<PAGE> 1
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 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to 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, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
BUTLER MANUFACTURING COMPANY
BMA Tower - Penn Valley Park
(P.O. Box 419917)
Kansas City, Missouri 64l4l-0917
March 10, 1997
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 15, l997, 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
2000;
2. 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 18, 1997, 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 18, 1997, will be
available for inspection during business hours from March 31, 1997 through
the close of business on April 14, 1997 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> 3
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the
solicitation of proxies for use at the Company's 1997 annual meeting of
stockholders on April 15, 1997, 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 10, 1997. 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 18, 1997, are entitled to vote at the meeting. As of February
18, 1997, there were 7,578,476 shares of common stock outstanding, each
share being entitled to one vote. As of February 18, 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 only matter
to be submitted to the Stockholders at the meeting is the election of
three directors. 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 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.
<PAGE> 4
ELECTION OF CLASS B DIRECTORS
NOMINEES.
The primary purpose for this year's annual meeting is the election of
three Class B Directors, each for terms of three years expiring at the
Annual Meeting of Stockholders for 2000. The terms of the other two
classes of directors do not expire until 1998 (Class C) and 1999 (Class
A). Persons elected as directors continue to hold office until their
terms expire or until their successors are elected and are qualified.
Each nominee has consented to be named and to serve if elected. All
nominees are current directors. If for any reason any should not be
available or able to serve, the proxies will exercise discretionary
authority to vote for substitutes proposed by the Board of Directors of
the Company.
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.
CLASS B NOMINEES
(TERMS WILL EXPIRE 2000)
ROBERT E. COOK
President and Chief Executive Officer of Frigidaire Home
Products, a division of White Consolidated, Inc.;
Chairman of the Audit Committee and member of the
Compensation and Benefits Committee.
Cook, age 53, has been a director since July, 1987.
He has been President and Chief Executive Officer of
Frigidaire Home Products, a division of White
Consolidated, Inc., since 1997. Frigidaire Home Products
is a manufacturer of major appliances and lawn and garden
products. From 1985 to 1997, he was President and CEO of
American Yard Products, Inc., a manufacturer of outdoor
power equipment.
2
<PAGE> 5
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 65, 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.
JUDITH A. ROGALA
Business Consultant. Formerly Executive Vice President,
Business Services Division, Office Depot Inc.; Member of
the Audit and Compensation and Benefits Committees.
Rogala, age 55, a director since 1989, has been a
business consultant since 1997. From 1994 to 1997, she
was Executive Vice President, Business Services Division,
Office Depot Inc., a distributor of office supplies.
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. She is also
a director of Red Roof Inns, Inc., a member of the Board
of Advisors, DSC Logistics, Inc. and a member of the
Economic Club of Chicago.
CLASS C DIRECTORS
(TERMS EXPIRE 1998)
ALAN M. HALLENE
Retired. Former President, Montgomery Elevator
International; Chairman of the Board Organization
Committee and member of the Audit Committee.
Hallene, age 68, 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.
3
<PAGE> 6
ROBERT J. NOVELLO
Chairman and Chief Executive Officer, Copeland
Corporation and Executive Vice President, Emerson
Electric Company; Member of the Audit and Board
Organization Committees.
Novello, age 59, has been a Director since 1996. He
has been Chairman and Chief Executive Officer of Copeland
Corporation, a subsidiary of Emerson Electric Company,
since 1987 and Executive Vice President, Emerson Electric
Company since 1988. Copeland manufactures compressors
for air conditioning systems and for commercial
refrigeration equipment. Mr. Novello is also an Advisory
Member, Board of Directors, Emerson Electric Company and
a director of the Air Conditioning and Refrigeration
Institute and of Northeastern University National
Council.
GEORGE E. POWELL, JR.
Retired. Former Chairman of the Board, Yellow
Corporation; Member of the Audit, Board Organization and
Executive Committees.
