<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
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(Name of Registrant as Specified in Its Charter)
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[LETTERHEAD OF BUTLER MANUFACTURING COMPANY]
March 8, 2000
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 18, 2000, beginning at 9:30 a.m., local time
for the following purposes:
l. To elect two directors each for a three year term expiring in 2003;
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 22, 2000, 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 22, 2000, will be available for inspection during business
hours from April 3, 2000 through the close of business on April 17, 2000 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/ Donald H. Pratt
Donald H. Pratt
Chairman of the Board
/s/ John W. Huey
John W. Huey
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 2000 annual meeting of stockholders on April
18, 2000, 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 8, 2000. 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 22,
2000, are entitled to vote at the meeting. As of February 22, 2000, there were
6,718,857 shares of common stock outstanding, each share being entitled to one
vote. As of February 22, 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 two 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 two
Class B Directors, each for terms of three years expiring at the Annual Meeting
of Stockholders for 2003. The terms of the other two classes of directors do not
expire until 2001 (Class C) and 2002 (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 two
nominees for director who receive the highest number of votes cast will be
elected as directors.
CLASS B NOMINEES
(TERMS WILL EXPIRE 2003)
ROBERT J. REINTJES, SR.
[Photo] President and Chief Executive Officer, Geo. P. Reintjes Co.,
Inc.; Chairman of the Audit Committee and Member of the
Compensation and Benefits and Executive Committees.
Reintjes, age 68, has been a director since April, 1994. He
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 in basic industries. He is also a director
of Midwest Grain Products, Inc. and an advisory director of
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.
GARY L. TAPELLA
[Photo] President and Chief Executive Officer, Rheem Manufacturing
Company; Member of the Audit and Board Organization Committees.
Tapella, age 56, 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
a director and past Chairman of the Gas Appliance Manufacturers
Association (GAMA), a director and current Vice Chairman of the
Air Conditioning and Refrigeration Institute (ARI) and Chairman
of ARI's International Committee.
2
<PAGE> 5
CLASS C DIRECTORS
(TERMS EXPIRE 2001)
ALAN M. HALLENE
[Photo] Retired. Former President, Montgomery Elevator International;
Member of the Audit and Board Organization Committees.
Hallene, age 71, 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.
ROBERT J. NOVELLO
[Photo] Chairman, Copeland Corporation; Chairman of the Compensation and
Benefits Committee and member of the Board Organization
Committee.
Novello, age 62, 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 also a director of the Air Conditioning
and Refrigeration Institute, Northeastern University National
Council and the Babson College Graduate Advisory Board.
K. DANE BROOKSHER
[Photo] Chairman and Chief Executive Officer, ProLogis Trust; Member of
the Audit and Compensation and Benefits Committees.
Brooksher, age 61, has been a Director since 1999. He has
been Chairman, Trustee and Chief Executive Officer of ProLogis
Trust since 1999. He joined ProLogis in 1993 as Co-Chairman and
Chief Operating Officer. ProLogis is a U.S. based real estate
investment trust specializing in the acquisition, development,
marketing, operation and ownership of distribution facilities and
services worldwide. From 1961 to 1993, he was with KPMG Peat
Marwick, last serving, prior to retirement, as the Area Managing
Partner and Chicago Office Managing Partner. He also served on
the KPMG Peat Marwick Board of Directors and Management
Committee. Mr. Brooksher also serves as a director of AON Risk
Services of Illinois and on the Board of Advisors of the J. L.
Kellogg Graduate School of Management at Northwestern University.
3
<PAGE> 6
CLASS A DIRECTORS
(TERMS EXPIRE 2002)
GARY M. CHRISTENSEN
[Photo] President and Chief Executive Officer, Pella Corporation; Member
of the Board Organization and Compensation and Benefits
Committees.
