<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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
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<PAGE> 2
BUTLER MANUFACTURING COMPANY
BMA Tower - Penn Valley Park
(P.O. Box 419917)
Kansas City, Missouri 64141-0917
March 9, 1998
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 21, 1998, beginning at 9:30 a.m.,
local time for the following purposes:
1. To elect three directors each for a three year term expiring in 2001;
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 23, 1998, 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 23, 1998, will be available for inspection during
business hours from April 6, 1998 through the close of business on April 20,
1998 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,
/s/ Robert H. West
---------------------------------------------
ROBERT H. WEST
Chairman of the Board
/s/ Richard O. Ballentine
---------------------------------------------
RICHARD O. BALLENTINE
Vice President, General Counsel and Secretary
----------------------------------------------------------------------
PLEASE JOIN US!
STOCKHOLDERS ARE INVITED TO GATHER IN ROZELLE COURT FOR COFFEE, JUICE
AND PASTRIES BEFORE THE MEETING. COMPANY DIRECTORS, EXECUTIVES AND
OTHER ASSOCIATES WILL BE PRESENT FROM 9:00 A.M.
----------------------------------------------------------------------
<PAGE> 3
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the solicitation
of proxies for use at the Company's 1998 annual meeting of stockholders on
April 21, 1998, 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 9, 1998. 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 23,
1998, are entitled to vote at the meeting. As of February 23, 1998, there were
7,659,050 shares of common stock outstanding, each share being entitled to one
vote. As of February 23, no shares of Class A or Class 1 Preferred Stock were
issued.
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 C DIRECTORS
NOMINEES.
The primary purpose for this year's annual meeting is the election of three
Class C Directors, each for terms of three years expiring at the Annual Meeting
of Stockholders for 2001. The terms of the other two classes of directors do
not expire until 1999 (Class A) and 2000 (Class B). 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 C NOMINEES
(TERMS WILL EXPIRE 2001)
ALAN M. HALLENE
Retired. Former President, Montgomery Elevator International;
Chairman of the Board Organization Committee and member of the Audit
Committee.
Hallene, age 69, 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,
and University of Illinois Foundation. He is a trustee of the
Butterworth Memorial Trust.
2
<PAGE> 5
ROBERT J. NOVELLO
Chairman, Copeland Corporation; Member of the Audit and Board
Organization Committees.
Novello, age 60, has been a Director since 1996. He has been
Chairman of Copeland Corporation, a subsidiary of Emerson Electric
Company, since 1987 and until 1998 was also Chief Executive Officer
of Copeland and Executive Vice President, Emerson Electric Company.
Copeland manufactures compressors for air conditioning systems and
for commercial refrigeration equipment. Mr. Novello is a director of
the Air Conditioning and Refrigeration Institute. He is also a
director of the Northeastern University National Council and the
Babson College Graduate Advisory Board.
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 59, 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.
CLASS A DIRECTORS
(TERMS EXPIRE 1999)
HAROLD G. BERNTHAL
Chairman, CroBern, Inc., Member of the Board Organization and
Compensation and Benefits Committees.
Bernthal, age 69, 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.
3
<PAGE> 6
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 59, 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 60, 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; a director of Atlas Copco North America Inc.
and is a trustee of the Midwest Research Institute.
CLASS B DIRECTORS
(TERMS 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 54, 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.
4
<PAGE> 7
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 66, 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 a member of the Kansas City Crime
Commission.
JUDITH A. ROGALA
President, Aramark Uniform Services, Aramark Corporation; Member of
the Audit and Compensation and Benefits Committees.
Rogala, age 56, has been a director since 1989. She has been
President, Aramark Uniform Services which rents and sells industrial
uniforms and image apparel, 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. She
is also a director of Red Roof Inns, Inc. and a member of the
Board of Advisors, DSC Logistics, Inc. She is a member of the
Economic Club of Chicago, the Committee of 200 and of the Alumni
Board, University of New Mexico.
GARY L. TAPELLA
President and Chief Executive Officer, Rheem Manufacturing Company;
Member of Audit and Board Organization Committees.
Tapella, age 54, has been a director since January, 1998. He
has been President and Chief Executive Officer of Rheem
Manufacturing Company since 1991. He has been with Rheem since 1968
serving in various domestic and international operations. Rheem is
a manufacturer of residential and commercial central air
conditioners, gas and electric furnaces and water heaters. He is
immediate past Chairman of the Gas Appliance Manufacturers
Association (GAMA), Chairman of the Air Conditioning and
Refrigeration Institutes' (ARI) International Committee and a member
of the Electrical Manufacturers Association.
