<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Dated February 6, 1996
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule
14a-12
BUTLER MANUFACTURING COMPANY
(Name of Registrant as Specified in Its Charter)
BUTLER MANUFACTURING COMPANY
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(e)(1)(ii), 14a-6(i)(1),
OR 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies: N/A
(2) Aggregate number of securities to which transaction
applies: N/A
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11: N/A (1)
(4) Proposed maximum aggregate value of transaction: N/A
[X] 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:
- ------------------
(1) Set forth the amount on which the filing fee is calculated
and state how it was determined.
<PAGE>
BUTLER MANUFACTURING COMPANY
BMA Tower - Penn Valley Park
(P.O. Box 419917)
Kansas City, Missouri 64l4l-0917
March 11, 1996
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
To the Stockholders:
The annual meeting of stockholders of Butler Manufacturing Company will be
held at Atkins Auditorium, Nelson-Atkins Museum of Art, 4525 Oak Street, Kansas
City, Missouri, on Tuesday, April 16, l996, beginning at 9:30 a.m., local time
for the following purposes:
l. To elect three directors each for a three year term expiring
in 1999;
2. To amend the Restated Certificate of Incorporation of Butler Manufacturing
Company to increase the authorized number of shares of common stock from 13
million shares to 20 million shares.
3. To approve the Butler Manufacturing Company Stock Incentive
Plan of 1996.
4. To approve the Butler Manufacturing Company Director Stock
Compensation Program.
5. To transact such other business as may properly come before
the meeting.
Holders of Common Stock of record on the books of the Company at the
close of business on February 20, 1996, will be entitled to vote at the meeting
or any adjournment thereof. A list of stockholders of the Company as of the
close of business on February 20, 1996, will be available for inspection during
business hours from April 1, 1996 through the close of business on April 15,
1996 at the Company's offices at BMA Tower, Kansas City, Missouri and will also
be available at the meeting.
Stockholders are requested to complete, sign, date and mail promptly in
the enclosed envelope the accompanying proxy so that, if you are unable to
attend the meeting, your shares may nevertheless be voted.
By Order of the Board of Directors,
ROBERT H. WEST
Chairman of the Board
RICHARD O. BALLENTINE
Vice President, General Counsel
and Secretary
<PAGE>
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the
solicitation of proxies for use at the Company's 1996 annual meeting of
stockholders on April 16, 1996, as set forth in the preceding Notice. It is
expected that this Proxy Statement and enclosed form of Proxy will be mailed to
stockholders commencing March 11, 1996. A returned Proxy will not be exercised
if you attend the meeting and choose to cast a ballot, or if you should
otherwise give written notice of revocation at any time before it is exercised.
Holders of common stock of record at the close of business on February
20, 1996, are entitled to vote at the meeting. As of February 20, 1996, there
were 7,592,598 shares of common stock outstanding, each share being entitled
to one vote. As of February 20, there were no shares of Class
A or Class 1 Preferred Stock issued or outstanding.
Stockholders representing a majority of the common stock outstanding and
entitled to vote must be present or represented by proxy in order to constitute
a quorum to conduct business at the meeting. The following proposals will be
submitted to the Stockholders at the meeting: the election of three directors;
the approval of an amendment to the Restated Certificate of Incorporation of the
Company to increase the number of authorized shares of common stock from 13
million shares to 20 million shares; the approval of the Butler Manufacturing
Company Stock Incentive Plan of 1996 ("Plan") and the approval of the Butler
Manufacturing Company Director Stock Compensation Program ("Program"). If any
other matters are properly brought before the meeting, the enclosed proxy
permits the stockholder to give discretionary authority to the persons named in
the proxy to vote the shares in their best judgment.
YOU ARE SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS TO SIGN, DATE AND
RETURN THE PROXY CARD IN THE ACCOMPANYING ENVELOPE, which is postage-paid if
mailed in the United States.
Abstentions and broker non-votes will be counted as present for purposes of
determining the existence of a quorum at the Annual Meeting. Abstentions will be
treated as shares present and entitled to vote for purposes of any matter
requiring the affirmative vote of a majority or other proportion of the shares
present and entitled to vote. With respect to shares relating to any proxy as to
which a broker non-vote is indicated on a proposal, those shares will not be
considered present and entitled to vote with respect to any such proposal. With
respect to any matter brought before the Annual Meeting requiring the
affirmative vote of a majority or other proportion of the outstanding shares, an
abstention or non-vote will have the same effect as a vote against the matter
being voted upon.
You may revoke your proxy at any time before it is actually voted at the
Annual Meeting by (i) delivering written notice of revocation to the Secretary
of the Company, (ii) submitting a subsequently dated proxy, or (iii) attending
the meeting and withdrawing the proxy. Each unrevoked proxy card properly
executed and received prior to the close of the voting will be voted as
indicated. Where specific instructions are not indicated, the proxy will be
voted FOR the election of all directors as nominated and FOR all other proposals
recommended by the Board of Directors.
<PAGE>
ELECTION OF CLASS A DIRECTORS
Nominees.
A primary purpose for this year's annual meeting is the election of three
Class A Directors, each for terms of three years expiring at the Annual Meeting
of Stockholders for 1999. The terms of the other two classes of directors do not
expire until 1997 (Class B) and 1998 (Class C). Persons elected as directors
continue to hold office until their terms expire or until their successors are
elected and are qualified.
Voting.
By checking the appropriate box on your proxy card you may (i) vote for all
of the director nominees as a group; (ii) withhold authority to vote for all
director nominees as a group; or (iii) vote for all director nominees as a group
except those nominees you identify in the line provided for that choice. The
three nominees for director who receive the highest number of votes cast will be
elected as directors.
2
<PAGE>
CLASS A NOMINEES
(Terms will expire 1999)
[Photo of Mr. Bernthal] HAROLD G. BERNTHAL
Chairman, CroBern, Inc., Member of the Board
Organization and Compen-sation and Benefits
Committees.
Bernthal, age 67, has been a Director since 1979.
He has been Chairman of CroBern, Inc., a health
care management and investment company, since 1986.
Mr. Bernthal served as Vice Chairman, President
and Chief Operating Officer of American Hospital
Supply Corporation from 1974 through 1985. He
is also a director of Nalco Chemical Company and
National Standard Company and a Governing Member,
Chicago Symphony Orchestra.
[Photo of Mr. Haw] C. L. WILLIAM HAW
President and Chief Executive Officer of National
Farms, Inc. Chairman of the Compensation and Benefits
Committee and a member of the Board Organization and
Executive Committees.
Haw, age 57, has been a Director since 1983. He
has been employed as the President and Chief
Executive Officer of National Farms, Inc., a
diversified agricultural production company, since
1974. He is also a director of Commerce Bank of
Kansas City, N.A. and an Executive Committee member
of the American Royal.
[Photo of Mr. Pratt] DONALD H. PRATT
President; member of the Executive Committee.
Pratt, age 58, has been a Director since 1979. He
joined Butler in 1965, became Executive Vice
President in 1980, and President of the Company in
1986. Mr. Pratt is also a director of Twentieth
Century Mutual Funds and is a trustee of the Kansas
City Art Institute and Midwest Research Institute. He
serves on the FFA Sponsors Advisory Board.
3
<PAGE>
CLASS B DIRECTORS
(Terms expire 1997)
[Photo of Mr. Cook] ROBERT E. COOK
President and Chief Executive Officer of American
Yard Products, Inc.; Chairman of the Audit Committee
and member of the Compensation and Benefits
Committee.
Cook, age 52, has been a director since July,
1987. He has been President and Chief Executive
Officer of American Yard Products, Inc. (formerly
Roper Corporation), a manufacturer of outdoor power
equipment, since 1983 and Chief Executive Officer
since 1985.
[Photo of Ms. Rogala] JUDITH A. ROGALA
Executive Vice President, Business Services Division,
Office Depot Inc.; Member of the Audit and
Compensation & Benefits Committees.
Rogala, age 54, a director since 1989, has been
Executive Vice President, Business Services Division,
Office Depot Inc. since June, 1994. From 1992 to
1994, she was the CEO and President of EQ-The
Environmental Quality Company, a management services
company for several affiliated companies specializing
in hazardous and solid waste management, energy
recovery and hydraponic agriculture. From 1990 to
1992, she was the CEO and President of Flagship
Express, Inc., a holding Company and Flagship Express
Services, Inc., an air express company. From 1980 to
1990, Ms. Rogala was a Senior Vice President for
Federal Express Corporation. She is a member of the
Board of Advisors, Dry Storage Corporation and a
member of the Economic Club of Chicago.
[Photo of Mr.
Reintjes] ROBERT J. REINTJES, SR.
President and Chief Executive Officer, Geo. P.
Reintjes Co., Inc.; Member of the Audit
and Compensation and Benefits Committees.
Reintjes, age 64, has been President and Chief
Executive Officer of Geo. P. Reintjes Co., Inc. of
Kansas City, Missouri for over 20 years. Geo. P.
Reintjes Co., Inc. is a specialty contracting firm
which installs refractories and weld overlay in
basic industries. He is also a director of Midwest
Grain Products, Inc. and Commerce Bank of Kansas
City, N.A. and is a trustee of the Francis Families
Foundation, Midwest Research Institute, and
Benedictine College. He is Chairman of the Kansas
City Crime Commission.
4
<PAGE>
CLASS C DIRECTORS
(Terms expire 1998)
[Photo of Mr. Hallene] ALAN M. HALLENE
Retired. Former President, Montgomery Elevator
International; Chairman of the Board Organization
Committee and member of the Audit Committee.
Hallene, age 67, has been a Director since 1979.
He served as a director of Montgomery Elevator
Company from 1960 to 1994 and President, Montgomery
Elevator International from 1989 to his retirement
in November, 1994. Mr. Hallene is also a director
of Pella Corporation, John D. and Catherine T.
MacArthur Foundation, First Midwest Bancorp and
University of Illinois Foundation. He is a trustee
of the Butterworth Memorial Trust.
[Photo of Mr. Powell] GEORGE E. POWELL, JR.
Chairman of the Board, Yellow Corporation; Member of
the Audit, Board Organization and Executive
Committees.
Powell, age 69, has been a Director since 1965.
Mr. Powell has been Chairman of the Board of Yellow
Corporation, a freight transportation company, and
its predecessor, Yellow Freight Systems, Inc., of
Delaware, since 1968. He is also a director of First
America Financial Corporation. He is President of
Powell Gardens, Inc., a trustee of Midwest Research
Institute and a director of the Kansas City Symphony.
[Photo of Mr. West] ROBERT H. WEST
Chairman of the Board and Chief Executive Officer;
Chairman of the Executive Committee and member of the
Board Organization Committee.
West, age 57, has been a Director since 1975.
He joined Butler in 1968, became President in 1978
and Chairman of the Board in 1986. Mr. West is a
director of Commerce Bancshares, Inc., Burlington
Northern Santa Fe Corporation, Kansas City Power &
Light Company, and St. Luke's Hospital. He is a
trustee of the University of Missouri at Kansas City.
5
<PAGE>
Certain Information Concerning the Board and Its Committees
The Board has four standing committees: (1) the Audit Committee, (2) the
Executive Committee, (3) the Board Organization Committee, and (4) the
Compensation and Benefits Committee. All committees consist of non-employee
directors except the Executive and Board Organization Committees. The primary
functions of the committees are described below.
During 1995, the Board met 6 times and the various committees met as
follows: Compensation and Benefits - 3 times; Audit - 2 times; Board
Organization - 1 time; and the Executive Committee had no meeting. The average
attendance at the aggregate of all board and committee meetings was 95%. All
directors attended 82% or more of such meetings.
Non-employee directors are paid $20,000 per annum, $1,000 for attendance at
each board and committee meeting and for attendance in connection with special
assignments. Attendance by means of conference telephone is compensated at the
rate of $1,000 per meeting. Travel allowances are provided where appropriate.
The Company provides $50,000 of accidental death and of term life insurance for
each non-employee director while the director serves as such and thereafter for
those who have served for more than ten years. Directors who are employees of
the Company receive no director compensation.
The Audit Committee recommends to the Board an independent accountant to
audit the books and records of the Company and its subsidiaries for the year. It
also reviews, to the extent it deems appropriate, litigation and pending claims,
the scope, plan and findings of the independent accountant's annual audit and
internal audits, recommendations of the auditor, the adequacy of internal
accounting controls and audit procedures, the Company's audited financial
statements, non-audit services performed by the independent auditor, and fees
paid to the independent auditor for audit and non-audit services. The Audit
Committee also monitors compliance with the Company's policies concerning
business conduct.
The Executive Committee acts for the Board of Directors upon matters
requiring action before the next Board meeting.
The Board Organization Committee recommends to the Board qualifications for
new director nominees, candidates for nomination, the structure of Board
committees, the review of director performance and policies concerning
compensation and length of service. The Committee considers written
recommendations from stockholders concerning these subjects and suggests that
they be addressed to the Secretary of the Company. Recommendations for director
nominees should provide pertinent information concerning the candidate's
background and experience.
A description of the Compensation and Benefits Committee's responsibilities
is set out under "COMPENSATION AND BENEFITS COMMITTEE.".
