SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
[ ] Confidential for Use of the Commission Only (as permitted by
Rule 14a-6[e][2])
BERKSHIRE HATHAWAY 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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $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:
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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:
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[ ] 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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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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BERKSHIRE HATHAWAY INC.
1440 Kiewit Plaza
Omaha, Nebraska 68131
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 6, 1996
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of the Shareholders
of Berkshire Hathaway Inc. will be held at the Holiday Convention
Centre, 3321 South 72nd Street, Omaha, Nebraska, on May 6, 1996 at
9:30 a.m. for the following purposes:
1. To elect directors.
2. To consider and act upon a proposed amendment to the
Corporation's Restated Certificate of Incorporation that would:
(A) create a new class of Class B Common Stock in which each share
is economically equivalent to one-thirtieth (1/30) of a share of
the current common stock, but has one-two-hundredth (1/200) of the
vote of a share of the current common stock; (B) redesignate the
Corporation's current common stock as Class A Common Stock and
change each share of existing common stock into a share of Class A
Common Stock; and (C) make each share of Class A Common Stock
convertible into thirty (30) shares of Class B Common Stock at the
option of the holder at any time.
3. To consider and act upon any other matters that may properly
come before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 8,
1996 as the record date for determining the shareholders having the
right to vote at the meeting or any adjournment thereof. A list of
such shareholders will be available for examination by a
shareholder for any purpose germane to the meeting during ordinary
business hours at the offices of the Corporation at 1440 Kiewit
Plaza, Omaha, Nebraska during the ten days prior to the meeting.
You are requested to date, sign and return the enclosed proxy which
is solicited by the Board of Directors of the Corporation and will
be voted as indicated in the accompanying proxy statement and
proxy. A return envelope is provided which requires no postage if
mailed in the United States. If mailed elsewhere, foreign postage
must be affixed.
By order of the Board of Directors
FORREST N. KRUTTER, Secretary
Omaha, Nebraska
March , 1996
A shareholder may request admission tickets to the meeting for
himself or herself and family members by completing and promptly
returning to the Company the ticket information envelope
accompanying this notice. Otherwise, admission tickets may be
obtained at the meeting by persons identifying themselves as
shareholders as of the record date. For a record owner, possession
of a proxy card would be adequate identification. For a beneficial-
but-not-of-record owner, a copy of a broker's statement showing
shares held for his or her benefit on March 8, 1996 would be
adequate identification.
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BERKSHIRE HATHAWAY INC.
1440 Kiewit Plaza
Omaha, Nebraska 68131
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
May 6, 1996
This statement is furnished in connection with the solicitation by
the Board of Directors of Berkshire Hathaway Inc. (hereinafter
"Berkshire" or the "Corporation") of proxies in the accompanying
form for the Annual Meeting of the Shareholders to be held on
Monday, May 6, 1996 and at any adjournment thereof.
This proxy statement and the enclosed form of proxy were first sent
to shareholders on or about March , 1996.
If the form of proxy enclosed herewith is executed and returned as
requested, it may nevertheless be revoked at any time prior to
exercise by filing an instrument revoking it or a duly executed
proxy bearing a later date.
Solicitation of proxies will be made solely by mail at the
Corporation's expense. The Corporation will reimburse brokerage
firms, banks, trustees and others for their actual out-of-pocket
expenses in forwarding proxy material to the beneficial owners of
its common stock.
Issued common stock of the Corporation consists of 1,381,308
shares, par value $5 per share, of which 187,796 shares are
presently held by Berkshire as Treasury shares. The remaining
1,193,512 outstanding shares are those eligible to be voted at this
meeting. Holders of record thereof as of the close of business on
March 8, 1996 will be entitled to one vote per share.
The presence at the meeting, in person or by proxy, of shareholders
holding in the aggregate a majority of the outstanding shares of
the Company's common stock entitled to vote shall constitute a
quorum for the transaction of business. A plurality of the votes
properly cast for the election of directors by the shareholders
attending the meeting, in person or by proxy, will elect directors
to office. A majority of votes properly cast upon any question,
including the proposed amendment to the Restated Certificate of
Incorporation, other than election of directors shall decide the
question. Abstentions and broker non-votes will count for purposes
of establishing a quorum, but will not count as votes cast for the
election of directors or any other question and accordingly will
have no effect.
Shareholders who send in proxies but attend the meeting in person
may vote directly if they prefer and withdraw their proxies or may
allow their proxies to be voted with the similar proxies sent in by
other shareholders.
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1. ELECTION OF DIRECTORS
At the 1996 Annual Meeting of Shareholders, a Board of Directors
consisting of six members will be elected, each director to hold
office until a successor is elected and qualified, or until the
director resigns, is removed or becomes disqualified.
