<PAGE>
PROXY STATEMENT
FOR THE
APRIL 26, 1999
ANNUAL SHAREHOLDERS' MEETING
Dear Shareholder:
You are cordially invited to attend Valmont's Annual Meeting of
Shareholders on April 26, 1999 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 the atrium entrance on the east side.
The formal meeting of Shareholders will be followed by a review of
Valmont's business operations for 1998 and the first quarter of 1999, 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 and Officers about the
activities of the Company.
If you cannot attend the meeting in person, please vote your shares by
proxy. Please complete, 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,
Mogens C. Bay
Chairman and Chief Executive Officer
<PAGE>
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 26, 1999, at
2:00 p.m. local time for the purpose of:
(1) Electing three directors of the Company to three year terms.
(2) Approving the Valmont 1999 Stock Plan.
(3) Ratifying the appointment of Deloitte & Touche LLP as independent
accountants for fiscal 1999.
(4) Transacting such other business as may properly come before the
meeting.
Shareholders of record at the close of business on March 5, 1999 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 complete, sign, date
and mail the enclosed proxy form.
BY ORDER OF THE BOARD OF DIRECTORS
Thomas P. Egan, Jr.
Secretary
Omaha, Nebraska 68154
March 24, 1999
2
<PAGE>
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 26, 1999, or at any adjournments thereof.
At the close of business on March 5, 1999, the record date for
shareholders entitled to notice of and to vote at the meeting, there were
outstanding 24,528,973 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 will not affect the election of Directors.
The proposals to approve the Valmont 1999 Stock Plan and to ratify
the appointment of the accountants require the affirmative vote of a majority
of shares present in person or represented by proxy. Abstentions will have
the same effect as a vote against these proposals. Broker non-votes on these
proposals are treated as shares for 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., One Valmont Plaza, Omaha, Nebraska 68154. To be
effective, the revocation must be received by the Secretary before the date
of the meeting. A shareholder may attend the meeting in person and at that
time withdraw the 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 24, 1999.
3
<PAGE>
CERTAIN SHAREHOLDERS
The following table sets forth, as of March 5, 1999, 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.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL OWNERSHIP PERCENT
BENEFICIAL OWNER MARCH 5, 1999 (1) CLASS (2)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Robert B. Daugherty 7,113,568 29.0%
Ocean Reef
Key Largo, FL 33037
Shapiro Capital Management Company, Inc. (3) 2,156,050 8.8%
3060 Peachtree Road, N.W.
Atlanta, GA 30305
Mogens C. Bay 609,045 2.5%
Charles M. Harper 98,000
Allen F. Jacobson 54,000
Lloyd P. Johnson 34,000
John E. Jones 32,000
Thomas F. Madison 47,230
Charles D. Peebler, Jr. 6,000
Bruce Rohde 20,000
Walter Scott, Jr. 74,000
Kenneth E. Stinson 34,000
Robert G. Wallace 38,000
Vincent T. Corso 61,101
Thomas P. Egan, Jr. 98,829
Joseph M. Goecke 204,937
Terry J. McClain 152,100
E. Robert Meaney 66,035
All Executive Officers and Directors
As Group (19 persons) 9,042,473 36.9%
</TABLE>
(1) Includes shares which the directors and executive officers have, or within
60 days of March 5, 1999 will have, the right to acquire through the
exercise of stock options, as follows: 8,000 shares each for Messrs.
Daugherty and Stinson; 16,000 shares each for Messrs. Harper, Jacobson,
Johnson, Madison, Scott and Wallace; and 313,334, 37,334, 37,351, 2,666,
39,822 and 31,253 shares for Messrs. Bay, Corso, Egan, Goecke, McClain and
Meaney respectively; and 638,885 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 common stock.
(3) This information is based on a Schedule 13G filed with the Securities and
Exchange Commission in February 1999.