Nominating Procedures
The Company's Bylaws establish a procedure for the nomination of candidates
for election to the Board of Directors. Nominations may be made at an annual
meeting of stockholders pursuant to the Corporation's notice of meeting, by or
6
<PAGE>
at the direction of the Board of Directors, or by any stockholderof the
Corporation who was a stockholder of record at the time of giving of
notice, who is entitled to vote at the meeting and who complied with the notice
procedures set forth. Notice of proposed stockholder nominations for election of
directors must also be given to the Secretary not less than 70 days nor more
than 90 days before the anniversary date of the last annual meeting for annual
meetings and not less than ten days after notice to stockholders for any special
meeting for the election of Directors. The notice must contain certain
information about each proposed nominee, including his/her age, business and
residence addresses and principal occupation, the number of shares of capital
stock of the Company beneficially owned by the nominee and such other
information as would be required to be included in a proxy statement. Provision
is also made for substitution of nominees should a designated nominee be unable
or unwilling to stand for election at the meeting. If the Chairman of the
meeting of stockholders determines that a nomination was not made in accordance
with these procedures, the nomination shall be void. The advance notice
requirement permits the Board to inform stockholders in a timely manner about
the qualifications of the proposed nominees.
BENEFICIAL OWNERSHIP TABLE
The following table sets forth information regarding beneficial ownership
of Butler common stock by all present directors and the executive officers who
are listed in the Summary Compensation Table. The table reports ownership as of
February 20, 1996. Except as indicated, no director or executive
officer beneficially owns as much as one percent of all outstanding Butler
common stock. The table also sets forth the number of shares
beneficially owned and the percentage of ownership of Butler common stock
by all directors and executive officers as a group and by each person
who was known by the Company to own beneficially as much as five percent of
the total outstanding shares of Butler common stock as of February 20, 1996.
Amount and Nature Percent of
of Beneficial Common Stock
Stockholder Ownership Owned
----------- --------- -----
Robert H. West (a) ...... 74,001
Donald H. Pratt (b) ..... 22,515
Harold G. Bernthal ...... 9,150
Robert E. Cook .......... 9,000
Alan M. Hallene ......... 3,600
C. L. William Haw ....... 6,000
George E. Powell, Jr..... 24,000
Robert J. Reintjes, Sr... 2,040
Judith A. Rogala.......... 1,350
Richard O. Ballentine (c).19,113
John J. Holland (d)...... 20,307
Richard S. Jarman (e).... 77,554 1.01%
All directors and
Executive Officers as a
Group of 23(f) 438,679 5.6%
7
<PAGE>
Trustee of Butler
Manufacturing Company
Employee Stock Ownership
Plan Trust (ESOP) (g).. 1,049,425 13.82%
Ryback Management
Corporation (h) .... 510,891 6.73%
FMR Corp. and Edward C.
Johnson 3d(i)........... 864,400 11.38%
For purposes of the table a person is deemed to be a beneficial owner of
shares if the person has or shares the power to vote or dispose of them, or if
the person has the right to acquire such power within sixty days through the
exercise of a stock option or otherwise ("stock acquisition rights").
Unless otherwise indicated in the footnotes below, each person had sole
voting and investment power over the shares listed under "Amount and Nature of
Beneficial Ownership" above. Percentage of ownership is calculated on the basis
of 7,592,598 shares outstanding at February 20, 1996, plus the number of
shares subject to stock acquisition rights for those persons and groups holding
such rights. The stockholders disclaim beneficial ownership in the shares
described in the footnotes as being "held by" or "held for the benefit of"
other persons.
(a) Includes 8,613 shares allocated to Mr. West's account under the ESOP and
239 shares held by a member of Mr. West's family. Mr. West shares no voting
and investment power with respect to the 239 shares.
(b) Includes 7,175 shares allocated to Mr. Pratt's account under the ESOP.
(c) Includes 9,337 shares subject to exercisable outstanding stock options,
4,414 shares allocated to Mr. Ballentine's account under the ESOP and 90 shares
held by a member of Mr. Ballentine's family. Mr. Ballentine shares voting and
investment power with respect to the 90 shares.
(d) Includes 15,000 shares subject to exercisable outstanding stock options
and 3,471 shares allocated to Mr. Holland's account under the ESOP.
(e) Includes 59,220 shares subject to exercisable outstanding stock options
and 4,964 shares allocated to Mr. Jarman's account under the ESOP.
(f) Includes 171,389 shares subject to exercisable outstanding stock options
and 49,405 shares allocated to the accounts of officers under the ESOP.
(g) The shares are held for the benefit of Plan participants. The amount and
percent do not include shares mentioned in the preceding footnotes which are
allocated to the accounts of officers. Under the Plan, the trustee passes on to
participants voting and permitted reinvestment decisions as to allocated shares.
(h) Ryback Management Corporation is an investment advisor for Lindner
Investment Series Trust. The shares are held by Lindner Growth Fund, a
registered investment company that is a separate series of the Lindner
Investment Series Trust. The reporting persons claim sole voting and investment
power with respect to all 510,891 shares. The address of Ryback Management
Corporation is 7711 Corondelet Avenue, St. Louis, Missouri 63105.
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<PAGE>
(i) FMR Corp. is the owner of Fidelity Management Trust Company (a Bank
that reports beneficial ownership of 546,250 shares of the Company's Common
Stock for institutional accounts) and Fidelity Management Research Company,
an investment advisor to several investment companies which reports beneficial
ownership of 381,150 shares. FMR Corp. reports that it is controlled by the
family of Edward C. Johnson 3d. The reporting persons and related entities
report sole power to vote 546,250 of the shares and sole power to dispose of
864,400 of the shares. The address of FMR Corp. is 82 Devonshire Street,
Boston, Mass. 02109.
</R)
COMPENSATION AND BENEFITS COMMITTEE
The Compensation and Benefits Committee ("Committee") is composed of five
independent outside directors. It is the Committee's responsibility to assure
that the Company's policies regarding executive compensation are followed, to
recommend changes to the policies, to recommend to the Board the compensation of
the Chief Executive Officer and of the President, to review compensation plans
for other executive officers and management personnel as recommended by the
Chief Executive Officer, and to administer the Company's stock incentive plans.
The Committee also reviews proposals concerning the adoption of or material
changes to Company pension plans, the financial condition of each plan and the
investment performance of each investment advisor. It recommends to the Board
the amount of the Company's annual contribution to the Employee Stock Ownership
Plan. The Committee also recommends to the Board the appointment of plan
trustees and approves the appointment of investment advisors and actuaries.
Compensation Committee Interlocks and Insider Participation
Messrs. Bernthal, Cook, Reintjes and Haw and Ms. Rogala serve as members
of the Committee. No Committee member is an officer or former officer of the
Company. No Committee or board member has been or is an executive of another
company on whose board a Butler executive sits.
REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE
ON EXECUTIVE COMPENSATION
Following is the Compensation and Benefits Committee's Report on the
Company's compensation policies and practices with respect to compensation for
executive officers.
Compensation Policies Applicable To Butler's Executive Officers. It is the
Company's policy that executive officers receive total compensation that is
appropriate in light of business unit and corporate performance, and the
executive's performance in achieving both annual and strategic goals and that is
competitive with compensation levels of companies of comparable type and size.
Each factor is considered in arriving at total compensation with business unit
performance given greater weight for business unit executives and corporate
performance for corporate executives.
Because of the cyclical nature of the Company's business, the Committee's
policy is to conservatively manage fixed compensation and emphasize variable,
results-oriented compensation, to achieve a competitive total compensation
package for executives. The Committee considers total remuneration data on an
annual basis to ensure that the Company is appropriately aligned with the market
for executive talent. Companies with whom the Committee compares compensation
are companies in the same or related industry as the Company and durable goods
manufacturing companies of comparable size as surveyed and reported by
independent consulting organizations. While the Committee does not attempt to
9
<PAGE>
set executive compensation at any particular competitive level, survey data
indicates that the Company's executive compensation is usually below the
midpoint of the compensation paid by such comparable companies.
The key elements of executive compensation are base salary, annual bonus
and stock options.
Base salaries for executives are set subjectively within salary ranges
which are established for each position based on the surveys mentioned above.
Factors typically considered by the Committee in setting base salaries are the
CEO's recommendation, individual performance, leadership, tenure and length of
time since the last salary adjustment.
The Company's executive officers are eligible for an annual incentive cash
bonus. Bonus amounts are discretionary and are based on
corporate affordability and on achievement of business unit and corporate pretax
operating earnings objectives. At the beginning of each year, threshold and
target levels of pretax operating earnings for the year are established for the
Company and each business unit. Normally, no bonus is awarded unless the
threshold level of pretax earnings is met. If the threshold level is met, the
Committee will consider bonuses ranging from 5 to 75% of annual base pay
depending on how close actual pretax operating earnings are to the established
targets. The Committee may also consider individual non-financial performance in
determining final amounts of any discretionary bonus awards.
Long-term incentives are provided exclusively through the grant of stock
options. Throughout its ninety-five year history, the Company has had a strong
tradition of employee stock ownership at all organizational levels. The belief
has been that employee stock ownership encourages close identity of interests
among shareholders, executives and operating personnel. Stock options are
granted at current market price so that executive rewards accrue only as
shareholder value increases. The Company believes that as a long-term incentive
the Company's stock price provides an appropriate yardstick by which to measure
and reward executive performance.
In setting executive compensation, the Committee takes into account a
number of other factors including pension benefits, supplemental retirement
benefits, insurance and other benefits, that are described in this Proxy
Statement.
Committee's Bases for the CEO's Compensation for 1995, Including the Factors and
Criteria Upon Which the CEO's Compensation Was Based. With respect to the salary
paid to Mr. West with respect to 1995, the Committee took into consideration, in
addition to the factors mentioned above, the following: the annual salaries of
chief executive officers of the comparable companies described above; the
Company's level of profitability in 1994; and Mr. West's leadership in setting
and effecting the long term strategic growth of the Company.
In 1995, the Company exceeded its target pretax operating earnings goal.
Based on these results, Mr. West was awarded a bonus of $207,000, as compared to
a bonus of $166,000 for 1994. In awarding this bonus, the Committee also
considered Mr. West's role in promoting the long-term strategic growth of the
Company.
This report is made over the name of each member of the Committee, namely
Harold G. Bernthal, Robert E. Cook, C.L. William Haw, Robert J. Reintjes, Jr.,
and Judith A. Rogala.
10
<PAGE>
SUMMARY COMPENSATION TABLE
The table below shows all plan and non-plan compensation awarded to, earned
by, or paid to the Company's Chief Executive Officer and its four most highly
compensated executive officers other than the CEO, for services rendered to the
Company and its subsidiaries during the periods indicated.
- --------------------------------------------------------------------------------
ALL OTHER
LONG-TERM COMPENSATION
ANNUAL COMPENSATION ($)
COMPENSATION STOCK
NAME AND ________________ OPTIONS
PRINCIPAL POSITION YEAR SALARY BONUS GRANTED (1)
- -------------------------------------------------------------------------------
Robert H. West 1995 $345,000 $207,000 None $
Chairman of the 1994 $332,000 $166,000 None $296,710
Board and Chief 1993 $321,000 $80,000 None $4,622
Executive Officer
- --------------------------------------------------------------------------------
Donald H. Pratt 1995 $269,000 $148,000 None $
President 1994 $259,000 $130,000 None $202,070
1993 $251,000 $38,000 None $2,001
- --------------------------------------------------------------------------------
Richard O.Ballentine 1995 $154,000 $77,000 None $
Vice President, 1994 $149,000 $75,000 None $21,419
General Counsel, 1993 $144,000 $20,000 None $3,386
and Secretary
- --------------------------------------------------------------------------------
John J. Holland 1995 $158.000 $97,000 None $
Vice President- 1994 $149,000 $75,000 None $46,846
Finance 1993 $135,000 $34,000 None $2,191
- --------------------------------------------------------------------------------
Richard S. Jarman 1995 $193,000 $97,000 None $
President, Bldgs. 1994 $187,000 $75,000 None $225,408
Division 1993 $180,000 $8,000 None $1,462
- ---------------------------------------------------------------------------
(1) * To offset its obligations under the Company's Supplemental Retirement
Benefit Plan for executives whose retirement benefit cannot be fully
funded through the Company's Base Retirement Plan for Salaried Employees,
the Company has agreed to pay the premiums for policies of split dollar
life insurance on the lives of such executives. Included in this
column is the value of premiums paid in 1995 for Mr. West of $291,000, for
Mr. Pratt of $198,000, for Mr.Ballentine of $17,000, for Mr. Holland of
$43,000 and for Mr. Jarman of $223,000.
o Includes $780 for the Company's 1995 contribution to the Employee
Stock Ownership Plan Trust and forfeitures allocated for each named
executive officer's account.
o Includes $210 for insurance premiums paid by the Company in 1995 with
respect to term life insurance for each named executive officer.
o Includes the Company's 25% matching contribution for 1995 to the named
executive officer's account in the Butler Employees' Savings Trust
(a 401(k) plan). $2,250 was allocated to Mr. West's account, $2,250
11
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to Mr. Pratt's, $1,855 to Mr. Ballentine's, $2,145 to Mr. Holland's
and $1,294 to Mr. Jarman's.
AGGREGATED OPTION/SAR EXERCISES AND
FISCAL YEAR-END OPTION/SAR VALUE TABLE
The following table sets out the number of exercised and unexercised
options and the value of all such in-the-money options held by the named
executive officers at December_31, 1995. The Company has no Stock Appreciation
Rights (SARs) outstanding.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Shares Options In-The-Money Options
Name Acquired at December 31, 1995 at December 31, 1995 (1)
1995 Stock Option ---------------------------------------------------------------------------
On Exercise Exercises Exercisable Unexercisable Exercisable Unexercisable
(#) Value Realized (1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
R. H. West 181,978 $3,135,902 0 0 $0 $0
- -----------------------------------------------------------------------------------------------------------------------------------
D. H. Pratt 24,240 $509,040 0 0 $0 $0
- ------------------------------------------------------------------------------------------------------------------------------------
R. Ballentine 6,620 $170,908 10,267 0 $289,478 $0
- -----------------------------------------------------------------------------------------------------------------------------------
J. H. Holland 7,050 $166,119 15,000 0 $421,200 $0
- ------------------------------------------------------------------------------------------------------------------------------------
R. S. Jarman 15,385 $443,623 59,220 0 $1,668,300 $0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Reflects the amount by which the fair market value of Butler stock
exceeded (in the case of exercised options) or exceeds (in the case of
unexercised options) the option price. At December 31, 1995, the
Company's stock price was $39.25.
