporation, Northern States Power Company, Potlatch Corporation,
Prudential Insurance Company of America, Sara Lee Corporation, Silicon
Graphics, Inc. and U S WEST Inc.
Served as Director of Company continuously since July 1976.
Valmont Stock: 16,000 shares
Robert G. Wallace, Age 69, Retired Executive Vice President and Director of
Phillips Petroleum Co.; Director, CBI Industries, Inc. and A. Schulman,
Inc.
Served as Director of Company continuously since April 1984.
Valmont Stock: 8,000 shares
(1) Messrs. Jacobson (Chairman), Harper, Johnson and Madison are
members of the Compensation Committee, which met two times during the last
fiscal year.The Compensation Committee, composed of directors who are not
employees of the Company, directs the administration of various management
incentive plans;takes action upon or makes recommendations to the Board of
Directors on salary changes for certain key management personnel; and take
action upon or makes recommendations to the Board of Directors concerning
certain employee benefit plan matters.
Messrs. Scott (Chairman), Jones and Wallace are members of the Audit
Committee, which met three times during the last fiscal year. The Audit
Committee, composed of directors who are not employees of the Company,
recommends selection of the independent public accountants; review matters
pertaining to the audit, systems of internal control and accounting
policies and procedures; has approval authority with respect to services
provided by the independent public accountants; and directs and supervises
investigations into matters within the scope of its duties.
The Company does not have a standing Nominating Committee.
(2) The Board of Directors held six meetings during the last fiscal
year. During 1995, non-employee directors were paid an annual fee of
$25,000 plus $2,000 for each board meeting and $1,000 for each committee
meeting attended. Committee chairmen receive an additional $6,000 per
year. Messrs. Harper, Jacobson, Johnson, Scott and Wallace have elected to
receive their fees in the form of deferred compensation. Payments are to
be made in fifteen annual installments commencing one year after the
earliest of termination of service as a director of the company, attainment
of age 70, or death. The deferred fees accrue interest indexed to U.S.
Government bonds, compounded monthly. Employee directors do not receive
director or meeting fees.
(3) Each non-employee director who is elected or continues as a
director following an Annual Shareholders Meeting receives a
non-discretionary stock award of 1,000 shares each year following such
meeting. Such shares are subject to an agreement that the shares or the
equivalent value must be returned to the Company if the Director leaves the
Board unless such departure is due to (i) death, (ii) retirement from the
Board at mandatory retirement age, or (iii) resignation or failure to stand
for re-election with the prior approval of the Board.
(4) Subject to shareholder approval of the Amendment to the Valmont
1988 Stock Plan (see page ___), each non-employee director received on July
20, 1995 an option to acquire 2,000 shares of Valmont common stock at the
then current market price of the Company's common stock. Such grant was
conditioned on approval of the Amendment by Valmont's shareholders at the
1996 Annual Meeting of Shareholders. Option grants for 2,000 shares of
common stock will be made annually commencing in 1996 if shareholders
approve the 1996 Stock Plan. See "Approval of the Valmont 1996 Stock Plan
- Director Participation."
(5) During fiscal 1992 the Company entered into a service agreement
with PKS Information Services, Inc., ("PKS") a subsidiary of Peter Kiewit
Sons', Inc. Mr. Walter Scott, a Director of the Company, is Chairman,
President and Director of Peter Kiewit Sons', Inc. The agreement is for a
term of five years and covers the use of time on the PKS mainframe computer
equipment. In 1995 lease payments totaled approximately $1,300,000.
Additionally, in 1995 t he Company paid Kiewit Construction Company,
another subsidiary of Peter Kiewit Sons' Inc., approximately $230,000 for
construction services to improve the Company's facilities. The Company
believes such payments were comparable to amounts that would have been paid
to unaffiliated entities.
(6) See "Certain Shareholders" for additional information on stock
ownership.
<TABLE>
Executive Compensation
The following Summary Compensation Table provides information on the annual
and long-term compensation for services paid by the Company to the Chief
Executive Officer and the four highest paid executive officers for the
three fiscal years ended December 30, 1995.
Summary Compensation Table
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
Payouts All
Name and Number of
LTIP Other
Principal Position Year Salary ($) Bonus ($) Options
(#) Payouts ($) Comp.($)(1)
<S> <C> <C> <C> <C>
<C> <C>
Mogens C. Bay (2) (3) 1995 $438,211 $518,812 50,000
$458,311 $77,645
President and Chief 1994 396,366 403,605 50,000
19,585 36,880
Executive Officer 1993 247,154 209,544 0
0 20,551
Robert B. Daugherty 1995 340,000 369,849 0
355,955 59,683
Chairman of the Board 1994 346,538 365,154 0
18,395 32,854
of Directors 1993 243,846 113,163 0
0 16,065
Gary L. Cavey (3) 1995 178,846 186,835 15,000
116,318 28,170
President and Chief 1994 133,819 221,154 15,000
0 15,973
Operating Officer - 1993 -- -- --
-- --
Industrial Products Division
Terry J. McClain(2)(3) 1995 165,385 171,777 7,000
116,318 25,304
Vice President and Chief 1994 142,173 119,245 15,000
7,683 12,560
Financial Officer 1993 -- -- --
-- --
Joseph M. Goecke (2) (3) 1995 203,000 99,313 0
141,907 27,044
President and Chief Operating 1994 199,212 221,913 10,000
10,550 19,425
Officer - Valmont Irrigation 1993 154,846 155,733 0
0 13,976
<FN>
(1) Amounts represent the Company's contribution under the Valmont
Employee Retirement Savings Plan and related Restoration Plan.
(2) Messrs. Bay, McClain and Goecke hold 3,000, 2,000 and 2,000
restricted shares of the Company's common stock, respectively, which on
December 30, 1995 were valued at $74,250, $49,500 and $49,500 respectively.
The restrictions lapse in February 1999. The executive receives dividends
paid on the restricted
stock.
(3) Mr. Bay became Chief Executive Officer in August 1993. Messrs.
Goecke, McClain, and Cavey became executive officers in August 1993,
January 1994, and July 1994, respectively.
</TABLE>
Stock Option Grants In Fiscal Year 1995
The following table provides information on 1995 stock option grants to
executive officers named in the Summary Compensation Table:
<TABLE>
<CAPTION>
Individual Grants
Potential Realizable
___________________________________________________________________________
_ Value at Assumed
% of Total
Annual Rates of
Options
Stock Price Appreciation
Granted to Exercise
for Option Term (2)
Options Employees In Price ($)
Expiration _______________________
Name Granted (1)(4) Fiscal Year Per Share
Date 5% ($) 10% ($)
<S> <C> <C> <C> <C>
<C> <C>
Mogens C. Bay 50,000 26.7% 23.75 Dec.
18, 2005 746,812 1,892,569
Robert B. Daugherty -- -- --
-- -- --
Gary L. Cavey 15,000 8.0% 23.75 Dec.
18, 2005 224,044 567,771
Terry J. McClain 7,000 3.7% 23.75 Dec.
18, 2005 104,554 264,960
Joseph M. Goecke -- -- --
-- -- --
___________________________________________________________________________
________________________________
All Shares Outstanding (3)
202,538,532 513,272,405
<FN>
(1) All options were granted on December 19, 1995, and become
exercisable in three equal annual installments commencing on the first
anniversary of the grant.
(2) Potential realizable value is based on the assumption that the
common stock price appreciates at the annual rate shown (compounded
annually) from the date of grant until the end of the ten-year option term.
The numbers are calculated based on the requirements promulgated by the
Securities and Exchange Commission. The actual value, if any, an executive
may realize will depend on the excess of the stock price over the exercise
price on the date the option is exercised (if the executive were to sell
the shares on the date of exercise) so there is no assurance that the value
realized will be at or near the potential realizable value as calculated in
this table.
(3) All shares outstanding represents the increase in total Company
shareholder value if the stock price and assumed rates used in the stock
option assumptions are achieved multiplied by the number of shares
outstanding at the end of fiscal 1995 (13,560,202).
(4) No stock appreciation rights were granted during fiscal 1995.
</TABLE>
Options Exercised in Fiscal Year 1995 and Fiscal Year End Values
The following table provides information on the exercise of stock options
during fiscal 1995 and the status of unexercised stock options at the end
of the year for the executive officers named in the Summary Compensation
Table.