4
<PAGE>
ELECTION OF DIRECTORS
The Company's Board of Directors crrently consists of twelve members,
including Messrs. Charles Peebler and Bruce Rohde, who were elected to the Board
in February 1999 to terms expiring in 2000 and 2001, respectively.
Messrs. Jacobson, Johnson and Wallace are retiring as Directors
effective with the 1999 Annual Meeting of Shareholders. Consequently, effective
with the 1999 Annual Meeting of Shareholders, the Company's Board of Directors
will be composed of nine members, divided into three classes. Each class serves
for three years on a staggered term basis. Of the Directors of the Company, only
Mr. Bay is an employee of the Company.
Three Directors have terms of office that expire at the 1999 Annual
Meeting. They have been nominated by the Board of Directors for re-election to
three-year terms. These nominees are:
Mogens C. Bay
John E. Jones
Walter Scott, Jr.
Unless authority to vote for directors is withheld, 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 2002:
MOGENS C. BAY, Age 50, Chairman and Chief Executive Officer of the Company since
January 1997. President and Chief Executive Officer of the Company from August
1993 to December 1996. Director, ConAgra, Inc. and Inacom Corp.
Served as Director of Company continuously since October 1993.
Valmont Stock: 609,045 shares
JOHN E. JONES, Age 64, Retired Chairman, President and Chief Executive Officer
of CBI Industries, Inc. Director, Allied Products Corporation, Amsted Industries
Incorporated, NICOR Inc. and BWAY Corp.
Served as Director of Company continuously since April 1993.
Valmont Stock: 32,000 shares
WALTER SCOTT, JR., Age 67, Chairman of Level 3 Communications, Inc. since March
1998. Previously, Chairman of the Board and President of Peter Kiewit Sons',
Inc. Director, Berkshire Hathaway, Inc., CalEnergy Company, Commonwealth
Telephone Enterprises, Inc., ConAgra, Inc., Level 3 Communications, Inc., Peter
Kiewit Sons', Inc., RCN Corporation and U.S. Bancorp.
Served as Director of Company continuously since April 1981.
Valmont Stock: 74,000 shares
5
<PAGE>
CONTINUING DIRECTORS - TERMS EXPIRE 2001:
CHARLES M. HARPER, Age 71, Former Chairman of the Board and Chief Executive
Officer of RJR Nabisco Holdings Corp. and ConAgra, Inc. Director, ConAgra, Inc.
Served as Director of Company continuously since April 1979.
Valmont Stock: 98,000 shares
THOMAS F. MADISON, Age 63, President of MLM Partners since January 1993;
Chairman of Communications Holdings, Inc. since September 1996; Vice Chairman
and Office of CEO of Minnesota Mutual Life Insurance Company from February 1994
to August 1994; Previously, President - Markets of U S WEST Communications.
Director, ACI Telecentrics, Aon Insurance Advisory Board, Communications
Holdings, Inc., Delaware Group of Mutual Funds, Digital River, Inc., LHS Health
Systems, Minnegasco Advisory Board, and Span Link.
Served as Director of Company continuously since June 1987.
Valmont Stock: 47,230 shares
BRUCE ROHDE, Age 50, Chairman and CEO of ConAgra, Inc. since September 1998.
President, Vice Chairman and Chief Executive Officer of ConAgra, Inc. from
September 1997 to September 1998. President and Vice Chairman of ConAgra, Inc.
from August 1996 to September 1997. Previously, President of McGrath, North,
Mullin & Kratz, P.C. Director, ConAgra, Inc.
Served as Director of Company continuously since February 1999.
Valmont Stock: 20,000 shares
CONTINUING DIRECTORS - TERMS EXPIRE 2000:
ROBERT B. DAUGHERTY, Age 77, Chairman Emeritus of the Company since December
1996; Chairman of the Board of the Company from March 1947 to December 1996.
Served as Director of Company continuously since March 1947.