PENSION PLAN TABLE
The following table shows estimated annual benefits payable upon retirement
at age 65 to salaried employees in the specified compensation and years of
service classifications. Average compensation generally means income reported on
Federal Income Tax withholding statements each year, including salary, bonus,
and other annual compensation but excluding relocation expenses, and
contributions the Company makes to provide benefits under other employee benefit
plans.
The average compensation is the employee's average compensation for the
five consecutive calendar years in which compensation is the highest during the
participant's entire completed calendar years of continuous employment. Benefits
are calculated on the assumption that the benefits will be payable over the
participant's lifetime and that no survivor benefits (which would reduce the
benefit shown) are to be paid. The benefits shown in the table are subject to a
deduction for the monthly income value of ESOP benefits and of the cash value or
death benefits of split dollar life insurance, if any. Average compensation and
<PAGE>
years of credited service for the individuals named in the compensation table at
December 31, 1995 were: Mr. Ballentine, $169,658 and 21 years; Mr. Jarman,
$209,105 and 21 years; Mr. Pratt, $294,893 and 31 years; Mr. Holland, $166,297
and 16 years; and Mr. West, $382,880 and 27 years.
12
Estimated Annual Pension for
Years of Credited Service
Average -------------------------------
Compensation 10 20 30 40
-- -- -- --
150,000 23,300 46,700 70,000 94,000
200,000 31,800 63,200 94,700 127,000
250,000 39,800 79,700 119,500 160,000
300,000 48,100 96,200 144,200 193,000
350,000 56,300 112,700 169,000 226,000
400,000 64,500 129,200 193,700 259,000
450,000 72,800 145,700 218,500 292,000
500,000 81,100 162,200 243,200 325,000
Deferred Compensation Plan
The Company has an executive deferred compensation plan that allows a small
number of senior executives (approximately 60) to defer up to 25% of their
annual compensation and up to 100% of any incentive pay. The amount deferred is
credited with interest at the end of each calendar year. Participants must defer
their compensation until a specified date, their retirement, termination of
employment or a change in control of the Company (as defined) and may elect to
take the balance of their deferred cash account at the end of the deferral
period in a lump sum or in monthly payments. They must begin taking payments
from their account no later than age 70. Messrs. West, Ballentine, Jarman and
Holland participated in this Plan in 1995.
Change of Control Employment Agreements
The Company has Change of Control Employment Agreements with six executive
officers, including Messrs Ballentine, Holland, Pratt and West. The Agreements
provide that upon a change of control (as defined in the Agreements), the
executive shall be entitled to receive until the third anniversary of the change
in control a base salary, annual cash bonuses and other fringe benefits at the
highest levels provided to the executive during certain periods immediately
preceding the change in control. Upon a termination of the executive other than
for cause, or upon the executive's resignation for good reason (as defined) or
resignation during a thirty (30) day period following the first anniversary of
the change of control, the executive is entitled to receive a lump sum cash
payment consisting of (a) the executive's base salary through the date of
termination, (b) a proportionate bonus based upon the executive's annual bonus
for the last three fiscal years, (c) three times the sum of the base salary plus
bonus the executive is entitled to under the Agreement, (d) other accrued
obligations, and (e) the difference between the actuarial equivalent of the
retirement benefit the executive would receive if he remained employed for the
Employment Period and the actuarial equivalent of the executive's actual
retirement benefit. In addition, for the remainder of the Employment Period, the
executive is entitled to continued employee welfare benefits, including life and
<PAGE>
family health insurance. If any payment to the executive, whether pursuant to
the Agreement or otherwise would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code, then the executive shall be entitled to
receive an additional payment equal to the excise tax and other taxes with
respect thereto. The Agreements continue for a three year term with provision
for automatic renewal. Benefits are provided subsequent to the expiration of the
Agreement if a change of control occurs during the initial or any renewal term.
13
PERFORMANCE GRAPH
The following line graph compares, for five years, beginning December 31,
1990, the yearly percentage change in the Company's cumulative total shareholder
return with the CRSP (Center for Research in Security Prices) Total Return Index
for the Nasdaq Stock Market (approximately 4100 stocks) and the Media General
"Other Building Material Group" index (approximately 42 stocks). The graph
assumes $100 invested at December 31, 1990 and reinvestment of dividends.
The CRSP Nasdaq Stock Market index is a broad equity market index which
includes the Company. The Media General Other Building Material Group index is
an industry index published by Media General Financial Services which also
includes the Company. This index is only generally related to the Company's
markets. Three of the Company's direct competitors, American Buildings Company,
NCI Building Systems, Inc. and United Dominion Industries, Ltd. whose
Varco-Pruden division competes with the Company, are included, but CECO and
Star Buildings, a division of Robertson-CECO Corporation are not. Conversely,
the Media General index includes firms such as Armstrong World Industries,
Inc., Owens Corning Fiberglas Corporation and Republic Gypsum Company whose
products do not compete with the Company's.
Value of $100 Investments Assuming Reinvestment of Dividends
at End of Year
[PERFORMANCE CHART SHOWING TRENDS INDICATED BY CHART BELOW]
- -------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
- --------------------------------------------------------------------------------
Butler $100.0 $78.7 $100.0 $200.9 $247.8 $444.2
- --------------------------------------------------------------------------------
Nasdaq $100.0 $160.6 $186.9 $214.5 $209.7 $296.3
- --------------------------------------------------------------------------------
Media General $100.0 $125.9 $156.7 $192.8 $170.4 $225.6
- --------------------------------------------------------------------------------
14
<PAGE>
PROPOSAL 2
AMENDMENT TO RESTATED CERTIFICATE OF
INCORPORATION OF THE COMPANY
Proposal
The Board of Directors recommends a vote FOR the following resolution,
which will be presented at the meeting:
"RESOLVED that the first paragraph of ARTICLE IV of the Restated
Certificate of Incorporation be amended to read in its entirety as
follows:
"The total number of shares of all classes of stock which the
Corporation shall have authority to issue is twenty million two hundred
ten thousand (20,210,000) shares consisting of:
1. Twenty million (20,000,000) shares of Common Stock without par
value, and
2. Ten thousand (10,000) shares of Class A Preferred Stock of the
par value of one hundred dollars ($100 per share, and
3. Two hundred thousand (200,000) shares of Class 1 Preferred Stock
without par value."
General
The effect of the proposed amendment will be to increase the authorized
common stock from 13 million shares to 20 million shares. It was declared
advisable and unanimously approved by the Board of Directors on December 12,
1995.
The Company is now authorized to issue a total of 13,210,000 shares,
consisting of 13,000,000 shares of common stock, 10,000 shares of Class A
Preferred Stock, and 200,000 shares of Class 1 Preferred Stock. As of February
20, 1996, 7,592,598 shares of common stock were issued and outstanding and an
additional 307,139 shares have been reserved for issuance pursuant to
outstanding stock options.
Effective July 1, 1995, the Company effected a three-for-two split of the
common stock so as to increase the number of outstanding shares from 4,998,383
to 7,497,086. Due in part to that action the Board has determined that the
number of authorized shares of common stock should be increased to provide the
Company with the flexibility to conduct the Company's future operations,
including the issuance, distribution, exchange, or reservation of shares of
common stock for stock dividends, acquisitions, financings, and stock incentive
plans. However, the Company has no present plans or commitments to issue the
additional shares of common stock authorized by this proposed amendment other
than under existing stock incentive plans.
Under certain circumstances, an increase in the number of authorized shares
of a corporation's capital stock can provide the Company with a means of
discouraging an unsolicited change in control. Although the proposed amendment
may allow the Board of Directors to issue additional shares of common stock in
the event of an unsolicited attempt to acquire control of the Company as a means
15
<PAGE>
of discouraging a hostile bidder, the Company's Board of Directors has no
present intention of using the additional shares for such a purpose, except
to the extent such an issuance could occur under the Company's Stockholder
Rights Plan. The Board is not presently aware of any plans to acquire control
of the Company.
If the proposed amendment is approved, the additional shares, when issued,
will have the same rights as the currently authorized common stock. The holders
of common stock do not have preemptive rights to subscribe for additional shares
of common stock.
Approval
Approval of the proposed amendment to the Company's Restated Certificate of
Incorporation requires the affirmative vote of the holders of a majority of the
shares of common stock outstanding. Abstentions or broker non-votes will have
the same effect as a vote against the proposed amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO THE
RESTATED CERTIFICATE OF INCORPORATION OF THE COMPANY INCREASING THE TOTAL NUMBER
OF AUTHORIZED SHARES AND THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
PROPOSAL 3
PROPOSED STOCK INCENTIVE PLAN OF 1996
Proposal
The Board of Directors recommends a vote FOR the following resolution which
will be presented at the meeting:
RESOLVED that the Butler Manufacturing Company Stock Incentive Plan
of 1996 as set forth in Exhibit A to the Butler Manufacturing Company
Notice of 1996 Annual Meeting of Stockholders and Proxy Statement dated
March 11, 1996, is hereby approved.
General
The Board of Directors is submitting to the stockholders for approval the
Butler Manufacturing Company Stock Incentive Plan of 1996 (the "Plan"). The Plan
was adopted by the Board on December 12, 1995, but will not become effective
until approved by the Stockholders. If approved by the stockholders, the Plan
will provide for the granting of stock options and other stock and cash awards
to key employees.
The purposes of the Plan are to allow the Compensation and Benefits
Committee of the Board of Directors to provide stock incentives that will
encourage close identity of interests between stockholders and key employees and
that will assist the Company in continuing to attract and retain highly
qualified personnel. A copy of the Plan is set forth as Exhibit A to this Proxy
Statement.
16
<PAGE>
Shares Reserved under the Plan
The number of shares of common stock that may be issued under the Plan for
awards granted wholly or partly in stock during the term of the Plan is six
hundred thousand (600,000). Shares related to awards under the Plan or the
Company's 1979 and 1987 Stock Incentive Plans (the "Prior Plans") that are
forfeited, canceled, terminated, expire unexercised, settled in cash in lieu of
stock or in such manner that all or some of the shares covered by the award are
not issued to a plan participant ("Participant"), or are exchanged in connection
with the receipt of a like number of shares received in satisfaction of the
purchase price, will also become available for awards under this Plan.
The shares available, shares subject to outstanding incentives, exercise
prices and other limitations in the Plan are subject to adjustment in the event
of reorganization, reclassification, split-up, consolidation, merger, and
certain distributions or similar transactions.
If a Stock Award or Performance Award is granted to induce the
Participant's purchase of other shares of the Company's common stock for cash at
fair market value on the date of purchase, then the other shares will not be
counted against the shares otherwise available for grant but shares issued
pursuant to the award will reduce the number of shares available for grant under
the Plan.
The shares issuable under the Plan may be drawn from either authorized but
previously unissued shares of common stock or from reacquired shares of common
stock, including shares purchased by the Company on the open market and held as
treasury shares.
A total of 307,139 shares of common stock are subject to outstanding
stock options granted under the Prior plans. Although 78,063 additional shares
are authorized for grant under the 1987 Stock Incentive Plan, no further grants
are expected prior to the meeting on April 16. No further Stock Incentives will
be granted under Prior Plans following the effective date of this Plan but
outstanding options and other stock incentives under Prior Plans may be
exercised in accordance with their terms.
Material Features of the Plan
The following brief description of the material features of the Plan is
qualified in its entirety by reference to the full text of the attached copy of
the Plan.
The Plan will be administered by a committee of the Board of Directors
consisting of not less than three disinterested directors ("Committee").
Currently the Compensation and Benefits Committee is serving as the Committee.
The Committee will have, among other powers, the power to interpret the Plan and
to establish, waive, amend, or suspend rules and regulations under the Plan.
Subject to the terms of the Plan, the Committee may also authorize the amendment
of outstanding Award Agreements so long as any amendment would not adversely
affect the rights of the Participant.
The Committee has the sole and complete authority to grant to eligible
participants ("Participants") one or more Incentives ("Incentives") consisting
of Stock Options, Stock Appreciation Rights, Stock Awards and Performance Awards
or a combination of any of these Incentives.
17
<PAGE>
Stock Options may be granted in the form of Incentive Stock Options
("ISOs") which may qualify for special tax treatment or as Nonqualified Stock
Options ("NQSOs"). Stock Options entitle the Optionee to purchase shares subject
to the option at not less than 100% of fair market value at the date of grant
during terms that may not exceed ten years.
A Stock Appreciation Right is a right granted in connection with an Option
that entitles the holder to settle all or part of the Option for a payment of
the appreciation in the option in cash or in shares of common stock having a
fair market value equal to the appreciation.
Stock Awards and Performance Awards generally provide for the grant of
restricted stock. Performance Awards may be denominated at the time of grant
either in shares of common stock ("Stock Performance Award") or in dollar
amounts ("Dollar Performance Award"). Payment under a Performance Award may be
made, at the discretion of the Committee, in shares of common stock or in cash
or in any combination thereof, only if the financial performance of the Company
or any business unit of the Company meets certain financial goals established by
the Committee during a specified period of at least one year. Stock Awards are
similar to Stock Performance Awards, except that the vesting of benefits under a
Stock Award need not be conditioned upon the satisfaction of specified
performance objectives established prior to the grant. Shares subject to Stock
Awards and Stock Performance Awards must provide for restrictions on transfer
and/or ownership that continue for a period of at least one year from the date
of grant in the case of awards that are performance based and that continue for
a period of three years from the date of grant in the case of Stock Awards that
are not performance based.