<TABLE>
<CAPTION>
Value of Unexercised
Number of
Unexercised In-The-Money Options
Options at FY-End
(#) at FY-End ($) (2)
________________________ ________________________
Shares
Acquired On Value
Exercise # Realized ($)(1) Exercisable
Unexercisable Exercisable Unexercisable
-------- -------- --------
-------- -------- --------
<S> <C> <C> <C> <C>
<C> <C>
Mogens C. Bay 9,867 $154,905 93,200 103,333
$1,193,804 $463,333
Robert B. Daugherty 0 0 0 0
0 0
Gary L. Cavey 3,200 31,125 33,700 31,000
407,650 139,000
Terry J. McClain 0 0 19,700 21,000
195,219 118,000
Joseph M. Goecke 1,149 152,831 16,000 10,667
137,752 82,667
<FN>
(1) Value realized is the difference between the closing price of the
Company's Common Stock on the day of exercise and the option exercise price
multiplied by the number of shares.
(2) Value is the difference between the closing price of the Company's
Common Stock on the last trading day of fiscal 1995 and the option exercise
price of the in-the-money options multiplied by the number of in-the-money
options.
</TABLE>
Long-Term Incentive Plans - Awards in Fiscal Year 1995
The following table provides information on the long-term incentive program
awards granted to the executive officers named in the Summary Compensation
Table during fiscal year 1995.
<TABLE>
<CAPTION>
Performance
Number Of or Other
Estimated Future Payouts under
Shares, Units Period Until
Non-Stock Price-Based Plans
or Other Maturation or
Threshold Target Maximum
Rights (#) Payout
($) ($) ($)
<S> <C> <C> <C>
<C> <C>
Mogens C. Bay 1 Unit (1)
98,500 197,000 394,000
Robert B. Daugherty 1 Unit (1)
76,500 153,000 306,000
Gary L. Cavey 1 Unit (1)
25,000 50,000 100,000
Terry J. McClain 1 Unit (1)
25,000 50,000 100,000
Joseph M. Goecke 1 Unit (1)
30,500 61,000 122,000
<FN>
(1) Awards are for the three-year award cycle ending in 1997. Similar
awards with the same estimated future payouts may be earned for award
cycles ending in 1995 and 1996. See "Compensation Committee Report on
Executive Compensation - Long-Term P erformance Incentives" for a
description of the award program.
</TABLE>
Compensation Committee Report on Executive Compensation
Valmont's executive compensation policies and practices are approved by the
Compensation Committee of the Board of Directors (the "Committee"). The
Committee consists of four Directors who are not employees of the Company.
The Committee's determinations on compensation of the Chief Executive
Officer and other executive officers are reviewed with all the non-employee
Directors who constitute a majority of the Board.
The Committee has implemented compensation policies, plans and programs
which seek to enhance shareholder value, by aligning the financial
interests of the Company's executive officers with those of its
shareholders. Annual base salaries are generally set at competitive median
levels. The Company relies on annual and long-term incentive compensation
and stock options to attract, retain and incent executive officers and
other key employees. Incentive compensation is variable and tied to
corporate, business unit and individual performance. The plans are
designed to incent management to grow earnings, enhance shareholder value
and focus on the long-term growth of the Company. All incentive
compensation plans are reviewed at least annually to assure their linkage
to the current strategies and needs of the business. The Company's
programs have been designed so that compensation paid to named executive
officers in 1995 will be deductible under the Internal Revenue Code's $1
million compensation limits for deductibility.
Valmont's executive compensation is based on four components, each of which
is intended to support the overall compensation philosophy.
Base Salary. Base salary is targeted at the median level for industrial
manufacturing companies of similar characteristics such as sales volume,
capitalization, and financial performance. Salaries for executive officers
are reviewed by the Committee on an annual basis and may be increased based
on the individual's performance or a change in competitive pay levels in
the marketplace.
The Committee reviews with the Chief Executive Officer and the human
resources executive and approves, with modifications it deems appropriate,
an annual salary plan for the Company's executive officers (other than the
Chief Executive Officer). The annual salary plan is developed by the
Company's human resources staff under the ultimate direction of the Chief
Executive Officer based on peer group and national surveys of industrial
manufacturing organizations with similar characteristics and on performance
judgments as to the past and expected future contributions of the
individual executive. In addition, the Committee periodically is advised
by independent compensation consultants concerning salary competitiveness.
The Committee reviews and fixes the base salary of the Chief Executive
Officer based on similar competitive compensation data and the Committee's
assessment of his past performance, his leadership in establishing
performance standards in the conduct of the Company business, and its
expectation as to his future contributions in directing the long-term
success of the Company and its businesses.
The Committee increased the Chief Executive Officer's salary in December
1995 to the current level of $500,000 per year, which is within the
mid-range of salaries of chief executive officers of industrial
manufacturing companies comparable in sales, capitalization and financial
performance. The salary increase also reflected the Committee 's desire to
reward Mr. Bay for his superior performance in increasing the Company's net
earnings by 31.1% in 1995.
Annual Incentives. The Company's short-term incentives are established
under the Total Value Impact (TVI) Plan. The Committee believes that the
annual bonus of significant employees, including executive officers, should
be based on optimizing operating profits and prudent management of the
capital employed in the business. Accordingly, the TVI plan provides for
target performance levels based upon the Company's or business units' net
operating income after tax less the cost of capital. A minimum threshold
level must be met before any awards are earned. Individual award targets
are based on a pre-determined percentage of base salary considering the
individual's position and the Committee's assessment of the individual's
expected contribution in such position. Participants, thresholds and
specific performance levels are established by the Committee at the
beginning of each fiscal year.
The Committee approved the participation of 49 significant
employees, including 13 executive officers, in the TVI Plan for 1995.
Based on performance levels achieved during 1995, the Committee approved
aggregate bonus payments of $3,109,480 . The TVI bonus of
$518,812 paid to the Chief Executive Officer for 1995 was based on
the pre-established performance goals under the Plan .
Long-Term Performance Incentives. Long-term performance incentives for
senior management employees are provided through the Long-Term Incentive
Program ("Program") established under the Company's 1988 Stock Plan. The
Program operates on three-year award cycles or in certain shorter periods
from the commencement of the Program. Target awards are established for
each participant based on a percentage of the participant's base salary.
Awards are earned on performance against specific goals based on average
three-year return on equity and average three-year net earnings and other
factors selected by the Committee. A performance matrix provides for the
earning of greater or lesser awards relative to the target award based on
greater or lesser levels of performance. The Committee selects the
participants, establishes the target award, and determines the performance
matrix based on return on equity, net earnings and other selected factors
at the beginning of each fiscal year. The Committee determines the payment
of awards following a review of performance at the end of each award cycle.
Awards may be paid in cash or in shares of common stock or any combination
of cash and stock.
The Committee selected the 13 executive officers who participated in the
award cycle ending in 1995. Based on performance goals previously
established by the Committee, the Committee approved payments aggregating
$1,919,228 for 1995 to the 13 executive officers. The award of
$458,311 to the Chief Executive Officer for 1995 was based on the
Company's increase in net earnings and improved return on equity during the
award cycle.
Stock Incentives. Long-term stock incentives are provided through grants
of stock options and restricted stock to executive officers and other key
employees pursuant to the Company's 1988 Stock Plan ("Plan"). The stock
component of compensation is intended to retain and motivate employees to
improve long-term shareholder value. Stock options are granted at the
prevailing market value and only have value if the Company's stock price
increases. Generally, stock options vest beginning on the first
anniversary of the grant in equal amounts over three to six years and
employees must be employed by the Company at the time of vesting in order
to exercise the options. The Committee believes this feature of the
compensation program directly links the participant's interests with those
of the shareholders and the long-term performance of the Company.
The Committee establishes the number and terms of options granted under the
Plan. The Committee encourages executives to build a substantial ownership
investment in the Company's common stock. The Option Exercised table on
page ___ reflects the shares acquired by certain executive officers during
1995. The table on page ___ reflects the ownership position of the
directors and executive officers at March 1, 1996. Outstanding performance
by an individual executive officer is recognized through larger option
grants. The Committee, in determining grants of stock options under the
Plan, also reviews and considers the executive's history of retaining
shares previously obtained through the exercise of prior options.