Christensen, age 56, has been a Director since 1999. He has
been President and Chief Executive Officer of Pella Corporation
since 1996. Pella Corporation manufactures wood windows and
doors. He joined Pella in 1990 as Senior Vice President, Sales
and Marketing and was named President and Chief Operating Officer
in 1994. From 1980 to 1990 he was a marketing executive for
General Electric and from 1971 to 1980 was with Trane
Corporation. He is a director of Brenton Banks, Inc., the Policy
Advisory Board, Harvard Joint Center for Housing Studies, and is
Chairman of the Iowa Business Council.
C. L. WILLIAM HAW
[Photo] President and Chief Executive Officer of National Farms, Inc.;
Chairman of the Board Organization Committee and a member of the
Audit and Executive Committees.
Haw, age 61, 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 an advisory director of Commerce Bank of Kansas
City, N.A.
JOHN J. HOLLAND
[Photo] President and Chief Executive Officer; Member of the Executive
Committee.
Holland, age 49, became a Director in January, 1999. He
joined Butler in 1980, became Vice President-Controller in 1986,
Vice President-Finance in 1990, Executive Vice President in 1998
and President and Chief Executive Officer in 1999. Mr. Holland is
a director of Commerce Fund, a mutual fund; an advisory director
of Allendale Insurance Company; and a director of Saint Luke's
Hospital. He is a former chairman of Heart of America Family
Services.
DONALD H. PRATT
[Photo] Chairman of the Board; Chairman of the Executive Committee.
Pratt, age 62, has been a Director since 1979. He joined
Butler in 1965, became Executive Vice President in 1980,
President in 1986, Vice Chairman in January, 1999 and Chairman in
June of 1999. Mr. Pratt is also a director and Vice Chairman of
American Century Mutual Funds; a director of Atlas Copco North
America Inc. and is a trustee of the Midwest Research Institute.
4
<PAGE> 7
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 Committee. The primary functions of the
committees are described below.
During 1999, the Board met 5 times and the various committees met as
follows: Compensation and Benefits - 3 times; Audit - 2 times; Board
Organization - 2 times. The Executive Committee did not meet. All directors
attended 88% or more of such meetings.
Non-employee directors are paid a retainer of $20,000 per annum (all in
Butler common stock) and $1,500 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 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 stockholder nominations for election of directors must also
be given to the Secretary not less than 90 days nor more
5
<PAGE> 8
than 120 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 current executive
officers who are listed in the Summary Compensation Table, and by all directors
and executive officers as a group as of February 22, 2000. 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
each other 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
December 31, 1999.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL COMMON STOCK
STOCKHOLDER OWNERSHIP OWNED
----------- --------- -----
<S> <C> <C>
K. Dane Brooksher ....................................... 498
Gary M. Christensen ..................................... 817
Alan M. Hallene ......................................... 6,265
C. L. William Haw ....................................... 19,665
John J. Holland (a) ..................................... 98,615 1.45%
John W. Huey (b) ........................................ 26,553
Richard S. Jarman (c) ................................... 35,591
Robert J. Novello ....................................... 2,421
Donald H. Pratt (d) ..................................... 22,617
Robert J. Reintjes, Sr .................................. 4,705
Gary L. Tapella ......................................... 1,592
Clyde E. Wills, Jr. (e) ................................. 60,664
All Directors and Executive Officers as a Group of 23 (f) 537,364 7.62%
Trustee of Butler Manufacturing Company
Individual Retirement Asset Account (IRAA) (g) ......... 803,552 11.4%
FMR Corp. and Edward C. Johnson 3d (h) .................. 435,150 6.184%
Dimensional Fund Advisors, Inc. (i) ..................... 409,450 5.82%
</TABLE>
6
<PAGE> 9
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 6,718,857 shares outstanding at February 22, 2000, 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 88,000 shares subject to exercisable outstanding stock options,
3,471 shares in Mr. Holland's IRAA account and 481 shares in his BEST
401(k) account.