Each Stock Incentive will be evidenced by a written award agreement that
will specify the terms and conditions of the Stock Incentive and any rules
applicable thereto.
The Committee has the sole discretion to determine the number or amount of
shares, units, cash or other rights to be awarded to any participant; however,
subject to adjustment, no Executive Officer of the Company may receive
Incentives under the Plan in any calendar year that relate to more than one
hundred thousand (100,000) shares of common stock or that provide for payments
under Dollar Performance Awards in excess of $900,000 in any calendar year.
Upon a change in control (as defined in the Plan), and unless the Committee
provides otherwise in the award agreement, vesting requirements, provisions for
forfeiture and restrictions on transfer expire, and provision is made for
partial maximum payments under Performance Awards for the period of time up to
the time of the change in control. Incentives are nontransferable unless the
Award Agreement provides otherwise and if such provisions do not disqualify the
award for exemption under Securities Exchange Commission Rule 16b-3, or any
requirement for qualification as an Incentive Stock Option, if applicable. No
Incentives may be granted under the Plan after December 11, 2005.
Eligible Participants
Under the Plan the Committee may only grant Stock Incentives to individuals
who are or will be salaried employees who are deemed by the Committee as persons
that will contribute significantly to the growth and successful operations of
the Company. Stock Incentives may also be granted in substitution for stock
incentives held by employees of other corporations who are about to become
employees of the Company due to a merger or acquisition.
18
<PAGE>
Amendments to the Plan
At any time the Board may amend or terminate the Plan; provided that it may
not amend the Plan without an affirmative vote of the stockholders with respect
to any amendment that would (i) increase the aggregate number of shares of
common stock that may be issued or transferred pursuant to Stock Incentives,
(ii) amend the provisions of the Plan with respect to eligibility to participate
and disinterest of members of the Committee, (iii)_permit any person who does
not meet the eligibility requirements of the Plan to be granted a Stock
Incentive under the Plan, (iv)_permit shares to be valued or to be optioned at
less than 100% of Fair Market Value, or that would (v) extend the term of the
Plan.
New Plan Benefits and Participation
No benefits or amounts have been allocated under the Plan, nor are any such
benefits or amounts now determinable and it is not possible to predict the
number or identity of future key employees of the Company that may participate
in the Plan, or except as set forth in the Plan, to describe the terms and
restrictions that may be included in specific award agreements.
Discussion of Federal Income Tax Consequences
Set forth below is a brief description of certain significant United Stated
federal income tax consequences of the Plan, under existing law. References to
the "Company" shall mean the Company or any subsidiary of the Company that
employs the participating employee, as the case may be. In addition, the
discussion applies primarily to participating employees that are citizens or
resident aliens of the United States whose tax home or abode is in the United
States.
The discussion is based on the Code and applicable regulations thereunder
in effect on the date hereof. Any subsequent changes in the Code or such
regulations may affect the accuracy of this discussion. In addition, this
discussion does not consider any state, local or foreign tax consequences or any
circumstances that are unique to a particular participant that may affect the
accuracy or applicability of this discussion.
Incentive Stock Options
No taxable income is recognized by the optionee upon the grant or exercise
of an ISO that meets the requirements of Section 422 of the Code. However, the
exercise of an ISO may result in alternative minimum tax liability for the
optionee. If no disposition of shares issued to an optionee pursuant to the
exercise of an ISO is made by the optionee within two years from the date of
grant or within one year after the date of exercise, then, upon sale of the
shares, any amount realized in excess of the exercise price (the amount paid for
the shares) will be taxed to the optionee as a long-term capital gain and any
loss sustained will be a long-term capital loss, and no deduction will be
allowed to the Company for federal income tax purposes.
If shares of common stock acquired upon the exercise of an ISO are disposed
of prior to the expiration of the two-year and one-year holding periods
described above (a "disqualifying disposition"), generally the optionee will
recognize ordinary income in the year of disposition in an amount equal to the
excess (if any) of the fair market value of the shares on the date of exercise
over the exercise price of the underlying options (the "Appreciation"), and the
19
<PAGE>
Company will be entitled to deduct such amount. Any gain realized from the
shares in excess of the amount taxed as ordinary income will be taxed as capital
gain and will not be deductible by the Company.
An ISO will not be eligible for the tax treatment described above if it is
exercised more than three months following termination of employment, except in
certain cases where the ISO is exercised after the death or permanent and total
disability of the optionee. If an ISO is exercised at a time when it no longer
qualifies for the tax treatment described above, the option is treated as a
nonqualified stock option ("NQSO").
Nonqualified Stock Options
No taxable income is recognized by the optionee at the time a NQSO is
granted under the Plan. Generally, on the date of exercise of a NQSO, ordinary
income is recognized by the optionee in the amount of the Appreciation and the
Company receives a tax deduction for the same amount. Upon disposition of the
shares acquired, an optionee generally recognizes the appreciation or
depreciation on the shares after the date of exercise as either short-term or
long-term capital gain or loss depending on how long the shares have been held.
If the stock received upon exercise of an option or stock appreciation
right is subject to a substantial risk of forfeiture, the income and deduction,
if any, associated with such award may be deferred in accordance with the rules
described below for restricted stock.
Stock Appreciation Rights
No income will be recognized by an optionee in connection with the grant
of a stock appreciation right ("SAR"). When the SAR is
exercised, the optionee will generally be required to include as taxable
ordinary income in the year of such exercise an amount equal to the amount of
cash received and the fair market value of any stock received. The Company will
generally be entitled to a deduction equal to the amount includable as ordinary
income by the optionee.
Restricted Stock
A recipient of restricted stock under a Stock Award or Performance Award
generally will be subject to tax at ordinary income rates on the excess of the
fair market value of the stock (measured at the time the stock is either
transferable or is no longer subject to forfeiture) over the amount, if any,
paid for such stock. However, a recipient who elects under Section 83(b) of the
Code within 30 days of the date of issuance of the restricted stock to be taxed
at the time of issuance of the restricted stock will recognize ordinary income
on the date of issuance equal to the fair market value of the shares of
restricted stock at that time (measured as if the shares were unrestricted and
could be sold immediately), minus any amount paid for the stock. If the shares
subject to the election are forfeited, the recipient will be entitled to a
capital loss for tax purposes only for the amount paid for the forfeited shares,
not the amount recognized as ordinary income as a result of the Section 83(b)
election. The holding period to determine whether the recipient has long-term or
short-term capital gain or loss upon sale of shares begins when the forfeiture
period expires (or upon issuance of the shares, if the recipient elected
immediate recognition of income under Section 83(b) of the Code).
20
<PAGE>
Limitation on Company Deductions for Certain Compensation
Under Section 162(m) of the Code, certain compensation payments in excess
of $1 million are subject to a limitation on deductibility for the Company. This
limitation on deductibility applies with respect to that portion of a
compensation payment for a taxable year in excess of $1 million to either the
chief executive officer of the Company or any one of the other four highest paid
executive officers who are employed by the Company on the last day of the
taxable year. However, certain "performance- based compensation," the material
terms of which are disclosed to and approved by stockholders is not subject to
this limitation on deductibility. The Company has structured the stock option,
stock appreciation rights and Performance Award portions of the Plan with the
intention that compensation resulting therefrom would be qualified
performance-based compensation that would be deductible. To qualify, the Company
is seeking stockholder approval of the Plan. However, incentives that may be
issued under the Stock Awards feature of the plan may not necessarily satisfy
the definition of performance based compensation as defined by the Code unless
the granting or vesting of incentives are based upon performance goals that have
been approved by a further stockholder vote.
Change in Control
Under certain circumstances, accelerated vesting or exercise of options or
SARs, or the accelerated lapse of restrictions on restricted stock, in
connection with a "change in control" of the Company might be deemed an "excess
parachute payment" for purposes of the golden parachute tax provisions of
Section 280G of the Code. To the extent it is so considered, the optionee or
grantee may be subject to a 20% excise tax and the Company may be denied a tax
deduction.
Approval
Approval of the Plan requires the affirmative vote of the holders of a
majority of the shares of common stock represented at the meeting. Abstentions
will be treated as shares present and will have the same effect as a vote
against the proposal. Broker non-votes will not be treated as shares present or
represented and entitled to vote at the Annual Meeting. The Board of Directors
believes that the approval of this Plan is in the best interests of the Company
since it will facilitate the Company's attraction, motivation and retention of
key employees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PLAN.
21
<PAGE>
PROPOSAL 4
PROPOSED DIRECTOR STOCK COMPENSATION PROGRAM
Proposal
The Board of Directors recommends a vote FOR the following resolution,
which will be presented at the meeting:
RESOLVED that the Butler Manufacturing Company Director Stock
Compensation Program as set forth in Exhibit B to the Butler
Manufacturing Company Notice of 1996 Annual Meeting of Stockholders and
Proxy Statement dated March 11, 1996, is hereby approved.
General
The Board of Directors is submitting to the stockholders for approval the
Butler Manufacturing Company Director Stock Compensation Program (the
"Program"). The Program was adopted by the Board on December 12, 1995, but will
not become effective until approved by the Stockholders.
The Program is intended to encourage close identity of interests between
stockholders and directors and to assist the Company in continuing to attract
and retain quality members of the Board of Directors by paying non-employee
Directors ("Outside Directors") their annual retainer in Butler's common stock.
A copy of the Program is set forth as Exhibit B to this Proxy Statement. The
current Outside Directors are those whose biographies appear herein other than
Messrs. West and Pratt.
Material Features of the Program
The following brief description of the material features of the Program is
qualified in its entirety by reference to the full text of the attached copy of
the Program.
Under the Program the dollar amount of the annual retainer established from
time to time by the full Board of Directors for Outside Directors will be
credited on a quarterly basis in shares of common stock to an account for each
Outside Director. The number of shares credited will be the dollar amount of the
retainer to be credited divided by the fair market value of one share of the
Company's common stock on the date the credit is made. Credits will be made on
the fifth (5th) Business Day of each calendar quarter. If the Plan is approved
by the Stockholders in April, 1996, quarterly credits made after the April
meeting will include amounts for the first and second quarters of 1996, the
payment of which is being deferred pending action of the stockholders.
An amount equal to any cash dividends payable on undistributed shares of
common stock credited to the account will also be credited to the account in
shares of common stock having a fair market value equal to the amount of the
dividend.
Stock certificates evidencing the shares credited will be distributed
annually, upon termination of participation or termination of the Program.
22
<PAGE>
The Program will be administered by the Board Organization Committee of the
Board of Directors ("the Committee"). That Committee will have full power and
authority to construe and administer the Program.
Rights under the Program may not be transferred, assigned, pledged or
hypothecated other than by will or the laws of descent and distribution or a
"qualified domestic relations order" as defined in the Internal Revenue Code, as
amended from time to time.
New Plan Benefits and Participation
The dollar amount of the current annual retainer for each of the seven
Outside Directors is $18,000. Under the Program, that amount may be adjusted by
the full Board, but not more frequently than annually. Had the program been in
effect for 1995, each of the Outside Directors would have received 733 shares of
common stock for the year in payment of the annual retainer in lieu of cash
payments of $18,000.
Amendments to the Plan
Subject to the limitation on the right of the Board to change the dollar
amount of the annual retainer, the Program may be amended by the Board of
Directors of the Company from time to time, and may be terminated by the Board
of Directors or Stockholders, except that any such action may not adversely
affect any director's rights under the Program that accrue prior to the
amendment or termination.
Discussion of Federal Income Tax Consequences
The fair market value of common stock allocated to directors' accounts
under the Program generally will be subject to Federal Income taxes at ordinary
income rates and the Company will be entitled to a deduction equal to such
amounts.
Approval
Approval of the Plan requires the affirmative vote of the holders of a
majority of the shares of common stock represented at the meeting. Abstentions
will be treated as shares present and will have the same effect as a vote
against the proposal. Broker non-votes will not be treated as shares present or
represented and entitled to vote at the Annual Meeting. The Board of Directors
believes that the approval of this Plan is in the best interests of the Company
since it will encourage close identity of interests between shareholders and
directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PROGRAM.
23
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected the firm of KPMG Peat Marwick as
independent certified public accountants to audit the books, records and
accounts of the Company for 1996. The selection was made upon the recommendation
of the Audit Committee, which consists of Messrs. Cook (chairman), Hallene,
Powell and Reintjes and Ms. Rogala. KPMG Peat Marwick has audited the Company's
books annually since 1952.
Representatives of KPMG Peat Marwick will be present at the stockholders
meeting. They will have the opportunity to make a statement and will be
available to respond to appropriate questions.
PROXY SOLICITATIONS AND OTHER MATTERS
The cost of soliciting proxies will be borne by the Company. The Company
will reimburse brokers, banks or other persons for reasonable expenses in
sending proxy material to beneficial owners. Proxies may be solicited through
the mail and through telephonic or telegraphic communications to, or by meetings
with, stockholders or their representatives by present and former directors,
officers and other employees of the Company who will receive no additional
compensation therefor.
Stockholders who intend to present proposals for inclusion in the Company's
proxy statement for the next annual meeting of stockholders on April 15, 1997,
must forward them to the Company at BMA Tower (P.O. Box 419917), Penn Valley
Park, Kansas City, Missouri 64141-0917, Attention: Secretary, so that they are
received not later than February 5, 1997.