The Committee granted options for an aggregate of 187,500 shares to 50
employees during 1995, including options for an aggregate of 105,500 shares
to the executive officers. The Chief Executive Officer was granted in
December 1995 a non-qualified option to acquire 50,000 shares. The number
of shares awarded in the 1995 grant, when valued at the stock price
on the date of grant, was approximately two times Mr. Bay's salary
which the Committee believes is a competitive annual grant compared to CEO
stock grants at other comparable industrial manufacturing companies and
recognizes the improved performance of the business in 1994 and 1995 under
Mr. Bay's leadership.
Restricted stock grants are also a part of the Company's long-term stock
incentives. Restricted stock awards will be issued when performance
results and the strategic needs of the business warrant. There were no
restricted stock awards in 1993, 1994 or 1995 to executive officers.
The Committee believes that the programs described above provide
compensation that is competitive with comparable manufacturing companies,
links executive and shareholder interest and provides the bases for the
Company to attract and retain qualified executives. The Company's stock
price increased over 45% in 1995 and the Company's market capitalization
increased over $106 million. The Committee will continue to monitor the
relationship among the executive compensation, the Company's performance
and shareholder value.
Compensation Committee
Allen F. Jacobson, Chairman
Charles M. Harper
Lloyd P. Johnson
Thomas F. Madison
Shareholder Return Performance Graphs
The following graphs compare the yearly change in cumulative total
shareholder return on the Company's Common Stock with the cumulative total
returns of the S&P SmallCap 600 Index and an index consisting of a
combination of the S&P's Electrical Equipment and Machinery Diversified
indexes for the five and ten year periods ended December 31, 1995. The
graphs assume that the value of the investment in Valmont Common Stock and
each Index was $100 on December 31, 1990 and December 31, 1985,
respectively, and that all dividends were reinvested.
<TABLE>
<CAPTION>
Indexed Returns ($)
Years Ending
Company/Index Dec 90 Dec 91 Dec 92 Dec 93 Dec 94
Dec 95
______________________ _______ _______ _______ _______
_______ _______
<S> <C> <C> <C> <C> <C>
<C>
Valmont Industries 100 96.50 163.01 181.59
157.33 232.10
S&P Smallcap 600 Index 100 148.49 179.74 213.50
203.31 264.22
Electrical/Machinery
Index 100 130.10 140.89 174.85
175.62 240.62
</TABLE>
<TABLE>
<CAPTION>
Indexed Returns ($)
Years Ending
Dec 85 Dec 86 Dec 87 Dec 88 Dec 89 Dec 90 Dec 91
Dec 92 Dec 93 Dec 94 Dec 95
______ ______ ______ ______ ______ ______ ______
______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C>
<C> <C> <C> <C>
Valmont Industries 100 95.61 131.24 300.54 507.82 320.27 309.07
522.07 581.57 503.88 743.36
S&P Smallcap 600
Index 100 03.23 89.29 106.69 121.51 92.73 137.69
166.66 197.97 188.52 245.00
Electrical/Machinery
Index 100 104.64 130.93 134.57 183.70 166.98 217.24
235.25 291.97 293.25 401.78
</TABLE>
APPROVAL OF AMENDMENT TO THE
VALMONT 1988 STOCK PLAN
The Board of Directors reviewed director compensation following the 1995
annual stockholders' meeting. The directors determined that, in lieu of
any increase in cash compensation, the directors would receive annual
options to acquire Valmont common stock at the fair market value of such
stock on the date of grant.
The directors therefore approved an amendment to the Valmont 1988 Stock
Plan (the "Amendment") in June 1995. Pursuant to the Amendment, each
non-employee director is entitled to receive annually a nonqualified stock
option for 2,000 shares of Valmont common stock exercisable at the closing
price of Valmont common stock on the date of grant. The Amendment provided
that the first such award would be made on the third business day following
the public release by the Company of its quarterly earnings for the second
quarter of fiscal 1995. Pursuant to the Amendment, Valmont's non-employee
directors each received on July 20, 1995 an option to acquire 2,000 shares
of Valmont common stock at an exercise price of $21.50 per share. Such
options become exercisable 180 days following shareholder approval of the
Amendment. Such grant was specifically conditioned on approval of the
Amendment by Valmont's stockholders at the 1996 annual meeting of
stockholders. If the stockholders do not approve the Amendment, the July
1995 option grants will be voided.
Valmont's stockholders are also being asked to approve the Valmont 1996
Stock Plan. This plan provides for a similar grant of nonqualified stock
options to non-employee directors on an annual basis beginning in 1996.
The Amendment therefore applies only to the grant of options to Valmont's
non-employee directors in July 1995.
The favorable vote of the holders of a majority of the outstanding shares
of Valmont's common stock present in person or represented by proxy at the
meeting is required for approval of the Amendment to the Valmont 1988 Stock
Plan.
The Board of Directors recommends a vote FOR the
approval of the Amendment to Valmont's 1988 Stock Plan.
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION TO
REQUIRE ALL STOCKHOLDER ACTION BE TAKEN AT A STOCKHOLDER MEETING
The Board of Directors has unanimously approved an amendment to Valmont's
Certificate of Incorporation to add a new Article XIII (the "Proposed
Amendment"), subject to stockholder approval. The Proposed Amendment reads
as follows:
ARTICLE XIII
Annual and Special Meeting of Stockholders
Any action required or permitted to be taken by the holders of the capital
stock of the Company must be effected at a duly called annual or special
meeting of such holders and may not be effected by any consent in writing
by such holders.
Delaware law permits, unless otherwise provided in the Certificate of
Incorporation, any action required or permitted to be taken by stockholders
to be taken without a meeting, without prior notice and without stockholder
vote, if a written consent setting forth the action to be taken is signed
by stockholders having the number of votes necessary to authorize such
action at a meeting of stockholders. Valmont's Certificate of
Incorporation currently does contain any provision restricting or
regulating stockholder action by written consent. Consequently, unless the
Proposed Amendment is approved, persons holding a majority of Valmont's
common stock could take significant corporate action without giving other
stockholders notice or the opportunity to vote.
The Board of Directors believes that all stockholder decisions should be
made only after thoughtful consideration of complete information by all
stockholders. The information is provided through proxy solicitation, and
the period between delivery of the proxy and the stockholder meeting
provides time for consideration of such proposals. The Board of Directors
believes that all stockholders, and not just stockholders executing a
written consent, should have the opportunity to participate in the decision
process.
The Proposed Amendment, by prohibiting stockholder action by written
consent, would require that notice of and the opportunity to participate in
any proposed stockholder action be given to all stockholders of Valmont who
are entitled to vote on the particular matter. Such notice would enable the
stockholders to take action, including judicial action, in order to protect
their interests.
The Proposed Amendment may make more difficult, or delay, certain actions
by a person or a group seeking to acquire a substantial percentage of
Valmont's common stock, even though such actions might be desired by the
holders of a majority of the outstanding shares of common stock. In
addition, the following provisions of Valmont's corporate governance
documents summarized below may make more difficult, or delay, actions by a
person seeking to obtain control of Valmont: the Certificate of
Incorporation provision providing for a classified board of directors, the
Stockholder Rights Plan, certain provisions of Valmont's bylaws, and
certain provisions of Delaware law.
Valmont's Certificate of Incorporation provides that its board of directors
is divided into three classes, each of which is elected by the stockholders
once every three years. The classification of directors means that at
least two annual meetings of stockholders, rather than one, are necessary
in order to effect a change in a majority of board members.
Valmont, in December 1995, adopted a stockholder rights plan by issuing a
dividend of one preferred share purchase right (the "Rights") for each
outstanding share of common stock. The Rights will become exercisable if a
person or group (other than certain exempt persons, including Robert B.
Daugherty and his related persons and entities who currently own
approximately 27% of Valmont's common stock) acquires 15% or more of
Valmont's common stock or announces a tender offer for 15% or more of
Valmont's common stock. Valmont can redeem the rights at $.01 each at any
time before a non-exempt person acquires 15% of Valmont's common stock. If
such a person acquires 15% or more of Valmont's common stock, each Right
would enable a Valmont stockholder (other than the acquiring person) to
acquire Valmont common stock having a market value of twice the Right's
exercise price or in effect at a 50% discount to the market price. If
Valmont were acquired by a merger or similar transaction after such event,
each Right would enable a Valmont stockholder (other than the acquiring
person) to buy shares of the acquiring company having a market value of
twice the Right's exercise price or in effect at a 50% discount to the
market price.