Powell, age 70, has been a Director since 1965. Mr.
Powell was Chairman of the Board of Yellow Corporation, a
freight transportation company, and its predecessor,
Yellow Freight Systems, Inc., of Delaware, from 1968 to
1983. 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 Foundation.
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 58, 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.
4
<PAGE> 7
CLASS A DIRECTORS
(TERMS EXPIRE 1999)
HAROLD G. BERNTHAL
Chairman, CroBern, Inc., Member of the Board Organization
and Compensation and Benefits Committees.
Bernthal, age 68, 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. He is an
honorary director of Valparaiso University.
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 58, 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.
DONALD H. PRATT
President; member of the Executive Committee.
Pratt, age 59, 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 American 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.
5
<PAGE> 8
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 1996, the Board met 5 times and the various committees met as
follows: Compensation and Benefits - 3 times; Audit - 2 times; Board
Organization - 2 times; and the Executive Committee had no meeting. The
average attendance at the aggregate of all board and committee meetings
was 98%. All directors attended 88% or more of such meetings.
Non-employee directors are paid $20,000 per annum (all in Butler
common stock), $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 at the direction of the Board of Directors, or by any
stockholder of the Corporation who was a stockholder of record at the time
of giving of notice, who is entitled to vote
6
<PAGE> 9
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 18, 1997. 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 18, 1997.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL COMMON STOCK
STOCKHOLDER OWNERSHIP OWNED
----------- ----------------- -----
<S> <C> <C>
Robert H. West (a) ................................................ 74,101
Donald H. Pratt (b) ............................................... 22,526
Harold G. Bernthal ................................................ 9,769
Robert E. Cook .................................................... 9,619
Alan M. Hallene ................................................... 4,219
C. L. William Haw ................................................. 6,619
Robert J. Novello.................................................. 376
George E. Powell, Jr............................................... 24,619
Robert J. Reintjes, Sr............................................. 2,359
Judith A. Rogala................................................... 1,969
Richard O. Ballentine (c).......................................... 14,702
John J. Holland (d)................................................ 16,832
Richard S. Jarman (e).............................................. 67,115
All Directors and Executive Officers as a Group of 25 (f) 412,306 5.25%
Trustee of Butler Manufacturing Company
Employee Stock Ownership Plan Trust (ESOP) (g)..................... 982,606 12.97%
Ryback Management Corporation (h).................................. 440,000 5.8%
</TABLE>
7
<PAGE> 10
<TABLE>
<S> <C> <C>
FMR Corp. and Edward C. Johnson 3d(i).................................... 863,950 11.4%
</TABLE>
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 7,578,476 shares outstanding at February 18,
1997, 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 3,837 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 10,000 shares subject to exercisable outstanding stock
options and 3,471 shares allocated to Mr. Holland's account under the
ESOP.
(e) Includes 46,475 shares subject to exercisable outstanding stock
options and 4,964 shares allocated to Mr. Jarman's account under the
ESOP.
(f) Includes 130,852 shares subject to exercisable outstanding stock
options and 57,352 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 440,000 shares. The
address of Ryback Management Corporation is 7711 Corondelet Avenue,
St. Louis, Missouri 63105.
(i) FMR Corp. is the owner of Fidelity Management Trust Company (a Bank
that reports beneficial ownership of 528,700 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 335,250 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 556,100 of the shares and sole power to dispose of
863,950 of the shares. The address of FMR Corp. is 82 Devonshire
Street, Boston, Mass. 02109.
8
<PAGE> 11
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 and to
the Company's 401(k) 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 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, stock options and restricted stock bonus awards.
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
9
<PAGE> 12
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 and restricted stock bonus awards. 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 and
restricted stock bonus awards 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.