Valmont Stock: 7,113,568 shares
CHARLES D. PEEBLER, JR., Age 62, President of True North Communications, Inc.
and Chairman and Chief Executive Officer of True North Diversified Companies
since December 1997. Previously Chief Executive Officer, President and
Director of Bozell, Jacobs, Kenyan & Eckherdt, Inc.; Director, American Tool
Companies, Inc. and True North Communications, Inc.
Served as Director of Company continuously since February 1999.
Valmont Stock: 6,000 shares
KENNETH E. STINSON, Age 56 , Chairman and Chief Executive Officer of Peter
Kiewit Sons', Inc. since March 1998. Chairman and Chief Executive Officer of
Kiewit Construction Group, Inc. from April 1994 to March 1998. Director,
ConAgra, Inc., Level 3 Communications, Inc. and Peter Kiewit Sons', Inc.
Served as Director of Company continuously since December 1996.
Valmont Stock: 34,000 shares
6
<PAGE>
(1) Messrs. Jacobson (Chairman), Harper, Johnson and Madison were members of
the Compensation Committee which met two times during 1998. 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 takes action upon
or makes recommendations to the Board of Directors concerning certain
employee benefit plan matters.
Messrs. Scott (Chairman), Jones and Wallace were 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; reviews
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 five meetings during the last fiscal year.
During 1998, 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, Jones, Scott and Wallace have elected
to receive their fees in the form of deferred compensation. The deferred
fees accrue interest indexed to U.S. Government bonds, compounded monthly.
Employee directors do not receive director or meeting fees.
(3) Mr. Daugherty, who was an employee of the Company through fiscal 1996,
received an award of $52,452 under the 1996-1998 Long-Term Performance
Share Program and $20,985 in benefits from the Company.
(4) Pursuant to the stockholder approved 1996 Stock Plan, each non-employee
director receives (i) an annual award of 2,000 shares of common stock of
the company and (ii) an annual award of a nonqualified stock option for
4,000 shares of common stock exercisable at the fair market value of the
Company's common stock on the date of grant. These awards are made
annually on the date of and following completion of Valmont's Annual
Shareholders' Meeting. The common stock award will be forfeited if the
director's services terminate for any reason other than death, retirement
from the board at the mandatory retirement age, or resignation or failure
to stand for re-election, in any such case without the prior approval of
the board.
(5) See "Certain Shareholders" for additional information on stock ownership.
7
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table provides information on the
annual and long-term compensation for services paid by the Company to the Chief
Executive Officer and the four highest paid executive officers for the three
fiscal years ended December 26, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------- --------------------------
AWARDS PAYOUTS
------ ------- ALL
NAME AND NUMBER OF LTIP OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) PAYOUTS ($) COMP. ($) (1)
------------------ ---- ---------- --------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Mogens C. Bay (2) 1998 600,461 0 100,000 231,407 37,434
Chairman and Chief 1997 551,923 368,086 100,000 755,630 114,238
Executive Officer 1996 501,923 721,201 100,000 749,512 114,504
Vincent T. Corso 1998 234,615 15,743 60,000 57,096 13,835
Sr. Vice President and 1997 205,769 150,622 30,000 168,758 33,287
Chief Operating Officer 1996 185,769 129,704 25,000 167,392 28,688
Terry J. McClain (2) 1998 220,190 0 50,000 57,096 12,478
Sr. Vice President and Chief 1997 200,769 131,238 30,000 191,777 36,083
Financial Officer 1996 185,577 260,704 25,000 190,224 36,884
E. Robert Meaney 1998 210,162 0 20,000 64,810 12,374
Sr. Vice President - 1997 210,000 24,890 10,000 230,119 30,227
International 1996 210,000 46,200 4,000 228,256 28,944
Joseph M. Goecke (2) 1998 203,000 0 0 62,743 11,958
Vice President 1997 203,000 113,477 0 233,966 40,598
1996 203,000 389,301 10,000 232,072 44,826
Thomas P. Egan, Jr. 1998 171,749 0 4,000 40,113 9,534
Vice President, Corporate 1997 165,254 53,617 4,000 111,180 22,403
Counsel and Secretary 1996 155,385 117,715 5,000 110,279 22,741
</TABLE>
(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 6,000, 4,000 and 6,000 restricted
shares of the Company's common stock, respectively, which on December 26,
1998 were valued at $87,750, $58,500 and $87,750 respectively. The
restrictions lapsed in February 1999. Each executive received dividends
paid on the restricted stock.