Each of the current directors of the Corporation is a nominee for
reelection. Certain information with respect to nominees for
election as directors is contained in the following table:
WARREN E. BUFFETT, age 65, has been a director of the Corporation
since 1965 and has been its Chairman and Chief Executive Officer
since 1970. Mr. Buffett is a controlling person of the Corporation.
He is also a director of The Coca-Cola Company, The Gillette Company
and Salomon Inc.
HOWARD G. BUFFETT, age 41, has been a director of the Corporation since 1993.
Mr. Buffett is President of International Operations of The GSI Group,
a company primarily engaged in the manufacture of agricultural equipment.
From 1992 until July 5, 1995, Mr. Buffett had been Vice President,
Assistant to the Chairman and a Director of Archer Daniels Midland Company,
a company engaged principally in the business of processing and
merchandising agricultural commodities. From 1988 until 1992, Mr.
Buffett was a member of the Douglas County, Nebraska Board of
Commissioners. He is also a director of Coca-Cola Enterprises Inc.
and Lindsay Manufacturing Co.
SUSAN T. BUFFETT, age 63, has been a director of the Corporation since 1991.
Mrs. Buffett has not been employed in the past five years.
MALCOLM G. CHACE, III, age 61, has been a director of the Corporation since
1992. For more than the past five years, he has been a private investor.
CHARLES T. MUNGER, age 72, has been a director and Vice Chairman of the
Corporation's Board of Directors since 1978. He is Chairman of the Board
of Directors of Wesco Financial Corporation, approximately 80%-owned by
the Corporation. Mr. Munger is also Chairman of the Board of Directors of
Daily Journal Corporation and a director of Salomon Inc.
WALTER SCOTT, JR., age 64, has been a director of the Corporation since 1988.
For more than the past five years, he has been Chairman of the Board of
Directors and Chief Executive Officer of Peter Kiewit Sons', Inc.,
a company engaged worldwide in construction, mining and telecommunications.
He is also a director of Burlington Resources Inc., California Energy
Company, Inc., C-TEC Corporation, ConAgra, Inc., MFS Communications
Company, Inc., and Valmont Industries Inc.
Warren E. Buffett and Susan T. Buffett are husband and wife. Howard G.
Buffett is the son of Warren and Susan Buffett. Otherwise, there is no
family relationship between any other officer or director of the Corporation.
When the accompanying proxy is properly executed and returned, the shares
it represents will be voted in accordance with the directions indicated
thereon or, if no direction is indicated, the shares will be voted in favor
of the election of the six nominees identified above. The Corporation expects
each nominee to be able to serve if elected, but if any notifies the
Corporation before this meeting that he or she is unable to do so, then the
proxies will be voted for the remainder of those nominated and, as
designated by the Directors, may be voted (i) for a substitute nominee or
nominees, or (ii) to elect such lesser number to constitute the whole Board
as equals the number of nominees who are able to serve.
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Board of Directors Meetings, Committees and Directors Compensation
Board of Directors' actions were taken in 1995 at the Annual
Meeting of Directors that followed the 1995 Annual Meeting of
Shareholders, at two special Directors' meetings, and upon two
occasions by Directors' unanimous written consent. Each director
attended all meetings of the Board and of the Committees of the
Board on which they served.
Mr. Scott is the member of the audit committee. The functions of
the audit committee are to ratify the selection of the independent
auditors; review the results of the annual audit; inquire into
important internal control, accounting and financial reporting
matters; and report and make recommendations to the full Board of
Directors. The audit committee met twice during 1995. The
Corporation does not have standing nominating or compensation
committees of the Board of Directors.
Directors who are employees of the Corporation or its subsidiaries
do not receive fees for attendance at directors' meetings.
Directors who are not employees receive a fee of $900 for each
meeting attended in person and $300 for participating in any
meeting conducted by telephone. A director who serves as a member
of the audit committee receives additional fees of $1,000
quarterly. Directors are reimbursed for their out-of-pocket
expenses incurred in attending meetings of directors or
shareholders.
Executive Compensation
The following table discloses the compensation received for the
three years ended December 31, 1995 by the Corporation's Chief
Executive Officer and its other executive officers at December 31,1995.
SUMMARY COMPENSATION TABLE
All
Name and Annual Compensation Other
Principal Position Year Salary Bonus Compensation
- -------------------- ---- -------- ------- -------------
Warren E. Buffett 1995 $100,000 -- $224,100(2)
Chief Executive Officer/ 1994 100,000 -- 212,600(2)
Chairman of the Board 1993 100,000 -- 205,200(2)
Marc D. Hamburg 1995 227,500 -- 7,500(3)
Vice President/Chief 1994 205,000 -- 7,500(3)
Financial Officer 1993 170,000 -- 8,500(3)
Charles T. Munger (1) 1995 100,000 -- 93,200(2)
Vice Chairman of the Board 1994 100,000 -- 76,200(2)
1993 100,000 -- 66,400(2)
______________________
(1) Mr. Munger is compensated by a Berkshire subsidiary.