Stock options and the opportunity to participate in the restricted
stock bonus award program are normally granted once a year to a group of
senior executives whose positions of responsibility afford them the
opportunity to significantly affect the future growth and profitability of
the Company. The total number of options granted in any one year will be
approximately equivalent to the total number of shares authorized for use
in the plan, divided by the number of years the current plan is expected
to remain in effect. The number of individual options awarded is
discretionary. Among factors considered are the executive's job
responsibilities, the Company's strategic priorities, the number of shares
currently owned by the executive, and the number of options previously
granted to the executive.
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 1996, INCLUDING THE
FACTORS AND CRITERIA UPON WHICH THE CEO'S COMPENSATION WAS BASED. With
respect to the salary paid to Mr. West for 1996, 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 1995;
and Mr. West's leadership in setting and effecting the long term strategic
growth of the Company.
In 1996, the Company exceeded its target pretax operating earnings
goal. Based on these results, Mr. West was awarded a bonus of $270,000,
as compared to a bonus of $207,000 for 1995. 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> 13
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.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION (1) ALL OTHER
NAME AND ANNUAL COMPENSATION RESTRICTED COMPENSA-
PRINCIPAL POSITION YEAR SALARY BONUS OTHER STOCK AWARDS TION (2)
<S> <C> <C> <C> <C> <C> <C>
Robert H. West 1996 $359,000 $270,000 $2,600 None $294,235
Chairman of the 1995 $345,000 $207,000 $520 None $294,240
Board and Chief 1994 $332,000 $166,000 None None $296,710
Executive Officer
Donald H. Pratt 1996 $280,000 $154,600 $1,300 None $200,235
President 1995 $269,000 $148,000 None None $201,240
1994 $259,000 $130,000 None None $202,070
Richard O. Ballentine 1996 $160,000 $80,000 $1,050 None $20,235
Vice President, 1995 $154,000 $77,000 $360 None $19,845
General Counsel, 1994 $149,000 $75,000 None None $21,419
and Secretary
John J. Holland 1996 $166,000 $83,500 $1,050 $15,750 $46,235
Vice President- 1995 $158,000 $79,000 $700 None $46,135
Finance 1994 $149,000 $75,000 None None $46,846
Richard S. Jarman 1996 $201,000 $101,000 $2,850 None $225,428
President, Bldgs. 1995 $193,000 $97,000 $1,100 None $225,284
Division 1994 $187,000 $75,000 None None $225,408
</TABLE>
(1) No stock options were granted in 1994, 1995, or 1996.
Restricted stock of the value indicated was awarded to the named
Executive upon his election to receive a portion of his annual
bonus in Butler common stock as described under "Restricted Stock
Bonus Program." The restricted stock vests on the third
anniversary of the date of the award. Dividends are payable on the
restricted stock.
(2) - 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 1996 for Mr. West of $291,000, for Mr. Pratt of $197,000, for
Mr. Ballentine of $17,000, for Mr. Holland of $43,000 and for Mr.
Jarman of $223,000.
- Includes $775 for the Company's 1996 contribution to the
Employee Stock Ownership Plan Trust and forfeitures allocated for
each named executive officer's account.
- Includes $210 for insurance premiums paid by the Company in
1996 with respect to term life insurance for each named executive
officer.
- Includes the Company's 25% matching contribution for 1996 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
to Mr. Pratt's, $2,250 to Mr. Ballentine's, $2,250 to Mr. Holland's
and $1,443 to Mr. Jarman's.
11
<PAGE> 14
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, 1996. The Company has no Stock
Appreciation Rights (SARs) outstanding.
<TABLE>
Shares 1996 Stock Number of Unexercised Value of Unexercised
Acquired Option Exercises Options In-The-Money Options
Name On Exercise Value at December 31, 1996 at December 31, 1996 (1)
(#) Realized (1) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
R. H. West 0 $0 0 0 $0 $0
D. H. Pratt 0 $0 0 0 $0 $0
R. Ballentine 5,430 $147,138 4,837 0 $141,869 $0
J. H. Holland 5,000 $116,650 10,000 0 $293,300 $0
R. S. Jarman 12,745 $310,585 46,475 0 $1,360,060 $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, 1996, the Company's stock price was
$40.50.