8
<PAGE>
STOCK OPTION GRANTS IN FISCAL YEAR 1998
The following table provides information on 1998 stock option grants to
executive officers named in the Summary Compensation Table. No stock
appreciation rights were granted during fiscal 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANT FOR OPTION TERM (3)
--------------------------------------------------------------- -----------------------
% OF TOTAL
OPTIONS
GRANTED TO EXERCISE
DATE OPTIONS EMPLOYEES IN PRICE ($) EXPIRATION
NAME GRANTED GRANTED FISCAL YEAR PER SHARE DATE 5% ($) 10% ($)
---- ------- --------- ----------- --------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Mogens C. Bay (1) 12/14/98 100,000 15.2% 15.875 12/13/08 978,009 2,497,644
Mogens C. Bay (2) 11/12/98 3,846 0.6% 15.500 12/17/99 3,023 6,299
Vincent T. Corso (1) 12/14/98 60,000 9.1% 15.875 12/13/08 586,805 1,498,587
Terry J. McClain (1) 12/14/98 50,000 7.6% 15.875 12/13/08 489,005 1,248,822
E. Robert Meaney (1) 12/14/98 20,000 3.0% 15.875 12/13/08 195,602 499,529
E. Robert Meaney (2) 4/22/98 6,909 1.0% 23.000 3/01/04 44,550 108,314
E. Robert Meaney (2) 4/22/98 9,105 1.4% 23.000 12/19/05 83,323 208,649
Joseph M. Goecke (2) 11/16/98 9,822 1.5% 15.250 12/07/02 27,928 64,857
Joseph M. Goecke (2) 11/16/98 13,874 2.1% 15.250 12/12/04 65,365 155,746
Thomas P. Egan, Jr. (1) 12/14/98 4,000 0.6% 15.875 12/13/08 39,120 99,906
Thomas P. Egan, Jr. (2) 5/1/98 1,042 0.2% 22.250 12/17/98 657 1,366
Thomas P. Egan, Jr. (2) 5/1/98 1,350 0.2% 22.250 12/17/99 2,396 4,951
- -------------------------------------------------------------------------------------------------------------------
All Shares Outstanding (4) 227,376,903 576,414,712
</TABLE>
(1) Options become exercisable in three equal annual installments commencing
on the first anniversary of the grant, or on the fifth anniversary of the
grant.
(2) Replacement options become exercisable six months following the grant.
These options were issued pursuant to the 1988 and 1996 Stock Plans upon
stock-for-stock option exercises as reflected in the Options Exercised
table on page 10.
(3) 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 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.
(4) All shares outstanding represent the increase in total Company shareholder
value if the stock price and assumed rates used in the stock option
assumptions are achieved over a ten year option period multiplied by the
number of shares outstanding at the end of fiscal 1998 (24,721,373).
9
<PAGE>
OPTIONS EXERCISED IN FISCAL YEAR 1998 AND FISCAL YEAR END VALUES
The following table provides information on the exercise of stock
options during fiscal 1998 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 19,334 190,340 313,334 270,512 1,365,000 0
Vincent T. Corso 0 0 37,334 111,666 135,172 48,328
Terry J. McClain 17,332 129,327 39,822 95,000 27,503 0
E. Robert Meaney 24,762 306,907 27,920 37,332 28,812 36,663
Joseph M. Goecke 36,334 251,921 2,666 33,696 14,663 0
Thomas P. Egan, Jr. 4,667 77,172 37,351 11,666 178,336 0
</TABLE>
(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 1998 and the option exercise
price of the in-the-money options multiplied by the number of
in-the-money options.