(2) Represents the value of directors' fees received by Mr. Buffett
and Mr. Munger in cash or deferred phantom equity interests from
certain non-subsidiary companies in which Berkshire has significant
investments.
(3) Represents contribution to a subsidiary's defined contribution
plan in which Mr. Hamburg participates.
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Board of Directors Report on Executive Compensation
Berkshire's program regarding compensation of its executive
officers is different from most public corporations' programs. Mr.
Warren E. Buffett recommends to the Board of Directors the amount
of his proposed remuneration and he sets the remuneration of
Berkshire's other executive officers (including both salary and
bonus). Mr. Buffett has been paid an annual salary of $100,000 for
each of the last 15 years. Factors considered by the Board of
Directors and Mr. Buffett are typically subjective, such as their
perception of the individual's performance and any planned change
in functional responsibility. Neither the profitability of the
Corporation nor the market value of its stock are considered in
setting executive officer remuneration (including both salary and
bonus). Further, it is the Corporation's policy that all
compensation paid to its executive officers be deductible under
Internal Revenue Code Section 162(m).
Submitted by the Berkshire Hathaway Inc. Board of Directors
Warren E. Buffett, Chairman Malcolm G. Chace, III
Susan T. Buffett Charles T. Munger
Howard G. Buffett Walter Scott, Jr.
Stock Performance Graph
The following chart compares the subsequent value of $100 invested
in Berkshire Hathaway Inc. common stock on December 31, 1990 with
a similar investment in the Standard and Poor's 500 Stock Index and
in the Standard and Poor's Property - Casualty Insurance Index.
Comparison of Five Year Cumulative Return*
-------------------------------------------
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
Berkshire Hathaway Inc. $100 $136 $176 $245 $306 $485
S&P 500 Index 100 130 140 155 157 215
S&P 500 Property-Casualty
Insurance Index ** 100 125 147 144 151 205
* Cumulative return for the Standard and Poor's indices based on
reinvestment of dividends.
** It would be difficult to develop a peer group of companies
similar to Berkshire. The Corporation owns subsidiaries engaged
in a number of diverse business activities of which the most
important is the property and casualty insurance business and,
accordingly, management has used the Standard and Poor's Property-
Casualty Insurance Index for comparative purposes.
Board of Directors
Interlocks and Insider Participation
Warren E. Buffett, Chairman of Berkshire's Board of Directors, is
an employee of the Corporation. Charles T. Munger, Vice Chairman
of Berkshire's Board of Directors, is employed by a Berkshire subsidiary.
4
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Security Ownership of Certain Beneficial Owners and Management
Warren E. Buffett, whose address is 1440 Kiewit Plaza, Omaha, NE 68131,
a nominee for director, is the only person known to the Corporation to be
the beneficial owner of more than 5% of the Corporation's common stock.
Beneficial ownership of the Corporation's common stock on March 1, 1996
by Mr. Buffett and by any other executive officers and directors of
the Corporation who own shares is shown in the following table:
Percent of
Amount and Nature of Outstanding
Name Beneficial Ownership Shares
- ---------------- -------------------------------- ------------
Warren E. Buffett........479,202 shares -- sole investment
and voting power (1)............. 40.2
Mr. Buffett has shared investment and
voting power with respect to 36,985
shares owned by Susan T. Buffett
Susan T. Buffett.........36,985 shares with respect to which
investment and voting power is shared
with Warren E. Buffett........... 3.1
Howard G. Buffett........14 shares -- sole investment
and voting power................. *
Malcolm G. Chace, III....4,129 shares -- sole investment and
voting power..................... 0.3
9,306 shares -- shared investment
and voting power(2).............. 0.8
Marc D. Hamburg..........0 shares......................... *
Charles T. Munger........18,829 shares -- sole investment and
voting power...................... 1.6
Walter Scott, Jr.........100 shares -- sole investment
and voting power (3)............. *
Directors and executive
officers as a group...548,565 shares................... 46.0
(1) Includes 474,998 shares (39.8%) owned directly and
beneficially by Mr. Buffett, and 4,204 shares (0.4%) owned by a
trust of which Mr. Buffett is sole trustee but with respect to
which Mr. Buffett disclaims any beneficial economic interest.
(2) Excluded are 1,552 shares in which Mr. Malcolm G. Chace, III
has a pecuniary interest but with respect to which he possesses
neither investment power nor voting power, and also does not
include 54 shares owned by Elizabeth Z. Chace, wife of Malcolm G.