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 1997, 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 - 1 time. All directors
attended 100% of such meetings.
Non-employee directors are paid a retainer of $20,000 per annum (all in
Butler common stock) and $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 at the meeting and who complied with the notice
procedures set forth. Notice of proposed
6
<PAGE> 9
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 23, 1998. 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
23, 1998.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL COMMON STOCK
STOCKHOLDER OWNERSHIP OWNED
- ----------- -------------------- -----
<S> <C> <C>
Robert H. West (a).......................................... 73,520
Donald H. Pratt (b)......................................... 22,547
Harold G. Bernthal.......................................... 10,323
Robert E. Cook.............................................. 10,173
Alan M. Hallene............................................. 4,773
C. L. William Haw........................................... 7,173
Robert J. Novello........................................... 929
George E. Powell, Jr........................................ 25,173
Robert J. Reintjes, Sr...................................... 3,213
Judith A. Rogala............................................ 2,523
Gary L. Tapella............................................. 100
Richard O. Ballentine (c)................................... 14,202
John J. Holland (d)......................................... 21,194
Richard S. Jarman (e)....................................... 56,951
All Directors and Executive Officers as a Group of 25 (f) 422,203 4.23%
Trustee of Butler Manufacturing Company
Individual Retirement Asset Account (IRAA) formerly
Employee Stock Ownership Plan Trust (ESOP) (g).............. 933,545 11.15%
FMR Corp. and Edward C. Johnson 3d(h)....................... 880,650 11.5%
</TABLE>
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<PAGE> 10
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 7,659,050 shares outstanding at February 23, 1998, 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 IRAA.
(b) Includes 7,175 shares allocated to Mr. Pratt's account under the IRAA.
(c) Includes 3,837 shares subject to exercisable outstanding stock options,
4,414 shares allocated to Mr. Ballentine's account under the IRAA 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 14,000 shares subject to exercisable outstanding stock
options and 3,471 shares allocated to Mr. Holland's account under the IRAA.
(e) Includes 37,500 shares subject to exercisable outstanding stock
options and 4,964 shares allocated to Mr. Jarman's account under the IRAA.
(f) Includes 155,600 shares subject to exercisable outstanding stock
options and 49,721 shares allocated to the accounts of officers under the
IRAA.
(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) FMR Corp. is the owner of Fidelity Management Trust Company (a Bank that
reports beneficial ownership of the Company's Common Stock for institutional
accounts) and Fidelity Management Research Company, an investment advisor to
several investment companies which also reports beneficial ownership of the
Company's common stock. 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 558,500 of the shares and sole power to dispose
of 880,650 of the shares. The address of FMR Corp. is 82 Devonshire Street,
Boston, Mass. 02109.
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<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 Individual
Retirement Asset Account plan (formerly 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
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<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 personal objectives and 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-seven 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 1997, INCLUDING THE FACTORS
AND CRITERIA UPON WHICH THE CEO'S COMPENSATION WAS BASED. With respect to the
salary paid to Mr. West for 1997, 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 1996; and Mr. West's leadership in setting
and effecting the long term strategic growth of the Company.
In 1997, the Company exceeded its target pretax operating earnings goal.
Based on these results and on Mr. West's role in promoting the long-term
strategic growth of the Company, Mr. West was awarded a bonus of $219,400.
This report is made over the name of each member of the Committee, namely
Harold G. Bernthal, Robert E. Cook, C.L. William Haw, Robert J. Reintjes, Jr.,
and Judith A. Rogala.
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<PAGE> 13
SUMMARY COMPENSATION TABLE
The table below shows all plan and non-plan compensation awarded to,
earned by, or paid to the Company's Chief Executive Officer and its four most
highly compensated executive officers other than the CEO, for services rendered
to the Company and its subsidiaries during the periods indicated.