LONG-TERM INCENTIVE PLANS - AWARDS IN FISCAL YEAR 1998
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 1998.
<TABLE>
<CAPTION>
PERFORMANCE ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF OR OTHER NON-STOCK PRICE-BASED PLANS
SHARES, UNITS PERIOD UNTIL --------------------------------------
OR OTHER MATURATION OR THRESHOLD TARGET MAXIMUM
RIGHTS (#) PAYOUT ($) ($) ($)
---------- ------ --- --- ---
<S> <C> <C> <C> <C> <C>
Mogens C. Bay 1 Unit (1) 148,500 270,000 540,000
Vincent T. Corso 1 Unit (1) 37,125 67,500 135,000
Terry J. McClain 1 Unit (1) 36,300 66,000 132,000
E. Robert Meaney 1 Unit (1) 34,650 63,000 126,000
Joseph M. Goecke 1 Unit (1) 27,912 50,750 101,500
Thomas P. Egan, Jr. 1 Unit (1) 23,595 42,900 85,800
</TABLE>
(1) Awards are for the three-year award cycle ending in 2000. See
"Compensation Committee Report on Executive Compensation - Long-Term
Performance Incentives" for a description of the award program.
10
<PAGE>
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 during 1998 consisted 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 non-employee Directors.
The Committee has implemented compensation policies, plans and programs
which seek to enhance shareholder value by aligning the financial interests of
the executive officers with those of the Company's 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, motivate and reward executive officers and other key employees.
Incentive compensation is variable and tied to corporate, business unit and
individual performance. The plans are designed to provide an incentive to
management to grow earnings, provide quality returns on investment, enhance
shareholder value and contribute to 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 1998 will be deductible under the Internal Revenue Code's
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 changed based on the
individual's performance or a change in competitive pay levels in the
marketplace.
The Committee reviews with the Chief Executive Officer an annual salary
plan for the Company's executive officers (other than the Chief Executive
Officer). The salary plan is modified as deemed appropriate and approved by the
Committee. 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 reviews information provided by independent compensation
consultants concerning salary competitiveness. The Committee reviews and
establishes 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's business, and its expectation as to his future contributions in
directing the long-term success of the Company and its businesses.
11
<PAGE>
The Committee increased the Chief Executive Officer's salary in
December 1998 to the current level of $624,000 per year. The salary increase
reflected the Committee's desire to reward Mr. Bay for his performance in
managing the Company during a difficult year in 1998 and his contribution to the
Company's performance since his appointment.
ANNUAL INCENTIVES. The Company's short-term incentives are paid
pursuant to the Total Value Impact (TVI) Program, established under the
stockholder approved Executive Incentive Plan. The Committee believes that the
annual bonus of key 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 the respective business unit's 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 beginning of year 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 48 key management
employees, including 8 executive officers, in the TVI Program for 1998. Based on
performance levels achieved during 1998, the Committee approved aggregate bonus
payments of $563,770. No TVI bonus was paid to the Chief Executive Officer for
1998 based on the pre-established performance goals under the Program.
LONG-TERM PERFORMANCE INCENTIVES. Long-term performance incentives for
senior management employees are provided through the Long-Term Performance Share
Program ("Program") established under the stockholder approved Executive
Incentive Plan and through the 1988 and 1996 Stock Plans. The Program operates
on three-year award cycles. The Committee selects participants, establishes
target awards, and determines a performance matrix (based on return on equity,
net earnings and other selected factors) at the beginning of each award cycle.
The performance matrix provides for the performance shares to be increased or
decreased in number based on greater or lesser levels of performance. Earned
performance shares are then valued at the company's stock price at the end of
the performance period. The Committee approves the number of performance shares
to be paid following a review of results at the end of each performance cycle.
Awards may be paid in cash or in shares of common stock or any combination of
cash and stock.