Chace, III.
(3) Does not include 10 shares owned by Suzanne M. Scott, wife of
Walter Scott, Jr.
* less than 0.1%.
Requirements for Reporting Securities Ownership
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and directors, and persons who own more
than ten percent of a registered class of the Corporation's
equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the New
York Stock Exchange. Officers, directors and greater than ten-
percent shareholders are required by SEC regulation to furnish
the Corporation with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received
by it, or written representations from certain reporting persons
that no Forms 5 were required for those persons, the Corporation
believes that during 1995 all filing requirements applicable to
its officers, directors, and greater than ten-percent beneficial
owners were complied with.
5
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2. PROPOSED AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO
AUTHORIZE CLASS B COMMON STOCK, TO REDESIGNATE THE CORPORATION'S
EXISTING COMMON STOCK AS CLASS A COMMON STOCK, AND TO MAKE CLASS
A COMMON STOCK CONVERTIBLE INTO CLASS B COMMON STOCK AT A RATIO
OF 30 SHARES OF CLASS B COMMON STOCK FOR EACH SHARE OF CLASS A
COMMON STOCK.
The Board of Directors has approved and recommends to the
shareholders the adoption of an amendment to Article Fourth of
the Corporation's Restated Certificate of Incorporation (the
"Amendment"). The amended Article Fourth would (a) increase the
number of shares of all classes of stock that the Corporation is
authorized to issue from 2,500,000 shares to 52,500,000, (b)
redesignate the existing common stock as Class A Common Stock,
(c) authorize the issuance of 50,000,000 shares of a new Class B
Common Stock, and (d) make each share of the Class A Common Stock
convertible into thirty (30) shares of Class B Common Stock. The
text of Article Fourth, as proposed to be amended, is attached as
Exhibit A. The summary of the amended Article Fourth contained
herein should be read in conjunction with, and is qualified in
its entirety by reference to, the full text of the proposed
Article Fourth set forth as Exhibit A.
Background and Reasons for the Proposal
In recent months, parties unrelated to Berkshire have indicated
an intent to market investment vehicles called unit investment
trusts to investors of as little as $1,000. These investment
trusts would purchase Berkshire shares and offer an indirect
investment in Berkshire. However, units of the trusts would have
none of the attributes of Berkshire shares such as the power to
vote, the right to periodic reports from the Corporation, and the
right to attend meetings of Shareholders.
The Board of Directors and management of Berkshire believe that
these investment vehicles, and such other similar vehicles as
would probably have been proposed if these were successfully
marketed, are not in the best interest of Berkshire or of
Berkshire's shareholders. The Board also believes that the
offering materials for the unit investment trusts that have been
filed to date are, and that any such materials for such vehicles
that would be filed in the future would likely be, misleading to
investors, with some prospect for harm to Berkshire or its
reputation as a result.
The likelihood that the promoters of these trusts will
aggressively market them, cause small investors to incur large
sales commissions, management fees and taxes that will do them
damage, and in the long run adversely affect Berkshire, has led
the Board to recommend the proposed Amendment. Given the
prospect of these unit trusts, Berkshire believes that the
correct reaction is to provide a direct, low-cost means of
investment in Berkshire so superior to the investments offered by
these promoters that it will render their products unmarketable.
The proposed amendment is intended to do so.
In considering the Amendment, shareholders should realize that
the recapitalization plan will impose certain new costs on
Berkshire, including increased cost associated with a potentially
larger number of shareholders than in the past. Berkshire
believes that these costs are warranted, particularly considering
the desire of some present shareholders for a lower price stock
in order to facilitate gifts.
Summary of the Amendment
Dividends and Distributions. Each share of Class B Common Stock
will have the right to receive one-thirtieth (1/30) of the amount
of any dividend or other distribution (including liquidating
distributions) per share declared on shares of the Class A Common
Stock, other than dividends or distributions payable in stock of
the Corporation, which shall be payable to holders of Class A
shares in Class A shares and to holders of Class B shares in
Class B shares. Shareholders should note that Berkshire has not
paid a cash dividend on its common stock since 1967, and has no
present intention to do so in the future.
Voting. Each share of Class B Common Stock will be entitled to
one-two-hundredth (1/200) of one vote per share on all matters
submitted to a vote of shareholders of the Corporation. The Class
B Common Stock and the Class A Common Stock will vote together as
one class on all matters except as otherwise required by
applicable law.