<TABLE>
<CAPTION> ----------------------------------------------------------------
LONG-TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
------------------------ --------------------- --------------
AWARDS
------
RESTRICTED STOCK
NAME AND STOCK (1) OPTIONS
PRINCIPLE POSITION YEAR SALARY BONUS OTHER ($) (# SHARES) ($) (2)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert H. West 1997 $374,000 $219,400 $ 5,870 None 0 $294,860
Chairman of the 1996 $359,000 $270,000 $ 2,600 None 0 $294,235
Board and Chief 1995 $345,000 $207,000 $ 520 None 0 $294,240
Executive Officer
Donald H. Pratt 1997 $292,000 $137,100 $ 1,725 None 0 $200,711
President 1996 $280,000 $154,600 $ 1,300 None 0 $200,235
1995 $269,000 $148,000 None None 0 $201,240
Richard O. Ballentine 1997 $166,425 $ 65,100 $ 750 None O $ 20,860
Vice President, 1996 $160,000 $ 80,000 $ 1,050 None 0 $ 20,235
General Counsel, 1995 $154,000 $ 77,000 $ 360 None 0 $ 19,845
and Secretary
John J. Holland 1997 $174,350 $ 80,000 $ 800 $5,000 4,000 $ 46,854
Vice President- 1996 $166,000 $ 83,500 $ 1,050 $15,750 0 $ 46,235
Finance 1995 $158,000 $ 79,000 $ 700 None 0 $ 46,135
Richard S. Jarman 1997 $215,000 $123,100 $ 1,825 None 0 $225,841
President, Bldgs. 1996 $201,000 $101,000 $ 2,850 None 0 $225,428
Division 1995 $193,000 $ 97,000 $ 1,100 None 0 $225,284
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) * Restricted stock of the value indicated was awarded to Mr. Holland 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 1997 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.
11
<PAGE> 14
. Includes $800 for the Company's 1997 contribution to the Individual
Retirement Asset Account (IRAA), formerly known as 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 1997 with
respect to term life insurance for each named executive officer.
. Includes the Company's 30% matching contribution for 1997 to the named
executive officer's account in the Butler Employees' Savings Trust (a
401(k) plan). $2,850 was allocated to Mr. West's account, $2,701 to Mr.
Pratt's, $2,850 to Mr. Ballentine's, $2,844 to Mr. Holland's and $1,831 to
Mr. Jarman's.
OPTION GRANTS DURING 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------
NUMBER OF PERCENT OF
NAME SECURITIES TOTAL GRANT DATE
UNDERLYING OPTIONS OPTIONS GRANTED EXERCISE PRESENT
GRANTED (#) (1) TO EMPLOYEES PRICE ($/SH) (2) VALUE ($) (3)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John J. Holland 4,000 3.5% $38.75 $57,448
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) For 1997, all options awarded to the named executive officer by the
Compensation and Benefits Committee were long-term incentive awards granted
on January 20, 1997. The option vested twelve months after the date of
grant. Vesting is accelerated upon death, permanent disability, or a change
of control of the Company. The option will expire five years from the date
of grant or earlier if employment terminates.
(2) The exercise price per share is the fair market value of the common stock
on the date of grant which is the closing price of Butler's common stock
on the New York Stock Exchange on the date of grant.
(3) We calculated these values by using the Black-Scholes stock option pricing
model.
The model, as we applied it, uses the grant date of January 20, 1997 and the
fair market value on that date of $38.75 per share as discussed above. The
model also assumes (a) a risk-free rate of return of 5.7% (which was the yield
on a U.S. Treasury Strip zero coupon bond with a maturity that approximates the
term of the option), (b) a stock price volatility of 39% (calculated using
month-end closing prices of Butler common stock on the New York Stock Exchange
for the period beginning with January 1, 1993 and ending as of the end of the
month preceding the grant date, (c) a constant dividend yield of 1.7% based on
the quarterly cash dividend rate of 14 cents per share on the Butler common
stock, and (d) an exercise date, on average of five years after grant.
We did not adjust the model for non-transferability, risk of forfeiture, or
vesting restrictions. The actual value (if any) an executive officer receives
from a stock option will depend upon the amount by which the market price of
Butler common stock exceeds the exercise price of the option on the date of
exercise. There can be no assurance that the amount stated as "Grant Date
Present Value" will actually be realized.