By the Order of the Board of Directors
March 11, 1996 Richard O. Ballentine, Secretary
24
<PAGE>
EXHIBIT A
[Butler Logo]
BUTLER MANUFACTURING COMPANY
STOCK INCENTIVE PLAN OF 1996
TABLE OF CONTENTS
Section Page
1. Purposes .............................................1
2. Definitions...........................................1
3. Grants of Stock Incentives............................4
4. Stock Subject to the Plan.............................4
5. Stock Awards..........................................5
6. Stock Options ........................................6
7. Stock Appreciation Rights.............................8
8. Performance Awards ...................................8
9. Termination or Suspension of Employment...............9
10. Adjustment Provisions................................11
11. Change in Control....................................12
12. Term.................................................13
13. Administration.......................................13
14. General Provisions ..................................14
15. Amendment or Discontinuance of Plan..................16
Adopted by the Board of Directors on December 12, 1995
Subject to Stockholder Approval
Effective: Date of Stockholder Approval
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BUTLER MANUFACTURING COMPANY
STOCK INCENTIVE PLAN OF 1996
1. PURPOSES.
The purposes of the Plan are (a) to provide additional incentive for
Key Employees of the Company and its Affiliates by authorizing a Committee of
the Board of Directors to grant Stock Incentives to such Key Employees, thereby
furthering their identity of interest with the interests of the Company's
stockholders, and increasing their interest in and commitment to the future
growth and prosperity of the Company; and (b) to enable the Company to induce
the employment and continued employment of Key Employees and to compete with
other organizations in attracting and retaining the services of highly-qualified
personnel.
2. DEFINITIONS.
Unless otherwise required by the context, the following terms, when
used in the Plan, shall have the meanings set forth in this Section 2:
Affiliate: Any entity that, directly or indirectly, is controlled by
the Company and any entity in which the Company has a significant equity
interest, in either case as determined by the Committee.
Award Agreement: Any written agreement, contract, or other instrument
or document evidencing any Stock Incentive, which may, but need not, be executed
or acknowledged by a Participant.
Board of Directors or Board: The Board of Directors of the
Company.
Code: The Internal Revenue Code of 1986 as now or hereafter
amended.
Change in Control: A Change in Control shall mean:
(i) The acquisition (other than from the Company) by any person, entity
or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act, (excluding, for this purpose, the Company or its subsidiaries, or any
employee benefit plan of the Company or its subsidiaries which acquires
beneficial ownership of voting securities of the Company) of beneficial
ownership, (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 15% or more of either the then outstanding shares of common stock or the
combined voting power of the Company's then outstanding voting securities
entitled to vote generally in the election of directors; or
(ii) Individuals who, as of the date hereof, constitute the Board (as
of the date hereof the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Company, as such terms are used in Rule 14a-11 of Regulation
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14A promulgated under the Exchange Act) shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; or
(iii) Approval by the stockholders of the Company of a reorganization,
merger, consolidation, in each case, with respect to which persons who were the
stockholders of the Company immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own collectively as a group more
than 50% of the combined voting power entitled to vote generally in the election
of directors of the reorganized, merged or consolidated company's then
outstanding voting securities, or a liquidation or dissolution of the Company or
of the sale of all or substantially all of the assets of the Company.
If any of the events enumerated in clauses (i) through (iii) occur, the
Board shall determine the effective date of the Change in Control resulting
therefrom, for purposes of the Plan.
Committee: A committee of the Board of Directors of the Company
consisting of not less than three directors, all of whom shall be disinterested
as provided in Section 13 of the Plan.
Common Stock: The Common Stock of the Company, no par value, or such
other class of shares or other securities as may be subject to the Plan as the
result of an adjustment made pursuant to the provisions of Section 10.
Company: Butler Manufacturing Company, a Delaware
corporation.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Executive Officer: At any time, an individual who is an executive
officer of the Company within the meaning of Exchange Act Rule 3b-7 as
promulgated and interpreted by the SEC under the Exchange Act, or any successor
rule or regulation thereto as in effect from time to time, or who is an officer
of the Company within the meaning of Exchange Act rule 16a-1(f) as promulgated
and interpreted by the SEC under the Exchange Act, or any successor rule or
regulation thereto as in effect from time to time.
Fair Market Value: The fair market value of a share of Common Stock on
the date as of which fair market value is to be determined shall be: (a) if the
Common Stock is reported on the NASDAQ National Market System of the National
Association of Securities Dealers, Inc., the last reported sales price of a
share of Common Stock as reported by NASDAQ; or (b) if the Common Stock is
listed on an established securities exchange or exchanges, the highest reported
closing price of a share of Common Stock on such exchange or exchanges. The fair
market value of the Common Stock if not so reported or listed and the fair
market value of any other property on the date as of which fair market value is
to be determined shall mean the fair market value as determined by the Committee
in its sole discretion.
Incentive Compensation: Bonuses, extra and other compensation
payable in addition to a salary or other base amount, whether
contingent or not, whether discretionary or required to be paid
pursuant to an agreement, resolution, arrangement, plan or
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practice, and whether payable currently or on a deferred basis, in cash, Common
Stock or other property.
Incentive Stock Option: A stock option granted hereunder
which satisfies the requirements of Section 422 of the Code.
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Key Employees: A salaried employee of the Company or of an Affiliate,
including an officer or director who is an employee, who in the opinion of the
Committee can contribute significantly to the growth and successful operations
of the Company or an Affiliate. The determination by the Committee that a Stock
Incentive be granted to an employee shall be deemed a determination by the
Committee that such employee is a Key Employee.
Non Qualified Stock Option: A right to purchase Common Stock from the
Company that is granted under Section 6 of the Plan and that is not intended to
be an Incentive Stock Option.
Participant: Any Key Employee selected by the Committee to
receive a Stock Incentive under the Plan.
Performance Award: Stock Incentives which shall consist of
Performance Awards under Section 8.
Prior Plans: The Butler Manufacturing Company Stock Incentive
Plan of 1979, as amended (the "1979 Plan"), and the Butler
Manufacturing Company Stock Incentive Plan of 1987, as amended (the
"1987 Plan").
Option: An option to purchase shares of Common Stock or,
where the context so requires, the instrument which evidences such
an option.
Plan: The Stock Incentive Plan herein set forth as the same
may from time to time be amended.
Restricted Shares: Shares of Common Stock issued or transferred subject
to terms and conditions with respect to payment, transfer or forfeiture as
authorized by paragraph (d) of Section 5.
Stock Appreciation Right: A right to receive a number of shares of
Common Stock, cash, or a combination of the two based on the increase in the
Fair Market Value of shares of Common Stock subject to an Option, as set forth
in Section 7 of the Plan.
Stock Award: An issuance or transfer of shares of Common Stock at the
time a Stock Incentive is granted or as soon thereafter as practicable, or an
undertaking to issue or transfer such shares in the future, including, without
limitation, such an issuance, transfer or undertaking with respect to a Stock
Incentive that is contingent, in whole or in part, upon the attainment of a
specified objective or objectives.
Stock Incentive: A stock incentive granted under the Plan in
one of the forms authorized in Section 3.
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Stock Purchase Right: A right granted as a part of a Stock Award
or Performance Award to purchase for cash shares of the Company's Common
Stock at their fair market value on the date of purchase through a cash payment
or the cancellation of all or a portion of an earned cash bonus.
Subsidiary: A corporation or other form of business
association of which shares (or other ownership interests) having
50% or more of the voting power are owned or controlled, directly
or
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indirectly, by the Company.
Substitute Stock Incentives: Stock Incentives granted
pursuant to Section 14.
3. GRANTS OF STOCK INCENTIVES.
(a) Persons Eligible to Participate. Subject to the
provisions of the Plan, the Committee may at any time grant Stock
Incentives under the Plan to, and only to, Key Employees.
(b) Forms of Stock Incentives. Stock Incentives may be
granted in the following forms:
(i) a Stock Award, in accordance with Section 5, or
(ii) a Stock Option, in accordance with Section 6, or
(iii) a Stock Appreciation Right, in accordance with
Section 7, or
(iv) a Performance Award in accordance with Section 8, or
(v) a combination of any of the foregoing.
(c) Award Agreements. Each Stock Incentive shall be evidenced by a
written Award Agreement that shall be delivered to the Participant and shall
specify the terms and conditions of the Stock Incentive and any rules applicable
thereto. Award Agreements may be executed on behalf of the Company and the Plan
by any Executive Officer of the Company or such other officer of the Company as
the Committee shall designate.
(d) Amendments of Award Agreements. Subject to the terms of the Plan,
the Committee may from time to time authorize the amendment of outstanding Award
Agreements; provided, that any such amendment that would adversely affect the
rights of any Participant or any holder or beneficiary of any Stock Incentive
theretofore granted shall not to that extent be effective without the consent of
the affected Participant, holder or beneficiary.
4. STOCK SUBJECT TO THE PLAN.
(a) Number of Shares Available.
The number of shares of Common Stock that may be issued under
the Plan for Awards granted wholly or partly in stock during
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the term of the Plan is six hundred thousand (600,000). Shares of Common Stock
related to Awards under this Plan or a Prior Plan that are forfeited, canceled,
terminated, expire unexercised, settled in cash in lieu of stock or in such
manner that all or some of the shares covered by an Award are not issued to a
Participant, or are exchanged in connection with the receipt of a like number of
shares received in satisfaction of the purchase price, shall also immediately
become available for Awards under the Plan.
If a Stock Award or Stock Performance Award is granted on the
condition that the Participant purchase other shares of the Company's Common
Stock for cash at fair market value on the
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date of purchase under a Stock Purchase Right, then only the shares issued under
the Stock Purchase Award or Stock Award shall be counted against the number of
shares available for awards and not the shares purchased for cash at fair market
value under the Stock Purchase Right.
No further Stock Incentives shall be granted under Prior Plans
following the effective date of this Plan but outstanding options and other
stock incentives under Prior Plans may be exercised in accordance with the terms
thereof.
(b) Use of Treasury and Other Shares. Authorized but unissued shares of
Common Stock and shares of Common Stock held in the treasury, whether acquired
by the Company specifically for use under the Plan or otherwise, may be used, as
the Board of Directors may from time to time determine, for purposes of the
Plan; provided, however, that any shares acquired or held by the Company for the
purposes of the Plan shall, unless and until transferred to a Participant in
accordance with the terms and conditions of a Stock Incentive, be and at all
times remain treasury shares of the Company, available for any corporate
purpose, irrespective of whether such shares are entered in a special account
for purposes of the Plan.
(c) Certain Limitations on Grants. Notwithstanding any provision herein
to the contrary, and subject to adjustment as provided in Section 10, no
Executive Officer of the Company may receive Stock Incentives under the Plan in
any calendar year that relate to more than one hundred thousand (100,000) shares
of Common Stock. In addition, and subject to other provisions of the plan
permitting the expiration of restrictions under certain circumstances, no Stock
Award or Stock Performance Award shall be granted under Section 5 or 8 unless
the shares subject to the Award (other than shares purchased for cash at fair
market value on date of purchase under a related Stock Purchase Right) are
subject to restrictions on transfer and/or ownership specified by the Committee
and the restrictions continue for a period of one year from the date of grant in
the case of Awards that are performance based and continue for a period of three
years from the date of grant in the case of Awards under Section 5 that are not
performance based.
5. STOCK AWARDS.
Stock Incentives in the form of Stock Awards shall be subject
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to the following provisions:
(a) General. A Stock Award shall be granted only (i) in payment of
Incentive Compensation that has been earned or (ii) as Incentive Compensation to
be earned.
(b) Valuation. For the purposes of the Plan, in determining the value
of a Stock Award, all shares of Common Stock subject to such Stock Award shall
be valued at not less than 100% of the Fair Market Value of such shares on the
date such Stock Award is granted, regardless of whether or when such shares are
issued or transferred to the Participant and whether or not such shares are
subject to restrictions which affect their value.
(c) Grant. Shares of Common Stock subject to a Stock Award may be
issued or transferred to a Key Employee at the time the Stock Award is granted,
or at any time subsequent thereto, or in installments from time to time, as the
Committee shall determine. With respect to a Stock Award providing for issuance
or transfer of shares subsequent to the time it is granted, the Committee may
provide for payment to the grantee of amounts not exceeding the cash dividends
which would have
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been payable in respect of such shares (as adjusted under Section 10 of the
Plan) if they had been issued or transferred at the time the Stock Award was
granted. Such payments may be made in cash, shares of Common Stock or a
combination of cash and shares. Such payments may be made at the time the shares
are issued or transferred, or at the time or times the cash dividends would have
been payable if the shares had been issued or transferred at the time the Stock
Award was granted. Any amount payable in shares of Common Stock under the terms
of the Stock Award may be paid in cash on each date on which delivery of shares
would otherwise have been made, in an amount equal to the Fair Market Value on
such date of the shares which would otherwise have been delivered.
(d) Terms Relating to Transfer, Payment or Forfeiture. A
Stock Award may contain such other terms and conditions as the
Committee may determine with respect to transfer, payment or
forfeiture of all or any part of the Stock Award.
(e) Other Terms. A Stock Award may be subject to such other terms and
conditions, including, without limitation, restrictions on sale or other
disposition of the shares issued or transferred pursuant to the Stock Award, as
the Committee may determine; provided, however, that upon the issuance or
transfer of shares pursuant to a Stock Award, the recipient shall, with respect
to such shares, be and become a stockholder of the Company fully entitled to
receive dividends, to vote and to exercise all other rights of a stockholder
except to the extent otherwise provided in the Stock Award. A Stock Award may
also include and be made contingent upon the exercise of a Stock Purchase Right.