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To the extent holders of shares of Class A Common Stock convert
to Class B Common Stock, their relative voting power will be
reduced, and the relative voting power of the remaining holders
of Class A Common Stock, including Warren E. Buffett, will be
increased. Mr. Buffett owns 39.8% of Berkshire's common stock,
his wife Susan T. Buffett owns 3.1% of such stock, and a trust of
which Mr. Buffett is trustee but in which he has no economic
interest owns 0.4% of such stock. Conversion of Class A shares
would thus increase the already significant voting power of Mr.
and Ms. Buffett and the trust, and limit the ability of other
shareholders to influence corporate action.
Mr. and Ms. Buffett have entered a voting agreement with
Berkshire providing that, should the voting power of shares held
by Mr. and Ms. Buffett and the trust exceed 49.9% of Berkshire's
total voting power, they will vote their shares in excess of that
percentage proportionately with the votes of the other Berkshire
shareholders.
Conversion. Each share of Class A Common Stock will be
convertible at any time at the election of the holder thereof
into thirty (30) fully paid and nonassessable shares of Class B
Common Stock. Shareholders should note that the Class B Common Stock
is not convertible into Class A Common Stock; that is, once a Class
A share is converted into 30 Class B shares, the conversion is
permanent. Berkshire's management believes that the
convertibility feature is important in order to maintain an
appropriate relationship between the market prices of the two
classes of common stock. Thus, if speculative interest in the
Class B shares should cause increases in price not warranted by
intrinsic value, arbitrage potential involving conversion of
Class A shares should dampen such activity.
Any holder of Class A Common Stock may effect a conversion by
surrendering the certificate or certificates representing the
Class A shares to be converted, duly endorsed, to the transfer
agent for Berkshire, Bank of Boston, c/o Boston EquiServe, P.O. Box 644,
Boston, MA 02102-0644, together with a written notice that
the holder elects to convert all or a specified whole number of shares
of Class A Common Stock to Class B Common Stock. Conversions
shall be deemed to occur at the close of business on the date
Berkshire's transfer agent receives such certificate or
certificates and notice. Shareholders will bear any transfer tax
upon conversion.
Conversion will be possible only if and after the shareholders
approve the Amendment and it becomes effective. Shareholders
should not deliver any notice of conversion prior to that time.
As part of the Amendment, Berkshire agrees to reserve and keep
available sufficient shares of Class B Common Stock, in addition
to any shares of Class B Common Stock then outstanding, to allow
conversion of shares of Class A Common Stock into Class B Common
Stock. The proposed Amendment, therefore, authorizes the
issuance of 50,000,000 shares of Class B Common Stock, allowing
for conversion of all authorized shares of Class A Common Stock,
with the potential for issuance of shares of Class B Common Stock
in public offerings, for acquisitions, or otherwise.
The Board of Directors recommends that holders of Class A Common
Stock not convert to Class B shares, other than for the limited
purpose of gifts of amounts of stock valued at $10,000 or less -
the size of gift that the current tax laws permit to be made tax-
free. Warren E. Buffett, Berkshire's Chairman and the holder of
approximately 40% of its common stock, has indicated that he
expects to hold only Class A shares (other than an occasional
conversion of a share in order to make small gifts).
Effectiveness. Upon the filing of the Amendment with the
Delaware Secretary of State, each outstanding share of common
stock and each share of common stock held by Berkshire as
treasury shares, will be reclassified as and changed into one
share of Class A Common Stock. Shareholders do not need to, and
are requested not to, submit their certificates representing
common stock for reissuance as Class A Common Stock. Outstanding
certificates representing shares of common stock will be deemed
to represent Class A Common Stock following the effective date of
the Amendment, assuming shareholder approval. Certificates of
Class A Common Stock will be issued in the normal course as
transfers occur.
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Berkshire intends to file the Amendment in coordination with a
public offering of Class B shares described below. The public
offering is expected to occur reasonably soon after the Annual
Meeting, but its exact timing will be determined only at the time
of or after the Annual Meeting. There may be some delay between
the Annual Meeting and the filing and effectiveness of the
Amendment, assuming that it is approved. Berkshire will notify
shareholders at the Annual Meeting or by a subsequent
communication of the exact time when the Amendment becomes
effective and the present common stock becomes the convertible
Class A Common Stock.
Shareholder Designated Contribution Plan. This Plan is not part
of the rights of holders of Berkshire common stock, but rather is
considered by the Board of Directors each year. The Board
expects, however, that participation in the Plan will be limited
to eligible Class A shares (shares held in street name are not
eligible to participate in the program), and that no holders of
the Class B Common Stock will be entitled to participate. This
is primarily because the cost of administration makes very small
designations impractical. Some limitation may be placed on the
amounts that holders of Class A shares will be allowed to
designate, so that the discrepancy between the classes is not
unduly large.