Valmont's bylaws require certain advance notice procedures which
stockholders must follow in order to nominate a director or present any
other business in an annual stockholders' meeting. Valmont's bylaws also
provide that special meetings of stockholders may be called only by the
president of Valmont, who must call such a meeting at the request of a
majority of the board of directors. Valmont's bylaws also contain
provisions that reserve to the board of directors the right to change the
number of directors and to fill vacancies on the board of directors.
Section 203 of the General Corporation Law of the Delaware prohibits a
publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years
after the date of the transaction in which the person became an interested
stockholder, unless upon consummation of such transaction the interested
stockholder owned 85% of the voting stock of the corporation outstanding at
the time the transaction commenced or unless the business combination is,
or the transaction in which such person became an interested stockholder
was, approved in a prescribed manner. A "business combination" includes a
merger, an asset sale and any other transaction resulting in a financial
benefit to the interested stockholder. An "interested stockholder" is a
person who, together with affiliates and associates, owns 15% or more of
the corporation's voting stock.
The Proposed Amendment is not being recommended in response to any effort
to obtain control of Valmont and the Board of Directors is not aware of any
such effort.
The favorable vote of the holders of a majority of the outstanding shares
of Valmont's common stock entitled to vote at the meeting is required to
approve the Proposed Amendment.
The Board of Directors recommends a vote FOR the approval of
Article XIII to the Certificate of Incorporation.
APPROVAL OF THE VALMONT EXECUTIVE INCENTIVE PLAN
The Board of Directors has unanimously approved the Valmont Executive
Incentive Plan (the "Plan"). The Plan is designed to provide incentives to
executive officers of Valmont who have significant responsibility for the
success and growth of Valmont and to assist Valmont in attracting,
motivating and retaining executive officers on a competitive basis.
Stockholder approval of the Plan is required if payments under the Plan are
to be tax deductible as performance-based compensation under Section 162(m)
of the Internal Revenue Code as enacted in 1993. Section 162(m) generally
disallows a tax deduction for compensation over $1 million paid to an
executive officer named in the Summary Compensation Table, unless such
compensation qualifies as performance-based. No payments will be made
under the Plan if the stockholders do not approve the Plan.
The principal features of the Plan are described below:
Administration of the Plan
The Plan will be administered by the Compensation Committee of the Board of
Directors (the "Committee"). The Committee will have the sole discretion
to interpret the Plan; approve a pre-established objective performance
measure or measures annually; certify the level to which each performance
measure was attained prior to any payment under the Plan; approve the
amount of awards made under the Plan; and determine who shall receive any
payment under the Plan.
The Committee will have full power and authority to administer and
interpret the Plan and to adopt such rules, regulations and guidelines for
the administration of the Plan and for the conduct of its business as the
Committee deems necessary or advisable. The Committee's interpretations of
the Plan, and all actions taken and determinations made by the Committee
pursuant to the powers vested in it hereunder, will be conclusive and
binding on all parties concerned, including Valmont, its stockholders and
any person receiving an award under the Plan.
Eligibility
Executive officers and other key management personnel of Valmont will be
eligible to receive awards under the Plan. The Committee will designate
the executive officers and other key management personnel who will
participate in the Plan each year.
Awards
The Committee will establish annual and/or long-term incentive award
targets for participants prior to the beginning of each fiscal year (or
such later date as may be permitted under Section 162(m) of the Internal
Revenue Code); provided, if an individual becomes an executive officer
during the year, such individual may be granted eligibility for an
incentive award for that year upon such individual becoming an executive
officer. Since the number of participants may change over time and the
selection of participants is discretionary, it is not possible to determine
the number of persons who will be eligible for awards under the Plan during
its term. However, it is anticipated that approximately 50
individuals, including Valmont's Chief Executive Officer, will participate
in the Plan.
The Committee will also establish annual and/or long-term performance
targets which must be achieved in order for an award to be earned under the
Plan. Such targets will be based on cash earnings, earnings per share,
growth in cash earnings per share, achievement of annual operating profit
plans, return on equity performance, or similar financial performance
measures as may be determined by the Committee. The specific performance
targets for each participant will be established in writing by the
Committee within ninety days after the commencement of the fiscal year to
which the performance target relates. The performance target will be
established in such a manner that a third party having knowledge of the
relevant facts could determine whether the performance goal has been met.
Awards will be payable following the completion of the applicable fiscal
year upon certification by the Committee that Valmont achieved the
specified performance targets established for the participant.
Notwithstanding the attainment by Valmont of the specified performance
targets, the Committee has the discretion, for each participant, to reduce
some or all of an award that would otherwise be paid. In no event may a
participant receive an award of more than 400% of such participant's base
salary under the Plan in any fiscal year; for this purpose, a participant's
base salary will be the base salary in effect at the time the Committee
establishes the performance targets for a fiscal year or period.
Effective Date, Amendments and Termination
The Plan becomes effective beginning with fiscal 1996, upon approval by the
stockholders of Valmont. The Committee may at any time terminate or from
time to time amend the Plan in whole or in part, but no such action shall
adversely affect any rights or obligations with respect to any awards
theretofore made under the Plan. However, unless the stockholders of
Valmont shall have first approved thereof, no amendment of the Plan shall
be effective which would increase the maximum amount which can be paid to
any one executive officer under the Plan in any fiscal year, which would
change the specified performance goals for payment of awards, or which
would modify the requirement as to eligibility for participation in the
Plan.
Vote Required for Approval
The favorable vote of the holders of a majority of the outstanding shares
of Valmont's common stock present in person or represented by proxy at the
meeting is required for approval of the Plan.
The Board of Directors recommends a vote FOR the approval of
the Valmont Executive Incentive Plan.
APPROVAL OF THE VALMONT 1996 STOCK PLAN
General
Valmont's Board of Directors has adopted the Valmont 1996 Stock Plan (the
"Plan"), subject to stockholder approval. The Board of Directors recognizes
the value of stock incentives in assisting Valmont in the hiring and
retaining of management personnel and in enhancing of the long-term
mutuality of interest between Valmont stockholders and its directors,
officers and employees. Since only 120,000 shares of common stock remain
available for grant under Valmont's current stock plans, the Board of
Directors has approved the Plan which authorizes the issuance of up to
800,000 shares of Valmont common stock.
Under the Plan, the Compensation Committee (the "Committee") of the Board
may grant stock options, stock appreciation rights, restricted stock and
stock bonuses to officers and other employees of Valmont and its
subsidiaries. The number of grantees may vary from year to year. The
number of employees eligible to participate in the Plan is estimated to be
approximately 75. The Committee administers the Plan and its determinations
are binding upon all persons participating in the Plan.
The maximum number of shares of Valmont's common stock that may be issued
under the Plan is 800,000. Any shares of common stock subject to an award
which for any reason are cancelled, terminated or otherwise settled without
the issuance of any common stock are again available for awards under the
Plan. The maximum number of shares of common stock which may be issued
under the Plan to any one employee shall not exceed 40% of the aggregate
number of shares of common stock that may be issued under the Plan. The
shares may be unissued shares or treasury shares. If there is a stock
split, stock dividend, recapitalization, or other relevant change affecting
Valmont's common stock, appropriate adjustments may be made by the
Committee in the number of shares issuable in the future and in the number
of shares and price under all outstanding grants made before the event.
Grants Under the Plan
Stock Options for Employees. The Committee may grant employees
nonqualified options and options qualifying as incentive stock options.
The option price of either a nonqualified stock option or an incentive
stock option will be the fair market value of the common stock on the date
of grant. Options qualifying as incentive stock options must meet certain
requirements of the Internal Revenue Code, including the requirement that
the aggregate fair market value of the common stock (determined at the time
of the grant of the option) with respect to which such options are
exercisable for the first time by an employee during any calendar year
shall not exceed $100,000. To exercise an option, an employee may pay the
option price in cash, or if permitted by the Committee, by withholding
shares otherwise issuable on exercise of the option or by delivering other
shares of common stock if such shares have been owned by the optionee for
at least six months. The term of each option will be fixed by the Committee
but may not exceed ten years from the date of grant. The Committee will
determine the time or times when each option is exercisable. Options may
be made exercisable in installments, and the exercisability of options may
be accelerated by the Committee. All outstanding options become immediately
exercisable in the event of a change-in-control of Valmont.