(b) Includes 22,000 shares subject to exercisable outstanding stock options,
2,878 shares in Mr. Huey's IRAA account and 18 shares in his BEST 401(k)
account.
(c) Includes 10,000 shares subject to exercisable outstanding stock options,
4,964 shares in Mr. Jarman's IRAA account and 54 shares in his BEST 401(k)
account.
(d) Includes 7,175 shares in Mr. Pratt's IRAA account and 452 shares in his
BEST 401(k) account.
(e) Includes 58,499 shares subject to exercisable outstanding stock options, 72
shares in Mr. Wills' IRAA account and 59 shares in his BEST 401(k) account.
(f) Includes 330,499 shares subject to exercisable outstanding stock options,
36,094 shares in officers' IRAA accounts and 1,555 shares in officers' BEST
401(k) accounts.
(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. The Plan's address is BMA Tower, Penn Valley Park, Kansas
City, Missouri, 64108.
(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 as of December 31, 1999, sole power to
vote 250,600 of the shares and sole power to dispose of 435,150 of the
shares. The address of FMR Corp. is 82 Devonshire Street, Boston, Mass.
02109.
(i) Dimensional Fund Advisors ("DMA") is an investment advisor to certain
investment companies and investment manager to certain other commingled
group trusts and separate accounts, all of which it refers to as "Funds."
DMA reports that it possesses sole investment and voting power with respect
to 409,450 shares, all of which it reports are owned by the Funds. DMA
disclaims beneficial ownership of all of such shares. All information
relating to DMA is as of December 31, 1999. DMA's address is 1299 Ocean
Avenue, 11th floor, Santa Monica, CA 90401.
7
<PAGE> 10
COMPENSATION AND BENEFITS COMMITTEE
The Compensation and Benefits Committee ("Committee") is composed of four
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 Chairman of the Board, President and Chief Executive Officer and of any
other officers who are directors, 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 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. Novello, Brooksher, Christensen, and Reintjes 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 comparable to or
slightly 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.
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<PAGE> 11
Base salaries for executives are set subjectively within salary ranges which are
established for each position based on the surveys mentioned above. Factors
typically considered by the Committee in setting base salaries are the CEO's
recommendation, individual performance, leadership, tenure and length of time
since the last salary adjustment.
The Company's executive officers are eligible for an annual incentive cash
bonus. Bonus amounts are discretionary and are based on corporate affordability
and on achievement of 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-nine 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
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 1999, INCLUDING THE FACTORS AND
CRITERIA UPON WHICH THE CEO'S COMPENSATION WAS BASED. With respect to the salary
paid to Mr. Holland for 1999, 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 1998; Mr. Holland's tenure in the position; and Mr.
Holland's leadership in setting and effecting the long term strategic growth of
the Company.
In 1999, the Company exceeded its target pretax operating earnings goal.
Based on these results, Mr. Holland was awarded a bonus of $115,500.
This report is made over the name of each member of the Committee, namely
Robert J. Novello (Chairman), K. Dane Brooksher, Gary M. Christensen, and Robert
J. Reintjes, Sr.,
9
<PAGE> 12
SUMMARY COMPENSATION TABLE
The table below shows all plan and non-plan compensation awarded to, earned
by, or paid to the Company's Chief Executive Officer and its four most highly
compensated executive officers other than the CEO, for services rendered to the
Company and its subsidiaries during the periods indicated.