Preferred Stock. As a result of the creation of the Class B
Common Stock and the redesignation of the common stock as Class
A Common Stock, certain non-substantive conforming language
changes are necessary with respect to the Preferred Stock portion
of Article Fourth, and will be made as part of the Amendment.
Trading in Class B Common Stock
For the purpose of creating an initial supply of Class B shares,
Berkshire intends to make a public offering of at least $100
million of new Class B shares. This offering will be made only
by means of a prospectus at the time of the offering, which is
expected to occur reasonably soon following the Annual Meeting,
assuming approval of the proposed Amendment. Because each
Class B share is the economic equivalent of 1/30th of a Class A
share, an offering of $100 million of Class B shares will have
the effect of increasing Berkshire's capital stock outstanding by
less than 3/10ths of 1%.
Berkshire could, of course, issue more than $100 million of
Class B shares, and will do so if believed necessary to forestall
any speculative excesses in the market for its stock.
Berkshire's management does not believe that Berkshire's stock is
presently undervalued. As a result, the issuance of new Class B
shares will not result in any diminution of per-share intrinsic
value of the existing common stock regardless of how many Class
B shares are sold.
Berkshire intends to file an appropriate application with the New
York Stock Exchange to list shares of the Class B Common Stock
for trading as soon as possible following effectiveness of the
Amendment. Conversations with officials of the Exchange have
occurred that make Berkshire's management confident that such
listing will occur. Berkshire cannot be assured, however, that
such listing will occur immediately or at all. The existing
common stock, redesignated as Class A Common Stock, is expected
to continue to be listed on the New York Stock Exchange.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION.
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3. OTHER MATTERS
As of the date of this statement your management knows of no
business to be presented to the meeting that is not referred to
in the accompanying notice, other than the approval of the
minutes of the last shareholders' meeting, which action will not
be construed as approval or disapproval of any of the matters
referred to in such minutes. As to other business that may
properly come before the meeting, it is intended that proxies
properly executed and returned will be voted in respect thereof
at the discretion of the person voting the proxies in accordance
with the best judgment of the person voting the proxies.
Deloitte & Touche served as the Corporation's independent public
accountants for 1995. Representatives from that firm will be
present at the meeting of shareholders, will be given the
opportunity to make a statement if they so desire, and will be
available to respond to any appropriate questions. The
Corporation has not selected auditors for the current year, since
its normal practice is for the Audit Committee of the Board of
Directors to make such selection after mid-year.
Annual Report
The Annual Report to the Shareholders for 1995 accompanies this
proxy statement, but is not deemed a part of the proxy soliciting
material.
A copy of the 1995 Form 10-K report as required to be filed with
the Securities and Exchange Commission, excluding exhibits, will
be mailed to shareholders without charge upon written request to:
Forrest N. Krutter, Secretary, Berkshire Hathaway Inc., 1440
Kiewit Plaza, Omaha, Nebraska 68131. Such request must set forth
a good-faith representation that the requesting party was either
a holder of record or a beneficial owner of common stock of the
Corporation on March 8, 1996. Exhibits to the Form 10-K will be
mailed upon similar request and payment of specified fees.
Proposals of Shareholders
Any shareholder proposal intended to be considered for inclusion
in the proxy statement for presentation at the 1997 Annual
Meeting must be received by the Corporation by November ,
1996. The proposal must be in accordance with the provisions of
Rule 14a-8 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934. It is suggested the
proposal be submitted by certified mail - return receipt
requested.
By order of the Board of Directors
FORREST N. KRUTTER, Secretary
Omaha, Nebraska
March , 1996
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EXHIBIT A
ARTICLE FOURTH OF THE CERTIFICATE
OF INCORPORATION AS PROPOSED TO BE
REVISED BY AMENDMENT
FOURTH: The total number of shares of all classes of stock that
the Corporation is authorized to issue is 52,500,000, of which
1,500,000 shares shall be Class A Common Stock, 50,000,000 shares
shall be Class B Common Stock, and 1,000,000 shares shall be
Preferred Stock. Shares of Preferred Stock shall have no par
value. Each share of Class A Common Stock shall have a par value
of $5.00. Each share of Class B Common Stock shall have a par
value of $0.1667. The Class A Common Stock and the Class B
Common Stock shall sometimes hereinafter be referred to
collectively as the "Common Stock."
1. Preferred Stock. The Board of Directors is authorized,
subject to limitations prescribed by law and the limitation on
authorized Preferred Stock stated above in this Article FOURTH,
to provide for the issuance of shares of Preferred Stock in one
or more series, and, by filing a certificate pursuant to the
applicable law of the State of Delaware, to establish from time
to time the number of shares to be included in any series, and to
fix the designation, powers, preferences and rights of the shares
of each such series and the qualifications, limitations or
restrictions thereof.