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 years of
credited service for the individuals named in the compensation table at
December 31, 1996 were: Mr. Ballentine, $185,071 and 22 years; Mr.
Jarman, $225,357 and 22 years; Mr. Pratt, $325,502 and 32 years; Mr.
Holland, $186,486 and 17 years; and Mr. West, $426,470 and 28 years.
12
<PAGE> 15
<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION FOR
YEARS OF CREDITED SERVICE
----------------------------------
AVERAGE COMPENSATION 10 20 30 40
- -------------------- -- -- -- --
<S> <C> <C> <C> <C>
150,000 23,200 46,500 69,700 93,700
200,000 31,500 63,000 94,400 126,700
250,000 39,700 79,500 119,200 159,700
300,000 48,000 96,000 143,900 192,700
350,000 56,200 112,500 168,700 225,700
400,000 64,500 129,000 193,400 258,700
450,000 72,700 145,500 218,200 291,700
500,000 81,000 162,000 242,900 324,700
550,000 89,200 178,500 267,700 357,700
</TABLE>
DEFERRED COMPENSATION PLAN
The Company has an executive deferred compensation plan that allows a
small number of 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, Holland and Jarman participated in this
Plan in 1996.
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 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
<PAGE> 16
RESTRICTED STOCK BONUS PROGRAM
The Company has a Restricted Stock Bonus Program that allows
approximately 15 senior executives, including Messrs. Ballentine, Holland,
Jarman and Pratt, to elect to receive up to 50% of their annual bonus in
the Company's common stock ("Bonus Stock"). If the eligible executive
makes such an election, the Company will match the Bonus Stock at a 50%
rate ("Match Stock"). The Match Stock is restricted and not transferable
for 3 years. If the Executive's employment is terminated prior to the end
of 3 years (other than due to retirement, disability, or a change of
control of the Company), or if the Executive transfers his or her Bonus
Stock during the 3-year period, the Match Stock will be forfeited. The
principal purpose of the Program is to increase share ownership among
senior executives and encourage close identity of interests among them and
shareholders.
14
<PAGE> 17
PERFORMANCE GRAPH
The following line graph compares, for five years, beginning December
31, 1991, the yearly percentage change in the Company's cumulative total
shareholder return with the CRSP (Center for Research in Security Prices)
New York Stock Exchange (NYSE) Stock Market Index, the CRSP NASDAQ Stock
Market Total Return Index and the Media General "Other Building Material
Group" Index. The graph assumes $100 invested at December 31, 1991 and
reinvestment of dividends.
The Company's stock was traded on the NASDAQ market until November
12, 1996 when it became listed on the NYSE. Indices for both markets are
shown. The Media General Other Building Material Group index is an
industry index published by Media General Financial Services which
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 is not. Conversely, the Media General index includes firms
such as Armstrong World Industries, Inc., Owens Corning Fiberglas
Corporation, USG Corporation and Republic Group, Inc., whose products do
not compete with the Company's.
VALUE OF $100 INVESTMENTS ASSUMING REINVESTMENT OF DIVIDENDS AT END OF YEAR
[LINE GRAPH]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Butler $100.00 $127.06 $255.29 $314.86 $564.34 $590.40
NASDAQ $100.00 $100.98 $121.13 $127.17 $164.96 $204.98
NYSE $100.00 $108.80 $120.10 $120.10 $162.80 $197.40
Media General $100.00 $124.44 $153.07 $135.31 $179.17 $199.09
</TABLE>
15
<PAGE> 18
INDEPENDENT PUBLIC ACCOUNTANTS
Representatives of KPMG Peat Marwick, independent certified public
accountants which audited the books, records and accounts of the Company
for 1996, 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.