The Committee previously selected the nine executive officers who
participated in the award cycle ending in 1998. Based on performance goals
previously established by the Committee, the Committee approved payments
aggregating $575,051 for 1998 to the eight executive officers. The award of
$231,407 to the Chief Executive Officer for 1998 was based on the Company's
performance during the award cycle. During 1998, the Committee selected the
participants and established the performance goals for the 1998-2000 award
cycle.
12
<PAGE>
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 stockholder approved 1988 Stock Plan and 1996 Stock
Plan (both referenced hereafter as the "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
have value only if the Company's stock price increases. Stock options vest
beginning on the first anniversary of the grant in equal amounts over three to
six years or on the fifth anniversary of the grant. Employees must be employed
by the Company at the time of vesting in order to exercise the options. The
Committee believes this element of the total 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 Options Exercised table on page 10
reflects the shares acquired by certain executive officers during 1998. The
table on page 4 reflects the ownership position of the directors and executive
officers at March 5, 1999. 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 531,000 shares to 133
employees during 1998, including options for an aggregate of 238,000 shares to
the executive officers. The Chief Executive Officer was granted a non-qualified
option in December 1998 to acquire 100,000 shares. The number of shares awarded
in the 1998 grant recognizes the performance of the business over the last four
years under Mr. Bay's leadership and the Committee's determination that the 1998
grant should be no less than the 1997 grant.
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 so warrant. There were no
restricted stock awards in 1996, 1997, or 1998 to executive officers.
The Committee believes that the programs described above provide
compensation that is competitive with comparable manufacturing companies, links
executive and shareholder interests and provides the basis for the Company to
attract and retain qualified executives. The Committee will continue to monitor
the relationship among executive compensation, the Company's performance and
shareholder value.
COMPENSATION COMMITTEE
Allen F. Jacobson, Chairman
Charles M. Harper
Lloyd P. Johnson
Thomas F. Madison
13
<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPHS
The graph on the following page compares the yearly change in the
cumulative total shareholder return on the Company's common stock with the
cumulative total returns of the S&P Small Cap 600 Index and an index consisting
of a combination of the S&P Manufacturing (Diversified) and Machinery
(Diversified) indexes for the five period ended December 31, 1998. The graph
assumes that the value of the investment in Valmont Common Stock and each index
was $100 on December 31, 1993 and that all dividends were reinvested.
[GRAPH]
TOTAL RETURN TO SHAREHOLDER'S
(DIVIDENDS REINVESTED MONTHLY)
<TABLE>
<CAPTION>
ANNUAL RETURN PERCENTAGE
YEARS ENDING
COMPANY/INDEX DEC94 DEC95 DEC96 DEC97 DEC98
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
VALMONT INDUSTRIES -13.36 47.53 68.47 -4.41 -27.72
S&P SMALLCAP 600 INDEX -4.77 29.96 21.32 25.58 -1.31
ELECTRICAL/MACHINERY INDEX 0.44 37.01 34.79 39.41 25.33
MANUFACTURING/MACHINERY INDEX -0.10 32.09 31.87 22.77 6.59
</TABLE>
<TABLE>
INDEXED RETURNS
BASE YEARS ENDING
PERIOD
COMPANY/INDEX 1993 1994 1995 1996 1997 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
VALMONT INDUSTRIES, INC. 100 86.64 127.82 215.34 205.85 148.80
S&P SMALLCAP 600 INDEX 100 95.23 123.76 150.14 188.56 186.10
MANUFACTURING/MACHINERY INDEX 100 99.90 131.95 174.00 213.62 227.70
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
APROVAL OF THE VALMONT 1999 STOCK PLAN
GENERAL
Valmont's Board of Directors has adopted the Valmont 1999 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 348,000 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 1,700,000 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 150. 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 1,700,000. Any shares of common stock subject to an
award which for any reasons 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 stock. 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. 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.
15
<PAGE>
Stock Appreciation Rights: The Committee may grant a stock
appreciation right (a "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 a 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 a 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. A maximum of
20% of the shares of stock available for issuance under the Plan may be issued
as Restricted Stock. The Committee intends that all restricted stock grants have
a restriction period of one year on performance-based restricted stock and three
years on tenure-based restricted stock. The Committee also intends to grant
acceleration or waiver of restricted stock provisions only in the case of
special circumstances.