Replacement Options. The Committee may grant a replacement option to any
employee who exercises all or part of an option using "qualifying stock".
A replacement option grants to the employee the right to purchase, at fair
market value as of the date of said exercise and grant, the number of
shares of stock used by the employee in payment of the purchase price for
the option or in connection with applicable withholding taxes on the option
exercise. A replacement option may not be exercised for six months
following the date of grant, and expires on the same date as the option
which it replaces. "Qualifying stock" is stock which has been owned by the
employee for at least six months prior to the date of exercise and has not
been used in a stock-for-stock swap transaction within the preceding six
months.
Stock Appreciation Rights. The Committee may grant a stock appreciation
right (an "SAR") in conjunction with an option granted under the Plan or
separately from any option. Each SAR granted in tandem with an option may
be exercised only to the extent that the corresponding option is exercised,
and such SAR terminates upon termination or exercise of the corresponding
option. Upon the exercise of an SAR granted in tandem with an option, the
corresponding option will terminate. SAR's granted separately from options
may be granted on such terms and conditions as the Committee establishes.
If an employee exercises an SAR, the employee will generally receive a
payment equal to the excess of the fair market value at the time of
exercise of the shares with respect to which the SAR is being exercised
over the price of such shares as fixed by the Committee at the time the SAR
was granted. Payment may be made in cash, in shares of Valmont common
stock, or any combination of cash and shares as the Committee determines.
Restricted Stock. The Committee may grant awards of restricted stock to
employees under the Plan. The restrictions on such shares shall be
established by the Committee, which may include restrictions relating to
continued employment and Valmont financial performance. The Committee may
issue such restricted stock awards without any cash payment by the
employee, or with such cash payment as the Committee may determine. The
Committee has the right to accelerate the vesting of restricted shares and
to waive any restrictions. All restrictions lapse in the event of a
change-in-control of Valmont.
Stock Bonuses. The Committee may grant a bonus in shares of Valmont common
stock to employees under the Plan. Such stock bonuses may be in lieu of
cash compensation otherwise payable to such employee, or may be in addition
to such cash compensation.
Director Participation. Each non-employee director will receive under the
Plan (i) an annual award of 1,000 shares of common stock and (ii) an annual
award of a nonqualified stock option for 2,000 shares of common stock
exercisable at the fair market value of Valmont's common stock on the date
of grant. These awards shall be made annually on the date of and following
completion of Valmont's annual stockholders' meeting, commencing with the
1996 annual stockholders' meeting. The common stock award will be forfeited
if the director's services terminate for any reason other than death,
retirement from the board at mandatory retirement age, or resignation or
failure to stand for re-election, in any such case without the prior
approval of the board.
Tax Withholding. The Committee may permit an employee to satisfy
applicable federal, state and local income tax withholding requirements
through the delivery to Valmont of previously-acquired shares of common
stock or by having shares otherwise issuable under the Plan withheld by
Valmont.
Other Information. Awards under the Plan are not transferable except by
will or the laws of descent and distribution and may be exercised only by
the grantee during his or her lifetime. The Board may terminate the Plan at
any time but such termination shall not affect any stock options, SAR's,
restricted stock or stock bonuses then outstanding under the Plan. Unless
terminated by action of the Board, the Plan will continue in effect until
December 31, 2005, but awards granted prior to such date will continue in
effect until they expire in accordance with their terms. The Board may
also amend the Plan as it deems advisable. All material amendments to the
Plan must be submitted to the stockholders for their approval to the extent
required by Rule 16b-3 promulgated under the Securities Exchange Act of
1934 as amended.
Federal Income Tax Consequences
With respect to incentive stock options, if the holder of an option does
not dispose of the shares acquired upon exercise of the option within one
year from the transfer of such shares to such employee, or within two years
from the date the option to acquire such shares is granted, for federal
income tax purposes (i) the optionee will not recognize any income at the
time of the exercise of the option; (ii) the excess of the fair market
value of the shares as of the date of exercise over the option price will
constitute an "item of adjustment" for purposes of the alternative minimum
tax; and (iii) the difference between the option price and the amount
realized upon the sale of the shares by the optionee will be treated as a
long-term capital gain or loss. Valmont will not be allowed a deduction
for federal income tax purposes in connection with the granting of an
incentive stock option or the issuance of shares thereunder.
With respect to the grant of options which are not incentive stock options,
the person receiving an option will recognize no income on receipt thereof.
Upon the exercise of the option, the optionee will recognize ordinary
income in the amount of the difference between the option price and the
fair market value of the shares on the date the option is exercised.
Valmont will receive an equivalent deduction at that time.
With respect to restricted stock awards and bonuses of common stock, an
amount equal to the fair market value of the Valmont shares distributed to
the employee (in excess of any purchase price paid by the employee) will be
includable in the employee's gross income at the time of receipt unless the
award is not transferable and subject to a substantial risk of forfeiture
as defined in Section 83 of the Internal Revenue Code (a "Forfeiture
Restriction"). If an employee receives an award subject to a Forfeiture
Restriction, the employee may elect to include in gross income the fair
market value of the award. In the absence of such an election, the employee
will include in gross income the fair market value of the award subject to
a Forfeiture Restriction on the earlier of the date such restrictions lapse
or the date the award becomes transferable. Valmont is entitled to a
deduction at the time and in the amount income is included in the gross
income of an employee.
With respect to stock appreciation rights, the amount of any cash (or the
fair market value of any common stock) received upon the exercise of a
stock appreciation right will be subject to ordinary income tax in the year
of receipt and Valmont will be entitled to a deduction for such amount.
Vote Required
The favorable vote of the holders of a majority of the outstanding shares
of Valmont's common stock present in person or represented by proxy at the
meeting is required for approval of the Plan.
The Board of Directors recommends a vote FOR
the approval of the Valmont 1996 Stock Plan.
Independent Public Accountants
The Board of Directors of the Company upon recommendation of the Audit
Committee on February 28, 1996 approved a change in the Company's
independent accountants from KPMG Peat Marwick LLP ("Peat Marwick") to
Deloitte & Touche LLP ("Deloitte") effective for fiscal year 1996. The
Board of Directors requests that shareholders ratify the appointment of
Deloitte. If ratification is not received, the Board will reconsider the
appointment. Representatives of both Peat Marwick and Deloitte are expected
to be present at the annual meeting, will have the opportunity to make a
statement if such representatives desire to do so, and are expected to be
available to respond to appropriate questions.
The reports of Peat Marwick on the financial statements of the Company
for the past two fiscal years contain no adverse opinion or disclaimer of
opinion and were not qualified or modified as to any uncertainty, audit
scope or accounting principle. In connection with the audits for the past
two fiscal years, there were no disagreements with Peat Marwick on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not
resolved to the satisfaction of Peat Marwick would have caused the firm to
make reference thereto in its report on the financial statements for such
years. During the past two fiscal years and through February 28, 1996,
Peat Marwick has not advised the Company of any reportable events (as
defined in Item 304(a)(1)(v) of Regulation S-K issued by the Securities and
Exchange Commission). Peat Marwick furnished the Company with a letter
addressed to the Securities and Exchange Commission in which it stated that
it agreed with the foregoing statements in this paragraph.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL YEAR 1996.
Shareholder Proposals
Shareholder proposals intended to be presented at the next annual meeting
of shareholders must be received by the Company no later than November 24,
1996 in order to be considered for inclusion in the proxy statement for
such meeting.
Other Matters
The Board of Directors does not know of any matter, other than those
described above, that may be presented for action at the Annual Meeting of
Shareholders. If any other matter or proposal should be presented and
should properly come before the meeting for action, the persons named in
the accompanying proxy will vote upon such matter and upon such proposal in
accordance with their best judgment.
By Order of the Board of Directors
Thomas P. Egan, Jr.
Secretary
Valmont Industries, Inc.
PROXY CARD
Valmont Industries, Inc.