The selection of the independent certified public accountants to
audit the books, records and accounts of the Company for 1997 will be made
by the Directors at its April, 1997 meeting based upon the recommendation
of the Audit Committee, which consists of Messrs. Cook (chairman),
Hallene, Novello, Powell, Reintjes and Ms. Rogala.
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 14, 1998, 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 4, 1998.
By the Order of the Board of Directors
March 10, 1997 Richard O. Ballentine, Secretary
16
<PAGE> 19
----------------------------
BUTLER
MANUFACTURING
COMPANY
----------------
NOTICE
OF
ANNUAL MEETING
OF
STOCKHOLDERS
AND
PROXY STATEMENT
----------------
TIME AND PLACE
Tuesday, April 15, 1997
9:30 a.m.
Atkins Auditorium
Nelson-Atkins Museum of Art
4525 Oak Street
Kansas City, Missouri
----------------------------
<PAGE> 20
[BUTLER LETTERHEAD]
March 10, 1997
TO: Participants in one or more of the following;
1) Butler Manufacturing Company Employee Stock Ownership Plan Trust
(ESOP)
2) Butler Employee Savings Trust (BEST)
3) Galesburg Hourly Employee Savings Trust (GHEST)
The shares shown on the enclosed instruction card are credited to your stock
account in the ESOP and/or in the Butler Common Stock Fund of the BEST or GHEST.
In accord with the terms of the Plans, participants have the right to instruct
each Plan's Trustee how these shares will be voted at any meeting of
stockholders. To assist in that process, the Company's Annual Report to
Stockholders for 1996 and a Proxy Statement for its Annual Meeting are either
enclosed with this letter or, if you own stock in your own name, have been
mailed to you.
PLEASE USE THE ENCLOSED INSTRUCTION CARD TO INSTRUCT THE TRUSTEE(S) 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 UMB Bank, the Company's stock transfer agent. UMB
Bank will tabulate votes and submit the results to the Trustees. Your
instruction card will be furnished to the appropriate Trustee with the
instructions of other participants. If you prefer, you may mail your card
directly to UMB Bank in the enclosed envelope. In any event, your voting
instructions to the Trustee will be kept confidential and will 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 28, 1997, 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 15, 1997, at 9:30 a.m.
Cordially yours,
BUTLER MANUFACTURING COMPANY BUTLER EMPLOYEE SAVNGS TRUST (BEST)
EMPLOYEE STOCK OWNERSHIP PLAN
TRUST (ESOP) GALESBURG HOURLY EMPLOYEE SAVINGS
TRUST
Boatmen's Trust Company of Kansas Fidelity Management Trust Company,
City, Trustee Trustee
Enclosures
<PAGE> 21
[BUTLER LOGO]
INSTRUCTION CARD
INSTRUCTIONS TO: Boatmen's Trust Company of Kansas City, Trustee of the
Butler Manufacturing Company Employee Stock Ownership
Plan Trust (ESOP) and Fidelity Management Trust Company,
Trusteee of the Butler Employee Savings Trust (BEST) and
Galesburg Hourly Employee Savings Trust (GHEST), for voting
at the Annual Meeting of Stockholders of Butler
Manufacturing Company on April 15, 1977.
Please vote the shares held by you for my ESOP stock account and/or Butler
Common Stock Fund as specified below.
1. Election of three Class B Directors - Nominees; ROBERT E. COOK, ROBERT J.
REINTJES, SR., JUDITH A. ROGALA
[] FOR all Nominees. [] AUTHORITY WITHHELD from all Nominees.
[] FOR all nominees, except vote withheld for the following Nominee(s):
-------------------------------------------------------------------
2. 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.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS CARD
(See reverse side for matters to be voted on)
The undersigned has received the Company's Annual Report for 1996 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
CREDITED IN THE ESOP STOCK ACCOUNT AND/OR THE BEST OR GHEST BUTLER COMMON
STOCK FUND 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.)