12
<PAGE> 15
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION 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, 1997. The Company has no Stock Appreciation Rights
(SARs) outstanding.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
SHARES 1997 STOCK NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTION EXERCISES OPTIONS IN-THE-MONEY OPTIONS
ON EXERCISE ---------------- AT DECEMBER 31,1997 AT DECEMBER 31,1997 (1)
---------- VALUE -------------------- ------------------------
NAME (#) 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 1,000 $25,955 3,837 0 $80,884 $0
- ------------------------------------------------------------------------------------------------------------
J. H. Holland 0 $0 10,000 4,000 $210,800 $0
- ------------------------------------------------------------------------------------------------------------
R. S. Jarman 8,975 $206,216 37,500 0 $790,500 $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, 1997, the Company's stock price
was $32.25.
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 IRAA 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, 1997 were: Mr. Ballentine, $206,354 and 23
years; Mr. Jarman, $253,522 and 23 years; Mr. Pratt, $366,422 and 33 years; Mr.
Holland, $212,052 and 18 years; and Mr. West, $493,218 and 29 years.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION FOR YEARS OF CREDITED SERVICE
------------------------------------------------------
AVERAGE COMPENSATION 10 20 30 40
- -------------------- -- -- -- --
<S> <C> <C> <C> <C>
$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
600,000 97,400 194,800 292,100 390,300
</TABLE>
13
<PAGE> 16
DEFERRED COMPENSATION PLAN
The Company has an executive deferred compensation plan that allows
approximately 60 executives to defer up to 25% of their annual salary 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, and Jarman participated in this Plan in
1997.
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.
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, 1992, 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 and the Media General "Other
Building Material Group" Index. The graph assumes $100 invested at December
31, 1992 and reinvestment of dividends.
The Company's stock is traded on the NYSE. 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 market's. Two of the Company's direct competitors,
American Buildings Company and NCI Building Systems, Inc., are included.
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.
[GRAPH]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Butler Mfg. 100.00 200.90 247.80 444.40 464.70 375.80
Media General 100.00 123.00 108.73 143.98 159.98 187.25
NYSE 100.00 110.50 110.40 149.70 181.50 241.10
</TABLE>
15
<PAGE> 18
INDEPENDENT PUBLIC ACCOUNTANTS
Representatives of Arthur Andersen LLP, independent certified public
accountants, which audited the books, records and accounts of the Company for
1997, 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 1998 will be made by the
Directors at its April, 1998 meeting based upon the recommendation of the Audit
Committee. Members of the Committee at that time will be Robert J. Reintjes,
Sr. (Chairman), Alan M. Hallene, C.L. William Haw, Judith A. Rogala and Gary L.
Tapella.
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
20, 1999, 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 11, 1999.
By the Order of the Board of Directors
/s/ Richard O. Ballentine
Richard O. Ballentine, Secretary
March 9, 1998
16
<PAGE> 19
-------------------
BUTLER
MANUFACTURING
COMPANY
---------------
NOTICE
OF
ANNUAL MEETING
OF
STOCKHOLDERS
AND
PROXY STATEMENT
---------------
TIME AND PLACE
Tuesday, April 21, 1998
9:30 a.m.
Atkins Auditorium
Nelson-Atkins Museum of Art
4525 Oak Street
Kansas City, Missouri
-------------------
<PAGE> 20
<TABLE>
<S> <C> <C>
PROXY
[BUTLER LOGO]
BUTLER MANUFACTURING COMPANY
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, C.L. William Haw 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 21, 1998 or at any adjournment thereof.
1. Election of three Class C Directors - Nominees: ALAN M. HALLENE, ROBERT J. NOVELLO, ROBERT H. WEST
[ ] 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 recomends 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 1997 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.
----------------------------------------------------------------------------
Stockholder's Signature
----------------------------------------------------------------------------
Stockholder's Signature
Date:
-----------------------------------------------------------------------
(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 THIS PROXY PROMPTLY IN THE ACCOMPANYING
ENVELOPE.
</TABLE>
<PAGE> 21
<TABLE>
<S> <C> <C>
[BUTLER LOGO]
INSTRUCTION CARD
INSTRUCTION TO: UMB Bank, N.A., Trustee of the Butler Manufacturing Company Individual Retirement Asset Account (IRAA) and
Fidelity Management Trust Company, Trustee 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 21, 1998.
Please vote the shares held by you for my IRAA stock account and/or Butler Common Stock Fund as specified below.
1. Election of three Class C Directors - Nominees: ALAN M. HALLENE, ROBERT J. NOVELLO, ROBERT H. WEST
[ ] 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 1997 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 IRAA 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.)
</TABLE>