<TABLE>
<CAPTION>
LONG-TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
--------------------------------- ----------------------- ------------
AWARDS
RESTRICTED STOCK
NAME AND STOCK (1) OPTIONS
PRINCIPAL POSITION YEAR SALARY BONUS OTHER ($) (# SHARES) ($) (2)
-------------------- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert H. West, 1999 $195,000 $ 0 $ 0 $ 0 0 $ 3,842
Former 1998 $388,750 $ 66,100 $ 2,999 $ 0 0 $298,790
Chairman of the 1997 $374,000 $219,400 $ 5,870 $ 0 0 $294,860
Board and Chief
Executive Officer*
Donald H. Pratt 1999 $314,167 $ 94,400 $ 1,089 $ 0 0 $202,181
Chairman of the 1998 $304,000 $ 51,700 $ 935 $ 0 0 $204,290
Board* 1997 $292,000 $137,100 $ 1,725 $ 0 0 $200,235
John J. Holland 1999 $314,171 $115,500 $ 569 $ 10,010 80,000 $ 47,825
President & Chief 1998 $225,000 $ 49,600 $ 920 $ 0 4,000 $ 47,990
Executive Officer* 1997 $174,350 $ 80,000 $ 800 $ 5,000 4,000 $ 46,854
Richard S. Jarman 1999 $256,163 $ 80,000 $ 245 $ 0 10,000 $227,796
Executive Vice 1998 $224,250 $100,000 $ 1,510 $ 0 0 $228,068
President* 1997 $215,000 $123,100 $ 1,825 $ 0 0 $225,841
John W. Huey 1999 $163,167 $ 53,900 $ 0 $ 0 15,000 $ 2,197
Vice President 1998 $142,504 $ 31,400 $ 0 $ 0 3,000 $ 2,029
General Counsel 1997 $136,504 $ 53,400 $ 0 $ 0 4,000 $ 3,055
And Secretary
Clyde E. Wills 1999 $189,334 $ 50,000 $ 19 $ 0 30,000 $ 4,185
President, 1998 $159,591 $ 16,000 $ 0 $ 0 5,000 $ 3,419
Buildings Div. 1997 $144,878 $ 85,300 $ 258 $ 0 10,000 $ 3,107
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
*On January 19, 1999, Mr. West relinquished the title of CEO; Mr. Pratt was
elected Vice Chairman; Mr. Holland was elected President and CEO; and Mr. Jarman
was elected Executive Vice President. On June 15, 1999, upon Mr. West's
retirement, Mr. Pratt was elected Chairman of the Board.
(1) For 1999 and 1997, 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.
At December 31, 1999, Mr. Holland held 594 shares of restricted stock
with a value of $13,253.
(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 1999 for Mr. Pratt of
$197,955, for Mr. Holland of $43,599 and for Mr. Jarman of $223,570.
This column also:
10
<PAGE> 13
- Includes $800 for the Company's 1999 contribution to the Individual
Retirement Asset Account (IRAA) and forfeitures allocated for each
named executive officer's account.
- Includes insurance premiums paid by the Company in 1999 with respect
to term life insurance for Mr. West of $384, Mr. Pratt of $768, Mr.
Holland of $768, Mr. Jarman of $768, Mr. Huey of $627 and Mr. Wills of
$727.
- Includes the Company's 30% matching contribution for 1999 to the named
executive officer's account in the Butler Employees' Savings Trust (a
401(k) plan). $2,658 was allocated to Mr. West's account, $2,658 to
Mr. Pratt's, $2,658 to Mr. Holland's, $2,658 to Mr. Jarman's, $770 to
Mr. Huey's, and $2,658 to Mr. Wills'.
<TABLE>
<CAPTION>
OPTION GRANTS DURING 1999
- --------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
---------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL GRANT DATE
UNDERLYING OPTIONS OPTIONS GRANTED EXERCISE PRESENT
NAME GRANTED (#)(1) TO EMPLOYEES PRICE ($/SH)(2) VALUE ($)(3)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John J. Holland 80,000 28.8% 26.00 $637,096
- --------------------------------------------------------------------------------------------------------------
Richard S. Jarman 10,000 3.6% 26.00 $ 79,637
- --------------------------------------------------------------------------------------------------------------
John W. Huey 15,000 5.4% 26.00 $119,456
- --------------------------------------------------------------------------------------------------------------
Clyde E. Wills 30,000 10.8% 26.00 $238,911
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For 1999, all options awarded to the named executive officers by the
Compensation and Benefits Committee were long-term incentive awards granted
on January 18, 1999. The options vest twelve months after the date of
grant. Vesting is accelerated upon death, permanent disability, or a change
of control of the Company. The options 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 this value by using the Black-Scholes stock option pricing
model.