Proxy for the Annual Meeting of Shareholders on April 22, 1996
The undersigned hereby constitutes and appoints Robert B. Daugherty and
Mogens C. Bay, or either of them, or any substitute appointed by either of
them, the undersigned's agents, attorneys and proxies to vote, as
designated below, the number of shares the undersigned would be entitled to
vote if personally present at the Annual Meeting of the Shareholders of
Valmont Industries, Inc., to be held at the Joslyn Art Museum, 2200 Dodge
Street, Omaha, Nebraska 68102, on April 22, 1996, at 2:00 p.m., local time
or at any adjournments thereof.
1) ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the contrary
below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
_________________________________________________________________
Mogens C. Bay
John E. Jones
Walter Scott, Jr.
(Instruction: To withhold authority to vote for any individual nominee,
write the nominee's name on the space provided below.)
_________________________________________________________________
2) Proposal to amend the Valmont 1988 Stock Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3) Proposal to approve the Valmont Executive Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4) Proposal to approve the Valmont 1996 Stock Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5) Proposal to amend the Certificate of Incorporation to eliminate
shareholder action without a meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6) PROPOSAL to ratify the appointment of Deloitte & Touche LLP
as independent accountants for fiscal 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
7) IN THEIR DISCRETION, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY
WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER. IF PROPERLY EXECUTED AND NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR ALL PROPOSALS.
Dated this ___ day of _______________, 1996.
Signature_______________________
Signature_________________________________
(When signing as attorney, executor, administrator,
trustee, guardian or conservator, designate full title.
All joint tenants must sign.
APPENDICES
The following plans are filed pursuant to Instruction 3 of Schedule 14A,
Item 10(b)(2). The plans are not part of the proxy statement, and copies
will not be provided to security holders.
VALMONT 1996 STOCK PLAN
SECTION 1
NAME AND PURPOSE
1.1 Name. The name of the plan shall be the Valmont 1996 Stock Plan
(the "Plan").
1.2. Purpose of Plan. The purpose of the Plan is to foster and promote
the long-term financial success of the Company and increase stockholder
value by (a) motivating superior performance by means of stock incentives,
(b) encouraging and providing for the acquisition of an ownership interest
in the Company by Employees and (c) enabling the Company to attract and
retain the services of a management team responsible for the long-term
financial success of the Company.
SECTION 2
DEFINITIONS
2.1 Definitions. Whenever used herein, the following terms shall
have the respective meanings set forth below:
(a) "Act" means the Securities Exchange Act of 1934, as amended.
(b) "Award" means any Option, Stock Appreciation Right, Restricted
Stock, Stock Bonus, or any combination thereof, including Awards
combining two or more types of Awards in a single grant.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Compensation Committee of the Board, which
shall consist of two or more members, each of whom shall be
"disinterested persons" within the meaning of Rule 16b-3 as
promulgated under the Act.
(f) "Company" means Valmont Industries, Inc., a Delaware corporation
(and any successor thereto) and its Subsidiaries.
(g) "Director Award" means an award of Stock and an annual Award of a
Nonstatutory Stock Option granted to each Eligible Director
pursuant to Section 7.1 without any action by the Board or the
Committee.
(h) "Eligible Director" means a person who is serving as a member of
the Board and who is not an Employee.
(i) "Employee" means any employee of the Company or any of its
Subsidiaries.
(j) "Fair Market Value" means, on any date, the average of the high
and low sales prices of the Stock as reported on the National
Association of Securities Dealers Automated Quotation system (or
on such other recognized market or quotation system on which the
trading prices of the Stock are traded or quoted at the relevant
time) on such date. In the event that there are no Stock
transactions reported on such system (or such other system) on
such date, Fair Market Value shall mean the average of the high
and low sale prices on the immediately preceding date on which
Stock transactions were so reported.
(k) "Option" means the right to purchase Stock at a stated price for
a specified period of time. For purposes of the Plan, an Option
may be either (i) an Incentive Stock Option within the meaning of
Section 422 of the Code or (ii) a Nonstatutory Stock Option.
(l) "Participant" means any Employee designated by the Committee to
participate in the Plan.
(m) "Plan" means the Valmont 1996 Stock Plan, as in effect from time
to time.
(n) "Restricted Stock" shall mean a share of Stock granted to a
Participant subject to such restrictions as the Committee may
determine.
(o) "Stock" means the Common Stock of the Company, par value $1.00
per share.
(p) "Stock Appreciation Right" means the right, subject to such terms
and conditions as the Committee may determine, to receive an
amount in cash or Stock, as determined by the Committee, equal to
the excess of (i) the Fair Market Value, as of the date such
Stock Appreciation Right is exercised, of the number shares of
Stock covered by the Stock Appreciation Right being exercised
over (ii) the aggregate exercise price of such Stock Appreciation
Right.
(q) "Stock Bonus" means the grant of Stock as compensation from the
Company, which may be in lieu of cash salary or bonuses otherwise
payable to the Participant or in addition to such cash
compensation.
(r) "Subsidiary" means any corporation or partnership in which the
Company owns, directly or indirectly, 50% or more of the total
combined voting power of all classes of stock of such corporation
or of the capital interest or profits interest of such
partnership.
2.2 Gender and Number. Except when otherwise indicated by the
context, words in the masculine gender used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural
shall include the singular.
SECTION 3
ELIGIBILITY AND PARTICIPATION
Except as otherwise provided in Section 7.1, the only persons eligible
to participate in the Plan shall be those Employees selected by the
Committee as Participants.
SECTION 4
POWERS OF THE COMMITTEE
4.1 Power to Grant. The Committee shall determine the Participants
to whom Awards shall be granted, the type or types of Awards to be granted,
and the terms and conditions of any and all such Awards. The Committee may
establish different terms and conditions for different types of Awards, for
different Participants receiving the same type of Awards, and for the same
Participant for each Award such Participant may receive, whether or not
granted at different times.
4.2 Administration. The Committee shall be responsible for the
administration of the Plan. The Committee, by majority action thereof, is
authorized to prescribe, amend, and rescind rules and regulations relating
to the Plan, to provide for conditions deemed necessary or advisable to
protect the interests of the Company, and to make all other determinations
necessary or advisable for the administration and interpretation of the
Plan in order to carry out its provisions and purposes. Determinations,
interpretations, or other actions made or taken by the Committee pursuant
to the provisions of the Plan shall be final, binding, and conclusive for
all purposes and upon all persons. Notwithstanding anything else contained
in the Plan to the contrary, neither the Committee nor the Board shall have
any discretion regarding whether an Eligible Director receives a Director
Award pursuant to Section 7.1 or regarding the terms of any such Director
Award, including, without limitation, the number of shares subject to any
such Director Award.
SECTION 5
STOCK SUBJECT TO PLAN
5.1 Number. Subject to the provisions of Section 5.3, the number of
shares of Stock subject to Awards (including Director Awards) under the
Plan may not exceed 800,000 shares of Stock. The shares to be delivered
under the Plan may consist, in whole or in part, of treasury Stock or
authorized but unissued Stock, not reserved for any other purpose. The
maximum number of shares of Stock with respect to which Awards may be
granted to any one Employee under the Plan is 40% of the aggregate number
of shares of Stock available for Awards under Section 5.1.
5.2 Cancelled, Terminated or Forfeited Awards. Any shares of Stock
subject to an Award which for any reason are cancelled, terminated or
otherwise settled without the issuance of any Stock shall again be
available for Awards under the Plan.
5.3 Adjustment in Capitalization. In the event of any Stock dividend
or Stock split, recapitalization (including, without limitation, the
payment of an extraordinary dividend), merger, consolidation, combination,
spin-off, distribution of assets to stockholders, exchange of shares, or
other similar corporate change, (i) the aggregate number of shares of Stock
available for Awards under Section 5.1 and (ii) the number of shares and
exercise price with respect to Options and the number, prices and dollar
value of other Awards, may be appropriately adjusted by the Committee,
whose determination shall be conclusive. If, pursuant to the preceding
sentence, an adjustment is made to the number of shares of Stock authorized
for issuance under the Plan, a corresponding adjustment shall be made with
respect to Director Awards granted pursuant to Section 7.1.
SECTION 6
STOCK OPTIONS
6.1 Grant of Options. Options may be granted to Participants at such
time or times as shall be determined by the Committee. Options granted
under the Plan may be of two types: (i) Incentive Stock Options and (ii)
Nonstatutory Stock Options. The Committee shall have complete discretion in
determining the number of Options, if any, to be granted to a Participant.