6. STOCK OPTIONS.
Stock Incentives granted under the Plan in the form of Stock Options
shall be subject to the following provisions:
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(a) Grant. Subject to the provisions of the Plan, including those
contained in this Section 6, the Committee shall have the sole and complete
authority to determine the Key Employees to whom Options shall be granted, the
number of shares of Common Stock to be covered by each Option, the option price
therefor and the conditions and limitations applicable to the exercise of the
Option. The Committee shall have authority to grant Incentive Stock Options or
to grant Non-Qualified Stock Options, or to grant both types of Options. In the
case of Incentive Stock Options, the amounts, terms and conditions of such
grants shall be subject to and comply with the requirements for Incentive Stock
Options as set forth in Section 422 of the Code, as from time to time amended,
and any regulations implementing such statute.
(b) Date of Grant. The "Date of Grant" of an Option shall be the date
the action of the Committee providing for the grant of the Option is taken, or
such later date as the Committee may provide. An amendment to the terms of an
existing Option shall not constitute the grant of a new Option except to the
extent that the amendment increases the number of shares subject to the Option
other than as the result of an adjustment effected pursuant to adjustment
provisions of the Plan.
(c) Price. The price at which shares of Common Stock may be purchased
under an Option (the "Option Price") shall be specified in the Option and shall
be not less than 100% of the Fair Market Value of such stock on the Date of
Grant of the Option.
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(d) Term. An Option shall be exercisable only during a term (the "Term
of the Option" or "Term") commencing not sooner than six months and one day
after the Date of Grant of the Option and ending (unless the Option shall have
terminated earlier under other provisions of the Plan) on a date fixed by the
Committee and stated in the Option, which date shall not be later than the tenth
anniversary of the Date of Grant. If an Option is granted for an original Term
of less than ten years, the Committee may, at any time prior to the expiration
of the Option, extend its Term for a period ending not later than the tenth
anniversary of the Date of Grant of the Option.
(e) Installments. An Option may provide that it shall be exercisable in
full or in part at any time during the Term of the Option, or that it shall be
exercisable in a specified series of installments. Unless otherwise provided in
the Option, installments or portions thereof not exercised in earlier periods
shall be cumulative and shall be available for exercise in later periods. The
Committee may, by so providing in an Option, require any partial exercise
thereof to be with respect to a specified minimum number of shares.
(f) Exercise. To the extent that the right to purchase shares has
accrued under an Option, the Option may be exercised from time to time by the
optionee or by a person or persons entitled to exercise the Option, by delivery
to the Company of a written notice, in the manner and in such form as may be
prescribed by the Committee, stating the number of shares with respect to which
the Option is being exercised, and by making provision satisfactory to the
Company for the payment in full of the Option
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price of the shares prior to or in connection with the delivery of certificates
evidencing the shares. The Committee may, in its discretion and upon request of
the Participant, issue shares of Common Stock upon the exercise of an Option
directly to a brokerage firm or firms to be approved by the Company, without
payment of the purchase price by the optionee but upon delivery of an
irrevocable guarantee by such brokerage firm or firms of the payment of such
purchase price or upon the participant's issuance to the brokerage firm of
irrevocable instructions to sell or margin a sufficient portion of the shares
and deliver the sale or margin loan proceeds directly to the Company to pay the
exercise price and any withholding taxes. Upon receipt of such notice and
payment arrangement in form satisfactory to the Company, the Company shall
deliver to or upon the order of the optionee, or such other person entitled to
exercise the Option, at the General Office of the Company, or at such place as
shall be mutually acceptable, a certificate of certificates evidencing such
shares. An Option may not be exercised for fractional shares of Common Stock.
(g) Payment in Common Stock. Payment in form satisfactory to the
Company may, at the option of the Company, include payment by transfer to the
Company of other shares of Common Stock owned by the Optionee. Common Stock
transferred to the Company in payment of the option price shall be valued at the
Fair Market Value of the Common Stock on the date of the exercise.
(h) No Stockholder Rights Prior to Exercise. No person shall have any
rights of a stockholder by virtue of an Option except with respect to shares
actually issued to him, and issuance of shares shall not confer retroactive
rights to dividends.
(i) Certain Limits on Incentive Stock Options. The aggregate fair
market value (determined as of the time the option is granted) of the stock for
which any employee may be granted Incentive Stock Options in any calendar year
under this Plan and all such other incentive stock option plans of the Company
and its subsidiaries shall not exceed limits specified from time to time in the
Code for Incentive Stock Options.
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7. STOCK APPRECIATION RIGHTS.
(a) Grant. Stock Appreciation Rights may be granted in connection with
any Option granted under the Plan or Prior Plans, either at the time of the
grant of such Option or at any time thereafter during the term of the Option. A
grant of Stock Appreciation Rights shall either be included in the instrument
evidencing the Option to which they relate or evidenced by a separate instrument
meeting the requirements of Section 3 of the Plan.
(b) Settlement. A person entitled to exercise an Option in connection
with which Stock Appreciation Rights shall have been granted shall be entitled,
at such time or times and subject to such terms and conditions as may be stated
in the granting instrument, to settle all or part of the Option by requesting
the Company to pay, in cancellation of the part of the Option to be settled,
consideration in an amount equal to the number of shares of Common Stock subject
to the canceled part of the Option times
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the amount by which the fair market value of one share on the exercise date
exceeds the Option Price (the "Appreciation"). The election shall be made in a
written instrument, in form satisfactory to the Committee, delivered in the
manner prescribed in Section 6 for the exercise of options.
(c) Form of Consideration. The form of the consideration to be paid for
the Appreciation shall either be cash, shares of Common Stock having an
aggregate market value on the exercise date equal to the Appreciation, or a
combination of cash and shares. Such form of consideration shall be specified
either by the Committee or, subject to the approval of the Committee, by the
person exercising the Stock Appreciation Right, provided that such form of
consideration shall in no event include fractional shares of Common Stock.
(d) Other Terms. An Option in connection with which Stock Appreciation
Rights are granted may prescribe or limit the period or periods of time during
which the Stock Appreciation Rights may be exercised as provided in paragraph
(b) of this Section 7, and may prescribe such additional terms and conditions
applicable to the exercise of the Stock Appreciation Rights as may be determined
by the Committee and as are consistent with the Plan. In no event may Stock
Appreciation Rights be exercised at a time when the Option in connection with
which they were granted is not exercisable.
8. PERFORMANCE AWARDS.
The Committee may grant Performance Awards which shall be denominated
at the time of grant either in shares of Common Stock ("Stock Performance
Award") or in dollar amounts ("Dollar Performance Award"). Payment under a Stock
Performance Award or a Dollar Performance Award shall be made, at the discretion
of the Committee, in shares of Common Stock ("Performance Shares"), or in cash
or in any combination thereof, if the financial performance of the Company or
any subsidiary, division, or other unit of the Company ("Business Unit")
selected by the Company meets certain financial goals established by the
Committee for the Award Period. The following provisions are applicable to
Performance Awards:
(a) Award Period. The Committee shall determine and include
in the Award Agreement for the Performance Award the period of time
(which shall be four or more consecutive fiscal quarters) for which
a Performance Award is made ("Award Period"). Grants of
Performance Awards need not be
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uniform with respect to the length of the Award Period. Award Periods for
different Grants may overlap. A Performance Award may not be granted for a given
Award Period after one half (1/2) or more of such period has elapsed.
(b) Performance Goals and Payment. Before a Performance Award is made,
the Committee shall establish objectives ("Performance Goals") that must be met
by the Business Unit during the Award Period as a condition to payment being
made under the Performance Award. The Performance Goals, which must be set out
in the Award Agreement, are limited to pre-tax earnings per share,
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divisional pre-tax income, net income, or any of the foregoing before the effect
of acquisitions, divestitures, accounting changes, and restructuring and special
changes (determined according to criteria established by the Committee). The
Committee shall also set forth in the Award Agreement the number of Performance
Shares or the amount of payment to be made under a Performance Award if the
Performance Goals are met or exceeded, including the fixing of a maximum payment
[subject to Section 8(f)]. A Performance Award may also include and be made
contingent upon the exercise of a Stock Purchase Right.
(c) Computation of Payment. After an Award Period, the financial
performance of the Business Unit during the Award Period shall be measured
against the Performance Goals. Before payment of any remuneration under an
Award, the Committee shall certify in writing that the performance goals and any
other material terms of the Award were in fact satisfied. The Committee, in its
sole discretion, may elect to pay part or all of the Performance Award in cash
in lieu of issuing or transferring Performance Shares. The cash payment shall be
based on the fair market value of Common Stock on the date of payment [subject
to Section 8(f)]. The Company shall promptly notify each Participant of the
number of Performance Shares and the amount of cash, if any, he or she is to
receive.
(d) Revisions for Significant Events. At any time before payment is
made, the Committee may revise the Performance Goals and the computation of
payment if unforseen events occur during an Award Period which have a
substantial effect on the Performance Goals and which in the judgment of the
Committee make the application of the Performance Goals unfair unless a revision
is made; provided, however, that no such revision shall be made with respect to
a Performance Award to the extent that the Committee determines the revision
would cause payment under the Award to fail to be fully deductible by the
Company under Section 162(m) of the Code.
(e) Requirement of Employment. To be entitled to receive payment under
a Performance Award, a Participant must remain in the employment of the Company
to the end of the Award Period, except that the Committee may provide for
partial or complete exceptions to this requirement as it deems equitable in its
sole discretion.
(f) Maximum Payment. No Participant may receive Performance Award
payments in respect of Stock Performance Awards in excess of 100,000 shares of
Common Stock in any calendar year or payments in respect of Dollar Performance
Awards in excess of $900,000 in any calendar year.
9. TERMINATION OR SUSPENSION OF EMPLOYMENT.
The following provisions shall apply in the event of the Participant's
termination of employment unless the Committee shall have provided otherwise,
either at the time of the grant of the Stock Incentive or thereafter:
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(a) Non Qualified Stock Options and Stock Appreciation
Rights.
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(1) Termination of Employment Other than Due to Death,
Disability, Cause or Retirement. If the Participant's employment with the
Company or its Affiliates is terminated for any reason other than death,
permanent and total disability, cause or retirement, the Participant's right to
exercise any Non Qualified Stock Option or Stock Appreciation Right shall
terminate ninety (90) days after the cessation of employment, unless it
terminates earlier by its terms or under other provisions of the Plan. Until the
Option or Right terminates it may be exercised by the optionee, his estate or
legal representatives for all or a portion of the shares as to which the right
of purchase had accrued under the Plan at the time of cessation of employment,
subject to all applicable conditions and restrictions provided in the Plan and
the Option. In no event shall an Option or Right be exercisable later than the
date of expiration of the Term of the Option or Right, and in no event shall an
Option or Right be exercisable for any shares as to which the right of purchase
had not accrued at the time of cessation of employment. Employment for the
purposes of this paragraph shall mean continuous full-time salaried employment.
Vacations, sick leaves and any approved absence on leave shall not constitute a
termination of employment or an interruption of continuous full-time salaried
employment.
(2) Disability or Retirement. If the Participant's employment
with the Company or its Affiliates is terminated by permanent and total
disability or retirement, any Non Qualified Stock Option or Stock Appreciation
Right held by such Participant shall terminate on the earlier of (i) the third
anniversary of such termination of employment or (ii) the date the Option or
Right would have otherwise expired by its terms had it not been for such
termination of employment. Until the Option terminates it may be exercised by
the optionee, his estate or legal representatives for all or a portion of the
shares as to which the right of purchase had accrued as of the date of such
exercise, subject to all applicable conditions and restrictions provided in the
Plan and the Option or Right. In no event shall such Option or Right be
exercisable later than the date of expiration of the term of the Option or
Right, and in no event shall such Option or Right be exercisable for any shares
as to which the right of purchase had not accrued at the time of exercise.
"Retirement" and "permanent and total disability" shall be defined by the
Committee.
(3) Death. If the Participant's employment with the Company or
its Affiliates is terminated by death, and if any Non Qualified Stock Option or
Stock Appreciation Right was in effect at the time of his death (whether or not
its terms had then commenced), the Option or Right may, until the expiration of
one year from the date of death of the Participant or until the earlier
expiration of the Term of the Option or Right, be exercised as and to the extent
it could have been exercised by the Participant had he been living at the time
of exercise, by the legal representatives of the Participant or by any person,
persons or entity to whom his rights under the Option or Right shall have been
transferred pursuant to the provisions of paragraph (g) of Section 14 of the
Plan. Such exercise shall not be limited to the shares as to which the right of
purchase had accrued at the date of death of the Participant, but shall be
subject to all applicable conditions and restrictions prescribed in the Plan and
the Option or Right, including any installment provision.
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(4) Acceleration and Extension of Exercisability.
Notwithstanding the foregoing, the Committee may, in its discretion, provide (A)
that a Non Qualified Stock Option or Stock Appreciation Right granted to a
Participant may terminate at a date earlier than that set forth above, (B) that
a Non Qualified Stock Option or Stock Appreciation Right granted to a
Participant not subject to Section 16 of
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the Exchange Act may terminate at a date later than that set forth above,
provided such date shall not be beyond the date the option or right would have
expired had it not been for the termination of the Participant's employment, and
(C) that a Non Qualified Stock Option or Stock Appreciation Right may become
immediately exercisable when it finds that such acceleration would be in the
best interests of the Company.
(b) Incentive Stock Options. Except as otherwise determined by the
Committee at the time of grant, if the Participant's employment with the Company
is terminated for any reason, the Participant shall have the right to exercise
any Incentive Stock Option and any related Stock Appreciation Right during the
90 days after such termination of employment to the extent it was exercisable at
the date of such termination, but in no event later than the date the option
would have expired had it not been for the termination of such employment. If
the Participant does not exercise such Option or related Stock Appreciation
Right to the full extent permitted by the preceding sentence, the remaining
exercisable portion of such Option automatically will be deemed a Non Qualified
Stock Option, and such Option and any related Stock Appreciation Right will be
exercisable during the period set forth in Section 9(a) of the Plan, provided
that in the event that employment is terminated because of death or the
Participant dies in such 90-day period, the option will continue to be an
Incentive Stock Option to the extent provided by Section 422 of the Code, or any
successor provision, and any regulations promulgated thereunder.