The model, as we applied it, uses the grant date of January 18, 1999 and
the fair market value on that date of $26.00 per share as discussed above.
The model also assumes (a) a risk-free rate of return of 6.7% (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 34.2%
(calculated using month-end closing prices of Butler common stock on the
New York Stock Exchange for the period beginning with January 1, 1995 and
ending December 31, 1999, (c) a constant dividend yield of 2.3% based on
the quarterly cash dividend rate of 16 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.
11
<PAGE> 14
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, 1999. The Company has no Stock Appreciation
Rights (SARs) outstanding.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
SHARES 1999 STOCK NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTION EXERCISES OPTIONS IN-THE-MONEY OPTIONS
----------------
ON EXERCISE VALUE AT DECEMBER 31, 1999 AT DECEMBER 31, 1999 (1)
----------- -------------------- ------------------------
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
- -------------------------------------------------------------------------------------------------------------
J. J. Holland 7,500 $ 77,006 8,000 80,000 0 0
- -------------------------------------------------------------------------------------------------------------
R. S. Jarman 37,500 $ 406,687 0 10,000 0 0
- -------------------------------------------------------------------------------------------------------------
J. W. Huey 0 0 7,000 15,000 0 0
- -------------------------------------------------------------------------------------------------------------
C. E. Wills 0 0 28,499 30,000 $189,111 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, 1999, the
Company's stock price was $22.3125.
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, 1999 were: Mr. Pratt, $416,165 and 35 years; Mr. Holland, $281,041
and 20 years; Mr. Jarman, $317,222 and 25 years; Mr. Huey, $189,818 and 22
years; Mr. Wills, $197,025 and 24 years; and Mr. West, who retired June, 1999,
$548,157 and 31 years.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION FOR YEARS OF CREDITED SERVICE
------------------------------------------------------
AVERAGE COMPENSATION 10 20 30 40
-------------------- -- -- -- --
<S> <C> <C> <C> <C>
$150,000 $22,900 $ 45,900 $ 68,800 $ 92,600
200,000 31,200 62,400 93,600 125,600
250,000 39,400 78,900 118,300 158,600
300,000 47,700 95,400 143,100 191,600
350,000 55,900 111,900 167,800 224,600
400,000 64,200 128,400 192,600 257,600
450,000 72,400 144,900 217,300 290,600
500,000 80,700 161,400 242,100 323,600
550,000 88,900 177,900 266,800 356,600
600,000 97,200 194,400 291,600 389,600
</TABLE>
12
<PAGE> 15
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. Jarman, Wills, and Huey participated in this Plan in 1999.
CHANGE OF CONTROL EMPLOYMENT AGREEMENTS
The Company has Change of Control Employment Agreements with six executive
officers, including Messrs, Pratt, Holland, Jarman, and Huey. 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
13 senior executives, including Messrs. Pratt, Holland, Jarman, Huey and Wills,
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.
13
<PAGE> 16
PERFORMANCE GRAPH
The following line graph compares, for five years, beginning December 31,
1994, the yearly percentage change in the Company's cumulative total shareholder
return with the Russell 2000 stock market index and the Media General "General
Building Materials Group" index. The graph assumes $100 invested at December 31,
1994 and reinvestment of dividends. The Russell 2000 index replaces the New York
Stock Exchange (NYSE) stock market index used in past performance graphs. While
the Company's stock is traded on the NYSE, the Company believes the Russell 2000
stock market index provides a more appropriate comparison than the NYSE index
given the Company's market capitalization. The Company's stock is included in
the Russell 2000 stock market index. The Company's total return for 1999 was
positive but less than the returns reported by the NYSE index for 1999.