Each Option shall be evidenced by an Option agreement that shall specify
the type of Option granted, the exercise price, the duration of the Option,
the number of shares of Stock to which the Option pertains, the
exercisability (if any) of the Option in the event of death, retirement,
disability or termination of employment, and such other terms and
conditions not inconsistent with the Plan as the Committee shall determine.
6.2 Option Price. Nonstatutory Stock Options and Incentive Stock
Options granted pursuant to the Plan shall have an exercise price which is
not less than the Fair Market Value on the date the Option is granted.
6.3 Exercise of Options. Options awarded to a Participant under the
Plan shall be exercisable at such times and shall be subject to such
restrictions and conditions as the Committee may impose, subject to the
Committee's right to accelerate the exercisability of such Option in its
discretion. Notwithstanding the foregoing, no Option shall be exercisable
for more than ten years after the date on which it is granted.
6.4 Payment. The Committee shall establish procedures governing the
exercise of Options, which shall require that written notice of exercise be
given and that the Option price be paid in full in cash or cash
equivalents, including by personal check, at the time of exercise or
pursuant to any arrangement that the Committee shall approve. The Committee
may, in its discretion, permit a Participant to make payment (i) in Stock
already owned by the Participant valued at its Fair Market Value on the
date of exercise (if such Stock has been owned by the Participant for at
least six months) or (ii) by electing to have the Company retain Stock
which would otherwise be issued on exercise of the Option, valued at its
Fair Market Value on the date of exercise. As soon as practicable after
receipt of a written exercise notice and full payment of the exercise
price, the Company shall deliver to the Participant a certificate or
certificates representing the acquired shares of Stock.
6.5 Incentive Stock Options. Notwithstanding anything in the Plan to
the contrary, no term of this Plan relating to Incentive Stock Options
shall be interpreted, amended or altered, nor shall any discretion or
authority granted under the Plan be so exercised, so as to disqualify the
Plan under Section 422 of the Code, or, without the consent of any
Participant affected thereby, to cause any Incentive Stock Option
previously granted to fail to qualify for the Federal income tax treatment
afforded under Section 421 of the Code. In furtherance of the foregoing,
(i) the aggregate Fair Market Value of shares of Stock (determined at the
time of grant of each Option) with respect to which Incentive Stock Options
are exercisable for the first time by an Employee during any calendar year
shall not exceed $100,000 or such other amount as may be required by the
Code, (ii) an Incentive Stock Option may not be exercised more than three
months following termination of employment (except as the Committee may
otherwise determine in the event of death or disability), and (iii) if the
Employee receiving an Incentive Stock Option owns Stock possessing more
than 10% of the total combined voting power of all classes of Stock of the
Company, the exercise price of the Option shall be at least 110% of Fair
Market Value and the Option shall not be exercisable after the expiration
of five years from the date of grant.
6.6 Replacement Options. The Committee may grant a replacement
option (a "Replacement Option") to any Employee who exercises all or part
of an option granted under this Plan using Qualifying Stock (as herein
defined) as payment for the purchase price. A Replacement Option shall
grant to the Employee the right to purchase, at the Fair Market Value as of
the date of said exercise and grant, the number of shares of stock equal to
the sum of the number of whole shares (i) used by the Employee in payment
of the purchase price for the option which was exercised and (ii) used by
the Employee in connection with applicable withholding taxes on such
transaction. A Replacement Option may not be exercised for six months
following the date of grant, and shall expire on the same date as the
option which it replaces. Qualifying Stock is stock which has been owned
by the Employee for at least six months prior to the date of exercise and
has not been used in a stock-for-stock swap transaction within the
preceding six months.
SECTION 7
DIRECTOR AWARDS
7.1 Amount of Award. Each Eligible Director shall receive a non-
discretionary Award of 1,000 shares of stock each year; such Award shall be
made annually on the date of and following completion of the Company's
annual stockholders' meeting (commencing with the 1996 annual stockholders'
meeting). Each Eligible Director shall be issued a common stock certificate
for such number of shares. Termination of the director's services for any
reason other than (i) death, (ii) retirement from the Board at mandatory
retirement age, or (iii) resignation or failure to stand for re-election,
in any such case with the prior approval of the Board, will result in
forfeiture of the Stock. If the Stock is forfeited, the director shall
return the number of forfeited shares of Stock, or equivalent value, to the
Company. The number of shares of Stock awarded to an Eligible Director
annually shall be appropriately adjusted in the event of any stock changes
as described in Section 5.3. In addition, each Eligible Director shall
receive a non-discretionary Award of a Nonqualified Stock Option for 2,000
shares of Stock exercisable at the Fair Market Value of the Company's
common stock on the date of grant; such Award shall be made annually on the
date of and following completion of the Company's annual stockholders'
meeting (commencing with the 1996 annual stockholders' meeting). The number
of nonqualified options awarded to a director shall be appropriately
adjusted in the event of any stock changes as described in Section 5.3.
7.2 No Other Awards. An Eligible Director shall not receive any other
Award under the Plan.
SECTION 8
STOCK APPRECIATION RIGHTS
8.1 SAR's In Tandem with Options. Stock Appreciation Rights may be
granted to Participants in tandem with any Option granted under the Plan,
either at or after the time of the grant of such Option, subject to such
terms and conditions, not inconsistent with the provisions of the Plan, as
the Committee shall determine. Each Stock Appreciation Right shall only be
exercisable to the extent that the corresponding Option is exercisable, and
shall terminate upon termination or exercise of the corresponding Option.
Upon the exercise of any Stock Appreciation Right, the corresponding Option
shall terminate.
8.2 Other Stock Appreciation Rights. Stock Appreciation Rights may
also be granted to Participants separately from any Option, subject to such
terms and conditions, not inconsistent with the provisions of the Plan, as
the Committee shall determine.
SECTION 9
RESTRICTED STOCK
9.1 Grant of Restricted Stock. The Committee may grant Restricted
Stock to Participants at such times and in such amounts, and subject to
such other terms and conditions not inconsistent with the Plan as it shall
determine. Each grant of Restricted Stock shall be subject to such
restrictions, which may relate to continued employment with the Company,
performance of the Company, or other restrictions, as the Committee may
determine. Each grant of Restricted Stock shall be evidenced by a written
agreement setting forth the terms of such Award.
9.2 Removal of Restrictions. The Committee may accelerate or waive
such restrictions in whole or in part at any time in its discretion.
SECTION 10
STOCK BONUSES
10.1 Grant of Stock Bonuses. The Committee may grant a Stock Bonus
to a Participant at such times and in such amounts, and subject to such
other terms and conditions not inconsistent with the Plan, as it shall
determine.
SECTION 11
AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN
11.1 General. The Board may from time to time amend, modify or
terminate any or all of the provisions of the Plan, subject to the
provisions of this Section 11.1. The Board may not change the Plan in a
manner which would prevent outstanding Incentive Stock Options granted
under the Plan from being Incentive Stock Options without the consent of
the optionees concerned. Furthermore, the Board may not make any amendment
which would (i) materially modify the requirements for participation in the
Plan, (ii) increase the number of shares of Stock subject to Awards under
the Plan pursuant to Section 5.1, (iii) materially increase the benefits
accruing to Participants under the Plan, or (iv) make any other amendments
which would cause the Plan not to comply with Rule 16b-3 under the Act, in
each case without the approval of the Company's stockholders. No amendment
or modification shall affect the rights of any Employee with respect to a
previously granted Award, nor shall any amendment or modification affect
the rights of any Eligible Director pursuant to a previously granted
Director Award.
11.2 Termination of Plan. No further Options shall be granted
under the Plan subsequent to December 31, 2005, or such earlier date as may
be determined by the Board.
SECTION 12
MISCELLANEOUS PROVISIONS
12.1 Nontransferability of Awards. No Awards granted under the
Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. All rights with respect to Awards granted to a Participant
under the Plan shall be exercisable during the Participant's lifetime only
by such Participant and all rights with respect to any Director Awards
granted to an Eligible Director shall be exercisable during the Director's
lifetime only by such Eligible Director.