Stock Bonuses: The Committee may grant a bonus in shares of Valmont
common stock to employees under the Plan. Such stock bonuses may be granted in
lieu of cash compensation otherwise payable to such employee.
Director Participation: Each non-employee director will receive under
the Plan (i) an annual award of 2,000 shares of common stock and (ii) an annual
award of a nonqualifed stock option for 4,000 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 1999 annual
stockholders' meeting. Directors currently receive similar grants under the 1996
Stock Plan. Following stockholder approval of the 1999 Stock Plan, directors
will receive such grants only pursuant to the 1999 Stock Plan. 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: Except as permitted by the Committee, awards under
the Plan are not transferable except by will or under 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, 2008, but awards granted prior
to such date will continue in effect until they expire in accordance with their
original terms. The Board may also amend the Plan as it deems advisable.
16
<PAGE>
Amendments which materially modify the requirements for participation in the
1999 Stock Plan or increase the number of shares of Valmont common stock subject
to issuance under the 1999 Stock Plan must be submitted to stockholders for
approval.
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, then for federal income
tax purposes (i) the optionee will not recognize any income at the time of
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
that the 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 1999 STOCK PLAN.
17
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors to file reports of changes in ownership of Valmont's
common stock with the Securities and Exchange Commission. Executive officers and
directors are required by SEC regulations to furnish Valmont with copies of all
Section 16(a) forms so filed. Based solely on review of the copies of such forms
furnished to Valmont and written representations from each of Valmont's
executive officers and directors, Valmont believes that all persons subject to
these reporting requirements filed the required reports on a timely basis during
fiscal 1998, except Kenneth E. Stinson, a director, filed one report late with
respect to one purchase transaction, and Mark E. Treinen and Brian C. Stanley,
executive officers, each filed one report late with respect to stock option
exercise transactions.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP ("Deloitte") has been appointed by
the Board of Directors to conduct the 1999 audit of the Company's financial
statements. The same firm conducted the 1997 and 1998 audits. The Board of
Directors requests that shareholders ratify this appointment. A representative
from Deloitte will be present at the Shareholders' Meeting and will have the
opportunity to make a statement and to respond to appropriate questions.
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, 1999 in order to be considered for inclusion in the proxy statement for such
meeting.
The Company's bylaws set forth certain procedures which shareholders
must follow in order to nominate a director or present any other business at an
annual shareholders' meeting. Generally, a shareholder must give timely notice
to the Secretary of the Company. To be timely, such notice must be received by
the Company at its principal executive offices not less than ninety nor more
than one hundred twenty days prior to the meeting. The bylaws specify the
information which must accompany such shareholder notice. Details of the
provision of the bylaws may be obtained by any shareholder from the Secretary of
the Company.
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.
18
<PAGE>
PROXY
VALMONT INDUSTRIES, INC.
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 26, 1999
The undersigned hereby constitutes and appoints Mogens C. Bay and Robert B.
Daugherty, or any substitute appointed by 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 26, 1999,
at 2:00 p.m., local time or at any adjournments thereof.
<TABLE>
<S><C>
1) ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as designated [ ] WITHHOLD AUTHORITY to vote for
to the contrary below). 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 approve the Valmont 1999 Stock Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3) PROPOSAL to ratify the appointment of Deloitte & Touche LLP as independent accountants for fiscal 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4) IN THEIR DISCRETION, the Proxies are authorized to vote upon such other
business or matters 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 IN FAVOR OF ALL PROPOSALS.
Dated this ___ day of _____________, 1999. Signature_______________________________________
Signature_______________________________________
(When signing as attorney, executor, administrator, trustee, guardian or conservator,
designate full title. All joint tenants must sign.)
</TABLE>
19
<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Valmont Industries Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / 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:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