The authority of the Board of Directors with respect to each
series of Preferred Stock shall include, but not be limited to,
determination of the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or
dates and the relative rights of priority, if any, of payment of
dividends on shares of that series;
(c) Whether that series shall have voting rights, in addition
to the class voting rights provided by law, and, if so, the terms
of such voting rights;
(d) Whether that series shall have conversion privileges,
and, if so, the terms and conditions of such conversion,
including provision for adjustment of the conversion rate in such
events as the Board of Directors shall determine;
(e) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such
redemption, including the date or dates upon or after which they
shall be redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions and
at different redemption dates;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the
terms and amount of such sinking fund;
(g) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, and the relative rights of priority, if any,
of payment of shares of that series; and
(h) Any other absolute or relative rights, preferences or
limitations of that series.
Dividends on outstanding shares of Preferred Stock shall be paid
or declared and set apart for payment before any dividends shall
be paid or declared and set apart for payment on shares of Common
Stock with respect to the same dividend period.
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The Preferred Stock shall be preferred over the Common Stock as
to assets, and in the event of any liquidation or dissolution or
winding up of the Corporation (whether voluntary or involuntary),
the holders of the Preferred Stock shall be entitled to receive
out of the assets of the Corporation available for distribution
to its shareholders, whether from capital, surplus or earnings,
the amount specified for each particular series, together with
any dividends accrued or in arrears, for every share of their
holdings of Preferred Stock before any distribution of the assets
shall be made to the holders of Common Stock, and shall be
entitled to no other or further distribution. If upon any
voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, the assets available for distribution to
holders of shares of Preferred Stock of all series shall be
insufficient to pay such holders the full preferential amount to
which they are entitled, then such assets shall be distributed
ratably among the shares of all series of Preferred Stock in
accordance with the respective preferential amounts (including
unpaid cumulative dividends, if any, as provided by the Board of
Directors) payable with respect thereto.
Neither the consolidation nor merger of the Corporation with or
into any other corporation, nor any sale, lease, exchange or
conveyance of all or any part of the property, assets or business
of the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning
of this Article FOURTH.
2. Class A Common Stock and Class B Common Stock. The powers,
preferences, and rights of the Class A Common Stock and Class B
Common Stock, and the qualifications, limitations and
restrictions thereof, are fixed as follows:
A. Issuance; Payment and Assessability. The shares of Class
A Common Stock and Class B Common Stock may be issued by the
Corporation from time to time for such consideration, having a
value not less than par value, as may be fixed from time to time
by the Board of Directors of the Corporation. Any and all shares
of Class A Common Stock and Class B Common Stock so issued for
which the consideration so fixed has been paid or delivered to
the Corporation shall be deemed fully paid stock and shall not be
liable to any further call or assessment thereon, and the holders
of said shares shall not be liable for any further payments in
respect of such shares.
B. Dividends; Distributions; Stock Splits. Holders of Class
A Common Stock shall be entitled to such dividends or other
distributions (including liquidating distributions) per share,
whether in cash, in kind, in stock (including a stock split) or
by any other means, when and as may be declared by the Board of
Directors of the Corporation out of assets or funds of the
Corporation legally available therefor. Holders of Class B
Common Stock shall be entitled to dividends or other
distributions (including liquidating distributions) per share,
whether in cash, in kind, in stock (including a stock split), or
by any other means, equal to one-thirtieth (1/30th) of the amount
per share declared by the Board of Directors of the Corporation
for each share of Class A Common Stock, and such dividends or
distributions with respect to the Class B Common Stock shall be
paid in the same form and at the same time as dividends or
distributions with respect to the Class A Common Stock; provided,
however, that, in the event of a stock split or stock dividend,
holders of Class A Common Stock shall receive shares of Class A
Common Stock and holders of Class B Common Stock shall receive
shares of Class B Common Stock, unless otherwise specifically
designated by resolution of the Board of Directors.
C. Voting. Each holder of Class A Common Stock shall be
entitled to one (1) vote for each share of Class A Common Stock
standing in his name on the books of the Corporation. Each
holder of Class B Common Stock shall be entitled to one-two-
hundredth (1/200th) of one vote for each share of Class B Common
Stock standing in his name on the books of the Corporation.
Unless otherwise required by the Delaware General Corporation
Law, the Class A Common Stock and the Class B Common Stock shall
vote as a single class with respect to all matters submitted to
a vote of shareholders of the Corporation.