(c) Stock Awards and Performance Awards. Except as otherwise determined
by the Committee at the time of grant, upon termination of employment for any
reason during the restriction period, all shares of Restricted Stock and
Performance Awards still subject to restriction shall be forfeited by the
Participant and reacquired by the Company at the price (if any) paid by the
Participant for such Restricted Stock and Performance Awards, provided that in
the event of a Participant's retirement, permanent and total disability, or
death, or in cases of special circumstances, the Committee may, in its sole
discretion, when it finds that a waiver would be in the best interests of the
Company, waive in whole or in part any or all remaining restrictions with
respect to such participant's shares of Restricted Stock.
(d) Termination for Cause. Notwithstanding the other provisions hereof,
a Stock Incentive granted to a Participant shall expire and the Participant
shall thereupon forfeit all rights thereunder if the Participant is terminated
for cause due to the misconduct of the Participant. The Committee shall, in its
sole discretion, determine whether a termination was for cause due to
<PAGE>
misconduct.
10. ADJUSTMENT PROVISIONS.
In the event of a reorganization of the Company, equitable adjustments
shall be made by the Committee in the Plan and in outstanding Stock Incentives.
Without limiting the foregoing, the Committee may authorize payments of cash or
other consideration with respect to outstanding Stock Incentives or it may
otherwise adjust the terms of the Stock Incentive with respect to: (a) the
number and class of shares or other securities that may be issued or transferred
pursuant to Stock Incentives in the aggregate or to any individual, (b) the
number and class of shares or other securities which have not been issued or
transferred under outstanding Stock Incentives, (c) the purchase price to be
paid per share under outstanding Options, and (d) the price to be paid per share
by the Company or a subsidiary for shares or other securities issued or
transferred pursuant to Stock Incentives which are
A-11
subject to a right of the Company or an Affiliate to reacquire such shares or
other securities. For this purpose, a "reorganization" shall be deemed to have
occurred in the event:
(i) any recapitalization, reclassification, split-up or
consolidation of shares of Common Stock shall be effected;
(ii) the outstanding shares of Common Stock are, in connection
with a merger or consolidation of the Company or the acquisition by another
corporation of Common Stock or of all or part of the assets of the Company,
exchanged for a different number or class of shares of stock or other securities
of the Company or for shares of the stock or other securities of another
corporation;
(iii) new, different or additional shares or other
securities of the Company or of another corporation are received by
the holders of Common Stock; or
(iv) any distribution other than an ordinary cash
dividend is made to the holders of Common Stock.
In the event of any other change in the capital structure or in the
capital stock of the Company, the Committee shall be authorized to make such
appropriate adjustments in the maximum number of shares of Common Stock
available for issuance under the Plan in the aggregate or to any individual and
any adjustments and/or modifications to outstanding Stock Incentives as it deems
appropriate.
11. CHANGE IN CONTROL.
Unless the Committee shall otherwise provide in the Award Agreement
relating to a Stock Incentive granted under the Plan, upon the occurrence of a
Change in Control:
(a) In the case of Stock Options and Stock Appreciation Rights granted
under the Plan or a Prior Plan (other than an Incentive Stock Option granted
under a Prior Plan) (i) each outstanding option or right that is not then fully
Exercisable
<PAGE>
shall automatically become fully exercisable until the termination of the option
exercise period of the option or right [as modified by subsection (ii) that
follows], and (ii) in the event the Participant's employment is terminated
within two years after a Change in Control, his or her outstanding options or
rights at that date of termination shall be immediately exercisable for a period
of three months following such termination, provided, however, that, to the
extent the option or right by its terms otherwise permits a longer option
exercise period after such termination, such longer period shall govern, and
provided further that in no event shall such option or right be exercisable more
than ten years after the date of grant.
(b) Any restrictions and provisions for forfeiture on all outstanding
Stock Awards shall automatically expire and immediately lapse and all such
awards shall be immediately and fully vested;
(c) Each Grantee of a Performance Award for an Award Period that has
not been completed at the time of the Change in Control shall be deemed to have
earned a minimum Performance Award equal to the product of (i) such
Participant's maximum award opportunity for such Performance Award, and (ii) a
fraction, the numerator of which is the number of full and partial months that
have elapsed since the beginning of such Award Period to the date on which the
Change in Control occurs, and the denominator of which is the total number of
months in such Award Period.
A-12
12. TERM.
(a) Effective Date. The Plan shall become effective upon its approval
by the affirmative vote of the holders of a majority of the shares of the
Company's Common Stock present or represented, and entitled to vote at a meeting
duly held in accordance with applicable law.
(b) Expiration Date. No Stock Incentives shall be granted under the
Plan after December 11, 2005. Unless otherwise expressly provided in the Plan or
in an applicable Award Agreement, any Stock Incentive granted hereunder may, and
the authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under any such Stock Incentive shall, continue after the authority for grant of
new Stock Incentives hereunder has been exhausted.
13. ADMINISTRATION.
(a) Committee. The Plan shall be administered by the Committee which
shall consist of not less than three directors of the Company designated by the
Board of Directors; provided, however, that no director shall be designated as
or continue to be a member of the Committee unless he shall at the time of
designation and throughout his service be a "disinterested person" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934 (or any
successor rule or statute at the time in effect) and be an "outside director"
for purposes of Section 162(m) of the Code.
<PAGE>
(b) Delegation by the Board. The Board of Directors by adoption of the
Plan delegates to the Committee all of its authority under the Plan, including
the authority to award Stock Incentives, but excluding the authority to amend or
discontinue the Plan.
(c) Authority of the Committee. Subject to the terms of the Plan and
applicable law, and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have full power and
authority to: (i) designate Participants; (ii) determine the type or types of
Stock Incentives to be granted to an eligible employee; (iii) determine the
number of shares of Common Stock to be covered by, or with respect to which
payments, rights, or other matters are to be calculated in connection with,
Stock Incentives; (iv) determine the terms and conditions of any Stock
Incentive; (v) determine whether, to what extent, and under what circumstances
Stock Incentives may be settled or exercised in cash, shares of Common Stock,
other securities, other Stock Incentives or other property, or canceled,
forfeited, or suspended; (vi) determine whether, to what extent, and under what
circumstances cash, shares of Common Stock, other securities, other Stock
Incentives, other property, and other amount payable with respect to a Stock
Incentive shall be deferred either automatically or at the election of the
holder thereof or of the Committee; (vii) interpret and administer the Plan and
any instrument or agreement relating to, or Stock Incentive made under, the
Plan; (viii) establish, amend, suspend, or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and (ix) make any other determination and take any other action
that the Committee deems necessary or desirable for the administration of the
Plan.
(d) Committee Discretion Binding. Unless otherwise expressly
provided in the Plan, all designations, determinations,
interpretations, and other decisions under or with respect to the
Plan or any Stock Incentive shall be within the sole discretion of
the Committee, may be made at any time and
A-13
shall be final, conclusive, and binding upon all persons, including the Company,
any Affiliate, any Participant, any holder or beneficiary of any Stock
Incentive, any stockholder and any employee.
(e) Liability of Committee Members. Members of the Board of Directors
and members of the Committee acting under the Plan shall be fully protected in
relying in good faith upon the advice of counsel and shall incur no liability
except for willful misconduct in the performance of their duties.
(f) Delegation. Subject to the terms of the Plan and applicable law,
the Committee may delegate to one or more officers or managers of the Company or
any Affiliate, or to a committee of such officers or managers, the authority,
subject to such terms and limitations as the Committee shall determine, to grant
Stock Incentives to, or to cancel, modify or waive rights with respect to, or to
alter discontinue, suspend, or terminate Stock Incentives held by, Participants
who are not officers or directors of the Company for purposes of Section 16 of
the Exchange Act, or any
<PAGE>
successor section thereto, or who are otherwise not subject to such
Section.
14. GENERAL PROVISIONS.
(a) No Rights to Employment. Nothing in the Plan nor in any instrument
executed pursuant thereto shall confer upon any Participant any right to
continue in the employ of the Company or an Affiliate or shall affect the right
of the Company or of an Affiliate to terminate the employment of any Participant
with or without cause.
(b) Share Issuance Subject to Compliance with Applicable Law. No shares
of Common Stock shall be issued or transferred pursuant to a Stock Incentive
unless the Company is satisfied that there has been compliance with all legal
requirements applicable to the issuance or transfer of such shares. In
connection with any such issuance or transfer, the person acquiring the shares
shall, if requested by the Company, give assurances satisfactory to the Company
that the shares are being acquired for investment and not with a view to resale
or distribution thereof and assurances in respect of such other matters as the
Company may deem desirable to assure compliance with all applicable legal
requirements.
(c) No Rights as Stockholder. Subject to the provisions of the
applicable Stock Incentive, no Participant (individually or as a member of a
group), and no beneficiary or other person claiming under or through him, shall
have any right, title or interest in or to any shares of Common Stock allocated
or reserved for the purposes of the Plan or subject to any Stock Incentive,
except as to such shares of Common Stock, if any, as shall have been issued or
transferred to him.
(d) Grants of Stock Incentives to Future Employees. The Company or
Affiliate may, with the approval of the Committee, enter into an agreement or
other commitment to grant a Stock Incentive in the future to a person who is or
will be at the time of grant a Key Employee, and, notwithstanding any other
provision of the Plan, any such agreement or commitment shall not be deemed the
grant of a Stock Incentive until the date on which the Committee takes action to
implement such agreement or commitment, which date shall for the purpose of the
Plan be the date of grant.
(e) Implementation of Stock Incentives by Affiliates. In the
case of a grant of a Stock Incentive to any employee of an
Affiliate, such grant may, if the Committee so directs, be
implemented by the Company issuing or transferring the shares, if
any, covered by the Stock Incentive to the
A-14
Affiliate, for such lawful consideration as the Committee may specify, upon the
condition or understanding that the Affiliate will transfer the shares to the
employee in accordance with the terms of the Stock Incentive. Notwithstanding
any other provision hereof, such Stock Incentive may be issued by and in the
name of the Affiliate and shall be deemed granted on the date it is approved by
the Committee or on such later date as the Committee shall specify.
<PAGE>
(f) Withholding and Payment of Taxes. The Company or an Affiliate may
make such provisions as it may deem appropriate for the withholding of any taxes
which the Company or Affiliate determines it is permitted or required to
withhold in connection with any Stock Incentive. Such provisions may include a
requirement that all or part of the amount of such taxes be paid to the Company
or Affiliate, in cash, at the time of settlement. Such provisions may also
permit the payment of such taxes through the withholding of shares of Common
Stock to be issued under a Stock Incentive or the delivery of shares owned by
the Participant.
(g) Nontransferability. No Stock Incentive and no rights under a Stock
Incentive or under the Plan, contingent or otherwise, shall, by operation of law
or otherwise, be transferable or assignable or subject to any encumbrance,
pledge, hypothecation or charge of any nature, or to execution, attachment or
other legal process, except that, in the event of the death of the holder of a
Stock Incentive, the holder's rights under the Stock Incentive may pass, as
provided by law, to the legal representatives of the holder, and such legal
representatives may transfer any rights in respect of such Stock Incentive to
the person or persons or entity (including a trust) entitled thereto under the
will of the holder of such Stock Incentive, or in the case of intestacy, under
the applicable laws relating to intestacy. During the life of a holder of a
Stock Incentive, the Stock Incentive shall be exercisable only by such holder.
Notwithstanding the foregoing, a Stock Incentive may be transferable, to the
extent set forth in the applicable Award Agreement, (i) if such Award Agreement
provisions do not disqualify such Award for exemption under Rule 16b-3 or (ii)
if such Stock Incentive is not intended to qualify for exemption under such
rule.
(h) Other Compensation. Nothing in the Plan is intended to be a
substitute for, or shall preclude or limit the establishment or continuation of,
any other plan, practice or arrangement for the payment of compensation or
fringe benefits to employees generally, or to any class or group of employees,
which the Company or any Affiliate now has or may hereafter lawfully put into
effect, including, without limitation, any retirement, pension, profit-sharing,
insurance, stock purchase, incentive compensation or bonus plan; provided, that
upon adoption of the Plan, the 1987 Plan shall terminate, except with respect to
rights then outstanding.
(j) Place of Administration. The place of administration of the Plan
shall conclusively be deemed to be within the State of Missouri and the
validity, construction, interpretation and administration of the Plan and of any
rules and regulations or determinations or decisions made thereunder, and the
rights of any and all persons having or claiming to have any interest therein or
thereunder, shall be governed by and be determined exclusively and solely in
accordance with, the laws of the State of Missouri. Without limiting the
generality of the foregoing, the period within which any action arising under or
in connection with the Plan, or any payment or award made or purportedly made
under or in connection therewith, must be commenced, shall be governed by the
laws of the State of Missouri, irrespective of the place where the act or
omission complained of took place and of the residence of any party to such
action and irrespective of the place where the action may be brought.
A-15
<PAGE>
(k) Substitute Options. Stock Incentives may be granted under the Plan
from time to time in substitution for stock incentives held by employees of
other corporations who are about to become employees of the Company or an
Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or an Affiliate, or the acquisition by the Company
or an Affiliate of the assets of the employing corporation, or the acquisition
by the Company or an Affiliate of stock of the employing corporation as the
result of which it becomes an Affiliate. The terms and conditions of the
substitute options so granted may vary from the terms and conditions set forth
in this Plan to such extent as the Committee at the time of grant may deem
appropriate to conform, in whole or in part, to the provisions of the stock
incentives in substitution for which they are granted.