12.2 Beneficiary Designation. Each Participant under the Plan may
from time to time name any beneficiary or beneficiaries (who may be named
contingent or successively) to whom any benefit under the Plan is to be
paid or by whom any right under the Plan is to be exercised in case of his
death. Each designation will revoke all prior designations by the same
Participant shall be in a form prescribed by the Committee, and will be
effective only when filed in writing with the Company. In the absence of
any such designation, Awards outstanding at death may be exercised by the
Participant's surviving spouse, if any, or otherwise by his estate.
12.3 No Guarantee of Employment or Participation. Nothing in the
Plan shall interfere with or limit in any way the right of the Company or
any Subsidiary to terminate any Participant's employment at any time, nor
confer upon any Participant any right to continue in the employ of the
Company or any Subsidiary. No Employee shall have a right to be selected as
a Participant, or, having been so selected, to receive any future Awards.
12.4 Tax Withholding. The Company shall have the power to
withhold, or require a Participant or Eligible Director to remit to the
Company, an amount sufficient to satisfy federal, state, and local
withholding tax requirements on any Award under the Plan, and the Company
may defer issuance of Stock until such requirements are satisfied. The
Committee may, in its discretion, permit a Participant to elect, subject to
such conditions as the Committee shall impose, (i) to have shares of Stock
otherwise issuable under the Plan withheld by the Company or (ii) to
deliver to the Company previously acquired shares of Stock, in each case
having a Fair Market Value sufficient to satisfy all or part of the
Participant's estimated total federal, state and local tax obligation
associated with the transaction.
12.5 Change of Control. On the date of a Change of Control, all
outstanding options and stock appreciation rights shall become immediately
exercisable and all restrictions with respect to Restricted Stock shall
lapse. "Change of Control" shall mean:
(i) The acquisition (other than from the Company) by any person,
entity or "group", within the meaning of Section 13(d)(3) or
14(d)(2) of the Act (excluding any acquisition or holding by (i)
the Company or its subsidiaries, (ii) any employee benefit plan of
the Company or its subsidiaries which acquires beneficial
ownership of voting securities of the Company and (iii) Robert B.
Daugherty, his successors and assigns and any tax-exempt entity
established by him) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Act) of 50% or more of either the
then outstanding shares of common stock or the combined voting
power of the Company's then outstanding voting securities entitled
to vote generally in the election of directors; or
(ii) Individuals who, as of the date hereof, constitute the Board
(as of the date hereof the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to
the date hereof whose election, or nomination for the
election by the Company's stockholders, was approved by a
vote of at least a majority of the directors then comprising
the Incumbent Board shall be, for purposes of this Plan,
considered as though such person were a member of the
Incumbent Board; or
(iii) Approval by the stockholders of the Company of a reorganization,
merger or consolidation, in each case, with respect to which
persons who were the stockholders of the Company immediately prior
to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of the combined voting
power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's then outstanding
voting securities, or a liquidation or dissolution of the Company
or of the sale of all or substantially all of the assets of the
Company.
12.6 Company Intent. The Company intends that the Plan comply in
all respects with Rule 16b-3 under the Act, and any ambiguities or
inconsistencies in the construction of the Plan shall be interpreted to
give effect to such intention.
12.7 Requirements of Law. The granting of Awards and the issuance
of shares of Stock shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or
securities exchanges as may be required.
12.8 Effective Date. The Plan shall be effective upon its
adoption by the Board subject to approval by the Company's stockholders at
the 1996 annual stockholders' meeting.
12.9 Governing Law. The Plan, and all agreements hereunder, shall
be construed in accordance with and governed by the laws of the State of
Delaware.
VALMONT EXECUTIVE INCENTIVE PLAN
1. Purpose. The principal purpose of the Valmont Industries, Inc.
Executive Incentive Plan (the "Plan") is to provide incentives to executive
officers of Valmont ("Valmont") who have significant responsibility for the
success and growth of Valmont and to assist Valmont in attracting,
motivating and retaining executive officers on a competitive basis.
2. Administration of the Plan. The Plan shall be administered by the
Compensation Committee of the Board of Directors (the "Committee"). The
Committee shall have the sole discretion to interpret the Plan; approve a
pre-established objective performance measure or measures annually; certify
the level to which each performance measure was attained prior to any
payment under the Plan; approve the amount of awards made under the Plan;
and determine who shall receive any payment under the Plan.
The Committee shall have full power and authority to administer and
interpret the Plan and to adopt such rules, regulations and guidelines for
the administration of the Plan and for the conduct of its business as the
Committee deems necessary or advisable. The Committee's interpretations of
the Plan, and all actions taken and determinations made by the Committee
pursuant to the powers vested in it hereunder, shall be conclusive and
binding on all parties concerned, including Valmont, its stockholders and
any person receiving an award under the Plan.
3. Eligibility. Executive officers and other key management
personnel of Valmont shall be eligible to receive awards under the Plan.
The Committee shall designate the executive officers and other key
management personnel who will participate in the Plan each year.
4. Awards. The Committee shall establish annual and/or long-term
incentive award targets for participants. If an individual becomes an
executive officer during the year, such individual may be granted
eligibility for an incentive award for that year upon such individual
becoming an executive officer.
The Committee shall also establish annual and/or long-term performance
targets which must be achieved in order for an award to be earned under the
Plan. Such targets shall be based on earnings, earnings per share, growth
in earnings per share, achievement of annual operating profit plans, return
on equity performance, or similar financial performance measures as may be
determined by the Committee. The specific performance targets for each
participant shall be established in writing by the Committee within ninety
days after the commencement of the fiscal year (or within such other time
period as may be required by Section 162(m) of the Internal Revenue Code)
to which the performance target relates. The performance target shall be
established in such a manner than a third party having knowledge of the
relevant facts could determine whether the performance goal has been met.
Awards shall be payable following the completion of the applicable
fiscal year upon certification by the Committee that Valmont achieved the
specified performance target established for the participant.
Notwithstanding the attainment by Valmont of the specified performance
targets, the Committee has the discretion, for each participant, to reduce
some or all of an award that would otherwise be paid. However, in no event
may a participant receive an award of more than 400% of such participant's
base salary under the Plan in any fiscal year; for this purpose, a
participant's base salary shall be the base salary in effect at the time
the Committee establishes the performance targets for a fiscal year or
period.
5. Miscellaneous Provisions. Valmont shall have the right to deduct
from all awards hereunder paid in cash any federal, state, local or foreign
taxes required by law to be withheld with respect to such awards. Neither
the Plan nor any action taken hereunder shall be construed as giving any
employee any right to be retained in the employ of Valmont. The costs and
expenses of administering the Plan shall be borne by Valmont and shall not
be charged to any award or to any participant receiving an award.
6. Effective Date, Amendments and Termination. The Plan shall become
effective on December 19, 1995 subject to approval by the stockholders of
Valmont at the 1996 Annual Meeting of Stockholders. The Committee may at
any time terminate or from time to time amend the Plan in whole or in part,
but no such action shall adversely affect any rights or obligations with
respect to any awards theretofore made under the Plan. However, unless the
stockholders of Valmont shall have first approved thereof, no amendment of
the Plan shall be effective which would increase the maximum amount which
can be paid to any one executive officer under the Plan in any fiscal year,
which would change the specified performance goals for payment of awards,
or which would modify the requirement as to eligibility for participation
in the Plan.
FOURTH AMENDMENT TO THE VALMONT 1988 STOCK PLAN
The Valmont 1988 Stock Plan (as previously amended, the "Plan") is
hereby further amended as follows:
A. Section 3.3 is amended by adding the following sentences
immediately preceding the last sentence of Section 3.3:
In addition, each director who is not an Employee of the Company
shall receive a non-discretionary award of a Nonqualified Stock
Option for 2,000 shares of Company Stock exercisable at the
closing price of the Company's common stock on the date of grant;
such award shall be made (i) on the third business day following
the public release by the Company of its quarterly earnings for
the second quarter of fiscal 1995, and (ii) annually thereafter
on the date of and following completion of the Company's annual
stockholders' meeting (commencing with the 1996 annual
stockholders' meeting). The number of nonqualified options
awarded to a director shall be appropriately adjusted in the
event of any stock changes as described in Article XI.
B. This Fourth Amendment to the Plan shall be effective upon its
approval by the stockholders of the Company, and any grant of Nonqualified
Stock Options pursuant to the Fourth Amendment shall be expressly
conditioned upon such stockholder approval.