The Media General Building Materials 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. Two of the Company's
direct competitors, NCI Building Systems, Inc. and Robertson-Ceco Corporation,
are included. Conversely, the Media General index includes firms such as
Armstrong World Industries, Inc., Owens Corning Fiberglas Corporation, USG
Corporation, and The Sherwin-Williams Company, whose products do not compete
with the Company's.
[Performance Chart]
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Butler Manufacturing 100.00 179.24 187.42 151.58 107.43 109.74
-----------------------------------------------------------------------------------------------
Media General 100.00 126.41 151.87 166.69 190.31 162.83
-----------------------------------------------------------------------------------------------
Russell 2000 100.00 128.44 149.77 183.23 178.09 212.98
-----------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 17
INDEPENDENT PUBLIC ACCOUNTANTS
Representatives of Arthur Andersen LLP, independent certified public
accountants, which audited the books, records and accounts of the Company for
1999, 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 2000 will be made by the
Directors at its April, 2000 meeting based upon the recommendation of the Audit
Committee. Members of the Committee are Robert J. Reintjes, Sr. (Chairman), K.
Dane Brooksher, Alan M. Hallene, C. L. William Haw, and Gary L. Tapella.
PROXY SOLICITATIONS
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.
DATES FOR THE SUBMISSION OF CERTAIN MATTERS
Stockholders who intend to present proposals for inclusion in the Company's
proxy statement for the next annual meeting of stockholders on April 17, 2001,
must forward them to the Company at BMA Tower, Penn Valley Park, 700 Karnes
Boulevard, (P.O. Box 419917), Kansas City, Missouri 64141-0917, Attention:
Secretary, so that they are received not earlier than December 19, 2000, or
later than January 18, 2001. In addition, proxies solicited by management may
confer discretionary authority to vote on matters which are not included in the
proxy statement but which are raised at the annual meeting by stockholders,
unless the Company receives written notice of the matter by January 18, 2001, at
the above address.
By Order of the Board of Directors
/s/ John W. Huey
John W. Huey, Secretary
March 8, 2000
15
<PAGE> 18
----------------------------------
BUTLER
MANUFACTURING
COMPANY
------------------
NOTICE
OF
ANNUAL MEETING
OF
STOCKHOLDERS
AND
PROXY STATEMENT
------------------
TIME AND PLACE
Tuesday, April 18, 2000
9:30 a.m.
Atkins Auditorium
Nelson-Atkins Museum of Art
4525 Oak Street
Kansas City, Missouri
----------------------------------
<PAGE> 19
INSTRUCTION CARD
INSTRUCTIONS 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), Galesburg Hourly Employee Savings
Trust (GHEST), Birmingham Hourly Employee Savings Trust
(BHEST), and Warwick Hourly Employee Savings Trust (WHEST)
for voting at the Annual Meeting of Stockholders of Butler
Manufacturing Company on April 18, 2000.
Please vote the shares held by you for my IRAA stock account and/or Butler
Common Stock Fund as specified below.
1. Election of two Class B Directors - Nominees: ROBERT J. REINTJES, SR.,
GARY L. TAPELLA
[ ] 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 1999 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, GHEST, BHEST OR WHEST 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.)
<PAGE> 20
BUTLER MANUFACTURING COMPANY PROXY
P.O. BOX 419917, KANSAS CITY, MISSOURI 64141-0917
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Donald H. Pratt, 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 18, 2000 or at any adjournment thereof.
1. Election of two Class B Directors - Nominees: ROBERT J. REINTJES, SR.,
GARY L. TAPELLA
[ ] 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 1999 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
Dated __________________________________
(Please sign exactly as your name(s)
appear. All joint owners must sign;
executors, trustees, custodians, etc.
should indicate the capacity in which
they are signing.) PLEASE RETURN THE
PROXY PROMPTLY IN THE ACCOMPANYING
ENVELOPE.