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<PAGE>
D. Conversion. Each share of Class A Common Stock may, at
the option of the holder of record thereof and without payment of
any consideration, be converted into thirty (30) fully paid and
nonassessable shares of Class B Common Stock. Any such
conversion may be effected by any holder of Class A Common Stock
surrendering such holder's certificate or certificates for the
Class A Common Stock to be converted, duly endorsed, at the
office of the Corporation or any transfer agent for the Class A
Common Stock, together with a written notice to the Corporation
that such holder elects to convert all or a specified whole number of
shares of Class A Common Stock and stating the name or names in
which such holder desires the certificate or certificates for the
Class B Common Stock to be issued. If so required by the
Corporation, any certificate for shares surrendered for
conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder
of such shares or the duly authorized representative of such
holder. Promptly thereafter, the Corporation shall issue and
deliver or cause to be issued and delivered to such holder or
such holder's nominee or nominees, a certificate or certificates
for the number of shares of Class B Common Stock to which such
holder shall be entitled as herein provided. Such conversion
shall be deemed to have been made at the close of business on the
date of receipt by the Corporation or any such transfer agent of
such certificate or certificates for Class A Common Stock and
such notice, and the person or persons entitled to receive the
Class B Common Stock issuable on such conversion shall be treated
for all purposes as the record holder or holders of such Class B
Common Stock on that date.
The issuance of certificates for shares of Class B Common
Stock issuable upon the conversion of shares of Class A Common
Stock shall be made without charge to the converting holder;
provided, however, that the Corporation shall not be required to
pay any tax that may be payable with respect to any transfer
involved in the issuance and delivery of any certificate in a
name other than that of the record holder of the shares being
converted, and the Corporation shall not be required to issue or
deliver any such certificate unless and until the person
requesting the issuance thereof shall have paid to the
Corporation the amount of such tax or has established to the
satisfaction of the Corporation that such tax has been paid.
The Corporation covenants that it will at all times reserve
and keep available, solely for the purpose of issuance upon
conversion of the outstanding shares of Class A Common Stock, a
number of shares of Class B Common Stock equal to thirty (30)
times the number of shares of Class A Common Stock then
outstanding, in addition to the number of shares of Class B
Common Stock then outstanding; provided, however, that nothing
herein shall be construed to preclude the Corporation from
satisfying its obligation to issue shares of Class B Common Stock
upon conversion of Class A Common Stock by delivery of purchased
or redeemed shares of Class B Common Stock which are held in the
treasury of the Corporation.
At the effective time of the amendment to the Restated
Certificate of Incorporation of the Corporation first authorizing
the issuance by the Corporation of shares of Class A Common Stock
and Class B Common Stock, each share of common stock of the
Corporation, par value $5.00 per share, issued and outstanding or
held in the treasury of the Corporation immediately prior to such
effective time, shall be reclassified as and changed into one
share of Class A Common Stock of the Corporation.
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<PAGE>
PROXY
BERKSHIRE HATHAWAY INC.
Annual Meeting of Shareholders to be held on May 6, 1996
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Marc D. Hamburg and Walter Scott,
Jr., or either of them, as proxies, with power of substitution to
each proxy and substitute, to vote the Common Stock of the
undersigned at the 1996 Annual Meeting of Shareholders of
Berkshire Hathaway Inc. and at any adjournment thereof, as
indicated on the reverse hereof on the proposal for Election of
Directors and amendment of the Restated Certificate of
Incorporation described in the Notice and Proxy Statement for
such meeting and as said proxies may determine in the exercise of
their best judgment on any other matters which may properly come
before the meeting.
IF PROPERLY EXECUTED AND RETURNED, THIS PROXY WILL BE VOTED AS
SPECIFIED OR, IF NOT SPECIFIED, WILL BE VOTED FOR ELECTING ALL
NOMINEES AND AMENDING THE RESTATED CERTIFICATE OF INCORPORATION.
PLEASE SIGN ON REVERSE SIDE AND MAIL PROMPTLY
IN THE ENCLOSED ENVELOPE
SEE REVERSE
SIDE
[x] Please mark
votes as in
this example.
1. Election of Directors:
Nominees: Warren E. Buffett, Charles T. Munger,
Susan T. Buffett, Howard G. Buffett,
Malcolm G. Chace, III and Walter Scott, Jr.
[ ] FOR [ ] WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[ ]
________________________________________________
For, except vote withheld from the above nominee(s).
2. Proposed amendment of the Corporation's Restated Certificate
of Incorporation creating a new class of Class B Common Stock,
redesignating the current stock as Class A Common Stock and
making each share of Class A Common Stock convertible into
thirty shares of Class B Common Stock.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
MARK HERE
FOR ADDRESS
CHANGE AND
NOTE AT LEFT [ ]
Please sign exactly as your name appears. If acting as attorney,
executor, trustee or in representative capacity, sign name and
title.
Signature: ______________________________Date _____________
Signature: ______________________________Date _____________
<PAGE>