15. AMENDMENT OR DISCONTINUANCE OF PLAN.
(a) Amendment. The Plan may be amended by the Board of Directors at any
time, provided that without the affirmative vote of the holders of a majority of
the shares of the Company's Common Stock present or represented, and entitled to
vote at a meeting duly held in accordance with applicable law, no amendment
shall be made which (i) increases the aggregate number of shares of Common Stock
that may be issued or transferred pursuant to Stock Incentives as provided in
paragraph (a) of Section 4, (ii) amends the provisions of paragraph (a) of
Section 13 with respect to eligibility and disinterest of members of the
Committee, (iii) permits any person who does not meet the eligibility
requirements of the Plan to be granted a Stock Incentive, (iv) amends the
provisions of Sections 5, 6, 7 or 8 to permit shares to be valued or to be
optioned at less than 100% of Fair Market Value, (v) amends Section 12. to
extend the term of the Plan, or (vi) amends this Section 15.
(b) Discontinuance. The Board of Directors may by resolution
adopted by a majority of the entire Board of Directors discontinue
the Plan.
(c) Consents. No amendment or discontinuance of the Plan by the Board
of Directors or the stockholders of the Company shall adversely affect, without
the consent of the holder thereof, any Stock Incentive theretofore granted.
<PAGE>
EXHIBIT B
BUTLER MANUFACTURING COMPANY
DIRECTOR STOCK COMPENSATION PROGRAM
1.Purpose. The purpose of this Director Stock Compensation Program
("Program") is to enable members of the Board of Directors (the "Board") of
Butler Manufacturing Company (the "Company") who are not employees of the
Company ("Outside Directors") to increase their proprietary interest in the
success and progress of the Company through their ownership of additional shares
of the Common Stock, no par value, of the Company (the "Common Stock").
2. Participation. Each person becoming an Outside Director of the Company shall
participate in the Program commencing on the later of the date of adoption of
this Program by the stockholders or the date the person becomes an Outside
Director and shall continue to participate until the resignation,
non-reelection, death or disability of any such Outside Director
("Participant").
3. Payment of Annual Cash Retainer In Stock.
(a) Payment of Retainer. The dollar amount of the annual retainer
payable to Outside Directors as established by the Board from time to time shall
be credited in Common Stock to accounts for each Participant ("Stock Account")
maintained by the Board Organization Committee of the Board of Directors ("the
Committee"). The amount of the credit for each calendar quarter for each
Participant shall be such number of shares of Common Stock of the Company as is
equal to one fourth of the dollar amount of the annual retainer payable to each
Participant divided by the Fair Market Value of one share of Common Stock on the
date the credit is made. The credit shall be made on the fifth (5th) Business
Day of each calendar quarter.
(b) Dividends, etc. An amount equal to any cash dividends payable on
shares of Common Stock shall also be credited to a Participant's Stock Account
in shares of Common Stock on the payment date for such dividend on all shares of
Common Stock. The amount of such credit to each Participant's Stock Account for
cash dividends shall be such number of shares of Common Stock as is equal to the
amount of the cash dividend payable on shares of Common Stock credited to the
Participant's Stock Account divided by the Fair Market Value of one share of
Common Stock on the date the credit is made. The number of shares credited to
Participant Stock Accounts shall be adjusted to reflect any stock split, stock
dividend, the issuance of stock purchase rights or similar transactions effected
prior to the issuance of stock certificates.
(c) Fair Market Value. The Fair Market Value of a share of Common Stock
shall mean the last sale price for the Company's Common Stock on the NASDAQ
National Market, or if the Company's Common Stock is not traded on that day, on
the next preceding day on which the Common Stock was so traded.
4. Issue of Stock Certificates. The Company shall issue from the
Treasury or from authorized but unissued shares a certificate to
each Participant in the amount of whole shares of Common Stock
credited to the Participant's Stock Account (a) annually on the
10th Business Day after the last calendar quarter of each year, (b)
<PAGE>
upon termination of participation or (c) upon termination of the
Program.
B-1
Until the issuance of the stock certificate, no right to vote or receive
dividends or other rights as a stockholder shall exist as to the shares of
Common Stock credited to a Participant's Stock Account, except to the extent
specified in Section 3. Upon any termination of Participation, termination of
the Program or any other distribution of a Participant's Stock Account in whole,
any fraction of a share of Common Stock shall be distributed in cash equal to
the Fair Market Value of the fractional share. Any other property credited to
the Participant's Stock Account other than shares of Common Stock shall be
distributed in kind or in cash equal to the fair market value thereof as
determined by the Committee.
5. Amount of Annual Retainer. The amount of the Annual Retainer
shall be determined by the full Board of Directors from time to
time, but not more frequently than annually.
6. Administration. The Program shall be administered by the Committee, which
shall have full power and authority to construe and administer the Program. Any
action taken under the provisions of the Program by the Committee arising out of
or in connection with the administration, construction, or effect of the Program
or any rules adopted thereunder shall, in each case, lie within the discretion
of the Committee and shall be conclusive and binding upon the Company and upon
all Participants, and all persons claiming under or through any of them.
7. Beneficiary Designation. A Participant shall designate a beneficiary or
beneficiaries who, upon the Participant's death, shall receive the Shares and
any other items credited to a Participant's Stock Accounts that otherwise would
have been delivered to the Participant. All designations shall be in writing and
signed by the Participant. The designation shall be effective only if an when
delivered to the Company during the lifetime of the Participant. The Participant
also may change beneficiaries by a signed, written instrument delivered to the
Company. The delivery of Shares shall be in accordance with the last unrevoked
written designation of beneficiary that has been signed and delivered to the
Secretary of the Company. In the event the Participant does not designate a
beneficiary, in the event that all of the beneficiaries named pursuant to this
section predecease the Participant, or if for any reason such designation is
ineffective in whole or in part, the Shares and other items credited to the
Participant's account that otherwise would have been delivered to the
Participant shall be delivered to the Participant's estate, and in such event,
the term "beneficiary" shall include such estate.
8. Transferability. The rights and privileges conferred under this Program shall
not be subject to execution, attachment or similar process and may not be
transferred, assigned, pledged or hypothecated in any manner (whether by
operation of law or otherwise) other than by will or the laws of descent and
distribution or a "qualified domestic relations order" as defined in the
Internal Revenue Code, as amended from time to time.
<PAGE>
9. Approval; Effective Date. This Program shall become effective
when approved by the holders of a majority of the Common Stock
present or represented and entitled to vote at a meeting of
stockholders.
10. Amendment and Termination. Subject to the provisions of Section 5, this
Program may be amended by the Board of Directors of the Company from time to
time, and may be terminated by the Board of Directors or Stockholders, except
that any such action shall not adversely affect any Participant's rights under
the Program that had accrued prior to such amendment or termination.
B-2
11. Expenses of the Program. All costs and expenses of the
Program shall be borne by the Company and none of such expense
shall be charged to any Participant.
12. Compliance with Rule 16b-3. It is the intention of the Company that the
operation of the Program comply in all respects with Rule 16b-3 under Section
16(b) of the Securities Exchange Act of 1934, as amended, and that all
Participants remain Disinterested Persons as defined by such Rule. Accordingly,
if any Program provision is later found to cause any crediting of Common Stock
to fail to qualify under Rule 16b-3 for an exemption from the operation of
Section 16(b) or if any Program provision would disqualify Participants from
remaining Disinterested Directors under Rule 16b-3, that provision shall be
deemed null and void, and in all events the Program shall be construed in favor
of its meeting the requirements of Rule 16b-3.
B-3
<PAGE>
_________________________
BUTLER
MANUFACTURING
COMPANY
_________________________
Notice
Of
Annual Meeting
Of
Stockholders
and
Proxy Statement
_________________________
TIME AND PLACE
Tuesday, April 16, 1996
9:30 a.m.
Atkins Auditorium
Nelson-Atkins Museum of Art
4525 Oak Street
Kansas City, Missouri
_________________________
<PAGE>
March 11, 1996
TO: Participants
BUTLER MANUFACTURING COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN TRUST (ESOP)
The shares shown on the enclosed instruction card are credited to your stock
account in the above Plan as of December 31, 1995. In accordance with the terms
of the Plan, each participant has the right to instruct the Trustee, Boatmen's
Trust Company of Kansas City, how these shares shall be voted. To assist in that
process, an Annual Report to Stockholders for 1995 and a proxy statement for the
meeting are either enclosed with this letter or have been mailed to you as a
Stockholder.
PLEASE USE THE ENCLOSED INSTRUCTION CARD TO INSTRUCT THE TRUSTEE
HOW TO VOTE.
Please put your instruction card in the white envelope enclosed for your
convenience and deposit it in the place provided by your Human Resources
Department for transmittal to the Trustee. Your instruction card will be
furnished to the Trustee with the instructions of other participants. If you
prefer, you may mail your card directly to the Trustee in the enclosed envelope.
In any event, your voting instructions to the Trustee shall be kept confidential
and shall not be communicated to the Company or any director, officer or
employee of the Company or any affiliated company. If the card is returned
signed without direction or no card is received, the shares will be voted in the
same proportion as the Trustee has been instructed to vote by participants
giving valid instructions.
We suggest that you mail the instructions by March 29, 1996, to allow the
Trustee time to vote the shares according to your instructions.
The Company invites you to attend the Annual Meeting of Stockholders which will
be held in Kansas City, Missouri, at Atkins Auditorium, Nelson-Atkins Museum of
Art, 4525 Oak Street on April 16, 1996, at 9:30 a.m.
Cordially yours,
BUTLER MANUFACTURING COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN TRUST
(ESOP)
Boatmen's Trust Company of Kansas
City, Trustee
Enclosures
<PAGE>
[BUTLER LOGO]
INSTRUCTION CARD
INSTRUCTIONS TO: Boatmen's Trust Company of Kansas City, Trustee of the Butler
Manufacturing Company Employee Stock Ownership Plan Trust, for voting
at the Annual Meeting of Stockholders of Butler Manufacturing Company on
April 16, 1996.
Pleae vote the shares held by you for my account as specified below.
1. Election of three Class A Directors - Nominees: HAROLD G. BERNTHAL,
C. L. WILLIAM HAW, DONALD H. PRATT
[ ] FOR all Nominees. [ ] AUTHORITY WITHHELD from all Nominees.
[ ] FOR all nominees, except vote withheld for the following Nominee(s):
_______________________________
2. Proposal to increase the authorized common stock of the Company.
[ ] For [ ] Against [ ] Abstain
3. Proposal to approve the Stock Incentive Plan of 1996.
[ ] For [ ] Against [ ] Abstain
4. Proposal to approve the Director Stock Compensation Program.
[ ] For [ ] Against [ ] Abstain
5. In your discretion, you are authorized to vote upon such other business as
may properly come before the meeting.
The Board of Directors recommends a vote FOR the Director Nominees and FOR each
proposal.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS CARD
(Reverse Side)
(See reverse side for matters to be voted on)
The undersigned has received the Company's Annual Report for 1995 and its Proxy
Statement. IF THE INSTRUCTION CARD IS NOT RETURNED OR IF NO DIRECTION IS GIVEN
WHEN THE DULY EXECUTED INSTRUCTION CARD IS RETURNED, THE SHARES WILL BE VOTED ON
EACH BALLOT ITEM IN THE SAME PROPORTION AS THE TRUSTEE HAS BEEN INSTRUCTED TO
VOTE BY PARTICIPANTS GIVING VALID INSTRUCTIONS.
_____________________________
Participant's Signature
Date_________________________
(Please complete, date and sign exactly as your name appears.)
RETURN CARD PROMPTLY IN ACCOMPANYING ENVELOPE
<PAGE>
[BUTLER LOGO]
BUTLER MANUFACTURING COMPANY PROXY
P.O. Box 419917, Kansas City, Missouri 64141-0917
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned appoints Donald H. Pratt, George E. Powell, Jr. and Robert H.
West, or any of them, each with full power to appoint his substitute, proxies
to vote, in the manner specified below, all of the shares of common stock of
Butler Manufacturing Company, held by the undersigned at the Annual Meeting of
Stockholders to be held on April 16, 1996 or at any adjournment thereof.
1. Election of three Class A Directors - Nominees: HAROLD G. BERNTHAL,
C. L. WILLIAM HAW, DONALD H. PRATT
[ } FOR all Nominees. [ ] AUTHORITY WITHHELD from all Nominees.
[ ] FOR all nominees, except vote withheld for the following Nominee(s):
_________________________________.
2. Proposal to increase the authorized common stock of the Company.
[ ] For [ ] Against [ ] Abstain
3. Proposal to approve the Stock Incentive Plan of 1996.
[ ] For [ ] Against [ ] Abstain
4. Proposal to approve the Director Stock Compensation Program.
[ ] For [ ] Against [ ] Abstain
5. In your discretion, you are authorized to vote upon such other business as
may properly come before the meeting.
The Board of Directors recommends a vote FOR the Director Nominees and FOR each
proposal.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS CARD
(Reverse side)
(See reverse side for matters to be voted on)
The undersigned has received the Company's Annual Report for 1995 and its Proxy
Statement. This Proxy is revocable and it shall not be voted if the undersigned
is present and voting in person. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED
PROXY IS RETURNED, THE SHARES WILL BE VOTED "FOR" ALL NOMINEES AND '"FOR" ALL
PROPOSALS.
_________________________________
Stockholder's Signature
_________________________________
Stockholder's Signature
Dated_______________
(Please sign exactly as your name(s) appear. All joint owners
must sign; executors, trustees, custodians, etc. should indicate
the capacity in which they are signing.)
PLEASE RETURN THE PROXY PROMPTLY IN THE ACCOMPANYING ENVELOPE.
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